FHWA Proposes Rollback of Buy America Waiver for Manufactured Products

What happened: In a long-anticipated move, the Federal Highway Administration (FHWA) March 7 released a proposal to roll back the longstanding waiver exempting manufactured products from Buy America requirements on federal-aid highway projects. In a news release, the agency called it a “major step” to “boost domestic manufacturing, bolster critical supply chains, and support the creation of good-paying union jobs.” FHWA will solicit comments on the implications of this proposal for 60 days after formal publication in the Federal Register.

Why it matters: FHWA proposes requiring that domestic content of manufactured products exceeds 55 percent, as measured by the cost of their components. In justifying the proposed change, the agency repeatedly cites domestic manufacturing as a policy priority for the White House and Congress. While briefly acknowledging concerns about potential highway project cost increases and delays, the agency states it will pursue targeted waivers for specific manufactured products to minimize them. FHWA will also publish a request for information, asking for further input on manufactured products that may be problematic without the waiver.

Dating back more than 40 years, FHWA’s waiver has exempted a wide variety of items – including highway striping, pumps, electronics, and generators – from domestic preference requirements. ARTBA and numerous other groups have supported the waiver in part because it would be costly – or impossible – to ensure many of these items were Buy America-compliant. In a 2023 survey co-sponsored by ARTBA, two-thirds of contractors believed a change in the waiver would cause a “major effect” on their operations, requiring significant additional time and costs to document and certify countless components within these items.

With strong bipartisan support, the Infrastructure Investment and Jobs Act (IIJA) maintained Buy America coverage for iron, steel and manufactured products (notwithstanding the FHWA waiver), while expanding it to several construction materials. The law also requires periodic reviews of waivers like this one.

What’s next: FHWA likely timed its announcement at the White House’s direction, so President Joe Biden can reference the proposal in his State of the Union address. Once the agency’s proposed rule and request for information appear in the Federal Register, ARTBA will encourage members and chapters to submit comments. For more information, please contact Rich Juliano or Prianka Sharma.