On January 25, 2021, newly inaugurated President Joe Biden signed an executive order titled Ensuring the Future Is Made in All of America by All of America’s Workers, herein referred to as the “Made in America” order. President Biden positions the executive order as part of his campaign pledge to strengthen U.S. manufacturing. The executive order enables the federal government to invest taxpayer dollars in American goods made by American workers and with American-made component parts.
A closer look at the specific language of the order reveals that the order will, in summary:
- Direct agencies to close potential loopholes in how domestic content is measured and increase content requirements;
- Appoint a new senior leader in the Executive Office of the President in charge of the government’s Made in America policy approach;
- Increase oversight of potential waivers to domestic preference laws;
- Connect new businesses to contracting opportunities by requiring active use of supplier scouting by agencies;
- Reiterate the President’s strong support for the Jones Act; and
- Direct a cross-agency review of all domestic preferences.
Furthermore, the Federal Acquisition Regulatory Council (FAR Council) plans on:
- Replacing the “component test” in Part 25 of the FAR that is used to identify domestic end products and domestic construction materials with a test under which domestic content is measured by the value that is added to the product through U.S-based production or U.S. job-supporting economic activity;
- Increasing the numerical threshold for domestic content requirements for end products and construction materials; and
- Increasing the price preferences for domestic end products and construction materials.
Implications for the Manufacturing Industry
The full effect of the “Made in America” executive order on manufacturers remain to be seen, as many of the policies will be put into place over the coming months. While many domestic manufacturers would surely benefit from the groundwork laid by the order, some fear that such policies could result in retaliatory price increases on exports from other countries, in addition to causing supply chain disruptions with the additional limitations to domestic purchasing.
Have a member of Barnes Dennig’s manufacturing team reach out to you to discuss the implications of this executive order on your business, and to determine your business can take advantage of state and federal programs to position you for success in 2021 and beyond. You can contact us here anytime or give us a call at 513.241.8313. We’re here to help.