FAR Updates: Buy American Act Requirements
On March 7, 2022, the Federal Acquisition Regulation (FAR) for Buy American Act Requirements” was updated as follows:
An important issue that was not finalized in the rule, but will be an important issue on the Buy American horizon is the designation of “critical” items and components. For “critical” domestic items or domestic items made of “critical” components, the rule contemplates a framework for higher price preferences in the form of an “additional preference factor” to be added to the existing price preference for domestic items (which is 20 percent for large businesses, or 30 percent for small businesses). 87 Fed. Reg. at 12791.
The final rule defines “critical items” as domestic construction material or domestic end products that are deemed critical to U.S. supply chain resiliency, and “critical components” as components that are mined, produced, or manufactured in the United States and deemed critical to the U.S. supply chain. Id. at 12797. Subsequent rulemaking will establish the “definitive” list of critical items and critical components at FAR 25.105, as well as their associated additional price preference factors. Id. at 12781. The definition of “component” in FAR 25.003 is currently limited to an article, material, or supply incorporated directly into an end product or construction material. How the new “critical” framework will treat inputs to components – like raw materials or subcomponents – remains to be seen.