News/Weekend/Economy:
Stimulus Alert – Don’t Be Caught Off Guard: The Buy American Provisions of the ARRA Are Complex and a Pitfall for the Unwary
The following news bulletin has been provided by Stoel-Rives
One of the most controversial features of the American Recovery and Reinvestment Act (”ARRA” or the “Act”) is its “Buy American” provision. There was a strong lobbying effort, which was successful, to impose domestic content requirements for all iron, steel, and “manufactured goods” supplied to ARRA-funded federal, state, and local public buildings and public works projects. Arguing that this might set off a world trade war similar to the infamous Smoot Hawley Tariff Act that contributed to the Great Depression, Senator McCain attempted to excise the Buy American provision from ARRA, but that effort was not successful.
The Senate did ameliorate the Buy American provision by adding a requirement that it be implemented consistent with U.S. obligations under international treaties, particularly the World Trade Organization’s Government Procurement Agreement, to which the United States is a party. This provision will not have any impact, however, on local public works projects, because cities and counties are not covered by these treaties. Some states, however, have signed onto treaty commitments with respect to state public works projects.
The Act contains three key elements: “public building or public work”, “manufactured goods”, and “produced in the United States”. None of these elements is defined in the Act. This means that to determine the applicable meanings, one must look to the legislative history of the Act, to analogous federal statutes such as the Buy American Act of 1933, and to regulations issued by agencies using ARRA funds to contract for public projects. Don’t expect consistency; there will be many uncertainties, until things begin to shake out.
Read the full alert regarding key points on how the Buy American provision of ARRA work and the issues at hand on www.stoel.com.
For more information contact:
Jere Webb at:
jmwebb@stoel.com
