Proposed regulations: Domestic preferences in government procurement

Proposed regulations aim to increase U.S.-made content in federal purchases and bolster critical supply chains.

Aim to increase U.S.-made content in federal purchases and bolster critical supply chains

The Department of Defense—together with the General Services Administration (GSA) and National Aeronautics and Space Administration (NASA)—have issued proposed regulations [PDF 433] to amend the Federal Acquisition Regulation (FAR) in an effort to implement an executive order addressing domestic preferences in government procurement.

The proposed regulations appear in today’s edition of the Federal Register.


President Biden on January 25, 2021, signed Executive Order 14005 that contemplates a series of actions to enable the U.S. government to maximize the use of goods, products, and materials produced in the United States in order to strengthen and diversify domestic supplier bases. These actions include:

  • Regulatory amendments to the implementation of the “Buy American Act” in FAR Part 25 to fit the current realities of the U.S. economy
  • The creation of a “Made in America Office” within the Office of Management and Budget to provide centralized management of domestic sourcing activities across federal procurement, federal financial assistance, and maritime policies
  • A public website with information on all proposed waivers to the Buy American Act and other “Buy American” laws, as defined in the executive order, to help more U.S. firms access federal contracting and provide data to the Made in America Office to inform policy development for domestic sourcing
  • A review by the Federal Acquisition Regulatory Council (FAR Council), in consultation with the Made in America Office, of the longstanding statutory exemption from the Buy American Act for commercial information technology (IT) to determine if the original purpose or other goals of the exemption remain relevant in the current economic and national security environment

Proposed regulations

Today’s proposed rule addresses Section 8 of Executive Order 14005, requiring the FAR Council to strengthen the effect of the Buy American Act.

As explained in a related fact sheet released by the Biden Administration, the proposed regulations aim to increase U.S.-made content in federal purchases and bolster critical supply chains, and direct the following changes to strengthen the Buy American requirements, for instance, by:

  • Making the Buy American initiative “real” and close loopholes by increasing the domestic content threshold
  • Strengthening domestic supply chains for critical goods with new price preferences
  • Increasing transparency and accountability in the Buy American rules

Comments are due on or before September 28, 2021. A virtual public meeting is scheduled for August 26, 2021.

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057

Steve Brotherton
Principal and Global Export and Sanctions Leader
T: 415-963-7861

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094

Irina Vaysfeld
T: 212-872-2973

Amie Ahanchian
T: 202-533-3247

Christopher Young
T: 312-665-3229

Gisele Belotto
Managing Director
T: 305-913-2779

George Zaharatos
T: 404-222-3292

Andy Doornaert
Managing Director
T: 313-230-3080

Jessica Libby
Managing Director
T: 612-305-5533

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