On Sept. 16, President Trump issued a presidential memorandum titled “Restoring Reciprocity in Government Procurement,” directing federal officials to take steps to restrict the availability of certain Canadian-origin products in the federal civilian procurement system. The action is in response to Canada’s recently implemented “Buy Canadian” policies, which will affect U.S. companies.

The memorandum directs the Office of Management and Budget (OMB) and the U.S. Trade Representative (USTR), in coordination with the Federal Acquisition Regulatory (FAR) Council, to identify Canadian-origin items that may be appropriately removed or designated as unavailable for purchase by federal civilian agencies, consistent with applicable law. OMB is also directed to notify agencies of available domestic alternatives to affected Canadian products.

The memorandum does not, however, impose an immediate, government-wide ban on Canadian-origin products. Rather, it establishes a process for OMB, USTR, the FAR Council, and individual agencies to evaluate and implement potential restrictions consistent with applicable law. The memorandum also directs USTR to continue monitoring Canadian procurement practices and permits USTR to recommend restoring access to Canadian-origin products should Canada change its current treatment of U.S. goods.  The memorandum is consistent with President Trump’s announcement last week that the General Services Administration has been directed to take steps to remove Canadian products from the Multiple Award Schedule program unless Canada reverses its position.

Key Considerations for Federal Contractors

Federal contractors and suppliers offering Canadian-origin products should closely monitor forthcoming guidance from OMB, USTR, the FAR Council, and individual agencies. In the meantime, contractors should consider reviewing their supply chains to identify potentially affected Canadian-origin products and available U.S.-origin alternatives. Contractors should also monitor civilian agency procurements for changes to country-of-origin requirements, solicitation terms, representations and certifications, and domestic preference provisions, while also considering how alternative sourcing could affect their pricing, lead times, and contract performance.

For questions concerning this memorandum, contact a member of Taft’s Government Contracts group.