Overview
This section establishes the foundational requirements of the Buy American statute, defining the "two-part test" for domestic end products and outlining the escalating domestic content thresholds for federal procurement through 2029. It also clarifies how these rules apply to iron and steel products, small business set-asides, and multi-year contracts.
Key Rules
- Two-Part Test for Domestic End Products: To qualify as domestic, an item must be manufactured in the United States and meet specific domestic content thresholds.
- Escalating Content Thresholds: For most manufactured items, the cost of domestic components must exceed:
- 60% for items delivered before 2024.
- 65% for items delivered between 2024 and 2028.
- 75% for items delivered starting in 2029.
- Iron and Steel Standards: For products consisting predominantly of iron or steel, foreign iron and steel must constitute less than 5% of the total component cost. The general COTS (Commercially Available Off-The-Shelf) waiver does not apply to these products, except for COTS fasteners.
- COTS Waiver: The domestic content test is waived for most COTS items, except for those predominantly made of iron or steel.
- Small Business Set-Asides: Participation in a small business set-aside does not exempt a product from the domestic content test; being "U.S.-made" is not sufficient to be "domestic" without meeting the percentage thresholds.
- Multi-Year Delivery: Contracts spanning threshold increase dates must comply with the higher percentage at the time of delivery unless a Senior Procurement Executive (SPE) approves an alternate test.
Practical Implications
- Supply Chain Planning: Contractors must proactively manage their supply chains to ensure compliance with the 65% and 75% "step-ups" if their contracts involve deliveries spanning the next several years.
- Strict Iron/Steel Compliance: Manufacturers of iron and steel end products face a significantly higher bar for compliance (95% domestic) and cannot rely on the standard COTS waiver to bypass content calculations.
- Administrative Oversight: Contracting Officers and Senior Procurement Executives must coordinate with the Made in America Office if they intend to allow a consistent domestic content threshold throughout the life of a multi-year contract to avoid the complexity of shifting delivery-year requirements.