On July 21, 2023, President Biden designated July 23-29, 2023, as “Made in America Week.” This proclamation builds on the Biden Administration’s efforts to bolster domestic manufacturing through evolving policies attached to government funds that require contractors and suppliers to feature varying amounts of U.S.-made content in their products and services. To commemorate this week, here is a refresher on “Made in America” and what it means for government contractors and suppliers.
What does “Made in America” mean?
Under Executive Order 14005, the Administration defined “Made in America” laws as “all statutes, regulations, rules, and Executive Orders relating to Federal financial assistance awards or Federal procurement, including those that refer to “Buy America” or “Buy American,” that require, or provide a preference for, the purchase or acquisition of goods, products, or materials produced in the United States, including iron, steel, and manufactured goods offered in the United States.” Generally speaking, “Made in America” or “Buy American” requirements refer to:
- The Buy American Act (BAA) of 1933, establishing domestic sourcing preferences for unmanufactured and manufactured articles, materials, and supplies procured by the federal government for public use, including those used on federal construction contracts;
- The Trade Agreements Act (TAA) of 1979, permitting, in certain circumstances, the waiver of certain BAA domestic sourcing requirements for “designated countries”;
- The Berry and Kissell Amendments, relating to Department of Defense (DOD) purchases of food, clothing, textiles, and tools;
- The Specialty Metal Restriction, relating to DOD purchases of “specialty metals” and items that contain “specialty metals”;
- The Balance of Payment Program, relating to DOD’s application of BAA policies outside of the U.S.;
- The American Recovery and Reinvestment Act of 2009, relating to construction materials procured using funds under the Recovery Act;
- The Department of Transportation (DOT) Buy America Act, relating to grants provided to states, localities, and other nonfederal entities for projects funded by the DOT; and
- The Build America, Buy America (BABA) Act of the Infrastructure Investment and Jobs Act (IIJA), expanding domestic content requirements to all federal infrastructure projects. For more on BABA requirements, see coverage here.
When do “Made in America” requirements apply?
Many government contracts or federally-funded projects include “Made in America” requirements, though the requirements will differ depending on project type, product type, source of funding, and contract value. For instance, in the case of Federal Acquisition Regulation (FAR)-based federal contracts, the BAA generally applies to contracts between the micro-purchase threshold of $10,000 and the TAA threshold of $183,000 (for supplies) or $7,023,000 (for construction materials). Above the relevant threshold, the TAA typically applies, which contains similar domestic sourcing requirements but includes exceptions to permit the use of products from many U.S. trading partners.
What companies must comply with “Made in America” requirements?
Prime contractors as well as their supply chains are impacted by “Made in America” requirements. While the applicable “Made in America” regulations do not always mandate inclusion of “Made in America” clauses in lower-tier subcontractor and supplier contracts, oftentimes prime contractors must include those requirements in order to ensure that the products or construction materials they deliver or use in a project are compliant with the applicable “Made in America” laws.
How do companies comply with “Made in America” requirements?
Any company performing a federal contract or federally-funded project, or acting as a supplier for such projects, should be cognizant of potential “Made in America” requirements. Companies should review their contracts to confirm applicable requirements and identify any certifications that they may be making with regard to the origin of project materials. Communicate with customers if the requirements are unclear. Prime contractors may want to establish procedures to obtain, archive, and update country-of-origin information from suppliers and include annual updates to ensure compliance throughout the life of a contract.
Have there been any recent updates to “Made in America” requirements?
The Biden Administration has used “Made in America” requirements as a vehicle to increase U.S. jobs and manufacturing in several key industries, including construction and electric vehicle (EV) charging infrastructure. The following updates highlight recent developments in “Made in America” requirements:
- Office of Management and Budget (OMB) Guidance on BABA Application: On February 9, 2023, OMB issued a proposed rule and notice of proposed guidance for infrastructure projects that will be subject to BABA, building on its preliminary guidance from April 2022. The new guidance provides additional color on how the government will interpret terms and concepts in BABA, including how the government will distinguish between a manufactured product and a steel/iron product, and how the government will define the requirement that “all manufacturing processes” for construction materials occur in the United States.
- Federal Highway Administration (FHWA) Updates to EV Charger Waiver Guidance: On February 12, 2023, FHWA released a limited waiver that, in a series of steps, created a domestic sourcing requirement specific to EV chargers, to be implemented on a phased timeline. On July 11, 2023, FHWA released updated Q&A’s for the new EV charger domestic sourcing requirements.
- DOD Updates to Procurement Regulations: On June 9, 2023, DOD proposed an amendment to the Defense Federal Acquisition Regulation Supplement (DFARS) to enact domestic sourcing requirements outlined in Executive Order 14005, including updates to the definitions of “domestic end product”, “qualifying country end product”, and “domestic construction material” to reflect the increase of domestic content thresholds from 55 percent to 60 percent in calendar year 2023, then to 65 percent in calendar year 2024, and to 75 percent in calendar year 2029.
“Made in America Week” showcases all of the opportunities available to contractors and suppliers willing to comply with the federal government’s domestic sourcing requirements. However, the complexity of the existing statutory scheme and the evolving, agency-specific nature of the requirements can make compliance seem like a daunting task. Seyfarth Shaw continues to monitor these changes and can lend its extensive expertise to contractors and suppliers currently in the federal procurement space, or those interested in taking advantage of the business opportunities that exist within that space.