Buy American Act
Instructor: Haroon Baqai
Cost and Price Analysis
12 February 2012
Summarize the main points of the Buy American Requirements.
Of the different acts mentioned in Chapter 2, the one that would possibly give a small-business owner more trouble when trying to sell three million widgets to the federal government is the Buy American Act. When a small business owner is trying to sell or meet a large quantity contract of goods to the government, the owner might try to import the goods from an overseas country just to keep the pricing down and to meet the required delivery dates. By doing these procedures, it would allow the small-business owner to be competitive with some of the larger companies that are capable of producing the three million widgets.
Under the Buy American Act, it requires the federal government to buy domestic articles, materials, and supplies for public use. For an article, material, or supply to be considered domestic it must be an unmanufactured end product mined or produced in the United States; or the end product is manufactured in the United States.
The purpose of this Act is to discourage businesses to sell to the government foreign products. When the government is only buying American made products it is encouraging the American business to produce a product that meets the government needs with pricing and quality. Some of the problems also with purchasing material from overseas vendors is that the required items might contain chemicals that do not meet American standards such as we have seen in some of China’s material containing lead.
Now there are some exceptions to the Buy American Act which include if the items are being used outside the United States; domestic items that are unreasonably priced; information technology that is a commercial item; when compliance to the Act would not be in the best interest of the government; and item purchased only for the commissary resale....