Maximizing Use of American-Made Goods, Products, and Materials
Jul 18, 2019
Signed by: Donald Trump
Signed on: Jul 15, 2019
Published on: Jul 18, 2019
Jul 18, 2019
Signed by: Donald Trump
Signed on: Jul 15, 2019
Published on: Jul 18, 2019
Summary
Makes it harder for the government to buy foreign goods by changing the rules to favor products made in the United States.
What problem does this solve?
The government's rules for buying American-made products were not strong enough, allowing agencies to purchase many goods from other countries. This order tightens the rules to make sure more government money is spent on products made in the USA.
What does this order do?
Increases price advantage for U.S. goods
Requires government agencies to add 20% to the price of foreign bids (30% for small businesses) when deciding which company to award a contract to, making U.S. goods more competitive.
Tighter 'foreign origin' rule for iron and steel
Changes the rule for iron and steel products. They are now considered foreign if the cost of foreign iron and steel is 5% or more of the total cost, a significant decrease from the previous 50% threshold.
New 'foreign origin' rule for other products
Changes the rule for all other products. They are now considered foreign if the cost of foreign parts is 45% or more of the total cost, down from 50%.
Requires report on further strengthening 'Buy American' rules
Orders a report on whether to make the rules even stricter, possibly lowering the foreign content limit for products to 25% in the future.
Supersedes parts of a 1954 executive order
Replaces parts of Executive Order 10582 from 1954 to make sure the new, stricter rules are followed.
Who does this affect?
- American manufacturers
- Federal government agencies
- Foreign companies selling to the U.S. government
What is the real world impact?
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Boosts American manufacturing
Directs government spending towards domestic companies to support American jobs and strengthen the national manufacturing industry.
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May increase government costs
Could raise the price of government projects if American-made goods are more expensive than foreign alternatives. This might lead to higher costs for taxpayers or fewer projects being funded.
When does this start?
This order takes effect immediately and sets deadlines for new rule proposals and reports.
Deadline for proposing new rules
Within 180 days of July 15, 2019, the Federal Acquisition Regulatory (FAR) Council must consider proposing new rules to strengthen Buy American requirements.
Deadline for report on further changes
Within 180 days of July 15, 2019, the Secretary of Commerce and Director of the Office of Management and Budget must submit a report on other possible changes to make the Buy American Act stronger.