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Buy American Act for Government Contracts - Essay Example

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Buy American Act for Government Contracts

The provisions of the Buy American Act therefore ensure that materials for use in developing public facilities are product of the United States. The particularly designated materials under the act’s control are iron, steel, and their products. If a construction material is a product of foreign raw materials then it only qualifies for application in developing public facilities if at least fifty percent of its raw materials are domestic (Ncsl, 2009). The act however grants leaf for application of such ‘non-domestic’ materials, in the specified category, under three conditions. The first condition is if the material is not domestically produced in either desirable quality or quantity. Leaf is also granted in cases where application of domestic products under the category would inflate costs by more at least 25 percent. A leaf is similarly granted for use of ‘non-domestic’ materials if application of domestic materials would be contrary to the interest of the American people. A contract under such waiver is however supposed to be reported in an official and written form. BAA regulations however exempt some countries, countries with trade ties to the United States. These countries enjoy the benefits as though their products were manufactured in the United States (Ncsl, 2009). Personal position over the Buy American Requirements The Buy American Requirements’ provisions are discriminatory, unfair and against the spirit of globalization and international trade. Selective waiver of the provision to some countries identifies discrimination against the countries to which total waiver is denied. The waiver is particularly designed to favor developed countries that have advanced technology into ‘large-scale’ production. Developing countries for example lacks the capacity to supply higher quantity of materials than can be produced by the United States’ domestic resources. This therefore means that only countries with high production capacity can trade in the regulated materials in America. It is similarly irrational to expect a developing country to exceed the United States in production capacity if both countries have the raw material. The act therefore significantly cuts off developing companies from trade in the specified materials in public facility development. While restricting trade with a foreign country would be rational, basing the reason on quantity is unfair to both the countries that with to trade in the restricted goods and the American taxpayers. This is because cheaper and higher quality materials could be derived from other countries whose production capacity might be lower than that of the United States. I therefore hold the opinion that the act is unfair and discriminatory may negatively influence the spirit of international trade between the United States and some countries (Ludwig, n.d). The Buy American requirement and the government position of a “free market” The provisions of the Buy America act completely contradict claims of a free market in the United States economy. This is because the natural forces of demand and supply control a free market as opposed to establishment of control measures by the act. Developing rules to control the market such as restricting market access to specified sellers therefore undermines the doctrine of a free market system. This is because under free market economy, which America claims to have, trade initiatives are directed by people’s ‘self-interest’ ...Show more

Summary

BUY AMERICAN ACT FOR GOVERNMENT CONTRACTS Summary of the main points The Buy American Act is a legislation that was designed to aid the ARRA provisions by establishing more strict conditions over imports to be used in construction of public utility facilities…
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Buy American Act for Government Contracts essay example
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