The team at Kelley Drye & Warren examined the Buy America provisions in the new infrastructure law.
Last month, President Biden signed the Infrastructure Investment and Jobs Act into law. This $1.2 trillion, bipartisan investment could transform America’s infrastructure… but will it be Made in America?
Once again, the legal eagles at Kelley Drye & Warren, LLC hosted a discussion on “this enormous amount of money” and how and when the federal government will ensure that America is rebuilt by American manufacturers.
The bipartisan infrastructure law has three critical components related to domestic procurement: the Build America, Buy America Act; Make it in America Act; and the BuyAmerica.gov transparency law. Dustin Painter, a partner at Kelley Drye, outlined these provisions and how the administration hopes to hit the ground running on infrastructure projects.
First and foremost, the “Build America, Buy America Act” requires Buy America preferences for iron, steel, construction materials and manufactured products on federal infrastructure assistance awards. It also imposes robust origin standards on those to be considered for federal contracts. And while “construction materials” are not defined in the bill, the traditional definition has come to include nonferrous metals, plastic, and polymer-based products, glass (optic fiber), lumber, and drywall. (The Office of Management and Budget (OMB) will help streamline and standardize these definitions in the next few months). Painter also noted that Congress has directed that Build America, Buy America be applied in a manner “consistent” with U.S. trade obligations related to government procurement.
Next, the “Make it in America Act” deals with transparency and accountability, by amending the Buy American Act of 1933 to increase domestic content — and directs the establishment of a central and publicly available website, which is now live, that publicly displays requested Buy American waivers. Additionally, the law makes it easier for individual American manufacturers and contractors to find one another.
The new infrastructure law includes a transparency mechanism and some supplier scouting provisions, including a directed partnership between the Department of Transportation and the NIST (National Institute of Standards and Technology) at the Commerce Department. The law also increases the breadth of federal assistance awards. Unlike the American Recovery Act of 2009, Build America, Buy America’s statutory authority is not limited to the funds appropriated or authorized in the infrastructure deal.
For those who claim they cannot source their projects domestically, there are waivers available. A contractor must demonstrate that Buy America is, “inconsistent with the public interest, not available in sufficient and reasonably available quantities of a satisfactory quality, and/ or if domestic products will increase the cost of the overall project by more than 25 percent.” And a fair warning to those who can, but won’t source domestically — these waiver requests must be submitted (and will be displayed publicly) on the new BuyAmerica.gov website.
The timeline for the new infrastructure law’s procurement provisions are swift.
“Within 60 days of enactment,” Painter said, “federal agencies will be required to submit to OMB and committees a report that identifies each Fed finance assistance program for infrastructure administered by the agency, identify the Buy America requirement, and asses the applicability of any existing domestic content procurement preferences. including its purpose, scope, applicability, and any exceptions for waivers of the requirements.”
Should companies be derelict in domestic procurement, David Hickey, an expert in government contracts continued, there will be penalties. “Each contract with each public entity should be examined carefully,” he said.
A designated Made in America official in each federal agency will be the senior accountable official for domestic sourcing, while contracting officers and grant managers view projects individually.
“Folks have to work through their supply chain to [determine if they’re eligible and how they’re going to participate],” Hickey added.
Hickey also mentioned the possibility of a bid protest — that is, if another company believes its competitor is using foreign procurement for a project. “They could file a bid protest even if the agency doesn’t disqualify you,” he said.
If you’d like to read more about, or hear from Kelley Drye about the Buy American provisions, click here.