Buy America and Buy American: What’s the difference and why it matters
Thu Oct 19, 2017
In this first year of Donald Trump’s administration, American sourcing requirements are receiving heightened focus that impacts business by providing opportunities and threats.
For instance, President Trump’s “Buy American Hire American” executive order restates the policy of the government to buy American. Federal agencies are required to make an assessment of what the executive order calls the “Buy American Laws” aimed at maximum use of United States materials. The executive order is now on the road to changing the landscape of preferences for American products by the end of the year.
When a company is asked to certify to its customer that its products comply with domestic content law, the answer is rarely straightforward. Considering the new executive order, contractors must be proactive and understand the Buy America Act and the Buy American Act.
The penalties for non-compliance are serious and include civil or criminal False Claims Act violations, suspension or debarment from contracting, contract terminations and other claims against a contracting business by the government. In recent years, the Department of Justice has increased efforts to prosecute False Claims Act violations in concert with Buy American violations. In 2016 alone the Department of Justice obtained more than $4.7 billion in settlements and judgments from civil cases under the False Claims Act.
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