Buy American Update

AGC has been active in our efforts to ensure that the "Buy American" requirements of the Recovery Act did not seriously delay $6 billion allocated for drinking water and wastewater projects being administered by the U.S. Environmental Protection Agency (EPA) and $1.4 billion allocated for the USDA's Rural Utilities Service (RUS). Trade agreement exceptions to the "Buy American" requirements in most cases do not flow down to sub-federal entities, such as municipal utility authorities that procure most of these projects.  Unfortunately this new policy has created a great deal of confusion and delays as agencies have been forced to apply "Buy American" for Recovery Act programs where this policy has not previously applied. AGC has been successful in educating EPA about the about the potential negative impacts of "Buy American" on SRF-funded stimulus projects, including project delays, litigation, bid protests, price gouging and potential criminal penalties and liability if contractors unknowingly incorporate certain materials into projects that either are not domestically manufactured or are of unknown origin, such as valves, gaskets, screws, pipe fittings etc.  AGC has  also raised concerns about certain major, and in many cases advanced systems and pieces of equipment, that are not manufactured in the United States, or contain components manufactured abroad, but are preferred and specified based on performance by state regulatory authorities and water utilities.  EPA has independently verified the validity of AGC's  concerns and has taken aggressive measures to ensure that there is a waiver process in place that recognize the realities of the water infrastructure market with respect to country of origin for materials and equipment incorporated into projects. To date EPA has issued 14 project specific regional "public interest" waivers and 4 national waivers including di minimus waivers which cover some of the aforementioned materials. AGC has hraised similar concerns with the USDA Rural Utilities Service (RUS) in early 2009, and on September 25 USDA issued their own  di minimus waiver citing the same logic that EPA has applied in the crafting of their waiver. Hopefully this will start to free up the estimated $3.8 billion in USDA projects it will fund with stimulus dollars. It is unknown whether additional waivers or guidance are forthcoming from USDA. Please see the attached document containing all regional project specific and national waivers of the "Buy American" provision as they relate to the EPA SRF and USDA RUS programs and make sure that your state and local water authorities and other AGC members are aware that waivers are being granted. Please note that project specific waivers must originate with owners procuring projects or state water authorityies funding projects . Contractors cannot initiate this process.  With respect to the di minimus waiver this will largely be the contractor's responsibility to account for costs and materials that fall under the 5% threshold.   For more information, contact Perry L. Fowler at (703) 837-5321 or fowlerp@agc.org