Buy American Act

Wouldn’t it be great if we could just buy American products only? In 1933 they passed the Buy American Act which is a major domestic preference statute governing procurement by the federal government. There are two types of procurement contracts that the Buy American Act applies too, supply and construction contracts. Both of the contracts have the same requirements, but the terminology is different. Now let’s discuss the requirements for both supply and construction contracts as related to the Buy American Act.

The Buy American Act requires both supply and construction contracts to purchase American products. When procuring supplies the Buy American Act prohibits buying supplies that are not domestic end products for use within the United States. A domestic end product is one that is manufactured in the United States. The requirements to purchase supplies have a two-part test, which determines whether a manufactured end product is a domestic end product: The first test is the end product is manufactured in the United States, and the second test is the cost of foreign components does not exceed 50 percent of the cost of all its components.

The Buy American Act prohibits buying supplies that are not domestic end products for use within the United States. A domestic end product is one that is manufactured in the United States. The requirements to purchase supplies has a two-part test, which determines whether a manufactured end product is a domestic end product: The first test is the end product is manufactured in the United States, and the second test is the cost of its U.S. and qualifying country components exceeds 50 percent of the cost of all its components. This test is applied to end products only and not to individual components. There are some exceptions to the Buy American Act that allows the purchase of foreign end products. 1) Public interest exceptions for certain countries. Due to some international agreements the Department of Defense...