EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET W ASHINGTON, D.C. 20503 June 11, 2021 M-21-26 MEMORANDUM FOR HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES FROM: Shalanda D. Young Acting Director SUBJECT: Increasing Opportunities for Domestic Sourcing and Reducing the Need for Waivers from Made in America Laws On January 25, 2021, the President signed Executive Order 14005, Ensuring the Future is Made in All of America by All of America’s Workers (the Executive Order). This Executive Order aims to help American businesses compete in strategic industries and ensure America’s workers thrive. It contemplates a series of actions to enable the United States Government to maximize its use of goods, products, and materials produced in, and services offered in, the United States. These actions include, among other things, requiring the Office of Management and Budget (OMB) to establish the Made in America Office (MIAO). The MIAO will provide greater oversight of waivers from Made in America Laws,1 thus increasing consistency and public transparency of such waivers. The Executive Order also directs the Federal Acquisition Regulatory Council (FAR Council) to consider strengthening applicable Made in America provisions in the Federal Acquisition Regulation (FAR). The MIAO aims to increase reliance on domestic supply chains and reduce the need for waivers through a strategic process aimed at: achieving consistency across agencies; gathering data to support decision-making to make U.S. supply chains more resilient;2 bringing increased transparency to waivers in order to send clear demand signals to domestic producers; and 1 The Executive Order defines “waiver” to include exceptions and waivers under applicable Made in America Laws. This memorandum often uses the term “waiver” generally to include both exceptions to the Buy American Act, waivers under the Jones Act, and other determinations under Made in America Laws unless noted otherwise. 2 Data gathering will be informed, in part, by the results of supply chain reviews conducted pursuant to Executive Order 14017, America’s Supply Chains (Feb. 24, 2021). In addition, as explained in this guidance, the MIAO seeks to gather data using a variety of approaches to support policy decisions to maximize the use of goods, products, and materials produced in, and services offered in, the United States – including product class reviews, agency analyses of waiver activity, discussions with SAOs, and reviews covering specific transactions (e.g., a direct Federal procurement for products or construction materials subject to the BAA). concentrating efforts on changes that will have the greatest impact. Together, these four principles will, over time, increase U.S.-made content and limit the use and impact of waivers. Consistent with these principles, this memorandum provides initial guidance to covered agencies3 (agencies) regarding the MIAO’s implementation of the Executive Order. This memorandum contemplates a phased implementation approach to allow the MIAO to build capacity and to give agencies time to adjust to new processes. The areas of implementation addressed in this guidance include: (1) Senior Accountable Officials. To facilitate implementation of these and other actions contemplated by the Executive Order, this memorandum requires agencies to designate a Senior Accountable Official (SAO) for domestic sourcing. The SAO will coordinate with the Made in America Director to implement a holistic approach to advance the policy set forth in Section 1 of the Executive Order, including by working to increase opportunities for U.S. manufacturing and reduce waivers. (2) Agency reports. This memorandum describes the required elements of the initial and semi-annual reports on use of Made in America Laws that agencies are required to submit pursuant to Sections 11 and 12 of the Executive Order. (3) Agency-OMB waiver review process. Pursuant to Section 4 of the Executive Order, this memorandum publishes a list of information that agencies must include when submitting proposed waivers to the Made in America Director for review and a deadline by which the Director of OMB, through the Made in America Director, will waive each review or notify the head of the agency of the result of the review. (4) Waiver transparency. Pursuant to Section 6 of the Executive Order, this memorandum outlines initial steps toward development of a public website that shall include information on all proposed waivers to Made in America Laws and whether those waivers have been granted. Greater management attention to strategies that incentivize domestic manufacturing investment and centralized management of waivers will send a strong demand signal to industry, thereby incentivizing enhanced domestic production activity and investment in domestic supply chains. As stated above, agencies should take a holistic approach to implementing the Executive Order, including by addressing how they will minimize waivers to all Made in America Laws. As soon as SAOs are identified, the MIAO will begin meeting with them to discuss management strategies to avoid and limit the need for waivers and to review the results of actions taken since issuance of the Executive Order. During the summer of 2021, the MIAO will begin working with SAOs to develop and refine the process and scope for transactional4 reviews that meet the principles described above 3 A covered agency for purposes of this memorandum is an “agency” as defined in section 3502(1) of title 44, United States Code that is not an “independent regulatory agency” as defined in section 3505(5) of title 44, United States Code. 4 A “transactional review,” for purposes of this memorandum, is a review of a waiver covering specific a business transaction (e.g., a direct federal procurement for products or construction materials subject to the Buy American Act). As explained in this memorandum, the MIAO intends to gather a variety of data to support decision-making to 2 without unduly delaying agency decisions. The waiver process will be phased-in, beginning with an initial phase of transactional reviews. The initial phase of transactional reviews includes Jones Act waivers and non-availability procurement waivers proposed by the 24 agencies subject to the Chief Financial Officers Act5 (CFO Act) pursuant to the Buy American Act (BAA). As it conducts these initial transactional reviews, the MIAO will work with SAOs to develop and refine a process to review additional waivers that are not part of the initial phase of transactional reviews (e.g., additional types of waivers, waivers proposed by non-CFO Act agencies) in the first quarter of fiscal year (FY) 2022, as well as to maximize opportunities to promote domestic sourcing. The MIAO will also confer with the General Services Administration to develop the public website required by Section 6 of the Executive Order. The public website is expected to be functioning by early FY 2022 and will include the results of initial waiver reviews completed before website construction is completed. Transparent reporting of waivers from Made in America Laws will not only build confidence that these laws are operating as intended, but also provide data to inform policy development and strategic decision-making. Taking agency input into account, the MIAO will provide further details to agencies prior to implementation of expansions or revisions of the waiver review process, including the processes for waiver transparency. Additional information is provided in the Attachment. Questions regarding this Memorandum should be sent to the MIAO at [email protected]. Attachment make U.S. supply chains more resilient, including product class reviews, agency analyses of their waiver activity, discussions with SAOs, and transactional reviews. 5 31 U.S.C. § 901. 3 Attachment Reducing the Need for Waivers from Made in America Laws Section 4 of the Executive Order requires the Made in America Office (MIAO) to update and centralize the Made in America waiver process. Sections 11 and 12 of the Executive Order require agencies to report to the MIAO on their compliance with Made in America Laws and suggestions for maximizing use of U.S.-made products and construction materials. Section 6 of the Executive Order requires prompt publication of proposed waivers. The MIAO will take a strategic approach to increasing reliance on domestic supply chains and reducing the need for waivers over time. This approach will include the phase-in of a waiver review process, with an initial focus on Jones Act waivers and non-availability procurement waivers pursuant to the Buy American Act under Federal procurements. This renewed emphasis on Made in America Laws is to serve as a key facet in a broader economic strategy to increase U.S. productivity and global competitiveness, as well as the resiliency of our manufacturing base to market volatility and manipulation. Moreover, it recognizes that foreign near-peer competitors are increasingly creating and exploiting economic vulnerabilities in gaining undue influence over the global transportation system, which provides the access to worldwide supply chains that supports our national defense, vital emergency services, critical infrastructure, economy, and way of life. Background As defined in section 2(b) of the Executive Order, “Made in America Laws” include all statutes, regulations, rules, and Executive Orders relating to Federal procurement or Federal financial assistance, including those that refer to “Buy American” or “Buy America” that require, or provide a preference for, the purchase or acquisition of goods, products, or materials produced in the United States, including iron, steel, and manufactured goods offered in the United States. Made in America Laws include laws requiring domestic preference for maritime transport, including the Merchant Marine Act of 1920 (Pub. L. No. 66-261), also known as the Jones Act, and the Cargo Preference Acts of 1904 and 1954. A number of key Made in America Laws are described below. Buy American Act (BAA) – The BAA6 is the primary law in Federal procurement providing a preference for domestic goods and manufactured products.