Monday Morning Briefing

Monday Morning Briefing

Executive Order Calls for Tougher Enforcement of Buy American Laws

Last week President Trump signed a “Buy American and Hire American” executive order, which the White House said will “usher in a new, more muscular Buy American policy based on the twin pillars of maximizing Made in America content and minimizing waivers and exceptions to Buy American laws.”  The order directs EPA and other federal agencies to review their procedures for implementing applicable Buy American laws and to minimize the granting of waivers that allow individual federally funded projects to use foreign iron and steel products.

The executive order requires federal agencies to “scrupulously monitor, enforce, and comply with Buy American Laws, to the extent they apply, and minimize the use of waivers, consistent with applicable law.”  Within 150 days, the heads of federal agencies must assess their compliance with Buy American laws, assess the use of waivers granted by their agencies and their effect on domestic jobs, and develop and propose policies to “maximize the use of materials produced in the United States, including manufactured products; components of manufactured products; and materials such as steel, iron, aluminum, and cement.”

The order further directs federal agencies to be “judicious” in their use of Buy American waivers and requires decisions on all waivers granted to be elevated to the agency head after consideration of whether the cost advantage of foreign-sourced iron and steel is the result of “injuriously subsidized steel, iron, or manufactured goods.”

The order will likely lead EPA to reevaluate its procedures for applying Buy American rules to the State Revolving Fund programs and the Water Infrastructure Finance and Innovation Act.  Congress has permanently applied Buy American rules to projects funded by the CWSRF and WIFIA, as well as to DWSRF projects funded through the 2017 fiscal year.  In each case the law allows EPA to grant an individual project waiver if domestic iron and steel products of sufficient quality or quantity are not available or if the use of such products would increase the project’s overall cost by more than 25 percent.