Background

As it has for decades, Buy America applies to federal-aid highway and transit projects. In addition to the long-standing requirements for domestic-manufactured steel, iron and certain manufactured products, the IIJA expanded Buy America coverage to construction materials, including non-ferrous metals; plastic and polymer-based products (including polyvinylchloride, composite building materials, and polymers used in fiber optic cables); glass (including optic glass); lumber; and drywall. The IIJA specifically exempts cement and cementitious materials; aggregates such as stone, sand, or gravel; or aggregate binding agents or additives from the definition of construction materials.

While the BABA Act covers manufactured products, a 1983 waiver from the Federal Highway Administration (FHWA) exempts many of those items from Buy America coverage on federal-aid highway projects. However, because of an IIJA requirement, the agency plans to review and invite public comments on that waiver in the near future.

Initial Look at New OMB Guidance

The new OMB document includes a narrative, questions, and draft guidance language. OMB will take comments on the draft for 30 days after it is published.

Key topics in the new guidance include the following:

• Adding to Covered Construction Materials. The draft guidance would add three new categories on covered construction materials to the five listed in the IIJA (noted above). They include composite building materials, fiber optic cable, and optical fiber. OMB is also exploring whether to cover additional categories, including coatings (e.g., paint, stain, and other coatings applied at the work site), brick and engineered wood products – along with standards for each category to determine if they were produced in the United States as required.
• Treatment of Aggregates. While acknowledging that Congress explicitly excluded aggregates and pavement materials from the definition of “construction materials” requiring Buy America coverage, OMB states the IIJA “does not specify whether these Excluded Materials should be entirely excluded from coverage under Buy America Preferences.” The narrative explains that OMB is considering covering these materials when they “have been processed into a specific form or shape or combined with other raw materials, such as combining them with cement powder and water to produce precast concrete products[.]” However, for purposes of federal-aid highway projects, please note that even if OMB chose to cover these types of manufactured products, the FHWA waiver may still apply for the time being.
• Analysis of Manufactured Products. In working with state transportation agencies to implement BABA, ARTBA and its members have sought clarity in distinguishing certain construction materials (covered by Buy America) from manufactured products (largely not covered because of the FHWA waiver). The draft guidance invites further comment on this issue. The document also examines determination of the “cost of components” for manufactured products, referencing a requirement that at least 55 percent of the total cost of such a product must be domestically produced. However, if the FHWA waiver continues to exempt many manufactured products, then “cost of components” may not be an issue on federal-aid highway projects.
• Procedures for Buy America Waivers. The draft guidance largely reiterates requirements for the waiver process published in last year’s initial guidance. The waiver may be based on “public interest,” “nonavailability” or “unreasonable cost.” Waivers must be submitted in writing and the relevant federal agency must post it publicly and seek public comments for at least 15 days (or 30 days for waivers of “general applicability”). In addition, the Made in America Office must review the waiver and offer its analysis as to whether it is consistent with law and policy.
• Reducing Burdens. The draft invites suggestions for “reducing burdens” on state and local agencies implementing the requirements.

Next Steps

ARTBA will be submitting comments to OMB on the draft guidance. We also invite individual ARTBA members and chapters to do the same. We welcome input on any of these issues as the process moves forward.

ARTBA remains in contact with officials at the White House and U.S. Department of Transportation on Buy America implementation. We are also working with other national associations with common interests.