U.S. domestic content increases in Buy American
The U.S. government strengthened the domestic content level requirement set forth in the Buy American Act to 75% by calendar year 2029.
Right off the bat, in July 2022, the U.S. government published the «Notice of Proposed Rulemaking» on Buy American to further strengthen the Buy American requirement through administrative means.
Earlier, on July 30, 2021, the Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Agency (NASA) published a proposed rule (86 FR 40980) to implement Section 8 of Executive Order 14005, which directs the Federal Acquisition Regulatory Council (FAR Council) to strengthen the impact of federal procurement preferences on Buy American for domestically manufactured products and construction materials with substantial domestic content.
After receiving and incorporating stakeholder comments, the U.S. FAR Council published a Final Rule on March 7, 2022, as Federal Acquisition Circular (FAC) 2022-05, effective October 25, 2022.
Subject to exceptions, the Final Rule increases the domestic content threshold for federal procurement initially from 55% to 60%, then to 65% in calendar year 2024 and to 75% in calendar year 2029.
Also, the rule increases domestic price preferences for end products and construction materials deemed critical or consisting of critical components.
A subsequent rulemaking will establish the final list of critical items and critical components in the FAR, along with their associated enhanced price preferences.
Domestic Content
When a final rule establishing the list and preference factors in FAR becomes effective, the highest price preference will be used for critical items or components.
The general policy with respect to federal procurement is contained in the FAR, which includes all regulations relevant to U.S. participation in the WTO Government Procurement Agreement (GPA), the USMCA, and other international agreements covering government procurement.
For legal purposes, the term «Buy American legislation» refers to all laws, regulations, rules and executive orders relating to the award of federal financial assistance or federal procurement, including those referring to «Buy America» or «Buy American,» that require the purchase or procurement of, or give preference to, goods, products or materials produced in the United States, including iron, steel and manufactured goods offered in the United States.
Buy American legislation includes laws requiring a domestic preference for shipping, such as the Merchant Marine Act of 1920 (P.L. 66-261), also known as the Jones Act.
