Summary
The U.S. Department of Transportation Federal Highway Administration (FHWA) on March 7, 2024, announced a proposed rule that would discontinue its longstanding Buy America waiver for manufactured products used in FHWA-funded or FHWA-participating projects.
The Upshot
- Manufactured products (excluding those that are predominantly made of steel or iron) have been subject to a general FHWA waiver of Buy America requirements since 1983.
- “Manufactured products” are generally materials, products, or components delivered to a project site for permanent incorporation into a highway project under Title 23, U.S. Code, and include all manufacturing processes, including applications of coatings. See 23 C.F.R. 635.410. "Manufactured Products," under a similar conception by the Federal Transit Administration, are essentially products that are manufactured. See 49 C.F.R. 661.3. (definition "manufacturing process").
- Generally, under the historic waiver, only FHWA-funded projects needed to include steel or iron produced in the United States.
- The proposed changes to the existing rule, if implemented, would impose Buy America requirements on manufactured products used in FHWA-funded projects (i.e., generally, manufactured products used in FHWA-participating or FHWA-funded projects would be required to be produced in the United States).
- Standards for determining whether a manufactured project is “produced in the United States” are proposed to be consistent with the Office of Management and Budget’s (OMB) existing standard.
The Bottom Line
If the proposed rule is adopted, contractors and project managers will need to be aware of and comply with the new requirements. More products/materials will be subject to Buy America Requirements. Interested parties should take advantage of FHWA’s comment period.
What’s Next
FHWA will initiate a 60-day comment period following the proposed rule’s impending publication in the Federal Register during which stakeholders may offer input as to the implementation and impact of the proposed rule.
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