President Trump signed a new executive order concerning the use of American made products and materials and American labor on federal and federally assisted procurements and projects. The “Buy American” portion of the order intends to narrow the universe of iron, steel, and manufactured goods that are able to comply with domestic materials and products sourcing laws already on the books. This web of confusing laws and regulations governs which products can be incorporated on federal and federally assisted construction projects.
The longstanding Buy American Act (BAA) has required U.S. products to be used on federal procurements since the Great Depression, but additional layers of statutes to modify the underlying law, as well as execute a growing international body of trade law, have changed the original Act over time. Under the Buy American Act, an “American-made” product means a product that is substantially transformed within the U.S. or comes from a country we have an existing trade agreement with.
For Federal Highway Administration and Federal Transit Administration projects a different, though similarly named law, called “Buy America” applies. This law also requires iron, steel and manufactured goods to be made in America, but its implementing regulations define “American made” more narrowly, requiring all processes involved in the iron or steel products (including melting and pouring) to take place in the U.S. The Executive Order takes this more narrow definition of “American-made” and applies it government-wide. The Order also intends to discourage the use of waivers to these laws and to study the effects of the various international trade agreements the U.S. is party to on American products in government procurements.
The Executive Order also included a provision that instructs government agencies to review the H-1B visa program and recommend reforms to the program. The H-1B program is a temporary, with a statutory limit, visa for foreigners to fill “specialty occupations” such as engineering. No changes are required at this time for employers currently utilizing the H-1B visa program.
For more information, contact Scott Berry at [email protected] or (703) 837-5321.