Buy America Provision Passes Senate!

Dave Johnson

Today the Brown-Merkley Amendment #1819 passed the Senate with a voice vote! Sen. Sherrod Brown made a brief floor speech that noted that the amendment closes a loophole by which companies evaded current Buy America requirements by breaking up jobs into small pieces that could then be outsourced. “The San Francisco/Oakland Bay Bridge was the most outrageous example of that,” he said, noting that the contract was broken up into 28 pieces that enabled the steel for the bridge to be brought in from a Chinese firm.

As I wrote last week, this amendment accomplishes the following:

  • Transparency: Requires agencies to provide notification on a public website and a 15 day comment period before proposed waivers of Buy America preferences are granted – similar to current practice by FHWA.
  • Reporting: Requires an annual report on the use of Buy America waivers for transportation projects, including justification for each waiver and the monetary value for each waiver.
  • Closes the “Segmentation” Loophole: Ensures that public works projects receiving federal aid cannot be “segmented” to evade Buy America preferences by clarifying that Buy America applies to contracts carried out within the scope of the National Environmental Policy Act (NEPA) assessment – same language in amendment to H.R. 7 by Rep. Cravaack (R-MN) passed in the House Transportation and Infrastructure Committee.
  • Works with Trade Agreements: Requires that Buy America preferences be carried out in a manner consistent with our international trade agreements.

About Buy America

Buy America provisions support American companies and workers by giving a preference to domestically produced iron, steel, and other manufactured goods in infrastructure projects that receive federal aid. They have commonsense exceptions that permit waivers to allow procurement of foreign product when there is insufficient domestic capacity, if the cost of the domestic product is unreasonable, or when the administering agency deems the waiver to be in the public interest.

The following is from a press release from the office of Sen. Sherrod Brown (D-OH):

“Buy America” provisions support American companies and workers by giving a preference to domestically-produced iron, steel, and other manufactured goods in infrastructure projects that receive federal aid. They are administered by several Department of Transportation agencies, with common-sense exceptions that permit waivers to allow the procurement of foreign-made products when there is insufficient domestic capacity, if the cost of the domestic product is unreasonable, or when the administering agency deems the waiver to be in the public interest.

However, over time, the effectiveness of “Buy America” preferences has been compromised by various loopholes to avoid sourcing goods and materials domestically. One of the most egregious examples is “segmentation,” whereby a project is split into various contracts and federal aid is not used on those where the contractor intends to use foreign iron, steel, and manufactured goods – bypassing American workers and evading the law. This loophole allowed Chinese-made steel to be used in the new Oakland, California Bay Bridge. Closing this loophole helps to ensure that Buy America is effectively enforced.

Brown’s legislation would require the Department of Transportation to improve transparency and reporting of proposed Buy America waivers, without unnecessary project delays, and ensure an annual accounting of federal funds used to purchase foreign-produced iron and steel. It also closes a loophole that permits the evasion of “Buy America” in some public works projects. The legislation also explicitly requires that Buy America preferences be carried out in a manner consistent with the United States’ international trade agreements.
A longtime supporter of Ohio’s steel industry, Brown has launched a multipronged effort to support Ohio steelmakers in response to relaxed regulations that undermine “Buy America” requirements intended to support the domestic steel industry.

  • Under Defense Department regulations, specialty metals procured for defense purposes—including steel armor plate—must be produced in the United States. Despite more than 35 years of practice requiring that steel armor plate be both melted and finished in the United States, the Defense Department issued guidance in 2009 that allowed armor plate melted in outside countries—including Russia and China—to be imported and subjected to simple finishing processes in the United States, then deemed to have been “produced” domestically. Such a practice hurts Ohio steelmakers and steel jobs, and puts our national security at risk by subjecting our armor plate supply to the whims of foreign nations. Brown’s bill, the United States Steel and Security Act, would require that steel purchased by the U.S. military be 100 percent “made in America”— both melted and finished in the United States.
  • Brown is also a co-author of the Invest in American Jobs Act, which would strengthen existing “Buy America” requirements for investments in highway, bridge, public transit, rail, and aviation infrastructure and equipment to ensure that all of the steel, iron, and manufactured goods used in these projects are produced in the United States.

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