Public Meeting Addresses 'Buy American' Rules.

• Author: Menzel, Anna

* On Aug. 26, the Federal Acquisition Regulatory Council and the Office of Management and Budget's Made in America Office held a public meeting to discuss proposed changes to Buy American Act regulations aimed at strengthening domestic preferences while reducing reliance on foreign sources of critical components.

While the general thrust of the proposed rule is clear, the meeting indicated that the precise manner and means by which the government would accomplish its objectives remain to be seen.

The proposed changes can be divided into three main categories: a multi-phase increase in the domestic content threshold used to determine whether an item qualifies as "domestic end product," from its current level of 55 percent to 60 percent, then to 65 percent, and then, ultimately, to 75 percent by 2029; enhanced price preferences for certain "critical items" and "critical components" manufactured in the United States; and new disclosure requirements related to those critical items and components.

The agenda for the Aug. 26 meeting covered each of the proposed changes, as well as other questions raised in the notice of proposed rulemaking related to Buy American Act waivers and certain exceptions.

Celeste Drake, director of the recently established Made in America Office, discussed the office's goals to promote domestic manufacturing and preserve domestic sources of critical items and components. She and the FAR Council then spent the rest of the meeting soliciting input from various stakeholders.

A variety of interests were represented among the commentators including representatives of trade associations, labor union spokespersons, small business owners and concerned individual citizens. Some spoke in favor of the proposed changes while others warned that significant changes could have a range of unintended consequences. For example, some commentators cautioned that the increased domestic content thresholds could cause certain companies to exit the federal market entirely--particularly if federal procurement is not their primary focus--and that Buy American preferences must be weighed against both U.S. international trade relationships and national defense priorities.

Even though the proposal does not affect the Trade Agreements Act regime, the notice on proposed rulemaking asked whether the "substantial transformation" standard under the TAA benefits domestic firms and what the U.S. government should do to acquire information about goods...