Legislation Aims to Restore 'Buy American' Act

May 20, 2005--New Homeland Security legislation, approved Wednesday by the House, promises to give U.S. industry an edge over foreign competition and make sure government contracts go to American firms.

The $34 billion authorization for the Department of Homeland Security's 2006 budget includes provisions for a wide range of security and counter-terrorism measures and, perhaps most significantly for small business owners, an amendment requiring the department to purchase mostly American goods and services.

The amendment, authored by House Small Business Committee chair Don Manzullo (R-IL), will force Homeland Security to conform to the 1933 Buy American Act, which mandates that federal agencies purchase products made from at least 50 percent of U.S. goods and labor.

In its brief history, Homeland Security has avoided complying with the depression-era law because the law allows government agencies to buy from foreign companies when not doing so would harm the public good. The Department of Defense considers 21 countries exempt from the rule, and these exemptions have extended to Homeland Security because the two agencies share similar missions. Manzullo's amendment attempts to close this loophole.

The amendment's proponents plan say this is only the beginning of an effort to make sure taxpayer dollars stay in the U.S.

"What we are saying is that those [exceptions] are not appropriate," said Rich Carter spokesman for the Small Business Committee and Rep. Manzullo. "We're not picking on homeland security - we're going to put this amendment on every authorization."

While Carter said that there was some opposition, the amendment passed easily on a voice vote.

Whether or not this particular amendment will have a direct impact on American small business is unclear - only 0.2% or $436,000 of Homeland Security spending in 2004 went to foreign contracts.