More Buy America Requirements Ahead

FHWA is proposing to roll back a Buy America waiver and a majority of contractors believe it will add time and cost to ensure compliance.

For more than 40 years, Federal Highway Administration (FHWA) has maintained a Buy America waiver for most manufactured products permanently incorporated into road and bridge projects. The agency now proposes to roll back that waiver to support President Biden’s agenda of bringing back domestic manufacturing.

You might recall that AGC previously reported on FHWA’s announcement. Since then, AGC and the American Road & Transportation Builders Association (ARTBA) jointly surveyed members on Buy America requirements for manufactured products and the potential impact on projects which receive federal funding.

AGC has always supported the goal of strengthening domestic manufacturing. However, the survey results show the challenge contractors will face trying to comply with the new requirements while minimizing project cost increases and delays.

Key Findings

A majority of firms believe that FHWA’s rolling back the manufactured products waiver would require significant additional time and cost to document and certify the components within manufactured products. 62% of respondents indicated that removal of the waiver would have a major effect on their project efficiencies, while 19% stated it will have a more minor impact.

As implementation of recent Buy America revisions continues, 56% of those who responded to the survey indicated that they find the current Buy America policy in their state(s) to be “Very Confusing” or “Somewhat Confusing.”

In addition, 69% of respondents stated that they will “price” risks in their bids reflecting uncertainty about costs and/or availability of Buy America-compliant materials for particular projects. This reality usually results in higher project costs and diluted benefits from federal investment.

Survey results were consistent within a variety of subgroups among the respondents. For example, 65% of DBE firms reported that they believe the repeal of the waiver will have a major impact on their project management, as described above. Moreover, 70% of these firms indicated that they would likely “price” in risks related to concerns over Buy America compliance.

If FHWA rolls back its waiver, respondents expect significant challenges in complying with Buy America requirements for many manufactured products. All eight categories of manufactured products included in FHWA’s Request for Information had a greater ratio of respondents indicating that compliance would be “Difficult” and “Very Difficult or Impossible” compared to “Easy” and “Possible.” Contractors anticipate particular difficulty with products such as LED lamps, traffic signals and controllers, vehicle detection equipment, traffic cameras, and Intelligent Transportation Systems hardware, as less than 15% of respondents believed these products would be “Easy” and “Possible” to acquire in compliance with a new FHWA Buy America policy.

The survey also asked respondents to name and evaluate additional manufactured products with which they had recent experience. Generators, electrical equipment, electronics, pavement markings and pumps appeared multiple times, generally assessed as “Very Difficult or Impossible” to procure in compliance with post-waiver requirements.

For full results of the survey, the questions, accompanying responses, comments and the full letter which the associations sent to FHWA, click HERE

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