States, construction coalition urge revamp of Buy America policies

As the infrastructure law nears the halfway point of its life, the rollout of its expanded Buy America provision, a key part of President Joe Biden’s bid to strengthen American manufacturing, has been confusing and failed to address gaps in the domestic supply chain.

That was the message from state transportation departments and construction experts testifying Thursday at a House Transportation & Infrastructure Highways and Transit Subcommittee hearing that focused on the Build America, Buy America Act that was expanded as part of the 2021 Infrastructure Investment and Jobs Act.

“We all agree on the goal, which is to spend American money on American stuff to benefit Americans,” said Carlos Braceras, Utah’s transportation chief who testified on behalf of the American Association of State Highway and Transportation Officials.

But an uncertain and time-consuming BABA rule process threatens to add costs and delays to projects, he said. “With the 2024 transportation construction season on the horizon, there remains significant concern regarding the readiness of industry for the transition to recent and anticipated increases in BABA requirements.”

The $1.2 trillion IIJA significantly expanded BABA to all federal agencies to ensure that no funds go to infrastructure projects “unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the United States.”

BABA now applies to previously exempted projects like transmission facilities, electric facility structures, broadband infrastructure, and buildings. The requirements had applied mostly to U.S. Department of Transportation highway and transit projects and only to iron, steel and certain manufactured products.

Since the law was enacted in November of 2021, the Biden administration has granted a series of waivers as it was crafting guidance. The Office of Management and Budget published initial BABA guidance in January, 2023, and then finalized the BABA rule last August before updating it again in late October. The frequent updates have caused further confusion in the industry, said subcommittee chair Rep. Rick Crawford, R-Ark.

“The contradictory guidance put forward by the Biden Administration on Buy America waivers continues to cause project delays and regrettably leads to cost increases for the businesses that build our roads and bridges as well as operate the equipment in our transportation network,” Crawford said.

Braceras, in his testimony named several states that are facing delays due to the requirements, often due to problems that utilities have in complying with BABA. Delaware, Nebraska, Georgia, Maine and California are among the states that have suffered difficulties, he said.

Congress can help by understanding the gaps in the supply chain and improving the waiver process, Braceras told lawmakers.

“The percentage of items that we talk about sometimes is very small in terms of the total project piece and so a better understanding of the supply chains — doing some market research — to figure out the more difficult items” would be helpful, he said.

On Thursday, the same day as the House hearing, a coalition of five construction associations sent a letter to OMB director Shalanda Young to amend guidance again by, among other things, delegating more responsibility to federal agencies and authorizing the agencies to issue waivers.

A “one-size-fits-all blanket implementation of BABAA domestic preference requirements without meaningful delegation to agencies makes little sense,” the letter said, adding that “OMB’s focus on managing virtually every aspect of the Build America, Buy America Act requirements is not practical and causes confusion and delay with federal agencies that fund construction projects.”

The letter was sent by the American Road & Transportation Builders Association, American Public Transportation Association, Associated General Contractors of America and National Association of Home Builders.