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Notice and Request for Comment on FHWA's Review of its General Applicability Waiver of Buy America Requirements for Manufactured Products Publication: Federal Register Agency: Federal Highway Administration Byline: Shailen P. Bhatt Date: 17 March 2023 Subjects: American Government  , Roads & Highways
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[Federal Register Volume 88, Number 52 (Friday, March 17, 2023)]
[Notices]
[Pages 16517-16520]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-05498]
[[Page 16517]]
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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
[Docket No. FHWA-2022-0027]
Notice and Request for Comment on FHWA's Review of its General
Applicability Waiver of Buy America Requirements for Manufactured
Products
AGENCY: Federal Highway Administration (FHWA), U.S. Department of
Transportation (DOT).
ACTION: Notice; request for comments.
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SUMMARY: The FHWA is seeking comments on its existing general
applicability waiver for manufactured products under its Buy America
waiver authorities. Following review and consideration of comments,
FHWA will publish a determination on whether to continue, discontinue,
or otherwise modify the waiver and will consider other actions related
to the implementation of Buy America requirements for manufactured
products.
DATES: Comments must be received by April 17, 2023.
ADDRESSES: Please submit your comments to the Federal eRulemaking
Portal at www.regulations.gov/, Docket: FHWA-2022-0027, and follow the
online instructions for submitting comments.
Instructions: You must include the agency name and docket number at
the beginning of your comments. Except as described below under the
heading ``Confidential Business Information,'' all submissions
received, including any personal information provided, will be posted
without change or alteration to www.regulations.gov. For more
information, you may review DOT's complete Privacy Act Statement
published in the Federal Register on April 11, 2000 (65 FR 19477).
FOR FURTHER INFORMATION CONTACT: For questions about this notice,
please contact Mr. Brian Hogge, FHWA Office of Infrastructure, 202-366-
1562, or via email at Brian.Hogge@dot.gov. For legal questions, please
contact Mr. David Serody, FHWA Office of the Chief Counsel, 202-366-
4241, or via email at David.Serody@dot.gov. Office hours for FHWA are
from 8 a.m. to 4:30 p.m., E.T., Monday through Friday, except Federal
holidays.
SUPPLEMENTARY INFORMATION:
Electronic Access and Filing
A copy of this notice, all comments received on this notice, and
all background material may be viewed online at www.regulations.gov
using the docket number listed above. Electronic retrieval assistance
and guidelines are also available at www.regulations.gov. An electronic
copy of this document may also be downloaded from the Office of the
Federal Register's website at: www.FederalRegister.gov and the
Government Publishing Office's website at: www.GovInfo.gov.
Confidential Business Information
Confidential Business Information (CBI) is commercial or financial
information that is both customarily and actually treated as private by
its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552),
CBI is exempt from public disclosure. If your comments responsive to
this notice contain commercial or financial information that is
customarily treated as private, that you actually treat as private, and
that is relevant or responsive to this notice, it is important that you
clearly designate the submitted comments as CBI. You may ask FHWA to
give confidential treatment to information you give to the Agency by
taking the following steps: (1) Mark each page of the original document
submission containing CBI as ``Confidential''; (2) send FHWA, along
with the original document, a second copy of the original document with
the CBI deleted; and (3) explain why the information you are submitting
is CBI. FHWA will protect confidential information complying with these
requirements to the extent required under applicable law. If DOT
receives a FOIA request for the information that the applicant has
marked in accordance with this notice, DOT will follow the procedures
described in its FOIA regulations at 49 CFR 7.29. Only information that
is marked in accordance with this notice and ultimately determined to
be exempt from disclosure under FOIA and Sec. 7.29 will not be
released to a requester or placed in the public docket of this notice.
Submissions containing CBI should be sent to: Mr. Brian Hogge, FHWA,
1200 New Jersey Avenue SE, HICP-20, Washington, DC 20590. Any comment
submissions that FHWA receives that are not specifically designated as
CBI will be placed in the public docket for this matter.
FHWA encourages commenters to share all information responsive to
the questions below, including confidential information. Doing so will
allow FHWA to have a complete picture of the effects of continuing,
discontinuing, or modifying the existing general applicability waiver
for manufactured products. Submitting information on domestic
production or plans to increase domestic production will ensure that
FHWA can make informed decisions to protect domestic manufacturers'
investments from international competition.
Executive Order 14005
In January 2021, President Biden issued Executive Order (E.O.)
14005, titled Ensuring the Future is Made in All of America by All of
America's Workers (86 FR 7475, Jan. 28, 2021). The E.O. sets forth a
policy that Agencies should, consistent with applicable law, maximize
the use of goods, products, and materials produced in, and services
offered in, the United States. The E.O. helps promote private sector
investment in the production of goods critical to our national security
and economic stability. As we bolster domestic supply chains, we create
jobs, strengthen our manufacturing sector, and create economic
opportunities for more of America's small businesses. FHWA is committed
to ensuring strong and effective Buy America implementation consistent
with E.O. 14005.
Build America, Buy America Act of 2021
On November 15, 2021, the President signed into law the Bipartisan
Infrastructure Law (BIL), enacted as the Infrastructure Investment and
Jobs Act (IIJA), (Pub. L. 117-58). The BIL includes the Build America,
Buy America Act (``BABA''), which expands the coverage and application
of Buy America preferences in Federal financial assistance programs for
infrastructure. BIL, div. G Sec. Sec. 70901-27.
BABA requires that iron, steel, manufactured products, and
construction materials made available for a Federal financial
assistance program for infrastructure be produced in the United States.
BABA Sec. 70914. However, BABA provides that the preferences under
Section 70914 apply only to the extent that a domestic content
procurement preference as described in Section 70914 does not already
apply to iron, steel, manufactured products, and construction
materials. BABA Sec. 70917(a)-(b). By statute at 23 U.S.C. 313, as
discussed below, FHWA has existing Buy America domestic content
preferences for steel, iron, and manufactured products.
In the case of manufactured products, the statute defines
``produced in the United States'' to mean that:
(i) the manufactured product was manufactured in the United
States; and (ii) the cost of the components of the
[[Page 16518]]
manufactured product that are mined, produced, or manufactured in
the United States is greater than 55 percent of the total cost of
all components of the manufactured product, unless another standard
for determining the minimum amount of domestic content of the
manufactured product has been established under applicable law or
regulation.
BABA Sec. 70912(6)(B).
In addition, BABA expresses a general policy preference against
general applicability waivers. For example, Section 70913(c) of BABA
requires Federal Agencies to identify ``deficient programs'' for
financial assistance, including programs that are ``subject to a waiver
of general applicability not limited to the use of specific products
for use in a specific project.'' BABA Sec. 70913(c)(2). Section
70914(d) also requires Federal Agencies to review existing general
applicability waivers of Buy America requirements by publishing in the
Federal Register a notice that: (i) describes the justification for a
general applicability waiver; and (ii) requests public comments for a
period of not less than 30 days on the continued need for the general
applicability waiver. BABA Sec. 70914(d). Obtaining information
through this notice will help FHWA determine the current state of
domestic production of manufactured products and what may be required
to incentivize increase domestic production, in line with the goals of
BABA and E.O. 14005. At the same time, FHWA will also consider how to
ensure that manufactured products are widely available in the immediate
future for FHWA-funded projects in the United States.
Following the initial notice and review and consideration of
comments received, the Agency must publish in the Federal Register a
determination on whether to continue or discontinue the general
applicability waiver. Id. Through this notice, FHWA describes the
original justification for its general waiver for manufactured products
and seeks public comments on whether it continues to be justified.
FHWA Buy America Requirements
Section 313(a) of title 23, U.S.C. requires that all steel, iron,
and manufactured products used in FHWA-funded projects be produced in
the United States. Under 23 U.S.C. 313(b) and its implementing
regulation at 23 CFR 635.410(c), FHWA can waive the application of this
requirement if their application would be inconsistent with the public
interest, or if products are not produced in the United States in
sufficient and reasonably available quantities and of a satisfactory
quality.\1\ Using this authority, FHWA issued in 1983 a public interest
waiver of general applicability of FHWA's Buy America requirement for
manufactured products (Manufactured Products General Waiver). 48 FR
53099 (Nov. 25, 1983). Based on the Manufactured Products General
Waiver, which is the subject of this notice and discussed in more
detail below, FHWA does not currently apply the Buy America
requirements to manufactured products except for predominantly steel
and iron manufactured products and predominantly steel and iron
components of manufactured products. FHWA also applies the BABA
domestic preference requirements to construction materials.
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\1\ 23 U.S.C. 313(b)(3) also allows for FHWA to waive the
application of 23 U.S.C. 313(a) if inclusion of domestic material
will increase the cost of the overall project contract by more than
25 percent. FHWA implements this provision in 23 CFR 635.410(b)(3).
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For all predominantly steel or iron materials, products, or
components delivered to a project site for permanent incorporation into
a highway project using Title 23, U.S.C. funds, all manufacturing
processes, including application of a coating, must occur in the U.S.
See 23 CFR 635.410. Coating includes all processes that protect or
enhance the value of the material to which the coating is applied. Such
projects involve both the acquisition and installation of such
equipment. Under existing policy and practice, FHWA applies its Buy
America requirement to both predominantly steel and iron products and
predominantly steel and iron components of manufactured products even
if the product itself is not predominantly steel and iron.\2\ In
addition, FHWA's Buy America requirement applies to all contracts,
regardless of the funding source, if any contract within the scope of a
determination under the National Environmental Policy Act involves an
obligation of Title 23, U.S.C. funds. See 23 U.S.C. 313(h).
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\2\ See FHWA's Buy America Questions and Answers for the
Federal-aid program, available at https://www.fhwa.dot.gov/construction/contracts/buyam_qa.cfm. The answer to question 12
explains that FHWA's Buy America requirements apply to any
predominantly steel or iron component of a manufactured product
regardless of the overall composition of the manufactured product.
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In general, FHWA will consider a Buy America waiver only when the
conditions of 23 U.S.C. 313(b) and Section 70914(b) of BABA have been
met. Section 635.410(c) of Title 23 CFR establishes FHWA's process for
consideration of waivers under 23 U.S.C. 313(b). Section 70914(d) of
BABA, described above, also sets forth a process for Federal Agencies
to review existing general applicability waivers of Buy America
requirements. This notice is being issued pursuant to the requirement
in Section 70914(d) of BABA that Agencies review general applicability
waivers, and in accordance with the process set forth therein. The
general applicability waiver being reviewed here is the existing
Manufactured Products General Waiver.
Nationwide General Applicability Waiver for Manufactured Products
FHWA's Buy America requirements for the Federal-aid highway program
were first established in 1978 through Section 401 of the Surface
Transportation Assistance Act (1978 STAA), Public Law 95-599 (1978). In
1982, these requirements were modified by Section 165 of the Surface
Transportation Assistance Act (1983 STAA), Public Law 97-424 (1983),
which provides the basic statutory language for FHWA's current Buy
America requirements.\3\ The Moving Ahead for Progress in the 21st
Century Act (MAP-21) codified this provision in 23 U.S.C. 313. The
provision prohibits the obligation of Federal-aid Highway funds for
projects unless steel, iron, and manufactured products used in such
projects are produced in the United States.
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\3\ In 1978, Section 401 of the Surface Transportation
Assistance Act, Public Law 95-599 (1978) provided broad domestic
origin requirements for various materials and supplies used in the
Federal-aid highway program. In 1982, these requirements were
modified by Section 165 of the Surface Transportation Assistance Act
(STAA), Public Law 97-424 (1983), which provides the current source
legislation for FHWA's Buy America requirements. Section 165
provided that, with exceptions, funds authorized by the STAA of
1982, title 23 of the United States Code, and certain other laws may
not be obligated for highway projects unless steel, cement, and
manufactured products used in such projects are produced in the
United States. In 1984, Congress amended Section 165(a) of the 1983
STAA by removing the word ``cement.'' Public Law 98-229, 98 Stat.
55, Sec. 10. In addition, Congress added coverage for iron in 1991.
Intermodal Surface Transportation Efficiency Act (ISTEA), Public Law
102-240, Section 1048(a) (1991).
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Following the 1978 STAA, FHWA issued an emergency rule to implement
the Buy America requirement. Simultaneously, FHWA granted a general
waiver for manufactured products. At the time, FHWA explained that
foreign structural steel was the only commodity having a significant
nationwide effect on the cost of Federal-aid highway construction
projects. While natural materials (such as sand, stone, gravel, and
earth materials) and petroleum-based products (such as fuels,
lubricants, and bituminous
[[Page 16519]]
products) were also used in large amounts in Federal-aid highway
construction projects, foreign competition in natural materials was not
significant due to their high transportation cost and the lack of
availability of petroleum-based products from domestic sources in
sufficient and reasonable quantities. Thus, FHWA found that it was in
the public interest to waive the Buy America requirements for products
and materials other than structural steel. See 43 FR 53717-01 (Nov. 17,
1978) and 45 FR 77455-01 (Nov. 24, 1980).
In 1983, following passage of the 1983 STAA, FHWA reaffirmed that
it continued to be in the public interest to waive the Buy America
requirements for manufactured products. See 48 FR 1946 (Jan. 17, 1983);
48 FR 53099 (Nov. 25, 1983). Because the Manufactured Products General
Waiver issued in the preamble to the 1983 final rule is a waiver of
general applicability that is not subject to a project-by-project
determination, FHWA refers to it as a general waiver.
2013 Request for Comments on the General Applicability Waiver for
Manufactured Products
On July 10, 2013, FHWA published a request for comments in the
Federal Register (78 FR 41492) (2013 RFC) regarding the continued need,
in whole or in part, for the Manufactured Products General Waiver.\4\
FHWA asked questions including:
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\4\ The notice also sought comments regarding the continued
need, in whole or in part, for the general waiver from Buy America
for ferry boat equipment and for pig iron and processed, pelletized,
and reduced iron ores. In addition, it sought comment on the
continuing need for the FHWA's minimal use threshold.
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Has the nature of the Federal-aid highway program and the
U.S. steel/iron manufacturing industry changed to such a degree that
FHWA needs to reconsider its criteria for applying Buy America
requirements to manufactured products?
Are there specific or general types of manufactured
products that should not be covered by a public interest waiver and
why?
Are there specific issues that should be considered for
manufactured products that include steel or iron components and
subcomponents?
FHWA received 81 comments in response to the 2013 RFC. FHWA
generally received supportive comments on the continued need for the
Manufactured Products General Waiver. Many of the adverse comments FHWA
received centered on a 2012 guidance memorandum on steel and iron
manufactured products, which FHWA rescinded in December of 2015.\5\
After considering the comments received on the 2013 RFC, FHWA decided
to take no further action regarding the Manufactured Products General
Waiver, and it remains in force today.
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\5\ Rescission of the 2012 memorandum followed the decision in
United Steel, Paper and Forestry, Rubber, Mfr., Energy, Allied
Indus. and Serv. Workers Int'l Union v. FHWA, 151 F. Supp. 3d 76
(D.D.C. 2015).
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Compliance Standards for Manufactured Products
FHWA's Buy America statute at 23 U.S.C. 313(a) and Section 70914(a)
of BABA both require that manufactured products used in federally
assisted projects be produced in the United States. As described above,
Section 70912(6)(B) of BABA additionally defines the term ``produced in
the United States'' to mean that the manufactured product was
manufactured in the United States and that the cost of the product's
domestically produced components exceeds 55 percent of the total cost
of all components. Section 313 of Title 23, however, does not provide a
similar definition for the term ``produced in the United States,'' and
FHWA has not promulgated such a definition for manufactured products
through regulation.
FHWA also does not currently have a standard for determining the
cost of components of a manufactured product. One such potential
standard that could be considered for adoption by FHWA is the
definition provided at 48 CFR 25.003 of the Federal Acquisition
Regulations (FAR).
Another issue to consider is how the applicable standards for
domestic content in manufactured products would apply to the steel and
iron components of those products. Under FHWA's existing practice for
iron and steel, Buy America requirements apply to any predominantly
steel or iron component of a manufactured product regardless of the
overall composition of the product.\6\
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\6\ See https://www.fhwa.dot.gov/programadmin/contracts/122297.cfm and Question #12, at https://www.fhwa.dot.gov/construction/contracts/buyam_qa.cfm.
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Request for Comments
Through this notice, FHWA is soliciting information and suggestions
from the public and a broad array of stakeholders across public and
private sectors regarding whether it should continue, discontinue, or
modify, in whole or in part, the Manufactured Products General Waiver.
FHWA is also soliciting information on other issues related to the
application of Buy America requirements to manufactured products used
in Federal-aid highway projects.
Questions on FHWA's General Waiver for Manufactured Products
In answering the questions below, please also explain the impacts
of your suggested course of action for FHWA on administering and
delivering Federal-aid highway projects and on supporting domestic
manufacturing and jobs.
General Considerations
1. Does the justification that was used by FHWA in granting the
General Waiver in 1983 still apply? Specifically, is FHWA's approach to
the application of Buy America requirements to manufactured products
still appropriate, considering the enactment of the BABA, and standards
established therein?
2. What systems or processes do funding recipients, contractors,
and manufacturers have to manage compliance with Buy America
requirements?
3. With respect to domestic manufacturers of products procured
using FHWA financial assistance, please provide information regarding
the volume of products procured through FHWA financial assistance.
4. With respect to domestic manufacturers of products previously
procured or expected to be procured using FHWA financial assistance, do
you expect to expand your domestic manufacturing based on the increase
in demand created by recent Federal investments? If so, by how much and
over what time period? If applicable, what is the timeline to bring
online additional capacity compliant with BABA?
5. Are there specific types of manufactured products that are
widely used on Federal-aid highway projects for which a large portion
of the components are known to not be produced in the United States or
not produced in sufficient quantities? If so, what are those
components, what manufacturer produces them, and where are they
primarily produced? What are the obstacles to having those components
produced in the United States? Please provide data to support your
comment.
Compliance Standards for Manufactured Products
6. Should FHWA consider defining the term ``produced in the United
States'' for manufactured products via rulemaking? If so, should it
consider adopting the definition for the same term that is used in
Section 70912(6)(B)
[[Page 16520]]
of BABA, as described above? Or should it consider adopting some other
definition? Should the definition vary by product or product type?
Should FHWA adopt the approach for determining ``cost of components''
of a manufactured product described by the Office of Federal Financial
Management in the Office of Management and Budget in the notification
of proposed guidance published on February 9, 2023 (88 FR 8374 (Feb. 8,
2023)), which is the same as is used in the FAR (48 CFR 25.003)?
7. With respect to domestic manufacturers of products previously
procured or expected to be procured using FHWA financial assistance,
are your products ``produced in the United States'' as defined by
Section 70912(6)(B) of BABA? In other words, are your manufactured
products manufactured in the United States and the cost of the
components of the manufactured product that are mined, produced, or
manufactured in the United States is greater than 55 percent of the
total cost of all components of the manufactured product?
8. If FHWA were to adopt a definition for manufactured products
produced in the U.S., should it consider also defining what it means
for a manufactured product to be manufactured in the U.S.? If so, what
manufacturing processes or assembly steps should be required to occur
domestically? Should the requirement vary by product or product type?
9. Federal financial assistance from FHWA may support the
procurement of ``rolling stock.'' For example, States and local
governments may seek to purchase certain electric vehicles under the
Congestion Mitigation and Air Quality Program.\7\ Should FHWA establish
any special provisions for applying Buy America requirements for
manufactured products to ``rolling stock'' such as vehicles or wheeled
equipment? If so, should FHWA consider applying requirements to rolling
stock similar to those used by other Operating Administrations of the
Department of Transportation, such as the Federal Transit
Administration \8\ or the Federal Railroad Administration? \9\
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\7\ See 23 U.S.C. 149(b)(8)(C).
\8\ See 49 CFR 661.11.
\9\ See 49 U.S.C. 22905(a)(2)(C) (allowing FRA to waive its Buy
America requirements if it finds that rolling stock cannot be bought
and delivered in the United States within a reasonable time).
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Manufactured Products With Steel and Iron Components
10. Are there specific issues that should be considered for
manufactured products that include steel or iron components?
11. Should FHWA define the meaning of a ``predominantly'' steel and
iron product? Why or why not? For example, could this help to
distinguish between manufactured products and steel and iron products,
for the purpose of applying Buy America requirements?
12. If FHWA adopts a definition for manufactured products produced
in the U.S. similar to that used in Section 70912(6)(B) of BABA how
should that definition be applied to predominantly iron or steel
components of manufactured products?
Comment Period for Notice
FHWA will consider comments received in the 30-day comment period
in determining whether to continue, discontinue, or modify the current
Manufactured Products General Waiver, or to consider other actions
related to the implementation of Buy America requirements for
manufactured products. Comments received after this period will be
considered to the extent practicable.
Issued in Washington, DC, under authority delegated in 49 CFR
1.85.
Shailen P. Bhatt,
Administrator, Federal Highway Administration.
[FR Doc. 2023-05498 Filed 3-16-23; 8:45 am]
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