City, state, impose few restrictions

March 01, 1992|By Ross Hetrick | Ross Hetrick,Staff Writer

Although the federal government has extensive buy-American regulations dating back to the 1930s, Maryland and Baltimore governments have relatively few restrictions.

The main federal law is the Buy American Act, which was passed during the Depression to bolster U.S. industry. The act generally gives U.S. products preference in government bidding. But various laws in recent decades have created a variety of loopholes and exceptions.

Like other federal agencies, the Department of Defense complies with the Buy American Act by adding a percentage surcharge to the price of foreign products for bidding purposes. The rate, which varies vary from agency to agency, is 50 percent for the Pentagon, according to spokesman Jan Walker.

If the cost of a U.S. product is $100, for instance, and a competing foreign product costs $80, the foreign article would be priced in the bidding process at $120 -- a $40 increase (half of its $80 price tag).

The surcharge, however, does not apply to products made in countries that have agreements with the United States not to impose such charges. Ms. Walker said the United States has reciprocal agreements with many nations, including members of NATO.

There are also numerous specific buy-American rules mandated by Congress, Ms. Walker said. These measures can apply to such items as food, clothing, textiles, machine tools, aircraft ejector seats, specialty metals and anchor chains and can be in force for one year, many years or indefinitely, she said.

Maryland's buy-American policy is limited to the purchase of steel and steel products.

State law requires Maryland State law requires Maryland agencies to purchase U.S.-made steel products if their price is no more than 20 percent higher than the lowest foreign bid.

The state policy also applies to the purchase of steel machinery weighing 10,000 pounds or more.

There are some exceptions to the law, said Richard F. Pecora, deputy secretary of the Department of General Services. One is when the U.S. secretary of labor determines that the foreign steel is produced in a "substantial labor surplus area." In this case, the price of domestic steel has to be more than 30 percent above that of imported steel.

The other exceptions are when domestic steel is not available in sufficient quantity, or if it is determined that the purchase of U.S.-made steel is not consistent with public policy.

Baltimore had no buy-American policy until last year, when an ordinance was passed instructing the city's purchasing agent to make "every reasonable effort" to buy U.S.-made passenger cars and trucks.

Originally, the ordinance had included all purchases costing more than $300. But the city's legal department said that would violate competitive bidding regulations, which award contracts to the lowest bidder.

The ordinance also specifies that additional products can be added by executive order or by action of the City Council.

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