What is the Buy American Act?

The Buy American Act of 1933 (41 U.S.C. §8301 et seq.) is the federal government's domestic-source preference law. It requires federal agencies to purchase only "domestic end products" — products manufactured in the United States from substantially all US-origin components — unless an exception applies.

What "domestic" means under the current rules (revised in 2022): - For "end products": manufactured in the US AND more than 60% of the cost of components are US-origin (rising to 65% in 2024, 75% in 2029) - For "construction materials": manufactured in the US AND substantially all components manufactured in the US

Exceptions when foreign sources are allowed: - Items determined unavailable from domestic sources - Items where domestic price is "unreasonably" higher (typically more than 20% premium for non-defense, 50% for defense) - Items below the micro-purchase threshold - Items purchased for use outside the US - Trade Agreement Act countries (signatories to WTO Government Procurement Agreement, NAFTA, and similar) — these countries' products are treated as eligible

The Trade Agreements Act (TAA) modifies Buy American by adding eligible countries. For TAA-covered procurements (above certain dollar thresholds, varying by agency), products from over 100 designated countries are treated as eligible.

Buy American compliance requires: - Tracking and certifying country of origin for products and components - Maintaining records for audit - Submitting domestic certifications with bids

Penalties for false certification include contract termination, debarment, and False Claims Act liability.

For vendors, Buy American materially affects sourcing decisions. Many federal contracts require US-origin products that cost more than foreign alternatives — bid pricing must reflect domestic sourcing. The Berry Amendment imposes even stricter domestic sourcing rules on Department of Defense procurement of clothing, food, and certain materials.