By Lisa Harris, KU Transportation Center Communications & Outreach Manager
Reprinted with permission from the Winter 2014 issue of the Kansas LTAP Newsletter, a publication of the Kansas Local Technical Assistance Program (LTAP) at the Kansas University Transportation Center.
The current Federal highway bill, MAP-21, made changes to FHWA’s Buy America that affect local agencies. The Buy American Act ensures that transportation infrastructure projects are built with American-made products. The statute pertaining to Federal Highway Administration (FHWA) funds, 23 U.S.C. 313, states that “The Secretary of Transportation shall not obligate any funds unless steel, iron, and manufactured products used in such project are produced in the United States.”
Local agencies are affected if they are participating in a federal aid project, and also if they are using their own local funds for projects that happen to include a NEPA review. The NEPA-related requirement is new under MAP-21, and has been effective since October 1, 2012.
If one contract, then all contracts
FHWA states that:
“Section 1518 of MAP-21 amends the Buy America statute at 23 U.S.C. 313 to require the application of Buy America to all contracts eligible for assistance under title 23 within the scope of a finding, determination, or decision under the National Environmental Policy Act (NEPA), regardless of funding source, if at least one contract within the scope of the same NEPA document is funded with Federal funding provided under Title 23.”
In other words, if one contract within the scope of a NEPA document is awarded using Federal-aid funding, then the Buy America provisions would apply to all contracts within the scope of the NEPA document, regardless of the source of funding. Even non-Federal-aid contracts under the same NEPA document will be subject to Buy America provisions.
How is this different than under the previous highway bill? We talked with Ron Seitz, chief of KDOT’s Bureau of Local Projects about this. He gave a related example in Kansas of a community that used federal local aid funds for a gateway project that included an Italian decorative metal arch in the contract. The arch did not meet Buy America provisions. Before MAP-21 was enacted, a community could have split off a component like this into a separate contract to be paid with local funds, bypassing the Buy America provisions, and that is what this community did. Now that is no longer possible.
If one activity, then all activities
If Federal funds are used for any activity within the scope of a NEPA decision, then Buy America applies to the entire project. This includes:
- environmental studies,
- document preparation,
- right of way acquisition,
- preliminary engineering, and
- other non-construction work.
For any contract or agreement for such work executed after October 1, 2012, all construction contracts on that project will be subject to Buy America regardless of whether Federal funds are used in any of the contracts for construction.
Is there any wiggle room?
FHWA does recognize that it is sometimes difficult to comply with Buy America. The Buy American Act has this language to allow some flexibility:
“The Secretary of Transportation may waive the requirement if the Secretary finds that:
- It would be inconsistent with the public interest;
- Such materials and products are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or
- Inclusion of domestic material will increase the cost of the overall project contract by more than 25 percent” (This is a standing waiver codified in regulations when alternate bidding procedures are used).
All waivers have to be posted in Federal Register. All proposed waivers are first posted on the FHWA’s website for a 15-day comment period prior to publishing the final decision in the Federal Register.
FHWA provides information to the public on the waivers they have granted. The Agency has granted 22 waivers in the last three years. You can read about these waivers at http://www.fhwa.dot.gov/construction/contracts/waivers.cfm. You can sign up to receive an automatic notification whenever the FHWA is considering issuing a Buy America waiver.
Some difficulties with compliance are difficult to address. For example, Seitz said, if you are buying equipment or a vehicle for a project, it is difficult to know if all the steel in those items is American steel. This situation does not fall neatly under the waiver eligibility. In these cases, he recommends calling him to discuss.
Buy America noncompliance / enforcement
What are the consequences of not complying with Buy America? FHWA states in a Q&A document (see link in Sources): Awarding any such non-Federal-aid highway contract on or after October 1, 2012, without applicable Buy America provisions would render all contracts within the scope of the NEPA document ineligible for Federal-aid highway funds.
How will this be enforced? Seitz said his team will continue to check for Buy America compliance for communities that receive federal aid or administer their own federal aid money with KDOT oversight. It will be up to FHWA to address any noncompliance.
Contracts awarded prior to October 1, 2012
If the contract in question was awarded before October 1, 2012, it does not need to comply with Buy America. (However, FHWA notes that any other contract within the scope of the same NEPA review awarded on or after October 1, 2012, must comply with Buy America provisions.)
For more information
For more information on Buy America and how it affects local agencies, read the Q&A document in the sources below.
Source:
- KS LTAP Newsletter. Winter 2014. http://www2.ku.edu/~kutc/pdffiles/LTAP2014-Winter.pdf
- Buy America Questions and Answers. US DOT. December 20, 2012. http://www.dot.gov/highlights/buyamerica
- Interview. Ron Seitz. February 18, 2014.