Guidance issued by the Biden Administration for projects funded by the $1T infrastructure spending package will that require materials purchased for projects be produced in the United States.
Waivers will be available if domestic materials are too expensive or if there is not an adequate supply.
The requirement is intended to increase domestic manufacturing jobs and materials production, reduce supply chain constraints and to diminish dependency on international suppliers like China, according to officials.
President Biden has said existing regulations have been watered down and used to hide the use of imported materials for nearly a century. The administration did not say what volume of construction materials used in current infrastructure projects is domestically produced, even though federal construction to date in 2022 totals $350B, according to the Associated Press.
Language in the infrastructure bill enacted last year included a requirement that all the “iron, steel, manufactured products and construction materials” used in federally funded projects be produced in the U.S. starting May 14th.
The requirements can be waived if buying the materials is “inconsistent with the public interest,” if there is insufficient supply/availability/quality of domestic materials or if the domestic materials would increase project costs by more than 25%.
Domestic manufacturers are currently operating at 78.7% capacity, according to the Federal Reserve. There are 6.9 million fewer manufacturing jobs today than there were in 1979 – the sector’s peak year – and domestic manufacturing jobs remain approximately 170,000 fewer today than before the pandemic. (Source)