The federal government’s “Buy America” procurement policies are supposed to help American businesses, but far too often companies are awarded waivers that allow them to export jobs overseas for reasons as vague as “unreasonable costs.”
Just days into office, President Biden put muscle behind a campaign pledge to strengthen U.S. manufacturing with his “Made in America” executive order. Key to Biden’s directive is increasing scrutiny of those waivers.
Although the order doesn’t close the loopholes, it does mandate one very important change to keep federal agencies accountable for the waivers they issue: Better reporting and transparency. Under the order, the General Services Administration will create a public website where all waiver requests will be posted.
As long as the website is kept current and easy to use, it should become much easier for American manufacturers to anticipate demand for domestic goods, challenge the waivers and ultimately get them reversed.
Thus, with this order, billions of dollars in federal contracts and tens of thousands of American jobs will hang on the performance of this site. Here’s what this website must include if American manufacturers are to have a chance:
- Waiver requests from all federal agencies;
- Determinations of past requests;
- Quantity of parts or materials needed;
- Production deadlines;
- Price the government would pay under a waiver;
- Maximum price the government is willing to pay to have the item domestically manufactured;
- Deadline to file objections to the waiver; and
- A way for American manufacturers to easily communicate with procurement officers about what they are in fact able to provide.
When I was CEO of United Streetcar, I applied for at least one waiver on a rare fastener. We needed millions of them. I recall thinking at the time—about 15 years ago—there must be an American company that could retool and make these fasteners, if I only had a way to tell every fastener manufacturer in America that I needed them. The asymmetry wasn’t in the technology; it was in the information. It was very difficult to determine if any American company could make what we needed at a competitive price.
You’d think it would be easier today. Not really.
A recent New York Times article told the story of how U.S. manufacturers of N95 masks are being boxed out of the American market, unable to sell a product people are desperate to buy. Why? First, Chinese masks are cheaper by just a few cents. Second, Amazon and other online retailers have barred direct-to-consumer sales of N95 masks to keep supplies moving to front-line workers. That means new mask manufacturers have just one market: businesses. And it turns out many hospital systems and state and local governments simply don’t want to go through the hassle of switching vendors, especially to one that costs a little more. As a result, DemeTech in Miami, Fla., is sitting on 30 million N95 masks it can’t sell.
Under Biden’s executive order, at least some of those government purchases of foreign masks would have to be reported in the new GSA database, giving DemeTech a place to start in matching its mask supply with a critical demand. So the federal government is about to create much more than a website—it is potentially providing a way for America to retain and recover tens of thousands, if not hundreds of thousands, of jobs.
U.S. manufacturers have waited long enough for “Buy America” to actually mean that. With the benefit of new leadership and the tools to enforce the policies, now it’s in the hands of government workers to get this right.
Chandra Brown is the CEO of MxD, the nation’s digital manufacturing institute, and the former deputy assistant secretary of manufacturing at the Commerce Department.
source: GoveExec
