Despite recent administration efforts to play down the impact of the “Buy America” provisions of the American Recovery and Reinvestment Act (ARRA), industry and business groups remain concerned that the provisions could cause delays on construction projects or be expanded to other programs.

Photo: AP/Wideworld

At a recent summit of North American leaders, President Obama played down ARRA’s Buy America provisions.

“The perception and the fear is that more Buy America-type requirements could be passed, and that creates a level of fear with Canada and our other trading partners,” says Chris Braddock, senior director of procurement policy with the U.S. Chamber of Commerce.

President Barack Obama on Aug. 10 said Buy America language was a “very specific” provision limited to ARRA and “[does] not extend beyond that.” But construction and business groups continue to be wary. “The way that this is being applied in the recovery act is much broader than anything we’ve seen before,” says Perry Fowler, director of Associated General Contractors of America’s municipal and utilities division. “It may not be the main reason why you’re not seeing EPA money flowing out right now, but it’s certainly a contributor.”

The Environmental Protection Agency has issued a number of waivers for water infrastructure projects, regionally and nationally. On Aug. 10, EPA announced it would waive “de minimus” use of foreign-manufactured incidental materials on water projects, up to 5% of the total materials cost, effective on July 24.

Bill Hillman, CEO of the National Utility Contractors Association, says the de minimus waiver, although intended to help speed up projects, actually creates more of a burden for construction owners who must work with their engineering or construction firms to identify which components are truly “incidental.”

Overall, industry groups say the de minimus waiver will help, but the potential for delays on larger projects still exists. Some utilities are trying to eliminate the issue by focusing on sewer projects in which all materials are manufactured in the U.S., says Susan Bruninga, director of public affairs for the National Association of Clean Water Agencies.

Fowler notes EPA has worked hard to allow critical projects to move forward. “They’ve tried really hard to interpret the [ARRA] in a way that’s consistent with the law but which affords some flexibility for projects,” he says.

But some lawmakers on Capitol Hill continue to try to incorporate Buy America provisions into other legislation, Fowler says. For example, the House of Representatives in May approved a green schools bill that included a Buy America provision.

The original 1964 Buy America law traditionally has applied only to the surface transportation program. The Buy America provision in ARRA “sets a precedent” for other markets, Fowler says.