DOE Implements New Domestic Manufacturing Requirement for Federally Funded Research

The Department of Energy (DOE) recently released guidance requiring innovations resulting from DOE sponsored research to have domestic manufacturing requirements. The guidance, referred to as the Science and Energy Department’s Determination of Exceptional Circumstances (DEC), is part of the Biden administration’s effort to build a robust and resilient domestic supply chain in critical technology areas. Weaknesses in the domestic supply chain have been highlighted by the ongoing COIVD-19 pandemic and this new DEC intends to encourage American energy innovations to be manufactured domestically.

An FAQ put out by DOE answers the question, “What does the DEC accomplish?” “The Science and Energy DEC allows DOE to extend the requirement for substantial domestic manufacture of DOE Science and Energy Technologies developed under a funding agreement beyond the Bayh-Dole Act requirement of U.S. Preference. The Science and Energy DEC does not alter DOE acquisitions or partnering engagements with industry. Since one of the stated goals of Bayh-Dole is to “promote the commercialization and public availability of inventions made in the United States by United States industry and labor,” DOE has determined that enhanced domestic manufacturing requirements will better promote the goals of the Act, better ensure domestic impact of DOE-funded technologies, and better protect critical supply chains.”

Domestic manufacturing requirements have been issued by DOE for inventions that have come about as a result of Advanced Research Projects Agency–Energy (ARPA-E) projects. DOE has created a waiver process for innovations where there is a “lack of domestic manufacturing capacity and other business considerations.”

The administration’s focus on bolstering the U.S. supply chain is in line with a recent White Paper on the “Hazards of Global Supply Chains,” authored by the ASME Manufacturing Public Policy Task Force. The paper discusses the supply chain disruptions that occurred following the onset of the COVID-19 pandemic, and how factors such as offshoring and outsourcing contributed to global shortages of key supplies in the months immediately following the outbreak. The paper also explains the role a strong manufacturing sector can play in bolstering economies against future disruptions of similar scale, and how to establish a domestic manufacturing industry capable of such fortification.

The white paper can be viewed on the ASME position statements webpage: https://www.asme.org/government-relations/position-statements.