On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 (the Recovery Act) into law. This act provided for a $787 billion economic stimulus package, of which, $135 billion is designated for construction, repair and maintenance of federal buildings, public transportation infrastructure and other public works. Section 1605 of the Recovery Act, titled “Use of American Iron, Steel, and Manufactured Goods” contains requirements that any project receiving stimulus funds for “the construction, alteration, maintenance, or repair of public buildings or public works” utilize “iron, steel, and manufactured goods…. produced in the United States.” This “Buy American” requirement has become a focal point within the construction industry, as contractors seek to maximize opportunities provided by the Recovery Act.
The Recovery Act does contain some exceptions to the requirements of section 1605. The “Buy American” requirements may be waived if it can be determined that buying American materials “would be inconsistent with the public interest.” An exception would also be granted if the availability of materials produced in the United States were insufficient. A third exception is if the use of American made components would increase the costs of the overall project by more than 25%.
The implementation of Section 1605 of the Recovery Act has generated some controversy within the construction industry as experts try to dissect various terms within the Act’ wording. The Recovery Act does not provide clear guidance for what constitutes a “maintenance” project. Previous public building projects have focused on terms such as “construction” and “repair”, but not “maintenance”. Industry experts have also speculated about the absence of a clear definition for the terms “public building” and “public works.” The phrase “produced in the United States” is also open to debate as the Recovery Act has not adopted definitions as historically presented within subpart 25.2 of the Federal Acquisition Regulation, which has governed previous public construction projects.
The provisions of Section 1605 of the American Recovery and Reinvestment Act of 2009 are facts of life now. These provisions will impact every step of the construction process. The controversy and uncertainty surrounding the implementation of the requirements within Section 1605 will continue to be a focus of attention until further clarification is provided.
Many businesses working on construction projects receiving stimulus funding will fall under the “Buy American” requirements of Section 1605. Dean Dorton Ford, PSC has over thirty years of experience in helping clients navigate through new legislation impacting their businesses. Our construction team devotes significant time to researching changes within the construction industry and seeking new opportunities to better serve our clients. We would be happy to offer your business our expertise.
If you have any questions please contact Justin Hubbard at jhubbard@ddfky.com
