AGC Critical of Biden’s New Buy America Guidance

“AGC of America supports sensible efforts to effectively incentivize the growth of America’s domestic manufacturing capacity,” said Stephen Sandherr, AGC’s CEO. “Instead, the Biden administration is doubling down on failed procurement policies with its new Buy America mandate. This is the kind of red tape initiative that undermines Americans’ confidence in the federal governments’ ability to effectively use their tax dollars.”

In an April 18 memorandum to federal department and agency heads, Shalanda Young, the White House Office of Management’s director said, “the act strengthens Made in America laws and will bolster America’s industrial base, protect national security and support high-paying jobs.”

The landmark statute, enacted last November, aims to increase the use of domestically produced iron, steel manufactured products, and construction materials in federally funded infrastructure projects.

Guidance provisions apply to “all federal financial assistance programs for infrastructure,” more specifically, federal infrastructure contracts issued on or after May 14 must comply with the requirements.

“It makes no sense to place unrealistic limitations on firms’ ability to source key materials at a time when prices for those products are skyrocketing and supplies are limited,” added Sandherr. “Supply chain shortages are already prompting firms to avoid bidding on new projects, as the Army Corps of Engineers discovered on a recent project that received zero bids because of concrete scarcities in parts of the country.”

“Worse, the new mandate requires individual federal agencies to run waivers by the White House for materials not made in America. This means that contractors, in addition to facing a patchwork of inconsistent, and likely conflicting, guidelines from individual agencies’ waiver processes, will also have to wait as the highest office in the land verifies them,” Sandherr contended.

The memo defines a “project” as “any activity related to the construction, alteration, maintenance or repair of infrastructure in the United States.”

Instead of improving infrastructure needs, firms will “spend more time waiting for federal officials to decide whether a project is in compliance with the administration’s latest layer of red tape,” argued Sandherr.

“Whatever minimal gains in domestic construction material production this new mandate might temporarily generate will be offset by the increased cost of constructing new projects, slower schedules to build those projects and the fact some key projects could be hamstrung from moving forward.”

Sandherr said there should be excitement surrounding the bipartisan infrastructure bill and how it will improve the lives of all Americans, but cautions this new mandate “will leave too many taxpayers wondering where the trillion dollars went while they are still stuck in traffic, still hearing about boil water orders and still wondering why we can’t have better transit systems.”

By David Schollaert, David@SteelMarketUpdate.com