Buy American
TrusSteel and Buy American
The $787 billion American Recovery and Reinvestment Act of 2009 (ARRA), is an economic stimulus package enacted by the 111th United States Congress and signed into law by President Barack Obama on February 17, 2009. Among the many provisions of this act are billions of dollars budgeted for federal construction projects.
Within ARRA there is a clause that directs that all iron and steel used in stimulus-funded public works projects must be produced in the United States, unless it meets certain price and availability exceptions. While still in committee, the Senate voted to keep this clause in place, but added language that made explicit that any mandates on materials would be within international trade treaties.
Many of you, already working on projects funded with ARRA dollars, have been asked if TrusSteel products comply with the provisions of the Buy American Act referenced into ARRA. The short answer is, "Yes!" But let me explain a bit more about our circumstances.
The ARRA's Buy American provision, enacted as Section 1605, combines aspects of two quite different U.S. domestic content laws - the "Buy American Act" and the "Buy America" statute. The first statute, the Buy American Act, enacted in 1933 and often changed, requires the government to give preference to U.S.-made products in all its purchases. The second statute, the Buy America law, first enacted in 1964 basically overlays the 1933 Act and applies mainly to Federal Transit Administration (FTA) grants provided to states and localities.
In order to implement the ARRA law
"the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council issued an interim rule [Interim Final Rule .ed.] that would:
(1) implement section 1512 of Division A of the American Recovery and Reinvestment Act (ARRA) of 2009, which implements the ARRA with respect to the unique Buy American provision;
(2) implement section 1605 of the ARRA by adding a new Subpart 25.6, entitled ''American Recovery and Reinvestment Act-Buy American Act-Construction Materials;'' and
(3) add new provisions and clauses at Part 52, with conforming changes to Subparts 1.1, 5.2, 25.0, 25.2, and 25.11."1
Subpart 25.6-American Recovery and Reinvestment Act-Buy American Act-Construction Materials - 25.602 Policy (the portion of the interim rule affecting TrusSteel components is Subpart 25.602), states:
Except as provided in 25.603
(a) None of the funds appropriated or otherwise made available by the Recovery Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work (as defined at 22.401) unless-
(1) The public building or public work is located in the United States; and
(2) All of the iron, steel, and other manufactured goods used as construction material in the project are produced or manufactured in the United States.
(i) Production in the United States of the iron or steel used as construction materialrequires that all manufacturing processes must take place in the United States, except metallurgical processes involving refinement of steel additives. These requirements do not apply to steel or iron used as components or subcomponents of other manufactured construction material. [emphasis by editor]
(ii) There is no requirement with regard to the origin of components or subcomponents in other manufactured construction material, as long as the manufacture of the construction material occurs in the United States.
(b) Use only domestic unmanufactured construction material, as required by the Buy American Act." 2
According to The Associated General Contractors of America (AGC), in their June 1, 2009 letter to the Federal Acquisition Regularion (FAR) Secretariat, "Subpart 25.6 makes clear... that this does not apply to iron and steel used as components or subcomponents of other manufactured construction materials."3 TrusSteel endorses this opinion.
Viewed as a manufactured component, TrusSteel trusses are in compliance with ARRA and the Buy American provisions as long as they are assembled within the USA. The fact that the chord and web subcomponents of TrusSteel trusses are manufactured in the USA, and the fact that TrusSteel connectors are manufactured in Canada, are both irrelevant to your compliance with this law.
You also may have spotted the phrase "domestic construction materials" appearing in specifications and bid notices recently. The ARRA creates a definition for domestic construction materials with the act. From 52.225-9 Buy American Act - Construction Materials, Feb. 2009, as prescribed in 25.1102(a) Definitions:
'Domestic construction material' means
(1) An unmanufactured construction material mined or produced in the United States;
(2) A construction material manufactured in the United States, if-
(i) The cost of its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. Components of foreign origin of the same class or kind for which nonavailability determinations have been made are treated as domestic." The "Cost of components" is defined in the act as, "For components purchased by the contractor, the acquisition cost, including transportation costs to the place of incorporation into the end product or construction material (whether or not such costs are paid to a domestic firm), and any applicable duty (whether or not a duty-free entry certificate is issued)".
TrusSteel trusses, taken as a job lot, would be domestic construction materials according to this definition. An exception might occur in a project where the cost of connectors was more than the cost of the chords and webs (material cost plus freight).
As an Authorized Fabricator for TrusSteel trusses, any letters of compliance with ARRA need to come from your company. I have drafted an example letter that you may choose to use as a model for your own compliance letter - see below.
Please feel free to contact me if you have any questions about this issue.
Sources
Dave Goodwin, National Marketing Director
TrusSteel TIPS, June 2009
1) The Associated General Contractors of America, "Buy American Requirements for Construction Material Summary", available athttp://www.agc.org/cs/advocacy/regulatory_action/regulatory_action_comment_details?id=108
2) American Recovery and Reinvestment Act of 2009 - full ACT available athttp://www.recovery.gov/?q=content/act
3) The Associated General Contractors of America, June 1 2009 letter to the FAR Secretariat.