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Federal law imposes a number of restrictions requiring federal agencies to acquire items that are produced or manufactured in the United States. The Buy American Act of 1933 (BAA), the first of the major domestic content restriction laws, requires federal agencies to apply a price preference for “domestic end products” and use “domestic construction materials” for covered contracts performed in the United States. Whether an end product (i.e., an article, material, or supply to be acquired for public use) is considered domestic for BAA purposes depends, in part, upon whether it is unmanufactured or manufactured and whether it “consist[s] wholly or predominately of iron or steel.” Federal law establishes a number of “exceptions” or circumstances in which an agency may purchase foreign end products or permit the use of foreign construction materials without violating the BAA.

In addition, some of the restrictions imposed by the BAA are waived pursuant to the Trade Agreements Act of 1979 (TAA). The TAA permits the President to waive domestic content restrictions that would discriminate against eligible products or suppliers from countries that have trade agreements with the United States. This distinction means that covered end products or construction materials imported from a designated country are treated as domestic end products or materials for purposes of the BAA when they have been wholly grown, produced, or manufactured in a designated country or have been “substantially transformed” into new and different articles within a designated country using materials from foreign nondesignated countries.

Some domestic content restriction laws apply only to specific federal agencies. For example, the Berry Amendment, which applies specifically to the Department of Defense (DOD), requires DOD to purchase certain items that have been entirely grown, reprocessed, reused, or produced within the United States, with certain exceptions (e.g., procurements by vessels in foreign waters). DOD is also subject to a specialty metals restriction, which requires that certain types of steel and metal alloys contained in aircrafts, missile and space systems, ships, tank and automotive items, weapon systems, ammunition, or any components thereof purchased by DOD be melted or produced in the United States, with certain exceptions. There are also a number of other domestic content restrictions that apply in specific contexts and, in many cases, are intended to address perceived gaps in the BAA.

https://crsreports.congress.gov/product/pdf/R/R46748 (27 pages)

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