Passed last February, the American Recovery and Reinvestment Act of 2009 was full of provisions to preserve and create jobs, invest in infrastructure, as well as energy efficiency and science, offer assistance to the unemployed, and stabilize the State and local economies.
Suppliers, manufacturers, distributors and contractors all have to consider what this means if they’re working on any ARRA-funded project. As a copper wire manufacturer, we certainly have to think about this, and have gotten plenty of questions from our customers about “Made in America.”
There’s a lot of information out there on the subject, and sometimes it can be difficult to sort through.
The portion of the ARRA that we’re interested in is the Buy American Provision Section 1605. To start off, it is a combination of two already-existing pieces of legislation: the Buy America Act of 1933 and the Buy American law of 1964.
Buy America law of 1964
Section 1605 of the ARRA – the Buy American Provision – brings aspects of both of these past laws together. It states the no funds given under this Act can be used for a public building or public works project (anything federally funded, as well as all state or locally-funded projects) unless “all iron, steel, and manufactured goods used…are produced in the US.” FAR Subpart 25.6, which implements Section 1605 above, says that “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.”
What does all this mean? Where are the lines drawn?
Foley & Lardner Law Firm gives a good rundown of certain parts we’re concerned about:
“Subpart 25.6 curiously avoids defining precisely what is required for manufactured construction material to be considered “produced” or “manufactured” in the United States. But given Subpart 25.6’s definition of “manufacturing,” by implication construction material will be considered “produced/manufactured” in the United States when it results from processing into a specific form and shape or combining of raw material into a property different from the individual raw materials, and that processing/combining occurs in the United States…..Even more important, Subpart 25.6 specifically provides that there is no component or subcomponent origin requirement for domestic “manufacturing” status. Thus, for purposes of the ARRA, construction material will acquire domestic origin status when manufactured in the United States without regard to the origin of its components.”
Keep in mind, there are stricter guidelines for some projects under the FTA and FHA, as they’ve decided to comply with the existing Buy America law for all ARRA grants, which makes it easier for them to qualify projects. Therefore, they go by the “100% domestic” requirements.
What all of this means to us is that we’ll need to work closely with our suppliers and our customers to make sure the requirements are met appropriately on any ARRA-funded project.
The government keeps information on the ARRA up-to-date if you’re interested. Or you can read the entire text of the Act