Buy American vs. Buy America

President Joseph R. Biden Jr. signed an executive order intended to strengthen Buy American provisions. Congress passed the Buy American Act in 1933. This program covers specified products and requires the U.S. government to purchase domestic construction materials. The Buy American Act created a national preference for the government to procure only domestic materials used for public construction unless a waiver had been granted. The 1933 Act applies to direct purchases by the federal government, but not third parties, such as private contractors given procurement funding through government endowments.

In summary, the executive order intends to strengthen oversite and leadership and increase waiver scrutiny and inter-agency communication about domestic preferences with respect to Buy American Act provisions.

The Executive Order does not apply to the Buy America Act. The Buy America Act is familiar those operating primarily in the transportation industry performing on projects utilizing funds administered by Federal Highway Administration (FHWA) for state and local public works entities. The Buy America Act was established within Section 165 of the Surface Transportation Assistance Act of 1982, which was a transportation funding and policy act created under the Reagan administration. This provision addresses concerns over the surface transportation of highways and bridges. The Buy America Act was intended to give preference for the use of domestically produced materials on any procurements funded at least in part by the federal government.

FHWA Issues Final CM/GC Regulations

Source: AGC Highway Facts Bulletin

The Federal Highway Administration (FHWA) on December 2, 2016 issued final rules on the use of Construction Manager General Contractor (CM/GC) procurement procedures in the federal-aid highway program. This regulatory action was mandated in the MAP-21 legislation. FHWA has been allowing states to use CM/GC under the authority of its Special Experimental Project Number 14 (SEP-14) process for the past several years. MAP-21 provided the statutory authority to allow state DOTs to use CM/GC as a routine contracting practice. AGC commented extensively on the proposed rule and FHWA highlighted those comments in the background portion of the rule notification. AGC will be reviewing the rules to determine which of our comments were adopted.

One significant issue AGC raised suggested that the rule should clarify whether the CM/GC contractor’s responsibilities are limited to providing constructability and material reviews, or whether the CM/GC contractor is expected to perform design services. The AGC referenced recent legal decisions that showed a trend of liability and responsibility being assigned to CM/GC contractors related to the preconstruction phase of the contract for what have been considered professional services provided. The FHWA decided that further clarification on this issue was unnecessary.