Long before the current trade disputes, the Buy American Act was passed to support domestic producers of goods. Enacted during the Herbert Hoover Administration, the law provides a federal procurement preference for U.S. manufactured products. The Federal Acquisition Regulation has implemented this policy by requiring the use of domestic products unless certain stipulated exceptions apply.
With regard to construction materials, domestic products must be used unless the cost exceeds the cost of comparable foreign products by more than 6%. In order to be responsive, a bid must provide information justifying the “unreasonable cost” exception. But how much information is required in order to avoid bid rejection? That was the question recently addressed by federal procurement authorities.
The other case in this issue involved two distinct yet commonly owned corporate entities, one with a collective bargaining agreement with a union and the second without. A federal appeals court was called upon to determine whether, due to ownership’s failure to observe corporate formalities, the second corporation could be held responsible for the obligations of the first.