The recent emphasis on imposing “Buy America” requirements on federally funded projects continued with the introduction of the Buy America 2.0 Act (Buy America 2.0), H.R. 5137, in the US House of Representatives on March 1.
Buy America 2.0 is the latest development in the enforcement of domestic preferences and the promotion of domestic industries. Other related actions include President Trump’s April 2018 Executive Order (EO) 13788, Buy American – Hire American and the BuyAmerican.gov Act of 2018 (S.2284). Steptoe advisories on the EO and S.2284 are available here and here. The new bill has been referred to the House committees on Transportation and Infrastructure and Energy and Commerce.
Unlike S.2284, which is a bipartisan bill introduced in the US Senate on January 9 of this year, Buy America 2.0 was introduced by and co-sponsored solely by Democrats. That noted, recent developments reflect a strong overall bipartisan support for Buy America actions.
What is Required by Buy America 2.0?
The chief sponsor, Rep. Brendan Boyle (D-Pa.), said Buy America 2.0 would “bolster American manufacturing and create quality, family-sustaining jobs.” He encouraged bipartisan support for the bill.
Buy America 2.0 mandates that federal funds to carry out a transportation or infrastructure project may not be obligated for a project unless the steel, iron, and manufactured goods used for the project are produced in the United States. It does create certain exceptions if domestically produced iron, steel or manufactured goods are not available in sufficient quality and quantity, if usage would increase project costs by over 25 percent, or if the requirement is not in the public interest. If the head of an agency receives a request for a waiver, the public must be provided the opportunity to review the request and provide comment. The bill also requires that its requirements are to be applied consistent with the obligations of the United States under international agreements.
Federally funded highway, rail, transit and railroad projects are already subject to various Buy American requirements and the bill states that it does not “supersede or preempt any existing Buy America provision to the extent such provision conflicts with [the requirement to use iron, steel and manufactured goods produced in the US].” However, Buy America 2.0 also has sections that specifically address certain provision in existing Public Transportation Buy America, Rail Loan and Loan Guarantee Buy America, Aviation Buy America, and Safe Drinking Water Buy America statutes.
What Does this Mean for Contractors and Other Recipients of Federal Funds?
Buy America 2.0 reaffirms the importance of domestic preferences. Such preferences are not new but the degree of attention and emphasis is new and notable. The requirements of the earlier EO, which mandates agency assessments of compliance with Buy America laws and seeks to limit the use of waivers, and the recent legislative initiatives, suggest that contractors and other recipients of federal funds should review their compliance systems and address issues where appropriate. Also, contractors should be alert for changes in Buy America laws, regulations and policies that result from heightened attention to “Buy America” requirements. Finally, changes in the laws may require alterations to a company’s existing supply chain.