CHICAGO Iron and steel
foundries, steelmaker Nucor Corp., the United Steelworkers
union and the Municipal Castings Association have objected to a
Federal Highway Administration (FHWA) ruling on "Buy America"
requirements, saying it could cost them millions of dollars in
The group has asked the U.S.
Appeals Court for the District of Columbia to review the final
rule, "Classification of Manufactured Products Under Buy
America," issued Dec. 21.
According to an FHWA memorandum
clarifying its position on the application of "Buy America"
requirements to manufactured products, "questions have arisen
regarding the scope of the application" since the American
Recovery and Reinvestment Act was passed in 2009.
"It has been suggested that
nuts, bolts, washers and other miscellaneous steel or iron
parts used in common off-the-shelf products ... must be Buy
America-compliant," the FHWA said, but "such a reading of Buy
America is inconsistent with (a) previous waiver decision and
is not cost-effective to administer."
The federal agency reiterated
that steel and iron productsincluding bolts, dowel bars
and rebarused in a wide variety of public works
structures are subject to Buy America coverage but that
"miscellaneous steel or iron components, subcomponents and
hardware necessary to encase, assemble and construct the above
components are not." Examples include clamps, fittings,
washers, nuts, screws, tie wire and spacers.
"The guidance interprets the Buy
America provision in a narrow, unwise and arbitrary way," Paul
Rosenthal, partner at Kelley Drye & Warren LLP, Washington,
which represents the plaintiffs, told AMM Feb. 25.
"The interpretation incorporated in its guidance to states is
not supported by statutes or any other precedent and has the
potential to create giant loopholes in the way the law is
Depending on how long the rule
remains in effect, "it could mean tens of millions of dollars"
in lost domestic sales for U.S. iron and steel producers,
He also complained that the
agency had not provided a public comment period. "If they had
proper notice out for industry and public to comment, they
would have known the rule was not sensible," he said.
The guidance is broader than
specifying what states can do with regard to requesting Buy
American waivers. The rule exempts fittings and fasteners "by
name" from the requirement, Rosenthal said. "Certainly these
are made in the United States and some of them are very large,
weighing hundreds of pounds."
The FWHA rulemakers perhaps
"misunderstand the nature of the fittings and fasteners, and
think its a small connector not incidental to the letting
of projects," he said.
The appeals court is not
expected to hold its first hearing on the petition for at least
a month, pending a response from the government.