With less than eight months remaining before compliance is set to begin, advice being given to heavy/highway construction contractors regarding January’s announcement of the federal Build America Buy America requirements is twofold:
- Assume the requirements scheduled to go into effect October 1 of this year and next year will take place
- Start identifying the “troublesome” products that will be needed to comply
While the updates to the Build America Buy America requirements were announced in the closing days of the Biden Administration, American Road & Transportation Builders Association’s (ARTBA) Rich Juliano believes the reasoning behind the new federal requirements is one of the few things also shared by the Trump Administration – which is the use of more domestic products.
The January 14 announcement – which came less than a week before the transition from President Biden’s to President Trump’s administrations – placed a deadline to end the FHWA’s longstanding waivers regarding manufactured products being assembled and originating in the U.S.
“Generally, President Trump and his administration are also very Pro America,” said Juliano, who serves as ARTBA’s general counsel and managing director of its Contractors Division. “This is an area where the two administrations have similar policy positions. So really, the question is how are they going to carry it out? … That’s really the issue.”
What the FHWA final rule does is rescind a longstanding waiver, dating back to 1983, for manufactured products. The more than 40-year waiver limited application of FHWA’s Build America Buy America requirements to iron and steel products while other materials needed on heavy/highway projects could derive from foreign sources. This waiver was rescinded in January by the Biden Administration to meet Build America Buy America requirements found in the current federal transportation funding bill – the Infrastructure Investment & Jobs Act (IIJA).
According to the FHWA, the goal of the latest requirements in utilizing domestic manufacturing for highway construction consists of three things:
- encourage investment in this sector;
- protect and expand domestic manufacturing; and
- increase reliance on U.S.-made products.
The theory behind, and commitment to, “Made in the USA” is well supported by the heavy/highway construction industry. However, there are questions regarding how the industry will be able to meet those October deadlines when some of the needed products for completing the transportation projects aren’t readily available in the U.S.
“I’m all for onshoring as much industry as we can,” said OCA Director of Public Agency Advocacy Chris Engle. “But until it actually happens, it’s kind of putting the cart before the horse by requiring it before the industry actually exists in this country.
“… The big thing to me is that if we don’t have an industry that produces that product in the United States, and it is still needed for projects now, you’re going to have to go through hoops to be able to keep the projects moving forward on schedule,” Engle added. “It could lead to delays of getting products until they come through.”
Delays in building and completing road and bridge projects is a main concern with the “October Requirements.”
Basically, by requiring the use of these domestically made products, the short-term problem is: What do you do when products are not available, or prohibitively expensive? “That is what we’re dealing with,” Juliano answered. “We support Buy America and the principles behind it. We know OCA does, all of ARTBA does, but the issue is how do you prevent disruptions to projects in the short term and increases in costs and delays? That’s what we’re trying to prevent.”
Two Words Causing Too Many Questions
This year’s October 1 requirement of having final assembly of all “manufactured products” used on transportation projects to take place in the U.S. is problematic.
“The term ‘manufactured product,’ there are hundreds of different items that can be put under that category,” Juliano said. “ … You have everything from pavement markings to pumps, to electronics; there are just dozens and dozens of items. It’s a simple two-word category that encompasses just many, many, many different items potentially used on a project. That makes it challenging to deal with, because you have different supply sources for different kinds of products, different assembly methods. You have all kinds of different variables.”
All these questions raise another big question: Can the FHWA – by the requirement’s start date – identify and ensure items can be readily manufactured domestically? And if not, consider a waiver, or short-time waiver, so projects can stay on schedule and on budget? All before October 1.
Engle and Juliano have their doubts, as both described the “Made in America Office,” which was created by the Biden Administration, is just one “very small office” looking and handling waivers across the federal government. “That’s a potential delay …,” Juliano said.
Delays are something contractors don’t appreciate at any time of a project – whether it is bidding or building the work. The Great Lakes Construction Co. President George Palko said, “The waiver process is extremely time consuming when we are faced with a short duration to bid and build a project. There really is not time for a multi-year waiver process.”
Foreseeing this Biden Administration/FHWA rescinding of the manufacturing product waiver for federally funded road and bridge projects, ARTBA began working beforehand with the Associated General Contractors of America (AGC) in surveying the nation’s heavy/highway contractors, subcontractors, suppliers, manufacturers and other industry partners. Conducted in 2024, the ARTBA/AGC survey sought insight regarding the Build America Buy America requirements for manufactured products and the potential impact it would have on projects. The survey received nearly 200 responses from contractors collectively working in all 50 states and the District of Columbia.
Key findings from the survey, which was presented to FHWA last May, included:
- The majority of firms believe the recission of manufactured product waivers would require significant time and cost to document and certify the components.
- Industry partners expect significant challenges in complying with Build America Buy America requirements for many manufactured products.
The ARTBA/AGC Survey asked respondents to evaluate several categories of manufactured products – such as retroreflective sheeting, LED lamps/lighting systems, utility products, Intelligent Transportation Systems (ITS) hardware, traffic signals and controllers, traffic cameras, changeable message signs and vehicle detection equipment – and the difficulty in accounting for them to meet Build America Buy America requirements. Survey responses on the ease of complying with the rescinded waivers ranged from 3.7% saying compliance would be “easy,” to 39% believing compliance would be “difficult” or “very difficult or impossible.”
The survey also asked respondents to list other manufactured products (outside the aforementioned categories) they use on road and bridge projects and the difficulty they foresee in meeting Build America Buy America requirements. Of the 230 items listed – ranging from aggregates and aluminum poles to waterproofing materials and wireless sensor nodes and systems – 68 products (30%) were identified as being “difficult,” very difficult,” or “impossible” to meet compliance.
While there are questions needing answered in the less than eight months prior to this year’s October 1st deadline, many think the 2026 October 1st deadline will be even more challenging.
According to the American Association of State Highway Officials (AASHTO), “FHWA’s new rule means that to be ‘Buy America-compliant’ for federal-aid projects obligated on or after Oct. 1, 2026, all manufactured products permanently incorporated into the project must be assembled in the U.S., with the U.S.-made portion of those material costs greater than 55% of the total cost of all the product’s components.”
Palko agrees and understands why fellow contractors are also seeing the made and derived in the U.S.A. requirement so challenging. “Is every component of a fire hydrant? Is every component of a lighting signal? Is every component of a control box sitting on a street corner that controls the walk and don’t walk signs made in America?” he asks. “That’s tough for us as contractors to know and to rely on our vendors at the time of bid that they are also in-tune with the specifications and are quoting us a product that when we are called to put it in place it meets all the requirements.
“That’s our biggest challenge as contractors, not just speaking for Great Lakes (construction) but the construction industry in general,” added Palko, who served on the AGC Board in the early days of IIJA when Build America Buy America regulations were initially discussed. “When you have a product that has many different components – be it steel, be it electric, be it rubber, be it whatever the case may be of what may be inside a component – are we able to safely say that everything was built in America?”
Along with the questions surrounding Build America Buy America requirements is the overriding question: Is it worth it? FHWA estimates compliance with the new policy will cost up to $8.5 billion over the next 10 years.
Juliano, who has shared the above diagram to show what the contracting industry could have in store in proving “Made in the USA” compliance, said the price tag is even higher if you calculate the time and effort contractors will spend in verifying Build America Buy America compliance. “That’s just a significant increase in administration costs for very little return in terms of strengthening domestic manufacturing – which we all support. But to look at these little items that are worth pennies basically, how does that help U.S. manufacturing. It doesn’t really make a lot of sense.”
What To Do When It Doesn’t Make Sense
While there are many questions centering on the approaching Buy America requirements, Juliano and Engle offer reminders and tips.
Both stressed to industry members that the Buy and Build America compliances are for projects obligated on or after the respective October 1 regulations go into effect. “If there is a way to get things installed or get them on-hand before the deadline(s) that’s a good idea,” said Engle, as he said it was a common practice used during COVID delays when contractors were faced with product shortages and increased costs.
Engle also reminded contractors of the importance of staying up to date through the quarterly OCA-ODOT Heavy Highway Specification Committee meetings. “We discuss this at every meeting … If you attend, you can keep up on the changing specs and regulations. We also publish the minutes; we would be glad to get them to our members so they have the latest of what’s going on with Build America, Buy America.”
The 19-year OCA director added that if contractors discover they can’t comply with the new regulations, notify ODOT. “I think communication is going to be key … As soon as you are aware that a product is not available in the United States on the project that you have, and that it will cause a delay, be sure you contact ODOT right away so that mitigation efforts can take place,” Engle said. “If there is a way to get an alternative product that serves the same purpose, ODOT can start working with you on mitigation. They don’t want to have the project being delayed any more than we do.”
“I think it is more important than ever to work with your industry representation and OCA,” said Juliano. “And OCA will work with ARTBA and others in trying to identify products that are going to be problematic.”
BUILD AMERICA BUY AMERICA REQUIREMENTS
The new federal rule changes, announced in January, will take effect in two phases:
For projects obligated on or after Oct. 1, 2025, final assembly of all manufactured products must occur in the U.S.
For projects obligated on or after Oct. 1, 2026, in addition to the final assembly requirement, the cost of components of products that are mined, produced or manufactured in the U.S. must be greater than 55% of the total cost of all components of the manufactured product.