NE Region Annual Utility Conference January 23, 2014 Kirk Fredrichs Wisconsin Division Office Assistant Division Administrator Federal Highway Administration.

Buy America:MAP-21 Related Changes,

Provisions & Waivers

NE Region Annual Utility ConferenceJanuary 23, 2014

Kirk FredrichsWisconsin Division OfficeAssistant Division AdministratorFederal Highway Administration

Topics for Discussion

Buy America General ProvisionsMAP-21 Changes to Buy AmericaManufactured ProductsBuy America Waiver ProcessQuestions?

Buy America General Provisions

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 RequestsMust demonstrate use is not in the Public Interest Insufficient domestic supply of satisfactory quality

23 USC 313 & 23 CFR 635.410Applies to all Federal-aid construction projects

Iron & Steel only (permanently incorporated)

BUY AMERICA vs. BUY AMERICANRequirement

Statute Applicability

Coverage Threshold

Buy America

USC 31323 CFR 635.410

Federal-aid Contracts

Iron and steel products only

0.1% of Total Contract or $2500

Buy American

FAR41 USC 10a-10d48 CFR 25

Direct Fed. Govt. contracts

All materials except the 100 specified

Specifically identified in NAFTA & other trade agmts

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 itselfProject (1) vs. Project Contracts (Many)

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.’’

MAP-21 Buy America SummaryApplies to all Federal-aid eligible construction contracts covered

under the NEPA determination, including:Highway and bridge constructionRailroad workUtility work (if eligible under State law)

Triggered by:Use of Federal-aid for any contract 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

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-21General 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

Manufactured Products under Buy AmericaManufactured 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).

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

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 productsGuardrail, posts, end sections, terminals, cablesFencing and fence postsPipe, conduit, manhole covers, risersMast arms, poles, structural members, luminairesReinforcing steel, wire mesh, strands, cables, etc.

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, sleevesWashers, bolts, nuts, screws, tie wire, spacers, chairs, lifting

hooksFaucets, door hinges, etc.

Manufactured Products not predominantly steel or iron

Buy America Waiver Process

1 State DOT identifies need for a waiver during preliminary engineering phase, submits request to FHWA Division Office

Starts FHWA process

2 Review and recommendation by FHWA Division Office Days/Weeks

3 Submittal to FHWA HQ office / conducts nationwide search Days/Weeks

4 Post waiver notice on website for 15-day comment period. Start coordination with industry and Dept. of Commerce Manufacturing Extension Partnership (MEP)

2-3 Weeks

5 Notification from MEP on domestic supplier scouting results. Coordination of MEP findings between Division/State DOT

Weeks

6 Coordination and FR publication by FHWA HQ /OST Weeks

7 Final notice publication in Federal Register/Approval 2-3 Weeks

Total time needed Several months

Buy America WaiversTwo Nationwide Waivers (Approved by FHWA Rule Making)

Specific Ferryboat parts in February 1994Pig iron, scrap, raw alloy materials, pelletized or reduced iron ore

in August 1994

Project Waivers General RequirementsMust comply with 23 CFR 635.410(c)(1)

public interest / unavailable domestically Consider re-design with domesticRequires 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

effectiveCould add 6 plus weeks to the approval process

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

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

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)

Buy America Certifications

No required “format” by FHWAStep by Step Summary certificationsPaperwork traceable to product deliveredDocuments “chain of custody”

Not acceptable from Prime ContractorMust be by a “Responsible & Knowledgeable” party

Discretion for certification format between FHWA Division Office and State DOTWisDOT Form DT2249 and DT2249a

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.

Thank you.

Questions?