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FWHA Imposes Buy America Requirement to Utility Relocations

The Federal Highway Administration issued an interpretation of  23 U.S.C. Section 313(g) to apply the Buy America Requirement to utility relocations.  Given the importance of federal funding to highway projects and the inevitable need for utility relocations, this interpretation can have important impacts on utility cooperatives. 

  • Buy America Requirements

Under 23 U.S.C. Sec. 313 (“Buy America Requirement”), projects using FHPA funds and administered by the federal DOT must use steel, iron, and manufactured products produced in the United States.  In 2012, Congress amended the Buy America Requirement to apply to “all contracts eligible for assistance under this chapter for a project . . . regardless of the funding source of such contracts, if at least 1 contract for the project is funded with [FAHP dollars].”  MAP-21 Act, P.L. 112-141 Sec. 1518 (July 6, 2012) (codified at 23 U.S.C. Sec. 313(g)).

  • Interpretation by FHWA

The FHWA has interpreted the amendment to impose the Buy America Requirement in the following two scenarios:

      • Utility work using FAHP funding; and
      • Utility work on FAHP-funded projects: The Buy America Requirement applies if the project involves at least one FAHP-funded construction contract authorized after October 1, 2012, or at least one FAHP-funded Preliminary Engineering contract authorized after January 1, 2013.

According to the FHWA interpretation, the Buy America Requirement does not apply to FAHP-funded projects where State law prohibits the State DOT from reimbursing utilities for relocation costs.  In addition, on a project-by-project basis, the Buy America Requirement may be waived.

The FHWA’s interpretation can be viewed online here.

  • Implication

Utility cooperatives with facilities along highways should take note of the Buy America Requirement and plan accordingly.  At the present time, NRECA and other organizations have requested the FWHA to reconsider its interpretation.  The joint letter is available online here.

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