The Buy American Act vs. Buy American Provision
When you are procuring steel for government contracts it is important to understand the general provisions that are typically included in your contract. Typical provisions included are the “Buy American Act” and “Buy America” provision from the American Recovery and Reinvestment Act. These two provisions sound similar, but have different considerations for meeting each provision’s requirements.
Buy American Act
The Buy American Act was signed by executive order on December 17, 1954. The Buy American Act applies to contracts for construction, alteration or repair of any public building or public work in the United States. The Buy American Act requires that over 50% of the product be attributed to American-made content. The Trade Agreement Act also allows products from countries that have signed certain international trade agreements with the United States to receive nondiscriminatory consideration and qualify for the Buy American Act. The Trade Agreement Act allows products from signatory countries of the following agreements to qualify as domestic products: World Trade Organization; Free Trade Agreement; Least Developed Countries; Caribbean Basin. If your federal contract is over $7,846,000.00 (or over $10,335,931.00 if you are dealing with products from Bahrain, Canada, Mexico or Oman) end-products are generally treated as domestic products in accordance with the Buy American Act. The cost-based waiver for provision is if the domestic materials are 6% more expensive than the foreign materials.
The following countries are generally treated as domestic- producing countries in accordance with the Buy American Act:
World Trade Organization Countries
Armenia, Aruba, Austria, Belgium, Bulgaria, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea (Republic of), Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Taiwan, or United Kingdom.
Free Trade Agreement Countries
Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Korea (Republic of), Mexico, Morocco, Nicaragua, Oman, Peru, or Singapore.
Least Developed Countries
Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina, Faso, Burundi, Cambodia, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Djibouti, East Timor, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, Laos, Lesotho, Liberia, Madagascar, Malawi, Maldives, Mali, Mauritania, Mozambique, Nepal, Niger, Rwanda, Samoa, Sao Tome and Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, Tanzania, Togo, Tuvalu, Uganda, Vanuatu, Yemen, or Zambia.
Caribbean Basin Countries
Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Bonaire, British Virgin Islands, Curacao, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saba, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Sint Eustatius, Sint Maarten, or Trinidad and Tobago.
Buy America Provision
The Buy America provision, also known as the Berry Amendment, was signed into law under the American Recovery and Reinvestment Act. This provision is included in government contracts that are funded wholly or in part by American Recovery and Reinvestment Act funding. This provision requires 100% of the product be American-made content. The cost-based waiver for this provision is if the domestic materials are 25% more expensive than the foreign materials.
This information is provided for informational purposes and should not be construed or relied upon as legal advice. Eiffel Trading, LLC is neither an attorney nor legal counsel, and you should consult an attorney for legal advice regarding the content covered in this article.
References:
http://www.acquisition.gov/far/html/Subpart%2025_1.html
http://www.acquisition.gov/far/html/Subpart%2025_4.html#wp1086589
http://www.acquisition.gov/far/html/Subpart%2025_2.html
http://fas.org/sgp/crs/misc/R42501.pdf