On January 25, 2021, President Biden issued a much-anticipated Executive Order announcing plans to strengthen the U.S. Government’s preference for domestically-sourced goods and services, including a proposal to tighten longstanding exceptions to domestic preference requirements.

Executive Order 14005 on Ensuring the Future Is Made in All of America by All of America’s Workers (“EO”) aims to “maximize” the U.S. Government’s purchasing of goods and services produced in the United States. In its key provisions, the EO:

  • Proposes to increase the domestic content threshold for determining whether a product qualifies as domestic, potentially exceeding the 55% threshold, which was increased to that number only last week by the Trump administration.
  • Directs the Federal Acquisition Regulatory Council (“FAR Council”) to replace the Buy American Act’s (“BAA”) longstanding domestic cost-of-components test with a domestic value-added test, using as-yet undetermined metrics.
  • Calls for new procedures that would increase the level of review required to obtain a waiver of domestic preference laws and the scrutiny that would apply to such waivers.
  • Contemplates leveraging trade remedies used to combat unfair trade as a means of enforcing federal procurement policies.
  • Establishes a new Made in America Office to oversee and administer domestic preference requirements in federal procurements.

This EO is the latest in a line of recent proclamations from the White House aimed at strengthening domestic preference requirements in federal contracting. Notably, the EO revokes certain earlier Trump administration executive orders, but it leaves in place—at least for now—the Final Rule issued on January 19, 2021 that increased the BAA’s Eisenhower-era domestic content requirements and price preferences in accordance with President Trump’s July 2019 Executive Order. The EO also left untouched the domestic procurement preferences for essential medicines, medical countermeasures, and critical inputs established in a separate order issued by President Trump in August 2020.

Ultimately, the effect of this latest EO will depend on the details of its implementation. While it largely avoids prescriptive details, the EO requires the FAR Council to consider proposing new implementing regulations within 180 days, and the Office of Management and Budget (“OMB”) and General Services Administration (“GSA”) likewise are directed to establish oversight and reporting mechanisms related to BAA compliance. Notably, the EO is unclear about whether and how it applies to the Trade Agreements Act of 1979 (“TAA”), and contractors will need to await guidance from the FAR Council to better understand this issue.

For our full analysis, the full client alert is available here.  We will continue to closely track these developments as they unfold. For now, however, the EO offers a clear indication that the Biden administration intends to maintain—if not increase—the U.S. Government’s recent emphasis on promoting and enforcing domestic sourcing requirements.

 

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Photo of Michael Wagner Michael Wagner

Mike Wagner helps government contractors navigate high-stakes enforcement matters and complex regulatory regimes.

Combining deep regulatory knowledge with extensive investigations experience, Mr. Wagner works closely with contractors across a range of industries to achieve the efficient resolution of regulatory enforcement actions and government…

Mike Wagner helps government contractors navigate high-stakes enforcement matters and complex regulatory regimes.

Combining deep regulatory knowledge with extensive investigations experience, Mr. Wagner works closely with contractors across a range of industries to achieve the efficient resolution of regulatory enforcement actions and government investigations, including False Claims Act cases. He has particular expertise representing individuals and companies in suspension and debarment proceedings, and he has successfully resolved numerous such matters at both the agency and district court level. He also routinely conducts internal investigations of potential compliance issues and advises clients on voluntary and mandatory disclosures to federal agencies.

In his contract disputes and advisory work, Mr. Wagner helps government contractors resolve complex issues arising at all stages of the public procurement process. As lead counsel, he has successfully litigated disputes at the Armed Services Board of Contract Appeals, and he regularly assists contractors in preparing and pursuing contract claims. In his counseling practice, Mr. Wagner advises clients on best practices for managing a host of compliance obligations, including domestic sourcing requirements under the Buy American Act and Trade Agreements Act, safeguarding and reporting requirements under cybersecurity regulations, and pricing obligations under the GSA Schedules program. And he routinely assists contractors in navigating issues and disputes that arise during negotiations over teaming agreements and subcontracts.

Photo of Samantha Clark Samantha Clark

Samantha Clark practices in the firm’s Public Policy Practice Group as well as the CFIUS and Government Contracts groups. Ms. Clark provides advisory and advocacy support to clients facing policy, political, and regulatory challenges in the aerospace, defense, and national security sector.

Before…

Samantha Clark practices in the firm’s Public Policy Practice Group as well as the CFIUS and Government Contracts groups. Ms. Clark provides advisory and advocacy support to clients facing policy, political, and regulatory challenges in the aerospace, defense, and national security sector.

Before joining the firm, Ms. Clark served in a number of senior staff positions on the U.S. Senate Armed Services Committee, most recently as Deputy Staff Director and General Counsel. In this role, she managed the passage of the National Defense Authorization Act (NDAA), the annual defense policy bill that authorizes the Defense Department’s budget. Ms. Clark worked on Chairman McCain’s legislative priorities to modernize the military retirement system and reform the defense acquisition system and served as an investigative counsel for the committee’s inquiry into cyber intrusions affecting U.S. Transportation Command contractors. During her time on the committee, she managed a multi-billion dollar policy portfolio that covered acquisition law and policy, national security law and policy, military, civilian, and acquisition workforce policy, congressional investigations, military end strength authorizations, military pay and compensation, law of war and detainee issues, and women in combat.

The Secretary of the Navy awarded Ms. Clark the Department of the Navy Distinguished Public Service Award for her “exceptional service to the Department of the Navy as Deputy Staff Director of the Senate Armed Services Committee,” and the Department of the Air Force awarded Ms. Clark her second Distinguished Public Service Award for her work leading specific legislative initiatives to modernize acquisition authorities and reform the military and civilian personnel systems in support of the Air Force during her tenure on the Senate Armed Services Committee.

Photo of Frederic Levy Frederic Levy

Frederic Levy is one of the nation’s leading suspension and debarment lawyers, focusing his practice on the resolution of complex compliance and ethics issues. He has successfully represented numerous high-profile corporations and individuals under investigation by the government in civil and criminal matters…

Frederic Levy is one of the nation’s leading suspension and debarment lawyers, focusing his practice on the resolution of complex compliance and ethics issues. He has successfully represented numerous high-profile corporations and individuals under investigation by the government in civil and criminal matters, including False Claims Act cases, and in suspension and debarment proceedings to ensure their continued eligibility to participate in federal programs. He has also conducted numerous internal investigations on behalf of corporate clients, particularly in the areas of program fraud and export controls, and often involving sensitive personnel or fiduciary matters. He has also advised corporations in voluntary or mandatory disclosures to a variety of federal agencies. Mr. Levy regularly counsels clients on government contract performance issues, claims and terminations, and he litigates such matters before the boards of contract appeals and in the Federal Circuit.

Photo of Jennifer Plitsch Jennifer Plitsch

Jennifer Plitsch is co-chair of the firm’s Government Contracts practice group. Her practice includes a wide range of contracting issues for large and small businesses in both defense and civilian contracting. Her practice involves advising clients on contract proposal, performance, and compliance questions…

Jennifer Plitsch is co-chair of the firm’s Government Contracts practice group. Her practice includes a wide range of contracting issues for large and small businesses in both defense and civilian contracting. Her practice involves advising clients on contract proposal, performance, and compliance questions as well as transactional and legislative issues. Her practice also includes bid protest and contract claims and appeals litigation before GAO, agency boards and the federal courts. Ms. Plitsch has particular expertise in advising clients in the pharmaceutical and biologics industry. She advises a range of pharmaceutical and biologics manufacturers on Federal Supply Schedule contracts, including the complex pricing requirements imposed on products under the Veterans Health Care Act, as well as research and development contracts and grants with various federal agencies. She also has significant experience advising on the requirements of various programs under which vaccine products and biodefense medical countermeasures are procured by the Government.