On January 9, a bipartisan group of senators introduced legislation that would allow the public to track waivers of Buy American requirements and encourage federal agencies to minimize their use. The proposal is prompted by the concern that federal agencies have granted an “excessive” number of waivers in recent years. This post examines the proposed legislation, including its incorporation of the President’s Buy American executive order.
The sponsors of the BuyAmerican.gov Act of 2018 are Senators Sherrod Brown (D-Ohio), Lindsay Graham (R-SC), Chris Murphy (D-Conn.) and Rob Portman (R-Ohio). Their bill (S. 2284) defines Buy American laws to include: the Buy American Act of 1933 (federal procurement of goods); the Berry Amendment (Defense Department (DoD) procurement of specified products), the Buy America Act (financial assistance provided by the U.S. Department of Transportation (DOT) for state and local transport projects); specialty metals purchased by DoD; and the American Recovery and Reinvestment Act of 2009 (Department of Homeland Security procurement of textile products).
These laws generally allow for the purchase of foreign-made products under certain circumstances: U.S.-produced goods are not available in sufficient quantity and of satisfactory quality to meet the needs of the agency; the price of U.S.-made products are unreasonable; or the agency determines that the purchase of foreign-made products would be in the public interest.
The legislation would direct the General Services Administration (GSA) to establish a central, publicly available website, BuyAmerican.gov, on which all waivers of Buy American laws would have to be posted. The website would include waivers that have been requested, are under consideration, or have been granted. It would also provide an opportunity for informal public comments on proposed waivers.
DOT offers precedents with websites that provide notice and comment opportunities for Buy America waiver requests. The Federal Highway Administration publishes a notice on its website at least 15 days before issuing a waiver of any Buy America requirement for federal-aid highway projects. Following the comment period, it publishes a notice in the Federal Register setting out its finding regarding the waiver. Similarly, the Federal Transit Administration publishes proposed waivers and waivers granted with a brief explanation of the reason for it.
The proposed law would also codify the Buy American executive order that President Trump issued in April 2017, which seeks to maximize the use of U.S.-made products and minimize the waiver of Buy American requirements. It directed all federal agencies to “scrupulously monitor, enforce, and comply with Buy American Laws” and minimize the use of waivers.
The legislation closely tracks the President’s order in seeking to reduce the use of public interest waivers, calling for their “judicious use”. Both the legislation and the order instruct agencies to take into account “whether a significant portion of the cost advantage of a foreign-sourced product” results from the use of dumped or subsidized steel, iron or manufactured goods, before granting a public interest waiver.
In addition, the legislation follows the executive order by requiring all federal agencies to report to the heads of the Commerce Department and Office of Management and Budget on their implementation of, and compliance with, Buy American laws, including their use of waivers. The Commerce Secretary would be directed to make a similar report to the Congress and the President. The agency and administration reports would be required six months after enactment of the law and annually for two years.
Under the executive order, the Commerce Secretary was directed to submit a Buy American report to the President by November 24. As noted in a recent post, the status and content of the report have not been made public.
The proposed legislation replicates the requirement in the executive order that the Commerce Secretary and the U.S. Trade Representative assess the impact of all U.S. free trade agreements (FTAs) and the WTO Government Procurement Agreement on the operation of Buy American laws, “including their impacts on the implementation of domestic procurement preferences”.
Tightening the use of waivers would not impact U.S. obligations under trade agreements, provided the waivers of the Buy American Act for products covered by U.S. trade agreements are not affected. To that purpose, the legislation includes the so-called “savings clause” that requires the legislation to be “applied in a manner consistent with United States obligations under international agreements”.
Jean Heilman Grier
January 11, 2018