Buy American Act changes enhance reshoring trend.

Date09 June 2022

Some South Carolina-based suppliers are feeling a burst of demand as domestic content percentages for materials used in public projects are set to go into effect in October.

The Buy American Act not to be confused with the Reagan-era Buy America Act was first created in 1933 to give preference to domestic manufacturers.

The bill has evolved over the years, but in January 2021, the Biden Administration passed an executive order sparking "the most robust changes to the implementation of the Buy American Act in almost 70 years," according to a White House news release.

The order raised the percentage of domestic content required in public projects from today's 55% to 60% starting Oct. 22, according to a document published by Federal Register.

By 2024, the required percentage will climb to 65%, and in 2029, to 75%. The initial increase to 60% will occur several months from publication of the final rule, according to the Defense Department, General Services Administration and National Aeronautics and Space Administration document.

Andrew McAllister, partner with Washington D.C-based Holland & Knight, shared in a webinar that materials "manufactured in the United States" is not defined in the law, but that it implies a step beyond assembly.

"Then the second piece of that test is that the cost of the components from the U.S. must exceed a certain threshold of the cost of all components," McAllister said, adding that iron and steel products undergo more strict standards.

Under the new ruling, foreign iron and steel must make up less than 5% of the total cost of components purchased.

"It doesn't mean you can never offer a foreign product," he said. "It's more so you're going to be penalized for providing that foreign product."

Bringing it all home

The Buy American Act may often come up in conversations about building materials and construction products, but it also dictates procurement for other forms of federal infrastructure as well for example, procedure trays used in tax-funded operating rooms.

COVID-19 wreaked havoc on medical product supply chains Greenville's CPT Medical depended on for their company's specimen collection supplies in 2020.

"A lot of it was not just made in China, but one of the largest specimen collection manufacturers COPAN is in Italy, and BD is in Germany," said Austin Shirley, vice president of commercial operations at CBT Medical's holding company Diversified Medical Healthcare. "So there was very little U.S...

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