Is a Shakeup Still Imminent for U.S. Domestic Sourcing?

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Following a February 18, 2020 blog post, Jeff Belkin, Mike Mortorano, and MJ Kim explain in Contract Management Magazine how a recent Federal Circuit decision and possible U.S. withdrawal from the World Trade Organization’s Government Procurement Agreement could impact existing procurement policies and supply chain decisions.

Now with the sudden economic devastation brought on by the coronavirus (COVID-19), the Trump Administration’s next move is more important than ever. As the U.S. economy falters and stimulus bills are pushed out, the potential implications of withdrawing from the WTO GPA have become magnified. The next stimulus likely will involve a substantial amount of infrastructure spending, so we will see if the Administration is going to keep moving towards domestic production, such as by marrying new federal stimulus to even stricter domestic preference requirements. One possibility is that the Administration may charge forward with a withdrawal from the WTO GPA, imposing more stringent Buy American Act requirements (or the distinct “Buy America” requirements, as in previous stimulus and DOT spending) on any new federal stimulus to prioritize and boost U.S. manufacturing. Conversely, the Administration may table that approach to ease the growing pressures on U.S. manufacturers and suppliers, who can benefit now from the availability of an open government procurement market and the flexibility of a worldwide supply chain. As the current economic landscape continues to rapidly develop in response to COVID-19, the Administration’s next move won’t be an easy one.