[This article was originally published in Law360.]
President Trump took a significant step this week towards implementing his often touted objective of protecting U.S. manufacturers and workers by signing the “Presidential Executive Order on Buy American and Hire American” (the “EO”) on April 18, 2017. In addition to addressing reforms to the H1-B visa program to protect U.S. workers, the EO sets forth a policy and action plan intended to “support the American manufacturing and defense industrial bases” by “maximiz[ing]” the Federal Government’s procurement of “goods, products, and materials produced in the United States,” and mandates strict compliance with the statutory and regulatory regimes for domestic sourcing preferences and restrictions (jointly referred to as “Buy American Laws”), such as the Buy American Act (41 U.S.C. §§ 8301–8305) and other buy America legislation, and implementing regulations.
In short, and as to procurement, the EO:
- Requires all agencies to assess their monitoring, enforcement, implementation, and compliance with Buy American Laws and the use of waivers to those laws, and to propose policies designed to ensure that the use of domestic sources is maximized, consistent with existing law.
- Requires an assessment of the impact on domestic procurement preferences of all free trade agreements and the World Trade Organization Agreement on Government Procurement.
- Elevates to the Head of the Agency the granting of any public interest waivers to Buy American Laws requirements and requires such determinations to consider whether the cost advantage of the foreign product is due to dumping or the use of an injuriously subsidized product.
- Requires the Secretary of Commerce to submit a report to President Trump within 220 days of the date of the EO which shall include “specific recommendations to strengthen implementation of Buy American Laws, including domestic procurement preference policies and programs.”
- Requires agencies to submit annual reports to the Secretary of Commerce and the Director of the Office of Management and Budget on agency efforts to maximize the procurement of domestic products, and requires the Secretary of Commerce to submit an annual report to the President based on the agency submissions.
Although this EO establishes the Administration’s policy to strictly enforce Buy American Laws to maximize the use of domestic manufacturers and labor, it does not change existing law or regulation.
Here are our key takeaways.