Federal Contracting: Opportunities Exist to Improve the Reporting of Waivers to Domestic Preference Laws
Fast Facts
Buy American and other domestic preference laws require federal agencies to buy goods made in the U.S. These laws can be waived, such as when a needed item isn't made here.
To improve transparency, a law required the General Services Administration to make a website for agencies to post such waivers. The Office of Management and Budget helped determine website elements and reviews the waivers.
Agencies can't yet report all their waivers on the website, and users have said the site is hard to navigate. Also, GSA and OMB disagree on future website updates.
We made 9 recommendations, including that GSA and OMB reach agreement on future updates.
Highlights
What GAO Found
Buy American and other domestic preference laws, generally require federal agencies and grantees to purchase goods produced in the U.S., but waivers and exceptions (collectively referred to as waivers) to those requirements may apply. The Infrastructure Investment and Jobs Act, enacted in November 2021, gave the General Services Administration (GSA) a year to develop a website where the public could access information on agencies' use of such waivers. GSA released the first iteration of the website in October 2021. As of June 2023, 17 federal agencies had reported information on 745 waivers for items such as laboratory equipment, freight containers, and weapons parts.
Domestic Preference Waivers Reported by Agencies as of June 2023
aTotal could include some duplicates.
However, key issues remain that need attention and resolution. For example:
- GAO found some errors in agencies' reporting of waivers that have not been resolved.
- The capability to report on one of the seven types of waivers identified by the Office of Management and Budget (OMB) related to unreasonable cost, has not been added to the website, as GSA is awaiting OMB direction to add it.
- The website does not include the results of routine data audits to identify data errors and violation of domestic preference laws, as required.
- Users noted that navigating the GSA website and identifying relevant waivers can be difficult.
OMB and GSA officials indicated that continued improvements to the website are needed. However, they have not agreed on future development plans because they have varying views on how much additional development is needed. They lack fundamental documents and data that could facilitate these decisions. This includes (1) a memorandum of understanding that establishes the extent of future website development and resource needs; and (2) metrics to gauge the effectiveness of the website. Without such an agreement and metrics, OMB and GSA goals will likely continue to be misaligned, future website development could stall, and the website would then continue to not address key user needs.
Why GAO Did This Study
For decades, U.S. manufacturing capability has declined as companies outsourced production to other countries. Various domestic preference laws have been enacted reflecting a preference to purchase U.S. products. These laws permit agency waivers, as appropriate, to contracts and federal financial assistance (e.g., grants).
The Infrastructure Investment and Jobs Act directed GSA to develop a public website displaying information on agencies' use of the waivers. The law included a provision for GAO to review this effort. This report describes (1) GSA actions to implement website requirements and (2) OMB and GSA plans for future website development.
To conduct this work, GAO analyzed statutory provisions, website content, and user feedback. GAO interviewed officials from GSA, OMB, five federal agencies, and industry associations. GAO chose the agencies based on their high use of waivers as of January 2023 and the associations based on internet and database searches.
Recommendations
GAO is making nine recommendations, two to GSA and seven to OMB, including that they correct reporting errors, provide the capability to report on the remaining waiver type, add audit report results, address user needs, reach agreement on future website development, and identify metrics to gauge effectiveness.
GSA agreed with the two recommendations. OMB generally disagreed or did not comment on the other seven. GAO continues to believe the recommendations are warranted.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Office of Management and Budget | The Director of OMB should ensure that all covered federal agencies have an active link on the madeinamerica.gov website that directs users to their federal financial assistance waivers. (Recommendation 1) |
OMB neither agreed nor disagreed with our recommendation. Action has been taken to implement this recommendation. In July 2024, all covered Federal agencies have an active link on the Federal financial assistance page of the madeinamerica.gov website, with the exception of the Office of Personnel Management (OPM). OPM is marked with an asterisk to indicate that it does not award federal financial assistance and therefore no link is provided.
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| Office of Management and Budget | The Director of OMB should establish an updated date for federal agencies to cross-post all their federal financial assistance waivers to the madeinamerica.gov website. (Recommendation 2) |
OMB neither agreed nor disagreed with our recommendation. In July 2024, OMB stated that its October 2023 Memorandum M-24-02 reminded all federal agencies of the requirement to cross-post all federal financial assistance waivers to the madeinamerica.gov website. We reviewed the contents of Memorandum M-24-02 and although it did not provide a specific date for agencies to cross-post their waivers, we believe that the action OMB took is consistent with our recommendation. As such, we consider this recommendation as implemented by OMB.
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| Office of Management and Budget | The Director of OMB should establish a date for providing federal agencies the capability to report unreasonable cost waivers for procurements. (Recommendation 3) |
OMB neither agreed nor disagreed with our recommendation. In July 2024, OMB stated that MIAO has procedures for reviewing unreasonable cost waivers and that MIAO is working with the General Services Administration (GSA) to build capability for including these waivers on the madeinamerica.gov website.
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| Office of Management and Budget | The Director of OMB should develop procedures for agencies to correct domestic preference waiver reporting errors, including deleting duplicate waiver records and adding waivers where agencies did not first obtain OMB approval. (Recommendation 4) |
OMB disagreed with our recommendation. In July 2024, OMB stated that our recommendation is not appropriate for OMB as GSA is responsible for the functionality of the Made in America website. This is an item MIAO has raised with GSA as an area for improvement.
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| Office of Management and Budget | The Director of OMB should provide guidance to federal agencies on reporting the results of routine audits to determine data errors and domestic preference law violations for procurement contracts on the madeinamerica.gov website. (Recommendation 5) |
OMB disagreed with our recommendation, stating that it was not obligated to provide such guidance to federal agencies. However, OMB said it would consider posting the results of audits to comply with the statute on the website. In July 2024, OMB stated that it will work with GSA to explore how to make audits available on the madeinamerica.gov website.
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| General Services Administration | The Administrator of GSA should conduct user testing with industry to obtain input on how, if at all, it could improve website functionality. (Recommendation 6) |
In March 2024, GSA took action to implement this recommendation by holding semi-structured interviews and conducting moderated usability testing with four industry-side users, representing a diverse set of users. As a result, GSA identified aspects of the website that users found helpful and that needed improvement. By implementing this recommendation, GSA has identified the top five recommendations for improving the website's homepage and access to waiver information, which will help improve users' experience.
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| General Services Administration | The Administrator of GSA should develop a formal agreement, such as a memorandum of understanding, with the Director of OMB to document the extent that further website development is necessary, and the resources needed for future development efforts. (Recommendation 7) |
GSA and OMB are in the process of developing a formal agreement concerning future website development. GSA officials expect the agreement to be finalized by the end of 2024.
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| Office of Management and Budget | The Director of OMB should develop a formal agreement, such as a memorandum of understanding, with the Administrator of the General Services Administration to document the extent to which further website development is necessary, and the resources needed for future development efforts. (Recommendation 8) |
OMB neither agreed nor disagreed with our recommendation. In July 2024, OMB is working with GSA on developing a joint plan to research new technical solutions for current deficiencies associated with the website and the underlying technology supporting it. Once that plan is developed, OMB and GSA will establish a joint timeline and funding strategy for implementation and develop a Memorandum of Understanding to memorialize the agreement.
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| Office of Management and Budget | The Director of OMB should identify goals and metrics to gauge the effectiveness of the madeinamerica.gov website. (Recommendation 9) |
OMB disagreed with our recommendation, stating that GSA should develop website metrics. In July 2024, OMB stated that it will work with GSA to identify appropriate goals and metrics to gauge the effectiveness of the madeinamerica.gov website. This will be incorporated within OMB's coordination with GSA described in response to Recommendation 8.
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