AASHTO Journal - FHWA Issues Final ‘Build America, Buy America’ Rule

On January 14, the Federal Highway Administration issued its long-awaited update to the “Build America, Buy America” rule that rescinds a 42-year old “general applicability waiver” for manufactured products and introduces a new 55 percent domestic content requirement for a host of construction materials.

[Above photo by WVDOT]

The final rule – which goes into effect on March 17 – terminates FHWA’s general waiver for manufactured products on October 1 of this year and implements the new 55 percent domestic content requirement on October 1, 2026.

In a statement, the FHWA said that by placing greater value on domestic manufacturing for highway construction materials, the new rule should “encourage investment in this sector, protect and expand domestic manufacturing, increase reliance on U.S.-made products, and ensure that federal-aid highway projects benefit from a broader domestic manufacturing base.”

The agency stressed that its new rule does not change current “Buy America” requirements for iron or steel products.

However, for clarity, the agency said its new rule provides definitions of iron, steel, and manufactured products, to illustrate compliance with both existing and new “Buy America” requirements.

According to analysis by the American Association of State Highway and Transportation Officials, FHWA’s new rule means that to be “Buy America-compliant” for federal-aid projects obligated on or after October 1, 2026, all manufactured products permanently incorporated into the project must be assembled in the U.S., with the U.S.-made portion of those material costs greater than 55 percent of the total cost of all the product’s components.

AASHTO noted in previously commentary on this FHWA rulemaking effort that, while the state department of transportation community has long expressed its “unwavering support” of this new rule, there remains “significant concerns” regarding the readiness of the industry to meet these new mandates.

“AASHTO fully supports the goal of expanding America’s manufacturing capacity, promoting domestic jobs, and encouraging economic growth as Congress intended through ‘Build America, Buy America,’ but this is a process that takes time,” said AASHTO Executive Director Jim Tymon.

[Editor’s note: The House of Representatives Committee on Transportation and Infrastructure held a hearing in February 2024 to elicit the perspectives of transportation stakeholders—including those of state DOTs – on the impact of these new “Buy America” provisions.]

“As we approach the final years of the Infrastructure Investment and Jobs Act, we need to do all we can to translate its dollars into tangible projects and benefits for every corner of the country,” Tymon stressed.

“If we are going to move away from the longstanding waiver for manufactured products, we need a gradual and deliberate transition,” he added. “Unfortunately, FHWA’s plan to remove the waiver right now will cause significant disruptions to state DOTs’ efforts to deliver important projects efficiently, on time and within budget.”

AASHTO also pointed out that reversing this action is anticipated to require a formal notice-and-comment rulemaking process pursuant to the Administrative Procedures Act, though Congress may also overturn it through the Congressional Review Act process.