This executive action will ensure that the federal government is investing taxpayer dollars in American businesses and simultaneously will ensure the policy will be implemented consistently.
“It’s based on his view that we are making things in America and all of America is core to our economic strategy,” a Biden administration official said.
The ‘Buy American’ policy has not been substantially updated since 1954 and to strengthen the policy and open more opportunities for American companies which produce in the US. This will help both large and small companies alike and help create higher paying jobs. Past administrations have allowed loopholes (waivers) so they could manufacturer offshore while still able to qualify for domestic preference as a ‘Made in America’ product. The Executive Order, “Made-in-America” refers to domestic preferences related to federal procurement, federal grants, and other forms of federal assistance.
“We’re excited the new administration will put some ‘teeth’ into the Buy American policy since it open new opportunities for our distributors since our product is made in the USA”, stated Michael Smith, CEO for Purealizer Industries, a US based manufacturer of commercial air purification systems.
Facts show nearly 60% of everything Americans buy now is made overseas, this is up from just 8 percent of goods in 1960. As American’s have wanted less expensive products many companies began to outsource to countries to lower their cost which has resulted in fewer good paying jobs for Americans.
For purposes of this fact sheet and the Executive Order, “Made-in-America” refers to domestic preferences related to federal procurement, federal grants, and other forms of federal assistance. Buy American and Buy America refers to the specific statutes that go by those names.
The dollars the federal government spends on goods and services are a powerful tool to support American workers and manufacturers. Contracting alone accounts for nearly $600 billion in federal spending. The Executive Order will direct agencies to utilize the national network in all 50 states including Puerto Rico. This will enable government agencies to connect with US (domestic) suppliers and manufacturers to procure products and services.
Key points in the new Executive Order include:
• This Order directs a process for updating domestic preferences to fit the current realities of the American economy.
• Directs a cross-agency review of all domestic preferences via the Manufacturing Extension Partnership.
• Directs agencies to close current loopholes in how domestic content is measured and increase domestic content requirements.
• Existing Buy American rules establish a domestic content threshold – the amount of a product that must be made in the U.S. for a purchase to qualify under Buy American law.
• This Executive Order directs an increase in both the threshold and the price preferences for domestic goods – the difference in price over which government can by a product from a non-US supplier.
• It also updates how government decides if a product was sufficiently made in America, building a stronger foundation for the enforcement of Buy American laws.