On October 23, the Biden Administration’s final guidance on applying Build America, Buy America requirements for infrastructure projects that receive federal financial assistance will go into effect. These rules aim to clarify what makes a U.S.-made product for the purposes of participating in the administration’s ambitious infrastructure agenda – an agenda that includes significant investments the technology industry strongly supports.
Unfortunately, the guidance fails to account for the realities of the commercial IT industry, which makes products that are essential for delivering broadband access to unserved and underserved communities, clean drinking water, and safe and reliable transportation. By failing to consider and implement industry feedback, the administration has jeopardized the success of its own ambitious infrastructure goals and, more importantly, missed an opportunity to deliver critical services for the American people.
Today’s most innovative technologies are largely developed and produced using established and secure global supply chains. While the tech industry is making investments to expand manufacturing capabilities in the United States, many components like sensors, computers, and semiconductors—which are needed for the boldest infrastructure projects—are either not made in the United States or not yet made in the quantities necessary. Despite this reality, the U.S. government has continued moving forward with restrictive domestic sourcing policies and requirements as the default. Without substantial waivers of these requirements, federal financial assistance recipients like states and localities will be forced to grapple with Build America, Buy America requirements on commercial IT that will likely contribute to infrastructure project delays and potentially significant increased project costs up to 25 percent.
It didn’t have to be this way. Over the past two years, industry has offered the administration multiple recommendations for implementing the Build America, Buy America requirements in a way that supports the procurement of the innovative technologies needed for infrastructure projects, rather than knee-capping federal agencies and state and local governments.
One commonsense recommendation ITI has consistently promoted is waiving Build America, Buy America requirements for commercial IT used in infrastructure projects. Since 2004, Congress has exempted commercial IT from the Buy American Act’s domestic sourcing requirements – which apply to purchases made by the U.S. federal government – to ensure the U.S. government can access best-in-class, global technology. This precedent recognizes that today’s most innovative technologies benefit from established and secure supply chains throughout the world. Rather than aligning with the federal government’s own purchase requirements, however, the Build America, Buy America restrictions on federal financial assistance recipients apply unprecedented and unrealistic domestic sourcing mandates for commercial IT used in infrastructure projects. The most practical, efficient, and cost-effective way to accomplish the Biden Administration’s infrastructure goals is to broadly waive Build America, Buy America requirements for commercial IT. However, the administration’s new guidance perpetuates a system in which federal agencies, states, and local governments will be forced to pursue endless waivers for technology not predominantly sourced in the U.S., resulting in project delays, increased costs, and uncertainty for both government and industry.
While waiving Build America, Buy America requirements for all commercial IT is the most straightforward and efficient means of ensuring infrastructure projects benefit from the use of innovative technologies, another way to ease the burden is to establish common waivers for discrete technologies routinely purchased by different funding recipients. Under the administration’s final guidance, a funding recipient, such as a state or local government, will now have to develop and submit a new waiver request every time it needs to procure technology that is not domestically available—even if that technology has already received a waiver for another project. Expanding a waiver’s application across the federal government’s financial assistance programming would ease administrative burdens and reduce duplicative efforts. It would also help ensure consistency and predictability in the procurement process, rather than the current piecemeal approach that requires federal agencies to make decisions about the applicability of waivers on a product-by-product basis.
These are only two of the many recommendations that industry has presented to the Biden Administration with the aim of bringing better infrastructure to the American people. The administration has instead advanced a set of rules that makes essential infrastructure projects unworkable. This choice will ultimately hurt the American communities who need these projects the most. We continue to urge the Biden Administration to truly engage with the technology industry and seize the opportunity to deliver for all Americans.