AGC joined with nine other construction industry groups in a letter to Federal Highway Administrator Greg Nadeau asking the agency to complete action on a proposed rule clarifying the applicability of Buy America requirements for manufactured products that may contain steel elements and for incidental products such as nuts, bolts and washers. In December 2012, the agency issued guidance to its division offices clarifying that:
“in order for a manufactured product to be considered subject to Buy America, the product must be manufactured predominantly of steel or iron. The Federal Highway Administration (FHWA) deems a product to be manufactured predominately of steel or iron if the product consists of at least 90 percent steel or iron content when it is delivered to the job site for installation.”
The guidance also waived Buy America requirements for miscellaneous steel or iron components, subcomponents and hardware such as screws, bolts and light bulbs. Soon after, FHWA issued a Notice of Proposed Rulemaking (NPRM) on Buy America requirements that included this guidance.
A steel manufacturer and several labor unions sued FHWA, challenging the guidance. On Dec.22, 2015, the U.S. District Court for the District of Columbia issued a decision supporting the plaintiff’s challenge of this guidance. Specifically, the judge vacated the 90 percent threshold exemption for manufactured steel and iron products and the waiver for miscellaneous steel or iron components, subcomponents and hardware. As a result, decisions on these types of components must now be made on a project-by-project basis and go through a formal, time-consuming waiver process. The judge criticized FHWA for not going through a formal rule making process.
The industry letter to Administrator Nadeau pointed out the problems with this approach, including delays and additional costs. Because the court objected to the process by which FHWA clarified its Buy America policy, the letter urged the agency to initiate a notice-and-comment rulemaking limited to the 2012 memo’s subject area as soon as possible.
For more information, please contact Brian Deery at deeryb@agc.org or (703) 837-5319.