WORLD TRADE  
ORGANIZATION  GPA/W/304 
27 April 2009 
 
 (09-2004) 
Committee on Government Procurement Original:   English 
  
 
RESPONSES OF THE UNITED STATES TO QUESTIONS OF THE EUROPEAN 
COMMUNITIES WITH RESPECT TO THE "BUY AMERICAN" PROVISIONS 
IN THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 
 
Communication from the United States
 
 
  The following communication, dated 25 April 2009,  is being circulated at the request of the 
Delegation of the United States.  
_______________ 
 
 
I. LEGAL FRAMEWORK 
1. General application 
1. How would the US ensure ARRA funding is used in a manner consistent with 
US obligations under international agreements? 
 On 17 February 2009, the President signed into law the US$787 billion American Recovery 
and Reinvestment Act (ARRA) (Pub. L. 111-5) ( http://thomas.loc.gov
).  The Act included two "buy 
American" provisions.  
 Section 604 of the ARRA requires the Departme nt of Homeland Security (DHS) to procure 
US-manufactured textile and appare l goods, subject to certain excep tions (including non-availability, 
de minimis , purchases outside the United States, and small purchases).  This provision becomes 
effective 180 days after the date of enactment  of the ARRA, which was 17 February 2009.  
Section 604(k) requires DHS to apply the "buy Amer ican" provision in a manner consistent with US 
obligations under international ag reements.  (Section 604 is not a ddressed in the responses to the 
remainder of the questions.) 
  Section 1605 of the ARRA includes a "buy American" provision that requires that only US-produced iron, steel and manufactured goods be used in public buildings and public works funded 
by the ARRA, subject to certain exceptions (public  interest, non-availability or unreasonable cost).  
Section 1605(d) of the ARRA requires the "buy Am erican" requirement to "be applied in a manner 
consistent with United States obligati ons under international agreements". 
  On 31 March 2009, an interim rule, amendi ng the Federal Acquisition Regulation ("Interim 
FAR Rule") to implement the "buy American" provisi on of Section 1605 of the ARRA with respect to 
procurement by the Federal government, was published in the Federal Register  (see 74 FR 14623-
14633).  GPA/W/304 
Page 2  
 
   The Office of Management and Budget (OMB ) issued "Updated Implementing Guidance for 
the American Recovery and Reinvest ment Act of 2009" that was posted on www.recovery.gov
 on 
3 April 2009.  The Guidance included Appendix 9, "Interim Final Guidance for Federal Financial 
Assistance" ("Interim OMB Guidan ce"), which sets out the requirements for financial assistance 
awards to implement Section 1605, as well as other sections, of the ARRA.  The Interim OMB 
Guidance was published in the Federal Register  on 23 April 2009 ( see 74 FR 18449-18463).  The 
Interim OMB Guidance requires the " buy American" requirement to be applied in a manner consistent 
with US obligations under international agreements. 
  Both the Interim FAR Rule and the Interim OMB Guidance require, in procurement covered 
by an international agreement, that the "buy Am erican" requirement of Section 1605 not be applied 
with respect to iron, steel and manufactured goods of  GPA and other international agreement Parties.  
In addition, both the Interim FAR Rule and th e Interim OMB Guidance provide a 60-day comment 
period following publication in the Federal Register  before the Rule and Guidance are finalized. 
 2. The US stated that the rights of the tradin g partners, Parties to the GPA, will not be 
affected by the ARRA and that the US administra tion does not need to take any further action 
to comply with the US international obligat ions.  Can the US reason what is the legal 
background for this opinion?  In any event, do es the US intend to co nfirm this to the GPA 
Parties in an official manner? 
 WTO document GPA/98, circulated to the GPA Parties on 24 April 2009, contains the 
US notification of the ARRA, the Interim FAR Ru le and the Interim OMB Guidance, which as noted 
above, require that the provisions of the ARRA  be applied in a manner consistent with 
US international obligations.  In addition, the Tr ade Agreements Act of 1979, as amended, authorizes 
the President to waive Federal-level discriminatory procurement provisions for parties to international 
agreements that provide reciprocal access for US goods, services and suppliers in their procurement.  
The President has delegated this authority to th e United States Trade Representative (USTR).  The 
USTR has issued such waivers when the GPA ha s been expanded to cove r additional WTO Members 
and when the United States has entered an inte rnational agreement that covers government 
procurement.  There is no need for the USTR to  issue new waivers.  Th is was recognized in the 
Congressional Conference Report on ARRA, which stated :  "Section 1605(d) is not intended to repeal 
by implication the President's authority under Title  III of the Trade Agreements Act of 1979.  The 
conferees anticipate that the Administration will re ly on the authority under 19 U.S.C. 2511(b) to the 
extent necessary to comply with US obliga tions under the WTO Agreement on Government 
Procurement and under US free trade agreements a nd so that Section 1605 will not apply to least 
developed countries to the same extent that it does not apply to the parties to those international 
agreements". 
 
3. What is the legal regime applicable, both in terms of procedure and eligibility of foreign 
suppliers, for procurement funded from federal f unds, which is effectuated by the States and/or 
cities?  Will the ARRA-funded procurement follow a different regime?  In the affirmative, please outline the main features of this new regim e and indicate, where it is stipulated in the 
ARRA. 
 As described in the response to question 1,  the Interim OMB Guidance sets out requirements 
that apply to the implementation of the "buy Am erican" requirement.  These requirements apply to 
financial assistance awards to sub-Federal entities under the ARRA.  Where the entity conducting the 
procurement is a covered entity and the procurem ent is a covered procurement under the GPA or 
another international agreement, the "buy American " requirement will not be applied to the products 
from the parties to the relevant agreements.  Th e Interim OMB Guidance contains an appendix that 
sets out the sub-Federal entities that are cove red by procurement obligations under various 
international agreements.  GPA/W/304 
 Page 3 
 
 
  4. What rules (procedural and for eligibility of foreign suppliers) have been applied/will be 
applied for cases of joint federal and sub-federal procurement? 
 Section 1605 of the ARRA requires application of the "buy American" requirement when any 
funds provided under that Act are used in a public building or public works project.  5. General Note No. 2 of the current US GP A commitments exempts a large number of 
government assistance instruments from the GPA.  Will this exception be applicable also for the 
ARRA-funded procurement?  What would be th e legal reasoning?  In particular, could the 
US provide the definition(s) and the differences between a grant and a procurement? In particular, what legal regime would apply for a situation when a government funding is 
provided to a sub-central entity with the requirement to accomplish a specific task (example:  
funding for major infrastructu re projects, motorways, etc.)? 
 US General Note 2 in Appendix I of the GPA provides that:  "Except as specified otherwise 
in this Appendix, procurement in terms of US c overage does not include non-contractual agreements 
or any form of government assistance, including coope rative agreements, grants, loans...".  The Note 
means that procurement that is conducted with  Federal financial assistance is not Federal 
procurement.  Where the Federal government provi des financial assistance, such as under the ARRA, 
to a sub-Federal entity for the purchase of goods  or services, including construction services, the 
recipient of the financial assistance conducts th e procurement according to its own regulations.  
However, it must comply with any Federal requir ements attached to the financial assistance.  
Procurement conducted with Federa l funds by sub-Federal entities not  covered by an international 
agreement are subject to the "buy American " requirement of Section 1605 of the ARRA. 
 
6. The ARRA refers to the following notions:  "manufactured goods", "produced in the 
United States", "public building", "public work ".  Does the US administration intend to 
provide definitions of these notions?  Will these definitions differ from those already provided 
for under the previously existing Buy America an d Buy American legislation?  If so, what will 
be the relevant definitions? 
 The definitions are set out in the Interi m FAR Rule and the Interim OMB Guidance, 
referenced in the response to question 1.  
7. Can the US explain what will be the impact of the ARRA legislation on procurement, 
which is currently exempted from the US GPA commitments?  For example, the exception for 
construction grades steel and the mass transit and highway projects? 
 Pursuant to Title XII of the ARRA, the "buy  American" requirement in Section 1605 of the 
ARRA does not apply to mass tran sit and highway projects, since those projects are subject to a 
separate "buy American" requirement.  Procurement su ch as construction-grade steel that is exempted 
from US commitments under the GPA and other interna tional agreements will be subject to the "buy 
American" requirement of Section 1605(a).  
8. The EC and the US concluded an Agreement in the form of an exchange of letters on 
government procurement (on 30  May 1995), by which the US granted no less favourable 
treatment than for out-of-state suppliers and for out-of-city suppliers for a number of States 
and cities.  Could the US confirm that th ese commitments will remain unaffected by the 
provisions of the ARRA Act and how will this be achieved? 
 The US-EC Exchange of Letters of May 1 995 is included in the list of international 
agreements in Section 176.90 of the Interim OMB Guidance.  Therefore, procurement covered under GPA/W/304 
Page 4  
 
  the Exchange of Letters is not subject to the "b uy American" requirement in Section 1605 of the 
ARRA.  
9. General Note No. 4 of the current US GPA commitments states that the Agreement 
would not apply for contracts, even though thei r elements are covered by the US commitments 
and the contracts are to be awarded by a covered  entity.  Could the US explain how this note 
will be deployed in conjunction with the ARRA Act? 
 US General Note 4 applies where an entity is not covered by the GPA.  It does not apply to 
entities that are covered by the GPA.  The Note  is not implicated in the implementation of 
Section 1605 of the ARRA. 
 
10. Does the US administration intend to  fulfil the obligation foreseen under the 
Article XIX:1 of the GPA, in respect to no tifications of implementing legislation? 
 The response to question 1 notes where th e ARRA and the implementing measures are 
published.  In addition, the United States has subm itted a notification to the Committee relating to the 
ARRA, the Interim FAR Rule and the Interim OMB Guidance, pursuant to Article XXIV:5(b) of the 
GPA.  It was circulated to the Committee on 24 April 2009 (GPA/98).  
2. Exceptions 
11. What will be the process of issuing waivers/ exceptions?  Who shall request a waiver?  
Will the US administration issue new implementi ng rules describing the application process for 
waiver requests or will the implementing rules refer to the previously established regime under 
Buy America and Buy American legislations? 
 Sections 25.603 – 25.606 of the Interim FA R Rule and Section 176.80 of the Interim OMB 
Guidance set out the requirements for waivers of th e application of the "buy American" requirement 
in accordance with Section 1605(b) of the ARRA. 
 
12. Will there be a possibility to obtain a waiv er for "category of cases" also for the 
ARRA-funded procurement?  If yes, could the US  outline the main features of the procedure?  
Will any consideration be given to the existing  Buy America and Buy American waivers or new 
waivers for ARRA-funded procurement would have to be issued? 
 Section 176.80 of the Interim OMB Guidance provi des that waivers may be issued in "a case 
or category of cases".  Materials that are already included in the list of domestically non-available 
materials ( see 48 CFR 25.104) continue to be considered domestically non-available for purposes of 
ARRA-funded projects.  
13. Will there be clear monitoring of the waivers issued/denied? 
 Section 1605(c) of the ARRA requires the head  of the Federal department or agency that 
grants a waiver under Section 1605(b) to publish a de tailed written justification for the waiver in the 
Federal Register .  Section 25.603(b) of the Interim FAR Ru le and Section 176.80(b) of the Interim 
OMB Guidance require publication of the waiver  determination within two weeks after the 
determination to issue a waiver is made, unless th e material has already been determined in the 
Federal Acquisition Regulation to be  domestically non-available ( see list at 48 CFR 25.104). 
  GPA/W/304 
 Page 5 
 
 
  14. Does the OMB intend to issue guidelines to determine what is "inconsistent with the 
public interest"?  Could the notion of public int erest vary by the States?  Can a local aspect be 
included in this notion (local public interest)? 
 Only federal agencies are authorized to i ssue waivers of the "buy American" requirement, 
including where application of the requirement w ould be inconsistent with the public interest, 
pursuant to Section 1605(b).  OMB does not plan to issue guidelines relating to determining what is 
"inconsistent with the public interest".  
15. Does the OMB intend to issue guidelines to  determine "domestic non-availability, 
insufficient quality of domestic supply"?  If not, who will assess these issues and what will be the 
legal basis for this assessment.  In particular, what shall be the territorial scope of the "non-
availability" – the entire US territory?  Once issued, will such a waiver be applicable throughout the US territory for a period of ti me?  Or will the "non-availability" have to be 
established for each procurement in question? 
 As noted in the response to question 14, only Fe deral agencies are authorized to issue waivers 
under Section 1605.  Section 176.80 of the Interi m OMB Guidance states:  "T he determinations of 
non-availability of the articles listed at 48 CFR 25.104(a) and the procedures at 48 CFR 25.103(b)(1) 
also apply if any of those artic les are manufactured goods needed in the project".  OMB does not 
intend to issue additional guidelines with respect to  domestic non-availability or insufficient quality of 
domestic supply.  With respect to Federal govern ment procurement, Section 25.603(a)(1) of the 
Interim FAR Rule provides that the determinations of non-availability already included in the Federal 
Acquisition Regulation ( see section 25.104(a)) and the procedures at 25.103(b)(1)) apply with respect 
to procurement covered by the ARRA.  
II. IMPLEMENTATION AND MONITORING 
16. Will the OMB or the USTR prepare an analysis  of the ARRA funding in relation to the 
GPA obligations applicable for specific funding/projects? 
 The Interim FAR Rule defines "Recovery Ac t designated country" in Sections 25.601 and 
52.225-23 to include the countries covered by the GPA and other international ag reements.  Similarly, 
the Interim OMB Guidance specifies the US states,  sub-Federal entities and other entities subject to 
US obligations under the GPA and ot her international agreements ( see Appendix to Subpart B of 
Part 176 – US States, Other Sub-Federal Entities, and Other Entities Subject to US Obligations under 
International Agreements). 
 
17. Which agencies will be involved in the implem entation process?  Will OMB be the sole 
agency issuing implementing guidelines, applicable to all US contracting entities or will there be additional "implementing rules" issued by other agencies?  If so, which ones? 
 As noted above, an Interim FAR Rule has been i ssued that applies to all Federal agencies, and 
OMB has issued Interim Guidance that applies to financial assistance provided under the ARRA.  
Federal agencies may issue supplemental guidance that  is tailored to their specific programmes that 
are funded by the ARRA.  
18. What is the timeline for the implementing rules and for the release of ARRA funding?  
Is there any opportunity for public comments prio r to release of any guidance or implementing 
rules? 
 With regard to the implementing rules, see the response to question 1.  Both the Interim FAR 
Rule and the Interim OMB Guidan ce became effective upon issuance.  Both also provide a 60-day GPA/W/304 
Page 6  
 
  comment period following publication of the respective measure in the Federal Register .  Based on 
the public comments, the final FAR rule and final OM B Guidance will be issued.  Distribution of the 
ARRA funds has begun.  
19. Will there be any guidelines provided to the US contracting authorities (both central 
and sub-central) which will provide and explain to them their GPA obligations, to ensure 
consistency with the US GPA commitments while tendering with ARRA funding? 
 See the response to question 1. 
 
20. Does the US intend to inform, about the allo cation of the ARRA funding, to various 
beneficiaries?  If yes, will this overview contain details per project, including information on the 
procurement procedure and perhaps information about the awards? 
 A website ( www.recovery.gov
) has been established to provide information on the use of 
ARRA funds.  In addition, many Federal agencies  will include information on their use of ARRA 
funds on their own websites. 
 
21. Does the US administration intend to monito r the correct application of the already 
previously existing Buy America and Buy American provisions? 
 The United States will continue to take the measures that it deems necessary and appropriate 
to ensure compliance with US laws and regulations.  
__________