President Trump’s ‘Buy American, Hire American’ executive order, issued on April 18, 2017, reinforces the Buy American Act of 1933 and shines a light on Federal procurement of American-made goods and services.
The “Buy American, Hire American” executive order states, “In order to promote economic and national security and to help stimulate economic growth, create good jobs at decent wages, strengthen our middle class, and support the American manufacturing and defense industrial bases, it shall be the policy of the executive branch to maximize, consistent with law, through terms and conditions of Federal financial assistance awards and Federal procurements, the use of goods, products, and materials produced in the United States.” This executive order compels those charged with leadership of Government agencies to acknowledge and implement the existing Buy American Act of 1933.
While essentially reiterating a pre-existing law, ‘Buy American, Hire American’ could have a significant effect on the Government contracting industry. The call for the heads of all agencies to “assess the monitoring of, enforcement of, implementation of, and compliance with Buy American Laws within their agencies” may result in stricter rulings on qualifying for an appropriate procurement of goods. To comply with the Act, any domestic end product purchased for use under a Government contract must be made in the United States. Additionally, an amount equal to 50% of the cost of the product’s component parts must be manufactured in the U.S. Contractors that are not in compliance with ‘Buy American, Hire American’ may subject themselves to punitive actions.
How You Can Use This Information
The ‘Buy American, Hire American’ executive order restates the requirements and importance of an existing law. Government contract bidders should, therefore, familiarize themselves with the full details of existing Buy American regulations. A stricter enforcement of this law by the Government could lead to increased oversight of its implementation and provisions, resulting in more contractor bid protests against unaware Contracting Officers. Contracting Officers must understand these laws to ensure preparedness and awareness in the proposal process.
What does CohnReznick Think?
CohnReznick is available to assist Government contractors with staying in the know on Government issues and preparing them for any major changes. Toward that end, we have several resources you should consider:
- CohnReznick Insights (www.cohnreznick.com/insights): Provides CohnReznick’s latest insights on business trends, regulatory developments, and economic issues. You can subscribe to receive Insights e-newsletters by email.
- CohnReznick Website (www.cohnreznick.com): In addition to Insights, our website provides extensive information about all aspects of Accounting and Assurance, Tax, and Advisory services.
- CohnReznick GovCon360 (www.govcon360.com): Keeps you up-to-date on the ever-changing regulatory environment that is government contracting. From reference materials to educational presentations and thought leadership pieces on industry matters, GovCon360 is a valuable resource for the Government contracting professional.