Recent reports have pointed out some downfalls of the Buy American Act. The Buy American Act has been around for a long time and requires the federal government to buy American-made iron, steel and manufactured goods wherever possible. The definition of "American-made" has evolved since the inception of the act in 1933.
Currently, an American-made product is defined as all of its manufacturing processes, constituent parts and/or materials originating in the U.S. In 2009, the American Recovery and Reinvestment Act (ARRA), created yet another standard, which applied to all projects with Recovery Act funds. The Recovery Act standard applies the "Buy American" requirement to sectors of the construction market that have never had to comply before.
According to a report in the Salt Lake City Tribune, the Utah Department of Transportation has warned state lawmakers that tough new enforcement of the "Buy American" law in federally funded highway projects could bring significant delays and cost increases locally.
"If one piece of iron or steel does not meet Buy America [Act] requirements, it eliminates the option to be reimbursed for the entire project, not just for that one item," Randy Park, UDOT project development director, told the Legislature’s Interim Transportation Committee.
He said the problem is not so much with large bridge girders or rebar in cement — which UDOT has plenty of experience in obtaining from certified U.S. sources — but with small items like nails and screws, whose origin may be murky. Also, utility companies are having trouble finding U.S. makers of poles, wire and some pipe they use in highway corridors, which may disqualify an entire highway project.
Park said in the past, the Federal Highway Administration allowed contractors to self-certify that smaller items they used were manufactured in the U.S., but now is requiring more detailed certification by UDOT that will increase costs and may bring delays.
Don't misunderstand, I think buying American is a noble endeavor and should be used when it makes sense. I feel that in a time of scarce funding for projects, however, when states desperately need additional dollars from the federal government, that nit-picking over where a nail or screw originates, is ridiculous.
"Buy America" doesn't make sense if it costs states more to accept federal money. We should make it easier to build roads, not harder. We should be focusing on project streamlining and reducing costs, not on how to delay and increase the costs of a project even more.
What's your experience been with "Buy America?" I'd love to hear, call me at 800-547-7377, ext. 1673 or e-mail me at Lisa.Cleaver@cygnus.com.
Thanks for reading!