For years, domestic content requirements have been a point of pain and frustration for government contractors. Historically, these regimes typically come in the form of the proverbial stick – that is, provide products and/or services that meet these country of origin requirements, or risk severe consequences (the billions in False Claims Act Trade Agreements Act settlements speak for themselves). But through the Inflation Reduction Act of 2022, Congress has taken a unique approach by authorizing the Department of Treasury to use country of origin as a carrot – offering certain energy facilities bonus tax credits for meeting specified “domestic content” requirements. To create this new carrot, Congress relied heavily on the Government’s prior experience with domestic content regimes – pulling predominantly from the Federal Transit Authority’s (“FTA”) “Buy America” regulations, but with a Buy American Act twist. In doing so, Congress has left the renewable energy industry with more questions than answers on the applicability of the bonus tax credit to their facilities.
Effective August 25, 2022, the U.S. Department of Defense (“DoD”) has issued two new changes to the Defense Federal Acquisition Regulation Supplement (“DFARS”) reinforcing national defense priorities that limit DoD…Continue Reading In the Interest of National Security – Two New DFARS Rules Reinforce Increased Scrutiny For Chinese-Origin Supply Chains
On April 18, 2022, the Biden Administration (through the Office of Management and Budget (“OMB”)) issued OMB Memorandum M-22-11 (the “Guidance”) relating to the “Buy America” sourcing requirements under the “Build America, Buy America” portion of the Infrastructure Investment and Jobs Act (“IIJA”), Pub. L. No. 117-58, §§ 70901-70953. The Act aimed to strengthen Made in America Laws in accordance with President Biden’s Executive Order 14005, “Ensuring the Future is Made in America by All of America’s Workers” (discussed previously here). In addition to tasking the Federal Acquisition Regulatory Council with amending FAR regulations for the Buy American Act (“BAA”), Congress also imposed new “Buy America” requirements on federal infrastructure programs.
Continue Reading “Build America, Buy America” – New Guidelines Issued for U.S. Infrastructure Projects
Over a year after the Biden Administration issued Executive Order 14005 on “Ensuring the Future is Made in America by All of America’s Workers,” (discussed previously here) the Federal Acquisition Regulatory Council (“FAR Council”) has published a Final Rule (87 Fed. Reg. 12780) implementing changes to the Buy American Act (“BAA”) regulations at FAR Subpart 25.1 and 25.2. These new rules require (eventually) for federal agencies to procure end items manufactured in the United States that are at least 75% domestic content – a drastic increase from the current 55% domestic content requirement. Surprised? You shouldn’t be. We’ve been expecting this rule for a while now. What is a surprise is the effective date – October 25, 2022. The FAR Council wants to give companies a little time for the new rule to sink in and for companies to assess their supply chains to ensure that they can comply with the new thresholds. Companies are well advised to take advantage of this “transition period” between now and October 2022 to get their ducks in a row.
Continue Reading Few Surprises – New Rule Implementing Biden’s “Made in America” Changes the Buy American Act Effective October 2022
Change is in the air for the Buy American Act (“BAA”). On July 30, 2021, the Federal Acquisition Regulatory Council published a proposed rule to the Federal Acquisition Regulation (“FAR”) to implement President Biden’s Executive Order 14005, on “Ensuring the Future is Made in America by All of America’s Workers,” which seeks to further strengthen U.S. Buy American laws and further encourage domestic procurement (previously discussed here). A public meeting to discuss the proposed rule is scheduled for August 26, 2021, and comments will be due September 28, 2021. This blog article summarizes the new BAA proposed rule, offering a primer in advance of the public meeting next week and the public comment deadline next month. Yes, folks – change is in the air. Fasten your seatbelts; we may encounter some turbulence ahead.
Continue Reading Fasten Your Seatbelts – Proposed Rule Implementing Biden’s “Buy American” Mandates
On January 25, 2021, President Joe Biden signed an Executive Order on “Ensuring the Future is Made in All of America by All of America’s Workers,” laying his administration’s foundation for further strengthening Buy American laws and encouraging domestic procurement. Using the broad phrase “Made in America Laws,” the EO aims to strengthen “all statutes, regulations, rules, and Executive Orders relating to Federal financial assistance awards or Federal procurement, including those that refer to ‘Buy America’ or ‘Buy American.’” This comes just days after the FAR Council’s implementation of President Trump’s Executive Order 13881, which required significant changes to the regulations implementing the Buy American Act, 41 U.S.C. §§ 8301-8305 (“BAA”), as discussed in our prior blog article. While only time will tell if the FAR Council will revisit the newly released regulations – they probably will, but not until later this year – we have provided below several key points from the EO so companies can start planning now for future developments.
Continue Reading Made in America – President Biden’s Executive Order on Buying (Even More?) American
On January 19, 2021, the Federal Acquisition Regulatory Council published the final rule amending the Federal Acquisition Regulation (“FAR”) in accordance with President Trump’s Executive Order 13881, “Maximizing Use of American-Made Goods, Products, and Materials.” As we discussed in our prior blog articles here (discussing the September 2020 proposed rule) and here (discussing the July 15, 2019 order), the Executive Order required significant changes to the regulations implementing the Buy American Act, 41 U.S.C. §§ 8301-8305 (“BAA”). The final rule varies very little from the September 14, 2020 proposed rule (discussed in greater detail here). Accordingly, the final rule amends applicable FAR clauses with three key impacts:…
Continue Reading “Buy (More) American” – Final Rule Implements Changes to the Buy American Act Regulations
On September 14, 2020, the Federal Acquisition Regulatory Council published the long anticipated proposed rule amending the Federal Acquisition Regulation (“FAR”) in accordance with President Trump’s Executive Order 13881, “Maximizing Use of American-Made Goods, Products, and Materials.” As previously discussed here, the Executive Order, signed on July 15, 2019, required significant changes to the implementing regulations of the Buy American Act, 41 U.S.C. §§ 8301-8305, changing policies dating back nearly 70 years. Accordingly, the proposed rule seeks to increase both the domestic content requirements and the evaluation preferences provided by the FAR for domestically manufactured goods, particularly with regard to domestic content requirements for steel or iron end products and products made predominantly from iron or steel. Most significantly, however, the proposed rule will revive heightened restrictions for commercially available-off-the-shelf (“COTS”) products that are made predominantly of iron or steel, requiring both the end product and 95 percent of the component parts be domestically sourced in order to qualify under the rule. The COTS exception remains available for other end products (that are not made predominantly of iron or steel), but the proposed rule still will impose heightened obligations and vendors now need to scrutinize their supply chains even more closely, even for COTS items. The FAR Council is accepting comments through November 13, 2020. A final rule is likely by early-2021.
Continue Reading Proposed Changes to the Buy American Act Regulations Implementing Trump Executive Orders
On August 6, 2020, President Trump signed the “Executive Order on Ensuring Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the United States,” requiring, among other things, the U.S. government to purchase “essential” medicines and medical supplies produced domestically, rather than abroad. Citing a need to reduce U.S. dependence on foreign suppliers, the Order sets forth several new requirements aimed at establishing reliable, long-term domestic production of essential drugs and devices, including their component parts. To be clear, this is a tall order: the Food and Drug Administration (FDA) will need to assemble a list of critical supplies and medicines; agencies will need to assess ways to secure the supply chain for both equipment and medicines; the Environmental Protection Agency (EPA) will need to consider how it can accelerate domestic manufacturing requests; the U.S. Trade Representative (USTR) and the Department of Defense (DOD) will need to re-negotiate the terms of international agreements; the Department of Veterans Affairs (VA) may (or may not) be exempted; and – lest it go without saying – everyone will have to update their regulations. While this “Buy American” requirement seems to take effect as soon as the FDA issues its list of critical materials, the Order may leave intact (at least temporarily) some exceptions, which may allow companies time to examine and adjust their supply chains. Over the longer term, most required agency actions are ordered to be realized within 90-180 days, but the inevitable regulatory updates will lag (far?) behind. For now, we find ourselves in a bit of a Twilight Zone – “the middle ground between light and shadow, between science and superstition, and … between the pit of man’s fears and the summit of his knowledge” – forced to guess which parts of this new Order are real and immediate, and which will leave us stuck in a “darker dimension.”…
Continue Reading “Buy American” in the Twilight Zone: Executive Order Strengthening the U.S. Public Health Industrial Base
On February 10, 2020, the U.S. Court of Appeals for the Federal Circuit issued its long-awaited decision in Acetris Health LLC v. United States, No. 2018-2399 (Feb. 10, 2020).
Continue Reading What Does it Mean to Manufacture? Federal Circuit’s Acetris Decision Fundamentally Alters Trade Agreements Act Compliance
Selling drugs to the Government just got a lot simpler. In Acetris Health LLC v. United States, No. 2018-2399 (Feb. 10, 2020), the Federal Circuit opened the Government door…
Continue Reading Federal Circuit Changes the Game for Selling Single-API Drugs to the Government