Yesterday, President Biden released details about a proposed rule that aims to toughen Buy American rules, with the hope that it will help bolster U.S. manufacturing.
The proposed rule, which the Biden Administration characterizes as the “most robust changes…in 70 years,” makes the following changes to Buy American requirements:
- Raises the domestic content threshold for products to qualify for federal government procurement. Currently, 55% of a product’s component parts must be manufactured in the U.S. to qualify under Buy American rules. The proposal would immediately increase the threshold to 60%, then gradually increase it further to 65% in 2024 and 75% in 2029.
- Creates new price preferences for critical goods, such as semiconductors and medical supplies. The Biden Administration argued that certain products are too important to be dependent on foreign suppliers, and that price preferences would support the development and expansion of domestic supply chains.
- Increases transparency of Buy American rules by establishing a reporting requirement for critical products. Currently, contractors must tell the government if they meet the content threshold, rather than reporting the total domestic content in their products.
The proposal is subject to a 60-day comment period to allow industry and the public to weigh in, after which the administration will work on a final rule. If you have questions about this announcement, please reach out to Mike Dankler at firstname.lastname@example.org and Alex Nichols at email@example.com.