Legislation Eliminates Loopholes That Allow the Government to Purchase
Products Manufactured Outside the United States

July 29, 2003 Washington, D.C. - U.S. Senator Russ Feingold today introduced legislation aimed at strengthening the 1933 Buy American Act and protecting jobs both in Wisconsin and across the country. Feingold's bill would strengthen the Buy American Act by making it harder to waive the Act's requirements that the government buy American made goods. It would also require that information be provided to Congress and to the American people about how often the Act is waived by federal departments and agencies. A summary of the bill is attached.

"The erosion of our manufacturing base needs to be stopped, and Congress should support policies that help to ensure that we do not continue to lose jobs in this vital segment of our economy," Feingold said. "It only makes sense for the federal government to make every effort to purchase goods that are made in America."

Numbers from Wisconsin's Department of Workforce Development indicate that the state has lost more than 77,000 manufacturing jobs in two-and-a-half years.

"The goal of the Buy American Act is for the federal government to buy goods that are made in America, whether it's Wisconsin or another state," Feingold said. "American companies deserve to know that they are not being shut out of this process by the loopholes that exist in the current law. With American jobs heading overseas at an alarming rate, the government should be doing all it can to make sure that U.S. taxpayer dollars are spent to support American jobs."

This legislation is supported by Save American Manufacturing, the AFL-CIO, the U.S. Business and Industry Council, the International Association of Machinists and Aerospace Workers, Milwaukee Valve Company, and the Wisconsin AFL-CIO.

The Buy American Improvement Act of 2003

Under current law, the federal government is supposed to protect American jobs by buying goods made in the U.S. But the law is full of loopholes. The Buy American Improvement Act of 2003, introduced by Senator Russ Feingold on July 29, 2003, will strengthen American manufacturing by making it harder to waive the Buy American requirement.

* Currently, heads of federal agencies have broad discretion to waive the requirement by determining that it is "inconsistent with the public interest" to comply, even after a contract has been opened up for bids.
Feingold's bill will prohibit agencies from invoking the public interest waiver after a request for bids has been published in the Federal Register.

* Heads of agencies can also waive the requirement if they determine that the lowest domestic bid is "unreasonable in cost." Feingold's bill would support American jobs by amending the unreasonable cost waiver to give domestic bidders, or sole domestic source bidders, preference when their bids are substantially the same as their foreign competitors.

* Federal agencies are permitted to waive the requirement if the goods purchased are to be used outside of the United States. Feingold's bill would require federal agencies to conduct an analysis of the difference in cost for obtaining certain goods outside the U.S. versus from a domestic source, including shipping costs, prior to invoking this waiver.

* The requirement can also be waived if it is determined that the needed item is not available from domestic sources "in sufficient and reasonably available commercial quantities and of a satisfactory quality." Feingold's bill would require federal agencies to conduct a study to determine whether domestic production can be initiated to meet procurement needs and whether there is a comparable item available from a domestic source before invoking the domestic availability waiver.

The bill also:

* Requires all federal agencies to submit annual reports on items purchased from foreign sources, including an itemized list of all waivers under the Act, with dollar values. Currently, only the Department of Defense is required to submit such a report.

* Increases the Buy American Act qualifying content standard from the current 50 percent to 75 percent.

* Requires the General Accounting Office to report to Congress with recommendations for defining the terms "inconsistent with the public interest" and "unreasonable cost" for purposes of invoking the corresponding waivers in the Act. These broad terms, which grant wide latitude to agency heads, are not defined in federal law.

* Addresses the crucial issue of dual-use technologies by prohibiting the awarding of a contract or sub-contract to a foreign company to manufacture goods containing any item that is classified as a dual-use item on the Commerce Control List unless approval for such a contract has been obtained through the Export Administration Act process.






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