Congress Expands Buy America Requirements in the Infrastructure Investment and Jobs Act (P.L. 117-58)

December 7, 2021

Congress Expands Buy America Requirements in the

Infrastructure Investment and Jobs Act (P.L. 117-58)

Domestic content preference laws, which require that

certain goods purchased with federal funds be

manufactured primarily in the United States, have received

increased attention from both Congress and the executive

branch in recent years. The Infrastructure Investment and

Jobs Act (IIJA; P.L. 117-58), enacted in November 2021,

made changes to “Buy America” requirements for federally

funded infrastructure projects.

broadband infrastructure; and real property and buildings.

Other projects may be covered; for example, the IIJA

authorizes federal funding for an expanded clean school bus

program. Although the program authorized in the IIJA to

fund purchases of electric school buses by local school

districts contains no explicit Buy America references, EPA

may determine that Buy America requirements will extend

to these items as well.

Buy America

Buy America requirements previously applied to iron, steel,

and certain manufactured goods. The IIJA broadens

coverage to include nonferrous metals, such as copper used

in electric wiring; plastic- and polymer-based products;

glass, including optical fiber; and certain other construction

materials, such as lumber and drywall. Congress did not

include cement and aggregates—comprising sand, gravel,

and crushed stone—in the IIJA’s list of construction

materials subject to Buy America. Industry groups asserted

that transporting these extremely heavy materials from

distant U.S. producers rather than closer Canadian or

Mexican producers would be costly and might have other

adverse effects including more damage to roads and

highways. Imported cement and aggregates accounted for

approximately 16% of total U.S. consumption in 2020;

however, this figure is not representative of the materials

use in federally funded projects.

“Buy America” refers to several statutes and regulations

that apply to federal financial assistance used to support

infrastructure-related projects, principally those involving

highways, public transportation, airports, aviation, and

intercity passenger rail, including Amtrak. Buy America

requirements also apply to certain federally funded waterrelated infrastructure projects and, in these cases, are

administered by the Environmental Protection Agency

(EPA). Buy America requirements as they relate to

transportation date to the Surface Transportation Assistance

Act of 1978 (P.L. 95-599) and are distinct from

requirements under the Buy American Act of 1933, which

is specific to direct procurement by the federal government.

Statutes containing differing Buy America requirements

applicable to each transportation mode are administered by

various Department of Transportation (DOT) agencies.

Each agency subject to the law maintains its own

regulations and monitors grantees’ performance. The

Federal Transit Administration, for example, addresses

different issues in its Buy America requirements from other

DOT agencies, such as the Federal Highway

Administration. EPA has separate requirements, and

implementing the IIJA will require agencies in certain other

federal departments, such as the Department of Energy and

the Department of Commerce, to develop Buy America

regulations of their own.

Compliance is the responsibility of recipients of federal

grants covered by Buy America statutes, such as a state

government seeking to use federal funds to cover part of the

cost of rebuilding a highway bridge or local governments

using federal funds to replace water pipes and sewage

systems. Grantees may obtain waivers of requirements to

use domestic products in certain circumstances.

Expanded Requirements

Buy America requirements traditionally extend to publicworks transportation and water-related infrastructure. The

IIJA expands Buy America coverage to other infrastructure

projects funded by federal grants, including transmission

facilities; structures and equipment of electric utilities;

To be considered “produced in the United States” under the

IIJA, manufactured goods must contain greater than 55%

domestic content and be manufactured in the United States.

In the case of construction materials all manufacturing

processes must occur in the United States. The law directs

the Office of Management and Budget (OMB) to define the

relevant manufacturing processes as they relate to

construction materials within 180 days of enactment. The

IIJA instructs OMB to ensure that construction materials

and associated inputs originate in the United States, as well

as to “seek to maximize the direct and indirect jobs

benefited or created in the production of the construction

material.”

Executive Order 14005 and the IIJA

The IIJA and Executive Order 14005 (E.O.) each contain

similar language that addresses domestic content

requirements. E.O. 14005, signed by President Biden in

January 2021, established a Made in America Office within

OMB with several responsibilities, including increased

enforcement of and compliance with domestic preference

statutes. The statute establishes a centralized system in

which OMB is to serve as the final authority in reviewing

waiver requests for all projects using federal funds;

previously, the various agencies that administer Buy

https://crsreports.congress.gov

Congress Expands Buy America Requirements in the Infrastructure Investment and Jobs Act (P.L. 117-58)

America requirements have been responsible for

considering waiver requests from their grantees.

The IIJA directs the Secretary of Transportation to enter

into an agreement with the Secretary of Commerce and to

consult with the Director of the Hollings Manufacturing

Extension Partnership to determine whether a domestic

entity could supply the iron, steel, manufactured product, or

construction material needed for an infrastructure project

prior to granting a Buy America waiver. In addition, both

the IIJA and E.O. 14005 instruct all federal agencies to

work with the Director of the Hollings Manufacturing

Extension Partnership to identify American firms that can

supply goods and materials that meet Buy America

requirements, as well as develop and sustain a domestic

supply base of such goods and materials.

Waivers allowed under prior Buy America laws are also

authorized under the IIJA, including where Buy America

requirements would be inconsistent with public interest;

products and materials are not domestically available in

sufficient quantities and/or of satisfactory quality; and if the

domestic products/materials raise the cost of the project by

a specified threshold. Prior to a waiver being granted, the

issuing agency must make the proposed waiver publicly

available on a website designated by OMB and must afford

the public a specified amount of time to comment. General

applicability waivers must be reviewed every five years to

determine whether or not a waiver should be continued.

Additionally, prior to granting a waiver, both the IIJA and

E.O. 14005 direct federal agencies to assess whether the

cost advantage of a foreign product is the result of unfair

trade practices, such as dumping or subsidization.

Effects on Manufacturing and

Employment

Buy America has several objectives that range from

shielding U.S. manufacturing and employment from import

competition to maintaining a domestic industrial base of

critical goods and materials. Assessing how well Buy

America has accomplished these purposes is difficult—as is

measuring the economic costs and benefits of Buy America

restrictions.

Steel has been a particular focus of Buy America laws. Data

on the quantity of steel used each year in projects subject to

Buy America requirements are not available, so it is not

possible to calculate accurately the share of domestic steel

production covered by the laws.

Employment in steel manufacturing has declined 47%

between 1990 and 2020; however, it has remained

moderately stable since 2009 (Figure 1). Domestic

producers’ share of the U.S. steel market has fluctuated

between 2000 and 2020, ranging from approximately 70%

to 90%, and experienced the market’s highest levels of

import competition during 2014-2015. Steel produced in

Canada and Mexico is entitled to duty-free access to the

U.S. market under the United States-Mexico-Canada trade

agreement. Some manufacturers contend that Buy America

requirements hinder the integration of the three economies

that the agreement is intended to promote.

greater domestic production of rail cars and transit buses

than would occur without the requirements. These

industries are relatively small, and the majority of sales are

to private railroads not covered by Buy America.

Figure 1. U.S. Steel Manufacturing Employment

Source: CRS analysis of Bureau of Labor Statistics, Current

Employment Statistics.

Potential Effects and Issues

The broadening of Buy America coverage under the IIJA

may impact supply chains across multiple industries,

including among suppliers to the construction industry.

Some firms that manufacture certain construction materials

contend that they rely on imported components or other

inputs, and assert that broadening Buy America coverage

may adversely affect their domestic manufacturing

activities. Barring import competition for a broader range of

procurement funded by federal grants also has the potential

to increase the market power of domestic producers in

industries that are already highly concentrated, possibly

leading to higher project costs.

Oversight of expanded Buy America requirements

mandated in the IIJA is likely to prove complicated due to

other provisions in the law. The IIJA increases the amount

of federal infrastructure funding provided directly to local

entities, such as counties or municipal bus systems, rather

than passing through state governments or metropolitan

planning organizations. This may also extend to

nontransportation infrastructure projects, such as tribal

broadband deployments, where eligible entities include

tribal governments, tribal colleges or universities, or native

corporations not previously engaged in overseeing Buy

America requirements. Some jurisdictions and

nongovernmental organizations may lack the staff and legal

expertise to comply with the Buy America regulations of

various federal agencies. This may complicate enforcement,

as specific procurement contracts often require complex

determinations of whether a bidder has adhered to federal

law and can lead to protracted legal challenges.

Christopher D. Watson, Analyst in Industrial

Organization and Business

One of the primary manufacturing industries affected by

Buy America is rolling stock, and has likely resulted in

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IF11989

Congress Expands Buy America Requirements in the Infrastructure Investment and Jobs Act (P.L. 117-58)

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