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Buy American Act

Essay by   •  December 9, 2011  •  Essay  •  1,079 Words (5 Pages)  •  3,258 Views

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1). Summarize the main points of the Buy American Requirements.

The Buy American Act was enacted in 1933. It governs procurements by the federal government. It aims to favor domestic products and it limits what can be procured from outside sources (sources that are not domestic). The products must be domestic end products in that they 1.) must be manufactured in the United States and 2.) the cost of domestic components must be more than 50 percent of the cost of all the components, with the exception of commercial off the shelf (COTS) items. This does not apply to procurements under the micro purchase threshold which is currently $3,000.00, and certain trade agreements. The Buy American Act applies to small business set asides. Small business set asides are solicitations that can only be awarded to a small business. The policy of the act is to purchase only (with a few exceptions) domestic end products for public use in the United States. There are exceptions to the Buy American Act that allow the contracting officer to procure supplies from a foreign source. These exceptions are public interest and nonavailability. The rules of the Buy American Act do not apply to acquisitions that have to abide by certain trade agreements. The Act differentiates between manufactured and unmanufactured articles. An unmanufactured article will be deemed a domestic end product or construction material if it has been mined or produced in the United States. Manufactured articles are considered domestic if they have been manufactured in the United States from components, "substantially all" of which have been mined, produced, or manufactured in the United States. "Substantially all" means that the cost of foreign components does not exceed 50 percent of the cost of all components (Buy American Act).

2). Explain whether or not you agree with the Buy American Requirements, and give the reasons for your opinion.

I agree with the requirements of the Buy American Act. The Act is directly aimed at benefitting our economy. It helps keep more jobs in the United States and shows loyalty to our country. I am a veteran and am proud to know that such an Act exists. I agree with the Act but I can also see where it would be a hindrance to some businesses, but it is better for the majority. Where we purchase products (where we invest our money) has a great impact on our economy.

3). Given that our government claims to promote competition, and that we call ourselves a "free market" (a.k.a. a capitalist society), do you think these requirements are contradictory to these claims? To some, "free market" means being able to procure material from anywhere in the market. Yes, I do think these requirements are contradictory to these claims because a business is really being told where to purchase their products from. This may not always be in their best interest. Support your answer with arguments and examples. An example would be if I were a small business without any manufacturing capabilities and wanted to quote on a solicitation that was over the micro purchase threshold. A manufacture in another country offered the products to me way cheaper than I could acquire them here. The manufacturer here cannot produce them for less, so he purchases 30% of the materials from the foreign manufacturer and manufactures the product himself and sells it for way more than I would have. I, on the other hand, don't have any manufacturing capabilities. I also cannot purchase the full

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