The preference for domestic over foreign products has been a cornerstone of U.S. policy since the early 1930s, when the Buy American Act (BAA) was established. Enacted in 1933 under President Hoover, the BAA encourages federal agencies to purchase U.S.-made materials and products. Various administrations have continuously revised the act, enhancing its focus on domestic supply chains and workforce.
Here’s why the BAA matters for GSA contractors: it influences federal agencies’ purchasing decisions, making it critical for you to understand its implications. With the Trump Administration prioritizing domestic products via programs like the America First Trade Policy, understanding the BAA is more important than ever.
Key Points about the Buy American Act (BAA)
- What is the BAA?
The BAA mandates that federal agencies prefer U.S.-manufactured goods. Recently, its guidelines were reinforced to further support domestic industries and small businesses by raising the U.S.-made content requirement from 55% to 65%, eventually reaching 75% by 2029. - How It Affects GSA Schedule Contractors
The BAA aims to boost U.S. manufacturing and employment by requiring that projects funded by taxpayer dollars use domestic materials. It establishes rules under the Federal Acquisition Regulation (FAR) to determine what qualifies as “domestic.” - Exceptions to the Rule
While striving to support domestic manufacturing, the BAA does allow exceptions, such as:- Non-availability of domestic products
- Unreasonable cost
- Public interest considerations
- Commercial IT products
Celebrating American-made products, recent executive orders have strengthened the BAA’s relevance for government contractors.
Executive Orders and Their Impact
- EO 13881: Maximize Use of American-Made Goods
Implemented in 2020, this order updated the domestic content criteria from 50% to 55%. It also adjusted the requirements for iron and steel products sold as Commercially Available Off-the-Shelf (COTS). - EO 14005 & EO 14036: Made in America & Promoting Competition
Issued by President Biden, these orders focus on enhancing U.S. economic competitiveness and broadening the definition of domestic products through new compliance measures. - The Final BAA Rule
Formalized in 2022, this rule increased the BAA’s domestic content threshold, setting milestones leading up to 75% in 2029, ensuring that U.S. products stay heavily favored in federal procurement.
Moving Forward with the BAA
Navigating these changes is crucial for success as a federal contractor. Stay informed about BAA and its evolving landscape to align your business strategies. Embrace these changes to capitalize on opportunities for domestic procurement.
By understanding and adapting to the BAA and related executive orders, contractors can position themselves to benefit from increased demand for U.S.-made products and contribute to the strengthening of America’s domestic market.
