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Public procurement localisation
On April 19, 2017 President Trump signed an executive order instructing every agency and department to conduct a comprehensive assessment aimed at strengthening Buy American and hire American policies. Section 2 of the order provides that, “It shall be the policy of the executive branch to buy American and hire American.” With regard to the first of these principles, the order provides that —
In order to promote economic and national security and to help stimulate economic growth, create good jobs at decent wages, strengthen our middle class, and support the American manufacturing and defense industrial bases, it shall be the policy of the executive branch to maximize, consistent with law, through terms and conditions of Federal financial assistance awards and Federal procurements, the use of goods, products, and materials produced in the United States.
To that end, the order directs the heads of government agencies to review their policies, and inter alia to “develop and propose policies for their agencies to ensure that, to the extent permitted by law, Federal financial assistance awards and Federal procurements maximize the use of materials produced in the United States[.]” Moreover, the agencies “shall assess the impacts of all United States free trade agreements and the World Trade Organization Agreement on Government Procurement on the operation of Buy American Laws, including their impacts on the implementation of domestic procurement preferences,” and make “specific recommendations to strengthen implementation of Buy American Laws, including domestic procurement preference policies and programs.” The order also seeks to limit the use of waivers, providing (among other things) that —
To the extent permitted by law, before granting a public interest waiver, the relevant agency shall take appropriate account of whether a significant portion of the cost advantage of a foreign-sourced product is the result of the use of dumped steel, iron, or manufactured goods or the use of injuriously subsidized steel, iron, or manufactured goods, and it shall integrate any findings into its waiver determination as appropriate.
On June 30, 2017 the Office of Management and Budget (OMB) and the Department of Commerce issued implementing guidance on the executive order. OMB Memo M-17-27 states that the government should “maximize, consistent with law, the policy and the statutory mandate to buy domestically manufactured products in its contracts and grants, and minimize use of exceptions and waivers, so that the federal government may optimize the positive impact of these laws for the betterment of United States citizens and taxpayers.” It retains authorized exceptions, for example when suitable products are not available; these must however be “carefully monitored” by agency management. The memorandum provides guidance for agencies to carry out the requirement that they report by September 15, 2017 to Commerce on their compliance, including descriptions of their use of exceptions and waivers; the results of any previous internal reviews of compliance; and their promotion of those laws, including training of acquisition personnel.
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