IWS Documented News INTERNATIONAL

IWS Documented News Service

_______________________________

Institute for Workplace Studies----------------- Professor Samuel B. Bacharach

School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies

Cornell University

16 East 34th Street, 4th floor---------------------- Stuart Basefsky

New York, NY 10016 -------------------------------Director, IWS News Bureau

________________________________________________________________________

 

Congressional Research Service (CRS)

 

Domestic Content Legislation: The Buy American Act and Complementary Little Buy American Provisions

John R. Luckey, Legislative Attorney

April 25, 2012

http://www.fas.org/sgp/crs/misc/R42501.pdf

[full-text, 19 pages]

 

Summary

Congress has broad authority to place conditions on the purchases made by the federal

government or with federal dollars. One of many conditions that it has placed on direct

government purchases is a requirement that they be produced in the United States. The most well

known of these requirements is the Buy American Act, which is the major domestic preference

statute governing procurement by the federal government. The Buy American Act applies to

direct purchases by the federal government of more than $3,000, providing their purchase is

consistent with the public interest, the items are reasonable in cost, and they are for use in the

United States. The act requires that “substantially all” of the acquisition be attributable to

American-made components. Regulations have interpreted this requirement to mean that at least

50% of the cost must be attributable to American content. While the act has only been

substantively amended four times since its enactment in 1933, every Congress in the intervening

years has seen fit to enact some form of additional domestic preference legislation.

 

Other domestic preference statutes, known as “Little Buy American Acts,” either impose a higher

domestic content requirement on procurements that are covered by the Buy American Act or

apply to indirect purchases (i.e., purchases not made by a federal entity, but which are made with

federal funds). The Buy America Act and the Berry Amendment, the most commonly recognized

of the Little Buy American Acts, are representative of the two most prominent categories of Little

Buy American Acts. The majority of Little Buy American Acts govern purchases not directly

made by a federal entity, but which use federal funds. The Buy America Act, which attaches a

domestic content requirement to purchases made with federal transportation funds, is illustrative

of this type of legislation. Unless the definitions of the Buy American Act are referenced, these

provisions generally require the purchase of 100% American-made products.

 

The second most common category of Little Buy American Act affects certain direct purchases of

the federal government (i.e., ones that are governed by the Buy American Act), for which

Congress has decided a greater percentage of American content should be required, as opposed to

the standard 50%. The Berry Amendment is probably the most recognized legislation in this

category. The Berry Amendment is a “super percentage” statute which limits the Department of

Defense when purchasing certain goods to such goods that are 100% American in origin.

 

This report summarizes (1) the Buy American Act, what it does and does not cover; (2) the Little

Buy American Acts found in permanent law, emphasizing what they govern, major exceptions

and why Congress felt them necessary in light of the requirements of the Buy American Act; and

(3) the temporary Little Buy American provision found in the American Recovery and

Reinvestment Act.

 

Contents

Introduction...................................................................................................................................... 1

The Buy American Act .................................................................................................................... 2

Little Buy American Acts in Permanent Law.................................................................................. 2

Domestic Content Requirements for Non-Direct Purchases ..................................................... 3

Buy America Act: Restrictions on Department of Transportation Funds............................ 3

Other Restricted Funds and/or Entities ............................................................................... 6

Super Percentage Requirements ................................................................................................ 8

The Berry Amendment: 10 U.S.C. §§ 2533a and 2533b..................................................... 8

Other Department of Defense Buy American Requirements: 10 U.S.C. § 2534 .............. 10

6 U.S.C. § 453b: Department of Homeland Security........................................................ 11

Veterans’ Burial Flags: 38 U.S.C. § 2301.......................................................................... 12

Provisions Which Encourage the Use of American Made Goods ........................................... 12

Federal Crop Insurance Corporation: 7 U.S.C. § 1506(p)................................................. 12

Other Department of Agriculture Related Entities: 7 U.S.C. Ch. 98................................. 12

Housing Assistance Programs: 12 U.S.C § 1735e-1 ......................................................... 12

Small Business Financial Assistance Under the Small Business Act: 15 U.S.C. § 661............ 13

Arson Prevention Grants: 15 U.S.C. § 2221 ..................................................................... 13

Educate America Act: 20 U.S.C §§ 5801 et seq................................................................ 13

School Lunch Program Funds: 42 U.S.C. § 1760 ............................................................. 13

Domestic Content Requirements in Procurements of Products for Use Outside the United States.......... 14

Foreign Assistance Act of 1961: 22 U.S.C. § 2381........................................................... 14

Engraving and Printing Currency , Postage Stamps, and Security Documents for

Foreign Governments: 31 U.S.C. § 5114 ....................................................................... 14

Renewable Energy Technology Transfer Program: 42 U.S.C. § 13316 ............................ 14

Clean Coal Technology Transfer Program: 42 U.S.C. § 13362 ........................................ 15

Environmental Technology Transfer Program: 42 U.S.C. § 13387................................... 15

The American Recovery and Reinvestment Act: P.L. 111-5.......................................................... 16

 

 

________________________________________________________________________

This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.