What does “manufacturing” mean to you? The US government wants to know | Foley & Lardner LLP


You are probably aware that the Buy American Act (BAA) establishes a preference, in the purchases of US government agencies, for the purchase of items made in the United States. But did you know that the BAA contract clause does not itself define the term “made in the USA?”

Everyone agrees that the BAA’s domestic preference is supposed to benefit American manufacturers, but there is less consensus when it comes to defining exactly what operations must be performed in the United States to constitute a national “manufacturing”. The Made in America Office of the U.S. Office of Management and Budget (OMB) raised this lack of consensus in a recent Request for information (RFI)seeking public input on how the federal government should define national manufacturing standards under the BAA.

For iron/steel articles, many national preference requirements contain explicit instructions on manufacturing processes that must be performed in the United States: All manufacturing process from the melting stage to the application of a protective coating. And, even for non-iron/steel articles, there are certain minimal finishing operations, such as packaging or painting, which are clearly not considered to be the “manufacture” of the underlying product. However, consensus and clarity become more difficult to achieve when trying to determine whether the final steps of a multi-step manufacturing process in the United States are significant enough to be considered domestic “manufacturing” versus to the previous steps carried out in a foreign country. country.

When a product has undergone significant processing outside the United States prior to its arrival in the United States for final processing, the assessment of the ability of processing in the United States to constitute domestic “manufacturing” generally requires a evidence-based analysis that assesses the comparative time, complexity, and value of processing operations performed in the United States and in foreign countries. Courts, the U.S. Government Accountability Office (GAO), and federal regulations have all formulated slightly different definitions or standards for what it means to “manufacture” an item, and OMB is now seeking public comment on “the meaning of manufacturing to determine if an end product is manufactured in the United States.

Manufacturers wishing to comment on the OMB RFI and offer their suggestions on how to define manufacturing for the purposes of the national preference requirements should submit their comments through the Federal Electronic Rulemaking Portal before Monday, June 6, 2022.

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