Contract News

Buy America Does Not Apply To Materials Which Remain In Place At The Contractor's Convenience

The manufacturing process for a steel/iron product is considered complete when the product is ready for use as an item (e.g., fencing, posts, girders, pipe, manhole cover, etc.) or could be incorporated as a component of a more complex product through a further manufacturing process (e.g., the case for a traffic signal head). The final assembly process does not need to be accomplished domestically so long as the steel/iron component is only installed and no manufacturing process is performed on the steel/iron component.

Example: shapes produced domestically from foreign source steel billets are not acceptable under Buy America since the initial melting and mixing of alloys to create the steel occurred in a foreign country.

Example: all welding must take place domestically since the welding rod itself is typically an iron/steel product and the welding process substantially alters the rod.

Buy America does not apply to minimal use of iron/steel materials provided that the total cost of all foreign source items used in the project, as delivered to the project site, is less than $2500 or one-tenth-of-one-percent of the contract amount, whichever is greater. If a supplier or fabricator wishes to use a partial fabrication process where domestic and foreign source components are assembled at a domestic location, the "as delivered cost "of the foreign components should include any transportation, assembly and testing costs required to install them in the final product.

For the Buy America requirements to apply, the steel or iron product must be permanently incorporated into the project. Buy America does not apply to temporary steel items, e.g., temporary sheet piling, temporary bridges, steel scaffolding and falsework, etc. Further, Buy America does not apply to materials which remain in place at the contractor's convenience.

The practice of making otherwise eligible items non-participating for the purpose of circumventing the Buy America requirements is unacceptable and should not be approved in Federal-aid projects. There is no clear-cut rule for resolving an after-the-fact discovery of an inadvertent incorporation of an excess amount of foreign materials into a project. Each situation should be resolved on a case-by-case basis.

Buy America provisions apply to all material incorporated in a Federal-aid project, even if an item is rendered as a "donated material "in accordance with 23 U.S.C. 323 - Donations and Credits. While States and local governments may receive a credit for donated material, this material must generally comply with Buy America requirements. There have been instances, where FHWA Divisions have approved Buy America waivers for the donation of material from existing stockpiles of locally owned material. The use of existing material was determined to be in the public interest, however, the procurement of new material for a donation would not generally be considered for a waiver

Contact our New York Contract Lawyer Now!

	Did You Know?
	There Are Three Elements For A Contract To Exist - Offer, Acceptance & Consideration The first step to creating a contract is an Offer; followed by Acceptance of the offer which must be valid and then its Consideration which is a legal concept meaning something of value that is given in exchange for a performance or a promise to perform.