Construction materials used on federal-aid highway projects are now subject to Buy America provisions required under the $1.2 trillion infrastructure law, but some waivers to the rules are being considered, according to the U.S. Department of Transportation.
The Build America, Buy America Act covers five construction materials categories: non-ferrous metals, plastics and polymer-based products, glass, lumber and drywall.
Iron, steel and “manufactured products” have already been subject to the rules. Asphalt, aggregates and other paving materials are not subject to Buy America.
Construction materials must now be produced in the U.S. to be used on projects federally funded under the infrastructure law, effective November 10. The materials were initially subject to the new law May 14, but a 180-day waiver was granted to enable federal agencies to develop enforcement and compliance guidance. That period ended November 10, and USDOT has decided not to extend the waiver.
However, the agency is proposing some grandfather provisions on construction materials for projects. Those are for any contracts entered into before November 10, and any contracts entered into before May 10, 2023 in which bid solicitations were published before May 14, 2022.
USDOT has also proposed limited waivers to the Buy America rule on construction materials, as well as iron, steel and manufactured products, on federal-aid projects in one of these three cases:
- The noncompliant materials make up the lesser of $1 million or 5% of total costs.
- The federal financial assistance for the project is less than $500,000.
- Or, the non-domestically produced miscellaneous minor components comprise no more than 5% of the total material cost of an otherwise domestically produced iron or steel product.
Comments on the new waiver proposals must be submitted to USDOT by November 20.
Construction groups have objected to the Biden administration’s enforcement of the Buy America rules because they say it will drive up the already-high costs of materials and the cost of projects. They also note the supply shortage, including for U.S.-produced products.
The Associated General Contractors reported November 1, before USDOT announced its waivers, that the transportation construction sector lagged faster-growing segments in September. Association CEO Stephen Sandherr attributed the lag to “the inevitable regulatory confusion that comes with the new Buy America requirements.”
“The best way to accelerate investments in our aging transportation sector is to provide immediate relief to the Buy America rules that make no sense at a time when supply chains remain very challenged,” Sandherr says. “The administration can provide an immediate boost to infrastructure upgrades by relaxing what are proving to be unworkable new requirements.”
Construction groups have called for more preparation and study of the availability of American-made construction materials and called for a smoother transition to the rules.
In previous support of waivers to the rule, the American Association of State Highway & Transportation Officials has said “domestic manufacturing is currently unable to ensure the availability and timely delivery of many materials needed for transportation projects that are underway, resulting in sometimes significant project delays and increased costs for limited materials.”
The American Road & Transportation Builders Association says the new waivers appear to address some of its concerns, particularly in not disrupting projects already awarded.
ARTBA says it plans to submit comments on the waivers and Buy America rules and encourages its members to do the same. “The association will continue to seek clarity on a number of related implementation issues.”
The infrastructure law’s Buy America provisions are designed to boost American manufacturing and job creation. USDOT says it proposed the waivers for lower-cost items to “maximize domestic content in federal financial assistance awards.
“Doing so will allow the department and its assistance recipients to make efficient use of its limited resources to focus their efforts on higher-value products with more significant opportunities to develop a domestic supply base and create well-paid jobs for American workers.”
The Biden administration’s enforcement order on Buy America already allows waivers of the rules in certain situations. Those reasons are if there is not enough domestic supply of the materials available, if U.S. materials will increase the overall cost of the project by more than 25%, or if the materials requirement is inconsistent with the public interest.