What's Old is New: The Buy American IT Exception

On January 3, 2006, the Civilian Agency Acquisition Council and the Defense Acquisition Regulation Council agreed to an interim rule, which amended Federal Acquisition Regulation Parts 25.103 and 25.1101, to implement Section 517 of Division H, Title V of the Consolidated Appropriations Act, 2005 (Pub. L. 108- 447). See Government Contracts Update, December 2005, "Applying the Buy American Act to Information Technology Procurements: New Deal Policies in the Information Age."

Section 517 authorizes exemption from the Buy American Act for acquisitions of information technology that are commercial items. See 71 Fed. Reg. 223; FAR case 2005-022. This interim rule makes: FAR 52.225- 1, Buy American Act-Supplies; FAR 52.225-2, Buy American Act Certificate; FAR 52.225-3, Buy American Act-Free Trade Agreements- Israeli Trade Act; and FAR 52.225-4, Buy American Act-Free Trade Agreements-Israeli Trade Act Certificate inapplicable. Furthermore, these changes will continue to be effective as long as language similar to Section 517 appears in future appropriations act.

The notice and comment period for this interim rule ended on March 6, 2006, and only two comments were received. CDW-G, a hardware and software supplier, praised the interim rule. The Department of Defense Inspector General (DoD IG) criticized it and suggested that it not be applied to DoD or it agencies for security reasons.

While at first blush the DoD IG's criticism may seem odd, as this exception has been in place since FY 2004, this is the first opportunity the DoD IG had to comment on the IT exception, and it might have had concerns about the exception since its inception in FY 04. What impact, if any, these comments will have on the final rule is unknown. We will keep you posted on any future developments.