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Last week, the Federal Register published President Biden’s Executive Order on Federal Research and Development in Support of Domestic Manufacturing and United States Jobs [1] (Executive Order), which requires federal agencies [2] to emphasize domestic manufacturing in research and development agreements, contracts, and plans.

The Executive Order specifically directs certain federal agencies to, among other things:

  • consider domestic manufacturing in federal Research & Development (R&D) funding agreement solicitations, including how R&D funding supports the overall U.S. manufacturing base;
  • use both Other Transaction Authority and the Small Business Innovation Research and Small Business Technology Transfer programs to support the production of leading-edge and new technologies in the United States, by streamlining program requirements and simultaneously encouraging domestic manufacture of the new technologies;
  • require recipients of federal R&D funding agreements to track and update the awarding agency on the location where “subject inventions” are manufactured and to report annually on licensees and manufacturing locations of such inventions; [3]
  • consider whether “exceptional circumstances” exist warranting restrictions on the right to retain title to subject inventions, including whether to extend the requirement to manufacture substantially in the United States to recipients of federal R&D funding agreements, to non-exclusive licensees of subject inventions, and for use or sale of subject inventions outside the United States.

The Executive Order also encourages the impacted agencies to develop a process by which the agency may waive the domestic manufacturing requirements for agency-funded technology or technology developed under an agency funding opportunity without first having to receive a waiver request from a federal R&D funding agreement recipient.  This process should set forth specific factors that may support a waiver, and seek concurrence from the Made in America Director prior to waiving domestic manufacturing requirements.  Additionally, the Executive Order directs the Secretary of Commerce, through the Director of the National Institute of Standards and Technology, to provide guidance to agencies on the factors and considerations they should weigh when determining whether domestic manufacturing is not commercially feasible. 

Key Takeaways

The government’s emphasis on protecting U.S. intellectual property and rebuilding domestic critical manufacturing continues to increase.  Entities seeking federal R&D funding may be able to further distinguish themselves in competitions by emphasizing their domestic manufacturing capabilities, efforts, or goals.  Conversely, entities that lack options for United States manufacturing may struggle to be deemed eligible for federal R&D projects, though the Executive Order’s emphasis on transparency and consistency within the process for obtaining waivers for “subject invention” domestic manufacturing requirements could help ensure such waivers are granted when warranted.

[1] Executive Order 14104, July 28, 2023.

[2] The Executive Order applies to the agencies under the Department of Defense, Department of Agriculture, Department of Commerce, Department of Health and Human Services, Department of Transportation, Department of Energy, Department of Homeland Security, National Science Foundation, and National Aeronautics and Space Administration.  Certain requirements also apply to all agencies participating in the Small Business Innovation Research and Small Business Technology Transfer programs or that have statutory Other Transaction Authority or authority from Congress to use other business arrangements for acquisitions.

[3] The Department of Commerce has been instructed to develop the award terms and conditions for these reporting requirements within 60 days of the Executive Order (late September 2023).

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Photo of Stephanie Crawford Stephanie Crawford

Stephanie L. Crawford is a counsel in Crowell & Moring’s Washington, D.C. office, practicing in the Government Contracts group.

Stephanie’s practice focuses on mergers and acquisitions, contract and regulatory compliance reviews, and counseling on supply chain, sourcing, and national security issues. Her practice…

Stephanie L. Crawford is a counsel in Crowell & Moring’s Washington, D.C. office, practicing in the Government Contracts group.

Stephanie’s practice focuses on mergers and acquisitions, contract and regulatory compliance reviews, and counseling on supply chain, sourcing, and national security issues. Her practice supports clients in the aerospace & defense, communications, energy, information technology, and consumer products sectors.

Photo of William B. O'Reilly William B. O'Reilly

William B. O’Reilly is a counsel in Crowell & Moring’s Washington, D.C. office, where he is a member of the firm’s Government Contracts Group.

Liam assists clients with all phases of government contracting, including contract formation and award controversies, performance counseling, and claims…

William B. O’Reilly is a counsel in Crowell & Moring’s Washington, D.C. office, where he is a member of the firm’s Government Contracts Group.

Liam assists clients with all phases of government contracting, including contract formation and award controversies, performance counseling, and claims and disputes litigation. His practice includes representing clients in bid protests before the Government Accountability Office and U.S. Court of Federal Claims. Liam also regularly advises clients on supply chain risk management, addressing issues such as cybersecurity, country of origin and domestic preferences, and counterfeit part detection and avoidance, as well as conducting internal investigations and mandatory disclosures for performance breaches and potential violations of the False Claims Act (FCA).

Photo of Alexandra Barbee-Garrett Alexandra Barbee-Garrett

Alexandra Barbee-Garrett is an associate in Crowell & Moring’s Washington, D.C. office, where she practices in the Government Contracts Group.

Alex represents government contractors in both litigation and counseling matters. Her practice includes bid protests before the Government Accountability Office (GAO), the U.S.

Alexandra Barbee-Garrett is an associate in Crowell & Moring’s Washington, D.C. office, where she practices in the Government Contracts Group.

Alex represents government contractors in both litigation and counseling matters. Her practice includes bid protests before the Government Accountability Office (GAO), the U.S. Court of Federal Claims, and the U.S. Court of Appeals for the Federal Circuit. Alex’s practice also focuses on federal regulatory compliance, mandatory disclosures to the government, contract disputes under the Contract Disputes Act (CDA), prime-sub disputes, and False Claims Act and internal investigations.

Prior to joining Crowell & Moring, Alex was a law clerk to Judge Richard A. Hertling of the U.S. Court of Federal Claims and a government contracts associate at another large law firm. Alex graduated honors from The George Washington University Law School, where she was an articles editor of The Public Contract Law Journal. Alex won the 2015 Government Contracts Moot Court Competition and served as chair for the 2016 competition. Prior to law school, Alex worked as a health care legislative assistant for Rep. Rick Larsen (WA) in the U.S. House of Representatives. She received her B.A. in international studies and anthropology from the University of Washington.

Photo of Jonathan M. Baker Jonathan M. Baker

Jonathan M. Baker is a partner in Crowell & Moring’s Washington, D.C. office. He practices in the Government Contracts Group.

Jon advises clients on a wide array of government contracts legal issues, including both federal and state bid protests, prime-sub disputes, government contracts…

Jonathan M. Baker is a partner in Crowell & Moring’s Washington, D.C. office. He practices in the Government Contracts Group.

Jon advises clients on a wide array of government contracts legal issues, including both federal and state bid protests, prime-sub disputes, government contracts due diligence and transactions, regulatory compliance, and contract terminations. Jon’s practice has a notable emphasis on technology-related issues, including counseling clients in the areas of patent and data rights, responding to government challenges to technical data and computer software rights assertions, and litigating cases involving complex and cutting edge technologies. Jon also provides guidance on national security matters, such as National Industrial Security Program Operating Manual compliance and facility and security clearance matters. In addition, Jon has advised clients on local government contract negotiation, internal and government investigations regarding potential False Claims Act issues, and export violations. Jon is also actively involved in the firm’s pro bono program, having litigated prisoner neglect, parental rights termination, and landlord-tenant matters.

Photo of Adelicia R. Cliffe Adelicia R. Cliffe

Adelicia Cliffe is a partner in the Washington, D.C. office, a member of the Steering Committee for the firm’s Government Contracts Group, and a member of the International Trade Group. Addie is also co-chair of the firm’s National Security practice. Addie has been…

Adelicia Cliffe is a partner in the Washington, D.C. office, a member of the Steering Committee for the firm’s Government Contracts Group, and a member of the International Trade Group. Addie is also co-chair of the firm’s National Security practice. Addie has been named as a nationally recognized practitioner in the government contracts field by Chambers USA.