The Biden administration on Tuesday is announcing it will increase requirements for federally procured goods to be sourced domestically, a step officials say will boost U.S. manufacturing and supply chains.
The administration will unveil an update saying that 60 percent of federally procured content must be made in the United States, up from 55 percent under the Buy American Act.
“This increase in the domestic content threshold is a key part of the Administration’s strategic approach to leveraging federal purchasing power to invest in American industry and all of America’s workers,” Livia Shmavonian, the director of the White House’s Made in America Office, said in a statement to The Hill.
“We’re sending a clear signal to the business community to drive new investments, to create good-paying jobs, and to fill gaps in our supply chain — and it’s working,” Shmavonian added.
The administration views the change as a way to increase domestic manufacturing, strengthen supply chains by reducing reliance on foreign goods and put a greater focus on U.S.-made products.
The announcement comes roughly eight months after the White House announced a rule to strengthen the requirements of the Buy American Act, which governs how federal agencies use their spending allotments. The rule change called for gradually raising the domestic content threshold so that 75 percent of federally purchased items are made domestically by 2029, increasing the amount by 20 percentage points over seven years.
Under the rule announced in March, the content threshold will increase to 65 percent in 2024 and 75 percent by 2029.
Biden signed an executive order earlier in his presidency to increase federal procurement of U.S.-made goods by tightening buy American requirements. The order also established the Made in America Office.
The White House Office of Management and Budget sent a memo to agencies and department heads last year outlining how the administration would aim to reduce waivers and increase transparency so the federal government outsources its manufacturing needs less often.