On January 14, 2025, the U.S. Department of Transportation (USDOT) Federal Highway Administration (FHWA) issued a final rule discontinuing its longstanding Buy America waiver for manufactured products used in federally-assisted projects. FHWA-funded projects where funds are committed after October 1, 2025, will need to comply with more stringent requirements with respect to domestic sourcing of certain manufactured products.
FHWA-funded projects have been subject to a waiver of the Buy America manufactured products domestic sourcing requirement since 1983. The final rule is effective March 17, 2025, and implements FHWA’s March 7, 2024 proposed rule.
Under the new rule, manufactured products (which are generally defined as non-predominantly steel or iron “articles, materials, or supplies that have been processed into a specific form and shape, or combined with other articles, materials, or supplies to create a product with different properties than the individual articles, materials, or supplies”) must be produced in the United States (“final assembly requirement”) and have greater than 55 percent of the manufactured product’s components, by cost, be mined, produced, or manufactured in the United States (“55 percent requirement”).
The final rules stagger the elimination of the waiver: (i) the “final assembly requirement” will become effective for projects where FHWA funds are committed on or after October 1, 2025, whereas (ii) the “55 percent requirement” will become effective for projects where FHWA funds are committed on or after October 1, 2026.
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