By Steve Yablonski
The Biden Administration is working to steel the Buy American Act of 1933.
By law, American-made municipal castings must be used in many federal, state and local-level public works infrastructure projects that are funded or financed with U.S. taxpayer dollars, said Tim McKernan, facility manager at EJ USA in Schroeppel.
The Buy American Act requires the federal government to buy American-made iron, steel and manufactured goods wherever possible.
Products covered by the law include:
• Manhole covers
• Iron and steel inlet grating
• Iron and aluminum lampposts and lamppost bases
• Various miscellaneous iron products
• Catch basin frames and grates
A product is defined as American–made under Buy American if at least 50% of its constituent parts or materials originated in the US.
The Biden Administration wants to increase that threshold to 60% this year, 65% in 2024 and 75% in 2029.
This will reportedly close loopholes in the current regulation while allowing businesses to onshore manufacturing and adjust their supply chains to increase the use of American-made components.
This change will create more opportunities for small- and medium-sized manufacturers and their employees, including small and disadvantaged enterprises, from all parts of the country, McKernan said.
The impact on companies like EJ and Nucor Steel of Auburn are huge.
“The Buy American clauses have revived industries that had all gone overseas to places like China and India. Not long ago, you could not find a made- in-USA bolt,” said McKernan. “The federal Buy America requirements bought this work and many other industries back to the USA.”
It started out with clauses added to Federal Highway spending. AIS was a term used that required American Iron and Steel to be incorporated in highway and bridge project. This expanded to other federal spending through recent legislation called BABA “Build America Buy America.”
One example is with EPA spending. Things like fire hydrants, valves and pipes must be made in America, McKernan said.
BABA is now tied to most if not all federal spending.
It has assured that key U.S. industries like foundries and steel mills will remain in the country.
According to the Municipal Castings Association, the federal Buy American Act and other “Buy America” laws attached to federal-aid programs provide preferences for the use of U.S.-mined or domestic end products used in the United States in government procurement. Some, like the preference applied to Federal Highway Administration aid, apply to specific materials (e.g., iron and steel). Many states also have Buy America-type policies. For instance, the Pennsylvania Steel Procurement Act requires that each state contract for the construction or alteration of a public work require the use of steel products produced in the United States.
Common sense idea
Applying a domestic content requirement does much to maintain and expand manufacturing jobs in the United States. Simply giving domestic firms a preference in government contracting creates jobs. Domestic content requirements maximize the economic stimulus effects of government spending and work to create jobs here at home rather than abroad.
“Nucor has long been an advocate of the common sense idea that projects built with American tax dollars should support American jobs — and having strong Buy America laws ensure just that, “said Jason Curtis, general manager, Nucor Steel Auburn.
During the pandemic, the national security risks of over-reliance on foreign supply chains for critical materials became clear, he said.
“Sourcing materials from countries that have substandard environmental protections creates additional risks,” Curtis said. “Buy American provisions strengthen our domestic supply chain, lower costs for state and local governments through locally-sourced manufacturing, protect the environment and create strong, high-paying jobs across Central and Upstate New York.”
Nucor Corporation is the largest steel producer and recycler in North America, employing more than 31,000 workers throughout the United States and North America at its 25 steel mills and more than 300 locations.
“We make our steel by recycling scrap metal into new steel products, which makes our Nucor mills among the cleanest in the world,” according to Curtis.
In New York state, approximately 600 Nucor people work at the company’s bar steel mill in Auburn and its steel joist and deck manufacturing facility in Chemung.
However, some say there are economic risks to the buy-American mandate.
By restricting government contracts to U.S.-manufactured parts and labor, the price tag could likely climb higher — and be paid for with American tax dollars, opponents fear. The practice also may motivate other countries to retaliate.
American-made construction materials are produced in facilities with the best environmental controls available in the world — by US taxpayers paid a living wage, while working in safe conditions, according to McKernan.
“U.S. materials are certified to comply with all quality, performance and safety standards. Our infrastructure is assured of getting the highest quality products in the world, from responsible sources who support human rights and environmental sustainability,” he said. “Absent these laws, access to U.S. taxpayer-financed government spending on public works is unfettered and foreign producers, including those owned and subsidized by geopolitical adversaries such as China and Russia, reap the benefit of U.S. tax dollars and the investments in U.S. public works infrastructure.”
Domestic products are required to serve the public interest and American manufacturers are held to high standards under the program.
A federal “Made in America Office” monitors the procurement of materials (www.madeinamerica.gov).
U.S. taxpayers fund government contracts.
“Buy America laws impose preferences for domestically produced products that are permanently incorporated into taxpayer-financed public works projects. They don’t apply to contractor profit, equipment, temporary structures, overhead or labor, which account for the vast majority of costs of a public works infrastructure project,” McKernan explained.
“U.S. industrial capacities are key to our economic and national security. Every dollar spent on American-made materials supports the U.S. economy at multiple levels,” McKernan added. “Buy America laws stimulate capital investments for new manufacturing capabilities and capacity in the United States. As a result of these programs, significant reshoring of manufacturing capacity is taking place. Capital investments in new facilities and good paying manufacturing jobs are returning to the US. EJ is proud to have made significant investments in Upstate New York and throughout the United States.”