AASHTO Journal - FHWA Rulemaking Seeks to End ‘Buy America’ Waiver

The Federal Highway Administration recently issued a notice of proposed rulemaking that seeks to discontinue its general waiver of “Buy America” requirements for manufactured products used in federally-funded highway projects.

[Above photo by Louisiana DOTD]

FHWA said its rulemaking specifically seeks to eliminate the 40-year-old “Manufactured Products General Waiver” in order to maximize the use of domestically-produced materials in the construction of U.S. highways and bridges that receive federal funding.

The agency’s rulemaking also proposes to create standards that would apply to manufactured products if the waiver is discontinued.

The proposed rule is in response to President Biden’s “Ensuring the Future is Made in All of America by All of America’s Workers” executive order, issued in January 2021, mandating that federal agencies should maximize the use of domestic products and strengthen the U.S. manufacturing sector. That order also seeks to promote private sector investment and opportunity for small businesses, bolster the domestic supply chains, and create jobs.

However, the FHWA stressed that its proposed rule will not change the longstanding “Buy America” requirements that currently apply to iron or steel products. Nor will the proposed rule change “Buy America” requirements expanded in the Infrastructure Investment and Jobs Act that apply to products classified as construction materials excluding certain materials such as cement and cementitious materials; aggregates such as stone, sand, or gravel; or aggregate binding agents or additives.

“We’re proposing to do away with a policy that did not incentivize restricted American-based manufacturing,” noted FHWA Administrator Shailen Bhatt in a statement.

“This policy supports the [Biden] administration’s commitment to create good-paying jobs within the U.S., allowing domestic manufacturing to grow,” he said. “American businesses now have a long-term incentive to tap into the broader federal government market.”

The agency added that it also plans to issue a Request for Information on the domestic availability of specific manufactured products commonly used in FHWA-funded projects, which will help guide FHWA implementation of its proposed should the “Buy America” waiver be rescinded.

The American Association of State Highway and Transportation Officials has previously expressed concern to both FHWA and the U.S. Department of Transportation regarding suspension or elimination of the “Buy America” waiver.

“State DOTs use a broad range of manufactured products on their projects supported by the federal-aid highway program, and many are not—or have significant components which are not—readily available domestically, including such products as traffic signals, cameras, luminaires, controllers, cabinets, changeable message signs, and traffic management system components,” AASHTO noted in a letter to FHWA in April 2023.

“Without the continuation of the current general applicability waiver of ‘Buy America’ requirements for manufactured products, the ability of states to carry out the federal-aid highway program will likely be impacted by project delays that could affect the safety of the travelling public and the operation of our road and highway system,” the group stressed.

Carlos Braceras – executive director of the Utah Department of Transportation and a former AASHTO president – reiterated those concerns at a Congressional hearing in February 2024.

Carlos Braceras. Photo via the House T&I committee.

“As you know, a key policy priority included in the IIJA [Infrastructure Investment and Jobs Act] pertains to new ‘Buy America’ requirements,” noted Braceras in his testimony before the House of Representatives Committee on Transportation and Infrastructure

“AASHTO and the state DOTs remain unwavering in our strong support of the goal to increase America’s manufacturing capacity by creating new domestic jobs and encouraging economic growth; however, we also recognize this transformation can’t occur overnight or with the flip of a switch,” he said. “As such, we firmly believe that a deliberative and practitioner-informed process between government and industry should continue to guide implementation of ‘Buy America’ rules. This will ensure timely, cost-effective investments and successful delivery of critical transportation infrastructure projects funded through the IIJA.”

“We agree with FHWA’s previous and longstanding finding that manufactured products in highway projects comprise a small portion of the overall market for those products,” noted Jim Tymon, AASHTO’s executive director.

“A ‘Buy America’ requirement for many of these products will not result in on-shoring of the manufacture of those products. Instead of completely eliminating the waiver, we recommend that the waiver be continued as FHWA carries out targeted market studies to observe which products can be on-shored successfully,” he said. “This approach will reduce potential project delays due to the lack of availability of domestic products. This strategy stands a stronger chance of achieving the overall goal of increasing domestic manufacturing.”