NE Region Annual Utility Conference January 23, 2014 Kirk Fredrichs Wisconsin Division Office Assistant Division Administrator Federal Highway Administration

Topics for Discussion Buy America General Provisions MAP-21 Changes to Buy America Manufactured Products Buy America Waiver Process Questions?

Buy America General Provisions All Manufacturing Processes must take place domestically (initial melting, bending, drilling, machining, etc.) Includes coatings on these materials Minimal use of iron and steel (0.1% total contract value or $2500, whichever is greater) allowed before Buy America requirements take effect Waiver Requests Must demonstrate use is not in the Public Interest Insufficient domestic supply of satisfactory quality 23 USC 313 & 23 CFR Applies to all Federal-aid construction projects Iron & Steel only (permanently incorporated)

BUY AMERICA vs. BUY AMERICAN Requirement StatuteApplicabilityCoverageThreshold Buy America USC CFR Federal-aid Contracts Iron and steel products only 0.1% of Total Contract or $2500 Buy American FAR 41 USC 10a-10d 48 CFR 25 Direct Fed. Govt. contracts All materials except the 100 specified Specifically identified in NAFTA & other trade agmts

MAP-21 (Section 1518) On July 6, 2012 President Obama signed into law MAP-21, which took effect on October 1, 2012 MAP-21 widened the scope of Buy America requirements to all eligible contracts for assistance under the scope of the NEPA determination (if at least one contract within the same NEPA determination is funded with Federal funds). Scope of NEPA Document defines the project itself Project (1) vs. Project Contracts (Many)

SEC Buy America Provisions Section 313 of Title 23, United States Code, is amended by adding at the end the following: ``(g) Application to Highway Programs - The requirements under this section shall apply to all contracts eligible for assistance under this chapter for a project carried out within the scope of the applicable finding, determination, or decision under the National Environmental Policy Act of 1969 (42 U.S.C et seq.), regardless of the funding source of such contracts, if at least 1 contract for the project is funded with amounts made available to carry out this title.

MAP-21 Section 1518 – A Closer Look shall apply to all contracts eligible for assistance Does not explicitly exclude utility and railroad contracts from Buy America. if at least one contract for the project is Title 23 funded Does not explicitly restrict this trigger to only construction contracts. NOTE: The application of Buy America to utility & railroad work can significantly affect the cost estimate for the project

MAP-21 Buy America Summary Applies to all Federal-aid eligible construction contracts covered under the NEPA determination, including: Highway and bridge construction Railroad work Utility work (if eligible under State law) Triggered by: Use of Federal-aid for any contract under the NEPA determination, including: Design Environmental evaluation Right-of-Way Construction NOTE: The application of Buy America to utility & railroad work can significantly affect the cost estimate for the project

FHWAs Interpretations of Buy America & MAP-21 FHWAs December 20, 2012 letter to AASHTO MAP-21 Buy America Q&A on website cfm cfm Clarifies our interpretation of the Section 1518 Buy America provisions in MAP-21 General Buy America Q&A on website _qa.cfm (Best Source of Information!) _qa.cfm

Utility Relocation Contracts and Agreements Utility relocation projects are covered under Buy America (including those that are not funded by FHWA) unless the State law prohibits payments for utility relocation. FHWA memo of July 11, provided reasonable time for utilities to take the necessary to comply (through December 31, 2013).

Manufactured Products under Buy America Manufactured Product Definition "a good brought to the construction site for incorporation into the project that has been processed into a specific form or shape or combined with other raw material to create a material that has different properties than the properties of the individual raw materials. (2 CFR ) Bending, extruding, drilling, coating, etc. Defined in December 21, 2012 Memo from FHWA (Mr. John Baxter).

Manufactured Products If domestically-produced steel or iron ingots are shipped overseas for any manufacturing process and then returned to U.S., the resulting product does not conform with the Buy America requirement. Enforcement of Buy America provisions is a State responsibility. Work with WisDOT concerning questions on applicability concerning manufactured products WisDOT Form DT2249 developed

Manufactured Products Subject to Buy America December 21, 2012 Memo determined that Buy America applies if: Product is manufactured predominantly of steel or iron (at least 90% steel or iron content by weight when delivered to job site) Products subject to Buy America include: Most steel and iron products Guardrail, posts, end sections, terminals, cables Fencing and fence posts Pipe, conduit, manhole covers, risers Mast arms, poles, structural members, luminaires Reinforcing steel, wire mesh, strands, cables, etc.

Manufactured Products Exempt from Buy America Exemptions from Buy America include: Miscellaneous steel or iron components, subcomponents and hardware necessary to: Encase, assemble and construct the components listed in the previous slide Examples include: Cabinets, covers, shelves, clamps, fittings, sleeves Washers, bolts, nuts, screws, tie wire, spacers, chairs, lifting hooks Faucets, door hinges, etc. Manufactured Products not predominantly steel or iron

Buy America Waiver Process 1 State DOT identifies need for a waiver during preliminary engineering phase, submits request to FHWA Division Office Starts FHWA process 2 Review and recommendation by FHWA Division Office Days/Weeks 3 Submittal to FHWA HQ office / conducts nationwide search Days/Weeks 4 Post waiver notice on website for 15-day comment period. Start coordination with industry and Dept. of Commerce Manufacturing Extension Partnership (MEP) 2-3 Weeks 5 Notification from MEP on domestic supplier scouting results. Coordination of MEP findings between Division/State DOT Weeks 6 Coordination and FR publication by FHWA HQ /OST Weeks 7 Final notice publication in Federal Register/Approval 2-3 Weeks Total time neededSeveral months

Buy America Waivers Two Nationwide Waivers (Approved by FHWA Rule Making) Specific Ferryboat parts in February 1994 Pig iron, scrap, raw alloy materials, pelletized or reduced iron ore in August 1994 Project Waivers General Requirements Must comply with 23 CFR (c)(1) public interest / unavailable domestically Consider re-design with domestic Requires HQ review and Consideration March 13, 2008 memorandum Includes a 15 day information public review & comment period. Required to publish in the Federal Register one day before effective Could add 6 plus weeks to the approval process

Waiver Request Submittal Waiver request must include: Federal-aid/ARRA project number Project description Project cost Waiver item cost Brief description of the items function Country of origin for the product Reason for the waiver Re-design analysis using domestic product

Buy America Waiver Process Waiver process is initiated by contracting agency (WisDOT) if it believes waiver is warranted under provisions of 23 CFR (c). WisDOT submits waiver request to FHWA Division in advance of need (preferably during preliminary engineering stage). Division reviews the waiver for sufficiency and forwards to Headquarters with recommendations FHWA posts the waiver for 15-day comment period

Buy America Waiver Process (continued) FHWA HQ coordinates with appropriate industry associations (NSBA, AISI, and AISC) Provide summary of findings and justifications for the waiver. Submits an intent to issue a waiver for the product to the Chief Counsel, then to Secretary for publication in Federal Register. Final Federal Register publication constitutes approval of the waiver. Process may take considerable time to complete (maybe 60 days)

Buy America Certifications No required format by FHWA Step by Step Summary certifications Paperwork traceable to product delivered Documents chain of custody Not acceptable from Prime Contractor Must be by a Responsible & Knowledgeable party Discretion for certification format between FHWA Division Office and State DOT WisDOT Form DT2249 and DT2249a

Successful Practices DOTs should consider Buy America waivers during preliminary engineering phase to avoid delays during construction, and explore the use of alternate domestic products as much as possible. DOTs consider Buy America waivers in their risk assessment and development of the Federal-aid program. DOTs have adequate material certification procedures in their program to ensure compliance.

Thank you. Questions?