Implementation of Buy America Provisions: Stakeholder Perspectives
2167 Rayburn House Office Building
This is a hearing of the Subcommittee on Highways and Transit.
Opening remarks, as prepared, of Highways and Transit Subcommittee Chairman Rick Crawford (R-AR):
We are here to better understand the Biden Administration’s implementation of Buy America, including those provisions that were in the Infrastructure Investment and Jobs Act (IIJA).
As most here know, I have forcefully supported U.S. manufacturing and our domestic steel industry for many years and am proud to serve as the Republican Co-chair of the Congressional Steel Caucus. I’m particularly pleased to have a great steel company, Nucor, which has significant investments in Arkansas, here with us today.
Buy America policy supports and strengthens our domestic manufacturing economy, which is crucial for both our national prosperity and security. Enforcing Buy America requirements ensures that taxpayer dollars are spent here in the United States, and not enriching our foreign adversaries, such as the Chinese Communist Party.
For example, in 2019, I led Congressional efforts to pass the Transit Infrastructure Vehicle Security Act (TIVSA), which was included as part of the National Defense Authorization Act of 2020. This law prohibits the use of federal funds to purchase rolling stock – buses and rail cars - from Chinese-owned or Chinese-domiciled manufacturers.
Unfortunately, codification of the TIVSA and its prohibition on purchasing transit equipment from China did not send a clear enough message to the Federal Transit Administration (FTA). The FTA determined that transit agencies which had formed contracts with restricted manufacturers, including the state-owned China Railway Rolling Stock MA Corporation, prior to December 2019, would be granted a lifetime exemption from the procurement prohibitions enacted by the law.
We are presently working to fix this loophole.
Earlier this Congress, the Committee marked up and passed my bipartisan bill, H.R. 3317, the Rolling Stock Protection Act, to firmly and finally put an end to the practice of sending American taxpayer dollars to Chinese-based manufacturers of rail cars and buses.
The recent Committee passage of the Rolling Stock Protection Act is just one example of the longstanding, bipartisan work of this committee to ensure that Buy America policies are effective.
Buy America is not new to the transportation sector. The first provisions date back to the Buy American Act of 1933, which was the first federal law to require domestic sourcing preferences for items purchased with federal funds.
The Surface Transportation Assistance Act (STAA) of 1982 expanded Buy America provisions and stipulated that funds authorized for federal-aid highway projects, including transit, rail, and road transportation, cannot be obligated unless the steel, cement, and manufactured products used are produced in the United States. STAA also directed the Federal Highway Administration (FHWA) to develop its Buy America waiver procedures to provide procurement requirement relief for grant recipients under specific circumstances.
One such waiver, affirmed in a 1983 FHWA final rule, exempted all manufactured products, other than steel and cement, from Buy America provisions. However, this “manufactured products” waiver, which has been in place for 40 years, is now under review by the Biden Administration, as required by IIJA.
During the public comment period on the waiver’s review, the Administration received more than 7,500 comments from stakeholders, and I hope that our witnesses today will share their thoughts on this important and pending process.
While I may not adamantly support everything IIJA did, one thing it made very clear was that Buy America was critical. For example, IIJA expanded Buy America provisions to federally funded projects that had previously been exempt, including transmission facilities, electric facility structures, broadband infrastructure, and real property and buildings.
IIJA also included the Build America, Buy America Act, which expanded domestic production preference for construction materials in addition to iron, steel, and manufactured products and extended those requirements to all infrastructure projects that receive federal funding, not just those authorized in the bill.
Further, IIJA created the Made in America Office, as part of the Office of Management and Budget, to provide and enforce compliance guidance and evaluate waiver requests for project applicants seeking exemptions under specific circumstances.
That said, since the enactment of IIJA, this committee has continued to receive testimony raising concerns about the implementation of Buy America. For example, despite direct legislative language, the Biden Administration took 15 months to publish final guidance on Buy America implementation and compliance.
To add to the confusion, during that same time frame, the U. S. Department of Transportation (DOT) was advancing its own waiver and exemption process guidance for grantees and funding applicants, which included the issuance of a waiver for all Buy America requirements for construction materials for awards obligated over a 180-day period.
The contradictory guidance put forward by the Biden Administration on Buy America waivers continues to cause project delays and regrettably leads to cost increases for the businesses that build our roads and bridges as well as operate the equipment in our transportation network.
States and industry need clear guidelines, including an understanding of what is and is not required when applying for a waiver, so that we can continue constructing a modern and efficient transportation system reliant on American manufacturing.
Our witnesses will offer their perspectives on the continued implementation of Buy America and the opportunities to continue growing and supporting domestic manufacturing. Again, I thank them for appearing before us today.