The New Buy America Executive Order: Potential Implications for DoD
I thought you might be interested in the Defense News article where I’m quoted (see link below) that discusses the potential implications for DoD of the President’s new Buy America Order, which directs a U.S. government-wide review of the use of Buy America waivers– with a focus on limiting their use in U.S. procurement of foreign goods and services in order to create U.S. jobs.
While it is uncertain what the review will ultimately show and what its impact will be on DoD programs, several facts are worth considering. First, the bulk of U.S. procurement dollars is spent by DoD – hence, most of the total dollar value of the waivers government-wide are also likely to arise from DoD procurement. Second, most of the foreign participation in U.S. defense programs is at the subsystem and component level (i.e., whether these items and services are integrated into supply chains of U.S. prime contractors). With respect to Buy America, according to available data, the largest use of Buy America waivers by DoD is for items/services consumed overseas (roughly 68% over a period of years). This presumably includes consumption by U.S. bases and other overseas operations and installations. But the second largest use is for imports from “qualifying countries” (roughly 21%). This includes imports from21 leading allies with reciprocal procurement MOUs.
Whether DoD will seek to eliminate these agreements and/or more broadly restrict foreign participation in defense programs remains to be seen. In all events, it certainly would be prudent for defense firms that participate in U.S. government programs to assess the potential impact of the Executive Order on their business operations and identify their vulnerabilities.
text of order: https://www.marketwatch.com/story/text-of-president-trumps-buy-american-and-hire-american-executive-order-2017-04-19