More than a month after President Biden issued an Executive Order focused on expanding the Buy American and Buy America statutes and regulations, questions remain as to the current applicability of the Buy American rules in the Federal Acquisition Regulation (FAR).
Continue reading at: Government Contracts Insider
The COVID-19 pandemic has demonstrated that U.S. companies and the federal government rely heavily on global supply chains. This has prompted congressional interest in better understanding the role of international trade in U.S. government procurement. As such, Members have sought ways to incentivize U.S.-based production by prioritizing the procurement of domestic goods and services, while upholding U.S. commitments under various international trade agreements. Separately, the Trump and Biden Administrations have issued executive orders that aim to maximize the procurement of domestic goods and services and increase oversight of waivers that would allow government purchases of foreign goods.
Within this context, Members have raised questions regarding how federal agency acquisitions comply with two domestic sourcing laws: namely, the Buy American Act of 1933 (BAA, 41 U.S.C. §§8301–8305) and Trade Agreements Act of 1979 (TAA, 19 U.S.C. §§2501–2581). Although both BAA and TAA have provisions that affect trade, there is a critical difference between their respective requirements. Whereas BAA operates as a price preference for U.S. products, TAA establishes a prohibition on procuring products and services from non-designated foreign countries, unless one of TAA’s exceptions applies.
Continue reading the report: https://crsreports.congress.gov/product/pdf/IF/IF11580
With the height of the federal buying season just about here, Federal Drive with Tom Temin got a progress report from Morris, Manning, and Martin partner Kelly Kroll on the recent Buy American Executive Order and other changes.
Listen to the Podcast at the: Federal News Network
On January 19, 2021, the domestic content restrictions of the Buy American Act (BAA) were significantly changed via a final rule (Final Rule) issued by the Federal Acquisition Regulation (FAR) Council. The Final Rule stemmed from a July 2019 Executive Order issued by President Trump, titled “Maximizing Use of American-Made Goods, Products, and Materials,” which sought to overhaul domestic content restrictions associated with federal procurement subject to the BAA.
It is more important than ever for government contractors subject to the BAA to understand the Final Rule’s updated requirements, especially as the Biden Administration turns its attention to further tightening the BAA’s restrictions. Soon after the publication of the Final Rule, President Biden issued another BAA-focused Executive Order that may result in even further significant revisions to the contours of the BAA. This alert will first outline the three key changes to the BAA that went into effect in January 2021, and will follow with an analysis of the potential impact of President Biden’s 2021 BAA mandates for the FAR Council.
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Three days into the new administration, President Biden issued an additional Executive Order (EO or Order) impacting government contractors, U.S. manufacturers, and grantees and other recipients of federal financial assistance.
Of particular importance for federal contractors, the Order requires the Federal Acquisition Regulatory (FAR) Council to consider several significant changes to existing Buy American Act rules applicable to federal procurements.
Continue reading at: Wiley
On January 19, 2021, the Federal Acquisition Regulatory Council published the final rule amending the Federal Acquisition Regulation (“FAR”) in accordance with President Trump’s Executive Order 13881, “Maximizing Use of American-Made Goods, Products, and Materials.” As we discussed in our prior blog articles here (discussing the September 2020 proposed rule) and here (discussing the July 15, 2019 order), the Executive Order required significant changes to the regulations implementing the Buy American Act, 41 U.S.C. §§ 8301-8305 (“BAA”). The final rule varies very little from the September 14, 2020 proposed rule (discussed in greater detail here). Accordingly, the final rule amends applicable FAR clauses with three key impacts:
The final rule and the new FAR clauses are effective on January 21, 2021 – although it is not required in new solicitations until February 22, 2021.
Continue reading at: Government Contracts and Investigations blog
Last spring, the Pentagon spent more than $165,000 on a set of sophisticated radio antennas for a contingent of elite Navy SEALs. Unfortunately, they were cheap knockoffs, courtesy of a California vendor apparently looking to secure some extra profit.
A search warrant application recently filed by the Defense Department provides a glimpse into how the alleged scam worked.
In April 2019, the Naval Special Warfare Command solicited bids to buy 450 VHF/UHF antennas for use by members of the Navy SEALs. The request required the body-worn antennas come from New York-based manufacturer Mastodon Design, and that the supplier qualify as a small business.
The government used to purchase the antennas directly from Mastodon. However, it no longer could because after Mastodon’s sale to a large multinational defense contractor, the once-boutique company no longer qualified as a small business. This meant the Navy would have to buy Mastodon’s antennas through an authorized small distributor or reseller.
On May 1, the sales team at Mastodon got an email from the procurement department of a California company called Vizocom. It said the company was bidding on a Navy contract and wanted to know how much 450 Mastodon antennas would cost. Mastodon quoted a price: $165,109.50.
Vizocom then submitted its bid to the Navy for the exact same amount. A source with direct knowledge of the situation told Quartz it was highly unusual that Vizocom wouldn’t want to make any money on the deal. At this price, the Navy awarded Vizocom the contract.
The company, however, would never actually place the order with Mastodon. Instead, it would import low-cost antennas from China and pass them off as from Mastodon using fake serial numbers and spec sheets, according to the search warrant application and sources with knowledge of the deal.
Continue reading at: Yahoo Finance
On July 15, 2019, President Trump signed Executive Order 13881 addressing domestic preferences in government procurement. Unlike Executive Order 13788 (April 18, 2017) and Executive Order 13858 (Jan. 31, 2019), which had no substantive effect on existing domestic preference statutes and regulations, this one does.
EO 13881 calls for the FAR Council to make two significant changes to FAR clauses implementing the Buy American Act. The first increases the domestic content requirements for items to comply with the Buy American Act. The second increases the price preference for domestic products.
Continue reading at: The Contractor’s Perspective
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.
The operative language of the BAA provides:
Only unmanufactured articles, materials, and supplies that have been mined or produced in the United States, and only manufactured articles, materials, and supplies that have been manufactured in the United States substantially all from articles, materials, or supplies mined, produced, or manufactured in the United States, shall be acquired for public use unless the head of the department or independent establishment concerned determines their acquisition to be inconsistent with the public interest or their cost to be unreasonable.
The Government flows down BAA requirements to government contractors in the form of standardized clauses contained in the Federal Acquisition Regulation (“FAR”) and Defense Federal Acquisition Regulation Supplement (“DFARS”).
The key to understanding the BAA is determining whether the solicited goods or “end products” are domestic, i.e. were mined, produced, or substantially manufactured in the United States.
Continue reading at: Seyfarth Shaw
On July 15, 2019, President Trump issued an Executive Order, “Maximizing Use of American- Made Goods, Products, and Materials.” The Executive Order builds on two prior “Buy American” Executive Orders and recommends two changes to current regulations implementing the Buy American Act of 1933. This alert summarizes the changes proposed in the Executive Order (known as “Buy American III”) and how they may affect a government contractor’s supply chain.
The Buy American Act does not apply to every procurement, but when it does apply, it mandates that federal agencies purchase domestic products. The Federal Acquisition Regulation (“FAR”) implements this mandate by requiring the use of “domestic end products” and defining what percentage of domestic content a domestic end item must contain. The Buy American Act contains a number of exceptions implemented in the FAR, including an exception when the cost of acquiring a domestic end product is unreasonable.
We predicted in an earlier publication that these two aspects of current Buy American Act regulations—the domestic content requirement and the determination of whether a domestic end product’s cost is “unreasonable”—were particularly susceptible to revision under President Trump’s “Buy American” agenda. One year later, these are precisely the provisions the new Executive Order seeks to revise. Below, we provide key takeaways from the Executive Order, followed by an in-depth analysis of the Executive Order’s potential affect on current Buy American Act compliance requirements.
Bottom Line Up Front: Key Takeaways From The New Executive Order:
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