BUY AMERICA Federal Law and FHWA Policy

Transcription

1 BUY AMERICA Federal Law and FHWA Policy Presented By: RAFIQ DARJI, M.S.,P.E. FHWA Florida Division LTAP Webinar June 16, 2016

2 Agenda Overview of US Code & Federal Law Changes to Buy America Under MAP-21 Application of Buy America Flexibilities in Buy America Buy America as it relates to Utilities Q&A

3 Question for the audience When was the Buy America Law created? A ARRA B under MAP-21 C D. 1965

4 Question for the audience When was the Buy America Law created? A ARRA B under MAP-21 C Surface Transportation Act D. 1965

5 Question for the audience Who Created the Buy America Requirements? A. State Legislatures B. US DOT (FHWA) C. US Congress D. MAP-21

6 Question for the audience Who Created the Buy America Requirements? A. State Legislatures B. US DOT (FHWA) C. US Congress (Federal Law) D. MAP-21

7 Question for the audience What types of materials are covered under Buy America? A. All materials supplied to Fed-Aid projects B. Steel and Iron only C. Steel, Iron, and Aluminum D. Steel, Iron, Aluminum and Copper

8 Question for the audience What types of materials are covered under Buy America? A. All materials supplied to Fed-Aid projects B. Steel and Iron only C. Steel, Iron, and Aluminum D. Steel, Iron, Aluminum and Copper

9 It is a Law US Code & Federal Regulation U.S. Congress passed the law requiring Secretary of Transportation shall not obligate any funds authorized to be appropriated to carry out the Surface Transportation Assistance Act of 1982 (96 Stat. 2097) or this title and administered by the Department of Transportation, unless steel and iron used in such project are produced in the United States. Laws The FHWA s statutory provisions for Buy America are found in Title 23 USC Section 313. Regulations 23 CFR Requires use of domestic iron and steel in all Federal-aid construction projects.

10 Why was this law created? Congress created this law to ensure American made goods and materials have preference over imported products with respect to government procurement and infrastructures projects. To ensure taxpayer dollars are used to create and maintain manufacturing jobs in the US.

11 Buy America Buy American

12 Buy America is a separate and distinct program from Buy American. Buy American applies to all federal direct procurements; it covers approximately 100 products and has completely different rules. Requirements are found in 41 U.S.C. 10(a)-10(c). Buy American is not applicable to Federal-aid Contracts

13 Buy America applies only to Federal-aid highway program under Title 23 funds Applies to iron and steel products All manufacturing processes must take place domestically including application of coatings

14 What is manufacturing process? Any process that: modifies the chemical content physical shape or size or final finish Includes: initial smelting through the bending and coating stages rolling, extruding, machining, grinding, drilling and welding must take place domestically If a domestic product is taken out of the US for any process, it becomes foreign source material

15 Materials must be permanently installed. Temporary materials may be left in place at the contractor's convenience. (If the temporary work is converted and incorporated as permanent, then the material has to comply with Buy America). Minimal Use Criteria - Non-domestic iron and steel materials may be used, provided that the cost of such material does not exceed one-tenth of one percent (0.1%) of the total contract cost or $2,500, whichever is greater. (The cost is that shown to be the value of the steel and iron products as they are delivered to the project)

16 Project Compliance Requirements Documentation/Certification: All permanently incorporated steel and iron materials must have certification stating that materials comply with Buy America requirements Must be certified by the Manufacturer

17 FDOT Specification Requirements Following excerpts taken from Section 6-5.2: Use steel and iron manufactured in the United States, in accordance with the Buy America provisions of 23 CFR , as amended Ensure that all manufacturing processes for this material occur in the United States As used in this specification, a manufacturing process is any process that modifies the chemical content, physical shape or size, or final finish of a product, beginning with the initial melting and continuing through the final shaping and coating. Submit a certification from the manufacturer of steel or iron, or any product containing steel or iron, stating that all steel or iron furnished or incorporated into the furnished product was produced and manufactured in the United States

18 FDOT Specification Requirements - continued Submit each such certification to the Engineer prior to incorporating the material or product into the project Prior to the use of foreign steel or iron materials on a project, submit invoices to document the actual cost of such material, and obtain the Engineer s written approval prior to incorporating the material into the project Note: FDOT uses site-manager to track the use of foreign steel in each project to assure usage is within the allowable limits

19 Good Example of Material Certification Statement Statement from Manufacturer: (obtained from FDOT project) We certify that all steel or iron furnished or incorporated into the finished product was manufactured in the United Stat in accordance with the requirements of the specifications and the Buy America provision of 23 CPR as amended. We further certify that the product was produced entirely within the United States.

20 Impact of MAP-21 on Buy America (BA) Moving Ahead for Progress in the 20 th Century Act. (MAP-21) On July 6, 2012 President Signed MAP-21 into law Prior MAP-21 : The BA law was applicable to project with flexibilities for using non Federal-aid funds After MAP-21: It applies to all projects within NEPA limits with no flexibilities for using non Federal-aid funds

21 San Francisco-Oakland Bay Bridge

22 Recent Events - Buy America The Economy, Jobs, Public Opinion, Congress

23 Changes to Buy America under MAP-21 Section 1518 of MAP-21 amends the Buy America statute at 23 U.S.C 313 to require the application of Buy America to all contracts eligible for assistance under title 23 within the scope of a finding, determination, or decision under the National Environmental Policy Act (NEPA), regardless of funding source, if at least one contract within the scope of the same NEPA document is funded with Federal funding provided under Title 23. The effective implementation date of section 1518 of MAP-21 is October 1, Federal participation in contracts or agreements for environmental studies and documentation preparation, right of way acquisition, preliminary engineering and other non-construction work will invoke the application of Buy America to the project, even if no Federal funds are used in the construction.

24 Example: application of Buy America requirements to all contracts eligible for assistance within the scope of a NEPA document

25 FDOT Specification change to accommodate MAP Source of Supply-Steel: Use steel and iron produced in the United States, in accordance with the Buy America provisions of 23 CFR , as amended. Ensure that all manufacturing processes for this material occur in the United States. As used in this specification, a manufacturing process is any process that modifies the chemical content, physical shape or size, or final finish of a product, beginning with the initial melding and mixing and continuing through the bending and coating stages. A manufactured steel or iron product is complete only when all grinding, drilling, welding, finishing and coating have been completed. Before MAP-21: Source of Supply-Steel (Federal Aid Contracts Only)

26 Buy America Flexibilities: Waivers Alternate Bid Process Minimum Amount

27 Project Specific Waivers: Buy America Waivers Requires approval from the Secretary of US DOT - Washington DC Must comply with 23 CFR (c)(1) Public interest finding Domestic steel products are not available. State DOT identifies the need for a waiver, prepares and submits to FHWA FHWA Division Office Review (proper justification is necessary, cheaper or time saving, or similar justifications will not work) FHWA- HQ Review (independent review, will contact industry) Posting of potential waiver notice on website for comments Publication in Federal Register FHWA strongly recommends that agencies consider re-design with domestic products to avoid a lengthy waiver process ( 4 to 9 months) and also there is no guarantee that waiver would be approved once it is submitted.

28 Other Buy America Flexibilities Alternative Bid Procedure Contract package must include: Alternative bids for foreign v/s domestic steel Foreign steel alternative must be 25% lower than domestic alternative (lowest domestic bid to lowest foreign bid) Based on total contract bid Minimal use 0.1% contract value or $2500, whichever is greater

29 Buy America and Utilities Utility relocation work incorporated into a federally funded construction contract. All materials must meet Buy America, regardless who pays for the work. Cannot make materials non participating. Cannot make component plans locally funded to circumvent Buy America. Cannot donate foreign steel materials.

30 Buy America and Utilities Stand alone federally funded utility relocation work All materials must meet Buy America. Cannot make materials non participating. Cannot make component plans locally funded to circumvent Buy America. Cannot donate foreign steel materials.

31 Buy America and Utilities Standalone non-federally funded utility relocation contracts. If State law prohibits utility reimbursement then Buy America does not apply to the utility relocation work since it is federally ineligible. However, if the non-reimbursable utility work is incorporated into a federally funded construction contract then Buy America would apply

32 Implementing Buy America Utility Agreements Include Buy America provisions Buy America Certification requirements

33 Enforcement The State DOT is responsible for enforcement of Buy America provisions to Federal-aid projects Inspect as any other Project Buy America material certification is required

34 NOTE: If you have any questions on Buy America implementation requirements for a specific construction or utility relocation Federal-aid project, you need to coordinate with FDOT District or CO first, prior to contacting Division Office

35 Successful Practices FHWA expects States and LPAs to enforce Buy America requirements States should consider Buy America requirements during preliminary engineering phase to avoid delays during construction, and explore the use of alternate domestic products. States should have adequate material certification procedures in their program to ensure compliance. Improper documentation or lack of documentation is easy to show. Showing fraud is difficult. A pattern must be established.

36 Intentional Violations: Penalties Affixing a label bearing Made in America, Representing that any product, not produced in the USA, used in Federal-aid Highway Program (Title 23) projects, was produced in the USA. Penalty for Falsification: Debarment (Title 48 CFR 9.4)

37 Project Violations Ineligibility: The project will be ineligible for Federal-aid (funds will be removed from all phases of project) Also, other project/s within the NEPA limits will be ineligible for Federal funds (for all phases of project/s)

38 Recent Changes in Buy America On February 19, 2013, a group of 8 manufacturing corporations and a labor union challenged FHWA s issuance of a December 21, 2012 memorandum and filed a petition for review Concerns were expressed regarding loss of Buy America coverage

39 12/21/2012 memo: Clarification of Manufactured Products under Buy America Initiated in response to ARRA oversight issues Requirements apply to structural steel or iron components of pavements, bridges, tunnels, etc. Does not apply to manufactured products that are: Not predominantly steel or iron (90% steel /iron content) Miscellaneous steel or iron components: The miscellaneous steel or iron components, subcomponents and hardware necessary to encase, assemble and construct the above components (or manufactured products that are not predominantly steel or iron) are not subject to Buy America coverage. Examples include, but are not limited to, cabinets, covers, shelves, clamps, fittings, sleeves, washers, bolts, nuts, screws, tie wire, spacers, chairs, lifting hooks, faucets, door hinges, etc.

40 On December 22, 2015, US District Court for the District of Columbia grants Plaintiffs' motion for summary judgment Setting the 90% threshold was a substantive rule implemented without appropriate notice and comment 90% threshold was arbitrary and capricious Miscellaneous products exemption also substantive FHWA Division Letter 1/19/26 to FDOT: FHWA withdraws the 12/21/2012 memo; Take necessary steps to comply with the current/existing policy Revisions do not affect existing contracts Note: Contact FDOT CO further clarifications and guidance

41 Additional valuable information can be obtained at the following web links; Construction Program Guide: Buy America Laws and Regulations: Buy America Waiver information: fm Buy America Q and A: a.cfm

42 Thanks Any questions? Rafiq Darji, M.S.,P.E. FHWA Florida Division