If your business wasn't already working with the federal government in some capacity, now may be the time to start.

For small businesses, the order also presents federal contracting opportunities, as agencies must now utilize the Manufacturing Extension Partnership, a national network that works with small and midsize manufacturers across the U.S. and in Puerto Rico. Contracting accounts for nearly $600 billion in federal spending, the White House estimates.

Collectively, the measures could be a game changer for small, would-be federal contractors, says Karen Kerrigan, president of the Small Business & Entrepreneurship Council, a nonpartisan advocacy group in Vienna, Virginia. The complexity of working with the government and the lack of transparency regarding opportunities have traditionally been stiff obstacles, she notes.

Buy American Backlash

Of course, some businesses may lose out in the effort, adds Kerrigan. Tightening the rules on Buy American may create opportunities for some smaller contractors, but hurt those who need to source from Canada and other countries. "One real concern is that upping Buy American content may mean some [small and midsize businesses] will be forced to turn to newly restricted domestic supply chains, which may raise their costs and competitively price them out of these contracts or winning new bids," she says. It becomes, in essence, a backdoor tariff. 

Former President Donald Trump also boasted Buy American policies through his "America First" agenda. (Trump also imposed tariffs trying, and failing, to win trade wars.) The Trump administration issued a number of executive orders, which included limits to exemptions or waivers to "Buy American" rules, and extending those rules to loans, grants, and other federal assistance programs. The day before he left office, Trump also issued a final rule increasing the percentage of U.S.-made content that an end product may contain to qualify under "Buy American" rules. It also increased the price preferences for domestic goods under the Buy American Act. 

That rule is now subject to a regulatory freeze. On January 20, Biden's chief of staff, Ronald Klain, sent a memo instructing all heads of executive departments and agencies to withdraw or hold any new or pending rules until an administration representative or Biden appointee is able to review them.