Buy American Restrictions

BARs were derived from the Buy American Act (BAA) of March 1933 and amended
by the Buy American Act of 1988. Restrictions may take several forms,
including: (a) straightforward prohibition of public sector bodies from
purchasing goods from foreign suppliers, (b) establishing local content
requirements of anything up to 100% of the value of the product, (c)
extending preferential terms to domestic suppliers, and (d) setting up of
manufacturing or assembly facilities in the United States. The BAA
contains four exceptions which permit an executive agency to procure
foreign materials when: (a) items are for use outside the United States,
(b) domestic items are not available, (c) procurement of domestic items is
determined to be inconsistent with the public interest, and (d) the cost of
domestic items is determined to be unreasonable. The Trade Act of 1979
(which addressed implementation of the Tokyo Round) waives the BAA for
certain designated countries which grant reciprocal access to U.S.
suppliers.