President Trump’s “Buy American, Hire American” Executive Order and the Construction Industry

“We will have two simple rules when it comes to this massive rebuilding effort, buy American and hire American” – President Donald Trump

On April 18, 2017, President Trump signed Executive Order No. 13788 implementing his “Buy American, Hire American” campaign promise.

Federal construction contractors familiar with “Buy American” clauses in federal contracts under the Federal Acquisition Regulations (FAR)–which require materials to be manufactured in the United States (or, depending on the clause, not manufactured in certain countries) unless a waiver is obtained–have waited anxiously to see what Trump’s “Buy American, Hire American” promise would mean for them.

Well . . .  as it turns out, not much, at least not yet.

With respect to “Buy American,” the executive order calls on federal agencies to “scrupulously monitor, enforce, and comply with [existing] Buy American laws, to the extent they apply, and minimize the use of waivers, consistent with applicable law.” To aid in this, the executive order requires:

1. the Secretary of Commerce and Director of the Office of Management and Budget (OMB) to issue guidance to federal agencies on how to monitor, enforce and comply with Buy American laws within 60 days of the executive order, or by June 17, 2017;
2. federal agencies to assess their compliance with Buy American laws including the use of waivers by type and impact on domestic jobs and manufacturing, develop policies to comply with Buy American laws, and to report their findings to the Secretary of Commerce and Director of OMB within 150 days of the executive order, or by September 15, 2017, and annually thereafter on November 15, 2018, 2019 and 2020; and
3. the Secretary of Commerce to submit a report to the President with recommendations on how to strengthen implementation of Buy American laws within 220 days of the executive order, or by November 24, 2017, and annually thereafter beginning January 15, 2019.

In short, no new Buy American requirements . . .  at least until President Trump receives the Secretary of Commerce’s report and then decides to do something.

With respect to “Hire American,” which was the most anticipated aspect of Trump’s campaign promise since there are no prior federal “Hire American” laws, the executive order states only that  “[i]n order to promote the proper functioning of the H-1B visa program, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.” While this may impact the tech industry, it will likely have little to no impact on the construction industry which hires few H-1B visa holders and will have no impact on the “hiring” of U.S. construction companies.

In short, thanks for playing.