President Trump continues to push forward with his “Buy American, Hire American” initiative with the issuance of his third Executive Order No. 13881 (the “Order”) on July 15, 2019, entitled “Maximizing Use of American-Made Goods, Products, and Materials.” This Order attempts to strengthen the standards that federal agencies must follow under the Buy American Act (“BAA”) by raising the threshold for domestic purchasing requirements.
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Congress enacted the Buy American Act (“BAA”) during the Great Depression, in order to protect American industry from foreign competition on federal procurement contracts. While the BAA is simplistic in its policy goal of promoting domestic purchasing, government contractors and subcontractors are often faced with complex and confusing rules for compliance.
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The typical government contract contains a laundry list of standard Federal Acquisition Regulation (FAR) or Defense Federal Regulation Acquisition Supplement (DFARS) clauses that outline the requirements for the construction or services to be provided. These clauses are either expressly stated, i.e. written out in full length in the contract, or incorporated by reference to a particular provision which the contractor must research for the specific language. But contractors beware: not all contracts are what they seem. Since 1963, courts have held that certain clauses are so integral to public procurements that they are deemed incorporated by operation of law, even if they are omitted from the contract.
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