Biden Administration Takes Another Step With New Domestic Procurement Rule

AAM’s take: The interim guidance is “a key milestone in the broadest expansion of Buy America since its inception.”

Last week, we wrote about a letter sent to the federal Office of Management and Budget (OMB) by Sen. Sherrod Brown (D-Ohio), urging it to follow the letter of the law when it issued its guidance regarding the recently passed Build America, Buy America Act. This was a new set of procurement rules meant to ensure all the iron, steel and manufactured products used in federally funded infrastructure projects will be American-made whenever possible.

Brown was a co-sponsor of that legislation, which passed last year as part of the Bipartisan Infrastructure Law and will affect all of its new spending. And OMB, the executive branch office that makes sure the federal agencies is following presidential policies, was responsible for writing the guidance to those agencies for how to comply with these new Buy America rules.

And sure enough, a few days later OMB issued its guidance. You can read it here. The Alliance for American Manufacturing (AAM) has read it carefully and we’re happy with what we saw. In a statement AAM President Scott Paul said:

“The interim guidance issued (Monday) is a key milestone in the broadest expansion of Buy America since its inception, fulfilling the overwhelming demand of American taxpayers by closing loopholes and giving more opportunities to American manufacturing across a range of sectors.

While there is little doubt that agencies, contractors, and recipients will ask for waivers of these new requirements, we are thankful that time limits will be attached, along with increased scrutiny that the Made in America Office will provide.”

You’ll remember the Biden administration created the Made In America Office to oversee these kinds of procurement rules (we recently interviewed its director, Celeste Drake, on The Manufacturing Report podcast; listen here). It will have a big role in making sure Buy America waivers are appropriately granted. Here’s how Government Executive explains the waiver process:

There are three situations in which agency heads may issue waivers to the ‘Buy America’ preferences: when it is not in the public interest; when the materials are not sufficiently available in the United States; or when using the materials would increase the cost of the project overall by more than 25%. Before an agency issues a waiver, it must make the proposed waiver available publicly on its website with a detailed explanation and give at least 15 days for the public to comment on it. Agencies must then submit the proposed waiver to the Made in America Office, which is housed within OMB, for review and a determination as to whether the waiver will be accepted.

The process is meant to be both thorough and transparent and complimentary to the Biden administration’s stated goal of identifying gaps in domestic industrial supply chains, and this interim guidance issued by OMB will keep it on that track.

The next date to watch for regarding the implementation of the Build America, Buy America Act is May 14. That’s the day when the law requires all covered federal agencies ensure that “none of the funds made available for a Federal financial assistance program for infrastructure … may be obligated for a project unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the United States.”

We’ll keep an eye on that date as the federal government comes into compliance with these new procurement rules.