Four leading construction industry groups, unhappy with the White House Office of Management and Budget’s implementation of federal Buy America requirements, are calling for a major change in the administration of the rules. The coalition would prefer OMB to focus on general domestic preference policy, with infrastructure funding agencies like the US Department of Transportation taking the lead on program specifics.
Buy America’s reach was greatly expanded under the Jobs and Infrastructure Investment Act of 2021 (IIJA). The $1.2 trillion infrastructure law includes the Build America, Buy America Act (BABAA), which outlines federal domestic preference requirements.
In a Feb. 15 petition to OMB Director Shalanda D. Young, the Associated General Contractors of America, the American Highway and Transportation Builders Association, the American Public Transportation Association and the National of Home Builders say they fully support the IIJA’s goal of strengthening the U.S. manufacturing But they add, “Unfortunately, OMB’s approach to managing virtually every aspect of the requirements of the Build America, Buy America Act is impractical and causes confusion and delay with federal agencies that fund construction projects.”
The groups say their members “have encountered significant difficulty navigating an opaque and unbalanced implementation of BABAA” by the OMB and its Made in America office.
A larger role is sought for other agencies
Industry associations want to see OMB to concentrate on broader policy issues, with more authority over the nuts and bolts of the program directed to other federal agencies more familiar with infrastructure projects.
“Because each agency’s infrastructure building stakeholders must consider unique inflation, supply chain, and related dynamics, OMB should focus on implementing BABAA at a widespread level of policy and empower federal agencies with broad discretion to fill in the details,” the groups say.
A particular focus of the coalition is the Office of Made in America’s process for evaluating proposed exemptions from Buy American requirements. Associations say the process is often long and unpredictable. They cite a May 21, 2021 Illinois Department of Transportation waiver request to OMB that was not released for public comment until August 28, 2023.
“OMB must change course and foster a deliberative, data-driven implementation process that not only prioritizes domestic manufacturing, but also provides adequate consideration for the timely and successful delivery of infrastructure projects essential,” says the coalition. IIJA’s inability to deliver on its infrastructure promise to the American people.”
In their petition to Young, the associations say the building materials market is still adjusting to meet BABAA requirements as the industry seeks to deliver a greater volume of IIJA-funded projects. “Amid these historic challenges, we have encountered significant difficulties navigating an opaque and unbalanced implementation of BABAA” by OMB, the coalition says. This would translate into smaller, delayed and more expensive infrastructure projects, he says.
An OMB spokesman did not immediately respond to a request for comment from ENR.
In their petition, the associations are asking that OMB issue new BABAA implementation guidance and also review information that other federal agencies collected for Buy America waivers. The groups say these collections of information do not comply with the Paperwork Reduction Act.
Federal national preference requirements have existed for decades, most notably for steel. But the importance of Buy America increased under the IIJA.
On the one hand, funding for projects in the infrastructure law increased considerably from previous levels. In addition, the statute added construction materials to the types of products subject to the requirements. In addition, the law expanded its application beyond IIJA-funded projects to those funded by other laws, such as appropriations bills.
The house panel also broadcasts the Buy America issues
Buy America programs and waivers were also the focus of a Feb. 15 House Highway and Transportation subcommittee hearing.
“State DOTs have recognized since ‘day one’ of the IIJA that the delivery of this historic investment is paramount,” said Carlos Braceras, Utah DOT Executive Director. “American money should be spent on American things.”
Braceras, who was testifying for the American Association of State Authorities and Transportation Officials, said state DOTs have experienced delays in IIJA-supported projects for a variety of reasons, including material availability and worker shortages. But he added that “we are seeing more delays as part of the industry’s efforts to comply with BABAA.”
Braceras said many states would like to see improvements to the Buy America waiver process, including reducing the time it takes to process applications.
“Historically, the waiver process has not been transparent or efficient,” said Ty Edmondson, CEO of TA Loving Co., a contractor based in Goldsboro, NC. Edmondson, testifying on behalf of AGC of America, also cited the Illinois DOT exemption case and said it was “not an isolated example.” He said BABAA’s current process leads to “unintended consequences such as project delays, material substitutions, project redesigns or contractors choosing not to bid on a project.”
