The Buy American Act restricts the purchase of non-domestic supplies. This act applies to federal government contracts for products used in the U.S. The act states that the cost of domestic components must exceed 50 percent of the total cost of components in an end product. The end product itself must also be manufactured in the United States. The purpose of this act is to give preferential treatment to domestically sourced materials and U.S. manufactured goods.
Businesses wishing to achieve compliance must ensure that the cost of domestic materials used in their end product exceed the cost of any non-domestic materials. They must also guarantee their end product is manufactured in the United States.