As anybody who has followed the news coming out of DC in the last several weeks may have noticed, President Biden has issued a flurry of Executive Orders, spanning a wide range of topics. This includes his January 25 “Executive Order on Ensuring the Future Is Made in All of America by All of America’s Workers.”
As will be of interest to any company doing business with the Federal Government, the Order signals potentially substantial changes to the sections of the Federal Acquisition Regulation (“FAR”) implementing the Buy American Act (“BAA”). The BAA and its related—and somewhat complex—regulatory framework encourage Federal agencies to procure goods produced in the United States by imposing a price evaluation preference for certain “Domestic End Products,” as that term is defined in the applicable regulations.
While the Executive Order contains a number of directives, among the most significant, is ordering the FAR Council to consider, within 180 days of the Order, proposing amendments to the FAR, which would:
(i) replace the “component test” in Part 25 of the FAR that is used to identify domestic end products and domestic construction materials with a test under which domestic content is measured by the value that is added to the product through U.S.-based production or U.S. job-supporting economic activity;
(ii) increase the numerical threshold for domestic content requirements for end products and construction materials; and
(iii) increase the price preferences for domestic end products and domestic construction materials.
These changes are even more noteworthy given that the FAR Council, just weeks ago, finalized a rule increasing the domestic content requirements and pricing evaluation preferences pursuant to the Act. Given the shifting landscape in what is already an uncertain area of procurement law, we will continue to monitor any fast moving developments in this area.
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The author has significant experience counseling businesses about Federal procurement law. If you would like more information about this topic, please contact us.
