The White House has released the final language of the Buy America Act. Our recent post looked forward to what we could expect from the final rule. Now the rule has been released, so what is in it?
The executive order promises quite a bit, and a lot of what is promised we will likely not see until 6 to 12 months down the road.
Here is what to expect now, in 6 months, and then down the road.
First, the final order was signed by President Biden on January 25, 2021. The order promises to keep federal dollars in America. The order sets forth ambitious timelines for accomplishing what amounts to an overhaul of how small and medium manufacturing is conducted in the United States.
The most convenient way to break down and digest this order is to look at what the immediate, 6-month, and 12-month timelines look like.
The most immediate change is the creation of the Made in America Director. This new Director will apparently reside within the Office of Management and Budget. When will this director be appointed, it is unclear. What is clear is that 45 days after the appointment of the new–let’s call them the “MiAD Director”–we will get our first glimpse of the new landscape.
45 days after appointment, the MiAD will publish a list of information granting agencies shall include when submitting waiver requests and justifications. Publish where, you might ask? Probably on a new public website designed to promote transparency, but as we all well know, this could also take the form of a memo. The MiAD will also publish a deadline, not to exceed 15 days, to waive review of a proposed waiver, or will notify the agency head in writing of its decision.
The decision must include a consultation as to whether the cost savings are in line with public interest. The language directly references manipulated prices for raw and manufactured materials. I suspect, as with the previous administration, this is a thinly-veiled provision meant to reference China.
Here is where things get spicy, and by spicy, I mean a regulatory nightmare. If the agency disagrees with the MiAD, and they are unable to resolve this dispute through writing, the Order calls for the dispute to be decided by the procedures laid out in Executive Order 12866, section 7. This order from back in 1993 calls for the Vice President and President to review the dispute, and issue a decision within 60 days of the request for review.
Given the President’s agenda, I am not certain resolving a dispute regarding granting a waiver for a widget will be high up on the priority list. Time will tell, but I am keenly interested to see if we will find out whether this process is used, and how often. My guess is that, before this is invoked, the agency head will be kindly asked…to rethink things.
This order also proposes each agency submit new FAR rules for FAR 48. Specifically, the component test in part 25 will be replaced with a “value added” test, which we don’t have specifics on yet. The numerical threshold for domestic content will be raised, which basically means how much of something has to be from the United States for it to be labeled “Made in America.” As well, price preferences will be increased. These final totals will be determined later.
These new proposed rules will be up for public comment in 180 days, we will keep an eye out for final rule language.
At the 180 day mark, each agency is required to submit a report outlining three main things; implementation and compliance with “Made in America” laws, consistency of existing waivers with “Made in America” laws, and recommendations on how to effectuate this policy better.
After the initial reports are due, every 6 months, each agency will submit a similar report to the MiAD. GSA gets a special requirement to ensure all products on Federal property comply with this order.
We should look for the first final rules to be off the presses approximately a year following the signing of this order.
Besides the regulatory overhaul, this order also establishes a task force to seek out small and medium size American manufacturers and suppliers who can fulfill procurements. Market research and supplier scouting must be conducted by each agency, before a waiver can be granted. For we attorneys, this means another trove of information to pore over when analyzing a solicitation. For suppliers and manufacturers, there will hopefully be a uniform process enabled to give these firms the ability to be discovered and utilized.
We talked above about a new public website. While the details are scarce, the website is meant as a portal for federal contractors and suppliers to meet. The stated goal is to improve transparency, giving access to approved and denied waivers, as well as information on manufacturers.
Taking everything into account, the order promises a whole heck of a lot. Will it deliver? Likely not completely, but it does give us a look at the priorities of this administration. The sections regarding publishing granted and denied waivers can bring uniformity across agencies, which is promising. This also provides attorneys a place to go to hold agencies accountable. I expect some form of revamping to this order in about 6 months, as the reports start rolling in.
As always, we will keep our eyes out, and keep you up to date with what we find.
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