May/June 2023 - 14

Guest Opinion
Buy America -
Striking the Right Balance
The program's goals are worthy and widely supported, but better
progress toward these goals requires the government to consistently
implement Buy America policies, simplify administrative
requirements and speed approval of appropriate waivers.
By Be n n e t t E. Re s n i k
One of
the most
effective ways
to reduce the
administrative
burden for
Buy America
compliance is
to simplify the
requirements.
POLICY WITH bipartisan support is hard to find
these days. Luckily, one of them involves the laudable
effort to have more U.S.-made products used in
federally funded contracts, such as public works and
infrastructure projects. For these efforts to thrive
and achieve a balanced Buy America policy, the
government must reduce bureaucratic complexity,
ensure greater transparency and tackle other problems
that impede achieving the goals of domestic
preference policies. Striking the right balance for
Buy America requires a careful consideration of
various factors such as economic benefits, job creation,
exemptions and waivers and international
trade obligations.
Domestic preference laws date back to 1933,
though there were earlier laws at the state and
local levels that encouraged domestic sourcing.
Congress and President Herbert Hoover enacted
the Buy American Act during the depths of the
Great Depression as part of the National Industrial
Recovery Act, creating a preference for U.S.-made
products in its procurement of goods and services.
Over time, subsequent laws expanded this effort.
In 1978, the Buy American Act was included
as part of the Surface Transportation Assistance
Act, which extended domestic-preference rules to
federally financed transportation projects, such as
airports, highways and public transit systems. Today,
the Build America, Buy America Act, enacted as
part of the Infrastructure Investment and Jobs Act,
requires all federal agencies to ensure no federal
financial assistance for " infrastructure " projects be
provided " unless all of the iron, steel, manufactured
products and construction materials used in the
project are produced in the United States. "
These laws became more urgent-but also more
complicated-as they were applied to new initiatives.
These include President Joe Biden's 2021 Executive
Order on " Ensuring the Future Is Made in All of
America by All of America's Workers " and the Inflation
Reduction Act, which includes the Clean Vehicle
14 Mass Transit | MAY/JUNE 2023
Credit (an electric vehicle tax incentive under IRS
section 30D with battery sourcing requirements).
Each statute is unique and enacted with different
requirements and policy goals in mind. The overarching
goal, however, is the same: To boost domestic
manufacturing and supply chains while increasing
U.S. jobs and promoting economic development
nationwide. But how does this happen effectively
and efficiently?
The Build America, Buy America Act applies " Buy
America " to all federally funded infrastructure and
public works projects. Though simple in purpose,
its requirements can vary depending on the program
or project involved. This makes it harder for
contractors to navigate the various rules and regulations,
which, of course, are meant to minimize
waste and misuse.
The Office of Management and Budget-and specifically
its Made in America Office - has made
progress in implementing President Biden's January
2021 Executive Order and requirements under
the Build America, Buy America Act and has been
a strong tip of the spear on domestic preference
policy efforts. A remaining core challenge involves
agencies determining how to apply domestic-preference
guidance to their infrastructure programs
and processes.
Critics of Buy America policy argue it increases
costs and reduces efficiency. However, these concerns
can be addressed by ensuring the policy is
implemented in a way that balances the economic
benefits with the costs. For example, exemptions
and waivers can be provided for goods and materials
when strict adherence to the laws is not in the
public interest, when the needed materials are not
sufficiently available in the U.S. and when using U.S.made
materials would increase a project's overall
cost by more than 25 percent. Timely approval of
these requests can help prevent project delays while
ensuring the overall objectives of the law are still
being met.
May/June 2023

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