Buy America Works

The Federal Highway Administration Deploys Initiative and Innovation in Executing the Recovery Act’s Important Buy America Provision

Sam Ungar and Donna Cooper explore how a new website used by the highway agency makes it easier to ensure that recovery funds flow almost entirely to American companies and workers—and urge other Department of Transportation offices to follow the FHWA’s lead.

Thanks to the Federal Highway Administration’s initiative and innovation in executing the important Buy America provision of the federal Recovery Act, an American steel company received orders that would have otherwise gone overseas.

John Tassone, marketing director of the Independence Tube Corporation, used the highway administration’s new Buy America website to let the government know that his Decatur, Alabama mill could produce bridge material. Independence and its workers got the job, which otherwise would have gone to a foreign company.

At a time of rising unemployment and economic uncertainty, more federal agencies should follow the FHWA’s example and go the extra mile to make sure that American infrastructure is built by American workers.

“We fought for the Buy American provision to be included in the Recovery Act because we believed it could make a difference,” said Leo W. Gerard, international president of the United Steelworkers union. “Those provisions, and especially the way that the Federal Highway Administration has implemented them, have surpassed all of our expectations and protected American jobs.”

Some background: Under various laws including the 2009 American Reinvestment and Recovery Act, only American-made steel and iron products may be used for federal infrastructure projects. Waivers for the so-called Buy American provision are generally granted only if U.S.-made products cost at least 25 percent more than foreign equivalents, or if there are no available American manufacturers. One of the problems with such waiver processes is that they assume government officials know when waiver requests are reasonable.

To overcome this problem, transportation officials decided to publish all waiver requests they received on a public website, and then invite American contractors to alert officials if there were U.S. vendors available to fill a given job. The site resembles a blog, with sometimes multiple “comments” from people objecting to exceptions from the Buy America requirement.

And so when Contra Costa County, California needed steel tubes for a new Recovery Act-funded bridge, they contacted several American suppliers who said they could not manufacture the necessary part. But after filing a waiver request on the FHWA website, “Independence Steel jumped up and said, ‘Wait a minute, we can make this,’” said project consultant Nick Panayotou in an interview. “So they went ahead and talked to our contractor, we put them in touch, and there you go, the tubes were able to come out to the site from there.”

Thanks to FHWA’s thoughtful solution, the highways agency spent 99.97 percent of its $2.63 billion in stimulus money in the United States. Just $7.9 million went overseas, the agency told Congress in 2010.

Other agencies and offices within the Department of Transportation—such as the Federal Aviation Administration and the Federal Rail Administration—should follow in the highway administration’s footsteps. Doing so would pave the way for realizing Secretary Ray LaHood’s vision of a department-wide online waiver request portal, which could create many more American jobs.

Sam Ungar is an intern and Donna Cooper is a Senior Fellow at the Center for American Progress.

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Sam Ungar

Research Assistant

Donna Cooper

Senior Fellow

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