In February, the FHWA published an updated Q&A document on the Build America, Buy America law. Clarifications on iron and steel construction products can be found in the document, along with a definition of what constitutes being "made in America."
Application dates for the rule, which eliminates the manufactured products waiver, are also included in the updates.
In the process, the agency keeps the Biden-era manufactured products rule unchanged and removes a waiver that industry groups favored.
Lane Kimble, director of the Wisconsin Transportation Builders Association, said FHWA had used its waiver authority since 1983. The waiver exempted a wide range of materials used on federal aid highway projects, including electronics, ITS hardware and electrical equipment. It also exempted other items, including signal boxes and pumps, from provisions mandating they be produced domestically.
"Manufactured construction products will need to be built in the United States and be made of at least 55 percent U.S.-made components," said Kimble. "President Trump and the USDOT initially put the rule change on hold last year for review."
ARTBA noted that removing the waiver, though well-intentioned, could cost the transportation construction industry $8.5 billion over the next decade.
Sean McMaster, FHWA administrator, told ARTBA members he wants to ensure Buy America requirements do not delay projects. But, McMaster told the association's executive committee, waivers must be "limited, strategic and temporary."
ARTBA announced the waiver phases out with federal aid projects obligated on or after Oct. 1, 2025, for which final product assembly must take place in the United States.
"The Q&A document does not detail new policies," the association said in its announcement to members. It said the document "simply clarifies how FHWA intends to interpret and implement the revised Buy America standards in this area."
Those revisions now include product classification and transition timelines, said the group, adding it is in regular contact with FHWA on the issue.
Longstanding Manufactured Product Exemption
In early 2024, FHWA released a proposal to roll back the waiver exempting manufactured products from Buy-America rules on federal aid highway projects.
ARTBA reported then that FHWA called it a step toward boosting domestic manufacturing, bolstering critical supply chains and supporting creation of union jobs.
The agency solicited comments on the implications of its proposal for 60 days after publication in the Federal Register.
"FHWA proposes requiring that domestic content of manufactured products exceeds 55 percent, as measured by the cost of their components," said ARBTA. "In justifying the proposed change, the agency repeatedly cites domestic manufacturing as a policy priority for the White House and Congress."
The agency's plan was to pursue targeted waivers for specific manufactured products to minimize costs and delays.
ARTBA said the industry supported the waiver because it would be costly, and perhaps impossible, to ensure many materials were Buy America-compliant.
In a 2023 survey co-sponsored by ARTBA, two-thirds of contractors believed a change in the waiver would cause a major effect on their operations. These effects would require "significant additional time and costs to document and certify countless components within these items," said the group.
ARTBA noted then that the IIJA maintained Buy America coverage for iron, steel and manufactured products while expanding it to construction materials.
"The law also requires periodic reviews of waivers like this one," the association said in explaining the rollback to members.
In its Q&A section explaining the changes to the Manufactured Products Final Rule, FHWA outlines updates to several material-specific requirements.
It said the final rule clarifies what kinds of products are subject to FHWA's Buy America requirements for steel and iron versus manufactured products.
For projects obligated on or after March 20, 2025, recipients of funds must classify products based on the definitions in the code. These definitions stand "regardless of any previous methods used to differentiate these two categories," said the agency.
FHWA said the new manufactured products rules are "generally" the same as those under the Build America, Buy America (BABA) Act.
"However, the application of FHWA's Buy America requirements may differ from the application of BABA's requirements," it added.
For example, BABA applies only to infrastructure projects, said the transportation agency. That's any work related to the construction, alteration, maintenance or repair of infrastructure regardless of whether it also is the primary purpose of the project.
"FHWA's Buy America requirements apply to all projects funded with Title 23 funds, even those not generally considered to be infrastructure projects," it said. "FHWA's Buy America requirements also provide distinctions for certain manufactured products not included in the BABA requirements."
The agency said Buy America rules do not apply to the non-iron or non-steel components of an iron or steel product.
Under the rule, a product can be classified as an iron or steel product even if it contains non-iron or non-steel components.
"In such a case, the Buy America requirements for steel and iron … apply to such products, not the requirements for manufactured products or construction materials."
The agency also said the cost of the foreign iron or steel product is only the cost of the foreign iron or steel in the product.
If an iron or steel product contains non-iron/steel components, recipients should use just the cost of the individual foreign iron or steel components.
For projects obligated between March 20, 2025, and Sept. 30, 2025, the waiver applies to manufactured products permanently incorporated in such projects.
"For projects obligated on or after Oct. 1, 2025, all manufactured products permanently incorporated into the project must be manufactured in the United States."
For projects obligated on or after Oct. 1, 2026, all manufactured products in the project must meet the final assembly requirement.
Plus, the cost of components that are mined, produced or manufactured in the United States must be greater than 55 percent of the total cost of all components.
Under the rule, specific requirements apply to precast concrete products, intelligent transportation systems (ITS) and other electronic hardware systems products installed in the highway right-of-way
"For such precast concrete products, components that consist ‘predominantly of iron or steel or a combination of both' must meet FHWA's requirements for iron and steel."
ITS cabinets or other enclosures that consist "predominantly of iron or steel or a combination" must meet requirements for steel and iron.
"These iron or steel component requirements apply to all projects, regardless of when they are obligated," said the agency.
These specified manufactured products also must meet the applicable requirements for manufactured products.
On or after Oct. 1, 2026, the cost of predominantly iron or steel components will count toward the 55 percent requirement, according to FHWA.
Kits must be acquired from one manufacturer or supplier as separate components from those assembled or installed to form a single product at the work site.
The rule states kits should be distinguished from systems consisting of interconnected individual components that together achieve a broad function.
"If a kit meets the definition of manufactured product … it should be classified as a single manufactured product," according to the update. "Individual components of the kit should not be classified as separate manufactured products, even though they may be brought to the work site separately."
FHWA said kits classified as manufactured products must meet Buy America requirements that apply to manufactured products.
"The manufacturer … should be considered the entity that performs the final manufacturing process that produces the kit"
The rule stipulates that this manufacturer is not the contractor that manufactures or assembles the on the work site.
"To comply with the final assembly requirement, the place at which the manufacturer of the kit brings together the kit's components must be in the United States."
However, a kit may be classified as a manufactured product even if its components are brought to the site separately or at different times.
In applying the 55 percent requirement, the rule refers to "transportation costs to the place of incorporation into the manufactured product.'"
However, the place of incorporation for kits should be considered the place at which the manufacturer of the kit brings together the kit's components.
The rule states, "it should not be read to refer to the transportation cost of the kit's components to the work site."
Excluded materials are cement and cementitious materials, aggregates or aggregate binding agents or additives, according to the update.
"Excluded materials are not subject to any applicable Buy America standard … if delivered to the project site on their own or in combination with other excluded materials."
Excluded material mixtures delivered to the work site without final for incorporation must not be classified as manufactured products.
Also, these mixtures are not subject to FHWA's Buy America requirements for manufactured products, according to the agency.
For mixtures combined with a non-excluded material and processed into a specific shape or form, the result is to be classified the same as any other material.
This stands "regardless of the fact that one of its components is an excluded material," according to FHWA. CEG
