WWEMA Window: Don't Be Fooled On 'Buy American'
By Dawn Kristof Champney, President Water and Wastewater Equipment Manufacturers Association
Effort is underway in Congress to make “Buy American” a permanent requirement for communities seeking financial assistance through the clean water and drinking water state revolving fund (SRF) programs. While that may sound like a laudable goal on first glance in wanting to put U.S. citizens to work and support U.S. manufacturing, the result will be just the opposite.
As we all painfully experienced during our brief encounter with Buy American as part of the American Recovery and Reinvestment Act (ARRA), projects on the waiting list for SRF assistance had to be shelved since they were never designed with this restrictive procurement requirement in mind. Communities scrambled to find Buy American-compliant projects that were “shovel ready” in order to meet the one-year deadline for monies to be spent. The onus was placed on the design engineers to ensure their projects met this new requirement. They then passed the liability along to the contractors and it eventually trickled down to the manufacturers. The only ones making money in the process were the lawyers who spent endless billable hours trying to educate all parties on what “produced in the U.S.” actually meant and how to justify “substantially transformed” foreign components and materials into something that meets the rules of the game. Heaven forbid a community had to go through the time-consuming, complex process of seeking a waiver in order to get the products they needed for the job.
Just when we thought we had crawled out from under that short-term federal procurement obstacle, here comes another attempt to make it a permanent condition of some $100 billion in funds available through the SRF programs. Though one might sympathize with U.S. manufacturers of steel and iron products trying to keep foreign competitors from dumping products in the U.S. made by companies that don’t share our same child-labor, environmental, health, and safety concerns, this is hardly the vehicle for achieving that goal by penalizing all other responsible U.S. suppliers from offering the most effective, affordable technologies that dare to utilize domestic and foreign supplies. In case you hadn’t heard, ours is a global marketplace. U.S. manufacturers have benefited greatly from being able to buy low-cost components overseas, enabling them to compete more effectively both domestically and abroad. At the same time, our communities have benefited greatly from the ingenuity of U.S. manufacturers that tap into innovative, international supply chains to incorporate into their production lines offering the best value to their customers. Now we stand the real risk of being locked out of export markets where our future growth lies, as our nation’s trading partners adopt similar measures in retaliation. Remember, with rare exception, municipalities are not covered by international trade agreements, so while we may not be in violation of any such agreements with this provision, nor are we protected from retaliation.
Everyone loses in this proposition, especially our towns and cities that rely on the best products and the lowest cost financing made available through the highly-successful SRF programs. As stated by the organizations representing the program and financial managers of the SRF programs in a joint letter to Congress, “the end result of this costly and damaging mandate will be delay, disruption, and ultimately the failure of the SRFs to fund many much needed projects.” The Council of Infrastructure Financing Agencies (CIFA) and the Association of Clean Water Administrators (ACWA) summed it up nicely in its letter, explaining that applying Buy American to the SRF programs “will mean almost insurmountable compliance difficulties; increased project costs; significant delays in project construction; the inability to secure need components and technology; and long-term damage to the state revolving fund model as municipalities turn away from an SRF loan because it imposes too many unworkable conditions.”
Let’s not put $100 billion at risk and instead focus on “Sell American,” where everyone ultimately benefits!
(NOTE: The views and opinions expressed in Water Online guest columns are those of the authors and do not necessarily reflect the opinions of Water Online, the editorial staff, or VertMarkets, Inc.)