The Office of Management and Budget (OMB) recently issued a memorandum that provides guidance to federal agencies on Buy American/Buy America waiver requests. The memorandum comes after President Biden signed Executive Order 14005 on January 25, 2021. The Executive Order, Ensuring the Future is Made in All of America by All of America’s Workers, requires, among other things, the OMB to establish the Made in America Office (MIAO), whose role is to increase reliance on domestic supply chains and reduce the need for waivers.
The memorandum states that the waiver review process will be implemented in phases. During the initial phase, the MIAO will review non-availability waiver requests from the 24 agencies subject to the Chief Financial Officers Act. The 24 agencies include the Department of Defense, the General Services Administration, the Department of Health and Human Services, the Department of Homeland Security, the Department of Transportation, and the Department of Veterans Affairs. Eventually, the MIAO will review all waiver requests from all “covered” agencies. The covered agencies include the executive departments, military departments, government corporations, and government controlled corporations.
By June 30, 2021, the agencies must designate a Senior Accountable Official (SAO) for domestic sourcing to coordinate with the MIAO Director to “implement a holistic approach to advance the policy set forth in Section 1 of the Executive Order, including by working to increase opportunities for U.S. manufacturing and reduce waivers.” The SAO will be responsible for identifying opportunities to increase the agency’s reliance on U.S. products, materials, and services as appropriate.
Proposed Waiver Requirements
As part of its review, the MIAO will evaluate why non-availability waivers are required. The agencies will have to provide the following information when submitting proposed waivers to the MIAO Director for review:
- The agency, contracting activity, and program (requirements) office.
- The item(s) being procured, including:
- A description of the item(s);
- The impact to the mission if the agency is not able to acquire the item(s);
- Country(ies) of origin and U.S. content (if any), of foreign end item intended for purchase, if known;
- If the waiver is to be issued pre-award, whether the supplier of the item(s) intended for purchase is a small or disadvantaged business; and
- The estimated value of the procurement (or portion of the procurement) covered by the waiver.
- A description of the market research activities and methods used to identify domestically manufactured items capable of satisfying the requirement, including the timing of the research and conclusions reached on the availability of sources (e.g., sources are available but cannot offer sufficient quantity; sources are available but cannot offer sufficient quality; no sources can be identified).
- If the waiver is to be issued pre-solicitation, a description of the competition is anticipated. If the waiver is to be issued pre-award, a description of what competition was conducted and how long the solicitation was open. If domestic sources were identified during market research but did not compete, a description of the potential reason(s), if known.
- Whether the solicitation will or did include the provision announcing the agency’s intention to provide a price preference for domestic end products and construction material.
- If a waiver is to be issued pre-award, an explanation of whether a U.S.-made end product was offered but would be rejected for reasons other than price.
- Identification of approving authority – non-availability determinations above $25,000 generally should be reviewed and approved at a level no lower than the head of the contracting activity.
The MIAO’s goal is to complete the majority of it waiver reviews within three to seven business days and in not more than 15 days from submission to OMB. However, the memorandum states that these time frames may be revised after review processes are developed and/or based on experience.
The information requirements are for non-availability waivers. The MIAO will be consulting with the agencies regarding the continuing use of other bases of waiver such as unreasonable costs, commercial information technology, and the partial COTS waiver. Given the Executive Order’s goal of reducing waivers, it can be anticipated that it will become more difficult to obtain Buy American/Buy America waivers in the near future.