Section 4: Buy America Guidelines
Anchor: #i1038049Overview
Buy America requires the use of domestic steel and iron in Title 23 funded highway contracts. The use of foreign steel or iron materials or products in a Federal-aid project is prohibited with few exceptions (e.g., temporary basis; manufactured products that are not predominantly steel and iron; minimal use; nationwide or individual waivers; etc.). Section 1518 of MAP-21 has modified 23 U.S.C. 313 to require Buy America on the basis of a contract's associated NEPA document. All contracts, irrespective of funding source, are subject to Buy America compliance if any contract to construct a portion of the NEPA project is or has been funded under Title 23. If a non-federal aid contract is awarded without the Buy America provisions on or after December 31, 2013, all subsequent contracts within the scope of the NEPA document would become ineligible for federal aid participation.
On federal-aid projects, utility facility owners will use domestically manufactured products that are composed predominately of steel and/or iron to incorporate into the permanent installation of the utility facility - in compliance with the Buy America provisions of 23 CFR 635.410 as amended. Examples of such products may include poles, cross arms, and structural support members; towers and girders used to comprise transmission towers and stand-alone structures; conductor support cables; high-strength bolts used as anchor bolts and anchor rods; iron or steel baseplates; encasement pipes, pipes and valves; rebar and other reinforcing iron/steel for all cast-in-place and precast installations; conduit and ducting; fire hydrants; manhole covers, rims, and drop-inlet grates.
According to FHWA (memo dated July 6, 1989), all manufacturing processes of the steel material in a project (i.e., smelting and any subsequent process which alters the steel material's physical form or shape or changes its chemical composition) must occur within the United States to be considered of domestic origin. “Domestically manufactured products” are those products manufactured in the United States that have not undergone any manufacturing process outside of the United States that modified the chemical content, physical shape or size, or final finish of the product, beginning with the initial melting and continuing through final shaping and coating. For example, the creation of steel in any fashion from the iron ore is considered a manufacturing process, and if that process is performed outside the US, the steel is non-compliant, even if the final product was manufactured domestically. Raw materials were originally included in Buy America; however, lack of adequate domestic supply resulted in a 1995 nationwide waiver for pig iron and reduced/processed/pelletized iron ore.
Utility agreements executed before Dec. 31, 2013, are not subject to Buy America requirements.
The date of the original Utility agreement will be used as the date to determine Buy America compliance if the Utility Agreement is amended after December 31, 2013, unless the amendment includes major changes in the scope of work.
Non-domestic iron and steel materials may be used provided the cost of such materials does not exceed one-tenth of one percent (0.1 %) of the individual Utility Agreement amount, or $2,500.00 whichever is greater, per 23 CFR 635.410 (b)(4). The De Minimis equation is calculated by the following formula: Combined Cost of Only those Materials that are subject to Buy America and are Non-Compliant (limited to the individual Utility Agreement) divided by the Total Utility Relocation Cost (cited in the individual Utility Agreement).
Anchor: #i1038346Documentation Requirements for Buy America
Prior to the installation of products subject to Buy America compliance, the utility facility owner will submit an executed TxDOT Form 1818 with attached Mill Test Reports, issued and signed by the initial fabricator, supplier of materials, or utility owner. Mill Test Reports should state that the materials were manufactured domestically. If the Mill Test Reports are not provided or lacking information, the utility facility owner may demonstrate Buy America compliance by providing a written certification signed by the vendor or manufacturer on company letterhead signed by an authorized representative declaring that all supplied materials subject to the Buy America provisions are fully compliant. The written certification will include the specific project information pertaining to the Standard Utility Agreement and state that all products that are composed predominately of steel and/or iron were manufactured domestically and in compliance with the Buy America provisions of 23 CFR 635.410 as amended.
The utility must furnish the following for verifying compliance with Buy America requirements (domestic origin) of steel and iron materials:
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- Form 1818 Material Statement - this form is to be completed, furnished, and signed by the supplier of materials, initial fabricator, or utility owner. Form 1818 will not be acceptable if it is incomplete and not signed by a notary. This form, when completed, should contain certification by the utility with attached evidence of compliance from the supplier / manufacturer. Anchor: #LXKUIBRT
- And one of the following (or a combination): Anchor: #VTYLBDFT
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- The Mill Test Report (MTR) issued and signed by the initial fabricator stating that the materials subject to Buy America were melted and manufactured in the United States; written certification from the factory(s). Anchor: #UTAXVKBJ
- Written certification signed by the vendor on company letterhead, or other acceptable documentation, signed by an authorized representative of the vendor declaring that all supplied materials subject to the Buy America provisions are fully compliant. Anchor: #GYYWWAMI
- Other written statements on company letterhead, signed by an authorized representative, from the manufacturers providing any additional treatment to the fabricated material (such as blasting, galvanizing or painting) stating that all treatment processes occurred in the United States. Anchor: #HWCMUNBD
- Written certification should state that all products that are composed predominately of steel and/or iron were manufactured domestically, in compliance with the BUY AMERICA pro-visions of 23 CFR 635.410. Certification should include project information pertaining to the standard utility agreement.
Additional Consideration to Certification Methods
Utility owners will bear responsibility to ensure all materials permanently incorporated into their utility relocations are either compliant or not required to be compliant with Buy America requirements.
Where a utility purchases manufactured products from a vendor for use by the owner in its relocation activities, a certification from the vendor to the utility that the materials meet Buy America requirements shall be deemed to constitute compliance by the utility owner.
Where a utility owner obtains construction services in connection with utility relocation work and the provider of construction services is also responsible for sourcing of manufactured products used in connection with that project, a certification from the provider of construction services that the materials provided meets Buy America requirements is sufficient.
Materials purchased by the TxDOT highway contractor from a TxDOT approved supplier for utility relocations included in the highway contract will not require any supporting documentation from the utility owner.
Anchor: #i1038517Exceptions to Buy America Provisions
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- Buy America does not apply to existing utility materials which are relocated from one location to another within the project limits. Anchor: #OBGRBWQK
- Buy America does not apply to any materials required for maintenance and temporary installations. Anchor: #HUTGCFUJ
- Buy America does not apply to any materials necessary to repair equipment that was discovered or damaged during construction and requires immediate action to restore to safe conditions or to minimize adverse public impact. Anchor: #UCMERPEN
- Buy America does not apply if the utility relocation effort is not eligible for federal reimbursement when State law prohibits TxDOT from reimbursing utilities. For example, if the utility owner does not have a compensable property interest and is therefore required to pay for 100% of the relocation effort, then the materials associated with that relocation are not subject to Buy America. However, all such work must remain separate from and cannot be accomplished under a utility agreement or contract that includes work eligible for Federal-aid. Anchor: #DOORJJGW
- Per 23 CFR 635.410, the work to be performed
under the utility agreement may include foreign iron and steel products
if the cost of Buy America compliant materials will cause the cost of
the work to increase by at least 25%. To determine applicability
of this provision, one of the following two procedures shall be
used, per TxDOT policy:
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- If the utility company will use a contractor or developer or concessioner to perform the work included in the utility agreement, the following procedures apply: Demonstration of meeting the 25% excess cost requirement must be accomplished by receiving two separate bids each from at least two qualified contractors for the work. Requests for bids from the qualified contractors must conform to 23 CFR 635.410 (b)(3). One bid from each contractor will include a cost of performing the work described in the utility agreement using Buy America compliant material and the other bid will include a cost for the same work assuming foreign materials. If the bid with the Buy America compliant materials is at least 25% greater than the bid that includes foreign material, then the contract can be awarded to the lowest bid based on materials that are not compliant with Buy America. Anchor: #LEVVPNJT
- If the utility company will perform work in the utility agreement with its own forces, the following procedures apply: Demonstration of meeting the 25% excess cost requirement must be accomplished by receiving two separate bids from vendors or manufacturers listing the cost of Buy America compliant materials on one bid document and listing the cost of non-compliant materials on a separate bid document. The utility company will take the cost of the Buy America compliant materials and use it to create the total estimated cost of the work included in the utility agreement. The utility company will do the same with the cost of the noncompliant materials. If the cost of the work included in the utility agreement with Buy America compliant materials is at least 25% greater than the cost using the materials that are not compliant with Buy America, then the non-compliant materials may be used.