While many American businesses are on the brink of having to close their doors due to the economic fallout from Covid-19, President Biden issued an executive order on Monday to support manufacturers, businesses and workers.
With the order, the 46th president is ensuring that when the federal government spends taxpayer dollars they are spent on American made goods by American workers and with American-made component parts. This order fulfills his promise to make Buy American real and close loopholes that allow companies to offshore production and jobs while still qualifying for domestic preferences.
These investments will support the manufacturing capabilities and technology needed to build a clean energy future and strengthen national security, and give American workers and companies the tools they need to compete globally in the future.
“We commend President Biden for taking action in his first days in office to strengthen our domestic supply chain and manufacturing base with a ‘Made in America’ executive order directing the federal government to spend taxpayer dollars on American-made goods produced by American workers using American-made components,” National Council of Textile Organizations (NCTO) president and CEO Kim Glas said.
“Increasing the domestic procurement threshold and the price preferences for domestic goods under the current Buy American law will bolster domestic production and stimulate more investment in U.S. manufacturing,” Glas said. “We believe it is critical that taxpayer dollars are used to invest in American manufacturing and our workforce. It is essential that we close loopholes in our Buy America laws, expand application and product coverage of domestic content rules, and close unnecessary contract waivers that undermine American manufacturing and its workforce.”
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The order states that federal law requires government agencies to give preferences to American firms, however, these preferences have not always been implemented consistently or effectively. And, some of these requirements, which shape how the government preferences domestic goods and services in what it buys, “have not been substantially updated since 1954, during the Eisenhower Administration.”
“It is long overdue that the U.S. government utilizes the full force of current domestic preferences to support America’s workers and businesses, strengthening our economy, workers and communities across the country,” Biden’s order said.
The president’s order establishes the goals and standards necessary to use federal purchasing, and other forms of federal assistance with domestic preference requirements, as a way to proactively invest in American industry “so it can continue to lead in the global marketplace.”
The order directs agencies to close current loopholes in how domestic content is measured and increase domestic content requirements. Existing Buy American rules establish a domestic content threshold–the amount of a product that must be made in the U.S. for a purchase to qualify under Buy American law. This order directs an increase in the threshold and the price preferences for domestic goods–the difference in price over which government can by a product from a non-US supplier. It also updates how government decides if a product was sufficiently made in America, building a stronger foundation for the enforcement of Buy American laws.
The order appoints a new senior leader in the executive office of the president in charge of the government’s Made-in-America policy approach. The new director of Made-in-America at the Office of Management and Budget (OMB) will oversee the implementation of the executive order,
Among its other provisions, it also connects new businesses to contracting opportunities by requiring active use of supplier scouting by agencies and directs agencies to utilize the Manufacturing Extension Partnership–a national network in all 50 states and Puerto Rico that supports small and medium-size manufacturers–to help agencies connect with new domestic suppliers who can make the products they need while employing America’s workers.
In addition, the order reiterates the president’s strong support for the Jones Act and its mandate that only U.S.-flag vessels carry cargo between U.S. ports, which supports American production and America’s workers. With the signing of the 2021 National Defense Authorization Act, the Jones Act has also been affirmed as an opportunity to invest in America’s workers as the country builds offshore renewable energy, in line with the president’s goals to build the future of clean energy in America.
NCTO launched a new industry video campaign Monday that outlines steps the Biden administration and Congress should take to re-shore the production of personal protective equipment (PPE) and the entire supply chain for critical products.
“We look forward to working with the Biden administration and Congress on immediately strengthening our domestic procurement laws,” Glas said. “The COVID-19 crisis was exacerbated when foreign supply chains broke down, leaving our frontline workers vulnerable, underscoring the vital need for America to manufacture essential medical products at home.”