What is a "Domestic Requirement" and how do I know if it applies to my project?
There are a variety of different types of construction projects that require domestically manufactured (U.S.-made) products, including bolts. There are three main pieces of legislation that mandate “domestic” products.
The American Recovery and Reinvestment Act of 2009
The American Recovery and Reinvestment Act of 2009, also known as “ARRA” or “Stimulus Plan,” was enacted into federal law with the primary thrust of funding going towards modernization and construction products. The ARRA mandates that materials be domestic in origin but does so in a fairly vague way and contains provisions that, in many cases, will allow the use of non-domestic product if the proper waivers are obtained.
The Buy American Act of 1933
The Buy American Act (BAA) was originally adopted as part of President Franklin D. Roosevelt’s New Deal economic programs during the Great Depression. It pertains to all federal government purchases of goods (services are exempt) with a value over $2,500. There are many exceptions to the Buy American Act that allow waivers for products, projects or entire categories of technology to be supplied from a non-domestic source, depending on the review process and the requirements of the given federal department or agency.
The Buy America Provisions of 1982
Often incorrectly referred to as the “Buy America Act,” this group of provisions is often confused with the Buy American Act (BAA) above. The Buy America Provisions are actually a series of provisions contained within the Surface Transportation Assistance Act of 1982 (TAA). This Act applies only to transit related projects over $100,000 that receives funding through federal grants. Because many large highway and transit projects utilize federal government grants as part of their funding, they often fall under these provisions.
The provisions are much more restrictive than the BAA of 1933. The provisions require that all iron and steel products are to be 100% US manufactured. However, most projects will have a small foreign allowance in order to allow for items that are not easily attainable in a domestic form or contain exemptions to allow foreign materials if they exceed a certain percentage threshold of savings over what the same product would cost domestically.
Other Notable Types of Domestic Requirements
- Similar to the TAA above, airport projects that receive funds from the Federal Aviation Administration under the Airport and Airways Facilities Improvement Act are required to have 60% of all steel and manufactured products be of domestic origin.
- Requirements for military projects can vary widely, as each military service (Army, Navy, and Air Force) has its own regulations in addition to the broader (and often changing) requirements of the Department of Defense (DoD). Due to the multitude of regulations, and because Congress frequently passes laws that pertain only to DoD contracting, military projects can vary widely in their application and severity of domestic requirements.
Something to keep in mind is that depending on the project, the contract provisions, and which agency has oversight, products manufactured in approved foreign countries may be acceptable as “domestic.” These approved countries can include Canada, European Union Member countries, World Trade Organization Government Procurement Agreement (WTO GPA) countries, Free Trade Agreement countries, and “least developed” countries. Also, different agencies may have different interpretations of the governing Act, so check carefully.
Although this is not a comprehensive list of situations in which a project may have a domestic requirement, these are the most common ones that we see on a daily basis.