Federal Procurement: International Agreements Result in Waivers of Some U.S. Domestic Source Restrictions

Over the years, Congress has enacted a variety of laws designed to encourage federal agencies to purchase U.S. supplies and services. These laws are commonly referred to as domestic preference laws or domestic source restrictions. Perhaps the best known of these laws is the Buy American Act, a 1933 law that established a statutory preference for U.S. supplies and construction materials. At the same time, Congress has approved a number of international agreements that open certain government procurements to goods and services from countries that are parties to those agreements. In addition, the Department of Defense (DOD) has entered into reciprocal procurement memoranda of understanding (MOUs) with some of its foreign counterparts, under which DOD may procure goods and services from those countries. Congress asked us to determine the effect of international agreements on the applicability of U.S. domestic source restrictions. In response, this report (1) identifies the current international trade agreements to which the U.S. is a party that contain government procurement provisions, as well as the reciprocal defense procurement MOUs, and (2) describes how these trade agreements and MOUs affect the applicability of selected domestic source restrictions.