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Buy American and Supply Chain Policy Roundup

Buy American and Supply Chain Policy Roundup

Buy American and Supply Chain Policy Roundup

Recent supply-chain vulnerabilities – highlighted by the COVID-19 pandemic, geopolitical competition, cyber-attacks, and global warming – are now causing U.S. policymakers to expand upon their historic efforts.  The Biden Administration and Congress are currently considering policy proposals to address supply-chain vulnerabilities, including legislation that would significantly impact existing Buy America and Buy American-type program requirements.  Below are summaries and links to key congressional legislation and executive branch actions we are actively tracking, including bill text, section-by-section summaries, and accompanying press releases. 

To learn more about our Buy American capabilities and resources, click here

Congressional Legislation

House Surface Transportation Infrastructure Reauthorization Legislation:  On June 10, the House Transportation and Infrastructure Committee announced its passage of the INVEST in America Act , which includes a number Buy America-focused sections, which are described in the section-by-section summary:

  • Sec. 1112. Buy America [23 USC 313]: Adds “construction materials” to the materials covered by Buy America and requires FHWA to issue a rule implementing this requirement that allows FHWA to increase domestic content over time based on availability. Directs FHWA to carry out research on domestic availability and identify suppliers of Buy America compliant materials to facilitate compliance with these requirements and support domestic jobs.  Ensures a transparent public process before waiving Buy America requirements. Strengthens existing domestic content requirements by requiring the Secretary to reevaluate any standing nationwide waivers every five years, including the manufactured products waiver, to determine whether those waivers remain necessary. This reevaluation must take into consideration the research on domestic availability and supply chains described above. Codifies longstanding congressional reporting requirements.
  • Sec. 2301. Buy America [49 USC 5320]:
    • Recodifies Buy America into section 5320, closes loopholes, removes bureaucratic burdens, clarifies waiver reporting requirements, and provides new incentives to boost domestic job production. Closes loopholes that allow waived components and components exceeding 70 percent domestic content to receive credit for 100 percent domestic content. Incentivizes higher domestic content by including final assembly costs into the domestic content calculation, providing an automatic 2.5 percent increase in domestic content if a zero-emission vehicle uses domestic battery cells, providing a bonus of 10 percent of domestic content for any component that exceeds 70 percent, and providing a bonus of 15 percent of domestic content for any component that exceeds 75 percent.
    • Requires FTA to conduct rolling stock certifications to remove the burden from transit agencies, allows certifications to be used for multiple procurements, sets a standard for recertifications, and provides fair competition by ensuring certifications are consistently applied. The DOT Inspector General will provide annual audits of the program. Creates a refined waiver process for passenger vehicles, allowing automatic waivers for passenger vehicles that are domestically assembled and have a 60 percent domestic content as measured by the American Automobile Labeling Act. Requires domestic components use domestic steel and iron. Prohibits imported components from becoming domestic components. Requires FTA to review its bus and rail component and final assembly regulations to maximize domestic job creation and align with modern manufacturing techniques. Phases in the modifications of Buy America over a five-year timeframe.
  • Sec. 9106. Buy America: Requires DOT to provide notice and opportunity for public comment on requests for waivers from FRA’s Buy America standards at least 30 days before making a finding on such request. Also requires DOT to annually report to Congress on the waivers granted during the preceding fiscal year.

House Stand-alone Legislation: 

Senate Surface Transportation Infrastructure Reauthorization Legislation:  On May 26, the Senate EPW Committee announced its unanimous passage of the Surface Transportation Reauthorization Act.  The legislation includes the following Buy America provision, as described in the Section-by-Section summary:

  • Sec. 1513. Buy America.  Section 1513 requires the Secretary to issue a public notice 15 days in advance of issuing a waiver for the Buy America requirement for Federal-aid projects and to report to Congress annually on all such waivers.

Senate US Innovation and Competition Act (Schumer Substitute Amendment to Endless Frontier Act):  On June 8, the Senate passed the United States Innovation and Competition Act of 2021 (S. 1260), in the form of a Schumer substitute amendment, by a vote of 68 – 32.  Both the Build America, Buy America Act (S. 1303) and the BuyAmerican.gov Act (S. 732) are included in the bill, and a section-by-section summary of the legislation can be found here.

Senate Stand-alone Legislation:

$1.2 Trillion Bipartisan Infrastructure Bill
On November 5, 2021 the House Transportation and Infrastructure Committee announced its passage of the Infrastructure Investment and Jobs Act.  The bill, passed by the Senate on August 10, will now be sent to President Biden and signed into law.  The bipartisan legislation directs nearly $550 billion in new spending over five years from FY 2022 through FY 2026 to modernize transportation projects, water, power and energy, broadband and resilience.  The bill authorizes the continuation of existing programs, such as the gas tax, for the remaining $650 billion.  A White House fact sheet summarizes various funding provisions.  The bill contains a number of “Buy America” provisions, including a section entitled the “Build America, Buy America Act,” incorporating the Senate stand-alone legislation.  These provisions build upon measures proposed by the Biden administration, beginning with the “Made in America” Executive Order.  In a statement, President Biden said:  “[w]e will get America off the sidelines on manufacturing solar panels, wind farms, batteries, and electric vehicles to grow these supply chains, reward companies for paying good wages and for sourcing their materials from here in the United States, and allow us to export these products and technologies to the world.”  With a signing ceremony on the horizon, President Biden also stated that Americans will see the infrastructure bill’s effects probably starting within the next two to three months. 

Legislation Regarding Telecommunications Supply Chains And Domestic Production Advances In The House Of Representatives: 
Several pieces of legislation that would address the U.S. information and communications technology (“ICT”) supply chain passed the U.S. House of Representatives on October 20, 2021.  

The Secure Equipment Act of 2021 (the “SE Act”): The SE Act would require the Federal Communications Commission (“FCC”) to adopt a rule currently being considered by the agency that would prohibit authorizations for equipment produced by entities that are determined by the FCC to pose an unacceptable risk to the national security of the United States under Section 2 of the Secure and Trusted Communications Networks Act of 2019.  The current list of entities and equipment that are listed under this provision is available here.  The comment period for the FCC’s rule ended on October 18, 2021.

The Information and Communication Technology Strategy Act (the “ICTS Act”): The ICTS Act would require the Department of Commerce to issue a report within one year of the bill’s enactment that:

  • Identifies ICTs that are critical to U.S. economic competitiveness;
  • Identifies the industrial capacity and assesses the economic competitiveness of domestic and foreign ICT vendors that are “trusted” and don’t pose national security risks;
  • Determines the extent to which identified vendors are dependent on suppliers that pose national security risks; and
  • Discusses potential federal actions to support trusted vendors to boost their economic competitiveness and reduce their reliance on suppliers that pose risks.

Within 180 days of issuing the report, the Department of Commerce would be required to submit a “whole-of-government” strategy to Congress with recommendations on the following:

  • How to improve federal support of the economic competitiveness of vendors identified in the report;
  • How the federal government can address barriers to market-based approaches to improve the competitiveness of vendors identified in the report; and
  • How to implement the strategy, including needed changes to laws, additional resources, and the roles of federal agencies.

The Open RAN Outreach Act (the “ORAN Act”): The ORAN Act would task the Department of Commerce’s National Telecommunications and Information Administration (“NTIA”) with conducting outreach and providing technical assistance to small operators of communications networks.  The NTIA’s outreach and technical assistance would focus on raising awareness about: (1) the benefits and challenges of using “Open Radio Access Network” or “Open RAN” standards; and (2) a competitive grant program established under the 2021 National Defense Authorization Act that supports the deployment of such open network technologies.  The ORAN Act’s sponsor, Congressman Colin Allred, stated that “[w]e must do all we can to strengthen our technology supply chain against any untrusted vendors and this bill helps small carriers do just that.”

The Communications Security, Reliability, and Interoperability Council Act (the “CSRIC Act”): The CSRIC Act would require the FCC to establish a council to advise the FCC on various issues including the security, reliability, and interoperability of communications networks.  The council would report to the FCC every two years and would be composed of companies in the communications industry, public interest organizations or academic institutions, and representatives of the federal, state, local, or tribal governments.

In related policy matters, comments may be filed with the Department of Commerce regarding the ICT industrial base and supply chains until November 4, 2021.