House Democrats Propose New "Buy American" Requirements as Jobs Package

Requires steel, iron and manufactured goods used in federal-aid highway, rail, public transit, aviation, wastewater and FEMA construction to be produced in the US

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The leading Democrats on the House Transportation & Infrastructure Committee proposed legislation instituting tough new "Buy American" requirements for construction projects. The bill, "Invest in American Jobs Act of 2011" (H.R. 3533), will require all steel, iron and manufactured goods used in the covered construction categories to be produced in the U.S. Covered categories include federal-aid highway, rail, public transit, Amtrak, aviation, wastewater and FEMA mitigation projects. Many of these categories have pre-existing requirements that would be superseded by this bill's more stringent requirements. Other programs have little experience with Buy American requirements outside of Recovery Act projects.

The legislation preserves the traditional opportunities for waivers: where compliance is not in the public interest, where American goods are unavailable in sufficient quantity or of sufficient quality, or where use of American goods increases the total project cost by 25 percent or more. However, the legislation requires regulations to be developed that outline the situations where a public interest waiver would apply (previously it was left to the agencies to determine) and they also remove labor costs from the determination of total project costs. At this point it is also unclear how they will define what constitutes being "produced in the United States" as there are multiple definitions in existing law for different programs covered by this legislation.

While it is unlikely to move on its own, the question now is whether the bill will be inserted into the surface transportation reauthorization legislation that is working its way through Congress. Chairman Mica does not seem opposed to the idea and has been quoted in Politico as saying "I'm basically for principal; I'm a Buy America kind of guy." AGC will continue to oppose these artificial restrictions on the construction supply chain and educate lawmakers on their negative impacts on our industry.

For more information on Buy American, visit AGC's Buy American information clearinghouse here.