The next president of the United States has said publicly that under his administration no government contracts will go to companies that don’t manufacture their products in America.
Hang on, so, that means no laptops, no cell phones, no TVs—heck, no furniture, most automobiles, appliances, and—I don’t know, probably—coffee makers? None of those? Well, we looked at the plan and, unsurprisingly, that’s not what it says.
While Joe Biden’s statement got headlines, the stories didn’t explain much about the policy intending to ensure this bold move. Meanwhile, Biden’s website includes over 6,400 words on his “Plan to Ensure the Future is ‘Made in All of America’ by All of America’s Workers”. I know, I counted them all.
[Note: I did not. Microsoft Word did.]
We here at GovConBrief have read them all and can tell you this: While it suggests significant changes, it does not say anything about prohibiting all contracts to entities that provide foreign-made goods. The plan says that companies receiving procurement contracts will be required to use “taxpayer dollars to support good American jobs” and promises to “use taxpayer dollars to buy American and spark American innovation”.
So why is Biden’s statement getting headlines when his plan isn’t? Probably because detailed dives into the policy papers of a person who is not yet president are presumably boring. So boring in fact that I purposely placed the P-sounds in this paragraph to make it less ponderous.
Let’s get to it!
What does the Biden plan say about government contracts?
If you’re a U.S. small business government contractor, an encouraging thing you might find in the Biden plan is the promise of “more”. The plan pledges to make the biggest public purchasing mobilization since World War II. It plans on $400 billion—yeah, “billion”—in infrastructure and R&D purchasing.
Specifics include:
- Clean vehicles and associated products
- American steel, cement, concrete, building materials, and equipment
- Critical medical supplies and pharmaceuticals
- Cutting-edge telecommunications and artificial intelligence
Biden, interestingly, also suggests creating a Federal Procurement Center—a program designed to help minority-owned firms get federal contracts. That’ll be something to keep an eye on.
The plan also states a commitment to the government-wide 23% small business contracting goal. (That’s no change but it’s always nice to hear.)
There are three, I guess you would call them principles, of the plan that seem to focus on government contracts: 1) Buy American, 2) Make it in America, and 3) Innovate in America. We’ll look at each individually.
What does “buy American” mean for government contractors?
Well, the “buy American” provision promises a $400 billion “Procurement investment” in clean energy and infrastructure. So, the Biden administration evidently plans a New Deal-esq commitment to purchasing from American enterprises engaged in green energy and focus on roads, bridges, etc. This, Biden hopes, will drive demand for American products and materials that are “shipped on U.S.-flagged cargo carriers.”
Now, when I first saw this, I was thinking of the Buy American Act, which, in general, requires contracting officers to give a preference to American-made products. And that is a component of it. But Biden says that the federal government has never lived up to the promise of the Buy American Act. The Plan therefore uses the phrase “Make Buy American Real”.
The Biden administration intends therefore to make it 1) harder to achieve “made in America” status with greater penalties for those companies claiming to offer U.S.-made products that are in fact made elsewhere, 2) harder to get Buy American Act waivers.
Biden also wants to strengthen the Buy America—no “n”—provisions related to infrastructure. (Buy America and Buy American are different because of, eh, reasons, I guess.) Buy America requires the steel, iron, and other materials used in transportation projects to be sourced and manufactured in America.
What does “make it in America” mean to government contractors?
Meanwhile, the “make it in America” provision hopes to bring manufacturing back to the U.S. by providing incentives and resources to smaller manufacturers, particularly those owned by women and people of color.
If you’re a government contractor right now, you’re probably thinking that 8(a) and WOSB/EDWOSB manufacturing contracts might be expanding. While you might be right, they are not actually mentioned.
The specifics in the plan include:
- A credit facility designed to support smaller manufacturers
- Increase the size of the Manufacturing Extension Partnership, a public-private partnership at the National Institute of Standards and Technology that provides resources to U.S. manufacturers
- A manufacturing tax credit
- Expansion of Manufacturing Innovation Partnerships
What does “innovate in America” mean to government contractors?
The “innovate” provision promises a $300 billion investment in research and development. You might be thinking SBIR and STTR and, at least regarding SBIR, you’d be right.
The plan specifically includes:
- Increased funding to several science agencies
- Investment in 5G, artificial intelligence, advanced materials, biotechnology, and clean energy vehicles
- A “scaled-up version” of the SBIR program and other programs seeking to provide R&D funding for small businesses
- Technical training programs through the Labor Department
- Infrastructure for new labs, etc. at educational institutions
Is that all?
No. A few other notables: Biden mentions using Congressman Jim Clyburn’s 10-20-30 plan to ensure procurement investment goes to high-poverty areas and using the Defense Production Act (something my colleague Ian Patterson knows a thing or two about) to manufacture medical products such as ventilators in America.
While there’s more to the plan, there’s no other specifics to draw out that federal contractors can use. And we’ve probably taken enough of your time on the day before Thanksgiving.
The takeaway: Biden can say all he wants that products will be made in the U.S. But the world doesn’t change overnight and the government is going to need certain staples that are not made here.