As anticipated by project sponsors and industry participants, the U.S. Department of Transportation (USDOT) issued a temporary waiver of Buy America requirements for construction materials on May 19, 2022.
The Infrastructure Investment and Jobs Act (IIJA) expanded the applicability of Buy America and required the Office of Management and Budget (OMB) to promulgate guidance extending the current Buy America requirements regarding iron and steel and manufactured products to include construction materials, as well. OMB issued initial IIJA-implementing guidance effective May 14, 2022. OMB also issued a request for information seeking public input on its guidance, and recently extended the deadline for comments to June 6, 2022.
Following the release of OMB’s guidance, USDOT proposed a temporary waiver for the new construction materials requirement to facilitate implementation of this new obligation. The public comments submitted in response overwhelmingly supported the implementation of the temporary waiver.
The temporary waiver issued by USDOT provides that it would be inconsistent with public interest to apply the Buy America preference to construction materials starting on May 14, 2022 because adequate compliance processes do not currently exist.
The temporary waiver applies to awards that are obligated during the 180-day period between May 14 and November 10, 2022. During the waiver period, if USDOT finds that there are currently sufficient compliance processes for certain categories of construction materials, USDOT may consider shortening the waiver duration overall or for those specific categories.
The purpose of the temporary waiver period is to (i) seek additional feedback on implementation of the construction materials requirement, (ii) provide project sponsors time to develop compliance procedures, and (iii) gather information on existing construction material sourcing and strategize ways to increase domestic production of those materials.
Notably, the temporary waiver addresses issues related to ongoing reviews of Buy America compliance and implies that project sponsors may be responsible for conducting audits. Manufacturers may also be responsible for demonstrating that their products meet applicable Buy America standards. These activities would go beyond the existing Federal Transit Administration Buy America regime, which generally requires an up-front certification instead of ongoing audits, as set forth in 49 CFR Part 611.
That said, the USDOT temporary waiver is applicable across modal agencies and this type of continuing due diligence is closer to the "step certification” that the Federal Highway Administration currently endorses in 23 CFR 635.410. For reference, the step certification process involves a separate Buy America certification by each corporate entity involved in the manufacturing process of the product, which results in a verifiable paper trail.
This temporary waiver period offers a critical opportunity for USDOT to work with project sponsors and industry participants to ensure that the new construction materials requirement does not hamper the ability of project sponsors to obligate the historic level of federal infrastructure funding under the IIJA.
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