04-18207. Nationwide Waiver of Buy America Requirements for Green Wire/Rod

AGENCY:

Federal Highway Administration (FHWA), DOT.

ACTION:

Notice; request for comments.

SUMMARY:

The FHWA is soliciting comments on a proposed nationwide waiver of the Buy America requirements for Green Wire/Rod. Specifically, based on comments received from the National Steel Bridge Alliance (NSBA) and Lincoln Electric Company, the FHWA has reason to believe that the supply from domestic sources of hot drawn mild steel randomly rolled into coils (commonly referred to as “green wire/rod”) that can be used in the manufacturing of filler metal wire/electrode (filler metal) is not adequate to permit full compliance with the Buy America requirements.

DATE:

Comments must be received on or before October 12, 2004.

ADDRESSES:

Mail or hand deliver comments to the U. S. Department of Transportation, Dockets Management Facility, Room PL-401, 400 Seventh Street, SW., Washington, DC 20590-0001, or submit electronically at http://dms.dot.gov/​submit,, or fax comments to [phone]. All comments should include the docket number that appears in the heading of this document. All comments received will be available for examination and copying at the above address from 9 a.m. to 5 p.m., e.t., Monday through Friday, except Federal holidays. Those desiring notification of receipt of comments must include a self-addressed, stamped postcard or you may print the acknowledgement page that appears after submitting comments electronically. Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comments (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70, Pages 19477-78) or you may visit http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT:

Ms. Jennifer Balis, [phone], Office of Program Administration, HIPA, or Mr. Michael Harkins, Office of the Chief Counsel, HCC-30, [phone]. Office hours are from 7:45 a.m. to 4:15 p.m., e.t., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access and Filing: You may submit or retrieve comments online through the Document Management System (DMS) at: http://dms.dot.gov/​submit. Acceptable formats include: MS Word (versions 95 to 97), MS Word for Mac (versions 6 to 8), Rich Text File (RTF), American Standard Code Information Interchange (ASCII)(TXT), Portable Document Format (PDF), and WordPerfect (versions 7 to 8). The DMS is available 24 hours each day, 365 days each year. Electronic submission and retrieval help and guidelines are available under the help section of the web site.

An electronic copy of this document may also be downloaded from the Government Printing Office's Electronic Bulletin Board Service at [phone] by using a computer, modem and suitable communications software. Internet users may also reach the Office of the Federal Register's home page at: http://www.archives.gov and the Government Printing Office's Web page at: http://www.access.gpo.gov/​nara.

Background

The “Buy America” requirements outlined in section 165 of the Surface Transportation Assistance Act of 1982 (STAA), Pub. L. 97-424; 96 Stat. 2097, 2136-2137, as amended, and the regulations implementing this section require that any iron or steel product that is permanently incorporated into a federally-aided highway construction project must be domestically manufactured. See 23 CFR 635.

Section 165(b)(2) of the STAA allows the Secretary of Transportation to grant a waiver of this requirement if such materials and products are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality. The Secretary has delegated this authority to the Federal Highway Administrator (49 CFR 1.48(c)(19)).

The manufacturing process for an iron or steel product includes any process that modifies a product's chemical content, physical size or shape. Under the current regulations, welding is considered a manufacturing process and therefore must be done domestically. In addition, the manufacture of the filler metals themselves are subject to Buy America, since they consist of ferrous materials that will, as a result of the welding process, become an integral part of the structural element to be permanently incorporated into the project. The filler metals can consist of a variety of raw materials, such as green wire/rod, strip, minerals, various alloys, and other chemicals. Although the FHWA has exempted raw materials from Buy America coverage (48 FR 53099), materials that undergo a process that alters their chemical content or physical size and shape are subject to Buy America's application.^[1] Since green wire/rod must undergo such a process before shipment to a welding manufacturer for further processing into filler metal, green wire/rod is subject to Buy America.

Recently, the NSBA and Lincoln Electric Company notified the FHWA that green wire/rod with the specific chemistry suitable for use in filler metal is no longer being produced domestically. Also, according to the NSBA, filler metal generally only comprises 0.3 percent to 0.5 percent of typical steel fabrication costs, and 0.04 percent to 0.06 percent of typical total project costs. Thus, considered alone, the cost of green wire/rod in filler metal would typically fall well below the minimal use percentage, which is $2500 or one-tenth of one percent of the total contract cost, whichever is greater (23 CFR 635.410(b)).

However, whenever the filler metal's cost is viewed in conjunction with the costs of other incidental items, such as nuts and bolts, a contractor might risk exceeding the minimal use percentage allowance. Therefore, the FHWA is considering a nationwide waiver of the Buy America requirements for green wire/rod used on Federal-aid highway construction projects. This notice solicits comments on the potential impact of such a waiver.

Description of Proposed Action

The basis for this proposed nationwide waiver is that green wire/rod with the specific chemistry suitable for use in filler metal is not produced in the United States in sufficient and reasonably available quantities which are of a satisfactory quality (see section 165(b)(2) of the STAA). Therefore, imposing Buy America requirements on these materials is not in the public interest. The FHWA is requesting comments on this proposed nationwide waiver and the availability of a domestic supply of the materials included in the proposed waiver.

Authority: Sec. 165 of Public Law 97-424, 96 Stat. 2097, 2136-2137, as amended by Public Law 98-229; 98 Stat. 55, and 105 Stat. 1914, 1933; 49 CFR 1.48(c)(19); 23 CFR 635.410.

Issued on: August 3, 2004.

Mary E. Peters,

Federal Highway Administrator.

Footnotes

1.  The FHWA discussed its decision to exempt raw materials from the Buy America requirements in the preamble of the final rule amending 23 CFR 635.410, published in the Federal Register on November 25, 1983, at 48 FR 53099. In addition, due to insufficient domestic supply, FHWA issued a nationwide waiver for pig iron and processed, palletized and reduced iron ores through the Federal Register at 60 FR 15478.