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DOD, NASA, GSA Issue Final Rule on Domestic Content Requirements

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The Department of Defense, NASA and the General Services Administration have released a final rule that seeks to raise the domestic content threshold for federal procurements to 75 percent by calendar year 2029.

The rule is set to take effect on Oct. 25th and amends the Federal Acquisition Regulation to implement an executive order that seeks to support domestic manufacturing by strengthening the use of federal procurement, according to a Federal Register notice published Monday.

In January 2021, an executive order was signed to require federal agencies to purchase U.S-made products and services as part of efforts to support U.S. businesses, manufacturers and workers and strengthen the enforcement of Buy American laws.

Under the new rule, the domestic content threshold will increase from 55 percent to 60 percent in the near term and then rise to 65 percent by calendar year 2029.

The policy will implement a fallback threshold to permit a domestic content threshold of 55 percent in cases where products that meet the higher threshold are unavailable or are of unreasonable cost.

The final rule will also provide a framework “through which higher price preferences will be applied to end products and construction material deemed to be critical or made up of critical components,” the notice reads.