In a move the Biden administration says is aimed at strengthening U.S. manufacturing, the Federal Highway Administration has proposed abandoning its more than 40-year-old blanket exemption from the federal national preference requirement for to manufactured goods used for federal aid. highway projects.
The FHWA detailed its latest Buy America action in a proposed rulemaking published March 7. Comments on the proposal must be made within 60 days of publication in the Federal Register.
U.S. Department of Transportation officials said the main reason for the proposed change is to strengthen U.S. manufacturing companies and supply chains and spur domestic job growth.
FHWA Administrator Shailen Bhatt said in a statement, “We are proposing to eliminate a policy that disincentivized restricted manufacturing in the United States.” Bhatt added that with the addition of the proposed new regulation, “U.S. companies now have a long-term incentive to take advantage of the broader government market.”
FHWA also said the new standards are in line with current Buy America Build America Act (BABAA) guidelines for manufactured products. The BABAA is included in the Jobs and Infrastructure Investment Act of 2021.
A major group of construction contractors criticized the FHWA’s proposal.
Brian Turmail, vice president of public affairs and strategic initiatives for the Associated General Contractors of America, told ENR via email, “While AGC supports efforts to strengthen domestic manufacturing, the process of implementing the new Buy America requirements and the proposed elimination of the manufactured goods exemption is being done too hastily and without proper consideration due to political pressure.”
Turmail added, “The reality is that the federal government has no knowledge of domestic manufacturing capabilities for many of the materials covered by the rules of the Build America, Buy America Act.”
He said: “It’s not clear how tying up infrastructure projects with even more red tape will create more jobs, boost domestic manufacturing or make our economy more efficient.”
The proposed new requirements would replace the current blanket exemption for manufactured products. The FHWA says the waiver was created in the Surface Transportation Assistance Act of 1978 and the standards were last changed in the 1983 surface transportation statute.
The new proposal would not alter the Buy America requirements that apply to iron or steel products, FHWA noted. It would also leave intact other BABAA requirements covering certain types of building materials.
In addition, several specific types of construction materials, such as cement and aggregates such as stone, sand or gravel, would also be exempt from Buy America.
The IIJA greatly expanded the scope of Buy America’s federal requirements. On the one hand, the IIJA greatly increased funding for highways and other infrastructure projects, most of which are covered by Buy America.
This law also increased the list of types of construction materials that are subject to national preferences and stated that Buy America would apply to projects funded by other federal laws beyond the IIJA, such as regular appropriations.
For a manufactured product to meet the proposed requirement, it must be manufactured in the US and the cost of its US-produced or manufactured components must exceed 55% of the total cost of the product.
FHWA also said it is proposing to apply its current Buy America requirements to two types of iron and steel materials that would be permitted to be used as components of manufactured products. These materials are the iron or steel components of precast concrete; and iron or steel enclosures for intelligent transportation systems and “other electronic hardware systems” installed on highway footprints or other properties.
