Infra Insight Blog

On January 14, 2025, the Federal Highway Administration (FHWA) announced a new final rule to end its longstanding waiver of Buy America requirements for “manufactured products” used in Federal-aid highway projects.

By way of background, FHWA’s Buy America statute was enacted in 1983 and required FHWA to ensure that all federally funded projects use only steel, iron, and manufactured products that are produced in the United States.  However, at the time, FHWA determined that it would be in the public interest to waive the Buy America requirements for manufactured products.  As noted in the final rule, this was due in part to FHWA’s view that manufactured products were used so minimally on highway construction projects that protecting them under Buy America would not incentivize domestic manufacturing or result in any economic benefits.  In the four decades that followed, this waiver, known as the Manufactured Products General Waiver, exempted from the Buy America requirements any manufactured products that were permanently incorporated into Federal-aid projects.

FHWA’s new final rule, known as the Buy America Requirements for Manufactured Products Final Rule, was issued in response to the Build America, Buy America Act (BABA) provisions enacted as part of the 2021 Infrastructure Investment and Jobs Act (P.L. 117-58).  Under BABA, there is a general policy preference against general applicability waivers like the Manufactured Products General Waiver, and the BABA provisions specifically require federal agencies to review existing general applicability waivers to determine whether such waivers should be discontinued.

On March 17, 2023, FHWA initiated the review required by BABA, publishing in the Federal Register a notice and request for comments on its waiver for manufactured products.  Following review and consideration of the comments received, FHWA determined to discontinue the Manufactured Products General Waiver, finding it to be overly broad, no longer in line with the purpose of domestic content procurement preferences and waivers and, therefore, no longer in the public interest.

The Buy America Requirements for Manufactured Products Final Rule ends the Manufactured Products General Waiver and aims to maximize the use of domestically produced manufactured products permanently incorporated into Federal-aid highway and bridge projects.  The new rule is intended to be rolled out in two phases:

• For projects obligated on or after October 1, 2025, final assembly of all manufactured products must occur in the U.S.
• For projects obligated on or after October 1, 2026, in addition to the final assembly requirement, the cost of components of products that are mined, produced, or manufactured in the U.S. must be greater than 55 percent of the total cost of all components of the manufactured product.

However, in light of the regulatory freeze issued by President Trump on his first day in office, it remains uncertain whether implementation of the new rule will be delayed or if the rule itself will be changed.  Nevertheless, the new Administration has signaled an intent to strengthen Buy America requirements to increase domestic manufacturing and bolster the U.S. economy.  Notably, in a directive issued by new Secretary of the U.S. Department of Transportation (U.S. DOT) Sean Duffy on January 29, 2025, faithful adherence to “all Federal statutory Buy America requirements” is specifically identified as a principle that governs the implementation and administration of all U.S. DOT policies, programs, and activities.

For now, recipients and contractors alike should begin reviewing their supply chains and manufacturing processes to ensure compliance with the new rule, all the while keeping an eye out for further developments and the release of additional information and guidance.

The Buy America Requirements for Manufactured Products Final Rule can be found here.