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April 20, 2022
On April 18, the Biden administration’s Office of Management and Budget issued a memo providing initial implementation guidance to federal agencies on the application of a “Buy America” preference for materials used in infrastructure projects.
The $1.2 trillion Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58), enacted in November 2021, expanded and made significant changes to Buy America requirements for federally funded infrastructure projects.
The OMB memo states that by May 14, 2022, agencies must ensure that all applicable programs comply with section 70914 of the IIJA, including by the incorporation of a Buy America preference in the terms and conditions of each award with an infrastructure project.
The IILA requires the following Buy America preferences:
(1) All iron and steel used in the project are produced in the United States. This means all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.
(2) All manufactured products used in the project are produced in the United States. This means the manufactured product was manufactured in the United States, and the cost of the components of the manufactured product that are mined, produced, or manufactured in the United States is greater than 55% of the total cost of all components of the manufactured product, unless another standard for determining the minimum amount of domestic content of the manufactured product has been established under applicable law or regulation.
(3) All construction materials are manufactured in the United States. This means that all manufacturing. processes for the construction material occurred in the United States.
The OMB guidance “applies to all federal financial assistance as defined in section 200.1 of title 2, Code of Federal Regulations—whether or not funded through the IIJA—where funds are appropriated or otherwise made available and used for a project for infrastructure.”
The memo outlines a Buy America waiver system for federal agencies to follow under certain circumstances.
Buy America requirements previously applied to iron, steel, and certain manufactured goods. The IIJA broadens coverage to include nonferrous metals, such as copper used in electric wiring; plastic- and polymer-based products; glass, including optical fiber; and certain other construction materials, such as lumber and drywall.
April 20, OMB released a notice of listening sessions that will take place on April 18 from 10:30 a.m.-12 p.m. ET, focused on nonferrous metals and plastic and polymer-based products, and April 28 from 2-3:30 p.m. ET, focused on glass, lumber, drywall and all other products.
The April 20 OMB notice also includes a request for information on Buy America requirements. The Federal Acquisition Regulatory Council, of which OMB is a member, must provide a definition of “end product manufactured in the United States” for purposes of the new Buy America requirements, and OMB is seeking input from stakeholders to ensure regulatory clarity in the final definition.
Key topics OMB is seeking feedback on include:
Written responses to the RFI must be submitted electronically via regulations.gov. The comment deadline will be 30 days from when the RFI is published in the Federal Register later this week or early next week.
While ABC supports strategies to expand domestic jobs and manufacturing to avoid global supply chain disruptions and capture economic benefits within America, Buy America policies need to be balanced with safeguards against increased costs and/or delays of infrastructure projects funded by the federal government and ultimately taxpayers.
ABC is reviewing the OMB memo and RFI to assess its impact on the construction industry and its global supply chain. ABC will be soliciting feedback from members and industry stakeholders and participating in the regulatory process.
Prior to this proposal, it was already unclear whether taxpayers could hope to gain a substantial rate of return on infrastructure investment given the intense increases already sustained in construction input costs over the past two years. The United States is the world’s largest steel importer; more than 31 million net tons was imported in 2021. Iron and steel prices are already up more than 50% over the past year, and restricting infrastructure projects to U.S.-produced iron and steel means taxpayers will get less infrastructure per dollar spent.
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