Senate Democrats Look to Strengthen “Buy American” Policies and Requirements


Last week a group of four Senate Democrats – led by Minority Leader Chuck Schumer (D-NY) – jointly published an article about “strengthen[ing]” the U.S. Government’s “Buy American policies.” While the senators acknowledged President Trump’s recent efforts to “re-examine the use of . . . Buy American waivers” (see our blog post regarding the “Buy American” Executive Order), they also expressed concern that these efforts would “not fundamentally change . . . Buy American policies.” In other words, both sides of the aisle are targeting “Buy American” reforms. In their article titled “A Better Deal: Taxpayer Dollars Should be Used to Support & Create American Jobs, Not Ship Them Overseas,” Senators Chuck Schumer (D-NY), Debbie Stabenow (D-MI), Bob Casey (D-PA) and Tammy Baldwin (D-WI) revealed that “Democrats will offer major amendments” to the FY 2018 National Defense Authorization Act (“NDAA”) “to protect and strengthen . . . Buy American policies in taxpayer-funded defense contracts.” The senators argued that “Buy American policies have been diminished by . . . waivers and loopholes that allow foreign firms access to large sums of taxpayer dollars.” In fact, in his September 12, 2017 speech on the Senate floor regarding the motion to proceed on the FY 2018 NDAA (H.R.2810), Senator Schumer declared that these “loopholes . . . have allowed Federal agencies to . . . skirt the spirit of the law.”

Pertinently, the senators proposed to strengthen Buy American policies by: “1) eliminating the current NDAA provisions that would weaken buy American laws by eliminating Buy American provisions for a number of products, 2) rolling back the ‘overseas exemption’ to the Buy American Act [41 U.S.C. §§ 8301–8305] and 3) increasing transparency by mandating up-to-date reporting on the use of Buy American waivers for specific products.”

With regard to their second proposal, the senators contended that the so-called “overseas exemption” has provided “the Department of Defense (DOD) the ability to waive Buy American rules simply because the item being purchased is intended for use overseas — this made up 65% of the exemptions DOD issued in the last year.” To curtail this apparent abuse, Senator Stabenow sponsored SA 988 and SA 827 to the FY 2018 NDAA:

With regard to the senators’ first proposal, Senator Baldwin – along with Senators Jack Reed (D-RI), Tim Kaine (D-VA), and Elizabeth Warren (D-MA) – also sponsored SA 329, the “Supporting America’s Defense Workers Act.” That amendment aimed to remove a provision in the bill that sunsets a requirement to procure certain defense items from within the National Technology and Industrial Base (“NTIB”), meaning the United States, Canada, the United Kingdom, and Australia. In effect, SA 329 would have continued the current NTIB sourcing requirement. It was reportedly one of the most contentious points of disagreement among Senate negotiators.

Ultimately, SA 988, SA 827 and SA 329 were left out of the version of the NDAA passed by the Senate on September 18, 2017. Senator Baldwin noted in a press release that she “strongly object[ed] to the bill’s elimination of critical Buy American standards. I fought against this misguided policy with my pro-Buy American amendment that was also supported by the Trump Administration.” Notwithstanding, Senator Stabenow still was pleased that SA 1014 was incorporated into the version passed by the Senate. SA 1014 “require[s] the Government Accountability Office to evaluate Buy American training policies for the Defense acquisition workforce.”

The Bottom Line

Practitioner’s Notes Regarding the “Overseas Exemption”


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National Law Review, Volume VII, Number 265