The first phase of the discontinuation of a decades-old mistake that governed highway construction projects began on Oct. 1.
Back in January, the Federal Highway Administration (FHWA) announced a new and momentous final rule: It was ending its longstanding blanket waiver of Buy America requirements for manufactured products used in federal-aid highway projects.
Wednesday (Oct.1) marked the first phase of the rollout of this new rule. It’s been a long time coming.
The FHWA’s general waiver has been in effect since 1983 – 42 years ago – despite directives in both the 2021 Bipartisan Infrastructure Law and the 1982 Surface Transportation Assistance Act (STAA) requiring coverage of manufactured products. Back then, the FHWA inexplicably “determined that Congress had not intended to cover all manufactured products” even though the 1982 STAA explicitly required the application of Buy America procurement preferences to “manufactured products.”
In the decades since, manufactured products necessary for the completion of construction projects assisted by the FHWA – such as lighting and traffic signals, electronic signs, utility equipment, and pumps and generators – could be purchased from virtually anywhere. For context, the FHWA distributes roughly $70 billion per year for infrastructure projects across the country. But the waiver surrendered the opportunity to maximize the return on taxpayer-funded infrastructure investments with stronger domestic supply chains and more jobs.
Fortunately, this waiver is scheduled to go into the dustbin. The new rule will roll out in two phases, according to the FHWA’s website:
For projects obligated on or after Oct. 1, 2025, final assembly of all manufactured projects must occur in the U.S.
For projects obligated on or after Oct. 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% of the total cost of all components of the manufactured product.
The Alliance for American Manufacturing has long stumped for the discontinuation of the FHWA’s general waiver for manufactured products, as have many in Congress. In fact, Sen. Tammy Baldwin (D-WI) as recently as last month pressed U.S. Department of Transportation officials to see that the FHWA adhered to the new final rule, and urged the FHWA to avoid issuing blanket waivers again in the future.
“Waivers that are targeted, time-limited, and transparent are indications of where there are gaps in domestic supply chains and serve as powerful market signals for investment in American factories. Where there is a demonstrated need, the FHWA should seek public comment on proposed waivers, as required by statute, at the earliest opportunity and without delay,” Baldwin wrote.
“It is a straightforward concept: when we use taxpayer dollars to build infrastructure, we should be using American products and supporting American businesses and workers.”