Buy American Requirements
The Buy American Act (41 U.S.C. 10a-10d) was enacted in 1933 to encourage the federal government to buy from American companies it does not apply to professional or personal services. There are some requirements that listed under the Buy American Act (BAA) that companies need to pay attention to. The Act requires all iron, steel, and manufactured goods that are incorporated into a public building or public work be produced in the United States (U.S.). This does not require individual components and raw materials that comprise a manufactured good originate in the U.S. Only the final manufactured product, must be assembled or manufactured into it final form in the United States, that will be incorporated into the public building or public work. It also does not require machinery and tools used by project laborers be produced in the U.S. It does require you to maintain adequate records documenting all procurement in their compliance with the Buy American Act. The restrictions are not applicable in acquisition subject to certain trade agreement. Under “Foreign Acquisitions” in the Federal Acquisition Regulations (FAR) Part 25 where most of the rules are located, it list some exceptions that Congress over the years have modified the law to justify buying foreign product when need be. Some exceptions are: if the products acquired are for use outside the U.S., if the product is not reasonable available in sufficient commercial quantities in the domestic market, the cost of the domestic product is unreasonable, and if the products are commercial information technology items. The Buy American Act does not apply to procurements under the micro purchase threshold according to the Federal Acquisitions Act of 1994. The Trade Agreement Act (FAR 52.225-12) waives the “Buy American Act” for eligible products purchased form countries that have signed an international trade agreement with the U.S. (ACE Inc.,).
I don’t think I really agree with this Act and I might be a little basis since I’m out of country (Egypt). I do think the act was made for the great depression to try and get the economy back running smoothly and get the Country back on their feet. If a contractor violates this Act it can be debarred form bidding on government contracts. In these times, I think it is very hard to ensure companies are still using the Act properly. When you have countries producing material at a cheaper cost than what it cost in the U.S., most companies will tend to lean to the lower cost for more profits.
I do not feel that these requirements are contradictory to the claims that we consider ourselves a “free market” in which our government promotes competition. When these requirements were considered it was a bad time for the economy, so the government was trying anyway possible to figure out a way to bring money back into the country. Creating requirements for agencies within the government to buy American products was a good way to put money back into the slumping economy.
The exceptions to the Buy American Requirement set by the government is really a needed break to be able to justify what the actually cost and material will be to from procuring for an outside cheaper choice. At the time it was fair and advantageous for our economy because it was working great. Over the years we are finding higher cost of American material vise foreign material that is in accordance with the requirements that are need to complete the projects. So the exceptions are fair depending on what country you are in and the requirements for the job.
Overall I think the Buy American Act was set for a good cause, but now it appears that the rest of the world reduce labor cost to get more business Buy American Requirements
The Buy American Act (41 U.S.C. 10a-10d) was enacted in 1933 to encourage the federal government to buy from American companies it does not...
Please join StudyMode to read the full document