The Buy American Act (BAA) was established in 1933 to prioritize American-made products in government procurement. However, various waivers and exceptions allow federal agencies to bypass these requirements under certain circumstances. Over the past five years, federal agencies have issued tens of thousands of such waivers, citing reasons such as domestic nonavailability, cost-effectiveness, or commercial IT exemptions.
This study analyzes data from the Federal Procurement Data System (SAM.gov), identifying contract actions that cited a BAA waiver from 2020 to 2024. The objective is to assess the frequency of waivers, identify which agencies and industries rely on them the most, and evaluate their financial implications.
Key questions addressed in this study:
- How frequently are BAA waivers used, and what is the trend over time?
- Which federal agencies, companies, and industries use them most often?
- What types of projects require waivers, and which countries are relied upon for foreign sourcing?
- What are the financial implications of these waivers?
Our goal with this research is to provide insights into federal procurement trends and offer policy recommendations to strengthen domestic manufacturing.
Background on the Buy American Act and Waivers
Overview of the Buy American Act (BAA)
The Buy American Act (41 U.S.C. Chapter 83) requires that the U.S. government prioritize domestically manufactured products in federal procurement contracts. The law applies to goods and construction materials but includes several key exceptions:
- Commercial IT Exception: Allows procurement of foreign IT products.
- De Minimis & Small Grants Waiver: Waives BAA requirements for projects where the total foreign-sourced content is below $1 million or 5% of project cost.
- Domestic Nonavailability Waiver: If no reasonable domestic alternative exists, a waiver may be granted.
- Public Interest Waiver: If enforcing BAA restrictions is deemed against public interest.
Regulatory Framework
BAA waivers are governed by multiple regulatory bodies, including:
- Federal Acquisition Regulations (FAR)
- U.S. Code (41 U.S.C. Chapter 83)
- Code of Federal Regulations (7 CFR Part 1787)
- Federal Register notices that define updates to waiver criteria
As seen in the Federal Register, waivers are often granted to reduce administrative burdens on smaller projects and expedite federal infrastructure work.
Data Source and Methodology
This analysis uses the Buy American Act Exceptions and Waivers dataset (February 2025) from SAM.gov, which documents contract actions citing BAA waivers over the past five years. The dataset includes:
- Agency Name & ID
- Place of Manufacture
- Country of Product Origin
- Vendor Details
- Total Contract Value & Dollars Obligated
To analyze trends, we cleaned and grouped the data by:
- Year (to assess trends over time)
- Agency (to identify the biggest waiver users)
- Industry (NAICS Code) (to see which sectors rely most on waivers)
- Country of Origin (to determine top foreign sourcing countries)
How Often Are Waivers Used?
BAA waivers have been used extensively in federal procurement, with over 120,000 waivers issued from 2020 to 2024. The following table shows the annual trend:
| Year | Number of Waivers Issued |
|---|---|
| 2020 | 27,068 |
| 2021 | 25,002 |
| 2022 | 25,453 |
| 2023 | 24,234 |
| 2024 | 23,878 |
Observations
- Waiver usage peaked in 2020, with over 27,000 waivers issued, possibly due to pandemic-related supply chain disruptions.
- A gradual decline in waivers has occurred, suggesting either an increase in domestic sourcing or policy shifts.
- Despite the decline, nearly 24,000 waivers were still issued in 2024, which highlights that foreign procurement remains extremely prevalent.
Which Federal Agencies Use Waivers the Most?
Some federal agencies rely on BAA waivers significantly more than others. The following agencies have issued the highest dollar value in waivers over the last five years:
| Agency | Total Dollars Obligated |
|---|---|
| Dept. of the Army | $3.56 billion |
| Department of Veterans Affairs | $1.54 billion |
| Office of Assistant Secretary for Preparedness | $1.16 billion |
| Defense Logistics Agency | $852 million |
| Federal Emergency Management Agency (FEMA) | $809 million |
Observations
- The Department of the Army is the largest user of BAA waivers, with over $3.5 billion obligated to contracts that bypassed domestic sourcing rules.
- Veterans Affairs (VA) and FEMA also issued high waiver amounts, likely due to procurement needs for medical supplies, disaster response, and emergency preparedness.
- Defense-related agencies account for a significant share of waivers, reflecting military reliance on specialized foreign-sourced equipment.
Which Companies and Organizations Use Waivers the Most?
The following companies received the highest number of waiver-related contracts:
| Vendor | Number of Waivers Used |
|---|---|
| JTF Business Solutions Corp | 11,052 |
| A-Line Accessories Inc. | 8,633 |
| Pro Buy Solutions, LLC | 4,083 |
| Industrial Supply Solutions | 3,874 |
| Premier & Companies, Inc. | 3,540 |
Observations
- JTF Business Solutions Corp leads with over 11,000 contracts granted waivers, indicating heavy reliance on foreign sourcing.
- Many top vendors are distributors rather than manufacturers, suggesting that federal procurement may rely on third-party sourcing.
- Further research is needed into supply chain transparency among government vendors.
Which Industries Rely on Waivers the Most?
Certain industries rely more on BAA waivers, as seen in the table below:
| Industry | Waivers Used |
|---|---|
| Stationery Product Manufacturing | 11,064 |
| Miscellaneous Electrical Equipment | 9,976 |
| Hardware Manufacturing | 9,494 |
| Aircraft Parts & Auxiliary Equipment | 5,756 |
| Electronic Connector Manufacturing | 4,309 |
Observations
- Office supplies and IT hardware frequently receive waivers, likely due to commercial IT exemptions.
- Defense-related industries, such as aircraft parts and electrical components, have high waiver usage.
- Some industries may benefit from domestic reshoring efforts to reduce reliance on waivers.
What Types of Projects Are Waivers Used For?
The types of projects that most frequently receive Buy American Act waivers span a variety of goods and services, primarily in procurement for office supplies, IT equipment, and industrial hardware.
| Project Type | Waivers Used |
|---|---|
| Office Supplies | 14,450 |
| Hardware, Commercial | 9,918 |
| Fuses, Arrestors, Absorbers, and Protectors | 9,852 |
| Connectors, Electrical | 5,253 |
| Kitchen Hand Tools and Utensils | 4,263 |
Observations
- Office supplies top the list, reflecting a high number of federal purchases for items such as paper, pens, and printers—many of which are sourced from foreign manufacturers.
- IT and electrical components (e.g., connectors and fuses) frequently receive waivers, potentially due to the commercial IT exemption.
- Kitchen tools and other miscellaneous products suggest broader consumer goods procurement that relies on overseas production.
Implications
The widespread waiver use in these sectors suggests a gap in domestic manufacturing capacity for common federal procurement needs. This raises questions about whether incentivizing domestic alternatives could reduce waiver reliance, or if we need to think about investing in domestic manufacturing infrastructure in some areas where it is lacking today.
Which Countries Are Most Frequently Used for Foreign Sourcing?
Many BAA waivers are issued because products are sourced from outside the U.S. The following countries are the most common origins for foreign-sourced products under waived contracts:
| Country | Waivers Used |
|---|---|
| China | 61,199 |
| Mexico | 20,274 |
| Taiwan | 5,597 |
| France | 4,371 |
| India | 3,675 |
Observations
- China is by far the largest foreign supplier, with over 61,000 waivers used for Chinese-made products.
- Mexico ranks second, reflecting North American supply chain integration.
- Other countries, including Taiwan, France, and India, are key suppliers of specific goods (e.g., IT equipment, aerospace parts, and industrial materials).
Implications
The heavy reliance on China raises concerns about supply chain vulnerabilities, national security risks, and long-term economic dependence. Policy efforts to diversify sourcing or strengthen domestic alternatives could reduce waiver reliance.
What Are the Financial Implications of These Waivers?
The total contract values associated with Buy American Act waivers are substantial. The following table outlines the annual spending trends for contracts granted BAA waivers:
| Year | Total Contract Value | Dollars Obligated |
|---|---|---|
| 2020 | $3.40 billion | $2.51 billion |
| 2021 | $929 million | $985 million |
| 2022 | $4.67 billion | $4.55 billion |
| 2023 | $1.91 billion | $1.51 billion |
| 2024 | $1.88 billion | $1.68 billion |
Observations
- 2022 saw the highest total contract value at $4.67 billion, possibly due to post-pandemic supply chain issues.
- The overall spending trend fluctuates, with peaks in 2020 and 2022.
- Over $1.6 billion was still obligated under waivers in 2024, suggesting continued reliance on foreign-made products despite policy efforts to boost domestic manufacturing.
Implications
The financial scale of these contracts shows that billions of taxpayer dollars are allocated to foreign-sourced goods and services each year. Policymakers may consider reshoring incentives to redirect this spending toward domestic suppliers.
Policy Implications and Recommendations
The continued reliance on Buy American Act waivers raises critical questions about the state of U.S. manufacturing, federal procurement policy, and supply chain resilience. While some waivers are unavoidable—due to national security needs, cost considerations, or unavailability of domestic alternatives—the sheer scale of waived contracts suggests an overreliance on foreign-made goods.
From 2020 to 2024, more than 120,000 waivers were issued, representing over $12 billion in federal spending. A significant portion of these funds flowed to foreign suppliers, with China alone accounting for more than 61,000 waivers. Meanwhile, industries that should be foundational to the U.S. economy—such as IT hardware, industrial components, and defense manufacturing—remain heavily dependent on imports.
To address these vulnerabilities, federal procurement policy must evolve. The following recommendations aim to reduce waiver reliance, strengthen domestic manufacturing, and ensure that taxpayer dollars are invested in American industry.
Strengthening Domestic Manufacturing Capacity
At its core, the widespread use of waivers is a supply problem. Federal agencies turn to foreign suppliers because, in many cases, domestic alternatives do not exist—or cannot scale quickly enough to meet demand.
Take IT hardware and electronic components, two of the most waiver-dependent procurement categories. The Commercial IT Exception, which allows agencies to buy foreign-made technology without restriction, has resulted in a flood of Chinese-made IT products entering federal supply chains. If U.S. manufacturers are to compete, they need targeted incentives, tax breaks, and public-private investment partnerships to scale up production.
The same is true for industrial hardware, electrical components, and specialized defense equipment—industries that have slowly moved offshore over the past three decades. Expanding domestic production incentives, R&D funding, and government-backed procurement guarantees could encourage manufacturers to reshore these critical supply chains.
If the goal of the Buy American Act is truly to support domestic industry, then the federal government should do more to look at where we need more viable domestic suppliers in certain industries and how to incentivize that growth if it makes sense to do so.
Refining Waiver Criteria to Close Loopholes
While some waivers are granted for legitimate reasons, others exploit regulatory loopholes that weaken the intent of Buy American laws.
For example, waivers citing “Domestic Nonavailability” are meant for cases where no suitable U.S.-made product exists. But a lack of transparency makes it difficult to verify whether agencies are actively searching for domestic alternatives—or simply defaulting to foreign suppliers out of habit. Strengthening reporting requirements, increasing public oversight, and requiring agencies to prove due diligence in sourcing American-made alternatives could significantly reduce unnecessary waivers.
Likewise, public interest waivers, which allow federal agencies to bypass Buy American requirements when a domestic preference is deemed “not in the best interest of the government,” are often used without clear justification. Increasing scrutiny on these approvals and requiring a more rigorous cost-benefit analysis could prevent abuse of this broad exemption.
In short, tightening waiver eligibility and improving oversight would ensure that these exceptions are used only when absolutely necessary—not as a default procurement strategy.
Reducing Dependence on China and Diversifying Sourcing
The dominance of China in federal procurement is a clear national security risk. With over 61,000 waivers granted for Chinese-made products, the U.S. government is funding a supply chain that is increasingly vulnerable to geopolitical tensions, trade restrictions, and disruptions in global shipping.
While fully eliminating reliance on Chinese imports may not be immediately possible, shifting procurement strategies toward regional allies and North American suppliers could mitigate risk.
- The U.S.-Mexico-Canada Agreement (USMCA) offers an opportunity to strengthen regional manufacturing partnerships. Expanding incentives for companies to source from Mexico and Canada—rather than China—could create a more resilient and geopolitically secure supply chain.
- Promoting trade agreements with allied nations, particularly in electronics, aerospace, and industrial manufacturing, could further diversify federal procurement sources.
- Expanding the Domestic Procurement Preference for certain critical goods—particularly defense, IT hardware, and emergency response equipment—could shift purchasing decisions toward more secure supply chains.
At a time when global supply chains are more fragile than ever, reducing dependence on China and investing in regional alternatives is both an economic and a strategic necessity.
Improving Compliance and Enforcement of Buy American Requirements
Even when domestic alternatives are available, loose enforcement of Buy American requirements allows agencies to continue purchasing foreign-made goods. Strengthening compliance mechanisms would ensure that waiver rules are followed correctly and that taxpayer dollars are spent in alignment with national economic priorities.
Key reforms could include:
- Increasing auditing of waiver approvals to prevent unnecessary foreign sourcing.
- Requiring agencies to submit public justification reports for high-dollar waivers, particularly those exceeding $10 million.
- Enhancing penalties for contractors that misrepresent foreign sourcing or fail to comply with domestic content requirements.
Improved enforcement would not only reduce misuse of waivers but also create a stronger incentive for agencies and contractors to seek out American-made alternatives.
A Policy Shift Toward Smarter Procurement
The Buy American Act is designed to prioritize U.S. industry, create jobs, and strengthen economic resilience—but its effectiveness is being undermined by excessive waiver use and procurement loopholes. By investing in domestic manufacturing, refining waiver rules, reducing China dependence, and improving enforcement, federal procurement policy can better align with the goals of economic security and national interest.
With billions of dollars at stake each year, the time for a smarter, more strategic approach to Buy American policy is now.
