FR 2021-00708

The recent Federal Acquisition Circular (FAC) 2021-04 addresses new regulations jointly issued by the Department of Defense (DoD), the General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA). This document sets out changes to the Federal Acquisition Regulation (FAR), placing a greater emphasis on utilizing American-made goods, with the intent to boost domestic economic growth and create employment opportunities.

General Summary

The essence of the new rule is to strengthen the domestic preference criteria under the Buy American statute. Specifically, it raises the domestic content requirement significantly—from 50% to 95% for iron and steel, and from 50% to 55% for other products and construction materials. Additionally, changes to price evaluation preferences are intended to support these goals by making U.S. goods more competitive against foreign products.

Significant Issues and Concerns

• Lack of Specific Implementation Dates: One notable issue is the document's failure to specify effective dates for the rule changes, directing readers to separate documents. This lack of clarity might lead to confusion or delays, particularly for businesses needing immediate compliance information.

• Tautological Language: The document includes a tautology with its definition of foreign iron and steel, stating that these are products not produced in the United States. This redundancy does not add informative value and might be perceived as lacking clarity.

• Economic Impact Analysis: The rule notes that it "will not have a significant economic impact on a substantial number of small entities" but does not offer concrete data or detailed analysis to substantiate this claim. This absence might be viewed critically by those seeking transparent and evidenced-based rule-making.

• Stakeholder Engagement: There is no mention of feedback or consultation with small entities regarding the rule changes. This omission could raise concerns about the inclusiveness and adequacy of stakeholder engagement during the drafting process.

Public Impact

The broader public may benefit from these changes through strengthened national economic security. By prioritizing American-made goods, the new rule aims to invigorate local production and create jobs. This may have a ripple effect on communities, potentially leading to enhanced economic stability and prosperity.

Stakeholder Impact

• Small Businesses: For small businesses, the increase in domestic content requirements could translate into new opportunities. However, for those reliant on foreign-sourced goods, adapting to these changes might incur additional costs or logistical challenges.

• Large Businesses: Larger firms might see significant changes in their supply chains and cost structures, especially those in industries heavily reliant on foreign materials. While they may benefit from increased competitiveness in domestic markets, adaptation might require substantial shifts in procurement practices.

In summary, while the aims of FAC 2021-04 seem aligned with promoting domestic economic interests, the document's omissions and lack of detailed analysis could pose challenges for stakeholders navigating these regulatory changes. The overall impact will largely depend on the successful implementation and clear communication of these regulations.