Buy American Act
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The Buy American Act (41 USC 10a-10d) was passed in 1933, mandating preferences for the purchase of domestically produced goods in direct procurements by the United States government. Other pieces of Federal legislation extend similar requirement to third-party purchases that utilize Federal funds, such as highway and transit programs.
In certain government procurements, the requirement purchase may be waived if purchasing the material domestically would burden the goverment with an unreasonable cost (the price differential between the domestic product and an identical foreign-sourced product exceeds a certain percentage of the price offered by the foreign supplier), if the product is not available domestically in sufficient quantity or quality, or if doing so is in the public interest.
The President has the authority to waive the Buy American Act within the terms of a reciprocal agreement or otherwise in response to the provision of reciprocal treatment to U.S. producers. Under the 1979 GATT Government Procurement Code, the U.S.-Israel Free Trade Agreement, the U.S.-Canada Free Trade Agreement, and the WTO 1996 Agreement on Government Procurement (GPA), the United States provides access to the government procurement of certain U.S. agencies for goods from the other parties to those agreements. However, the Buy American Act was excluded from the GPA's coverage.
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The Act requires that a product be manufactured in the U.S. of more than 50 percent U.S. parts to be considered Made in USA for government procurement purposes.
