Buy America: MAP-21 Related Changes, Provisions & Waivers

1. Buy America:MAP-21 Related Changes, Provisions & Waivers NE Region Annual Utility Conference January 23, 2014 Kirk Fredrichs Wisconsin Division Office Assistant Division Administrator Federal Highway Administration

2. Topics for Discussion • Buy America General Provisions • MAP-21 Changes to Buy America • Manufactured Products • Buy America Waiver Process • Questions?

3. Buy America General Provisions • 23 USC 313 & 23 CFR 635.410 • Applies to all Federal-aid construction projects • Iron & Steel only (permanently incorporated) • All Manufacturing Processes must take place domestically (initial melting, bending, drilling, machining, etc.) • Includes coatings on these materials • Minimal use of iron and steel (0.1% total contract value or $2500, whichever is greater) allowed before Buy America requirements take effect • Waiver Requests • Must demonstrate use is not in the Public Interest • Insufficient domestic supply of satisfactory quality

4. BUY AMERICA vs. BUY AMERICAN

5. MAP-21 (Section 1518) • On July 6, 2012 President Obama signed into law MAP-21, which took effect on October 1, 2012 • MAP-21 widened the scope of Buy America requirements to all eligible contracts for assistance under the scope of the NEPA determination (if at least one contract within the same NEPA determination is funded with Federal funds). • Scope of NEPA Document defines the project itself • Project (1) vs. Project Contracts (Many)

6. SEC. 1518 Buy America Provisions Section 313 of Title 23, United States Code, is amended by adding at the end the following: ``(g) Application to Highway Programs - The requirements under this section shall apply to all contracts eligible for assistance under this chapter for a project carried out within the scope of the applicable finding, determination, or decision under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), regardless of the funding source of such contracts, if at least 1 contract for the project is funded with amounts made available to carry out this title.’’

7. MAP-21 Buy America Summary • Applies to all Federal-aid eligible construction contracts covered under the NEPA determination, including: • Highway and bridge construction • Railroad work • Utility work (if eligible under State law) • Triggered by: • Use of Federal-aid for anycontract under the NEPA determination, including: • Design • Environmental evaluation • Right-of-Way • Construction • NOTE: The application of Buy America to utility & railroad work can significantly affect the cost estimate for the project

8. FHWA’s Interpretations of Buy America & MAP-21 • FHWA’s December 20, 2012 letter to AASHTO http://www.fhwa.dot.gov/construction/contracts/121220.cfm • MAP-21 Buy America Q&A on website http://www.fhwa.dot.gov/map21/qandas/qabuyamerica.cfm • Clarifies our interpretation of the Section 1518 Buy America provisions in MAP-21 • General Buy America Q&A on website http://www.fhwa.dot.gov/construction/contracts/buyam_qa.cfm (Best Source of Information!) • http://www.fhwa.dot.gov/construction/cqit/buyam.cfm

9. Manufactured Products under Buy America • Manufactured Product Definition • "a good brought to the construction site for incorporation into the project that has been processed into a specific form or shape or combined with other raw material to create a material that has different properties than the properties of the individual raw materials.” (2 CFR 176.140) • Bending, extruding, drilling, coating, etc. • Defined in December 21, 2012 Memo from FHWA (Mr. John Baxter).

10. Manufactured Products • If domestically-produced steel or iron ingots are shipped overseas for any manufacturing process and then returned to U.S., the resulting product does not conform with the Buy America requirement. • Enforcement of Buy America provisions is a State responsibility. • Work with WisDOT concerning questions on applicability concerning manufactured products • WisDOT Form DT2249 developed

11. Manufactured Products Subject to Buy America • December 21, 2012 Memo determined that Buy America applies if: • Product is manufactured predominantly of steel or iron (at least 90% steel or iron content by weight when delivered to job site) • Products subject to Buy America include: • Most steel and iron products • Guardrail, posts, end sections, terminals, cables • Fencing and fence posts • Pipe, conduit, manhole covers, risers • Mast arms, poles, structural members, luminaires • Reinforcing steel, wire mesh, strands, cables, etc.

12. Manufactured Products Exempt from Buy America • Exemptions from Buy America include: • Miscellaneous steel or iron components, subcomponents and hardware necessary to: • Encase, assemble and construct the components listed in the previous slide • Examples include: • Cabinets, covers, shelves, clamps, fittings, sleeves • Washers, bolts, nuts, screws, tie wire, spacers, chairs, lifting hooks • Faucets, door hinges, etc. • Manufactured Products not predominantly steel or iron

13. Buy America Waiver Process

14. Buy America Waivers • Two Nationwide Waivers (Approved by FHWA Rule Making) • Specific Ferryboat parts in February 1994 • Pig iron, scrap, raw alloy materials, pelletized or reduced iron ore in August 1994 • Project Waivers General Requirements • Must comply with 23 CFR 635.410(c)(1) • public interest / unavailable domestically • Consider re-design with domestic • Requires HQ review and Consideration • March 13, 2008 memorandum • Includes a 15 day information public review & comment period. • Required to publish in the Federal Register one day before effective • Could add 6 plus weeks to the approval process

15. Waiver Request Submittal • Waiver request must include: • Federal-aid/ARRA project number • Project description • Project cost • Waiver item cost • Brief description of the item’s function • Country of origin for the product • Reason for the waiver • Re-design analysis using domestic product

16. Buy America Waiver Process • Waiver process is initiated by contracting agency (WisDOT) if it believes waiver is warranted under provisions of 23 CFR 635.410 (c). • WisDOT submits waiver request to FHWA Division in advance of need (preferably during preliminary engineering stage). • Division reviews the waiver for sufficiency and forwards to Headquarters with recommendations • FHWA posts the waiver for 15-day comment period • http://www.fhwa.dot.gov/construction/contracts/waivers.cfm

17. Buy America Waiver Process (continued) • FHWA HQ coordinates with appropriate industry associations (NSBA, AISI, and AISC) • Provide summary of findings and justifications for the waiver. • Submits an intent to issue a waiver for the product to the Chief Counsel, then to Secretary for publication in Federal Register. • Final Federal Register publication constitutes approval of the waiver. • Process may take considerable time to complete (maybe 60 days)

18. Buy America Certifications • No required “format” by FHWA • Step by Step • Summary certifications • Paperwork traceable to product delivered • Documents “chain of custody” • Not acceptable from Prime Contractor • Must be by a “Responsible & Knowledgeable” party • Discretion for certification format between FHWA Division Office and State DOT • WisDOT Form DT2249 and DT2249a

19. Successful Practices • DOTs should consider Buy America waivers during preliminary engineering phase to avoid delays during construction, and explore the use of alternate domestic products as much as possible. • DOTs consider Buy America waivers in their risk assessment and development of the Federal-aid program. • DOTs have adequate material certification procedures in their program to ensure compliance.

20. Thank you.Questions?