Buy America Requirements for Federal Highway Projects (2020) / Chapter Skim
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Pages 13-21
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From page 13... ...
NCHRP LRD 80 13 without notice and opportunity for public comment.130 The U.S. District Court for the District of Columbia concluded that the emergency regulation had been validly issued, because the FHWA Buy America provision (which had been enacted eleven days earlier)
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From page 14... ...
14 NCHRP LRD 80 to trace."149 Accordingly, in the 1983 final rule, FHWA issued a Public Interest waiver from the FHWA Buy America provision for all "manufactured products other than steel and cement manufactured products."150 This November 1983 Manufactured Products waiver has never been rescinded and remains in effect today, although there have been some substantive changes in the FHWA Buy America provision since then. For example, the FHWA Buy America provision has not applied to cement since 1984,151 and has applied to iron since 1991.152 Therefore, the Manufactured Products waiver has long been construed to exempt all manufactured products except for predominantly steel or iron products from the FHWA Buy America requirements.153 The Manufactured Products waiver allows FHWA grant recipients and their contractors to purchase a broad range of manufactured products (such as mechanical and electrical equipment)
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From page 15... ...
NCHRP LRD 80 15 exclusion for "programs providing Federal financial assistance that are subject to comparable domestic preferences."163 Arguably, the FHWA Buy America provision constitutes a "comparable domestic preference" so that the 2019 Executive Order does not apply to projects subject to the FHWA Buy America provision. However, it is questionable whether the domestic preferences in the FHWA Buy America provision are truly comparable to the January 2019 Executive Order, since domestic content requirements for manufactured products are waived under the former but are maximized under the latter.
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16 NCHRP LRD 80 However, as discussed in Section II.C, FHWA reversed course in a December 2012 memorandum, in which FHWA undertook to specifically address whether "nuts, bolts, washers, and other miscellaneous steel or iron parts used in common off-the-shelf products such as toilets and the filaments in light bulbs must be Buy America compliant."175 In the 2012 FHWA memo, FHWA expressed concern that the FHWA Buy America provision was being applied to steel and iron components of manufactured products. According to the 2012 FHWA memo, this was "inconsistent" with the 1983 Manufactured Products waiver and was "not cost-effective to administer."176 The 2012 FHWA memo stated that "some States have subjected signal heads and other traffic control equipment to Buy America," as a specific example of such an "inconsistent" practice (despite the fact that 2006 FHWA guidance specifically identified traffic signal heads as components that were subject to the FHWA Buy America provision)
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NCHRP LRD 80 17 from 29 state transportation agencies186)
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18 NCHRP LRD 80 manufactured product consisting of less than 90 percent steel or iron was covered by the Manufactured Products waiver, and could be procured for use on an FHWA project without seeking a project-specific waiver for that product. This would have exempted large quantities of steel and iron from the FHWA Buy America provision, because under that definition of "predominantly" steel or iron, any manufactured product could be supplied to an FHWA-funded project without a waiver as long as more than 10 percent of its content consisted of some material other than steel or iron, as delivered to the project site.
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From page 19... ...
NCHRP LRD 80 19 factured product. However, the United Steel court appeared to agree that as long as a manufactured product is comprised of less than 50 percent steel or iron, it is not "predominantly" steel or iron.208 It would appear reasonable for an FHWA division to conclude that any manufactured product comprised of less than 50 percent steel or iron is covered by the Manufactured Products waiver, and that a project-specific waiver is not required for either the product or its steel and iron components, even in light of the United Steel ruling.
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From page 20... ...
20 NCHRP LRD 80 provision.220 Although the FHWA Buy America provision had expressly referred to vehicles and rolling stock for more than a decade, that statutory language was never seriously tested, due in part to the Manufactured Products waiver, and due in part to the fact that relatively few vehicles were purchased with FHWA grant funds. In May 2011, FHWA published Buy America waiver requests it had received from Alameda County, CA and San Francisco County, CA to purchase electric vehicles and hybrid vehicles using FHWA funds under the CMAQ program.221 Pursuant to its notice-and-comment waiver requirements discussed in detail in Section IV.A.2, FHWA posted the waiver requests on its Buy America website for 15 days to receive public comments on the requests.
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From page 21... ...
NCHRP LRD 80 21 same commenters criticized FHWA for its practice of granting partial Public Interest waivers that permitted some FHWA grant recipients to purchase vehicles conditioned only on final assembly in the United States, without any domestic content requirements.232 No formal action was taken by FHWA in response to the 2013 notice and comments, regarding the applicability of the FHWA Buy America provision to vehicles. Subsequent statements by FHWA indicated that, while it would prefer not to subject vehicle procurements to the FHWA Buy America provision, FHWA considered itself legally obligated to, at minimum, require final assembly in the United States.
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