July 22, 2024

Report: Pentagon Skirting Buy American Act, Costing U.S. Jobs

The U.S. Department of Defense (DOD) spent over $163 billion of taxpayer money on goods manufactured by foreign companies since 2007, according to a report released by U.S. Sen. Chris Murphy (D-CT).

The report sounds the alarm on the staggering amount of Buy American Act waivers granted by the DOD and other federal agencies. In 2013 alone, the DOD used 28,887 waivers and spent $19.7 billion on foreign goods.

“This is a simple concept: the United States government should give preference to American manufacturers when it purchases goods with taxpayer dollars. But right now that’s not happening,” said Murphy. “Instead of investing billions of dollars in our manufacturing economy, we’re shipping money and jobs overseas.”

The Buy American Act, enacted in 1933, is supposed to give U.S. manufacturers a leg up on foreign firms during federal procurement. Most of the waivers granted by the Department of Defense fall under the blanket exemption of “goods used overseas.”

“While we were engaged in two wars, with military personnel all over the world, it is clear that this exemption makes the Buy American Act almost meaningless,” the report says.

The waivers are creating what the report calls a “vicious cycle” of U.S. manufacturing job loss. The DOD will often award contracts overseas instead of working with U.S. companies that are the last manufacturer of a certain item, “thereby assuring the demise of a struggling domestic manufacturer.”

Murphy has introduced a bill to update the Buy American Act and reorient procurement decisions toward American manufacturers. The 21st Century Buy American Act closes many of the loopholes that the DOD and other federal agencies have been using to get around domestic production requirements.