Biden Announces New Requirements For Government Infrastructure Purchases

( )- On Wednesday, the Biden administration released guidance that it has proposed that it believes will increase the usage of goods that are made in America for any infrastructure project around the country that is funded by the government.

During his State of the Union address on Tuesday night, President Joe Biden touted his administration’s work to implement a requirement that all construction materials that are used in federally-funded infrastructure projects have to be made in America.

As the president said:

“When we do these projects … we’re going to buy American. It’s totally consistent with international trade rule.”

He continued that the new rules that are going to be put out will ensure that these projects use American-made “lumber, glass, drywall, fiber optic cables. And, on my watch, American roads, American bridges and American highways are going to be made with American products.”

The White House Office of Management and Budget released the proposed guidance. It did so by direction of Congress under the bipartisan infrastructure law that was passed in 2021 and totals $1 trillion.

Livia Shmavonian is the head of an office at the White House whose goal is to spur the federal government to purchase more goods that are made in America. She explained this week that this new proposal “will strengthen implementation of domestic content standards, while also improving federal financial assistance management, consistency, transparency and oversight”

The new guidance released by the OMB seeks to set specific standards that would ensure that all manufacturing processes that are done for construction materials actually happen in the United States. According to Shmavonian, this includes setting standards for “plastic and polymer-based products, glass including optic glass, lumber and drywall.”

The bipartisan infrastructure law itself actually expanded the standards significantly to require that any infrastructure project that’s funded by the federal government has to use more manufactured products that are made in America. This includes general construction materials as well as steel and iron.

The OMB is working to get input about whether it should include other construction materials in the guidelines, which could include engineered wood products, bricks, stains and paints – to name a few.

This all falls in line with an executive order that Biden signed during the first few days he was in the White House that sought to close the loopholes that exist in current “Buy American” provisions. These apply to roughly one-third of the total $600 billion in services and goods purchased annually by the federal government.

The Biden administration also issued new rules in March of 2022 that would raise the domestic content thresholds. In order for a product to be labeled as “Made in America” for the purposes of federal purchases before, only 55% of the total value of the goods’ components parts had to actually be manufactured within the U.S.

The new rule increased that threshold to 60% by October of this year. It will then increase to 65% next year and to 75% for 2029.