105.10 Buy America Source of Steel and Iron
GENERAL DESCRIPTION
The Michigan Department of Transportation (MDOT) and the Federal Highway Administration (FHWA) continue to partner to address compliance with Buy America requirements on all state and local projects that include federal-aid funding.
Code of Federal Regulation (CFR) / FHWA Regulations
Buy America Requirements can be found in 23 CFR Section 635.410 and Build America, Buy America Act requirements can be found in 2 CFR Part 184. Work items and materials specifically shown in the project plans, specifications, and contract documents that are permanently incorporated into the project, regardless if they are defined as temporary or not, must meet the requirements in the Special Provision for Domestic Materials or the Special Provision for Domestic Materials, Multiple Contracts under National Environmental Policy Act Decision
Buy America Source of Iron and Steel
Examples of products that are subject to Buy America coverage regarding iron or steel include, but are not limited to, the following:
- Steel or iron products used in pavements, bridges, tunnels or other structures, which include, but are not limited to, the following: fabricated structural steel, reinforcing steel, piling, high strength bolts, anchor bolts, dowel bars, permanently incorporated sheet piling, bridge bearings, cable wire/strand, pre-stressing/post-tensioning wire, motor/machinery brakes and other equipment for moveable structures;
- Guardrail, guardrail posts, end sections, terminals, cable guardrail;
- Steel fencing material, fence posts;
- Steel or iron pipe, conduit, grates, manhole covers, risers;
- Mast arms, poles, standards, trusses, supporting structural members for signs, luminaires, or traffic control systems; and
- Steel or iron components of precast concrete products, such as reinforcing steel, wire mesh, lifting lugs, and pre-stressing or post-tensioning strands or cables.
All iron and steel products, materials, components, etc., must meet the Buy America requirements. All manufacturing processes, including application of coatings, must occur within the United States.
Minimal use of foreign iron or steel is allowed provided the total invoice cost of foreign iron and steel permanently incorporated into the project does not exceed 0.1 percent (0.1%) of the total contract amount or $2,500, whichever is greater. The total invoice cost is the invoice amount charged for the iron and/or steel within the product, material, or component delivered to the project. The contractor is required to maintain this minimal usage amount and provide the monetary values with product or material delivery prior to incorporation.
The use of foreign iron and/or steel under the minimal usage amount does not need to be approved by the FHWA. This amount is not considered a waiver to the Buy America requirements. The minimal usage amount is to be approved by the engineer as long as the maximum values are not exceeded. The contractor is to provide the engineer with the monetary amount of foreign iron and/or steel in each pay item, product, material or component. The contractor is also required to maintain a list of all foreign steel and iron incorporated into the project and provide the list to the engineer.
Buy America Waiver
The FHWA has established a Buy America waiver process for iron and steel products, components, and materials that are not domestically produced or processed, but are required per the contract. Waiver approvals are pursued during the preliminary engineering/design phase of projects and do not include after-the-fact discovery of an inadvertent incorporation of foreign iron and steel into a federal-aid project.
Buy America waivers are typically issued per item and on a project basis and are not transferrable to other projects. These waivers are issued by the Washington D.C. headquarters of the FHWA and are not issued by project staff of any other agency or office. Waiver processing may be necessary after letting for products or components that are no longer domestically produced or processed. This discovery may impact a project schedule and, therefore, waiver discussions must occur as soon as possible upon discovery that domestically produced or processed iron and steel products or processes are not available. Managing offices are to work with the Construction Contracts Unit in the CFS Division for processing and submittal of the waiver request with supporting information to the FHWA Michigan Division Office. The FHWA approval process may take 3 years so prompt submittal of waiver requests are required. Supporting information that is to be provided to the Construction Contracts Unit is as follows and examples can be provided:
- MDOT Contract ID
- FHWA Project Number
- Federal Item Number
- Brief Project Description (from contract inquiry system)
- Original Project Amount
- Current Project Amount (at time of waiver submittal)
- Waiver Pay Item, Product or Process
- Cost of Waiver Pay Item, Product or Process
- Country of Origin of the Pay Item, Product, or Process (if known)
- Reasons for the Waiver Request
- Description of the efforts made by the contractor and MDOT to locate a domestically manufactured product
- Analysis of re-design of the project using alternate or approved equal domestic product
Buy American Act
For clarification, there is also a federal requirement and specification for Buy American (note the additional letter "n" in American). Buy American does not apply to road and bridge projects; it is a requirement for direct federal grants (e.g. aeronautics projects). Project staff must ensure that they receive the Buy America certification and not Buy American certification as there is a substantial difference between the two requirements.
Source of Construction Materials (Build America, Buy America Act)
The Contractor must provide construction materials for permanent incorporation into the work that are produced in the United States per 2 CFR Part 184, Buy America Preferences for Infrastructure projects.
The manufacturing processes for each construction material must occur within the United States.
- Non-ferrous metals All manufacturing processes means from initial smelting or melting through final shaping, coating, and assembly;
- Plastic and polymer-based products (including polyvinylchloride, composite building materials, and polymers used in fiber optic cables). All manufacturing processes, from initial combination of constituent plastic or polymer-based inputs, or, where applicable, constituent composite materials, until the item is in its final form;
- Glass (including optic glass). All manufacturing processes, from initial batching and melting of raw materials through annealing, cooling, and cutting;
- Lumber All manufacturing processes, from initial debarking through treatment and planing;
- Drywall All manufacturing processes, from initial blending of mined or synthetic gypsum plaster and additives through cutting and drying of sandwiched panels;
- Fiber Optic Cable (including drop cable). All manufacturing processes, from the initial ribboning (if applicable), through buffering, fiber stranding and jacketing. All manufacturing processes also include the standards for glass and optical fiber, but not for nonferrous metals, plastic and polymer-based products, or any others;
- Optical Fiber All manufacturing processes, from the initial preform fabrication stage through the completion of the draw; and
- Engineered Wood All manufacturing processes, from the initial combination of constituent materials until the wood product is in its final form including from initial debarking through pressing, trimming, and sanding of glued sheets or boards.
Certification examples are shown below.
Source of Manufactured Products
The Contractor must provide manufactured products for permanent incorporation into the work that are produced only in the United States per Title 23 of the CFR Section 635.410, Buy America Requirements.
Manufactured products means articles, materials, or supplies that have been processed into a specific form and shape, or combined with other articles, materials, or supplies to create a product with different properties than the individual articles, materials, or supplies. If an item is classified as an iron or steel product, an excluded material, or construction material, then it is not a manufactured product.
An article, material, or supply classified as a manufactured product may include components that are iron or steel products, excluded materials, or construction materials. Mixtures of excluded materials delivered to a work site without final form for incorporation into a project are not a manufactured product.
Items that consist of two or more construction materials that have been combined together through a manufacturing process, and items that include at least one construction material combined with a material that is not a construction material (including steel/iron) through a manufacturing process are treated as manufactured products, rather than as construction materials.
Manufactured products that are predominantly iron or steel must comply with the Source of Iron/Steel. Final assembly for all other manufactured products must occur in the United States for the manufactured product to be considered compliant with the Buy America Act. Precast concrete products are classified as manufactured products and must meet the requirements of 23 CFR 635.410 and subsection 105.10.C of the Standard Specifications for Construction. Components of precast concrete products that consist wholly or predominantly of iron or steel or a combination of both must also meet the requirements of subsection 105.10.A of the Standard Specifications for Construction. The cost of such components may be included in the applicable calculation for purposes of determining whether the precast concrete product is produced in the United States.
Intelligent transportation systems and other electronic hardware systems that are installed in the highway right of way or other real property are classified as manufactured products, the cabinets or other enclosures of such systems that consist wholly or predominantly of iron or steel or a combination of both must meet the requirements of subsection 105.10.A of the Standard Specifications for Construction. The cost of cabinets or other enclosures may be included in the applicable calculation for purposes of determining whether systems referred to in the preceding sentence are produced in the United States.
Other Materials
Articles, materials or supplies that do not meet subsection 105.10.A or 105.10.B or 105.10.C are classified as Other Materials and do not have any domestic materials requirements. This includes the following items that are specifically categorized as other (excluded) materials per Section 70917(c) of the Infrastructure Investment and Jobs Act of 2021.
- Cement and cementitious materials, including asphalt cements
- Aggregates such as stone, sand, or gravel
- Aggregate binding agents or additives
These materials do not have any requirements for domestic manufacturing.
MEASUREMENT, DOCMENTATION & PAYMENT
Measurement
De-Minimis Non-Compliant Construction Materials and Manufactured Products
The requirements for construction materials and manufactured products are waived for a de minimis amount defined as when the total value of the non-compliant items is no more than the lesser of $1,000,000 or 5 percent of total applicable costs for the contract. The total value of non-compliant items is the value of all construction materials and manufactured products that are not compliant with subsections 105.10.B and 105.10.C that are permanently incorporated into the contract. The total applicable contract costs include the costs of all iron, steel, construction materials, and manufactured products used on the contract. The 5 percent threshold of total applicable contract costs is based on the following formula:
- A / B
- Where:
- A = the total value of non-compliant construction materials and manufactured products used in the contract;
- B = the total applicable contract costs (iron, steel, construction materials, and manufactured products).
The 5 percent threshold is based on the actual invoiced cost of the iron, steel, construction materials, and manufactured products, not an anticipated cost of those items. Engineers need to work with the Contractor to help ensure the value of the non-compliant items is no more than the lesser of $1,000,000 or 5 percent of total applicable costs. Contractors are to track this value, and Engineers can request documentation at any time.
Documentation Requirements
Iron, Steel, and/or Manufactured Products Certification
The following information is provided as a sample letter of certification for Buy America iron/steel and/or manufactured product compliance. Documentation must be provided on company letterhead and include the manufacturer’s name.
- Date (when certification was produced)
- Company Name
- Company Address
- City, State Zip
- Phone Number
- Email Address
- Subject: Buy America Certification for Project (XXXXX-XXXXXXA)
- I, (company representative), certify that the following product(s)/material(s)/manufactured product(s) provided to the subject project are in full compliance with the Federal Highway Administration (FHWA) Buy America requirements as specified in Title 23 of the Code of Federal Regulations (CFR) Section 635.410.
- Pay Item, Products and/or Materials
- Water Main, DI, 24 in
- - Buy America compliance.
- Joint, Expansion, E2
- - Dowel Bar, Buy America compliance.
- Spun Concrete Poles
- - Buy America compliance.
- Water Main, DI, 24 in
- Signed by company representative
Construction Materials Certification
The following information is provided as a sample letter of certification for Buy America Construction Material compliance. Documentation must be provided on company letterhead and include the manufacturer’s name.
- Date (when certification was produced)
- Company Name
- Company Address
- City, State Zip
- Phone Number
- Email Address
- Subject: Buy America Certification for Project (XXXXX-XXXXXXA)
- I, (company representative), certify that the following construction material(s) provided to the subject project are in full compliance with the requirements in the Special Provision for Domestic Materials / Special Provision for Domestic Materials, Multiple Contracts under National Environmental Policy Act Decision.
- Materials
- Lumber
- - Full Compliance
- Fiber Optic Cable
- - Full Compliance
- Lumber
- Signed by company representative
Basis of Payment
No payment, including stockpile and delivered payments, is to be made for any materials or products containing iron or steel until all Buy America certifications have been received by the engineer. The only exception to this requirement is for fabricated elements that are stamped "Approved for Use" by MDOT's Structural Fabrication Unit (internal or contracted inspection personnel) performing shop inspection at fabrication facilities (e.g. structural steel and structural precast concrete). The Structural Fabrication Unit verifies Buy America for materials with "fabrication inspection" as the basis for acceptance, as noted in the Materials Quality Assurance Procedures manual. All elements that are represented by a stamped "Approved for Use" Bill of Lading (shipping document) by the Structural Fabrication Unit must be visually inspected after being unloaded at the project site before being accepted by the engineer. These elements may then be partially or fully paid provided the inspector was given an "Approved for Use" stamped Bill of Lading upon arrival of the elements (structural steel or structural precast concrete). The fabricator is required to maintain a listing of all materials that do not meet Buy America and obtain approval from the engineer prior to incorporation of foreign iron and/or steel into any fabricated products.
Collaboration is necessary between MDOT’s Structural Fabrication Unit and the Engineer to ensure the amount of foreign steel approved for use is less than the minimal usage thresholds above. MDOT's Structural Fabrication Unit will not seek approval from the project office for incorporation of foreign iron and/or steel into a project, but will verify that the engineer has approved the use of foreign iron and/or steel prior to stamping "Approved for Use". The Structural Fabrication Unit will issue fabrication inspection memorandums to the engineer, for projects requiring structural steel and structural precast concrete fabrication inspection, after fabrication is complete for information purposes only. These memorandums summarize the fabrication inspection and state Buy America has been verified at the fabrication facility.