The requirement to incorporate domestic steel and iron on federal-aid projects has been around for thirty years, but our current transportation act, MAP–21, has influenced an increasing number of questions about Buy America and its impact to local assistance projects. Below are the top five Buy America inquiries I’ve received from subscribers and the responses I’ve shared.
Question 1: What is “Buy America”?
Answer 1: Buy America refers to provisions (23 U.S.C.313 and 23 CFR 635.410) that require steel and iron used on all federal-aid projects be made in the United States1. Additionally, all manufacturing processes (rolling, extruding, machining, bending, grinding, drilling, coating, welding and smelting )involved in steel or iron products must occur within the United States.
Question 2: What changes did MAP–21 make to Buy America?
Answer 2: As of October 1, 2012, all contracts eligible within the scope of a NEPA approval must comply with Buy America provisions. The requirement holds whether a contract (within the NEPA approval) is funded with Federal-aid funds or not2.
Essentially, Buy America applies at the project level rather than at the contract level of the past.
Question 3: Can I request a waiver for Buy America requirements?
Answer 3: Approval of waivers are rare, but a local agency may request a waiver on a project-by-project basis3 (for specific projects, specific products, specific geographical areas, or combinations) if:
- Buy America is inconsistent with the public interest, or
- There is not a sufficient supply of domestic materials of satisfactory quality.
Question 4: If I make the cost of an eligible iron and steel product non-participating (i.e. not seek federal reimbursement), does Buy America still apply?
Answer 4: Regardless of the type of funds used for procurement of an eligible iron or steel item used a federal-aid project, Buy America provisions apply. Inaccurately identifying an item of work as non-participating does not excuse compliance with Buy America.4
Question 5: Are utility relocations performed by utility companies subject to Buy America provisions?
Answer 5: The applicability of Buy America provisions in this scenario is dependent on the eligibility of work.5
- If the utility relocation is eligible for federal reimbursement, the relocation is subject to Buy America provisions.
- If the utility relocation is not eligible for federal reimbursement,, the relocation is not subject to Buy America (regardless if federal reimbursement is requested or not).
These inquiries in no way attempt to address all Buy America issues that may come up with your federal-aid project. Here are several helpful pages published by FHWA that I recommend for more information about Buy America:
- FHWA Construction Program Guide: Provides the authority and legal basis of the Buy America policies.
- FHWA’s Buy America Q and A for Federal-aid Program: 48 questions and answers pertaining to Buy America inquiries that have been presented to the Office of Program Administration.
- MAP–21 Buy America Questions & Answers: Buy America questions and answers specific to the impact from MAP–21.
- Buy America Issues to Consider for Utility Work on Projects: Questions and answers with respect to utility work.
If you’re still unable to find the answer to your Buy America question, don’t hesitate to contact you DLAE.
The minimum threshold for Buy America to apply is $2,500 (the total amount of iron and steel products as delivered to the project) or 0.1% of the total contract amount, whichever is greater. ↩
If a non-Federal-aid contract without Buy America provisions was awarded before October 1, 2012, then the rest of the contracts within the scope of the NEPA document would remain eligible for Federal-aid funding as long as they contain the Buy America provisions. ↩
Another way that I’ve addressed this question is by examining the ownership (i.e. liability) of a utility to be relocated. If a local agency is liable for the cost of a utility relocation, it’s typically eligible for federal reimbursement. If a utility company is liable for the cost of a utility relocation, it’s typically not eligible for federal reimbursement. Relocations that serve as betterments (e.g. under-grounding) immediately come to mind as situations that break this explanation, but in general, it’s a simple way of determining if a relocation is subject to Buy America. ↩