The Biden administration announced recently a proposed rule that would remove 70 of the 109 articles currently on a list of goods presumed to be unavailable from domestic sources and thus exempted from federal procurement rules under the Buy American Act. The White House said this change would support U.S. manufacturers and supply chains by encouraging further market research and fostering investment in domestic manufacturing of subject goods. Comments on this rule will be due 60 days after it is published in the Federal Register.
According to an administration fact sheet, articles proposed for removal based on demonstrated domestic manufacturing capacity include certain types of beef, petroleum/crude oil, cadmium, and talc.
Articles proposed for removal due to national security and supply chain concerns include microprocessor chips, critical minerals, and rare earth minerals, including nickel, platinum, tungsten, tantalum, manganese, cobalt, cadmium, and bauxite. Under the proposed rule federal agencies would be required to publish proposed waivers for each acquisition in which they plan to procure such items from foreign sources and a final waiver would be required when an item is not procured domestically or from a partner to the World Trade Organization Agreement on Government Procurement or a trade agreement.
The rule notes that the current non-available articles list is a wide-ranging mix of natural resources, compounds, materials, and other items of supply. While some of these articles have no known domestic production sources, the rule states, and there is “no substantial evidence that there is a major increase in the availability of the articles” proposed for removal, “there is evidence that there is capacity for many” of those articles. The administration believes that continuing the general presumption of non-availability for such goods “can disincentivize domestic sourcing by signaling a lack of confidence in domestic manufacturers’ capacity to meet the federal government’s current demand or grow capacity to meet future demand.”
For more information on this rule or Buy American requirements, please contact attorneys Mark Segrist, Mark Tallo, or Josh Rodman.
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