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Dive brief:
- The Federal Highway Administration announced Thursday a proposal to suspend its four-decade-old general exemption from Buy America requirements for manufactured goods used in federally funded highway projects. The aim is to strengthen domestic manufacturing and supply chains and also stimulate employment.
- The FHWA also intends to create standards that apply to manufactured products covered by the Buy America requirements and is seeking input to describe those standards. Contractors have complained before about the lack of clarity about these requirements.
- This proposed rule would implement President Joe Biden’s rule Executive order of January 2021 to maximize domestically produced goods. The agency reviewed the waiver under the Jobs and Infrastructure Investment Act of the Build America, Buy America Act, which greatly expanded the domestic hiring requirement.
Diving knowledge:
Buy America generally applies to direct federal procurement, goods the US government buys for its own use, while BABA applies to awards made with federal financial assistance, according to the Made in America office. BABA requires that all manufactured goods, construction materials, and iron and steel used in federally funded infrastructure projects be made in America.
The FHWA’s Buy America waiver dates to 1983; At the time, manufactured goods were being used in insufficient amounts in highway construction projects to spur domestic manufacturing, the statement said.
“For decades, U.S. highway projects have been able to use taxpayer dollars to buy products made in other countries,” Transportation Secretary Pete Buttigieg said in the statement. “As we rebuild America’s infrastructure, this new rule would require federal highway projects to use products made here.”
The White House issued last August final guidance on your BABA standards, which define the relevant building materials and local manufacturing process standards for each material.
The FHWA’s proposed rule will not change the Buy America requirements that currently apply to iron or steel products, nor will it change the BABA requirements that apply to products classified as building materials or excluded materials, including cement; aggregates such as stone, sand or gravel; or aggregate binding agents.
To meet the proposed requirement, a product must be manufactured in the US and the cost of its US-produced or manufactured components must exceed 55% of its total cost. Although contractors are reimbursed for the additional cost of materials made in the United States, some of these products can be difficult to obtain. This could result in project delays as builders are forced to apply for an exemption instead of being automatically offered.
Builders weigh in
The agency also issued a request for information on the national availability of manufactured products is commonly used in FHWA-funded projects, which will help guide implementation should the waiver be rescinded. The RFI and proposed waiver were published today in the Federal Register and for comment are open until May 13.
The American Association of State Authorities and Transportation Officials has expressed this previously concern to the US FHWA and DOT this suspension or removal of the waiver would delay projects, as some domestically produced materials are not yet sufficiently available.
“Rather than removing the exemption entirely, we are recommending that it continue as the FHWA conducts targeted market studies to see which products can be successfully located,” AASHTO Executive Director Jim Tymon said in a statement press “This strategy has a greater chance of achieving the overall goal of increasing domestic manufacturing.”
