The White House has issued guidance to increase the use of U.S.-made iron, steel, construction materials, and manufactured products in government-funded infrastructure projects.
The White House Office of Management and Budget (OMB) released the final guidance on Aug. 14, intended to support the implementation of the provisions outlined in the “Build America, Buy America” Act.
According to the White House, the final guidance directed by Congress under the $1 trillion 2021 infrastructure law will help to “bolster American businesses, workers, and economic growth.”
This will serve as a guide to agencies in using tax dollars to strengthen the U.S. economy by supporting the creation of good jobs and expanding domestic production through infrastructure investment, it stated.
The OMB received about 1,950 public comments from a range of interested stakeholders, such as local governments, manufacturers, suppliers, and labor organizations, among others, before finalizing the guidance.
The guidance establishes manufacturing standards for polymer-based products and certain construction materials, including fiber optic cable, optical fiber, plastic, glass, lumber, and drywall.
The OMB said it added engineered wood, but opted not to include additional construction materials, including paint, stain, and bricks. Manufactured products must originate from the United States, and the cost of U.S.-made components must exceed 55 percent of the cost of all components.
These rules do not apply to tools, equipment, and supplies, such as temporary scaffolding, that are brought to the construction site and removed at or before the completion of the infrastructure project, it said.
The OMB also noted that agencies could issue waivers if needed when U.S.-made products are not sufficiently available. Agencies can also seek a waiver if the use of U.S. materials would result in an increase in the cost of the overall infrastructure project by more than 25 percent.
President Joe Biden signed an executive order in 2021 that aimed at closing loopholes in existing “Buy America” provisions, which apply to about a third of the $600 billion in goods and services the federal government buys annually.
The White House stated that the Biden administration “has made significant progress rebuilding our roads and bridges, making public transportation accessible, investing in clean infrastructure, upgrading power grids to transmit clean energy, and more—with 37,000 projects funded and counting already.”
In March 2022, the Biden administration separately issued rules to raise domestic content thresholds.
Previously, products were deemed qualified as Made in America for federal purchases if 55 percent of the value of their component parts were manufactured in the United States. The 2022 rule increased the threshold to 60 percent in October, 65 percent in 2024, and 75 percent in 2029.The Congressional Research Service stated in a 2019 report that Buy America requirements have been blamed for project delays, “which can arise from domestic supply problems, the difficulty of compliance, and the waiver application process.”
“More generally, in a survey of people in the public transportation industry in the mid-1990s, Buy America was mentioned by respondents as the cause of project delay more often than any other reason. One possible reason is that compliance with Buy America requirements is often not straightforward,” the report reads.
“Sometimes there are disagreements about whether a good should be treated as an end product, a component, or a subcomponent, and a project may be delayed while the federal agency concerned considers the circumstances of a particular procurement,” it added.
