Friday, February 8, 2019

New Executive Order to Strengthen Buy-American Preferences

The President signed out a new Executive Order (EO 13858) late last month designed to strengthen buy-American preferences for infrastructure projects. The policy, simply stated, is to maximize the use of goods, products, and materials produced in the US, in Federal procurements and through the terms and conditions of Federal financial assistance awards.

This EO extends the essential requirements of the Buy American Act to the alteration, construction, conversion, demolition, extension, improvement, maintenance, reconstruction, rehabilitation, or repair of infrastructure projects in the United States.

Infrastructure projects are projects in the following sectors: surface transportation, including roadways, bridges, railroads, and transit,; aviation; ports, including navigational channels; water resources projects; energy production, generation, and storage, including from fossil-fuels, renewable, nuclear, and hydroelectric sources; electricity transmission; gas, oil and propane storage and transmission; electric, oil, natural gas, and propane distribution systems; broadband internet; pipelines; storm-water and sewer infrastructure; drinking water infrastructure; cybersecurity; and any other sector designated later.

Agencies administering covered programs have been instructed to "encourage" contractors to use, to the greatest extent practicable, iron and aluminum as well as steel, cement, and other manufactured products produced in the US in every contract, subcontract, purchase order, or sub-award that is chargeable to the Government. Agencies have also been tasked to report to the President any tools, techniques, terms or conditions that have been used or could be used to maximize the used of domestic sources.

It will be interesting to see whether "cost" is a factor when considering foreign vs domestic sources. What if domestically produced iron and aluminum were double the cost of foreign imports? Could the term "to the maximum extent practical" be used to justify the procurement of imports in such cases?

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