• Comments Sought on Interim Stimulus Buy American Regulations
  • May 8, 2009 | Authors: Jennifer L. Richter; Carly T. Didden; Jennifer A. Cetta
  • Law Firm: Patton Boggs LLP - Washington Office
  • The Office of Management and Budget (OMB) recently released interim Buy American regulations that apply only to the use of stimulus funds and provided guidance on how these interim regulations will apply to government loans and grants. OMB plans to release final regulations soon and is taking comment on the regulations on June 1st.

    The stimulus Buy American regulations are a bit different from the existing Buy American regulations. The American Reinvestment and Recovery Act requires that none of the stimulus funds appropriated may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States. The stimulus Buy American regulations include three exceptions (the existing Buy American regulations contain five exceptions). The Buy American requirements can be waived by the agency of jurisdiction under three circumstances.

    • Public Interest Exception. If the agency makes a determination that applying the Buy American restriction would be inconsistent with the public interest.
    • Non-availability Exception. If the agency determines that iron, steel, and the relevant manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality.
    • Unreasonable Cost Exception. If the agency determines that inclusion of iron, steel, and manufactured goods produced in the United States will increase the cost of the overall project by 25% (or 6% for unmanufactured materials).

    The Recovery Act also requires that the Buy American provisions are applied in a manner consistent with the United States’ obligations under international agreements.