Today, Congressman Mike Michaud sent a letter to U.S. Department of Transportation Secretary Ray LaHood urging him to look into the use of far-reaching, long-term waivers his department has issued over the years to get around requirements to buy American products for highway and infrastructure projects.
"Buy America policies play a critical role in ensuring that American taxpayer dollars are spent creating jobs in the United States whenever possible," said Michaud, a member of the House Transportation and Infrastructure Committee. "While the Department of Transportation has the authority to issue waivers on a case-by-case basis, it is troublesome that some waivers have been issued for entire sectors and have been on the books for decades without regular review. I hope this letter will shed some light on the use of long-term waivers and ensure that our Buy America standards are being implemented and adhered to fully."
The full text of the letter Michaud sent to Secretary LaHood today can be found below.
April 13, 2012
The Honorable Ray LaHood
Department of Transportation
1200 New Jersey Avenue, SE
Washington, DC 20590
Dear Secretary LaHood:
I am writing to express my concerns with general waivers to Buy America requirements issued by the Department of Transportation (DOT). Based on my research, numerous waivers of this far-reaching nature have been issued in the last several decades, some of which are still in effect today. As Congress focuses our efforts to improve our economy and put Americans back to work, I believe it is critical to scrutinize these waivers and determine whether or not they remain necessary or are denying American companies the ability to provide goods and services to the federal government.
Existing regulations give DOT the authority to grant waivers to Buy America requirements on a case by case basis, yet the agency has on numerous occasions issued long-term, general or nationwide waivers. I have identified the following examples, though the lack of transparency in the Buy America process could mean that more general waivers have been issued but are not easily found:
1) A "general public interest waiver" for foreign-sourced spare parts first published in 46 FR 5808 in 1981;
2) A "permanent general public interest waiver" for microcomputers first published in 51 FR 36126 in 1986;
3) A "nationwide waiver" for certain ferryboat equipment and machinery first published in 59 FR 6080 in 1994;
4) A "nationwide waiver" for pig iron and processed, pelletized, and reduced iron ore first published in 60 FR 15478 in 1995;
5) A "general public interest waiver" for "small purchases" under $100,000 first published in 60 FR 37932 in 1995; and
6) A waiver "valid until such time as a domestic source becomes available" for minivans assembled in Canada first published in 75 FR 35123 in 2010.
As this list demonstrates, Buy America waivers have been issued for entire sectors and groups of contracts. Moreover, many of these waivers have been in effect for decades.
Given the broad scope of the waivers listed above, I am concerned that they are unnecessarily and unjustifiably blocking American companies from filling DOT-funded contracts. I hope you can answer the following questions, which will help illuminate the extent to which these waivers are published and reviewed. First, is this a complete list of all general, nationwide, or indefinite waivers issued by DOT since 1978? If not, what are the other waivers and what is their status? Second, Buy America implementing regulations provide that the Federal Transit Administration will "consider all appropriate factors on a case by case basis" when evaluating waiver requests. What specific statutory authority allows DOT to issue long-lasting and far-reaching waivers or waivers for entire sectors of goods? Third, is there a formal review process for these general waivers? If so, what is it, and what is the regularity with which these waivers are reviewed? Fourth, what steps has DOT taken to evaluate whether or not these waivers are negatively affecting U.S. companies doing business in the sectors affected by general waivers? Your responses to these questions will provide important information as I continue my analysis of these exceptions to Buy America standards.
Buy America policies play a critical role in ensuring that American taxpayer dollars are spent creating jobs in the United States whenever possible. Your agency has distinguished itself in its efforts to improve the process by which waiver are issued to Buy America requirements, and I strongly support these initiatives, especially as the economic recovery continues to be slow. I hope you will work with me to evaluate general Buy America waivers and to ensure that they are still warranted.
Thank you for your consideration of this letter. I look forward to your answers to these questions.
Member of Congress