The Biden administration announced on March 4, 2022 a final rule that raises how much of a product must be made in the USA to count as domestic under the Buy American Act.
The federal government spends more than $600 billion a year on goods and services. Under the old rule, a product qualified if 55% of the value of its components was made here.
What the rule changes
- The threshold rises to 60% in 2022, 65% in 2024 and 75% in 2029.
- It creates a framework for higher price preferences for critical products and components, to be named in a later rulemaking.
- The SBA created a manufacturing office in its federal contracting division to help find USA suppliers.
The White House called it the biggest update to the Buy American Act in nearly 70 years. It followed Executive Order 14005, which also set up the “Made in America Office” at the Office of Management and Budget.
Siemens investment
The same day, President Biden and Siemens USA CEO Barbara Humpton announced that Siemens will invest $54 million in more USA production and create 300 jobs making electrical infrastructure equipment, used in products such as electric vehicle chargers.
FAQ
What is the new domestic content threshold?
60% in 2022, rising to 65% in 2024 and 75% in 2029.
What was the old threshold?
55%.
How much does the federal government spend on goods and services?
More than $600 billion a year.
Source & credit
Source: The White House, March 4, 2022: “FACT SHEET: Biden-Harris Administration Delivers on Made in America Commitments”.