The president’s executive order sets the stage for higher domestic content requirements for federal procurements and a threshold for iron and steel products.
President Donald Trump issued an executive order Monday that could set the stage for higher domestic content requirements for federal government procurements.
The executive order envisions the possibility that most end products will be treated as foreign origin if the cost of foreign products used in the end products composes 45% or more of the cost of all products used in such end products, as opposed to the current 50% threshold generally applying to “Buy American” procurements.
Further, the order raises the possibility that the Federal Acquisition Regulation (FAR) would be amended to treat iron and steel end products as foreign origin if the cost of foreign iron and steel used in such goods composes 5% or more of the cost of all products used in such end products.
The FAR currently doesn’t include a set-aside foreign content threshold for iron and steel, but contains language generally requiring domestic iron and steel to be used as part of acquisitions involving goods like construction materials.
Specifically, Trump’s executive order calls for the Federal Acquisition Regulatory Council to consider, by the end of Jan. 11, proposing the envisioned thresholds for notice and public comment.
The FAR Council is a federal body assisting with the direction and coordination of government-wide procurement policy.
The order calls for the council to “promptly issue” a final rule setting the new thresholds, if appropriate and consistent with applicable law and U.S. national security interests.
“The head of each executive agency shall issue such regulations as may be necessary to ensure that agency procurement practices conform to the provisions of any final rule issued pursuant to this order,” the executive order states.
Further, the order calls for various department heads to, by the end of Jan. 11, submit a report to the White House detailing other potential changes to the FAR, including reducing the proposed 45% foreign content benchmark to 25%.
“The report shall include recommendations based on the feasibility and desirability of any decreases, including the timing of such decreases,” the order states.
