By name, it sounds simple enough: Build America, Buy America. However, nearly a year after enacted as part of the Infrastructure Investment & Jobs Act (IIJA) there are many unknowns – and many questions unanswered.
The $1.2 trillion IIJA includes language stating infrastructure projects – whether receiving full or partial federal funding – are required to utilize “construction materials” manufactured in the United States. While infrastructure projects traditionally receiving federal money were mandated to use U.S.- manufactured iron and steel, the list of U.S.-made requirements has expanded in the current infrastructure bill.
The expansion of U.S.-made requirements is through the Build America Buy America Act (BABA), which is contained in the IIJA. BABA is the bi-partisan effort by Ohio U.S. Senators Sherrod Brown (D) and Rob Portman (R), who helped co-sponsor the bill. A media release noting the inclusion of BABA into the IIJA and its subsequent signing, states the longterm infrastructure funding bill “now implements Buy America rules across the board – ensuring that American taxpayer dollars are used to purchase American-made products for all federally funded infrastructure projects – closing loopholes and securing a major investment in American-made iron, steel and manufactured products.”
“One of the biggest changes that we will see in our industry is the inclusion of ‘Construction Materials’ that are now under the ‘Buy America’ umbrella,” according to ODOT. “… The materials listed in the (IIJA) that will most definitely need addressed on our ODOT projects are non-ferrous metals, plastics and polymer-based products (including polyvinylchloride, composite building materials, and polymers used in fiber optic cable), glass (including optic glass) and lumber.”
“It basically went from steel products and iron products, to now encompassing every product,” said Gerken Paving Inc. Vice President Dean Breese, who currently serves on the board of directors for the American Road & Transportation Builders Association (ARTBA).
Though there are exclusions of project materials that are not required to be produced in the U.S. – such as wood and other items used in temporary forms; cement and cementitious materials and aggregates, which include stone, sand or gravel; or aggregate binding agents or additives – the addition of “and construction materials” is concerning for project owners and contractors.
OCA Director of Public Agencies Chris Engle says the devil is in the details. “We all know what the law says … We don’t know what the process is going to be to implement this.”
What Are We Looking At?
While project owners, such as state DOTs, and contractors are well versed with the required use of U.S.- manufactured iron and steel, the current learning curve centers on items now needing to be made in the USA. Engle listed: “Glass beads used in pavement markings; traffic signal controllers – anything that has computer chips …; basically, all the epoxy products will have to meet the Buy America requirements,” he said.
“It encompasses wood and windows, doorknobs and light switches,” interjected Breese. “Everything for building that contractors may need for rest areas … It encompasses almost any product that is put into a federally funded project.”
George Palko, president/CEO of Great Lakes Construction Co., who serves on the Associated General Contractors (AGC) of America Board of Directors and chairs the group’s Highway & Transportation Division, said, “Departments of Transportation have no published list of which of their approved vendors are in compliance with the new requirements of the law. There is no definition of what is included under ‘construction materials’ as part of this requirement. The requirement goes into effect November 10, 2022, with little definition, criteria or waiver process communicated to the industry.
“This has not directly impacted contractors yet because it doesn’t go into effect until November 10 …,” Palko added.
ODOT is working with contractors to find that information, as it joined other state DOTs earlier in the year by filing a federal Request For Information (RFI) for clarification of the Buy America requirements. “As with any policy such as this, there will continue to be questions and clarifications needed as we work together under the new requirements,” ODOT stated. “… Answers to this RFI have not been posted yet, but once they are, valuable clarifications on some things will be given.”
Engle said the Buy America requirements for iron and steel have been around for a while and “have been worked into everybody’s processes. All the contractors are aware of it … They know what ODOT is expecting and know what they need to prove domestic origin, but with the new Buy America regulations it’s increasing the applicability to many other areas that have not been considered … It’s forcing everyone to examine what they’re using, and make sure that it’s sourced in America if it’s available.”
Born On Date
Domestic content requirements (i.e., Buy American & Buy America) for public construction in the United States dates back nearly 90 years, when The Buy American Act was passed in 1933 in the U.S. Congress. Buy America, which has comparisons and contrasts to Buy American, was established nearly 50 years later.
Buy American was signed into law on the final day of the Herbert Hoover Administration to encourage use of U.S.-made construction materials for government-funded post-Depression public works projects. According to MBP, a construction management services firm based in Fairfax, Va., Buy American covers specified products and requires the U.S. Government to purchase domestic construction materials used for public construction.
The Buy American Act applied to federal government purchases, but not private contractors awarded procurement funding through government endowments. The Buy America Act appeared in the late-1970s following the collapse of the nation’s steel industry. During the Ronald Reagan Administration, Buy America was included in the 1982 Surface Transportation Assistance Act, as it addressed concerns regarding construction of highways and bridges. According to MBP, Buy America gives “preference for the use of domestically produced materials on any procurements funded at least in part by the federal government.”
In the MBP article, “Buy American vs. Buy America: A Simple Guide to Successfully Navigating the Differences,” the Buy American Act is less expensive and easier to comply with than the Buy America Act.
Buy American applies “when federal government is directly assisting the procurement of products, or a federal facility is being constructed.” Under Buy American, goods and products meet the requirements if they contain at least 50% domestic content and are 100% manufactured in the U.S.
To meet Buy America Act requirements, the final product also must be 100% manufactured in the U.S. However, Buy America differs from Buy American because all the components of steel and iron must be 100% mined, melted and manufactured in the U.S.
While waivers existed with both the Buy American and Buy America federal acts, a September 2022 opinion piece by InsideSources, “How ‘Buy America’ Will Hurt America’s Infrastructure,” mentions the absence of an important waiver in the IIJA’s Buy America Act. “The latest infrastructure law … does not include a waiver that has been a crucial component of information and communications technology-related programs for decades. This waiver recognizes that technology products are global in scope and that most such products, including those manufactured by U.S. companies, rely on the worldwide supply chain and cannot be sourced in compliance with Buy America requirements.
“The lack of such a waiver that recognizes this reality,” the InsideSources article continued, “hamstrings state, local and tribal governments that receive infrastructure funding.”
It’s Not the Policy, It’s the Procedure
Most Americans would agree in supporting domestic content requirements and Buy America. In a 2019 article, “Made in USA: Turning Preference into Purchases,” by Reshoring Initiative Founder/President Harry C. Moser, surveys show U.S. consumers nearly unanimously support homegrown materials and manufacturing:
- 97% have a positive view of U.S. manufactured goods
- 91% believe in its importance and believe the U.S. government should take steps supporting American manufacturing
- 85% believe a strong U.S. manufacturing sector is important to national security
- 80% would be willing to pay more for U.S. goods
“Quality, jobs and the economy are the most commonly cited reasons for which Americans prefer U.S.-made goods,” wrote Moser. “… Americans support U.S. manufacturing out of a belief that it’s important for longterm job growth and economy stability.”
Engle believes recent global events have demonstrated the importance of domestic content requirements. “I think the supply chain issues that have occurred the past couple of years have really pointed out the need for America to be self-sufficient and not have to rely on foreign governments and foreign countries to supply the things that we need to keep America moving forward and build our transportation system,” he said. “We don’t want to get caught in the situation where the supply chain is controlled outside of our country and having issues and not being able to provide what we need when we need it.”
Breese agrees. “I think it’s a great idea – don’t get me wrong – that we support American-made products. I don’t think anyone disagrees with that, it’s just the fact that we aren’t ready for it,” he said. “This was sprung on us in a bill and there has not been a lot of thought given to what we’re going to do for projects that we’re requiring products that may not even be built in the United States right now; or if they are they are so limited that there aren’t enough to go around.”
With BABA requirements going into effect on federal funded transportation projects let on and after Nov. 10, 2022, the industry still has questions, and contractors are looking to national associations, such as AGC and ARTBA, for answers.
“ARTBA knows about Buy America,” Breese said. “It has questioned people from the federal government asking what it means and how it will be implemented, and to my knowledge they haven’t gotten any satisfactory answer yet … It’s really up in the air, which is a big part of the problem …”
“Both (AGC and ARTBA) support initiatives that make sense and better the industry and the traveling public,” Palko said, “but not ones that place limitations on companies, cost companies more money, compound the current supply chain issues already plaguing the industry and lastly slow construction schedules to complete a project. (AGC and ARTBA) are advocating on behalf of thousands of member companies. This is an issue that will impact everyone in the industry, not just a few companies.”
Seeking Clarity
Author Steve Maraboli wrote: “It’s a lack of clarity that creates chaos and frustration …”
Engle said frustration on behalf of the construction industry in how to comply with BABA requirements stems from a lack of information. “There are still an awful lot of questions as to how this is going to apply, and how waivers are going to be administered for those products that aren’t available or are way more expensive to source from America.”
Palko said the industry is looking for an approved vendor list that includes “a size limit to be placed on the value of a project with the Buy America requirement before it takes effect; and possibly limiting the dollar value of the construction materials that fall under this requirement, so not to include every screw, nail, washer, etc.”
“Like George said, I would like to see a list of what (FHWA) expects right now to purchase, and that somebody has researched it and knows that those products can actually be purchased from United States manufacturers,” Breese said.
“We don’t know what the process is going to be to implement (BABA requirements). Who is going to be checking?” Engle added. “FHWA certainly doesn’t have the people to do it, and I don’t know that ODOT has the people to do it. It will probably get pushed off onto the contractors to certify (USA manufactured products). My guess is a lot of the contractors are going to be at the mercy of their suppliers to identify domestic products …”
The unanswered questions, lack of information and paperwork regarding IIJA’s Buy America requirements have counties and municipalities deciding not to apply for the federal grant money. One contractor noted: “To go get a half million dollar grant and then have to worry about tracking the carbon footprint of my materials; tracking down Buy America paperwork; or tracking down this and tracking down that and thinking I’m going to have to hire three more people to do this … They’re thinking it’s not worth it.”
According to ODOT, it will be incorporating Buy America requirements into its contracts by proposal note, which it said, “is currently in draft form and will be finalized as additional information is received.” The department added, “Incorporation into Ohio’s contracts using the proposal note, including the content of the proposal note, is very similar to other states across the nation. As we continue to learn more, we will work with our industry partners in Ohio to properly navigate the change.”
“I think by and large our contractors want to use American made products,” Engle said. “But when they aren’t available, you have to do what you have to do to make it work (and finish the project). It is kind of frustrating that you would have this increased funding (through the IIJA), but then additional restrictions that potentially tie things up and slow projects down while people are trying to get answers on what is and isn’t meeting the requirements of the Buy America bill.”
(Editor’s note: Ohio Contractor reached out to FHWA regarding the expanded requirements in the IIJA’s Buy America Act. However, it did not receive comment by deadline. We will hear from FHWA at Winter Conference.)