On January 31, 2019 President Trump issued an Executive Order (EO) On Strengthening Buy-American Preferences for Infrastructure Projects. This EO strengthens and expands “Buy American” requirements that are a condition of many Federally-funded infrastructure projects, such as sewer lines, roads and bridges, and broadband internet. The EO’s scope is broad and the financial impact likely to be great, as it will raise the costs of many infrastructure projects, as companies try to comply with requirements that severely restrict supply options. Specifically, projects done under EPA’s Water Infrastructure Finance and Innovation Act (WIFIA) or energy projects through the Department of Energy’s Loan Guarantee Program are likely impacted. The impact extends to agencies far beyond EPA and DOE; current estimates indicate that 30 Federal agencies award over $700 billion in federal assistance to 40,000 nonfederal recipients, much of which may be affected.
Previously, metals such as iron and steel were subject to such requirements resulting from a similar Executive Order (EO 13788) signed on April 18, 2017. Now, the new EO will expand the types of products to include concrete, and other manufactured products whose definition includes “items and construction materials composed in whole or in part of non-ferrous metals such as aluminum; plastics and polymer-based products such as polyvinyl chloride pipe; aggregates such as concrete; glass, including optical fiber; and lumber.” Within 90 days of issuance, the EO requires the head of each Agency to encourage the recipients of any new contract, subcontract, purchase order, or sub-award to use, to the greatest extent practicable, iron and aluminum as well as steel, cement, and other manufactured products produced in the United States. Each Federal agency that is subject to the EO must prepare a report within 120 days of the EO’s issuance. The report must contain a plan or program for the EO’s implementation to meet the EO’s goals and specify whether the Agency will impose requirements on restricting products used in Federal projects to only those manufactured in the United States.
Peter Navarro, Director of the Office of Trade and Manufacturing at the White House, said the White House will be monitoring the implementation of the Order, which grants Agency management discretion in how the requirements will be applied within their Agency. The “Buy American” initiative is popular in “rust belt” manufacturing states such as Ohio. The initiative does not enjoy support among many industries, whose input costs or even ability to source work is severely hampered. Some fear that this additional requirement will be a hurdle that will delay work and slow economic activity broadly in the U.S. This announcement is made as a Chinese delegation arrives in Washington, DC for high stake trade negotiations. WWEMA will closely monitor developments for the new “Buy American” efforts and focus on obtaining EPA or any other implementation guidelines associated with this Order. A copy of the Executive Order can be found HERE.