Congressman Denny Rehberg, R-Mont., recently sent a letter to Office of Management and Budget Director Peter Orszag telling him that the so-called “Buy American” provision in the federal stimulus package – which requires that stimulus-funded projects use only iron, steel and components manufactured in the U.S. – has bogged down Montana projects. Rehberg writes:
Unfortunately, this all or nothing mandate has caused great concern in my home state of Montana, where uncertainty in the implementation of this provision and the waiver process has many wondering whether or not their projects will qualify. To eliminate uncertainty and ensure that stimulus funds reach needed projects, I urge your immediate action to issue implementation guidance on the “Buy American” provision in the stimulus bill.
Rehberg cites two projects, specifically, that he says have hit snags as a result of the provision: a wastewater treatment plant upgrade in Conrad and a regional water project on the Rocky Boy Indian Reservation, where specialty equipment needed to break ground is not readily available.
In a letter sent to the Montana Department of Environmental Quality, Travis Meyer, of Morrison-Maierle, Inc. and project manager on the Conrad wastewater treatment plant upgrade, says the “Buy American” provision, as it reads, is almost impossible to meet. He writes:
In their bids, the contractors that submitted on the project made every effort to meet the Buy American requirements. For example, they made sure that all of the rebar for the concrete and all of the piping that was quoted would meet this stipulation. However, when it came to the specialized treatment equipment required, the contractors were unable to find suppliers or manufacturers that could certify that all of their iron, steel and other manufactured goods are produced or manufactured in the United States…
…The feedback we have received from the manufacturers that bid on this project is that in order for them to remain competitive in today’s global economy and stay in business, they must manufacture their products using parts and materials that make the most economic sense. In most cases, nearly all of the parts and materials used to build these specialized machines do in fact come from the United States and in almost all cases the machines themselves are assembled in the United States. However, everyone we have talked to so far has stated their equipment contains at least a few parts that were made somewhere else, primarily because those parts are not available from a U.S. source in the quantities required or the quality required. Please note that the use of the word “all” in the ARRA requirements makes it extremely difficult for any manufacturer of complex specialized equipment to meet this stipulation.
Read the entire letter here (.pdf).
The original “Buy American” clause proposed for the federal stimulus plan was eventually softened, but economists still disagree on whether it should have been eliminated all together. See the New York Times’ “Room for Debate” blog to read more qualified opinions than mine on the issue.
Also, Bloomberg reported Tuesday that the Obama administration has loosened restrictions provided in the “Buy American” provision to limit disruptions the “rules may have on stimulus spending.”
According to Rehberg’s office, The Office of Management and Budget said it would make a decision on the congressman’s request for “immediate guidance to all federal agencies” on the “Buy American” provision within the next few weeks. Rehberg, along with every U.S. House Republican, voted against the federal stimulus plan.
Here’s Rehberg’s entire letter:
Dear Director Orszag:
The recently passed American Recovery and Reinvestment Act (ARRA) included a “Buy American” provision that requires projects funded by the act to use only iron, steel, and manufactured goods produced in the United States. Unfortunately, this all or nothing mandate has caused great concern in my home state of Montana, where uncertainty in the implementation of this provision and the waiver process has many wondering whether or not their projects will qualify. To eliminate uncertainty and ensure that stimulus funds reach needed projects, I urge your immediate action to issue implementation guidance on the “Buy American” provision in the stimulus bill.
Many projects in Montana, including the City of Conrad’s Wastewater Treatment Plant Upgrade and the Rocky Boys-North Central Montana Regional Water Project, are having difficulty getting American-made certifications for specialty equipment that is not readily available in the market. If they do not have these certifications, the money intended to support infrastructure development in Montana will go unused. As you know, current law does not provide sufficient guidance for communities who wish to request waivers from the Buy American provision and there is a statutory deadline of 90 days to award bids. These projects are “shovel-ready” and need immediate assistance to ensure prompt certification of American Recovery and Reinvestment Act requirements.
As Montana’s sole Representative, I am requesting immediate guidance to all federal agencies so that they may quickly implement common-sense direction and certainty for those projects that are currently delayed based on the Buy-American provisions in the American Recovery and Reinvestment Act.
Sincerely
Denny Rehberg
Montana’s Congressman