President Trump’s “Buy American and Hire American” Executive Order (EO), issued April 18, 2017, reflects Executive Branch policy and orders several agencies to submit reports due in 60 and 150 days. But it does not change the statutes and regulations that currently govern Federal procurement and Buy American requirements. As such, the EO will have no immediate e ect on existing Federal contracts and solicitations. But it could result in recommendations to a ect future procurements.

Section 2(b) of the EO states that it is the policy of the Executive Branch to buy American and hire American by maximizing the use of goods, products and materials produced in the United States consistent with existing law. Section 2(b) states that it is the policy of the Executive Branch to promote higher wages and higher employment rates for workers in the United States by rigorously enforcing and administering the laws governing entry into the United States by workers from abroad.

Section 3, “Immediate Enforcement and Assessment of Domestic Preferences According to Buy American Laws,” directs agencies to “scrupulously monitor, enforce and comply with” Buy American laws and to minimize the use of waivers. To that end, the EO directs agencies to report within 150 days regarding their enforcement of Buy American laws, their use of waivers and to propose policies to ensure that federal procurements maximize the use of materials produced in the United States. It directs that within 60 days the U.S. Trade Representative and the Departments of Commerce, State and Labor must issue guidance to implement the policies of this EO and to assess the use of free trade agreements within 150 days. Within 220 days, the O ice of Management and Budget and the U.S. Trade Representative must submit a report to the President that includes the findings from the above reports with recommendations to strengthen implementation of Buy American laws.

The EO’s requirements for these reports provides domestic manufacturers with an opportunity to lobby agencies to recommend changes in statutes and regulations to promote increased use of domestic products. But it is a good idea to be mindful of the current “Buy American” Federal procurement policy. The Federal Acquisition Regulation (FAR) Part 25 implements statutes that govern the Federal Government’s preference for domestic products.

The Buy American Act (BAA), 41 U.S.C. §§8301 – 8305, requires federal agencies to procure domestic end products and construction materials. To qualify under the BAA, a product must meet a two- part test: it must be manufactured in the United States and the cost of domestic components must exceed 50 percent of the cost of all the components. FAR 25.101(a). Commercial-o -the-shelf (COTS) items need not meet the latter “component test,” as a statute makes the BAA and a number of Federal statutes inapplicable to procurement of such COTS products. 41 U.S.C. 1907. The waiver of the component test particularly a ects domestic manufacturers of computer products, because many components are manufactured abroad. In addition, the FAR currently includes a waiver of BAA requirements for a list of materials and products that are not available in the United States. FAR 25.104.

In the Trade Agreements Act of 1979, 19 U.S.C. §2511 provides that for Federal procurement, the President may waive treatment less favorable than that accorded the United States for the products of certain “designated countries”. This is implemented by FAR 25.4, Trade Agreements, which lists the trade agreements and designated countries to which this waiver applies. The list is extensive.

Domestic manufacturers and their trade associations should monitor this process and the reports it generates. This process ultimately may a ect the eligibility of their products for future Federal procurements.

The Executive Order is available at the White House site.