Buy American Act

The Buy American Act (BAA) (41 U.S.C. § 10a–10d) was passed by U.S. Congress in 1933. The purpose of the Buy American Act is to provide preferential treatment for domestic sources of unmanufactured articles, manufactured goods, and construction material for public use unless a specific exemption applies.

Purchases exceeding "Micro-Purchase" Threshold

The act requires the federal government to purchase domestic supplies for use in the United States, if—

(a) The supply contract exceeds the micro-purchase threshold; or
(b) The supply portion of a contract for services that involves the furnishing of supplies exceeds the micro-purchase threshold. In determining what are domestic goods, the place of mining, production, or manufacture is controlling.

Two Part Test for Domestic End Product

The Buy American Act restricts the purchase of supplies that are not domestic end products. The BAA uses a two-part test to define a domestic end product.

1.The article must be manufactured in the United States
2.The cost of domestic components must exceed 50 percent of the cost of all the components

DoD has issued a final rule amending DFARS 252.225-7000 and 252.225-7001 provision and clause which includes a partial waiver to the two part test. The waiver allows a Commercial Off-The-Shelf (COTS) item to be treated as a domestic end product if it is manufactured in the U.S., without tracking the origin of the item’s components.

Exceptions and Waivers

Exceptions that allow the purchase of a foreign end product are listed at FAR 25.103 and DFARS 225.103. Under certain conditions, federal and/or DoD procurements may be waived:

a)Public Interest. The head of the agency determines that a domestic preference would be inconsistent with the public interest. This exception applies when an agency has an agreement with a foreign government that provides a blanket exception to the Buy American Act. DoD currently has the following agreements: World Trade Organization Government Procurement Agreement (WTO GPA), Free Trade Agreements (FTAs) with various countries (including Caribbean Basin Trade Initiative (CBTI)), Memorandum of Understandings (MOUs) with Qualifying Countries listed in DFARS 225.872 and North American Free Trade Agreement (NAFTA).
b)Non-availability. BAA does not apply with respect to articles, materials, or supplies not mined, produced, or manufactured in the U.S. in sufficient and reasonable available commercial quantities and of a satisfactory quality. "FAR 25.104 - Nonavailable articles" [1] and DFARS 225.104 list articles determined to be non-available.

c).Unreasonable Costs. If purchasing the material domestically would burden the government with an unreasonable cost. The unreasonable cost exception is implemented through the use of an evaluation factor applied to low foreign offers. The Contracting Officer may determine unreasonable cost in accordance with FAR 25.105/Subpart 25.5 and DFARS 225.105/Subpart 225.5.
d)Resale. The contracting officer may purchase foreign end products specifically for commissary resale.
e)Information Technology that is a commercial item.

Guidance

DPAP Memo - Improving Compliance with the Berry Amendment and Buy American Act - June 20, 2017

http://www.acq.osd.mil/dpap/policy/policyvault/OSD005724-17-DPAP.pdf

References

FAR 25.1 and DFARS 225.1

Clauses and Provisions*: