Buy American Act (BAA) | Buy America Act | Trade Agreement Act (TAA)
Purpose
Federal government must prefer U.S.-mined, produced, or manufactured goods for use in the United States.
Domestic End Product Test (Two-Part Test)
1. Manufactured in the U.S.
- Product must be completed in the form required for government use within the United States.
- GAO interpretation: manufacturing = final completion happens domestically.
2. Component Cost Requirement
- Domestic components must exceed a set percentage of total component cost.
Component Thresholds
Products NOT predominantly made of iron or steel
- Domestic components > 60% of total component cost.
Products made wholly or predominantly of iron or steel
- Foreign iron/steel must be < 5% of total component cost.
COTS (Commercially Available Off-The-Shelf) Items
- Components test is waived for COTS items.
- Exception: The waiver does NOT apply to products wholly or predominantly made of iron/steel.
When Does the Buy American Act (BAA) Apply?
General Applicability
BAA applies to federal acquisitions over $10,000.
Interaction with the Trade Agreements Act (TAA)
TAA Waiver of BAA: Under the Trade Agreements Act, the government waives BAA requirements for certain foreign products.
What Products Qualify for the Waiver?
Products from designated countries — countries with international trade agreements with the U.S.
Products from countries meeting special criteria:
- Least developed countries
- Caribbean Basin countries (often included depending on context)
Effect of TAA Coverage
In TAA-covered acquisitions:
- Designated country products are treated equally to U.S. domestic products.
- They receive equal consideration during evaluation.