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Biden Vows to Enforce ‘Buy American’ Rule for Federal Agencies

July 28, 2021, 6:57 PM

President Joe Biden vowed the strongest enforcement ever for rules that require the federal government to favor American vendors when they purchase goods, saying his predecessors had too freely allowed exceptions.

Biden toured a Mack Trucks Inc. factory in politically sensitive Pennsylvania on Wednesday, where he said forthcoming regulations would increase U.S. manufacturers’ share of the federal automobile fleet -- about 600,000 vehicles strong, he said -- to 70% from 55% by 2029.

Agencies that want to hire foreign vendors or buy goods from overseas will have to clear the requests with a new White House office, he said.

“In recent years, ‘Buy American’ has become a hollow promise,” he said. Federal agencies and their contractors “have got a new sheriff in town. We’re going to be checking.”

The new procurement rule is designed to give contractors time to shift their supply chains but is stringent enough to have an immediate impact on the way taxpayer dollars are spent, one administration official said in a briefing for reporters Tuesday. Biden began the process in an executive order he signed in January, shortly after taking office, and the White House has received input from businesses and unions, officials said.

Biden’s visit to the Mack-Lehigh Valley Operations Manufacturing Facility in Lower Macungie Township in Pennsylvania is part of a series of domestic trips intended to keep up momentum for his economic agenda, including a bipartisan infrastructure plan in excess of $550 billion.

The president said during his remarks that he’d reached agreement on final details of that legislation with Democrats and Republicans in the Senate. He has described the infrastructure development plan as badly overdue -- with countless U.S. roads, bridges, rail lines and airports in need of repair and expansion -- and crucial to keep up with similar efforts by adversaries led by China.

“People follow us because of our example. It’s about time we get back up and reassert who we are,” he said, slapping his podium with a folder. “This is the United States of America.”

Under his new “Buy American” rule, the domestic content of products bought by federal agencies would be raised immediately to a minium threshold of 60% -- a 5 percentage-point increase from existing standards -- and increase in phases to 75% by 2029.

The White House says the immediate change would close a loophole and eventually create more opportunities for small- and medium-sized companies. The proposal would also apply enhanced price preferences to certain critical products to support domestic supply chains for these goods.

The proposal is subject to a 60-day comment period and only takes effect after a final rule is published. The White House signed off on the proposal in early July but didn’t release it until this week. Officials said this is just the first set of reforms to existing rules aimed at bolstering American manufacturing and innovation.

Since his campaign last year, Biden promised to ensure that the federal government spends money on buying “made in America” products and in his first cabinet meeting, he instructed each agency to focus their efforts on spending taxpayer dollars in a way that supports U.S. manufacturing.

Earlier: Biden’s Buy-America Dream Relies on Buying EVs That No One Makes

Under his administration, government agencies have spent more than $2 billion on products produced in the U.S. They include electric vehicles for the Department of Energy’s fleet and the Department of Labor buying $1.5 million of products, from office furniture to safety testing equipment for mines and other workplaces, according to a White House fact sheet.

The president’s proposal comes as federal spending on contracts is increasing, in part because federal agencies are awash in stimulus money to combat the coronavirus pandemic. Federal spending on contracts reached a record high of $682 billion in fiscal year 2020, up 14% from the previous year, according to Bloomberg Government’s federal contracting data.

Defense contractors Lockheed Martin Corp., Raytheon Technologies Corp.and General Dynamics Corp. received a combined $129.5 billion of that spending.

Contract spending is likely to increase again this fiscal year, which ends in September, because the recent $1.9 trillion stimulus package offers health officials tens of billions of dollars in supplemental funding to continue fighting the coronavirus, including for testing and contact tracing.

--With assistance from Courtney Rozen.

To contact the reporters on this story:
Jenny Leonard in Washington at jleonard67@bloomberg.net;
Mario Parker in Washington at mparker22@bloomberg.net

To contact the editors responsible for this story:
Alex Wayne at awayne3@bloomberg.net

Justin Blum

© 2021 Bloomberg L.P. All rights reserved. Used with permission.

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