New Buy America Requirements Come Into Focus

What happened: The U.S. Department of Transportation (U.S. DOT) Nov. 4 published two new sets of proposed waivers from Buy America requirements for federal-aid highway and transit projects. If implemented, the waivers would exempt certain projects and products from Buy America obligations. The agency also announced new Buy America coverage for five categories of construction materials will begin today.

Why it matters: As ARTBA has previously reported, the Infrastructure Investment and Jobs Act (IIJA) expanded Buy America coverage to ‘construction materials’ – specifically non-ferrous metals, PVC/plastics, lumber, drywall and glass. Aggregates and other pavement-related materials are not covered. Iron, steel and certain manufactured products remain subject to Buy America. Buy America requires a domestic manufacturing process for covered items that are permanently incorporated into projects.

The IIJA’s expansion of Buy America to construction materials was scheduled to take effect May 14, but the Department delayed it through a six-month waiver until Nov. 10. In its announcements this week, the agency indicated it will not extend that waiver and Buy America coverage for materials will finally take effect today.

U.S. DOT’s two sets of proposed narrower waivers are:

Proposed Waiver of Buy America Requirements for De Minimis Costs, Small Grants, and Minor Components

The agency would waive Buy America requirements for iron, steel, manufactured products, and construction materials on a federal-aid project if:

• The total value of non-domestic products is no more than the lesser of $1,000,000 or 5 percent of total allowable costs from the federal-aid funding;
• Federal-aid funding for the project is below $500,000; or
• The non-domestically produced miscellaneous minor components comprise no more than 5 percent of the total material cost of an otherwise domestically produced iron or steel product.

Proposed Waiver of Buy America Construction Materials Requirement for a Narrow Category of Contracts and Solicitations

The agency would waive the new Buy America requirement for construction materials on ‘sufficiently advanced’ projects, including:

• Any contract entered into before Nov. 10, 2022; and
• Any contract entered into before March 10, 2023, if the contract results from a solicitation published prior to May 14, 2022.

Among other purposes, the first group of waivers appears to address the use of commercially available off-the-shelf (COTS) products, an ARTBA priority given their minimal cost and difficulty to certify as domestically-manufactured.

As to the second group of waivers, U.S. DOT’s narrative explains that some state and local agencies exercise pre-award authority to solicit construction contracts before federal funds are fully obligated for them. They intend this waiver to avoid scenarios where a project design or contract would have to be pulled back and altered to comply with the new Buy America coverage of construction materials.

What’s next: U.S. DOT will take comments on these two waivers until Nov. 20. ARTBA plans to submit comments and encourages interested members and chapters to do the same.

The two groups of proposed waivers appear to address some of ARTBA’s concerns expressed through meetings with and written submissions to federal agencies during recent months. The association will continue to seek clarity on a number of related implementation issues. Please contact Rich Juliano or Nick Goldstein with feedback on these proposed waivers and Buy America generally.