Pentagon adds weight to Buy American policy

12 July 2017

The Pentagon is making a renewed push to enforce laws that shut out foreign suppliers from defence supply chains.

memo from the Office of Management and Budget tells federal agencies to more closely enforce such laws, as part of Donald Trump’s bid to put America first when it comes to trade.

Agencies are told to limit exemptions and to draft policies to maximize the procurement of US products, especially steel, iron, aluminium and cement.

The 1933 Buy American Act requires the Pentagon to purchase domestically-produced products for purchases costing more than $3,500, while the 1941 Berry Amendment applies mainly to clothing and food products purchased by the military.

However, a number of free trade agreements grant American defence manufacturers exemptions when it comes to sourcing materials from outside the US.

The letter said that billions of dollars worth of goods were purchased every year under exemptions and called for the application of waivers to be carefully monitored.

It ordered the heads of all government agencies to assess their compliance with Buy American laws, including use of exceptions and waivers.

Agency heads were told to develop policies that would maximise use of material produced in the US and to report to the director of the Office of Management and Budget (OMB) and the secretary of commerce on their findings and recommendations.

It also told them to instruct category managers to look at ways of improving the visibility of US-produced goods in the marketplace.

Agencies were also told to consider ways in which Buy American laws could be strengthened.

Where the Trade Agreements Act (TAA) takes precedence over Buy American laws, agencies were told to find ways to ensure that designated countries, especially those that had opened their own government procurement to United States products and suppliers, were favoured.

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