[Excerpt] Congress has broad authority to place conditions on the purchases made by the federal government or with federal dollars. One of many conditions that it has placed on direct government purchases is a requirement that they be produced in the United States. The most familiar of these requirements is known as the Buy American Act, which is the major domestic preference statute governing procurement by the federal government. The Buy American Act applies to direct purchases by the federal government of more than $3,000, providing the purchase is consistent with the public interest, the items or services are reasonable in cost, and they are for use in the United States. The act requires that “substantially all” of the acquisition be attributable to American-made components. Regulations have interpreted this requirement to mean that at least 50% of the cost must be attributable to American content.
While the act has only been substantively amended four times since its enactment in 1933, every Congress in the intervening years has seen fit to enact some form of additional domestic preference legislation. This legislation has been generally directed at purchases that for some reason were not governed by the Buy American Act and often took the form of temporary law that was enacted Congress after Congress, often as an appropriations rider to deny the use of funds to purchase goods that were not of domestic origin. While this approach has not been abandoned, the current trend appears to be to codify these “Little Buy American Acts” as permanent law.
This report summarizes (1) the Buy American Act, what it does and does not cover; (2) the Little Buy American Acts found in permanent law, emphasizing what they govern, major exceptions, and why Congress felt them necessary in light of the requirements of the Buy American Act; and (3) the temporary Little Buy American provision found in the American Recovery and Reinvestment Act.