The second pillar of the Buy American Act, the price preference, also saw a significant change. For procurement where the Buy American Act applies, the calculated bid pricing from a company offering a foreign end product (that not meeting the American Made content as defined above), will include an adder (increase) when compared to a domestic item offered against the same contract. That adder varies depending upon the size of the American Manufacturer making the product: from a large business the adder is 20%, and a 30% increase when compared to a domestic item offered by a small business. For example, in the case of a procurement request issued for 1,000 pounds of type X-750 spring wire for a new Corp of Engineers dam project, two bids are received: imported (product of Korea) material is offered at $20.00 per pound and large American manufacturer's product is offered at $23.00 per pound. In determining the award, the price used for comparison will be $24.00 (+20% of bid price for the Korean material) and $23.00 , with the award going to the large American manufacturer. Had the product been from a small American manufacturer, the imported material's bid would have been calculated at $26.00 (+30%) for comparison, again with the outcome being an award to the American Made wire.
This new standard is an increase from 6% and 10%, respectively. As a note, The price preference is used for evaluation purposes only, and is not the price the agency will actually pay.
These changes become effective on February 22nd - but more changes are expected later this year. On January 25th, President Biden signed an executive order directing further changes to the law. On the surface, it appears the changes will be far reaching. One of the high points from the order include the establishment of the Made in America Office to ensure enforcement of the Buy American Act, a mechanism that has been lacking at the contract level for many years, and will likely expose loopholes in the system, mainly in the exemption process for products "not reasonably available" in the United States. The order also discussed creation of methods to actively seek out domestic suppliers, and further increases to the Made in America pricing preference requirements addressed above.