Buy America Requirements for Federally Funded Airports (2013)

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61 tractor twice, because responses to the original bid request did not satisfy Buy America requirements. The respondent indicated that it did not seek an Unavailability waiver despite the lack of compliant domestic bids in response to an open solicitation, as FAA Headquarters would have to approve any Un- availability waiver. The respondent stated that the domestic tractor eventually procured had less horsepower and cost $15,700 more than the re- jected foreign bid. Due to the relatively high threshold for obtaining an Unavailability or Unrea- sonable Cost waiver for manufactured goods under the AIP Buy America provision, vehicle procure- ment is one of the areas where domestic prefer- ences most significantly impact AIP grant recipi- ents. 3. Electronic Equipment.—A common complaint by survey respondents was that many items of elec- tronic equipment (and their components) were not manufactured domestically. Also, the manufactur- ers often do not know the country of origin of many components (such as circuit boards, bolts, and belts). One respondent questioned how the AIP Buy America requirement could realistically be en- forced, “given the fact that very little is made in this country any longer”—specifically referring to “all items with electronic components.” Grant recipients typically are able to purchase foreign electronic components as insubstantial components or subcomponents of larger equipment procurement projects. One respondent indicated that it determined that less than 5 percent of the components of its airport beacon and windcone equipment were electrical components and sub- components of foreign origin. Another respondent noted that some electronic components of a checked baggage inspection system, funded under an ARRA grant, were not manufactured domestically. In that case, the Transportation Security Administration issued a waiver after determining that less than 5 percent of the ARRA project funds were attribut- able to foreign components. Likewise, grant recipients are able to purchase foreign electronic equipment that is incorporated into a facility as part of an overall construction pro- ject. One respondent indicated that items including heating-ventilation-air conditioning equip- ment, programmable thermostats, and smoke and carbon monoxide detectors are simply not manufac- tured domestically. However, by treating those items as manufactured construction materials, and evaluating project cost at the constructed facility level, “the domestic content of the entire project would easily be greater than 60%,” even when ac- counting for the cost of the foreign subcomponents. iii. Reimbursable Agreements Three survey respondents indicated that they had entered into reimbursable agreements with the FAA to replace FAA equipment in AIP-funded de- velopment projects. Two indicated that they in- cluded Buy America requirements in the equip- ment procurement contract, and another indicated that the project engineer reviewed to ensure that the procured equipment satisfied Buy America re- quirements. However, none of the respondents in- dicated whether the AIP Buy America require- ments or the BAA requirements were satisfied for the replacement equipment. The APP-500 Office is aware that there are questions regarding this is- sue, and future written guidance may be expected to address reimbursable agreements. iv. General Delays Aside from the handful of delays mentioned above (related to fabrication backlogs for domestic materials or rebids due to noncompliant bids), most respondents estimated their AIP Buy America de- lays to be minimal, measured in hours rather than days. These minimal-duration compliance tasks included drafting AIP Buy America requirements in bid provisions, responding to vendor requests for clarification, searching nationwide waivers for the bid items, and preparing waiver requests for items not on the nationwide waiver lists. Respondents appeared to be generally satisfied with the proce- dures established by the APP-500 Office. IV. CONCLUSION Until recently, Buy America requirements for federal airport grant funds had not been the subject of significant scrutiny, guidance, or enforcement. That changed as a result of the 2009 ARRA stimu- lus bill, which required the FAA to publish Buy America waivers granted with ARRA funds. Since then, the FAA has published some guidance and some waivers, including a number of notices in the Federal Register. However, there remains very lit- tle administrative material directly related to the AIP Buy America provision. In particular, there is almost no record of allegations or investigations of noncompliance. The administrative record is ex- pected to grow in the coming years as a result of the FAA’s increased attention to the issue. In general, the AIP Buy America provision is a stricter domestic preference requirement than ex- ists elsewhere in federal law. For example, the Un- reasonable Cost exception is much higher in the AIP Buy America provision than in the BAA. This means that AIP grant recipients are often not al- lowed to purchase certain foreign goods, but the federal government can directly purchase the same