Contractors, suppliers and local governments are struggling to figure out how Buy America requirements will be applied to stimulus projects.
The American Recovery and Reinvestment Act requires builders use construction materials made in the U.S. But local governments are still waiting for federal agencies to release rules specifying how the Buy America requirements will be enforced and what, if any, waivers might be available for builders.
Contractors are asking suppliers to distinguish between materials that meet Buy America rules and materials that don’t, said David Ralston, a partner with Foley & Lardner LLP’s Washington, D.C., office. But it’s not always easy to figure out how the rules will be applied to different items, he said.
It’s easy for some materials, such as steel girders or rebar, that must be fabricated in the U.S., Ralston said.
But the rules are ambiguous for other manufactured goods, such as air-conditioning units or ducts. Those items are made from steel, but must be assembled from various components that Buy America rules indicate do not need to be made in the U.S.
“What about things such as ductwork?” Ralston asked. “What about pieces of metal that are used inside drywall? What is it? That is part of what is producing the havoc in the market.”
The rules will be easy for some Wisconsin suppliers that provide piping for sewer and water jobs. Bert McNeil, salesman with HD Supply Waterworks Group Inc., New Berlin, said the company already separates its domestic and foreign products because some owners already enforce Buy America rules.
“It’s really clear,” he said, “For example, the castings that we sell for water mains — each casting has to have the name of the country in which it was made cast into it.”
Still, uncertainty over Buy America requirements on stimulus projects is delaying water and wastewater projects, said Perry Fowler, director of The Associated General Contractors of America’s municipal and wastewater division. He said the rules should not be part of the stimulus package because they are impeding job creation.
“The AGC’s position is we would like to see stimulus work,” Fowler said. “We were under the impression that using existing programs to bid this work would streamline the process because everybody already understood the process.”
Davy Engineering Co., La Crosse, is guessing what some of the U.S. Environmental Protection Agency’s Buy America rules will be and is writing them into sewer and water jobs that might get stimulus money, said President Michael Davy. On a well project for the village of Curtiss, for example, the company told bidders the EPA will let them get a Buy America waiver for up to 5 percent of the materials purchased.
“We are just anticipating they will have something similar,” Davy said. “Maybe they won’t, but we are hoping that they will.”
Davy said contractors will end up relying on suppliers to determine whether equipment meets the Buy America standards.
“Everybody wants to learn about how to do this thing right,” he said. “We’re going to struggle here for a little while, but we have to figure this out because all of the money is going to be gone by February.”