White House issues guidelines on limiting exemptions from domestic procurement laws – What entrepreneurs need to know
On June 11, 2021, the White House released new guidance on its plans to limit exemptions from national procurement laws, bolstering its January 2021 executive order on “Ensuring the Future is Made Across America by all American workers ”. the advice, titled “Increasing Opportunities for Domestic Sourcing and Reducing the Need for Waivers from Made in America Laws”, provides an overview of how the Biden administration intends to enforce national procurement laws such as the Buy American Act (“BAA” ) over the next few years.
We have already written about the executive decree of January 2021 here. Among other things, the Executive Order established a Federal Made in America (“MIAO”) office to review decisions by agencies to waive laws such as the BAA for government procurement, grants, and other government procurement activities. He also asked the Office of Management and Budget to establish reporting and monitoring procedures to promote enforcement of Made in America laws. Guidance meets this requirement.
Among other things, the orientation:
- Requires each agency to designate a Senior responsible official, an official responsible for coordinating with the Made in America Director to implement the waiver review process,
- Establish the review procedures for exemption requests by the Made in America Office (“MIAO”),
- Implements the requirement of the executive decree that procurement activities prepare agency reports on compliance with Made in America laws, and
- Explains the process of developing the public database of all proposed exemptions at the start of fiscal year 2022.
It is important to note that the guidelines create an “initial phase” of the implementation of the executive decree, indicating that future phases will follow. In this “initial phase”, the Biden administration will focus on (1) waivers of Jones Law and (2) waivers of non-availability of purchases under the BAA proposed by the 24 agencies subject to the Law on Jones Law. chief financial officers (“CFO”). During the first quarter of fiscal 2022, the MIAO will progressively review exemptions proposed by non-CFO Act agencies and other types of exemption requests.
In one blog post Announcing the guidelines, new Made in America office manager Celeste Drake said the guidelines are intended to “improve practices and processes to ensure that Made in America laws are not just an exercise in compliance,” as well as “strengthen[e] the actions announced in the 100-day supply chain review. “
Made in America Executive Order
President Biden’s 25 January 2021, decree aims to “maximize” the purchase by the US government of goods and services produced in the United States. The executive decree created the MIAO to oversee and administer national preference requirements in federal government procurement. The executive order typically requires agencies to obtain approval from the Made in America director before granting an exemption from Made in America laws. The term “Laws Made in America” is defined broadly in the Executive Order as covering all executive statutes, regulations, rules and executive orders that refer to “Buy in America”, “Buy in America” or include other requirements of national preferences.
The executive order also required that the director of Made in America, within 45 days of his appointment, publish a list of the information and justifications required to support a proposed exemption and a time frame within which the Made in America management will notify the company. match the results of the article. Celeste Drake, trade policy expert and former union official, was chosen by President Biden as Director Made in America April 27, 2021. To the extent permitted by law and in accordance with national security, the results of the waiver review will be available on a public website.
Key provisions of the original guidelines
The initial guidelines detail a gradual approach to the implementation of the executive decree from summer 2021. More specifically, the guidelines fall into four categories: (1) appointment of senior officials in each agency; (2) procedures for reviewing and approving exemptions; (3) additional requirements for the agency’s initial and semi-annual reports on the use of Made in America laws; and (4) stages in the development of the public website listing all proposed waivers and indicating whether waivers have been granted.
Senior officials responsible
The initial guidelines require agencies to designate a primary lead (“SAO”) for national procurement by June 30, 2021 and send the name of the SAO to the MIAO. The SAO must be “superior enough” to direct the agency’s activities regarding relevant Made in America laws, such as identifying opportunities to increase the agency’s dependence on domestic products and services. researching suppliers, participating in interagency product-level reviews, managing an exemption reduction strategy, and meeting regularly with the Made in America director to discuss progress in implementing the strategy reduction in exemptions. The SAO is also responsible for ensuring that the agency follows the procedures below for submitting exemption requests to the MIAO.
Review and approval of agency exemption requests
The guide broadly defines the term “disclaimer” to include all “exceptions and waivers under applicable Made in America laws”, including automatically applicable statutory waivers. Indeed, the guide lists various provisions of the FAR among the “waivers and exceptions”, including those implementing the Law on Trade Agreements and the Trade Information Technology Exception, which occur by application of the law. It remains to be seen how the Biden administration will apply its waiver review procedures for these types of exceptions, but the current “initial phase” does not require agencies to respond to them.
To sufficiently assess why the agency requires the waiver, the initial guidelines detail the required information that must be included by the agency. If a Covered Agency requests a waiver due to unavailability, they must submit the following information:
(1) identify the agency, procurement activity and program office;
(2) provide a description of the final item or construction material being procured, including consideration of the impact on the assignment if not procured, the country (ies) of US origin and content, the estimated value of the supply and, if before award, whether the supplier of the item (s) is a small business or an underprivileged business;
(3) describe the market research activities used to identify domestically produced items that meet agency requirements;
(4) describe whether competition is expected or whether the procurement was carried out using competitive procedures;
(5) determine whether the solicitation will include or include a price preference for finished goods and domestic building materials;
(6) explain that in the event of pre-award, a final product made in the United States would be rejected for reasons other than price; and
(7) identify the approving authority for determinations of non-availability over $ 25,000.
CFO Act agencies requesting exemptions from the Jones Act must provide a description of the transport required, explain why the agency cannot acquire transport on a vessel qualified under the Jones Act, justify why it is in the best interests of the national defense to deviate from the requirement, and provide any additional clarification information.
MIAO expects to complete the review of the majority of exemptions within 3-7 business days and no more than 15 days from submission.
Agency reports on the use of Made in America laws
Under Section 11 of the Executive Order, each agency must report on its use of Made in America laws by July 24, 2021. The initial guidelines provide a list of sections that must be included in the report. First, the report will identify all types of Made in America waivers that are relevant to the agency and the agency’s plan for handling the waivers. This section includes a discussion of the agency’s process for maximizing the use of national sources, an explanation of the agency’s waiver review procedures, the profile of waivers granted in FY2020, and a summary the types of construction products and / or materials for which non-availability exemptions are most frequently used. Second, the report should describe the continued use by the agency and the rationale for any long-standing or country-wide deviations. Third, the report will include the agency’s recommendations to maximize the use of domestic goods, products and services. Finally, the report will detail the status and the result of the agency’s examination of actions incompatible with the decree, in particular if actions of the agency will be suspended, revised or canceled or if new actions are proposed.
In addition to the initial reports, Section 12 of the Executive Order requires each agency to file semi-annual reports on the agency’s implementation and compliance with Made in America laws. The initial guidelines include similar content requirements for these semi-annual reports.
Public website development
Under Article 6 of the Decree, the General Service Administrator is required to develop a public website to communicate information on all proposed exemptions and whether such exemptions have been granted. The MIAO is responsible for reporting all proposed waivers 5 days after receipt to the GSA for posting on the public website. The initial guidelines explain that the website “will be designed to help manufacturers, dealers and other interested parties, including potential domestic manufacturers who do not currently sell to federal agencies, easily identify opportunities to do business on the market. federal market ”.
As previously discussed, the new MIAO waiver procedures aim to reduce agency use of Made in America waivers by increasing scrutiny of these waiver requests. In addition to the close scrutiny of the MIAO, the proposed exemptions and the results of the MIAO review will be posted on a public website. The public database of waiver decisions has the potential to provide useful precedents for entrepreneurs considering applying for a waiver from an agency. However, given the scrutiny of waiver decisions and public reports, contractors should carefully consider information provided to the agency as part of the review process that may become public.