Buy American, or not
The “Buy American” clause in the American Recovery and Reinvestment Act (ARRA) is intended to protect American jobs. However, a group of 28 industry associations and at least one local official say the clause is hard to implement and could cost taxpayers more money.
The 28 associations, including the Washington-based Water and Wastewater Equipment Manufacturers Association and the U.S. Chamber of Commerce, sent a letter to congressional leaders in November asking that Buy American clauses be excluded from future economic stimulus legislation. The associations say most of the $6 billion in ARRA funds for the drinking water and wastewater State Revolving Fund program are being delayed by concerns and confusion relating to Buy American rules. “The end result of these Buy American provisions has been to slow [work on] ‘shovel ready’ projects,” the letter states.
That was the experience for officials in Conrad, Mont., who sought ARRA funds to help finance the construction of a $5.5 million wastewater treatment plant, says Conrad’s Finance Officer Agnes Fowler. The city learned that it was exempt from many of the Buy American regulations only after it had accepted several bids on the project. “We [believed] that the bids were higher than they [needed to be] because of the criteria that we were originally led to believe we were going to have to meet,” Fowler says. As a result, the city reissued the bids.
Fowler says if similar clauses are included in future legislation, they should provide more exemptions, such as a percent limit on the cost difference between domestic and foreign products. “If feasible, buy American, yes,” Fowler says. “But, if it ends up costing the taxpayer astronomical figures over a foreign product, are we cutting off our nose to spite our face by buying American?” she says.