Stricter Buy America Rules for Procurement Set to Take Effect

A rule going into effect Oct. 25 will increase a requirement for U.S.-made content in the hundreds of billions of dollars of goods and services the federal government procures each year.

The requirement, handed down by the White House via executive order in 2021 but going into force this month, will bolster existing domestic preferences to require a greater share of a product’s overall cost come from components produced on U.S. soil.

The Buy American Act, first passed in 1933, applies pricing incentives to domestic products that the government deems “critical” to U.S. supply chains. Amendments and presidential executive orders have been made to tweak the goal over the decades.

“This is a continuance of the emphasis on ‘know your supply chain’ that we’ve seen in the government for the past several years,” said Sheila Armstrong, of the law firm Morgan Lewis.

Under the latest revision, domestic components will have to account for 60% of the total cost of a product or service to be considered American-made, up from 55%. Incremental increases will follow each fiscal year until 2029, when the made-in-America requirement will reach 75%.

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