Industry News
Congress to Consider Expanding Buy American Rules
TweetDecember 27, 2009
Before adjourning for 2009, the House of Representatives passes an omnibus spending bill (H.R. 2847) that would expand the scope of the Buy-American Act. Title IV of H.R. 2847, the “Jobs for Main Street Act of 2010 (commonly referred to as the “jobs bill”), includes up to $27.5 billion for highway infrastructure, $8.4 billion for public transportation, $4.1 billion for school renovation grants, and $2 billion for Innovative Technology Loan Guarantee Program.
Section 4002 of the bill specifies that all the funding described above would be subject to the same Buy-American requirements as the American Recovery and Reinvestment Act, which sparked fears of protectionism in early 2009. Another part of the bill, section 2013, would restrict the use of waivers for major infrastructure projects.
The section, aimed at limiting the authority of the transportation department to award contracts to foreign providers, would the following new requirements for the issuance of waivers of the Buy American provisions:
REQUIREMENTS FOR ISSUANCE OF WAIVERS.—
‘‘(1) PUBLIC INTEREST WAIVERS.—The Secretary may issue a waiver under subsection (b)(1) only after the Secretary has considered the potential impacts of the waiver on domestic manufacturing employment.
‘‘(2) INSUFFICIENT DOMESTIC SOURCE WAIVERS.—The Secretary may issue a waiver under subsection (b)(2) with respect to a material or product only if the Secretary publishes notice of the waiver on the Internet for a period of at least 5 business days prior to issuance of the waiver and a sufficient domestic source of the material or product does not identify itself during the period.
‘‘(d) TRANSPARENCY OF WAIVERS.—
‘‘(1) IN GENERAL.—When the Secretary receives a written request for a waiver under this section, the Secretary shall—
‘‘(A) publish the request on the Internet within 5 business days of the date of receipt of the request; and
‘‘(B) if the Secretary decides to issue a waiver based on the request, publish on the Internet, within 30 days following the date of issuance of the waiver, a detailed written justification as to why the waiver is necessary, inluding an identification of the amount of Federal funds associated with the waiver.
‘‘(2) EMPLOYMENT IMPACT STATEMENT.—In issuing a waiver based on a finding under subsection (b)(1), the Secretary shall include, as part of the Secretary’s written justification for the waiver decision, a statement detailing the short- and long-term impact of the decision on domestic manufacturing employment.’’
In addition to these tighter waiver requirements, the bill includes language to block the circumvention of the Buy American rules at the sub-Federal level by prohibiting federally funded bridge projects from being “segmented by state or local governments in order to avoid Buy American requirements.
Seperately, Senator Russ Feingold introduced the Buy American Improvement Act (S. 2890). Designed to make it harder to waive the Buy American requirements, the bill would:
- Prohibit agencies from invoking a waiver in the “public interest” after a request for bids has been published in the Federal Register.
- Amend the “unreasonable cost” waiver to give domestic bidders, or sole domestic source bidders preference over foreign competitors.
- Clarifies that the cost of domestic procurement is “reasonable” if it is 25% higher than the foreign alternative.
- Require Federal Agencies to conduct an analysis of the difference in cost for obtaining certain goods outside the
- Require Federal agencies to conduct a study to determine whether domestic production can be initiated to meet procurement needs and whether there is a comparable item available from a domestic source prior to invoking a waiver.
- Require that products be at least 75% American-made in order to qualify under the Buy American Act (up from 50%).
An identical companion bill (H.R. 4351) was introduced the same by Representative Daniel Lipinski (D-IL) in the House.
