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NPCA flags court’s reversal of Buy America exemption for steel hardware

Citing a late-2015 U.S. District Court decision vacating Federal Highway Administration Buy America exemptions for miscellaneous steel components, the National Precast Concrete Association is urging members who fabricate precast structures for federally funded projects to evaluate use of tie wire, lifting devices and any other elements from foreign sources, and assume requests for documentation that all structure components are domestic.

Rebar tie wire and lifting devices manufactured overseas are no longer authorized for use in FHWA construction projects after the court nullified terms of a 2012 Transportation Secretary memo allowing precasters to use foreign-sourced steel hardware in federally funded work. Eight plaintiffs led by a United Steelworkers International Union affiliate challenged the document’s Buy America exemptions in the District of Columbia Circuit Court.

An NPCA member alert notes: Spool-fed tie wire is not made in the U.S. but commonly used in rebar tying guns; domestic manufacturing capacity for certain precast concrete-grade, steel lifting devices is not sufficient for industry needs; and, the court decision could force producers to alter production methods for future federally funded work, as pre-decision bid awards are not affected.

In 2012, the association reports, some state departments of transportation were strictly interpreting Buy America and requesting documentation for every element of supplied products—including lifting devices and tie wire—on American Recovery and Reinvestment Act-funded projects. NPCA met with the FHWA regarding the impracticalities of Buy America for miscellaneous items, one of the factors influencing the Transportation Secretary’s exemption memo. The District Court decision digs deep into the exemption terms:

The [Transportation Secretary announced] that he would not apply the Buy America requirement to two broad categories of products: (1) steel or iron “manufactured” products and (2) “miscellaneous steel or iron” products. As to the first category, a steel or iron “manufactured” product is one that is made up largely, but not entirely, of steel or iron. The 2012 Memorandum exempts from the Buy America mandate steel or iron manufactured products that contain less than 90 percent steel or iron (the “90-Percent Threshold”). As a result, a manufactured product that contains no more than 89.9 percent steel or iron now can be obtained from a foreign source. As to the second category of products, the 2012 Memorandum exempts all “miscellaneous steel and iron” products, defined as those products that are available “off-the-shelf” or are “necessary to encase, assemble and construct” manufactured products (the “Miscellaneous Products Exemption”). So, for instance, a faucet or bolt that is made of 100 percent steel or iron now is exempt from the Buy America requirement.

Although not opposed to the latter exemption, the District Court found a) that the memo constituted a substantive rule change of a federal regulation; and, b) any agency filing such a rule change needs to formally publish its proposal in the Federal Register and open it to public comment. NPCA President Ty Gable and Director of Certification and Regulatory Services Richard Krowelski are tracking agency response to the court action after an early-2016 meeting in Washington, D.C. with an FHWA Buy America official. The association feels the agency should formally file the Buy America exemptions as a proposed rule change to avoid any disruptions in upcoming federal projects.