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The Buy American Act and The Buy America Act requires the U.S. government to give preference to U.S. made products in its purchases.


The Buy American Act was first passed in 1933 and signed into law by President Hoover.  It requires the United States government to give preference to U.S. made products in its purchases. 


The Buy America Act was enacted in 1983.  It requires the U.S. government to give preference to U.S. made products in mass-transit-related procurements valued over $100,000 and funded at least in part by federal grants.


The Buy American Act does not address the issue of American or foreign labor, only the issue of American or foreign material.


The nationality of the company is not germane to Buy American Act determinations. It is permissible for a contractor to use foreign labor in the performance of a Government contract overseas.


The Davis-Bacon Act is not applicable to contracts performed in foreign countries and, therefore, would not apply to an American base overseas.


The Service Contract Act is limited to contracts within the United States and its territories and expressly excludes U.S. bases within foreign countries.


The Buy American Act does not stop a federal buyer from purchasing a foreign product. Instead, the buyer must add an evaluation penalty to the cost of a product that is not a "domestic end-product.  A "domestic end-product" is one that is (1) manufactured in the U.S., and (2) composed of at least 50 percent U.S.-made components.


Civilian agency buyers must add a 6-percent penalty to an offered price for foreign-made products or a 12-percent penalty if the competing domestic vendor is a small business or operates in a labor surplus area. Defense agency buyers add a 50-percent penalty to the foreign company's offered price. But the penalties make winning a lot less likely. Not surprisingly there is great incentive to classify products as American-made.


Under the new Executive Order signed by President Trump in 2016 only the head of agencies will be allowed to approve waivers of Buy American Laws.


The Trade Agreements Act (TAA)  usurps application of the Buy American Act. TAA Exempt certain countries from the Buy America Act.  See TAA Designated Countries.  It also, permits the government to procure products and services from overseas companies if the cost exceeds the following thresholds: 


-Procurement of supplies and services -- $169,000

-Procurement of construction services -- $6,481,000


The North America Free Trade Agreement (NAFTA) also permits procurement from overseas sources if the threshold exceeds:


-Procurement of supplies and services -- $25,000(Canada) $56,190(Mexico)

-Procurement of construction services -- $7,304,733


Congress passed the TAA to meet certain requirements under The General Agreement on Tariffs and Trade (GATT). The TAA requires federal agencies to treat the products of countries that have signed the GATT's Government Procurement Code (GPC) as favorably as those produced in the U.S.  Certain types of goods and services are exempt.




Resource Remarks

Buy America Handbook

Provides details on the Buy America Program.

Buy America Policy Statements

Find policy statements published on the Buy America Act.

Contractors' Use of Foreign Labor on Federal Contracts

Learn how foreign labor can be used on federal contracts.

Davis Beacon and Related Acts

The Davis-Bacon and Related Acts, apply to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works.

Federal Acquisition of Foreign Supplies and Services


Rules and conventions of government contracting explained.

Notice of Proposed Buy America Waivers

Find published waivers of the Buy America Act.

TAA Exempt Countries

See a list of countries exempt from The Buy America Act.

The General Agreement on Tariffs and Trade (GATT).

This booklet contains the complete text of the General Agreement together with all amendments which have become effective since its entry into force.

The Service Contract Act FAQ pagae

Frequently Asked Questions Pertaining to the Issuance of Wage Determinations.

The Walsh-Healey Act

A US federal law on basic labor rights for US government contracts.

White House

Made In America home page.




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