The Infrastructure Investment and Jobs Act (PL 117-58; IIJA) expanded the scope of the Buy America preference by requiring that all construction materials, iron and steel, and manufactured products used in federally supported infrastructure projects be produced in the United States. Prior to IIJA, Buy America requirements did not apply to construction materials.
The federal government began implementing the new requirements earlier this year, starting with the Office of Management and Budget Implementation Guidance, followed by the U.S. Department of Transportation’s (USDOT) temporary waiver for construction materials, set to expire on November 10, 2022.
Proceedings of the US Department of Transportation
On November 4, 2022, USDOT took three concurrent actions: (1) USDOT allowed its temporary waiver for construction materials to expire, with the IIJA Buy America requirement effective November 10, 2022; (2) USDOT proposed a narrow waiver for minimal costs, small grants, and minor stakes; and (3) USDOT proposed a waiver for narrow categories of contracts and solicitations to facilitate transition to the new construction material standard in specific circumstances.
(1) Buy America requirement for construction materials effective November 10, 2022
USDOT’s rationale for the temporary waiver was that it would be against the public interest to immediately implement the new construction material requirement because adequate compliance processes had not yet been implemented. Based on comments and input received from stakeholders, USDOT believes that the temporary waiver has served its intended purpose by providing adequate transition time. As a result, projects with USDOT funds or financial assistance obligated on or after November 10, 2022, are now subject to the construction materials requirement, unless covered by a separate waiver.
(2) Proposed Waiver of Purchase America Requirements for De Minimis Costs, Small Grants, and Minor Shares
USDOT proposed a narrow waiver for minimal costs, small grants, and minor components. It will waive Buy America requirements for iron and steel, fabricated products, and construction materials used in infrastructure projects funded under USDOT-funded programs under a single financial assistance award:
- The total value of the nonconforming products is not less than $1,000,000 or 5% of the total allowable cost under the federal financial assistance grant;
- The amount of the federal financial aid grant is less than $500,000; or a
- Miscellaneous minor components of non-domestic manufacture do not exceed 5% of the total material cost of an otherwise domestically manufactured iron or steel product.
(3) Proposed Waiver of America Purchase Requirement for Construction Materials for a Narrow Category of Contracts and Solicitations
USDOT also proposed a new waiver to support compliance with the new Buy America requirement for construction materials by including carve-outs for specific categories. For the first component, USDOT proposed to waive the construction material requirements for any contracts entered into prior to November 10, 2022. Second, USDOT proposed to waive the construction material requirements for any contracts entered into prior to March 10, 2023. Requests published prior to May 14, 2022, the date USDOT issued the original temporary waiver.
Comments on the two proposed waivers are due November 20, 2022. USDOT may consider late comments to the extent practical.
Federal Immigration Administration “Dear Colleague” Letter
To help transit agencies prepare for the implementation of construction material requirements, Federal Transit Administration (FTA) Administrator Nuria Fernandez published a Dear Colleague Letter to transit agencies on November 7, 2022. This article summarizes the general Buy America development as well as the transition under the IIJA. Agencies purchase America’s bonds for FTA-funded projects.
Federal agencies will continue to develop and refine implementation guidance for the expanded Buy America preference under the IIJA. To ensure the success of the important policy objective that underpins these Buy America requirements, project sponsors and industry participants must continue to partner with the federal government and share their expertise and project-specific experience on which the federal government relies.