Trump to expand ‘Buy America’ rules to infrastructure projects

The White House will be preparing a completely new executive order expanding rules favoring American-made products in government projects, according to four administration officials as well as two additional people familiar with the matter.

The order, which will be said to be nearing completion, might apply current “Buy America” provisions to programs where they do not currently exist. In particular, the rules will apply to infrastructure projects such as roadways, pipelines as well as broadband.

Earlier iterations of the order sought broader — as well as stricter — mandates for federal agencies to source U.S. goods as well as services, yet the language was significantly tailored during the review process as procedural as well as ideological roadblocks arose, three of these people said.

The Discharge of the order might conclude a contentious process which’s lasted more than six months in which multiple federal agencies as well as offices — the Department of Defense, the modest Business Administration, the Department of Transportation, the Office of Management as well as Budget as well as the White House’s Office of Legal Counsel — raised concerns about the potential purview of the order, originally proposed by one of President Donald Trump’s key trade advisors, Peter Navarro.

Reached for comment, Navarro said: “the idea’s not my job to correct fake news.”

Among the concerns raised in recent months, according to three people familiar with the matter: a legal question of whether the executive branch alone could require vendors to source specific products as well as a financial question of how much such a policy might cost the government. For the latter reason, significant opposition was said to emerge via the Office of Management as well as Budget, which might be tasked with issuing guidance to additional agencies involved within the order.

“The expectation will be which the idea might cost a lot more money,” said one person familiar with the matter, who requested anonymity to discuss a private deliberation. “If an agency chooses to buy a product not made in America, one main reason might be because the idea was more cost-effective.”

The total dollar amount of federal outlays affected by the completely new order will be unclear, as will be the estimate for the potential cost increase.

The federal contracting process already has long-active regulations prioritizing U.S. domestic goods over foreign goods. Under the Buy American Act of 1933, which oversees direct federal purchases, civilian agencies give a cost advantage of up to 12 percent for purchasing U.S. domestic goods, while the Defense Department gives a cost advantage of 50 percent. The “Buy America” rules, which took effect in 1983, pertain to state as well as local transportation projects often funded by the Federal Transit Authority as well as require 100 percent of the materials to come via the U.S.

Under both laws, waivers can be granted if the cost of using U.S. products will be considered unreasonable.

“Typically, if we see a change in sourcing, the idea’s usually going toward a place like China or India as opposed to coming back to the U.S.,” said Michael Mason, partner at Hogan Lovells who represents government contractors. “as well as the reason why companies are doing which will be because labor as well as materials are cheaper, as well as they could offer the government a lower cost.”

The forthcoming proposal expands on previous efforts by the Trump administration as well as, specifically, Navarro’s White House Office of Manufacturing as well as Trade Policy, to reinforce preferences for American goods as well as services in government business.

“The laws have not changed, yet I know agencies have been instructed to ensure which they’re in compliance,” said Karen Harbaugh, partner at Squire Patton Boggs focused on government contracts. “I have seen requests for waivers being given heightened scrutiny.”

A January 2017 executive order required all completely new pipelines to be constructed using American-made material. An April 2017 executive order directed agencies to review existing Buy American policies in order to “maximize” preference for U.S. goods as well as workers. A July 2017 executive order commissioned a wholesale review of the manufacturing as well as supplier base for the Department of Defense. A Pentagon spokesman says the resulting report has been submitted to the White House.

“The Department of Defense continues to work closely with all inter-agency partners to implement policy, legislation as well as executive orders. At This kind of time, there isn’t anything to provide on a completely new or forthcoming executive order,” said Lt. Col. Mike Andrews, a spokesman for the Department of Defense. He referred questions on This kind of specific issue to the White House.

The White House did not respond to multiple emails as well as phone calls seeking comment.

— Follow CNBC’s Kayla Tausche on Twitter:
@KaylaTausche

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