President Biden’s Buy American final rule increases domestic manufacturing content requirements

This month, President Joe Biden announced the final rule of his Buy American initiative, which includes increasing the mandated U.S.-made content for federal contractors from 55 percent to 75 percent over seven years and strengthening domestic supply chains for critical goods. This final rule follows Executive Order 14005, which Biden signed during his first week in office that launched a review of existing Buy American policies and created the first Made in America Office within the Office of Management and Budget.

The final rule raises the domestic content percentage from 55 to 60 percent in October 2022, 65 percent by January 2024, and 75 percent by January 2029. This gives automakers and other federal contractors seven years to jump from 55 to 75 percent. The new rule will also allow the government to track the manufacturing trail to ensure compliance with these updated standards. These are the most expansive updates to the Buy American Act in almost 70 years.

According to a fact sheet released by The White House, the federal government spends over $600 billion annually on goods and services. The Buy American initiative supports Made in America laws that allow the U.S. to use this purchasing power to grow new industries domestically while continuing to promote international supply chains. By raising the domestic content threshold, the administration hopes to create more opportunities for small- and medium-sized manufacturers throughout the nation.

The Small Business Administration’s new manufacturing office within its federal contracting division and the Hollings Manufacturing Extension Partnership will support these efforts to develop American sources for federal government needs.