The White House released a proposed rule July 28 that is intended to increase the amount of American-made supplies the federal government purchases and bolster domestic supply chains.
The proposed rule would make changes to the Buy American Act, passed in 1933, that requires federal agencies to domestically procure materials and products intended for public use.
Changes to the Buy American Act include:
- Raising the domestic content threshold. The act states that products bought with taxpayer money must "substantially all" be made in the U.S. Currently, products qualify if 55 percent of its component parts were manufactured in the U.S. The proposed rule raises that threshold to 60 percent, with a phased increase to 75 percent, allowing businesses time to adjust their supply chains. The Small Business Administration has created a manufacturing office in its federal contracting division to support this work, the White House said.
- Applying enhanced price preferences to select critical products and components. Preferences would support development and expansion of domestic supply chains for critical products and provide a source of stable demand for domestically made products, the White House said.
- Establishing a reporting requirement for critical products. Reporting challenges have hampered implementation of the act for decades, the White House said. Currently, contractors can only tell the government if they meet the domestic content threshold, but not report the total domestic content in their products. A new reporting requirement would increase compliance with the act and improve data on actual U.S. content of goods purchased, the White House said.
The White House said implementing these changes would increase the amount of U.S. content in products the federal government buys and support the domestic production of critical products. The federal government spends $600 billion annually on procurement, the White House said.
Read the White House's full news release here.