Written by Micki Vandeloo, GPC, President, Lakeview Consulting, Inc.
On January 25, 2021, President Joe Biden signed the Made in America Executive Order, which included the following key directives:
- Federal agencies must close current loopholes in how domestic content is measured and increase domestic content requirements.
- The President will appoint a new senior leader in the Executive Office in charge of the government’s Made-in-America policy approach.
- A central review of agency waivers to domestic preference laws.
- Businesses will be connected to federal contracting opportunities by using the supplier scouting expertise of the Manufacturing Extension Partnership.
- The President will continue to be a strong advocate for the Jones Act and the mandate that only US-flag vessels carry cargo between US ports. This Act in partnership with the 2021 National Defense Authorization Act, will provide an opportunity to invest in US workers as we build offshore renewable energy.
- Federal agencies will report on their implementation of current Made in America laws and make recommendations for achieving the President’s goals on a bi-annual basis.
In addition, the Executive Order is intertwined with the President’s commitment to invest in American manufacturing by encouraging using taxpayer dollars to spur investment in our own country.
The Order also notes that “Made in America” refers to domestic preferences related to federal grants, federal contracts and other forms of federal assistance[1].
What does all this mean for the grant landscape under the Biden administration? I believe this action indicates the President’s support for not only the Made in America label, but for funding to support the execution of the order. In addition, I believe there will be more stringent Buy America requirements for federal grantees.
Here are some specific outcomes I expect from the Made in America Executive Order.
- A change in the Buy America requirements for federal grantees and contractors – In the future, I expect that any new federal grant or contracting opportunity will require more stringent requirements for purchase of goods under the grant or contract. Applicants will have to specifically certify that the goods procured under the grant or contract are truly made in America.
- Federal grants to support American/local supply chain development – In order to ensure their products are Made in America, manufacturers will have to shore up their local supply chains and/or bring product in house that is currently manufactured overseas. This will result in expensive additional capital and facility expenditures for American manufacturers, and I would expect both federal and state governments to provide grants and incentives to support this economic development activity.
- Greater focus on developing the future American manufacturing workforce- Since the pandemic started, there has been a greater number of workforce development grants as the nation has recognized the need to backfill H1B visa jobs and come up with ways to address the workforce skills gap. I believe this trend will continue at the state and federal levels to help manufacturers access the talent necessary to support increased American manufacturing activity. There will also be additional state and federal support for apprenticeship programs and other innovative approaches to fill the skilled talent workforce gap, which will continue to widen.
- Greater manufacturing activity, particularly in the clean energy sector – President Biden is strongly supporting growth in the clean energy sector to reduce America’s dependence on foreign oil and fossil fuels. The Department of Energy has long made investments into clean energy initiatives and states like California have also invested heavily in clean energy projects to support their aggressive state energy goals. I expect additional grants to support the investments manufacturers will have to make to support this sector and the development of innovative technologies to promote clean energy use by the American public.
- An increased need for partnerships to help the manufacturing community address the challenges presented by Buy America requirements- I have long been a proponent of partnerships to help manufacturers address challenges. New grant opportunities generated by this Executive Order will likely require partnerships between manufacturers, economic developers, nonprofits serving the manufacturing community and secondary and higher education entities. This will ensure development of comprehensive and scalable solutions to workforce and supply chain challenges by manufacturing stakeholders.
To summarize, the Buy America Executive Order has far reaching benefits to the manufacturing community, but also presents some challenges including needed investments to support re-shoring and supply chain localization, as well as growth in the need for manufacturing services; the greater need for a skilled workforce; and an increased need for manufacturers to develop and participate in partnerships to help create and execute solutions to workforce and supply chain challenges. The opportunity associated with this Executive Order is exciting and I applaud the administration’s focus on American manufacturing and clean energy! I look forward to supporting American manufacturing as they seek resources (grants, incentives and partnerships) to ensure they meet this opportunity and its’ challenges head on!
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[1] https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/25/president-biden-to-sign-executive-order-strengthening-buy-american-provisions-ensuring-future-of-america-is-made-in-america-by-all-of-americas-workers/
