Buy American Act requires the U.S. federal government to procure manufactured articles, materials, and supplies that have been manufactured in the U.S. substantially all from domestic components, subject to certain exceptions. On January 19, 2021, the Federal Acquisition Regulation Council issued a final rule to implement Executive Order 13881 issued by former President Trump, which called for expansion of the preference for domestic goods, products, and materials in government procurement. The final rule implements the following three major changes for procurements subject to the Buy American Act:
(i) domestic content requirement increases from 50% to 55% of the cost of all components;
(ii) cost of foreign iron and steel for iron and steel products (excluding commercially available off-the shelf (COTS) fasteners) must be less than 5% of the cost of all components in the product; and
(iii) price preference for domestic items in non-Department of Defense (DoD) procurements increases from 6% to 20% for large business and from 12% to 30% for small businesses.
The final rule, effective on January 21, 2021, applies to solicitations issued on or after February 22, 2021 and resultant contracts.