Federal Agencies Spent Over $92 Billion on Foreign Contracts Because of Buy America Loopholes

Elizabeth Brotherton-Bunch

Elizabeth Brotherton-Bunch Digital Media Director, Alliance for American Manufacturing

Michigan Sen. Debbie Stabenow (D) is a longtime proponent of Buy America, which ensures that when the federal government builds new infrastructure or buys new goods, the materials and products purchased are American-made.

It’s commonsense policy, as it reinvests taxpayer money into local communities, supporting job growth and strengthening the economy.

But loopholes have meant that some federal agencies have skirted Buy America — and so Stabenow wanted to find out just how much money is being sent overseas.

Spoiler: It’s a lot.

A new report from Stabenow’s office found that 13 federal agencies used Buy America loopholes to spend more than $92 billion on foreign contracts between 2008 and 2016.

The Defense Department led the way, spending nearly $85 billion on foreign contracts because of loopholes (and spent about $154 billion total on foreign purchases during that same period). The department, unfortunately, has a history of skirting these laws — 81 out of 280 Defense Department contracts were found to not comply with Buy America, a recent audit by the agency’s inspector general found.

And while the Defense Department is certainly the biggest offender, it is hardly alone. Other agencies that used loopholes to spend money on foreign contracts include the State Department, which spent nearly $2.5 billion; the Department of Homeland Security, which spent more than $1.58 billion; and the Treasury Department, which spent more than $510 million.

These agencies bypass Buy America in a variety of ways, including granting themselves an exemption if a particular item isn’t available in “sufficient quality or quantity” from U.S. manufacturers; if an agency determines complying with Buy America is “inconsistent with the public interest,” such as responding quickly to a national emergency; and if a product is set to be used outside the United States, like at an embassy or for overseas military operations.

The problem is that federal agencies have often stretched the limits of the loopholes, the report notes.

“[F]ederal agencies have abused their authority by granting domestic non-availability waivers even when a U.S. manufacturer could clearly fill the intended contract,” the report states. “In February 2018, DoD’s Inspector General issued a report finding multiple instances when DoD contracting officials improperly purchased foreign-made items… In one documented example, Air Force officials did not perform adequate research to find American vendors to produce Buy American-compliant football uniforms. Instead, officials issued two domestic non-availability waivers to purchase foreign made jerseys and pants.”

Agencies also are allowed Buy America waivers if a purchase is from a company that is located in a country that has joined certain free-trade agreements with the United States. This eases certain Buy America restrictions, so long as U.S. manufacturers are given equal access to that country’s market.

The problem is that the United States is rarely given that access.  “These agreements have given foreign manufacturers substantially more opportunities to bid on U.S. government contracts and have shortchanged American manufacturers,” the report states.

For example, the United States opened about 80 percent of its federal procurement market in 2010 to countries that were signers to the World Trade Organization (WTO) Agreement on Government Procurement. Other signers gave significantly less access to their markets; South Korea granted access to just 13 percent of its total procurement spending, while the European Union provided U.S. companies access to just 16 percent.

Stabenow recommends strengthening Buy America laws in the report, including via her Make It In America Act, which seeks to close Buy America loopholes, further prioritize American companies, eliminate the overseas exemption, and create more transparency in the foreign procurement process. The senator is also supportive of the Made In America Act of 2018, which would add new Buy America requirements to 16 federal programs.

“My report shows that foreign companies are benefitting from loopholes in our nation’s Buy American laws," Stabenow said. "My agenda closes these loopholes, holds the federal government accountable, and creates opportunities for Michigan businesses and workers.”

Find the whole report here.

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Reposted from AAM

Posted In: Allied Approaches, From Alliance for American Manufacturing

Union Matters

Failing Bridges Hold Public Hostage

From the USW

From tumbledown bridges to decrepit roads and failing water systems, crumbling infrastructure undermines America’s safety and prosperity. In coming weeks, Union Matters will delve into this neglect and the urgent need for a rebuilding campaign that creates jobs, fuels economic growth and revitalizes communities.

The Seattle Department of Transportation (SDOT) gave the public just a few hours’ notice before closing a major bridge in March, citing significant safety concerns.

The West Seattle Bridge functioned as an essential component of  the city’s local and regional transportation network, carrying 125,000 travelers a day while serving Seattle’s critical maritime and freight industries. Closing it was a huge blow to the city and its citizens. 

Yet neither Seattle’s struggle with bridge maintenance nor the inconvenience now facing the city’s motorists is unusual. Decades of neglect left bridges across the country crumbling or near collapse, requiring a massive investment to keep traffic flowing safely.

When they opened it in 1984, officials predicted the West Seattle Bridge would last 75 years.

But in 2013, cracks started appearing in the center span’s box girders, the main horizontal support beams below the roadway. These cracks spread 2 feet in a little more than two weeks, prompting the bridge’s closure.

And it’s still at risk of falling.  

The city set up an emergency alert system so those in the “fall zone” could be quickly evacuated if the bridge deteriorates to the point of collapse.

More than one-third of U.S. bridges similarly need repair work or replacement, a reminder of America’s urgent need to invest in long-ignored infrastructure.

Fixing or replacing America’s bridges wouldn’t just keep Americans moving. It would also provide millions of family-supporting jobs for steel and cement workers, while also boosting the building trades and other industries.

With bridges across the country close to failure and millions unemployed, America needs a major infrastructure campaign now more than ever.

 

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There is Dignity in All Work

There is Dignity in All Work