May 21, 2019

May 21, 2019

Subscribe to Latest Legal News and Analysis

May 20, 2019

Subscribe to Latest Legal News and Analysis

Implementation of “Buy American” for Infrastructure Projects Begins May 1st

In 2017, President Trump issued an executive order entitled “Buy American and Hire American” which stated a commitment to do just that. Earlier this year, expanding on this policy, President Trump issued an executive order entitled “Strengthening Buy-American Preferences for Infrastructure Projects.”This order requires federal agencies to encourage contractors working on infrastructure projects that receive federal grants or loans to purchase domestically produced materials. Pursuant to the order, agencies are required to begin encouraging use of domestic products by May 1st, and requires submission of an implementation plan by May 31st.

The new executive order seeks to fill somewhat of a gap in current federal legislation that will no doubt have an effect on an investor’s analysis of a public-private partnership delivery model. The federal Buy American Act applies domestic preference to manufactured materials that are used in the construction of federal projects. Then, there are a set of federal laws that have domestic preference provisions for specific materials in specific construction projects that receive federal funding. The new executive order applies to “covered programs,” which basically includes infrastructure projects that received financial assistance from a federal program, but do not currently include domestic preference requirements. In other words, the policy now potentially applies to any project that receives federal funds, even if it is not solicited by the federal government.

The term “infrastructure projects” is broadly defined, and will apply to local projects that receive federal assistance like aviation, surface transportation, ports, water resources, and energy production projects. The new executive order expands both the types of materials and types of projects for which the Buy American policy is applicable. The interplay with rules for local preference enforced by local governments is unclear, although existing federal regulations typically prohibit the use of local preference for federally funded projects. Also unclear is whether there is or will be an actual enforcement mechanism. The significance and magnitude of this latest push for stronger domestic preference will be revealed in the coming weeks as federal agencies begin to encourage the policy and submit plans for implementation.

© 2019 Bilzin Sumberg Baena Price & Axelrod LLP

TRENDING LEGAL ANALYSIS


About this Author

Elise Holtzman, Construction Attorney, Bilzin Sumberg Law Firm
Associate

Elise focuses her land use and government relations practice on guiding clients through land use issues and representing clients in all levels of the procurement process. Elise understands how law and policy influence business and development, and her grasp of the political dynamics in South Florida makes her an invaluable advocate on behalf of her clients. This is particularly true when she helps navigate clients through the RFP and/or administrative bid protest process.

305-350-2402
Albert Dotson, Bilzin Sumberg Law Firm, Real Estate and Land Development Attorney
Partner

Nationally recognized for his work on public-private partnerships (P3), Al's experience includes rail and transit facilities, airports, marinas, sports stadiums, convention centers, healthcare/life sciences facilities, educational institutions, water and sewer facilities, and parking structures.

Al is recognized throughout Florida for his work representing local, national, and international clients in responding to government contract solicitations and defending against, or prosecuting quasi-judicial and judicial bid protests.

305-350-2411