2932 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

1 2 CFR part 184 established in 88 FR 57750 (Aug. 

23, 2023) and M–24–02 (Oct. 25, 2023). 

§ 250.16 Format of compliance plan for 

transportation services and affiliate 

transactions. 

* * * * * 

(e) * * * 

(1) Any person who transports gas for 

others pursuant to subpart B or G of part 

284 of this chapter and who knowingly 

violates the requirements of §§ 358.4 

and 358.5 of this chapter, this section, 

or § 284.13 of this chapter will be 

subject, pursuant to sections 311(c), 501, 

and 504(b)(6) of the Natural Gas Policy 

Act of 1978, to a civil penalty, which 

the Commission may assess, of not more 

than $1,584,648 for any one violation. 

* * * * * 

PART 385—RULES OF PRACTICE AND 

PROCEDURE 

■ 3. The authority citation for part 385 

continues to read as follows: 

Authority: 5 U.S.C. 551–557; 15 U.S.C. 

717–717w, 3301–3432; 16 U.S.C. 791a–825v, 

2601–2645; 28 U.S.C. 2461; 31 U.S.C 3701, 

9701; 42 U.S.C. 7101–7352, 16441, 16451– 

16463; 49 U.S.C. 60502; 49 App. U.S.C. 1–85 

(1988); 28 U.S.C. 2461 note (1990); 28 U.S.C. 

2461 note (2015). 

■ 4. Revise § 385.1504(a) to read as 

follows: 

§ 385.1504 Maximum civil penalty (Rule 

1504). 

(a) Except as provided in paragraph 

(b) of this section, the Commission may 

assess a civil penalty of up to $28,618 

for each day that the violation 

continues. 

* * * * * 

■ 5. Revise § 385.1602 to read as 

follows: 

§ 385.1602 Civil penalties, as adjusted 

(Rule 1602). 

The current inflation-adjusted civil 

monetary penalties provided by law 

within the jurisdiction of the 

Commission are: 

(a) 15 U.S.C. 3414(b)(6)(A)(i), Natural 

Gas Policy Act of 1978: $1,584,648 per 

violation, per day. 

(b) 16 U.S.C. 823b(c), Federal Power 

Act: $28,618 per violation, per day. 

(c) 16 U.S.C. 825n(a), Federal Power 

Act: $3,738 per violation. 

(d) 16 U.S.C. 825o–1(b), Federal 

Power Act: $1,584,648 per violation, per 

day. 

(e) 15 U.S.C. 717t–1, Natural Gas Act: 

$1,584,648 per violation, per day. 

(f) 49 App. U.S.C. 6(10) (1988), 

Interstate Commerce Act: $1,659 per 

offense and $78 per day after the first 

day. 

(g) 49 App. U.S.C. 16(8) (1988), 

Interstate Commerce Act: $16,590 per 

violation, per day. 

(h) 49 App. U.S.C. 19a(k) (1988), 

Interstate Commerce Act: $1,659 per 

offense, per day. 

(i) 49 App. U.S.C. 20(7)(a) (1988), 

Interstate Commerce Act: $1,659 per 

offense, per day. 

[FR Doc. 2025–00516 Filed 1–13–25; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Highway Administration 

23 CFR Part 635 

[Docket No. FHWA–2023–0037] 

RIN 2125–AG13 

Buy America Requirements for 

Manufactured Products 

AGENCY: Federal Highway 

Administration (FHWA), U.S. 

Department of Transportation (DOT). 

ACTION: Final rule. 

SUMMARY: This final rule amends 

FHWA’s Buy America regulation to 

terminate FHWA’s general waiver for 

manufactured products and establish 

Buy America requirements for 

manufactured products with respect to 

Federal-aid highway projects. The 

standards for applying Buy America to 

manufactured products are generally 

consistent with the Office of 

Management and Budget’s (OMB) 

guidance implementing the Build 

America, Buy America Act (BABA) 

provisions of the Infrastructure 

Investment and Jobs Act (also known as 

the Bipartisan Infrastructure Law (BIL)). 

DATES: This final rule is effective March 

17, 2025. 

FOR FURTHER INFORMATION CONTACT: For 

questions about this final rule, please 

contact Mr. Brian Hogge, FHWA Office 

of Infrastructure, 202–366–1562, or via 

email at Brian.Hogge@dot.gov. For legal 

questions, please contact Mr. David 

Serody, FHWA Office of Chief Counsel, 

202–366–4241, or via email at 

David.Serody@dot.gov. Office hours for 

FHWA are from 8:00 a.m. to 4:30 p.m., 

eastern time (E.T.), Monday through 

Friday, except Federal holidays. 

SUPPLEMENTARY INFORMATION: 

Electronic Access and Filing 

This document, the notice of 

proposed rulemaking (NPRM), all 

comments received, and all supporting 

material may be viewed online at 

www.regulations.gov using the docket 

number listed above. Electronic retrieval 

assistance and guidelines are available 

on the website. It is available 24 hours 

each day, 365 days each year. An 

electronic copy of this document may 

also be downloaded from the Office of 

Federal Register’s website at 

www.federalregister.gov and the U.S. 

Government Publishing Office’s website 

at www.GovInfo.gov. 

I. Executive Summary 

FHWA is required, by statute, to 

ensure that all projects funded under 

title 23 of the United States Code 

(U.S.C.) (Federal-aid projects) use only 

steel, iron, and manufactured products 

that are produced in the United States. 

23 U.S.C. 313. FHWA refers to these 

requirements as ‘‘Buy America’’ 

requirements. In other words, FHWA’s 

Buy America requirement for 

manufactured products mandates that 

all such products used on Federal-aid 

projects must be ‘‘produced in the 

United States.’’ 23 U.S.C. 313. The Buy 

America requirement for manufactured 

products has existed in some form since 

the enactment of the Surface 

Transportation Assistance Act of 1978 

(1978 STAA), Public Law 95–599 

(1978), with those requirements being 

modified close to their current form by 

section 165 of the Surface 

Transportation Assistance Act of 1982 

(1982 STAA), Public Law 97–424 

(1983). 

In 1983, following the passage of the 

1982 STAA, FHWA determined that it 

would be in the public interest to waive 

the Buy America requirements for 

manufactured products, with that 

waiver known as the Manufactured 

Products General Waiver. See 48 FR 

1946 (Jan. 17, 1983); 48 FR 53099 (Nov. 

25, 1983). Under the Manufactured 

Products General Waiver, manufactured 

products that were permanently 

incorporated into Federal-aid projects 

did not need to be produced 

domestically, apart from predominantly 

iron or steel components of 

manufactured products. 

Through this rule, FHWA is 

establishing specific dates on which the 

Manufactured Products General Waiver 

will be terminated and is amending its 

Buy America regulation at 23 CFR 

635.410 to establish standards regarding 

Buy America requirements that will 

apply to manufactured products on 

Federal-aid projects. These standards 

are substantially similar to those 

established by OMB that apply to 

manufactured products subject to 

BABA.1 This means that to be 

considered ‘‘produced in the United 

States’’ and therefore Buy Americacompliant, manufactured products must 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 2933 

2As described in more detail in the discussion of 

23 CFR 635.410(c)(1)(iv) below, while precast 

concrete may be considered a manufactured 

product, wet concrete delivered to a work site is not 

a manufactured product, as wet concrete is a 

mixture of excluded materials delivered to a work 

site without final form. 

3The Buy America requirement for cement was 

eliminated by Congress in 1984. See Public Law 98– 

229. 

4Congress also added a Buy America requirement 

for iron in 1991. See Public Law 102–240. 

5See section 1903 of Public Law 109–59. 

6FHWA’s regulations implementing Buy America 

have also remained consistent since 1983, apart 

from reacting to statutory changes by removing a 

Continued 

be manufactured in the United States 

(‘‘final assembly requirement’’) and 

have greater than 55 percent of the 

manufactured product’s components, by 

cost, be mined, produced, or 

manufactured in the United States (‘‘55 

percent requirement’’). 

Under this final rule, a manufactured 

product is defined as an article, 

material, or supply that has been 

processed into a specific form and 

shape, or combined with other articles, 

materials, or supplies to create a 

product with different properties than 

the individual articles, materials, or 

supplies. If, however, an article, 

material, or supply meets this definition 

but could also be classified as an iron 

or steel product, excluded material, or 

other product category as specified by 

law or in 2 CFR part 184, that article, 

material, or supply is not a 

manufactured product. Further, 

mixtures of excluded materials 

delivered to a work site without final 

form for incorporation into a project are 

also not manufactured products. For the 

purpose of this rule, an article, material, 

or supply is generally only subject to 

one set of requirements. For example, a 

manufactured product is only subject to 

FHWA’s Buy America requirements for 

manufactured products in § 635.410(c), 

meaning that the product must meet the 

final assembly and 55 percent 

requirements. An iron or steel product, 

on the other hand, must meet FHWA’s 

existing Buy America requirements for 

iron and steel in § 635.410(b), generally 

requiring that all manufacturing 

processes, including application of a 

coating, for these materials must occur 

in the United States. See 23 CFR 

635.410(b)(1)(ii). 

Pursuant to § 635.410(c)(2)(i), 

however, precast concrete products that 

are classified as manufactured products 

must have their predominantly iron or 

steel components meet FHWA’s Buy 

America requirements for iron and 

steel.2 Similarly, pursuant to 

§ 635.410(c)(2)(ii), the cabinets or other 

enclosures of intelligent transportation 

systems (ITS) and other electronic 

hardware systems that are installed in 

the highway right of way or other real 

property and classified as manufactured 

products must comply with FHWA’s 

Buy America requirements for iron and 

steel if the cabinet or enclosure is 

predominantly iron or steel. These 

specified manufactured products must 

also comply with FHWA’s Buy America 

requirements for manufactured 

products. However, the predominantly 

iron or steel components for precast 

concrete and the predominantly iron or 

steel cabinet or enclosure for ITS and 

other electronic hardware systems will 

be considered for the purpose of the 55 

percent content requirement. 

The requirements established in this 

rule are substantially similar to those 

proposed in the NPRM. 89 FR 17789 

(March 12, 2024). FHWA notes, 

however, that the final assembly 

requirement will become effective for 

Federal-aid projects obligated on or after 

October 1, 2025. The Manufactured 

Products General Waiver will remain in 

place until this date. In addition, unlike 

the NPRM, the 55 percent requirement 

will subsequently become effective for 

Federal-aid projects obligated on or after 

October 1, 2026. This means that, to be 

Buy America-compliant, for Federal-aid 

projects obligated on or after October 1, 

2026, all manufactured products 

permanently incorporated into the 

project must both be manufactured in 

the United States and have the cost of 

the components of the manufactured 

product that are mined, produced, or 

manufactured in the United States be 

greater than 55 percent of the total cost 

of all components of the manufactured 

product. 

The regulatory impact analysis (RIA) 

prepared for this final rule pursuant to 

Executive Order (E.O.) 12866, as 

amended by E.O. 14094, is available in 

the rulemaking docket. The RIA 

estimates the costs and benefits 

associated with establishing Buy 

America requirements for manufactured 

products. The RIA discusses anticipated 

benefits of the rule qualitatively, as they 

could not be quantified. Expected 

benefits include protecting and 

expanding domestic manufacturing, 

increasing supply chain resiliency, and 

increasing consistency in applying 

domestic content procurement 

preferences for manufactured products 

between FHWA and other Federal 

agencies that are subject to the 

requirements of BABA. Expected costs 

of this rule relate to increased material 

costs for manufactured products used in 

Federal-aid highway construction 

projects, project delay, and the 

administrative costs to FHWA and 

recipients of FHWA financial assistance. 

FHWA is able to quantify only increased 

material costs and the administrative 

costs to FHWA and recipients of FHWA 

financial assistance. FHWA estimates 

the increased material costs for 

manufactured products permanently 

incorporated into Federal-aid projects to 

range from $41 million to $980 million 

per year. FHWA further estimates an 

additional $167,000 per year in 

increased FHWA administrative costs 

and an additional $22 million per year 

in increased administrative costs to 

recipients of FHWA financial assistance. 

FHWA estimates the 10-year cost of this 

rule to range from $545 million to 

$8,466 million at a 2 percent discount, 

with annualized costs of $61 million to 

$942 million. 

II. Background and Regulatory History 

A. History of the Manufactured Products 

General Waiver 

FHWA’s Buy America requirements 

were first established in 1978 by section 

401 of the 1978 STAA, which imposed 

a Buy America requirement to certain 

unmanufactured and manufactured 

articles, materials, and supplies. 

Following enactment of the 1978 STAA, 

FHWA issued an emergency rule to 

implement the Buy America 

requirement of section 401; that rule 

temporarily waived the provisions of 

section 401 to all products and materials 

other than structural steel. See 43 FR 

53717 (Nov. 17, 1978). 

In 1980, following the issuance of that 

emergency rule, FHWA issued an NPRM 

to establish regulations implementing 

section 401 of the 1978 STAA. 45 FR 

77455 (Nov. 24, 1980). In that NPRM, 

FHWA proposed to extend the coverage 

of Buy America requirements to all steel 

construction materials used in highway 

construction projects, while excluding 

all other materials and products from 

being subject to Buy America. 45 FR 

77455. Prior to the 1980 rulemaking 

being finalized, Congress enacted the 

1982 STAA, which instituted new Buy 

America requirements that are similar to 

those that exist today. Section 165(a) 

established Buy America requirements 

for all steel, cement,3 and manufactured 

products used on Federal-aid projects, 

requiring that they be produced in the 

United States.4 In 2005, Congress 

codified the current Buy America 

requirements for steel, iron, and 

manufactured products at 23 U.S.C. 313, 

and those Buy America requirements 

remain in effect today.5

In late 1983, FHWA issued its final 

rule implementing section 165 of the 

1982 STAA, creating its current Buy 

America regulations at 23 CFR 635.410.6


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2934 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

reference to a Buy America requirement for cement 

(49 FR 18820 (May 3, 1984)) when Congress 

removed that requirement and adding a reference to 

a Buy America requirement for iron (58 FR 38973 

(July 21, 1993)) after Congress added that 

requirement. 

7Throughout this document, references to part 

184 refer to both the text in 2 CFR part 184 and the 

preamble published at 88 FR 57750 in the Federal 

Register. 

48 FR 53099 (Nov. 25, 1983). In this 

rule, FHWA found that a waiver of Buy 

America requirements for manufactured 

products was in the public interest, 

thereby creating the Manufactured 

Products General Waiver. 48 FR 53102. 

FHWA stated that product 

manufacturers did not generally express 

approval of applying Buy America 

requirements to manufactured products. 

Id. at 53101. For those that did, FHWA 

stated that they were primarily opposed 

to unfair foreign trade practices. Id. 

Rather than apply Buy America 

requirements for manufactured products 

to remedy this concern, FHWA stated 

that unfair practices could be instead 

addressed through import laws. Id. at 

53102. Further, FHWA determined that 

it was not the intent of Congress in 

enacting the 1982 STAA for FHWA to 

apply a Buy America requirement to 

manufactured products; FHWA noted 

that it had consistently waived 

manufactured products from coverage 

under Buy America laws and Congress 

did not specifically direct a change in 

that policy by enacting the 1982 STAA. 

Id. at 53101–02. FHWA thus interpreted 

that to mean that not all manufactured 

products had to be covered by the Buy 

America requirements of section 165. Id. 

Finally, FHWA stated that materials and 

products other than steel, cement, 

asphalt, and natural materials 

comprised a small percent of the 

highway construction program; that 

other manufactured products were 

minimally used and there would be 

little economic effect to applying Buy 

America requirements to them; and that 

it would be difficult and 

administratively burdensome to identify 

the various materials comprising 

manufactured products and trace their 

origin. Id. at 53102. 

B. Build America, Buy America Act 

On November 15, 2021, the President 

signed the BIL (Pub. L. 117–58) into 

law. The BIL includes BABA, which 

expands the coverage and application of 

domestic content procurement 

preferences in Federal financial 

assistance programs for infrastructure. 

BIL, div. G sections 70901–70927. 

Among other requirements, BABA 

mandates that all iron, steel, 

manufactured products, and 

construction materials used in projects 

supported by funds made available for 

a Federal financial assistance program 

for infrastructure be produced in the 

United States. BABA section 70914. The 

BABA, however, provides that this 

mandate applies to iron, steel, 

manufactured products, and 

construction materials only to the extent 

that a domestic content procurement 

preference that meets the requirements 

of section 70914 does not already apply. 

BABA section 70917(a)–(b). As FHWA 

has an existing statutory Buy America 

requirement for steel, iron, and 

manufactured products at 23 U.S.C. 313, 

BABA’s savings provision results in 

FHWA applying its existing Buy 

America requirements under 23 U.S.C. 

313 to iron, steel, and manufactured 

products, not the requirements of 

BABA. FHWA does, however, apply 

BABA’s domestic content procurement 

preference to construction materials. 

Under BABA, all manufactured 

products must be ‘‘produced in the 

United States.’’ BABA section 70914. 

For manufactured products, BABA 

defines ‘‘produced in the United States’’ 

to mean that (1) the manufactured 

product was manufactured in the 

United States and (2) the cost of the 

components of the manufactured 

product that are mined, produced, or 

manufactured in the United States is 

greater than 55 percent of all 

components of the manufactured 

product, unless another standard for 

determining the minimum amount of 

domestic content of the manufactured 

product has been established under 

applicable law or regulation. BABA 

section 70912(6)(B). 

The BABA also expresses a general 

policy preference against general 

applicability waivers like the 

Manufactured Products General Waiver. 

For example, section 70913(c) of BABA 

requires Federal Agencies to identify 

‘‘deficient programs,’’ which includes 

programs subject to general applicability 

waivers. Section 70914(d) of BABA also 

requires Federal Agencies to review 

existing general applicability waivers by 

publishing in the Federal Register a 

document that: (i) describes the 

justification for the general applicability 

waiver; and (ii) requests public 

comments on the need for the waiver. 

Following consideration of comments 

received, BABA then requires Federal 

Agencies to publish in the Federal 

Register a determination on whether to 

continue or discontinue the general 

applicability waiver. BABA section 

70914(d)(2)(B). On March 17, 2023, 

FHWA initiated the review required by 

section 70914(d) of BABA for the 

Manufactured Products General Waiver, 

publishing in the Federal Register at 88 

FR 16517 a notice and request for 

comments on the waiver (‘‘2023 RFC’’). 

C. OMB’s Guidance on BABA 

On August 23, 2023, at 88 FR 57750, 

OMB revised its guidance in title 2 of 

the CFR to add a new part 184 that 

provides additional guidance on 

implementing BABA.7 Part 184 includes 

definitions for key terms, including iron 

or steel products, predominantly of iron 

or steel or a combination of both, 

manufactured products, component, 

and manufacturer. 2 CFR 184.3. In line 

with section 70912(6)(B) of BABA, 2 

CFR 184.3 states that a manufactured 

product is ‘‘produced in the United 

States’’ if the product was manufactured 

in the United States and the cost of 

components of the manufactured 

product that are mined, produced, or 

manufactured in the United States is 

greater than 55 percent of the total cost 

of all components of the manufactured 

product, unless another standard that 

meets or exceeds this standard has been 

established under applicable law or 

regulation for determining the minimum 

amount of domestic content of the 

manufactured product. Part 184 also 

provides guidance for determining the 

cost of components of manufactured 

products. Pursuant to 2 CFR 184.5, in 

determining whether the cost of 

components for manufactured products 

is greater than 55 percent of the total 

cost of all components, there are two 

standards depending on the origin of the 

component. For components purchased 

by the manufacturer, the cost of the 

component is the acquisition cost, 

including transportation costs to the 

place of incorporation into the 

manufactured product (whether or not 

such costs are paid to a domestic firm) 

and any applicable duty (whether or not 

a duty-free entry certificate is issued). 2 

CFR 184.5(a). For components 

manufactured by the manufacturer, the 

cost of the component is all costs 

associated with the manufacture of the 

component, including transportation 

costs described in 2 CFR 184.5(a), plus 

allocable overhead costs, but excluding 

profit and any costs associated with the 

manufacture of the manufactured 

product. 2 CFR 184.5(b). 

Part 184 also states that an article, 

material, or supply should be classified 

as only either an iron or steel product, 

manufactured product, construction 

material, or section 70917(c) material, 

that the classification must be made 

based on the status of the material at the 

time it is brought to the work site for 

incorporation into an infrastructure 

project, and that the material must meet 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 2935 

8https://www.whitehouse.gov/wp-content/ 

uploads/2023/10/M-24-02-Buy-AmericaImplementation-Guidance-Update.pdf. 

9Throughout this document, the NPRM refers to 

both FHWA’s proposal to discontinue the 

Manufactured Products General Waiver and to 

propose standards for applying Buy America to 

manufactured products. 

10Per the De Minimis Costs and Small Grants 

Waiver, ‘‘total applicable project costs’’ are defined 

as the cost of materials used in the project that are 

subject to a domestic preference requirement, 

including materials that are within the scope of an 

existing waiver. 

the Buy America standards for only the 

single category in which it is classified. 

2 CFR 184.4(e) and (f). Part 184 defines 

a section 70917(c) material as cement 

and cementitious materials; aggregates 

such as stone, sand, or gravel; or 

aggregate binding agents or additives. 2 

CFR 184.3. These materials are named 

section 70917(c) materials in 2 CFR part 

184 because they are referred to in 

section 70917(c) of BABA. 

As stated earlier, part 184 does not, by 

its own terms, apply to FHWA’s Buy 

America requirements for steel, iron, 

and manufactured products; it applies 

only to FHWA’s domestic content 

procurement preference for construction 

materials. 2 CFR 184.2(a). Part 184 does, 

however, apply to all Federal financial 

assistance programs for infrastructure 

that are administered by Federal 

agencies that did not have a domestic 

content procurement preference for 

steel, iron, and manufactured products 

meeting or exceeding BABA’s 

requirements. 

On October 25, 2023, OMB issued 

memorandum M–24–02, 

‘‘Implementation Guidance on 

Application of Buy America Preference 

in Federal Financial Assistance 

Programs for Infrastructure’’ (‘‘OMB 

Implementation Guidance’’).8 Section VI 

of the Implementation Guidance warns 

against overly broad waivers, stating 

that they ‘‘undermine market signals 

designed to boost domestic supply 

chains, particularly for key articles, 

materials, and supplies in critical 

supply chains,’’ and that ‘‘[w]aivers that 

are overly broad will tend to undermine 

domestic preference policies.’’ Section 

VI also states that public interest 

waivers of domestic content 

procurement preferences ‘‘must be used 

judiciously and construed to ensure the 

maximum utilization of goods, 

products, and materials produced in the 

United States.’’ 

D. Notice of Proposed Rulemaking 

Based on the comments received to 

the 2023 RFC, and after considering the 

President’s policy, as embodied E.O. 

14005, ‘‘Ensuring the Future is Made in 

All of America by All of America’s 

Workers,’’ to maximize the use of goods, 

products, and materials produced in the 

United States; the intent of Congress, as 

expressed in BABA’s preference against 

general applicability waivers; the 

purpose and goals of domestic content 

procurement preferences and waivers; 

and FHWA’s original rationale for 

issuing the Manufactured Products 

General Waiver, FHWA proposed to 

discontinue the Manufactured Products 

General Waiver and proposed regulatory 

standards for applying Buy America to 

manufactured products should the 

waiver be discontinued. 89 FR 17789 

(Mar. 12, 2024).9

In proposing to discontinue the 

Manufactured Products General Waiver, 

FHWA noted that the intent of Congress, 

as expressed in sections 70933 and 

70935 of BABA, and the President’s 

policy for the Federal Government, as 

expressed in section 1 of E.O. 14005, is 

that Federal agencies should use terms 

and conditions in Federal financial 

assistance awards to maximize the use 

of goods, products, and materials 

produced in the United States, which 

would not be consistent with continuing 

the Manufactured Products General 

Waiver. Id. at 17795. FHWA also noted 

that continuing the waiver would 

undermine the purposes that domestic 

content procurement preferences, such 

as FHWA’s Buy America requirement, 

are intended to serve. Id. Further, 

FHWA considered the Implementation 

Guidance’s policy on waivers, that they 

should not be overly broad in order to 

ensure that they appropriately convey 

market signals on where the domestic 

supply chain can be bolstered and that 

they should be time-limited to ensure 

that, once available, Buy Americacompliant materials can receive 

appropriate consideration for inclusion 

in federally funded projects. Id. Again, 

FHWA noted that the Manufactured 

Products General Waiver was 

inconsistent with these principles. Id. 

FHWA further observed that the 

Manufactured Products General Waiver 

was overly broad, disincentivizing 

manufacturers from domestically 

producing manufactured products by 

broadly covering all products, even 

those that are or could be produced 

domestically. Id. at 17795–96. Finally, 

FHWA noted that the waiver fails to 

provide domestic manufacturers with 

knowledge of the current gaps in the 

domestic manufacturing sector by 

covering all manufactured products, 

failing to provide market signals that 

distinguish between manufactured 

products that are domestically produced 

and those that are not. Id. at 17796. 

FHWA observed that this lack of clarity 

hinders manufacturers who wish to 

enter the market from understanding the 

competitive landscape, again 

disincentivizing them from attempting 

to provide domestic manufactured 

products on Federal-aid projects. Id. 

FHWA stated its belief that, in line with 

OMB’s Implementation Guidance, 

waivers should aim to proactively 

encourage domestic manufacturing by 

providing clear market signals about 

which markets domestic manufacturers 

can enter with the reasonable 

expectation that their products could 

adequately compete for use on Federalaid projects. Id. 

Accordingly, in the NPRM, FHWA 

stated its belief that the Manufactured 

Products General Waiver is overly 

broad, no longer in line with the 

purpose of domestic content 

procurement preferences and waivers, 

and therefore no longer in the public 

interest. Id. FHWA thus proposed to 

discontinue the Manufactured Products 

General Waiver. Id. 

In the NPRM, FHWA acknowledged 

that discontinuing the Manufactured 

Products General Waiver and applying 

Buy America requirements to 

manufactured products may result in 

cost increases, project delays, and 

product unavailability if not done 

carefully. Id. To mitigate this concern, 

FHWA stated that it would consider 

proposing targeted waivers. Id. 

Accordingly, FHWA published a 

Request for Information (RFI), seeking 

specific and detailed information on 

what products are not and cannot be 

produced in the United States in the 

near future. Id. at 17796–97. FHWA 

stated in the NPRM that, based on the 

information received from this RFI, it 

would propose time-limited and 

targeted waivers covering domestically 

unavailable products if it would be 

appropriate to do so. Id. at 17797. 

FHWA also stated that were the 

Manufactured Products General Waiver 

to be rescinded, manufactured products 

would fall under the coverage of DOT’s 

‘‘Waiver of Buy America Requirements 

for De Minimis Costs and Small Grants’’ 

(‘‘De Minimis and Small Grants 

Waiver’’). 88 FR 55817 (Aug. 16, 2023). 

The De Minimis Costs and Small Grants 

Waiver would then waive the 

application of FHWA’s Buy America 

requirements for manufactured products 

under a single financial assistance 

award for which (1) the total value of 

non-compliant products is no more than 

the lesser of $1 million or 5 percent of 

total applicable costs 10 for the project 

(‘‘departmental de minimis waiver’’); or 

(2) the total amount of Federal financial 

assistance applied to the project, 


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11Per section 70917(a) and (b) of BABA, BABA’s 

domestic content procurement preferences apply 

unless a Federal Agency has a domestic content 

procurement preference that meets or exceeds the 

requirements of section 70914 of BABA. This means 

that were FHWA to enact less stringent Buy 

America requirements to manufactured products 

than in BABA, both those requirements and BABA’s 

requirements would become effective, essentially 

raising the requirements to BABA’s level of 

stringency. 

through awards or subawards, is below 

$500,000 (‘‘small grants waiver’’). 88 FR 

55820. 

At the same time as FHWA proposed 

discontinuing the Manufactured 

Products General Waiver, the NPRM 

proposed adopting standards that would 

define, per the language in 23 U.S.C. 

313, when a manufactured product is 

‘‘produced in the United States.’’ Id. In 

doing so, FHWA recognized that while 

it had the discretion to define Buy 

America requirements for manufactured 

products, those standards would have to 

meet or exceed those under BABA.11 Id. 

To minimize burden and ensure 

consistency with other Federal agencies 

implementing BABA, FHWA proposed 

to adopt standards closely similar to 

those under BABA. Id. Thus, FHWA 

proposed to adopt the definition of 

when a manufactured product is 

‘‘produced in the United States’’ that is 

found in section 70912(6)(B) of BABA. 

Id. FHWA proposed to replace current 

§ 635.410(c), which discusses the 

process for requesting a Buy America 

waiver and the procedures FHWA will 

take to respond to that request, with a 

new paragraph that would discuss these 

Buy America requirements for 

manufactured products. Id. at 17799. 

Further, FHWA proposed to replace 

mentions of ‘‘steel or iron materials’’ 

and ‘‘steel and iron materials’’ in 

§ 635.410(b) with the single phrase of 

‘‘iron or steel products,’’ which FHWA 

proposed to define at § 635.410(c)(1)(ii). 

FHWA did not otherwise propose to 

modify the application of the current 

Buy America requirements to steel and 

iron in § 635.410(b). 

FHWA received 136 comments to the 

NPRM and 41 comments to the RFI from 

State departments of transportation 

(State DOTs), local governments, 

manufacturers, associations, and 

individual citizens. FHWA first 

discusses comments on the proposal to 

rescind the Manufactured Products 

General Waiver. 

III. Rescission of the Manufactured 

Products General Waiver 

Many commenters to the NPRM and 

RFI expressed their opinion on whether 

FHWA should finalize its proposal to 

discontinue the Manufactured Products 

General Waiver. While many of these 

comments are similar to those submitted 

to the 2023 RFC and discussed in the 

NPRM, FHWA summarizes them below. 

A. Comments in Favor of Rescinding the 

Manufactured Products General Waiver 

Generally, commenters in favor of 

recission argued that doing so would 

have positive economic impacts. These 

commenters argued that rescinding the 

waiver would stimulate economic 

growth, create and protect American 

jobs, and restore America’s 

manufacturing base. Commenters in 

favor of rescinding the waiver also 

stated that doing so would fortify 

America’s domestic supply chains, 

increasing national security by 

minimizing dependence on foreign 

sources and preventing supply chain 

shocks due to foreign pressures. Such 

commenters argued that fortifying 

domestic supply chains may even curb 

the rising cost of materials. 

Those in favor of rescission further 

argued that doing so is important to 

domestic manufacturers and workers, 

ensuring that taxpayer funds go to U.S. 

businesses. FHWA received comments 

from manufacturers stating that they 

produce manufactured products 

domestically but have to compete with 

cheaper foreign products on Federal-aid 

projects. Commenters stated that, 

contrary to the current situation, 

rescinding the waiver would provide 

domestic manufacturers and workers 

the first opportunity to supply products 

on Federal-aid projects. Commenters, 

particularly manufacturers, also argued 

that rescinding the waiver would both 

incentivize domestic manufacturers to 

onshore production and incentivize 

current domestic manufacturers and 

manufacturers who might onshore in 

the near future to increase their 

domestic manufacturing capacity. 

Commenters also indicated that 

manufacturers may be waiting for 

regulatory certainty before increasing 

domestic capacity. 

Other commenters espoused their 

belief in the benefits of domestically 

produced products themselves, stating 

they are of higher quality and 

manufactured with improved labor and 

environmental standards versus foreign 

products. Commenters further argued 

that domestic manufacturing is likely to 

spur innovation and the development of 

new technologies. 

Commenters in favor of rescission 

further pressed that the Manufactured 

Products General Waiver is inconsistent 

with the Administration’s priorities, the 

clear text of 23 U.S.C. 313, and the 

congressional intent of BABA. With 

respect to BABA, such commenters 

argued that the findings in section 

70911, the requirement in section 70914 

to apply requirements to manufactured 

products, the definition of ‘‘deficient 

programs’’ in sections 70912 and 

70913(c), and the requirement for 

Federal agencies to review existing 

waivers of general applicability in 

section 70914(d) all indicated 

congressional disapproval of existing 

waivers of general applicability like the 

Manufactured Products General Waiver. 

Finally, commenters in favor of 

rescinding the Manufactured Products 

General Waiver argued that it is 

inconsistent with the purpose of 

waivers of domestic content 

procurement preferences. Such 

commenters stated that waivers of 

domestic content procurement 

preferences should be transparent, 

targeted, time-limited, and used only 

when necessary; these commenters 

argued that the Manufactured Products 

General Waiver is inapposite to these 

principles as it covers all manufactured 

products for an indeterminate period of 

time. Commenters continued that the 

overbroad nature of the Manufactured 

Products General Waiver makes the 

current supply of domestic products 

unclear, disincentivizing manufacturers 

from attempting to produce 

manufactured products domestically. 

B. Comments in Favor of Continuing the 

Manufactured Products General Waiver 

Some commenters in favor of 

continuing the Manufactured Products 

General Waiver expressed opposition to 

domestic content procurement 

preferences entirely, stating that they 

run counter to free trade agreements and 

negatively affect the economies of 

countries that use them. 

For those specifically suggesting that 

FHWA maintain the Manufactured 

Products General Waiver, many argued 

that there will be an insufficient number 

of Buy America-compliant 

manufactured products, either because 

of a lack of current supply or because 

the current supply would be insufficient 

given the increased demand for 

compliant products that would result if 

the waiver were rescinded. Some 

commenters suggested that some 

products and components may never be 

able to be produced domestically, due, 

for example, to a lack of domestic raw 

materials or prohibitive environmental 

regulations. 

In comments to the NPRM and RFI, 

commenters expressed particular 

concern over the domestic availability 

of certain products, as listed below. 

• luminaires (including light-emitting 

diode (LED) luminaires) 

• LED lighting systems 

• road weather information systems 


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• bridge joints and bearing pads 

• video imaging systems 

• video imaging vehicle detection 

system 

• closed-circuit television cameras 

• permanent crash cushions 

• generators 

• pumps and other products used in 

pump stations 

• spread spectrum radios 

• electronic screening equipment 

• electronic message signs 

• rolled erosion control products 

• traffic signals and signal systems 

• traffic buttons 

• traffic signal controllers 

• traffic cabinets 

• lane use control signals 

• pedestrian crossing beacons 

• traffic sensors 

• other products in traffic management 

systems 

• environmental sensors 

• avalanche control systems 

• aeration equipment 

• battery backup systems 

• retroreflective sheeting 

• ultraviolet disinfection equipment 

• crossarms and crossarm braces 

• railroad ties 

• railroad spikes and other supports 

• precast concrete 

• rolling stock 

• various other ITS technologies and 

electrical equipment 

• various other information 

communication technologies and 

network communication devices 

• various pieces of utility equipment 

FHWA notes, however, that some 

products commenters described as being 

unavailable domestically were 

described by others as being available. 

FHWA also notes that it has not made 

any determinations on whether these 

items would be considered 

manufactured products under the 

standards promulgated in this final rule, 

and that some could be classified as iron 

or steel products or construction 

materials, or as components of 

manufactured products, rather than 

manufactured products themselves. 

FHWA discusses how to determine the 

classification of a single item below in 

the analysis of § 635.410(c)(2). 

Commenters also argued that 

rescinding the waiver would increase 

the cost of manufactured products and 

the cost of the projects using them. 

Commenters generally stated that this 

cost increase would be caused by 

reducing the supply of manufactured 

products that could be used on Federalaid projects by removing the ability to 

use foreign products. Commenters also 

indicated that costs may increase if 

imposing Buy America requirements for 

manufactured products limited the 

number of compliant manufacturers to 

the point where monopolies for certain 

products formed. Commenters also 

argued that foreign products are, on 

average, less costly than domestically 

produced products, noting that, 

otherwise, domestic products would 

already be used in Federal-aid projects 

and Buy America requirements would 

be unnecessary. Further, commenters 

argued that the imposition of Buy 

America requirements on manufactured 

products may incentivize manufacturers 

to use more expensive domestic 

components to ensure that their 

products meet the 55 percent 

requirement. Certain commenters also 

stated that project costs would increase 

from higher bid prices due to 

contractors pricing the risk of not 

procuring compliant manufactured 

products into their bids. Other 

commenters raised concern that project 

costs may increase because there would 

be fewer bidders, as some contractors 

may not place bids if they are unsure 

about procuring compliant products. 

Commenters also raised concerns 

about the increased costs that imposing 

Buy America requirements on 

manufactured products may cause to 

contractors and manufacturers. 

Commenters stated that costs to 

contractors could increase from a lack of 

compliant products, producing delays 

that could result in increased incidental 

costs and the costs of repeated 

demobilization and mobilization. 

Similarly, commenters also raised 

concern over the imposition of penalties 

related to contract administration if 

contractors were unable to acquire 

compliant products. Other commenters 

stated that the imposition of 

requirements would require 

manufacturers to redevelop, redesign, 

and resource their products, all of 

which trigger increased costs. 

Commenters also questioned whether 

the new requirements would increase 

the amount of domestically 

manufactured products at all. Such 

commenters contended that 

manufactured products make up a 

minor portion of the total material cost 

of Federal-aid projects, which they 

alleged indicated that the market for any 

Buy America-compliant manufactured 

products may be too small to incentivize 

onshoring. In addition, these 

commenters argued that products that 

would be Buy America-compliant may 

not be competitive in the global market, 

further reducing the incentive for 

manufacturers who compete 

internationally to onshore production. 

In short, these commenters stated that 

manufactured products are not used in 

Federal-aid projects in large enough 

quantities to justify the additional costs 

that they alleged would be triggered by 

imposing Buy America requirements on 

manufactured products. 

In addition, commenters in favor of 

retaining the Manufactured Products 

General Waiver argued that removing 

the waiver and imposing Buy America 

requirements on manufactured products 

may cause project delay or cancellation. 

Such commenters argued that reducing 

the supply of products that could be 

used on Federal-aid projects is likely to 

create material shortages. If a Buy 

America-compliant product is 

unavailable, commenters warned that 

contracting agencies would need to 

either acquire a waiver to procure a noncompliant product, which would 

require time and cost to try to procure; 

wait for the product to be produced 

domestically; or redesign the project. 

Commenters also noted the delay in 

developing projects that would result 

from the time needed for contracting 

agencies to modify contract 

specifications and bid documents, for 

contractors to prepare bids based on the 

new requirements, and for 

manufacturers to produce sufficient 

amounts of compliant products. 

Commenters also raised concerns that 

imposing Buy America requirements on 

manufactured products may hinder the 

ability of contracting agencies and 

contractors to change project design or 

scope quickly, given the inability to turn 

to foreign products. Similarly, 

manufacturers presented concerns that 

imposing requirements would prevent 

them from being able to quickly switch 

to foreign suppliers if required by 

circumstances. 

Overall, many commenters opposing 

removing the Manufactured Products 

General Waiver and imposing Buy 

America requirements on manufactured 

products argued that doing so would 

result in fewer projects or projects of 

lesser quality. These commenters 

alleged that by making projects more 

costly and causing increased project 

delays and potential cancellations, 

imposing Buy America requirements on 

manufactured products would result in 

contracting agencies being able to 

complete fewer projects. This would 

then eliminate the benefits such projects 

would otherwise bring, such as safety, 

quality of life, sustainability, resiliency, 

and economic development 

improvements. Commenters also argued 

that imposing requirements may result 

in modifications to projects that would 

reduce their benefits, stating that 

contracting agencies and contractors 

may attempt to avoid using 

manufactured products on projects to 


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avoid triggering the new requirements. 

In addition, commenters complained 

that imposing Buy America 

requirements on manufactured products 

would exacerbate the current obstacles 

facing the construction industry, such as 

the unavailability of certain products, 

supply chain disruptions, inflation and 

other price increases, and labor 

shortages. 

Another common criticism raised by 

commenters involved the administrative 

burden of ensuring compliance with 

new requirements. Commenters 

protested the time and difficulty they 

thought would be needed to trace the 

origin and cost of components, 

particularly on smaller companies and 

disadvantaged business enterprises. 

Commenters also raised concerns that it 

may be laborious to identify the cost 

and origin of components as 

manufacturers may not know this 

information, have an incentive to 

provide this information, or want to 

provide detailed and potentially 

proprietary information on their 

products. These commenters further 

argued that this process of identifying 

components would be unduly 

burdensome when purchasing products 

from third parties. Commenters also 

raised the concern that, because the 

proposed Buy America standards 

require that more than 55 percent of 

components, by cost, must be produced 

in the United States, the fluctuation in 

the cost of components may result in 

sudden changes to whether a product is 

compliant. Other commenters raised 

concerns over the administrative burden 

to test and reevaluate new, compliant 

products. In general, commenters 

argued that these concerns are 

particularly heightened because parties 

are still adjusting to the burden caused 

by the addition of BABA’s construction 

material requirements. 

A different set of concerns was raised 

by commenters who procure 

manufactured products for both Federalaid projects and other projects. In 

general, many of these commenters 

stated that their process was to procure 

manufactured products in large 

quantities to be used for later projects, 

some of which may be federally funded 

but some of which might not be. Such 

commenters stated that imposing Buy 

America requirements on manufactured 

products would likely require them to 

procure products on a project-specific 

basis, which would increase costs and 

cycle times; purchase only Buy 

America-compliant products, which 

may result in the compatibility concerns 

described below; or maintain 

inventories of both Buy Americacompliant and non-compliant products. 

These commenters stated that this last 

option would result in more variability, 

necessitating increased training and 

knowledge to complete common 

maintenance, repair, and replacement 

functions and to manage infrastructure. 

Commenters also expressed concern 

that procuring compliant and noncompliant products would require more 

physical space to house and segregate 

the products. 

Those in favor of retaining the 

Manufactured Products General Waiver 

also expressed concern that domestic 

components and products will not be 

compatible with currently used 

components, products, and systems. 

These commenters warned that a lack of 

compatibility between existing noncompliant components, products, and 

systems and compliant components and 

products may necessitate the complete 

replacement of products or systems 

when a component or product has to be 

replaced. Commenters also argued that 

imposing requirements on 

manufactured products may prevent 

entities from using specialized products 

that are necessary to meet regulatory 

requirements or required specifications 

if such products are not domestically 

produced. 

Other commenters that were in favor 

of maintaining the Manufactured 

Products General Waiver, contrary to 

those in favor of rescinding the waiver, 

argued that foreign products may be of 

higher quality than domestic products, 

have a track record of quality that 

domestic products lack, be more 

technologically advanced or innovative, 

or have reduced environmental impacts. 

Commenters raised particular concerns 

that, in order to meet the proposed Buy 

America requirements, manufacturers 

may opt to incorporate lower-quality 

domestic components into their 

products. Commenters warned that 

imposing requirements on 

manufactured products may also stifle 

economic development of 

manufacturers, leading to job loss. 

Finally, commenters argued that the 

problems with imposing Buy America 

requirements to manufactured products 

would not be solved through the 

application of the De Minimis and 

Small Grants waiver. These commenters 

stated that projects procuring 

manufactured products may not be 

covered by the De Minimis and Small 

Grants waiver because the project 

heavily involves the procurement of 

manufactured products or the 

procurement of manufactured products 

is itself the focus of the project, or 

because the project simply is of too large 

a scale. Commenters also criticized the 

burden needed to track the costs of 

materials for purpose of the 

departmental de minimis waiver, 

particularly for utilities. 

C. FHWA Response 

FHWA again notes that many of the 

comments received to the NPRM reflect 

the same concerns commenters made in 

response to the 2023 RFC. As stated in 

the NPRM, FHWA does not believe they 

reflect justified reasons to continue the 

Manufactured Products General Waiver 

without change. In general, these 

comments do not reflect concern over 

rescinding the Manufactured Products 

General Waiver entirely, but the effect 

such rescission may have on specific 

products or categories of products if 

rescission of the waiver results in them 

not being domestically produced in 

sufficient quantities. For instance, 

FHWA does not believe that 

commenters claiming that there will not 

be sufficient numbers of Buy Americacompliant products justifies retaining 

the waiver; it, instead, calls for 

manufacturers, recipients of FHWA 

financial assistance, and FHWA to work 

together to identify the products that are 

not in fact domestically manufactured 

in sufficient amounts and for FHWA to 

issue waivers for those products. As 

described in more detail in section V, 

below, FHWA intends to mitigate this 

concern by phasing in the requirements 

of this rule, analyzing which products 

and categories of products may require 

waivers, and issuing waivers if 

appropriate. 

To take another example, while 

FHWA understands that some Buy 

America-compliant manufactured 

components and products will not be 

compatible with existing components, 

products, and systems, FHWA does not 

find this a sufficient reason to continue 

the Manufactured Products General 

Waiver in its entirety, given that the 

Manufactured Products General Waiver 

sweeps much more broadly than just 

products that are replacing existing 

products and systems. This may be a 

reason to consider granting a productspecific waiver, but FHWA does not 

believe it justifies maintaining the 

Manufactured Product General Waiver’s 

coverage of unrelated products. 

Similarly, FHWA does not believe that 

the fact that some entities may use 

specialized products or that some 

specific products may be preferred by 

entities justifies retaining the 

Manufactured Product General Waiver 

for unrelated products; they, at best, are 

reasons for considering waivers for 

specific products when these specific 

occurrences arise. 

Similarly, many commenters argued 

that because domestic manufacturers 


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12FHWA does not believe it is likely that 

manufacturers will use more expensive domestic 

components than necessary to ensure that their 

products have 55 percent of components, by cost, 

be produced in the United States. FHWA believes 

that such manufacturers would not be competitive 

in a market with other manufacturers who use less 

expensive domestic components. 

will not spring up to provide Buy 

America-compliant products and 

components, removing the 

Manufactured Products General Waiver 

will result in negative consequences, 

such as higher costs, reduced flexibility, 

and potential project delays and 

cancellations. FHWA does not believe 

that this concern justifies maintaining 

the Manufactured Products General 

Waiver; it suggests that were domestic 

manufacturers not to emerge, FHWA 

should consider issuing waivers for 

products of limited domestic 

availability. Again, as described in more 

detail in section V, FHWA believes it 

important to first consider the impacts 

of this final rule on manufacturers 

before issuing any waivers. As provided 

in E.O. 14005 and section 70911 of 

BABA concerning the benefits of Buy 

America in general, this rule will 

provide a powerful incentive for 

manufacturers to onshore production 

that does not currently exist under the 

Manufactured Products General Waiver. 

During the transition period before the 

new Buy America requirements for 

manufactured products become 

effective, FHWA will be able to more 

fully analyze the extent of this 

onshoring. In the event that a market for 

some manufactured products does not 

develop, FHWA will be able to identify 

those products and consider waivers 

accordingly. 

Overall, FHWA does not believe that 

these arguments answer FHWA’s 

concern, discussed in the NPRM, that 

the Manufactured Products General 

Waiver is overly broad and no longer in 

line with the purpose of domestic 

content procurement preferences and 

waivers. Instead, they suggest either that 

commenters believe that no categories of 

manufactured products will ever be 

domestically produced in sufficient 

quantities or that commenters believe 

that the overbroad nature of the 

Manufactured Products General Waiver 

is justified because of the issues that 

specific products or categories of 

products may face when complying 

with Buy America requirements. 

Based on comments from 

manufacturers who currently produce 

domestic products and who stated that 

they would increase capacity if the 

waiver were rescinded, FHWA believes 

that at least some manufactured 

products will be domestically produced 

in sufficient quantities. Further, FHWA 

does not believe that continuing the 

overbroad Manufactured Products 

General Waiver is necessary because of 

the difficulties some products or 

categories of products may face in 

complying with Buy America 

requirements. FHWA understands the 

concern that some products may not be 

domestically available; FHWA further 

believes this concern is heightened for 

certain ITS and other electronic 

products, utility products, and products 

used in railroad work. As stated in the 

NPRM, however, FHWA believes that 

the more preferable approach is to issue 

waivers, as appropriate, for those 

products and categories of products. In 

this way, such targeted waivers can 

provide manufacturers with insight into 

market demand that can trigger 

investments into domestic 

manufacturing in specific products, 

which cannot happen under the 

Manufactured Products General Waiver. 

FHWA believes that this approach can 

ensure that manufactured products 

needed for Federal-aid projects are 

available while also providing an 

opportunity to domestic manufacturers 

who can provide manufactured 

products to these projects where a 

waiver is not needed. FHWA discusses 

its intended process for implementing 

such waivers, where necessary, in 

section IV. 

FHWA does recognize that some 

concerns over removing the 

Manufactured Products General Waiver 

and imposing Buy America 

requirements on manufactured products 

apply regardless of whether domestic 

manufacturers ever produce sufficient 

amounts of domestic products. These 

include concerns that imposing such 

requirements is contrary to free trade 

agreements; that imposing Buy America 

requirements will inherently increase 

the cost of all products that are not 

currently compliant and require 

manufacturers to redevelop, redesign, 

and resource their products; that 

projects may be delayed as parties 

modify contract specifications and bid 

documents and contractors prepare 

bids; and the administrative burden of 

imposing new requirements. 

Some of these concerns inherently 

reflect the fact that FHWA is imposing 

new Buy America requirements on 

Federal-aid projects. For instance, 

FHWA believes it apparent that many 

manufacturers will have to shift to 

making products compliant with 

requirements that would otherwise not 

exist; that contract specifications and 

bid documents will have to be changed 

to include new requirements, and that 

contractors will need time to prepare 

bids after considering the new 

requirements; and that the new 

requirements will pose administrative 

burden on those responsible with 

complying with them. FHWA 

acknowledges the burden that such 

activities could place on affected 

parties, but FHWA believes that the 

overall public interest in the policies 

behind Buy America (as described in 

E.O. 14005 and section 70911 of BABA) 

is better served by considering these 

issues when determining the date on 

which to first apply the new Buy 

America requirements as well as the 

need for potential future waivers rather 

than whether to rescind the 

Manufactured Products General Waiver 

and impose Buy America requirements 

at all. Were these concerns sufficient to 

continue the Manufactured Products 

General Waiver, the waiver would 

seemingly be required to remain in 

effect indefinitely, even if there were 

sufficient sources of all manufactured 

products used on Federal-aid projects. 

FHWA does not believe this can be a 

sensible outcome. FHWA believes that 

the better approach is to allow for time 

for affected parties to set up processes 

to handle the change in regulatory 

requirements, which FHWA intends to 

do by implementing the final assembly 

and 55 percent requirements over time, 

as described in more detail below in 

section V. 

FHWA also acknowledges, as 

explained in more detail in the RIA, that 

rescinding the Manufactured Products 

General Waiver and applying Buy 

America requirements to manufactured 

products may lead to an increase in cost 

in some products. While the price of 

products and components may increase, 

FHWA believes that this is the natural 

result of achieving the goal of increasing 

domestic manufacturing, as stated in 

E.O. 14005 and BABA.12 Were domestic 

products available at the same or a 

lower price than foreign products, 

FHWA would expect contracting 

agencies to purchase domestic products 

even if no Buy America requirements 

existed, creating a domestic supply of 

manufactured products. The fact that 

commenters indicated that this is not 

the case demonstrates that contracting 

agencies procure foreign products 

because they are less expensive than 

domestic alternatives. The imposition of 

domestic content procurement 

preferences should thus be expected to 

increase the cost of procuring the 

projects covered by those preferences. 

For manufactured products where 

manufactures onshore production of 

Buy America-compliant products, 

FHWA expects that the increase of the 

cost of the products will occur alongside 


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13For instance, the OMB Implementation 

Guidance states: ‘‘If a recipient is a State that has 

assumed procurement obligations pursuant to the 

Government Procurement Agreement or any other 

trade agreement, a waiver of a Made in America 

condition to ensure compliance with such 

obligations may be in the public interest.’’ 

the creation of domestic manufacturing 

jobs. For manufactured products where 

manufacturers elect not to onshore 

production, FHWA intends to issue 

waivers to allow for the continued use 

of lower-priced foreign products, 

reducing or eliminating any burden 

from cost increases. While FHWA 

cannot determine at this point the 

extent to which manufacturers will 

onshore specific products, FHWA 

believes that this rulemaking will either 

have no effect on the cost of products 

or result in both increases in product 

costs and in increases in domestic 

manufacturing jobs. 

FHWA also acknowledges 

commenters who expressed opposition 

to Buy America requirements on the 

grounds that such requirements are 

counter to free trade agreements. Many 

free trade agreements, such as the 

United States-Mexico-Canada 

Agreement (USMCA), expressly exempt 

grants, loans, cooperative agreements, 

and other forms of Federal financial 

assistance from coverage. Other trade 

agreements, such as the World Trade 

Organization Agreement on Government 

Procurement, specifically exclude 

highway and mass transit projects from 

coverage. To the extent that FHWA’s 

Buy America requirements would 

conflict with a trade agreement, FHWA 

believes that specific situation may 

justify a waiver of the requirements; 

FHWA does not believe that it would 

justify a waiver of Buy America 

requirements to all manufactured 

products.13

Finally, FHWA again notes that, once 

Buy America requirements apply to 

manufactured products, such products 

may be exempted by the De Minimis 

and Small Grants waiver. FHWA 

acknowledges that the De Minimis and 

Small Grants waiver will not exempt all 

manufactured products from Buy 

America requirements, as that was not 

the intention of the De Minimis and 

Small Grants waiver. As stated in the 

NPRM, the purpose of that waiver is to 

prevent the recission of the 

Manufactured Products General Waiver 

from affecting ‘‘small projects and 

projects using limited amounts of 

manufactured products.’’ Id. at 17797. 

In conclusion, after a careful review of 

all the comments received to the 2023 

RFC and NPRM, FHWA believes that 

the Manufactured Products General 

Waiver is no longer in the public 

interest and is rescinding it for all 

recipients of FHWA financial assistance. 

As discussed in more detail in section 

V, FHWA recognizes that some products 

and categories of products may not be 

currently domestically produced in 

sufficient amounts. Rather than 

continue the Manufactured Products 

General Waiver, FHWA intends to 

analyze which products and categories 

of products may require waivers, and 

issue waivers where appropriate. 

IV. General Comments 

FHWA next discusses general issues 

raised by commenters regarding the 

final rule. Section V then includes a 

discussion of specific regulatory 

provisions of the final rule. 

Process for Rescission of Waiver 

Comment: In the NPRM, FHWA 

proposed to rescind the Manufactured 

Products General Waiver and, at the 

same time, issue time-limited and 

targeted waivers covering any 

manufactured products that FHWA 

determines are not currently produced 

in the United States and might not be 

able to be produced in the United States 

in the near future. Some commenters 

argued that FHWA should rescind the 

Manufactured Products General Waiver 

only when these time-limited and 

targeted waivers are in place. Others 

stated that FHWA should institute a 

delayed effective date for the rescission 

of the Manufactured Products General 

Waiver in general, and then set later 

effective dates for the application of Buy 

America requirements to particular 

products. Still other commenters argued 

for a different model, stating that FHWA 

should apply Buy America requirements 

to specific manufactured products based 

on their availability. Under this 

approach, FHWA would not set an 

effective date for the final rule upfront 

but rather gradually narrow the scope of 

the Manufactured Products General 

Waiver as FHWA removes specific 

manufactured products from its 

coverage as they become domestically 

available; FHWA would thus only fully 

rescind the waiver when suppliers 

could demonstrate the ability to provide 

Buy America-compliant versions of all 

manufactured products used on Federalaid projects. Other commenters 

suggested that FHWA should proceed 

with a stepped approach, first 

identifying products that are Buy 

America-compliant and applying Buy 

America requirements to them, then 

identifying products that are 

manufactured in the United States and 

applying the final assembly requirement 

to them, and finally identifying 

products that are manufactured in the 

United States and meet the 55 percent 

requirement and apply both the 

manufactured and 55 percent 

requirements to them. Other approaches 

raised by commenters include that 

FHWA should rescind the waiver for 

products only when there is a clear 

basis for expecting the emergence of 

U.S. sources, that FHWA should 

prioritize industry use cases and 

applications that are high value in 

national security where necessary 

investments are made domestically, and 

that FHWA should allow contracting 

agencies to continue to use existing 

systems and product sources while 

requiring them to study and develop a 

transition plan towards procuring Buy 

America-compliant products. 

FHWA Response: After reviewing the 

comments, FHWA concludes that the 

best approach is a transition to the final 

assembly and 55 percent requirements 

for Federal-aid projects. FHWA believes 

that this approach is similar to the 

approach discussed in the NPRM, where 

FHWA proposed to issue waivers at the 

same time as it would rescind the 

Manufactured Products General Waiver. 

While the NPRM indicated that 

FHWA would issue waivers at the same 

time as it issued a final rule, FHWA 

believes, after analyzing the comments 

received, that it is not necessary to issue 

waivers at this time. Based on 

comments received, FHWA recognizes 

that there are both domestic 

manufacturers of products used in 

Federal-aid projects and products for 

which there are no domestic 

manufacturers at the moment. For the 

latter group, FHWA does not believe it 

necessary to issue waivers at this time, 

as FHWA believes doing so will 

negatively affect onshoring that would 

otherwise be incentivized by the 

promulgation of this final rule. FHWA 

believes that by stating that it will 

impose the final assembly requirement 

on October 1, 2025, and the 55 percent 

requirement on October 1, 2026, 

manufacturers will be incentivized to 

begin onshoring production. 

FHWA does not believe that it is 

sensible to continue to apply the 

Manufactured Products General Waiver 

but only remove products from its 

coverage when it is shown that those 

products are domestically produced in 

sufficient amounts. Under this approach 

suggested by many commenters, Buy 

America requirements would not apply 

to manufactured products until a 

domestic market for those products has 

emerged. FHWA, however, does not 

believe it reasonable to apply Buy 

America requirements, which are 

designed to incentivize domestic 

production, only after domestic 


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14 In addition, one commenter stated that FHWA 

should withdraw its proposed rule and continue its 

general applicability waiver for eighteen months 

and another commenter stated that FHWA should 

review the Manufactured Products General Waiver 

after 5 years. As neither commenter indicated that 

FHWA would rescind the Manufactured Products 

General Waiver at the end of these time periods, 

FHWA does not view these comments as 

commenting on a proposed transition period, but 

rather comments arguing that FHWA should 

continue the Manufactured Products General 

Waiver. FHWA’s response to comments arguing to 

continue the Manufactured Products General 

Waiver can be found in section IV. 

15Other commenters stated what they believed 

the effective date should be for specific categories 

of manufactured products. While useful in 

providing information on the necessity of waivers 

for those specific products, FHWA does not believe 

it appropriate to base the effective date of imposing 

Buy America requirements on all manufactured 

products on the effective date for specific products. 

16See 87 FR 31931 (May 25, 2022), issuing a 

general waiver of the BABA requirements for DOTfunded programs for a period of 180 days. 

production has been established. In 

addition, it is unclear if domestic 

markets for manufactured products 

would ever develop in this scenario; 

commenters did not provide sufficient 

evidence that manufacturers would 

onshore production if there were no 

immediate incentive to do so. FHWA 

finds it equally likely in such a scenario 

that the majority of manufacturers 

would elect not to onshore and that the 

Manufactured Products General Waiver 

would apply indefinitely for some 

products. That is not FHWA’s intention; 

while there may be some manufactured 

products that require time-limited, 

targeted waivers, FHWA believes that 

those waivers should be granted when 

the incentive of Buy America 

requirements has failed to function, not 

when manufacturers have chosen to 

continue producing products abroad 

because FHWA has actively chosen to 

weaken that incentive. 

FHWA disagrees with commenters 

that it should only apply the final 

assembly and the 55 percent 

requirement to products when they are 

shown to meet them. For the same 

reasons stated above, FHWA believes 

that doing so removes the incentive for 

manufacturers to comply with the 

requirements. FHWA believes that Buy 

America requirements should apply to 

all manufactured products unless it can 

be shown that the specific products or 

categories of products require a waiver 

based on the conditions in 23 U.S.C. 

313(b). 

Transition Period for Requirements 

Comments: In the NPRM, FHWA 

sought comment on whether a transition 

period would be needed for its proposed 

Buy America requirements for 

manufactured products. This transition 

period would provide time between the 

publication of the final rule and the date 

on which the Buy America requirements 

for manufactured products would come 

into effect, requiring them to be 

produced in the United States. If 

commenters believed such a period was 

necessary, FHWA requested comment 

on what commenters believed the 

effective date of the proposed Buy 

America requirements should be. 

A small number of commenters 

argued that FHWA should not provide 

any sort of transition period, and that 

the proposed Buy America requirements 

should be effective immediately when 

the final rule became effective. These 

commenters argued that the 

Manufactured Products General Waiver 

was in effect for over 40 years, so it was 

necessary to act expediently to avoid 

continuing what these commenters 

viewed as its negative effects. These 

commenters also stated that BABA was 

enacted in November 2021, so affected 

parties had time to prepare for the 

imposition of Buy America 

requirements to manufactured products. 

Finally, these commenters argued that 

affected parties had additional time to 

prepare for the imposition of Buy 

America requirements to manufactured 

products as DOT and other Federal 

agencies employed various phase-in 

waivers for BABA’s requirements. 

Other commenters suggested that 

FHWA provide a transition period for 

the imposition of Buy America 

requirements for all manufactured 

products, with commenters presenting 

various lengths that they believed were 

appropriate. Two commenters suggested 

a period of 180 days, one commenter 

suggested a transition period of 6 

months, one commenter suggested a 

period of 9 months, four commenters 

suggested a period of 1 year, one 

commenter suggested a period of 1 year 

after FHWA puts in place any productspecific waivers, six commenters 

suggested a period of 18 months, one 

commenter suggested a period of 

between 18 and 24 months, one 

commenter suggested a period of 2 

years, one commenter suggested a 

period of 2 years for Federal awards 

obligated after the effective date of the 

final rule, one commenter suggested a 

period of 30 months, seven commenters 

suggested a period of 3 years, one 

commenter suggested a period of 38 

months, one commenter suggested a 

period of 4 years, and two commenters 

suggested a period of 5 years.14 In 

addition, one commenter suggested that 

the Manufactured Product General 

Waiver should be continued for at least 

a few more years and another suggested 

that FHWA should delay 

implementation of any requirements for 

3 to 5 years.15

Commenters gave various reasons for 

why they believed a transition period 

was necessary. These include that DOT 

imposed a phase-in period for BABA’s 

construction material requirements; 16

that other Federal agencies imposed a 

phase-in period for BABA’s 

requirements; the time required for 

FHWA to formulate, review, and 

approve any product-specific waivers, 

including the time for FHWA to 

determine which products used on 

Federal-aid projects are BABAcompliant and conduct market research 

on those that are not; the time required 

for FHWA to provide any guidance on 

the new requirements; the time required 

for manufacturers, contractors, and 

contracting agencies to determine if the 

products they manufacture and use are 

compliant with the new requirements; 

the time for manufacturers, contractors, 

and contracting agencies to update and 

modify their current Buy America 

processes, including the time to set up 

systems for compliance, train personnel 

and other stakeholders on the new 

requirements and processes, rewrite 

standard specifications, materials lists, 

and bid documents, and modify any 

guidance documents; the time for 

manufacturers to onshore domestic 

production of manufactured products 

and components, including the time for 

manufacturers to exit long-term leases, 

contracts, and other obligations 

manufacturers might have overseas, 

establish domestic manufacturing sites 

and supply chains, redesign products, 

test and certify products; the time for 

manufacturers to produce a sufficient 

amount of compliant products to have 

on hand; the time for project designers 

to incorporate the new Buy America 

requirements into future projects; the 

time for affected parties to understand 

and process how the new requirements 

will impact the design, construction, 

and costs of future projects; the time for 

contracting agencies to test and approve 

newly designed manufactured products; 

the time for contracting agencies and 

contractors to identify new vendors and 

adjust any product occurs; the time for 

affected parties to consume their stock 

of existing manufactured products and 

retire existing contractual agreements; 

and the time for contracting agencies 

and contractors to stockpile materials. 

FHWA Response: After reviewing the 

comments received, FHWA believes that 

a transition period is necessary for the 

reasons identified by commenters to 

implement the new Buy America 

requirements, and FHWA thus disagrees 


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17See https://www.fhwa.dot.gov/construction/ 

contracts/buyam_qa_baba_pre10232023.cfm. 18FHWA recognizes that there may be entities 

that produce or utilize products in some projects 

that are covered by FHWA’s Buy America statute 

and in other projects that are covered by BABA or 

Buy America requirements applicable to other DOT 

agencies. Indeed, FHWA believes that one of the 

benefits of imposing Buy America requirements on 

manufactured products that are similar to the 

requirements in BABA is the uniformity provided 

to contracting agencies, contractors, and 

manufacturers. At the same time, FHWA believes, 

based on the comments received to the NPRM, that 

contracting agencies, contractors, and 

manufacturers that are involved in Federal-aid 

projects have not completely shifted their processes 

and production of products used on Federal-aid 

projects to be BABA-compliant. Thus, while 

uniformity may provide some benefits to certain 

entities and products in the future, FHWA believes 

that there is a current lack of uniformity. In short, 

FHWA does not believe that the transition period 

given for BABA should be thought of as serving as 

a transition period for FHWA’s Buy America 

requirements for manufactured products. 

with commenters arguing against the 

imposition of any such period. While 

FHWA understands the urgency some 

commenters feel to rescind the 

Manufactured Products General Waiver, 

FHWA believes it must do so with 

consideration of the issues raised by 

commenters to ensure that affected 

parties are ready to apply Buy America 

requirements to manufactured products 

used on Federal-aid projects. Further, 

FHWA does not believe that the fact that 

BABA was enacted in November 2021 

and that other Federal agencies have 

imposed phase-in waivers for its 

requirements justifies not having a 

transition period for the imposition of 

FHWA’s Buy America requirements. 

While BABA was enacted in November 

2021, FHWA has been consistent in 

stating that, due to section 70917(a)–(b), 

BABA’s manufactured product 

requirements do not apply to Federalaid projects.17 FHWA thus does not 

believe it reasonable to now state that 

contracting agencies, contractors, and 

manufacturers should have been 

preparing for the implementation of Buy 

America requirements on manufactured 

products on Federal-aid projects 

because BABA applied a domestic 

content procurement preference to 

manufactured products on projects 

funded by other agencies.18 Similarly, 

FHWA does not find it reasonable to 

believe that contracting agencies, 

contractors, and manufacturers should 

have been preparing for the 

implementation of Buy America 

requirements on manufactured products 

on Federal-aid projects during 

transitional waivers granted by other 

agencies for other programs. 

In determining the appropriate time to 

apply the new Buy America 

requirements, FHWA carefully reviewed 

the different periods suggested and the 

reasoning behind them. Based on this 

review, FHWA believes that it is 

appropriate to have a longer transition 

period for the 55 percent requirement 

than the final assembly requirement, 

given that many of the reasons provided 

by commenters for why a transition 

period is needed do not apply or apply 

with less force to the imposition of the 

final assembly requirement. For 

instance, determining whether a 

product is manufactured in the United 

States is much simpler and clearer than 

determining whether more than 55 

percent of its components, by cost, are 

produced in the United States. 

Similarly, FHWA expects the time for 

manufacturers to shift production to be 

compliant with the final assembly 

requirement to be much less than the 

time needed to be compliant with the 55 

percent requirement, which requires 

shifting supply chains and component 

manufacturing to the United States. 

Further, FHWA does not believe that a 

manufacturer’s decision to shift 

manufacturing products from overseas 

to the United States will impact the 

product itself to the same degree as 

changing the source of the product’s 

components; thus, FHWA does not 

believe that requiring products to be 

manufactured in the United States will 

result in the same effects to project 

development that the 55 percent 

requirement may. 

At the same time, FHWA recognizes 

that even imposing this final assembly 

requirement will require contracting 

agencies, contractors, and 

manufacturers to devote time to 

modifying their processes to account for 

this new requirement. FHWA 

acknowledges that these parties may be 

required to update standard 

specifications, material lists, and bid 

documents; modify guidance 

documents; and identify new vendors 

that can provide products meeting the 

final assembly requirements. After 

considering the range of transition 

periods suggested by commenters and 

the reasoning behind those dates, 

FHWA believes it appropriate to apply 

the final assembly requirement for 

Federal-aid projects on October 1, 2025. 

While this is on the lower end of the 

range of dates suggested by commenters, 

FHWA notes that commenters suggested 

ranges for the transition periods of both 

the final assembly and 55 percent 

requirements. As FHWA believes that 

many of the concerns raised by 

commenters reflect more heavily 

concerns with implementing the 55 

percent requirement, FHWA believes 

that a choice on the lower end of the 

suggested range is appropriate. Based on 

the comments received, FHWA believes 

that this will provide time for 

contracting agencies, contractors, and 

manufacturers to be prepared for the 

imposition of the final assembly 

requirement with minimal disruption to 

the construction of Federal-aid projects. 

Simultaneously, FHWA believes that 

this date will provide an incentive for 

manufacturers to begin moving final 

assembly of manufactured products to 

the United States. 

At the same time, FHWA recognizes 

that some manufacturers may not 

ultimately move final assembly of their 

products to the United States and that 

domestic companies may not emerge 

that manufacture certain products in the 

United States. For that reason, from the 

effective date of this rule to October 1, 

2025, FHWA will monitor the status of 

the domestic market of manufactured 

products that can comply with the final 

assembly requirement. Based on 

FHWA’s analysis, FHWA may choose to 

delay the start date for the final 

assembly requirement by issuing a 

temporary waiver of the final assembly 

requirement for manufactured products 

if more time is needed to onshore 

domestic production; however, FHWA 

maintains that it is important for this 

rulemaking to send out a clear market 

signal to begin that process of 

onshoring, even if it takes longer than 

FHWA currently expects. While 

commenters suggested a shorter 

transition period before imposing the 

final assembly requirement may be 

possible, such a shorter period may not 

provide FHWA time to properly monitor 

changes in the market and adjust 

accordingly. 

FHWA believes that a longer 

transition period is necessary before 

imposing the 55 percent requirement. 

Based on the range of comments 

received on the preferred duration of a 

transition period, from 6 months to 5 

years, FHWA finds it reasonable to 

begin the 55 percent requirement for 

Federal-aid projects on October 1, 2026. 

At this point, starting on October 1, 

2026, manufactured products 

permanently incorporated into Federalaid projects will need to comply with 

both the final assembly and 55 percent 

requirements. FHWA believes that a 

transition period ending on September 

30, 2026, for the 55 percent 

requirement, which also serves as a 

transition period for the full imposition 

of FHWA’s Buy America requirements 

for manufactured products, reflects the 

general middle ground of dates 

suggested by commenters. FHWA 

believes that a shorter transition period 

may not give contracting agencies, 

contractors, and manufacturers time to 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 2943 

19Waiver of Buy America Requirements for EV 

Chargers, 88 FR 10619, February 21, 2023. 

adjust to the new requirements. 

Conversely, FHWA believes that a 

longer transition period may not send 

the proper market signals to 

manufacturers to incentivize them to 

begin onshoring as soon as they are able 

to. FHWA believes that the transition 

period should reflect the minimum 

amount of time for affected parties to 

ready themselves for the new 

requirements. While some parties may 

desire a longer timeframe, FHWA 

believes that transition period through 

September 30, 2026, before imposing 

the 55 percent requirement provides 

this minimum amount of time. 

FHWA nonetheless will monitor the 

status of the domestic market and the 

progress contracting agencies, 

contractors, and manufacturers are 

making to ready themselves for the 

imposition of the 55 percent 

requirement. FHWA may modify the 

start date of the 55 percent requirement 

based on information received by 

issuing a temporary, time-limited 

waiver of its Buy America requirements 

for manufactured products. In addition, 

prior to imposing the 55 percent 

requirement, FHWA intends to continue 

to perform market research, analyzing 

the effects issuance of this final rule has 

on the domestic market for 

manufactured products and listening to 

affected parties, including any parties 

requesting prospective waivers of the 55 

percent requirement. Based on that 

research and considering the comments 

to the RFI and any future RFIs, FHWA 

may propose targeted waivers covering 

products that do not meet the 55 percent 

requirement prior to those requirements 

taking effect. 

As discussed in more detail below, 

the start date for the final assembly and 

55 percent requirements being 

promulgated in this final rule means 

that all Federal-aid projects obligated on 

or after those dates are subject to the 

applicable requirements. 

FHWA emphasizes that while the 

final assembly requirement does not 

begin until October 1, 2025, and the 55 

percent requirement does not begin 

until October 1, 2026, the other 

regulatory changes in this final rule 

become operative for all Federal-aid 

projects obligated on or after March 17, 

2025. This means that for all Federal-aid 

projects obligated on or after March 17, 

2025, all iron or steel products, as 

defined in § 635.410(c)(1)(iii), must 

comply with FHWA’s Buy America 

requirements for steel and iron in 

§ 635.410(b). This also means that, for 

all Federal-aid projects obligated on or 

after March 17, 2025, per 

§ 635.410(c)(2), articles, materials, and 

supplies should be classified as an iron 

or steel product, a manufactured 

product, or another product as specified 

by law or in 2 CFR part 184; an article, 

material, or supply must not be 

considered to fall into multiple 

categories. In other words, starting for 

all Federal-aid projects obligated on or 

after March 17, 2025, all iron or steel 

products must comply only with 

§ 635.410(b) and all manufactured 

products must comply only with 

§ 635.410(c), with the final assembly 

and 55 percent requirements taking 

effect later. 

In addition, for Federal-aid projects 

obligated on or after October 1, 2025, 

manufactured products must comply 

with the final assembly requirement, 

and for Federal-aid projects obligated on 

or after October 1, 2026, manufactured 

products must generally comply with 

both the final assembly and 55 percent 

requirements. 

As stated in the NPRM, FHWA does 

not intend for these new Buy America 

requirements to supplant current FHWA 

waivers that cover specific 

manufactured products. See 89 FR 

17798. As noted in the NPRM, FHWA’s 

Buy America requirements for 

manufactured products are 

substantively similar to those in 

FHWA’s Electric Vehicle (EV) Charger 

Waiver, which waives FHWA’s Buy 

America requirements to EV chargers 

under certain circumstances.19

Specifically, the EV Charger Waiver 

waives FHWA’s Buy America 

requirements for EV chargers 

manufactured on or after March 23, 

2023, and before July 1, 2024, if final 

assembly of the charger occurs in the 

United States and installation of the 

charger began by October 1, 2024. The 

EV Charger Waiver further waives 

FHWA’s Buy America requirements for 

EV chargers manufactured on or after 

July 1, 2024, if final assembly of the 

charger occurs in the United States and 

more than 55 percent of the charger’s 

components, by cost, are manufactured 

in the United States. For all EV chargers 

covered by the waiver, if the charger’s 

housing is predominantly iron or steel, 

it is not covered by the EV Charger 

Waiver and that housing must meet 

FHWA’s existing Buy America 

requirements for steel and iron. 

Presently, EV chargers covered by the 

EV Charger Waiver should either have 

already begun installation or be 

compliant with both the final assembly 

and 55 percent requirements. FHWA 

does not intend for its imposition of Buy 

America requirements to all 

manufactured products through this 

rulemaking to require EV chargers that 

have already begun installation to be 

pulled out of the ground, nor to set less 

stringent Buy America requirements on 

EV chargers than those that already exist 

under the EV Charger Waiver. FHWA 

therefore intends the EV Charger Waiver 

to continue to apply to EV chargers 

procured in FHWA funded projects, not 

the requirements and transition period 

set in this final rule. FHWA nonetheless 

notes that, for projects obligated on or 

after October 1, 2026, the requirements 

that apply to EV chargers and those that 

apply to other manufactured products 

will effectively be the same. 

In addition, besides manufactured 

products covered by existing FHWA 

waivers, per § 635.410(c)(2)(i) and (ii), 

precast concrete products classified as 

manufactured products using the 

definition in § 635.410(c)(1)(iv) and ITS 

and other electronic hardware systems 

that are installed in the highway right of 

way or other real property and classified 

as manufactured products using the 

definition in § 635.410(c)(1)(iv) are 

subject to requirements on a different 

timeline than other manufactured 

products. For precast concrete products 

classified as manufactured products, 

components of the precast concrete 

products that consist wholly or 

predominantly of iron or steel or a 

combination of both, as defined in 

§ 635.410(c)(1)(vi), must continue to 

comply with FHWA’s existing Buy 

America requirements for iron and steel 

at § 635.410(b) in every Federal-aid 

project. Precast concrete products will 

then have to additionally comply with 

the final assembly requirement and the 

55 percent requirement for Federal-aid 

projects obligated on or after October 1, 

2026. This same timeframe applies to 

the application of the requirements in 

§ 635.410(c)(2)(ii). The cabinets or other 

enclosures of ITS and other electronic 

hardware systems that are installed in 

the highway right of way or other real 

property and classified as manufactured 

products per § 635.410(c)(1)(iv) that 

consist predominantly of iron or steel or 

a combination of both, as defined in 

§ 635.410(c)(1)(vi), must continue to 

comply with FHWA’s existing Buy 

America requirements for iron and steel 

at § 635.410(b) in all projects. The 

systems must then additionally comply 

with the final assembly requirement for 

Federal-aid projects obligated on or after 

October 1, 2025, and the 55 percent 

requirement for Federal-aid projects 

obligated on or after October 1, 2026. 

FHWA discusses the requirements in 

§ 635.410(c)(2)(i) and (ii) in more detail 

below. FHWA notes that the specified 

steel and iron components of these 

products should currently be compliant 


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20FHWA discusses comments on projects using 

alternate delivery methods below. 

21Pursuant to 23 U.S.C. 115, AC allows a State 

DOT to begin work and incur costs that can later 

be reimbursed with Federal funding after FHWA 

approves a request to convert the AC from eligible 

for funding to an obligation to fund and reimburse. 

with FHWA’s existing Buy America 

requirements for iron and steel if they 

are used on Federal-aid. FHWA is 

therefore continuing its existing 

requirements for these products and 

components without break, and FHWA 

is not adding any additional 

requirements in this respect. 

Effect on Projects in Development 

Comments: In the NPRM, FHWA 

sought comment on whether there 

should be a buffer period for certain 

projects that are in development that 

have not had Federal awards obligated 

or authorized but have relied on the 

Manufactured Products General Waiver 

in project development. FHWA notes 

that this is distinct from the question 

regarding the transition period for the 

new Buy America requirements. The 

issue of the effect of rescission on 

projects in development concerns which 

projects, at the start of imposition of the 

final assembly requirement and later the 

55 percent requirement, are subject to 

those requirements based on their 

developmental status at the time. 

Commenters presented various views 

regarding what they believed was the 

appropriate point in project 

development to apply the new Buy 

America requirements for manufactured 

products. Some commenters suggested 

that the requirements should not apply 

to projects in the design stage at the 

time the requirements become effective; 

these commenters argued that doing so 

would avoid costly redesigns that delay 

construction and allow project designers 

to begin designing projects knowing 

which requirements would apply to 

those projects. 

Other commenters argued that the 

requirements should not apply to 

projects that have already gone out for 

advertisement or already solicited 

applications. Such commenters stated 

that this approach enables bidders and 

applicants to estimate project costs more 

accurately and prevents those costs from 

exceeding application estimates; in 

addition, these commenters stated that 

if price is a factor in award selection, 

this approach avoids reopening 

advertisements and solicitations and 

delaying awards. Commenters also 

stated that this would enable bidders 

and applicants to evaluate the domestic 

availability of manufactured products 

before responding to advertisements or 

solicitations, allowing the project to 

avoid delays that might occur if 

awarded contractors had to search for 

compliant products or potentially 

redesign the project. Commenters 

presented similar reasons for why any 

new requirements should not apply to 

projects that have already opened 

bidding when the new requirements 

become effective. One commenter 

argued that the requirements should not 

apply to projects that have been put out 

to bid or are put to bid within one year 

of final agency action, stating that this 

would allow contracting agencies to rely 

on the Manufactured Products General 

Waiver for projects already in the 

developmental process and avoid the 

loss of time and money that would 

occur if they had to be redesigned or 

rebid. 

Still other commenters argued that 

any new Buy America requirements for 

manufactured products should not 

apply to projects already obligated or 

authorized at the time the requirements 

become effective; such commenters 

stated that this would allow projects to 

be completed on time without 

significant cost changes and allow 

contracting agencies to include 

appropriate language in their contracts. 

Various commenters also suggested 

that the new Buy America requirements 

for manufactured products should not 

apply to projects already in the 

procurement phase to prevent 

unnecessary delays; that they should 

not apply to contracts already executed; 

that they should not apply to products 

already purchased prior to the final 

rule’s effective date; that they should 

not apply to material procurement 

contracts for at least eighteen months 

after the final rule is issued; and that 

they should not apply to products 

purchased prior to the start dates of the 

requirements, provided that they are 

installed at least twelve months after 

delivery as parties may have acquired 

non-compliant products with long lead 

times. 

Finally, some commenters argued that 

any new requirements should not apply 

to projects at any stage in the project 

development process at the time the 

new requirements become effective. 

Commenters favoring this broad 

approach stated that it would avoid the 

loss of time and money that would 

occur if projects had to be redesigned or 

rebid. 

FHWA Response: After carefully 

reviewing the comments received, 

FHWA believes that the most 

appropriate choice is to have the new 

Buy America requirements for 

manufactured products apply to all 

Federal-aid projects obligated after the 

start dates of the requirements.20 This 

means that Federal-aid projects must 

comply with the final assembly 

requirement if obligated on or after 

October 1, 2025, and must comply with 

both the final assembly and 55 percent 

requirements if obligated on or after 

October 1, 2026. Federal-aid projects 

that have already obligated FHWA 

financial assistance before October 1, 

2025, do not need to comply with the 

final assembly or 55 percent 

requirements. FHWA believes that the 

point of obligation represents a clear 

point after which Federal requirements, 

including Buy America, apply to a 

project. By applying FHWA’s 

requirements at the point of obligation, 

FHWA also believes this aligns with the 

date on which Federal requirements, 

including FHWA’s requirements, are 

generally triggered for a project. This is 

in contrast to more nebulous points 

suggested by commenters, such as the 

start of project development or design. 

While FHWA recognizes that some 

Federal-aid projects may be currently 

being designed based on the existing 

Manufactured Products General Waiver, 

FHWA believes that delaying the start 

dates of the Buy America requirements 

on manufactured products will allow 

changes to be made to those projects, if 

necessary, during the transition period 

to minimize disruption. 

Similarly, for Federal-aid projects 

using advance construction (AC), 

FHWA believes that the new Buy 

America requirements for manufactured 

products should become effective for 

Federal-aid projects where FHWA 

approves the AC designation by the 

applicable start date.21 This means that 

for Federal-aid projects where FHWA 

approves the AC designation on or after 

October 1, 2025, the project must 

comply with the final assembly 

requirement. For Federal-aid projects 

where FHWA approves the AC 

designation on or after October 1, 2026, 

the project must comply with the final 

assembly and 55 percent requirements. 

For Federal-aid projects where FHWA 

approves the AC designation on or after 

October 1, 2025, but before October 1, 

2026, the project must comply with the 

final assembly requirement but does not 

need to comply with the 55 percent 

requirement. 

Per 23 U.S.C. 115(a)(2), a project 

proceeding under AC must generally be 

in accordance with all procedures and 

requirements applicable to the project. 

FHWA accordingly believes that, before 

requesting AC approval, a State DOT 

should be aware that the approval for 

the project will require the project to 

proceed in accordance with the Federal 

procedures and requirements generally 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 2945 

applicable to the project, including Buy 

America requirements for manufactured 

products. In addition, FHWA believes 

that the date of AC approval represents 

a clear point that makes clear to all 

affected parties which requirements 

apply to a given project. 

Buffer Period for Projects in 

Development Using Alternate Delivery 

Methods 

Comments: In the NPRM, FHWA also 

requested comment on the appropriate 

buffer period, if any, for alternate 

project delivery methods. These 

alternative delivery methods are where 

contracts are awarded and work is 

authorized and obligated in phases, 

such as with design-build. Under this 

delivery method, FHWA may, for 

instance, obligate funds for the design 

phase of a project and then later obligate 

funds for the construction phase of a 

project. 

Commenters presented various 

arguments as to when any new Buy 

America requirements for manufactured 

products should take effect for projects 

using alternate delivery methods. Some 

commenters suggested that the 

requirements should not apply to the 

physical construction phase if FHWA 

financial assistance is obligated before 

the effective date of the new 

requirements or, similarly, that the 

requirements should only apply to new 

awards issued prior to the design and 

development phase. Other commenters 

relatedly suggested that the 

requirements should not apply to 

projects that have been initiated before 

the final rule’s effective date, using the 

earliest obligation date for any phase of 

the project to serve as the date of 

initiation. Such commenters argued that 

this would allow projects to continue to 

rely on the Manufactured Products 

General Waiver when the project’s 

estimates, designs, and scope have been 

prepared based on that waiver. 

Commenters stated that this would also 

prevent retroactive adjustments after 

contractors or consultants have been 

selected, which could otherwise cause 

delays, and avoid requirements from 

changing when a project advances from 

preconstruction to construction. Other 

commenters suggested that 

requirements should not apply to 

projects that have issued a Request for 

Qualifications (RFQ), stating that this 

would prevent wasting efforts taken by 

funding recipients to develop a cost 

estimate in advance of issuing the RFQ 

and ensure that the project is delivered 

as initially envisioned. Other 

commenters suggested that the new Buy 

America requirements for manufactured 

products should not apply to projects 

using alternate delivery methods when 

those projects have already entered the 

procurement phase or should be 

determined at the contracting officer’s 

discretion. 

FHWA Response: FHWA has carefully 

analyzed the comments regarding 

alternate delivery methods. FHWA 

believes that the new Buy America 

requirements for manufactured products 

should apply to all Federal-aid projects 

where a contract providing for both the 

preconstruction (such as preliminary 

design under a design-build contract) 

and construction phases is in place, but 

the construction phase has not been 

obligated by the time of this final rule’s 

start dates. In other words, for Federalaid projects using alternate delivery 

methods, if the construction phase of 

the project is obligated on or after 

October 1, 2025, the project must 

comply with the final assembly 

requirement, even if funds have been 

obligated for preconstruction phases 

prior to October 1, 2025. Similarly, if 

the construction phase for a Federal-aid 

project using alternate delivery methods 

is obligated on or after October 1, 2026, 

the project must comply with the final 

assembly and 55 percent requirements, 

even if funds have been obligated for 

preconstruction phases prior to this 

date. 

While FHWA understands the 

opinion expressed by commenters to 

allow projects that have been obligated 

funds for preconstruction work to 

continue to rely on the Manufactured 

Products General Waiver if such 

obligation occurs prior to this rule’s 

start dates, FHWA believes that the 

focus point should be on the obligation 

of funds for construction. In addition, 

FHWA generally believes that the 

transition period in this final rule 

should allow many Federal-aid projects 

currently in design to proceed to 

construction by the time the new 

requirements become effective. For 

Federal-aid projects that do not, the 

delayed start dates for the requirements 

will provide the necessary time for 

changes to occur to prepare for the 

imposition of the new requirements. 

FHWA has concerns that allowing 

Federal-aid projects to be covered by the 

Manufactured Products General Waiver 

if they are in preconstruction stages 

when the final assembly and 55 percent 

requirements become effective may be 

used to delay the full application of the 

new Buy America requirements for 

manufactured products, allowing 

foreign products to be purchased even 

when domestic ones are available. 

FHWA does not intend to disrupt the 

progress of projects but also does not 

intend to continue to allow the 

Manufactured Products General Waiver 

continue longer than needed; FHWA 

believes that allowing Federal-aid 

projects that have FHWA financial 

assistance obligated for construction 

before the start dates of this final rule 

provides an appropriate middle ground. 

Compliance 

Comments: In the NPRM, FHWA 

stated that it was not proposing any 

required method of compliance to ease 

the burden that tracking the origin and 

cost of components may pose. FHWA 

requested comment on any specific 

provisions that it should consider in 

easing the administrative burden in 

demonstrating compliance with the Buy 

America requirements for manufactured 

products. 

Many commenters nonetheless 

indicated that they desired FHWA to 

specifically clarify what constitutes 

compliance, such as what level of detail 

is required to prove compliance and 

what penalties FHWA could bring about 

in cases of noncompliance. These 

commenters further suggested that 

FHWA should clearly state who is 

responsible for tracking and providing 

information on the compliance of 

manufactured products. One 

commenter, however, agreed with 

FHWA that not prescribing any specific 

method of compliance will ease 

administrative burden. 

Commenters desiring FHWA to clarify 

a specific method of compliance 

suggested various possible methods. 

One commenter suggested that FHWA 

should allow recipients of FHWA 

financial assistance to rely on a fair 

inference that a manufactured product 

meets Buy America requirements, such 

as by relying on a certification, absent 

material evidence to the contrary. Other 

suggested that FHWA should clarify that 

a certification from a contractor or 

manufacturer would demonstrate 

compliance. Some commenters also 

suggested that FHWA itself should 

provide certification forms. Other 

commenters went further, suggesting 

that FHWA should itself certify 

manufactured products as compliant or 

develop a list of manufactured products 

that are compliant with its standards. 

Finally, some commenters stated that 

once a product in a product line is 

certified as compliant, that certification 

should cover other products from that 

product line for a certain period of time. 

FHWA Response: After analyzing the 

comments received on this topic, FHWA 

believes that commenters did not 

indicate that they desired FHWA to 

prescribe a specific form of compliance 

but rather sought clarification on what 

might constitute compliance. While not 


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2946 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

22See Q#48 of FHWA’s Buy America Q and A for 

Federal-aid Program for more information: https:// 

www.fhwa.dot.gov/construction/contracts/buyam_

qageneral.cfm. 23https://www.fhwa.dot.gov/utilities/buyam.cfm. 

prescribing any form of compliance, 

FHWA believes that the manufacturer 

will be in the best position to certify 

that a specific product meets these 

requirements. FHWA notes, however, 

that recipients of FHWA financial 

assistance are ultimately responsible for 

compliance with FHWA’s Buy America 

requirements. FHWA therefore believes 

that the recipient is in the best position 

to determine the best form of any 

certification. 

Due to the nature of the Buy America 

requirements for manufactured 

products, each product’s compliance 

must be determined individually. Given 

that the compliance of products might 

change, FHWA does not believe that it 

is in a position to certify compliance or 

have a list of compliant products; a 

product from one product line may be 

compliant at one point and that same 

product may then become noncompliant later in a different product 

line based on choices made by the 

manufacturer. Any certification from 

FHWA would only provide a brief 

snapshot of a specific manufactured 

product, which would be minimally 

helpful for other parties seeking to 

procure similar products. FHWA 

instead believes that it is more 

appropriate for parties to consult with 

product manufacturers, who are in the 

best position to provide current 

information on the compliance of their 

products. 

In determining the proper remedy for 

resolving an after-the-fact discovery of 

the incorporation of noncompliant 

manufactured products, FHWA intends 

to follow the same process as it does for 

determining the remedy for a discovery 

of the incorporation of noncompliant 

iron or steel. FHWA will review 

relevant information to determine the 

appropriate resolution, which may 

include removing the noncompliant 

products, making the noncompliant 

products non-participating, or 

determining that all project costs are 

ineligible.22

Scope of Buy America Requirements 

Comments: In the NPRM, FHWA 

noted that 23 U.S.C. 313(h) requires 

FHWA’s Buy America requirements to 

apply to all contracts that are eligible for 

FHWA assistance, regardless of the 

funding source for the specific 

contracts, if any contract within the 

scope of a finding, determination, or 

decision under the National 

Environmental Policy Act (NEPA) is 

funded with amounts made available to 

carry out title 23, U.S.C. In the NPRM, 

FHWA stated that because of this 

provision, were FHWA to rescind the 

Manufactured Products General Waiver 

and impose Buy America requirements 

for manufactured products, those Buy 

America requirements would apply to 

all contracts eligible for FHWA financial 

assistance for a project carried out 

within the scope of the applicable 

finding, determination, or decision 

under NEPA so long as one contract for 

the project is funded with amounts 

made available to carry out title 23, 

U.S.C. 

Commenters expressed confusion 

over the scope of FHWA’s Buy America 

requirements under 23 U.S.C. 313(h) 

versus BABA’s domestic content 

procurement preferences. For instance, 

commenters suggested that certain 

manufactured products are not used in 

infrastructure projects or are not integral 

to the construction of an infrastructure 

project and therefore should not be 

covered by any Buy America 

requirements. Commenters representing 

utility companies in particular argued 

that FHWA’s Buy America requirements 

for manufactured products should not 

apply to utility relocations, stating that 

the utility relocation is not an 

infrastructure project, that the utility 

company does not receive any Federal 

funds for the relocation but is only 

reimbursed for its costs, and that the 

involvement of the utility company in 

the project is involuntary. 

Other commenters, particularly those 

involved in the electric vehicle (EV) 

charging industry, expressed confusion 

over how 23 U.S.C. 313(h) functions if 

the NEPA determination is a categorical 

exclusion (CE). These commenters 

suggested that 23 U.S.C. 313(h) would 

require them to seek a NEPA 

determination on a project’s scope, even 

though the project is an approved CE, to 

determine the applicability of Buy 

America requirements. 

FHWA Response: FHWA wishes to 

clarify that 23 U.S.C. 313(h) represents 

a unique Buy America provision that is 

exclusive to FHWA. This provision 

applies to FHWA’s Buy America statute, 

not other domestic content procurement 

preferences, such as those in BABA; 

thus, FHWA’s Buy America 

requirements will be different from 

those applied by other Federal agencies. 

Under 23 U.S.C. 313(h), FHWA’s Buy 

America requirements, including its 

Buy America requirement for 

manufactured products, apply not just 

to the Federal-aid project itself but also 

to contracts under the scope of the 

applicable NEPA finding, 

determination, or decision. This means 

that a manufactured product does not 

need to be integral to the Federal-aid 

project itself to be subject to FHWA’s 

Buy America requirements. For 

instance, with respect to FHWA’s 

existing Buy America requirements for 

iron and steel, FHWA has long made 

clear that 23 U.S.C. 313(h) requires that 

all utility work eligible for FHWA 

financial assistance must meet its Buy 

America requirements for iron and steel, 

even if FHWA does not fund the utility 

work.23 Given that 23 U.S.C. 313(h) 

applies to manufactured products to the 

same extent as it does to iron and steel, 

FHWA thus believes that it is clear that 

these new requirements will similarly 

apply to all utility work eligible for 

FHWA financial assistance. In other 

words, a manufactured product must 

comply with the Buy America 

requirements if it is permanently 

incorporated into the Federal-aid project 

or if it is permanently incorporated as 

part of work done under a contract 

within the scope of the applicable NEPA 

finding, determination, or decision of a 

Federal-aid project and is eligible for 

FHWA financial assistance. FHWA 

discusses the issue of permanent 

incorporation in more detail below 

when discussing the introductory text to 

§ 635.410(c). 

With respect to commenters raising 

concerns about the applicability of CEs 

to 23 U.S.C. 313(h), FHWA notes that a 

CE is a form of a NEPA finding, 

determination, or decision. FHWA 

would not require or believe it 

necessary for a party to seek a further 

NEPA determination after obtaining an 

approved CE solely for the purpose of 

determining the extent of Buy America 

requirements under 23 U.S.C. 313(h). 

The CE itself would dictate the scope; 

all contracts eligible for FHWA financial 

assistance under the scope of the CE 

would need to comply with FHWA’s 

Buy America requirements if one such 

contract received Federal-aid funding. 

V. Section-by-Section Discussion 

Section 635.410(b)—Recipient 

Comments: FHWA proposed to 

remove the word ‘‘State’’ in existing 

§ 635.410(b)(2) and (3) and (d) and 

replace it with the word ‘‘recipient.’’ 

FHWA also proposed to use the word 

‘‘recipient’’ throughout § 635.410(c). 

One commenter requested that FHWA 

provide a definition of the word 

‘‘recipient,’’ stating that it was unclear 

whether this term referred to the 

contracting agency, contractor, 

manufacturer, or a combination of such 

entities. 


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FHWA Response: For the purpose of 

the final rule, the word ‘‘recipient’’ in 

§ 635.410(b), which discusses FHWA’s 

Buy America requirements for iron and 

steel, refers to the recipient of FHWA 

financial assistance. The change to 

‘‘recipient’’ in § 635.410(b) and (d) from 

‘‘State’’ is simply meant to reflect that 

rather than providing funds to States, 

FHWA also provides discretionary grant 

funds directly to other entities, such as 

local governments and metropolitan 

planning organizations. In addition, 

FHWA notes that its current Buy 

America requirements apply to 

Territorial governments, who receive 

funding from FHWA through the 

Territorial Highway Program under 23 

U.S.C. 165(c). The definition of ‘‘State’’ 

for purposes of § 635.410 does not 

include such Territories, even though 

such Territories are subject to the same 

Buy America requirements as States. 

See 23 CFR 635.403(f); 23 U.S.C. 

101(a)(28). In making this change, 

FHWA does not intend to change the 

existing practice as it currently applies 

to States. 

Section 635.410(b)—Iron or Steel 

Products 

Comments: FHWA proposed to 

maintain its existing Buy America 

requirements for steel and iron found in 

§ 635.410(b), with the only change being 

replacing references to ‘‘steel and iron 

materials’’ and ‘‘steel or iron materials’’ 

with the phrase ‘‘iron or steel products.’’ 

FHWA further proposed to define ‘‘iron 

or steel products’’ in § 635.410(c)(1)(iii). 

This change was meant to create a 

distinction between the category of iron 

and steel materials and manufactured 

products that may contain iron and 

steel. FHWA discusses the effect of this 

change in further detail when 

discussing § 635.410(c)(2) below. 

With respect to the requirements in 

§ 635.410(b), FHWA received several 

comments on § 635.410(b)(4), which 

allows for a de minimis amount of 

foreign iron and steel to be used in 

Federal-aid projects. Under this 

provision, foreign iron and steel can be 

used in a Buy America-compliant 

project if the cost of such materials does 

not exceed 0.1 percent of the total 

contract cost or $2,500, whichever is 

greater. Commenters expressed 

confusion over how this de minimis 

provision would apply to manufactured 

products and how it is connected with 

the departmental de minimis waiver. 

Other commenters suggested changes to 

the de minimis provision in 

§ 635.410(b)(4), such as by setting a total 

contract cost above the current $2,500 

figure. Other commenters argued that 

FHWA should codify the departmental 

de minimis waiver in the regulatory 

text, similar to how the de minimis 

provision is currently codified at 

§ 635.410(b)(4). 

In addition, one commenter stated 

that the proposed language in 

§ 635.410(b)(1)(ii), that all 

manufacturing processes for iron or 

steel products must occur in the United 

States, could suggest that all 

manufacturing processes for 

components of the products that are not 

made of iron or steel must be 

domestically produced. This commenter 

suggested modifying the language to 

state that ‘‘if iron or steel products are 

to be used, all manufacturing processes 

of the iron or steel components, 

including application of a coating, for 

these materials must occur in the United 

States.’’ 

FHWA Response: FHWA is clarifying 

that § 635.410(b)(4) only applies to iron 

or steel products; it does not apply to 

materials properly classified as 

manufactured products under 

§ 635.410(c)(1)(iv). The de minimis 

provision applicable to manufactured 

products is found in the departmental 

de minimis waiver. Other comments 

discussing changes to existing 

§ 635.410(b)(4) or codifying the 

departmental de minimis waiver in 

§ 635.410 are beyond the scope of this 

rulemaking. 

With respect to changes made to 

§ 635.410(b)(1)(ii), FHWA notes that the 

current language states that all 

manufacturing processes for steel or 

iron materials must occur in the United 

States. FHWA does not intend for its 

change in language, from ‘‘steel or iron 

materials’’ to ‘‘iron or steel products’’ to 

change the scope of the requirements in 

§ 635.410(b)(1)(ii) with respect to the 

category of iron or steel products. The 

intent is for FHWA’s current Buy 

America steel and iron requirements, 

codified in § 635.410(b), to continue to 

apply to all steel and iron in a product 

classified as an iron or steel product. 

The only functional change FHWA is 

making in § 635.410(b)(1)(ii) is to 

distinguish between iron or steel 

products and manufactured products 

that contain iron and steel. FHWA also 

notes that the language used in 

§ 635.410(b)(1)(ii) substantially mirrors 

the language used in 2 CFR 184.3 to 

determine when an iron or steel product 

is manufactured in the United States. 

Existing § 635.410(c) 

Comments: In the NPRM, FHWA 

proposed to replace the current 

§ 635.410(c), which discusses the 

process for requesting Buy America 

waivers and the procedures FHWA will 

take to respond to that request, with a 

new paragraph detailing FHWA’s Buy 

America requirements for manufactured 

products. 

FHWA received multiple comments 

expressing concern with removing 

existing § 635.410(c). Commenters 

stated their reservations with this 

approach, arguing that it appeared 

FHWA was removing the ability for 

recipients of FHWA financial assistance 

to request Buy America waivers. These 

commenters also indicated that FHWA 

should codify its waiver process in its 

Buy America regulation, similar to how 

it is done by OMB in 2 CFR 184.7. Other 

commenters also expressed 

dissatisfaction with FHWA’s current 

Buy America waiver process and 

suggested what they viewed as potential 

solutions. 

FHWA Response: FHWA did not 

intend for removing current § 635.410(c) 

to remove the ability for recipients of 

FHWA financial assistance to request 

Buy America waivers. The authority for 

recipients to request waivers is found in 

23 U.S.C. 313(b), and FHWA is not 

altering, nor could it alter, that ability 

through this rule. As stated in the 

NPRM, FHWA made the choice to 

remove existing § 635.410(c) because the 

current provision is out of date and does 

not reflect FHWA’s current statutory 

requirements regarding waivers, 

FHWA’s current organizational 

structure, or FHWA’s current procedure 

for processing waivers. FHWA believes 

that recipients of FHWA financial 

assistance understand the current Buy 

America waiver process and therefore 

does not believe that codifying this 

process is necessary. 

FHWA also notes that comments on 

modifying its current waiver process are 

out of the scope of this rulemaking. 

Section 635.410(c)—Introductory Text 

Comments: In § 635.410(c), FHWA 

proposed to state that manufactured 

products used and permanently 

incorporated in Federal-aid highway 

construction projects must be produced 

in the United States. Commenters, 

particularly those representing the 

utility industry, questioned what it 

meant for a manufactured product to be 

permanently incorporated into a 

Federal-aid project. These commenters 

argued that utility infrastructure that is 

being relocated, replaced, or modified 

does not become a permanent part of the 

Federal-aid project because it is being 

relocated, replaced, or modified only to 

accommodate project construction. 

Other commenters also suggested that 

FHWA should clarify that its Buy 

America requirements do not apply to 

existing in-use equipment. 


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2948 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

24See https://www.fhwa.dot.gov/utilities/ 

buyam.cfm for more information on the application 

of Buy America requirements to utility work on 

projects. 

FHWA Response: FHWA chose the 

language used in § 635.410(c) for 

FHWA’s Buy America requirements for 

manufactured products to align with the 

language currently in § 635.410(b)(1)(i) 

regarding FHWA’s Buy America 

requirements for steel and iron. FHWA 

intends for the standard for permanent 

incorporation of manufactured products 

to be the same as FHWA currently uses 

to determine whether steel and iron is 

permanently incorporated. In other 

words, FHWA would apply its Buy 

America requirements to iron, steel, and 

manufactured products permanently 

incorporated into Federal-aid projects. 

The requirements do not apply to steel, 

iron, or manufactured products used on 

a temporary basis on Federal-aid 

projects, meaning when contract 

specifications provide that the iron, 

steel, and manufactured products used 

on the project either must be removed 

at the end of the project or may be 

removed at the contractor’s 

convenience. FHWA believes that 

continuation of this current policy, 

along with the discussion of 23 U.S.C. 

313(h) above, should provide the 

necessary guidance on whether the 

relocation, replacement, or modification 

of utilities constitutes permanent 

incorporation of the products. In short, 

any contract or agreement involving 

utility work that uses any amount of 

Federal-aid Highway Program funding 

must comply with FHWA’s Buy 

America requirements, including the 

new requirement for manufactured 

products.24

In terms of applicability of the Buy 

America requirements to manufactured 

products to existing in-use equipment, 

FHWA also notes that the final assembly 

requirement will apply to all Federalaid projects obligated on or after 

October 1, 2025, and the 55 percent 

requirement will apply to all Federalaid projects obligated on or after 

October 1, 2026. Where FHWA’s Buy 

America requirements for manufactured 

products apply, all permanently 

incorporated manufactured products 

must be produced in the United States. 

Section 635.410(c)(1)(ii)—Excluded 

Materials 

Comments: In the NPRM, FHWA 

defined ‘‘excluded materials’’ as 

‘‘section 70917(c) materials as defined 

in 2 CFR 184.3.’’ Under 2 CFR 184.3, 

‘‘section 70917(c) materials’’ are defined 

as ‘‘cement and cementitious materials; 

aggregates such as stone, sand, or gravel; 

or aggregate binding agents or 

additives.’’ Commenters suggested that 

FHWA should, instead of crossreferencing to 2 CFR 184.3, provide a 

definition of the terms ‘‘aggregates,’’ 

‘‘aggregate binding agents,’’ and 

‘‘additives’’ in the regulatory text of 

§ 635.410. 

FHWA Response: As noted in the 

NPRM, section 70917(c) of BABA does 

not explicitly comment on whether 

excluded materials could be considered 

manufactured products. By providing a 

definition of excluded materials and 

then stating in the definition of 

manufactured products that excluded 

materials cannot be manufactured 

products, FHWA seeks to make clear, in 

alignment with 2 CFR part 184, that 

excluded materials are not, standing 

alone, manufactured products. As stated 

in more detail below when discussing 

§ 635.410(c)(1)(iv), FHWA believes that 

excluded materials may nonetheless 

constitute components of manufactured 

products when combined with other 

materials, including other excluded 

materials, to create a manufactured 

product. In other words, excluded 

materials may be standalone materials, 

and this not subject to FHWA’s Buy 

America requirements for manufactured 

products, or components of 

manufactured products, and thus the 

manufactured product would be subject 

to the final assembly and 55 percent 

requirement. For manufactured 

products containing excluded materials 

as components, the excluded material 

must be considered in determining 

whether the manufactured product has 

more than 55 percent of its components, 

by cost, produced in the United States. 

In terms of determining whether an 

excluded material is itself not a 

manufactured product, FHWA views an 

aggregate as a broad category of 

particulate matter, such as stone, sand, 

or gravel. FHWA views aggregate 

binding agents as materials used to bind 

together small aggregates, and FHWA 

views additives as materials added to 

other materials to improve their 

properties. FHWA, however, does not 

believe that a definition more specific 

than this is necessary for the purpose of 

this rulemaking; FHWA doubts that 

aggregates, aggregate binding agents, or 

additives will generally be considered 

standalone manufactured products. If 

such outlier cases occur, FHWA 

believes they are more appropriately 

dealt with on a case-by-case basis or 

through the issuance of future guidance. 

Section 635.410(c)(1)(iii), (vi)—Iron or 

Steel Products 

Comments: In the NPRM, FHWA 

defined ‘‘iron or steel products’’ as 

articles, materials, or supplies that 

consist wholly or predominantly of iron 

or steel or a combination of both. FHWA 

further defined ‘‘predominantly of iron 

or steel or a combination of both’’ as a 

material where the cost of the iron and 

steel content exceeds 50 percent of the 

total cost of all its components. Both of 

these definitions mirror the definitions 

of the terms in 2 CFR part 184. 

Commenters raised concerns 

regarding the difficulty in evaluating the 

steel and iron content of products to 

determine whether those products 

would be considered manufactured 

products, and subject to the new Buy 

America requirements for manufactured 

products, or iron or steel products, and 

subject to the existing Buy America 

requirements for iron and steel. These 

commenters suggested that it may be 

difficult for recipients of FHWA 

financial assistance to determine the 

cost of the iron and steel content of a 

product. One commenter suggested that 

FHWA allow recipients to use another 

metric, such as weight percentage, to 

determine how to classify a product, 

arguing that determining the weight of 

iron and steel in a product is easier to 

determine than the cost of the iron and 

steel. 

FHWA Response: FHWA believes that 

adopting a definition that distinguishes 

between iron or steel products and 

manufactured products that contain iron 

or steel is important to allow contracting 

agencies, contractors, and 

manufacturers to understand which 

requirements apply to a given material. 

FHWA acknowledges that recipients of 

FHWA financial assistance may need to 

consult with manufacturers to 

determine the cost of a product’s iron or 

steel content. FHWA, however, believes 

that using the standard proposed, which 

is the standard under BABA and 2 CFR 

part 184, provides a single standard that 

applies to iron or steel products across 

Federal agencies; this is important to 

provide certainty to contracting 

agencies, contractors, and 

manufacturers regarding the 

requirements that apply to a given 

material no matter the Federal agency 

that is funding the procurement of the 

material. 

Section 635.410(c)(1)(iv)— 

Distinguishing Manufactured Products 

From Other Materials 

Comments: In the NPRM, FHWA 

proposed to define a manufactured 

product as an article, material, or supply 

that has been processed into a specific 

form and shape, or combined with other 

articles, materials, or supplies to create 

a product with different properties than 

the individual articles, materials, or 


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25This rule applies generally to manufactured 

products. FHWA discusses the specific exceptions 

to it below when discussing § 635.410(c)(2)(i) and 

(ii). 

supplies. FHWA noted, however, that if 

an item is classified as an iron or steel 

product, an excluded material, or other 

product category as specified by law or 

in 2 CFR part 184, it should not be 

classified as a manufactured product. 

Commenters expressed confusion 

about what materials should be 

classified as manufactured products, 

with one commenter requesting FHWA 

to clarify whether FHWA’s definition 

meant that a manufactured product 

included all permanent materials or 

products incorporated into a project 

outside of the categories specifically 

listed in the definition. Other 

commenters requested for FHWA to 

specifically state that certain materials 

are not manufactured products and 

therefore not subject to FHWA’s Buy 

America requirements. One commenter 

requested clarity on the meaning of 

FHWA’s statement in the preamble to 

the NPRM that ‘‘products brought to the 

work site in an unprocessed or 

minimally processed state, such as 

topsoil, compost, and seed, would not 

be considered manufactured products’’ 

and that ‘‘non-manufactured or raw 

materials mixed off of the work site with 

other non-manufactured or raw 

materials of similar types would not 

necessarily result in the mixed material 

brought to the work site being classified 

as a manufactured product if it remains 

in an unprocessed or minimally 

processed state, such as minimallyprocessed fill dirt.’’ 

Other commenters requested that 

FHWA provide clarity on distinguishing 

between manufactured products and 

construction materials. Certain 

commenters requested that FHWA 

specifically classify specific products as 

either a manufactured product or a 

construction material. Commenters in 

particular raised concerns over how to 

classify construction materials that have 

articles, materials, supplies, or binding 

agents added to them, as the definition 

of ‘‘construction material’’ in 2 CFR 

184.3 states that minor additions of 

articles, materials, supplies, or binding 

agents to a construction material do not 

change the categorization of the 

combined material as a construction 

material. Such commenters requested 

that FHWA define when a construction 

material has minor additions and 

should be classified as a construction 

material versus when a construction 

material has non-minor additions and 

should be classified as a manufactured 

product. One commenter requested that 

FHWA provide a list of manufactured 

products that include construction 

materials that have undergone nonminor additions for this purpose. Other 

commenters requested that FHWA 

clearly state that a product that is a 

combination of two construction 

materials should be classified as a 

manufactured product, not a 

construction material. 

FHWA Response: The definition of 

‘‘manufactured product’’ has two steps. 

First, to be a manufactured product, the 

material must either (1) be processed 

into a specific form and shape; or (2) 

combined with other articles, materials, 

or supplies to create a product with 

different properties than the individual 

articles, materials, or supplies. Like 

OMB, FHWA finds it necessary to have 

a positive definition for what constitutes 

a ‘‘manufactured product.’’ For 

example, FHWA would not classify a 

raw material as a manufactured product 

because it is not manufactured under 

FHWA’s meaning of the term. Raw 

materials are not (1) processed into a 

specific form and shape; or (2) 

combined with other articles, materials, 

or supplies to create a product with 

different properties than the individual 

articles, materials, or supplies. 

In terms of determining whether a 

material is processed into a specific 

form and shape, FHWA wishes to make 

clear that some materials, like raw 

materials, are not processed into a 

specific form and shape. Alternatively, 

some products may exist in such a 

minimally processed state that they 

should not be considered ‘‘processed 

into a specific form and shape,’’ such as 

topsoil, which should not be considered 

a manufactured product. 

For the purpose of determining 

whether a material is combined with 

other articles, materials, or supplies to 

create a product with different 

properties than the individual articles, 

materials, or supplies, FHWA clarifies 

that some materials may be combined 

with other materials but produce a 

product that lacks different properties 

than the individual materials. For 

example, a mixture of raw materials in 

an unprocessed or minimally processed 

state, such as minimally processed fill 

dirt, should not be classified as a 

manufactured product because the fill 

dirt does not have different properties 

than its individual components. 

In short, some materials may not be 

classified as a manufactured product 

under this first step. A material properly 

classified as a manufactured product 

under this first step is then analyzed 

under the second step of the definition. 

Under this second step, a material is 

excluded from classification as a 

manufactured product if it could also be 

classified as an iron or steel product, an 

excluded material, or other product 

category as specified by law or in 2 CFR 

part 184. Except for a specific subset of 

products discussed in § 635.410(c)(2)(i) 

and (ii), below, FHWA intends for 

materials to be classified as only one 

category of material and, based on that 

classification, only subject to one set of 

requirements, as applicable to the 

classification. 

FHWA recognizes that without this 

second step, certain materials could be 

viewed as both manufactured products 

under the first step and as another 

category, which would make it unclear 

what requirements applied to that 

material. For instance, a material could 

be considered a manufactured product 

under the first step of the definition but 

also contain such a high amount of iron 

and steel to be considered an iron or 

steel product, such as might be the case 

for some vehicles. This second step 

makes clear that such a material is 

properly classified as an iron or steel 

product and subject to FHWA’s Buy 

America requirements for iron and steel 

under § 635.410(b), not FHWA’s Buy 

America requirements for manufactured 

products under § 635.410(c).25

Similarly, a material that falls under the 

definition of an excluded material could 

also be considered a manufactured 

product under the first step of the 

definition of ‘‘manufactured product,’’ 

such as cement. Again, in such a case, 

such a material would be properly 

classified as an excluded material, not a 

manufactured product. As excluded 

materials are not subject to any Buy 

America requirements standing alone, 

such a material would not have any 

domestic content procurement 

preference placed on it. To use another 

example, certain materials classified as 

construction materials under 2 CFR 

184.3 could also be considered a 

manufactured product under the first 

step of the definition of ‘‘manufactured 

product,’’ such as fiber optic cable. 

Once more, such a material is properly 

classified as a construction material and 

is subject to BABA’s construction 

material requirements under 2 CFR part 

184, not FHWA’s Buy America 

requirements for manufactured 

products. 

FHWA acknowledges that, to 

determine whether a material should be 

classified as a construction material or 

manufactured product during this step 

two, parties need to understand the 

definition of what constitutes a 

construction material in 2 CFR 184.3. 

Per 2 CFR 184.3, a construction material 

is an article, material, or supply that 

consists of only one of the following 


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eight items: non-ferrous metals; plastic 

and polymer-based products (including 

polyvinylchloride, composite building 

materials, and polymers used in fiber 

optic cables); glass (including optic 

glass); fiber optic cable (including drop 

cable); optical fiber; lumber; engineered 

wood; or drywall. In addition, these 

eight materials may have minor 

additions of articles, materials, supplies, 

or binding agents added to them and 

remain properly categorized as a 

construction material. In discussing 

minor additions in 2 CFR part 184, OMB 

did not provide a specific definition but 

instead stated that ‘‘Federal agencies 

should exercise reasonable discretion in 

applying this term within their 

respective Federal financial assistance 

programs for infrastructure.’’ 88 FR 

57767. FHWA does not believe that this 

rulemaking, which concerns FHWA’s 

requirements for manufactured products 

under 23 U.S.C. 313, is the proper place 

to define what constitutes non-minor 

additions for the purpose of determining 

whether a material should be 

considered a construction material; if 

necessary, FHWA would instead seek to 

do so through additional guidance. 

FHWA notes that a material properly 

classified as a manufactured product 

under this two-step definition may 

include components that, on their own, 

would be categorized as iron or steel 

products, excluded materials, 

construction materials, or other 

categories of products. FHWA 

emphasizes that it is the classification of 

the material itself that determines 

whether it is a manufactured product 

versus an iron or steel product, 

excluded material, or construction 

material. For example, a traffic light 

may contain iron and steel components 

and glass, a construction material, as a 

component. In determining how to 

classify the traffic light, the first step is 

to determine whether the traffic light is 

processed into a specific form and shape 

or combined with other articles, 

materials, or supplies to create a 

product with different properties than 

the individual articles, materials, or 

supplies. The second step is to 

determine whether the traffic light itself 

should be classified as an iron or steel 

product, excluded material, or other 

product category as specified by law or 

in 2 CFR part 184. The fact that 

components of the traffic light might be 

iron or steel products or construction 

materials may be relevant to 

determining the proper classification of 

the traffic light; for example, if the iron 

or steel components represent more 

than 50 percent of the cost of all the 

traffic light’s components, the traffic 

light should be classified as an iron or 

steel product. It is important to note, 

however, that merely containing such 

iron or steel components and 

construction materials as components 

does not mean that the traffic light is 

automatically classified as an iron or 

steel product or a construction material. 

This determination must be made by 

looking at the specific definition 

applicable to each category of material. 

If a material meets the definition of a 

manufactured product under the first 

step and is not excluded under the 

second step, it is properly classified as 

a manufactured product, unless it is a 

mixture of excluded materials delivered 

to a work site without final form for 

incorporation into a project, as 

discussed below in the analysis of 

§ 635.410(c)(1)(iv). FHWA reiterates, 

however, that a material properly 

classified as a manufactured product is 

only subject to FHWA’s Buy America 

requirements for manufactured products 

if the material is permanently 

incorporated into a Federal-aid project. 

FHWA believes that this guidance 

should allow contracting agencies, 

contractors, and manufacturers to 

properly determine the proper 

classification of articles, materials, and 

supplies. 

Section 635.410(c)(1)(iv)—Excluded 

Materials 

Comments: Under FHWA’s definition 

of a manufactured product, discussed in 

detail above, an excluded material, by 

itself, should not be classified as a 

manufactured product. FHWA stated in 

the NPRM, however, in alignment with 

2 CFR part 184, that excluded materials 

may constitute a component of a 

manufactured product when combined 

with other materials, including other 

excluded materials. If a manufactured 

product contains components that are 

excluded materials, those excluded 

materials must be considered in 

determining whether 55 percent of the 

product’s components, by cost, are 

produced in the United States. FHWA 

once again, notes, however, that 

mixtures of excluded materials 

delivered to a work site without final 

form for incorporation into a project are 

not considered manufactured products; 

comments on this topic are discussed in 

detail below. 

Some commenters expressed 

opposition to having a combination of 

excluded materials be classified as a 

manufactured product. Others 

expressed opposition to applying a Buy 

America requirement to excluded 

materials in any form. One commenter 

requested that FHWA should make it 

clear in the final rule that excluded 

materials do not have a Buy America 

requirement placed on them. 

FHWA Response: FHWA clarifies that, 

consistent with 2 CFR part 184, an 

individual item listed in section 

70917(c) of BABA that is brought to the 

work site for permanent incorporation 

into a Federal-aid project should be 

classified as an excluded material and 

not subject to a Buy America 

requirement. For example, cement 

brought to the work site for permanent 

incorporation into a Federal-aid project 

is not subject to FHWA’s Buy America 

requirements. If the individual excluded 

material is combined with another 

excluded material, such as cement 

combined with aggregates, that 

combined material should be 

considered to be a manufactured 

product, assuming that it means the 

definition of a manufactured product in 

§ 635.410(c)(1)(iv). In this case, each 

excluded material (the cement and 

aggregates) is a component of the 

manufactured product and must be 

considered when determining whether 

55 percent of the components, by cost, 

of the product are produced in the 

United States. On the other hand, an 

excluded material combined with the 

same excluded material would remain 

an excluded material and not be subject 

to FHWA’s Buy America requirements. 

In short, a Buy America preference may 

apply to excluded materials as a 

component of a manufactured product; 

it cannot apply to an excluded material 

standing alone. 

FHWA agrees with OMB that the 

language in section 70917(c) of BABA 

indicates that Congress did not intend 

for excluded materials to be considered 

construction materials and did not 

intend excluded materials, standing 

alone, to be classified as manufactured 

products. See 88 FR 57771–73. In 

addition, FHWA agrees with OMB that 

section 70917(c) does not prevent 

excluded materials from being 

components of manufactured products 

and considered the same as any other 

component of a manufactured product. 

See id. at 57772. FHWA further believes 

that it is useful to align the treatment of 

excluded materials under FHWA’s Buy 

America requirements with the 

requirements of these materials under 2 

CFR part 184 where appropriate. FHWA 

believes that this promotes uniformity 

for contracting agencies, contractors, 

and manufacturers operating between 

different Federal Agency programs and 

will allow for these entities to build up 

a greater amount of experience with 

these requirements. 


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Section 635.410(c)(1)(iv)—Reference to 

Construction Materials 

Comments: In the definition of 

manufactured product, FHWA stated 

that: ‘‘If an item is classified as an iron 

or steel product, an excluded material, 

or other product category as specified by 

law or in 2 CFR part 184, then it is not 

a manufactured product.’’ Many 

commenters suggested that FHWA 

should remove the reference to ‘‘other 

product category as specified . . . in 2 

CFR part 184’’ and instead just list the 

specific construction materials 

referenced in 2 CFR part 184. 

FHWA Response: Pursuant to section 

70915(b) of BABA, OMB is given the 

authority to determine which 

construction materials are covered by 

BABA’s requirements and to define the 

manufacturing processes that must 

occur in the United States for those 

construction materials. As stated above, 

except for specific products, described 

in more detail in the discussion of 

§ 635.410(c)(2)(i) and (ii), below, FHWA 

believes that materials should be 

classified as only one category of 

material and, based on that 

classification, be subject to only one set 

of requirements, as applicable to the 

classification. The purpose of referring 

to ‘‘other product category as specified 

by law or in 2 CFR part 184’’ is to make 

clear that products that could be 

classified as both another category and 

a manufactured product should not be 

considered manufactured products and 

are not subject to FHWA’s Buy America 

requirements for manufactured 

products. Thus, items classified as 

construction materials by OMB are not 

properly classified as manufactured 

products and are not subject to FHWA’s 

Buy America requirements for 

manufactured products. Given that 

OMB has the authority to define 

construction materials and thereby 

impose BABA’s construction material 

requirements on them, FHWA does not 

find it appropriate to separately list 

construction materials in its own 

regulation. 

Section 635.410(c)(1)(iv)—Mixtures of 

Concrete or Asphalt Delivered to a Job 

Site Without Final Form 

Comments: In the definition of 

manufactured products in the NPRM, 

FHWA stated that ‘‘[m]ixtures of 

concrete or asphalt delivered to a job 

site without final form for incorporation 

into a project are not a manufactured 

product.’’ Many commenters stated that 

FHWA should clarify that this exception 

should apply to all mixtures of excluded 

materials, not just mixtures of concrete 

or asphalt. Other commenters suggested 

that FHWA should reference a ‘‘work 

site’’ instead of a ‘‘job site,’’ given that 

§ 635.410(c)(2) stated that classification 

of a material should occur based on its 

status at the time it is brought to the 

work site for incorporation into an 

infrastructure project. Still other 

commenters disagreed, stating that 

FHWA should clarify that the 

exemption should apply to mixtures 

delivered to or proximate to a work site. 

Finally, some commenters opposed 

treating mixtures of concrete or asphalt 

without final form from those that are in 

a settled form, contesting that there is 

no reason to treat the two differently. 

FHWA Response: In the preamble to 

2 CFR part 184, OMB stated: ‘‘In the 

case of section 70917(c) materials, OMB 

clarifies . . . to the extent that section 

70917(c) materials were only combined 

as an unsettled mixture without final 

form when reaching the work site, such 

as in the case of wet concrete or hot mix 

asphalt, the unsettled mixture should 

not be considered a manufactured 

product.’’ 88 FR 57772. In the NPRM, 

FHWA stated its agreement with OMB 

on this topic and that FHWA intended 

for its proposed regulations to have the 

same reach as 2 CFR part 184 in this 

respect. 

FHWA disagrees with commenters 

suggesting that settled mixtures of 

excluded materials should not be 

considered manufactured products like 

FHWA proposed for unsettled mixtures 

of excluded materials. FHWA agrees 

with OMB that unsettled mixtures are 

not processed into a specific shape or 

form like settled mixtures. Id. While 

settled mixtures may have different 

properties than individual excluded 

materials, FHWA agrees with OMB that 

it is more appropriate to only treat 

excluded materials that have set or 

dried into a particular shape or form 

prior to reaching the work site as 

manufactured products. FHWA also 

notes that aligning its Buy America 

requirements with the BABA 

requirements in 2 CFR part 184 will 

promote uniformity and allow 

contracting agencies, contractors, and 

manufacturers that work with different 

Federal agencies a greater ability to 

increase their knowledge of how these 

requirements work. 

FHWA does agree with commenters 

that the language in the final rule 

should better reflect the intent of OMB. 

For this reason, FHWA believes it 

appropriate to modify its regulatory text 

to make clear that this exception applies 

to all mixtures of excluded materials 

without final form. FHWA also agrees 

that it is appropriate to reference a 

‘‘work site’’ instead of a ‘‘job site,’’ given 

that is the language used by OMB and 

the language included in § 635.410(c)(2). 

FHWA intends the use of ‘‘work site’’ in 

§ 635.410(c)(1)(iv) to mirror the use of 

‘‘work site’’ in § 635.410(c)(2). Thus, the 

work site is generally the location of the 

infrastructure project at which the 

mixture will be incorporated; however, 

there may be circumstances where it is 

more appropriate for the work site to be 

considered to be broader than the 

location of the infrastructure project. As 

the definition of the work site will 

depend on the specific project and 

material being delivered, FHWA does 

not believe it necessary to state that the 

mixtures can be delivered proximate to 

a work site. 

Section 635.410(c)(1)(vii)—Produced in 

the United States 

Comments: In the NPRM, FHWA 

defined when a manufactured product 

was ‘‘produced in the United States’’ 

and thereby when a manufactured 

product would be compliant with 

FHWA’s Buy America requirements. 

FHWA proposed to adopt the definition 

of ‘‘produced in the United States’’ 

found in section 70912(6)(B) of BABA, 

which would require a manufactured 

product be manufactured in the United 

States and the cost of components of the 

manufactured product that are mined, 

produced, or manufactured in the 

United States be greater than 55 percent 

of the total cost of all components of the 

manufactured product. FHWA stated in 

the NPRM that it believed it was 

required by BABA to adopt general 

standards that meet or exceed those 

under BABA. Further, FHWA stated in 

the NPRM that it was proposing to 

choose requirements similar to BABA’s 

manufactured product requirements to 

minimize the burden placed on 

contracting agencies, contractors, and 

manufacturers. FHWA also stated that 

aligning its Buy America requirements 

for manufactured products with those 

applicable to manufactured products 

under BABA would provide consistency 

between the two regimes. 

Some commenters noted the benefit of 

aligning FHWA’s Buy America 

requirements for manufactured products 

with BABA’s domestic content 

procurement preference for 

manufactured products, with one 

manufacturer stating that similar 

standards would enable it to use the 

same compliant products in projects 

subject to BABA and FHWA’s Buy 

America statute. Other commenters 

suggested various other methods for 

FHWA to determine when a 

manufactured product is ‘‘produced in 

the United States.’’ One commenter 

stated that the requirements should vary 

based on product or product type. 


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26Under FHWA’s Buy America requirements for 

iron or steel, a recipient of FHWA financial 

assistance can demonstrate compliance through 

other methods as well. For instance, § 635.410(b)(2) 

allows a recipient to satisfy the requirements 

through having standard contract provisions 

mandating the use of domestic materials and 

products, including steel and iron materials, to the 

same or greater extent as the provisions of 

§ 635.410(b). Per § 635.410(b)(3), recipients may 

also demonstrate compliance with FHWA’s Buy 

America requirements for iron and steel through 

including alternate bid provisions in conformance 

with that provision. Finally, FHWA notes, as stated 

above, that the de minimis provision for iron or 

steel products under § 635.410(b)(4) continues to 

apply to iron or steel products. 

Others suggested that FHWA should 

allow products to be sourced from 

countries for which the United States 

has trade agreements. One commenter 

argued that FHWA should remove the 

55 percent requirement altogether. 

Other commenters sought clarification 

over how to determine whether a 

manufactured product was produced in 

the United States under FHWA’s 

proposed standards. Commenters 

questioned how to determine when a 

product was manufactured in the 

United States for the purpose of the 

final assembly requirement. 

Commenters also sought clarification on 

how to determine if a component was 

mined, produced, or manufactured in 

the United States for the purpose of 

meeting the 55 percent requirement. 

FHWA Response: FHWA believes its 

Buy America requirements for 

manufactured products must meet or 

exceed those under BABA pursuant to 

section 70917(a) and (b) of BABA, that 

choosing requirements meeting BABA’s 

is the minimally burdensome option, 

and that doing so allows for the benefit 

of consistency between projects subject 

to FHWA’s Buy America requirements 

and those subject to BABA. 

With respect to what it means for a 

product to be manufactured in the 

United States, and what it means for a 

component to be mined, produced, or 

manufactured in the United States, 

FHWA intends for the requirements to 

reflect the same principles found in 

BABA and the Federal Acquisition 

Regulation (FAR). FHWA intends to 

issue further guidance on these topics in 

the future. FHWA notes, however, that 

the manufactured and 55 percent 

requirements apply to the manufactured 

product itself, not the components of a 

manufactured product. For example, a 

component of a manufactured product 

does not need more than 55 percent of 

its components—the subcomponents of 

the manufactured product –by cost, to 

be mined, produced, or manufactured in 

the United States. 

Section 635.410(c)(2)—Buy America 

Requirements for Iron and Steel 

Comments: In the NPRM, FHWA 

proposed for an article, material, or 

supply to only be classified as an iron 

or steel product, a manufactured 

product, or other products as specified 

by law or in 2 CFR part 184. FHWA 

further proposed that an iron or steel 

product must meet FHWA’s existing 

Buy America requirements for iron and 

steel in § 635.410(b). Finally, FHWA 

proposed that, except as otherwise 

provided in § 635.410(c)(2)(i) and (ii), an 

article, material, or supply should not 

be considered to fall into multiple 

categories. 

Several commenters expressed 

confusion about what it meant for a 

material to meet the requirements of 

§ 635.410(b). Others expressed 

confusion over whether the rule would 

require that predominantly iron and 

steel components of manufactured 

products be compliant with 

§ 635.410(b). 

Commenters representing the iron and 

steel industry expressed opposition to 

not requiring predominantly iron or 

steel components of manufactured 

products to be subject to FHWA’s Buy 

America requirements for iron and steel. 

These commenters stated that this 

would be contrary to longstanding 

FHWA practice. They further stated 

their belief that not requiring 

predominantly iron or steel components 

of manufactured products to meet 

FHWA’s Buy America requirements for 

steel and iron would be in conflict with 

BABA’s savings provision, arguing that, 

pursuant to the savings provision in 

section 70917(a) and (b) of BABA, 

BABA cannot be used to modify an 

agency’s existing requirements that meet 

or exceed BABA’s. These commenters 

argued that BABA’s savings provision 

does not merely allow FHWA to 

preserve its existing Buy America 

policies but explicitly preserves such 

policies. Commenters also argued that 

they believed changing Buy America 

policies is in conflict with BABA’s 

intent to expand the application of Buy 

America requirements. 

Commenters further argued that 

legislative history demonstrates that 

Congress intended the 1982 STAA to 

cover all steel products, including steel 

components of manufactured products. 

Commenters also pointed to a statement 

in the Federal Register notice where 

FHWA instituted the Manufactured 

Products General Waiver which they 

believed indicated that FHWA 

acknowledged Congress’ intent in 

expanding Buy America coverage to 

include all steel products. At the time, 

FHWA stated: ‘‘Congressional concern 

that Federal money spent to improve 

highways should also aid U.S. industry 

is apparent in the first sentence of 

Section 165, which requires the 

Secretary of Transportation to ensure 

that funds authorized for Federal-aid 

highway projects would only buy U.S.- 

made steel. The FHWA therefore has 

expended the Buy America rule to 

include all steel products.’’ See 48 FR 

53102. Finally, commenters opposed to 

FHWA changing current policy argued 

that doing so would harm the domestic 

steel and iron industry and would allow 

foreign steel and iron to be used, which 

they stated was unfairly traded and 

higher-emitting. 

Other commenters, however, argued 

for removing the policy of applying 

FHWA’s Buy America requirements to 

predominantly iron and steel to iron 

and steel components of manufactured 

products. These commenters stated that 

the current policy is creating a burden 

on contracting agencies, contractors, 

and manufacturers, as well as 

marketplace confusion as FHWA’s 

policy does not apply to projects subject 

to BABA. One commenter stated that 

the history of iron and steel of 

components is not generally tracked, 

making compliance with the current 

policy difficult. 

FHWA Response: FHWA does not 

intend for its Buy America requirements 

on manufactured products to 

substantially modify its existing Buy 

America requirements for iron and steel, 

codified at § 635.410(b). For 

manufactured products containing 

sufficient amounts of iron and steel, by 

cost, to be classified as ‘‘iron or steel 

products’’ under the definition in 

§ 635.410(c)(1)(iii), FHWA believes that 

those products are properly subject to 

FHWA’s existing Buy America 

requirements for iron and steel. 

Accordingly, FHWA is making clear in 

§ 635.410(c)(2) that such iron or steel 

products remain covered by FHWA’s 

existing Buy America requirements for 

iron and steel in § 635.410(b). Under 

these requirements, pursuant to 

§ 635.410(b)(1)(ii), all manufacturing 

processes of the iron or steel product, 

including application of a coating, must 

generally occur in the United States.26

FHWA, however, is making clear 

what products are subject to its existing 

steel and iron requirements and what 

are subject to its new manufactured 

product requirements. Except for the 

specific products and components 

discussed below, FHWA believes that 

manufactured products containing 

predominantly iron or steel components 

should not be subject to both FHWA’s 

existing steel and iron requirements and 

its new manufactured product 


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27FHWA notes that recipients of FHWA financial 

assistance may need to track the cost of iron or steel 

components of a material to determine whether that 

material is properly classified as an iron or steel 

product or a manufactured product. In situations 

where the iron and steel content of a material is 

close to 50 percent of the total cost of all its 

components, this may require tracking the cost of 

components of lesser costs. If the material is 

properly classified as an iron or steel product, 

FHWA’s Buy America requirements for iron and 

steel would require the iron and steel components, 

including the iron and steel components of lesser 

cost, to be domestically manufactured; however, 

larger, components that are not iron or steel would 

not need to be domestically produced. 

Alternatively, if the material is properly classified 

as a manufactured product, the origin of the iron 

and steel components of lesser cost would not need 

to be tracked. In either case, FHWA expects the 

burden of tracking the origin and cost of all 

components of lesser cost to be more burdensome 

than the requirements under this final rule. 

requirements. In other words, for 

Federal-aid projects, predominantly iron 

or steel components of a product 

classified as a manufactured product do 

not need to comply with FHWA’s Buy 

America requirements for iron and steel; 

the manufactured product itself only 

needs to comply with FHWA’s Buy 

America requirements for manufactured 

products. FHWA believes that, with the 

imposition of Buy America 

requirements for manufactured 

products, it is generally unnecessary to 

continue to apply Buy America 

requirements to predominantly iron and 

steel components of those manufactured 

products. Manufacturers may continue 

to use domestically manufactured iron 

and steel components for the purpose of 

meeting the 55 percent requirements, 

and FHWA expects manufacturers of 

products with more costly iron and steel 

components to continue to do so. 

FHWA is not, however, imposing a 

requirement that predominantly iron 

and steel components, no matter the 

value, must be domestically 

manufactured. FHWA believes, 

however, that for iron and steel 

components of lesser costs, it would be 

unduly burdensome to require tracking 

the origin and cost of these components 

as well as other components that are 

higher priced, which would be 

necessary to meet the 55 percent 

requirements.27

Further, requiring all predominantly 

iron and steel components to be 

domestically produced would create 

discrepancies between FHWA’s Buy 

America requirements and BABA’s 

requirements, which FHWA seeks to 

avoid when not justified. Under BABA, 

an article, material, or supply should 

not be considered to fall into multiple 

categories and must meet the specific 

Buy America preference for only the 

single category in which it is classified. 

See 2 CFR 184.4(e) and (f). Maintaining 

FHWA’s current policy would result in 

some materials being BABA-compliant 

but not Buy America-compliant. As 

stated below in the discussion of 

§ 635.410(c)(2)(i) and (ii), FHWA 

believes that there may be some 

products and components for which the 

continued application of this policy 

may be justified, and the departure from 

BABA’s requirements, based on the 

circumstances surrounding the 

manufacture of the products and 

components. FHWA does not believe 

that the same rationale exists for all 

predominantly steel and iron 

components, no matter what size or 

what cost, in all manufactured products. 

FHWA does not believe that requiring 

manufactured products containing 

predominantly iron and steel 

components to generally be subject to 

only FHWA’s Buy America 

requirements for manufactured products 

is contrary to BABA’s savings provision 

in section 70917(a) and (b) of BABA. 

Section 70917(a) of BABA states that 

BABA ‘‘shall apply to a Federal 

financial assistance program for 

infrastructure only to the extent that a 

domestic content procurement 

preference as described in section 70914 

does not already apply to iron, steel, 

manufactured products, and 

construction materials.’’ Section 

70917(b) states that nothing in BABA 

‘‘affects a domestic content procurement 

preference for a Federal financial 

assistance program for infrastructure 

that is in effect and that meets the 

requirements of section 70914.’’ FHWA 

interprets these provisions to mean that 

BABA only applies to FHWA’s 

programs only to the extent that a 

domestic content procurement 

preference for iron, steel, manufactured 

products, and construction materials 

meeting or exceeding the requirements 

of section 70914 does not already exist. 

Further, FHWA interprets section 

70917(b) to mean that, where a domestic 

content procurement preference for 

iron, steel, manufactured products, and 

construction materials meeting or 

exceeding the requirements of section 

70914 does exist, BABA has no effect on 

such domestic content procurement 

preferences. 

FHWA also disagrees that the 

legislative history of the 1982 STAA 

demonstrates that Congress intended the 

1982 STAA to cover all steel 

components of manufactured products. 

Similarly, FHWA finds commenters’ 

reference to FHWA’s statement in the 

Federal Register notice that created the 

Manufactured Products General Waiver 

as failing to indicate congressional 

intent to apply Buy America 

requirements for steel to all steel 

components. In that statement, FHWA 

said that congressional intent in section 

165 of the 1982 STAA indicated that its 

Buy America requirements for steel 

should extend to all steel products. See 

48 FR 53102. At the time, FHWA was 

referencing the fact that it had 

previously applied its Buy America 

requirements for steel to only structural 

steel when implementing section 401 of 

the 1978 STAA, and that it was then 

applying its Buy America requirements 

for steel to all steel products. 

Finally, FHWA believes that the 

effects of this rule on the domestic iron 

and steel industries will be minimal. 

Currently, predominantly iron and steel 

components of manufactured products 

used on Federal-aid projects are 

required to be produced domestically. 

FHWA believes it likely that, where 

such components represent a large cost 

of the manufactured product, 

manufacturers will continue to use such 

domestically produced components. 

Doing so will allow manufacturers to 

more easily satisfy the 55 percent 

requirement, while requiring minimal 

changes to product design. For less 

expensive iron and steel components, 

FHWA believes that manufacturers 

should have the option to replace them 

in their products with foreign 

components. FHWA agrees with 

commenters that tracing the origin of 

the iron and steel for these minor 

components is burdensome and, given 

their cost, does not provide sufficient 

value to the iron and steel industry to 

justify these burdens. 

Section 635.410(c)(2)—Classification at 

the Work Site 

Comments: In the NPRM, FHWA 

proposed the classification of an article, 

material, or supply into a specific 

category to be based on its status at the 

time it is brought to the work site for 

incorporation into an infrastructure 

project; this classification would then 

determine which requirements, if any, 

the article, material, or supply would be 

subject to. In addition, FHWA proposed 

to state that the work site is generally 

the location of the infrastructure project 

at which the iron or steel product or 

manufactured product will be 

incorporated. 

Many commenters expressed 

confusion over how to distinguish 

between a component of a manufactured 

product and the manufactured product 

itself. Commenters were particularly 

concerned when components for a 

product were brought to the work site 

separately, with commenters expressing 

confusion over the fact that a material 

may be seemingly classified differently 

depending on whether its components 


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2954 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

28See 88 FR 57776 for OMB’s discussion of kits. 

are assembled on or away from the work 

site. Some commenters wondered 

whether bringing components 

separately to a work site and assembling 

them there would result in the 

components constituting a kit for a 

manufactured product versus separate 

manufactured products. In contrast, 

other commenters stated that FHWA 

should not adopt a principle that 

components can be brought to a work 

site separately but still be considered a 

kit and classified as a single 

manufactured product; such 

commenters stated there is no authority 

in title 23, U.S.C. for FHWA to adopt 

such a principle. Commenters similarly 

argued that FHWA should not adopt a 

method for classification that would 

allow a system to be classified as a 

single manufactured product; however, 

other commenters pushed for the 

opposite. Finally, some commenters 

argued that FHWA should not base 

classification on the status of a product 

when it is brought to the work site at all 

but instead on the status of a product 

when it is procured. 

FHWA Response: FHWA believes that 

it is essential to set a point at which an 

article, material, or supply is classified 

into a specific category—whether that 

be an iron or steel product, a 

manufactured product, or any category 

specified in law such as a construction 

material—or not classified into any 

category. For manufactured products, 

this point is especially important to 

distinguish between the manufactured 

product itself and its components. 

FHWA believes that the point chosen by 

OMB, when the product is brought to 

the work site, appropriately allows for 

distinguishing among systems, which 

would be comprised of multiple 

manufactured products with Buy 

America requirements applied to each; 

manufactured products; and 

components. FHWA is concerned that 

alternative points of classification may 

lead to diluting the Buy America 

requirements. For instance, allowing for 

classification at the point a material is 

incorporated into a project may result in 

multiple manufactured products, iron or 

steel materials, and construction 

materials being combined together and 

classified as one single manufactured 

product. In particular, this kind of 

classification could result in iron and 

steel products generally being 

considered components of 

manufactured products, thereby 

functionally eliminating FHWA’s 

longstanding requirement that all iron 

and steel products must be produced in 

the United States. FHWA further notes 

that were it to choose a different point, 

that could result in certain materials 

being classified differently under 

FHWA’s Buy America requirements 

versus under 2 CFR part 184; this, in 

turn, may lead to multiple, different 

requirements applying to the same 

material. To ensure uniformity, FHWA 

believes it appropriate to classify 

materials at the same point as is done 

by Federal agencies subject to BABA. 

FHWA recognizes, however, that 

certain manufactured products may be 

acquired for incorporation into an 

infrastructure project from a single 

manufacturer or supplier as separate 

components, which are then assembled 

together to form a single product at the 

work site. FHWA refers to such 

products as ‘‘kits.’’ FHWA, in alignment 

with OMB, believes that these kits 

should be classified as a single 

manufactured product; the individual 

components of the kit should not, in 

other words, be classified as separate 

manufactured products when they are 

brought to the work site. 28 FHWA 

believes that this approach avoids a 

situation where contractors are 

incentivized to assemble a kit offsite 

and then bring the finished product to 

the work site, even if it is inefficient to 

do so. FHWA further disagrees with 

commenters suggesting that this notion 

of kits is prohibited by title 23, U.S.C. 

Again, FHWA is not suggesting that 

multiple manufactured products can be 

brought to the work site, assembled into 

one system or finished project, and then 

only be subject to FHWA’s Buy America 

requirements for manufactured 

products. FHWA is merely reflecting the 

notion, echoed by commenters, that 

while the point of classification is 

important to prevent the classification 

system from being abused to dilute the 

stringency of Buy America 

requirements, it should also not result 

in the same product being classified 

differently purely by the location where 

it is assembled. 

FHWA notes that the concept of kits 

has similarities with the idea of 

classifying a product based on its status 

at the time of procurement. FHWA 

emphasizes, however, that a kit 

represents a single product purchased 

from a single manufacturer or supplier. 

FHWA believes that classifying a 

product based on its status at the time 

of procurement may allow for the 

classification of entire systems as a 

single manufactured product, which 

would dilute the stringency of the Buy 

America requirements and not be in 

concert with classification under 2 CFR 

part 184. 

Section 635.410(c)(2)(i), (ii)—Specified 

Products 

Comments: In the NPRM, as stated 

above, FHWA proposed to generally 

require that iron or steel materials only 

comply with FHWA’s existing Buy 

America requirements for iron and steel 

found in § 635.410(b) and that 

manufactured products only comply 

with FHWA’s manufactured product 

requirements found in § 635.410(c). In 

§ 635.410(c)(2)(i), however, FHWA 

proposed to require precast concrete 

products that are classified as 

manufactured products to have all 

predominantly iron or steel components 

comply with FHWA’s existing Buy 

America requirements for iron and steel. 

Similarly, in § 635.410(c)(2)(ii), FHWA 

proposed to require the cabins or other 

enclosures of ITS and other electronic 

hardware systems installed in the 

highway right of way or other real 

property and classified as manufactured 

products, if predominantly iron or steel, 

to comply with FHWA’s existing Buy 

America requirements for iron and steel. 

Multiple commenters expressed 

opposition to the separate requirements 

placed on these specific manufactured 

products in § 635.410(c)(2)(i) and (ii). 

These commenters argued that such 

separate requirements prevented 

uniformity of FHWA’s Buy America 

requirements to all manufactured 

products and uniformity with BABA’s 

requirements for manufactured 

products. Commenters also argued that 

manufacturers do not know the ultimate 

owner of items when manufacturing and 

shipping them. Thus, commenters 

argued that these separate requirements 

created risks of non-compliance if a 

contractor purchases a product that is 

BABA-compliant but not compliant 

with § 635.410(c)(2)(i) or (ii), as the 

contractor may not know whether the 

product needs to be BABA-compliant 

versus FHWA-compliant when 

purchasing the product or may receive 

the wrong version of the product from 

the manufacturer. Another commenter 

argued that manufacturers would 

merely shift from using iron and steel to 

other materials where possible to avoid 

these requirements. 

Commenters representing the iron and 

steel industry argued that there is no 

distinction between iron and steel in the 

specific products referenced in 

§ 635.410(c)(2)(i) and (ii) and the iron 

and steel in the components of other 

manufactured products. These 

commenters argued that there is no 

reason to require the iron and steel in 

the specific products referenced in 

§ 635.410(c)(2)(i) and (ii) to be 

domestically produced but not the iron 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 2955 

29For example, as indicated in the responses to 

an RFI published collectively by DOT and the U.S. 

Department of Energy, the housing of an EV charger 

may comprise over 50 percent of the costs of the 

charger. 86 FR 67115 (Nov. 24, 2021). 

and steel in other products. Finally, 

commenters sought clarification over 

the definition of ‘‘intelligent 

transportation systems and other 

electronic hardware systems’’ found in 

§ 635.410(c)(2)(ii). 

FHWA Response: FHWA generally 

believes that a single material, if 

classified as an iron or steel product, 

should only be subject to its Buy 

America requirements for iron and steel 

in § 635.410(b); if classified as a 

manufactured product, FHWA generally 

believes the product should only be 

subject to its Buy America requirements 

for manufactured products in 

§ 635.410(c). FHWA also believes, 

however, that iron or steel components 

of precast concrete and iron or steel 

enclosures of ITS and other electronic 

hardware systems installed in the 

highway right of way or other real 

represent unique situations justifying 

FHWA to generally apply its Buy 

America requirements for manufactured 

products to the products as a whole and 

its Buy America requirements for iron 

and steel to specific components. 

As stated in the NPRM, FHWA 

believes that the products referenced in 

§ 635.410(c)(2)(i) and (ii) are regularly 

used in highway construction projects 

and that manufacturers have formed 

longstanding supply chains to 

incorporate Buy America-compliant 

iron or steel components into them. 

FHWA believes that these products are 

currently used extensively in Federalaid projects, where, currently, all their 

predominantly iron and steel 

components are required to comply 

with FHWA’s Buy America 

requirements for iron and steel. FHWA 

further believes that the iron and steel 

in the precast concrete and the iron and 

steel in the enclosures of ITS and other 

electronic hardware systems represent a 

significant portion of the value of those 

manufactured products.29 FHWA thus 

believes that the requirements of 

§ 635.410(c)(2)(i) and (ii) will have a 

limited impact on the manufacture of 

these specifically-referenced products. 

While FHWA acknowledges that the 

requirements that apply to these 

products are distinct from those that 

apply to other manufactured products 

under FHWA’s Buy America regulation 

and BABA, FHWA believes this is 

justified by the significant market for 

these products solely within FHWA’s 

funding programs. FHWA therefore 

believes that manufacturers of these 

products will be incentivized to 

produce products compliant with these 

unique requirements in sufficient 

amounts and that contractors should be 

able to determine whether any 

particular product is compliant with 

FHWA’s regulations. 

FHWA emphasizes that the specific 

requirements of § 635.410(c)(2)(i) and 

(ii) apply only to the specifically 

referenced products and components. 

While FHWA understands that the iron 

and steel in these products is similar to 

the iron and steel in all manufactured 

products, FHWA believes that the 

specific nature of these products, as 

stated above, justifies different 

requirements from other manufactured 

products. 

With respect to ‘‘intelligent 

transportation systems and other 

electronic hardware systems,’’ FHWA 

clarifies that its requirements in 

§ 635.410(c)(2)(ii) apply to the cabinets 

or other enclosures of the physical 

electronic hardware system, or other 

physical ITS, if (1) the system is 

classified as a manufactured product 

under § 635.410(c)(1)(iv); (2) the system 

is installed in the highway right of way 

or other real property; and (3) the 

cabinets or other enclosures of such 

system consists wholly or 

predominantly of iron or steel or a 

combination of both. Where the 

requirements of § 635.410(c)(2)(ii) do 

apply, the cabinet or other enclosure 

must comply with FHWA’s existing Buy 

America requirements for iron and steel, 

meaning that all iron and steel of the 

cabinet or other enclosure must be 

domestically produced. 

Finally, for the components specified 

in § 635.410(c)(2)(ii), FHWA is 

modifying a reference from components 

that are ‘‘manufactured predominantly 

or iron or steel or a combination of 

both’’ to components that ‘‘consist 

wholly or predominantly of iron or steel 

or a combination of both.’’ FHWA does 

not intend this to be a substantive 

change but instead to mirror the 

language used in the definition of ‘‘iron 

or steel products.’’ Through this change, 

FHWA seeks to make clear that the 

determination of whether components 

of precast concrete products or the 

cabinets or other enclosures of 

intelligent transportation systems and 

other electronic hardware systems that 

are installed in the highway right of way 

or other real property should be 

determined as iron or steel products and 

subject to FHWA’s Buy America 

requirements for iron and steel should 

be based on the same definition that 

iron or steel products are subject to 

generally. 

Section 635.410(c)(3)—Cost of 

Components 

Comments: In § 635.410(c)(3), FHWA 

proposed to determine whether the cost 

of components for manufactured 

products is greater than 55 percent of 

the total cost of all components through 

the same method as used under 2 CFR 

184.5 for projects subject to BABA. Per 

2 CFR 184.5(a), the cost of a component 

purchased by the manufacturer is the 

acquisition cost, including 

transportation costs to the place of 

incorporation into the manufactured 

product (whether or not such costs are 

paid to a domestic firm), and any 

applicable duty (whether or not a dutyfree entry certificate is issued). For 

components manufactured by the 

manufacturer, 2 CFR 184.5(b) the cost of 

a component is all costs associated with 

the manufacture of the component, 

including transportation costs as 

described in 2 CFR 184.5(a), plus 

allocable overhead costs, but excluding 

profit; the cost of such components also 

does not include any costs associated 

with the manufacture of the 

manufactured product. FHWA copied 

this definition verbatim into proposed 

§ 635.410(c)(3). 

Some commenters disagreed with 

FHWA’s approach to determining the 

cost of components entirely, requesting 

that FHWA should allow additional 

costs to factor into the cost of any 

component, including the cost of 

domestic manufacturing, the cost of 

software and firmware, the value added 

at each manufacturing stage, the cost of 

the intellectual property, and the cost of 

the research and development for the 

product. One commenter argued that the 

cost of components should be 

determined at the overall system level. 

Other commenters sought clarification 

on FHWA’s proposed definition. 

Commenters expressed confusion over 

what were allowable manufacturing 

costs for the component versus 

unallowable manufacturing costs for the 

manufactured product. Others sought 

clarification over what FHWA meant by 

allocable overhead costs. 

FHWA Response: FHWA disagrees 

with commenters suggesting that FHWA 

depart from the standard used in 2 CFR 

184.5 to determine the cost of 

components. FHWA believes that 

uniformity with BABA’s requirements is 

important and beneficial where 

appropriate to ensure that manufactured 

products are compliant under FHWA’s 

Buy America statute and BABA and to 

allow for contracting agencies, 

contractors, and manufacturers to build 

up a greater amount of experience with 

these requirements. 


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FHWA notes that § 635.410(c)(3)(ii) 

differentiates between costs associated 

with the manufacture of a component, 

which are to be considered in 

determining the cost of the component, 

and costs associated with the 

manufacture of the manufactured 

product, which are not. Costs associated 

with the manufacture of the 

manufactured product itself, outside of 

the cost to manufacture a component, 

should not be considered in valuing the 

component. For example, the cost of 

assembling the component into the 

manufactured product is a cost of 

manufacturing the manufactured 

product, not a cost of manufacturing the 

component. 

Finally, FHWA is correcting an error 

in the proposed regulatory text, where 

§ 635.410(c)(3)(ii) made reference to 

‘‘paragraph (a) of this section.’’ That 

reference is from 2 CFR 184.5(b) and 

refers to 2 CFR 184.5(a). FHWA is 

thereby correcting the reference to 

§ 635.410(c)(3)(i) to properly align with 

2 CFR part 184. 

VI. Rulemaking Analyses and Notices 

A. Executive Order 12866 (Regulatory 

Planning and Review), Executive Order 

13563 (Improving Regulation and 

Regulatory Review), and DOT 

Regulatory Policies and Procedures 

The OMB has determined that this 

rulemaking is a significant regulatory 

action within the meaning of E.O. 

12866, as amended by E.O. 14094. 

A more detailed discussion of the 

economic analysis associated with this 

rulemaking can be found in the RIA, 

which is available on the docket. The 

RIA estimates the costs and benefits 

associated with imposing Buy America 

requirements to manufactured products. 

The expected benefits of this rule relate 

to protecting and expanding domestic 

manufacturing, increasing the resiliency 

of supply chains, and increasing 

consistency in applying domestic 

content procurement preferences for 

manufactured products between FHWA 

and other Federal agencies that are 

subject to BABA’s requirements. None 

of these benefits have been quantified. 

The costs of this rule relate to 

increased material costs for 

manufactured products used in highway 

construction projects, administrative 

costs to FHWA and recipients of FHWA 

financial assistance, and potential 

delays in project delivery. FHWA 

estimates that total costs associated with 

this rule, between FY 2026 and FY 

2035, will range from $545 million to 

$8,466 million at a 2 percent discount 

rate. The estimated increase in material 

costs for manufactured products ranges 

from $41 million to $980 million per 

year. Much of the wide range of 

uncertainty surrounding the estimates 

stems from the difficulty of estimating 

(1) the fraction of inputs to highway 

construction that are manufactured 

products; (2) the fraction of 

manufactured products that are 

currently domestically supplied but fail 

to meet the 55 percent requirement; and 

(3) the likely price premiums for 

purchasing manufactured products that 

would be compliant with this rule, 

compared to non-compliant 

manufactured products currently used 

in highway construction. FHWA further 

estimates an additional $167,000 per 

year in increased FHWA administrative 

costs to cover the salary and employerprovided benefits of an additional 

Federal employee to help administer the 

Buy America program. We also estimate 

an additional $22 million per year in 

administrative costs to recipients of 

FHWA financial assistance related to 

verifying product compliance. Those 

costs do not include additional 

administrative costs related to setting up 

systems to track compliance or applying 

for any project-specific waivers that may 

be necessary based on specific 

circumstances. 

The 10-year discounted totals of these 

costs are provided in the table below at 

a 2 percent discount rate. The rest of the 

costs could not be quantified with the 

information available. 

Category 10-Year 

total at 2% 

Benefits: 

Promote Domestic Manufacturing.Not quantified. 

Supply Chain Resiliency ............ Not quantified. 

Consistency ................................ Not quantified. 

Total Benefits ................................. Not quantified. 

Costs: 

Materials Costs .......................... $361 to $8,282. 

FHWA and State Administrative 

Costs.

$184. 

Other Administrative Costs ........ Not quantified. 

Project Delay .............................. Not quantified. 

Negative Secondary Impacts ..... Not quantified. 

Total Costs .................................... $545 to $8,466. 

Annualized Costs ........................... $61 to $942. 

Annualized costs are $61 million to 

$942 million per year at a 2 percent 

discount rate, $60 million to $932 

million per year at a 3 percent discount 

rate, and $58 million to $890 million 

per year at a 7 percent discount rate. 

FHWA has responded to comments 

made regarding the preliminary 

regulatory impact analysis in the RIA. 

This rule will not adversely affect in a 

material way the economy, any sector of 

the economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local, territorial, or 

Tribal governments or communities. 

These changes do not create a serious 

inconsistency with any other agency’s 

action or materially alter the budgetary 

impact of any entitlements, grants, user 

fees, or loan programs. 

B. Regulatory Flexibility Act 

In compliance with the Regulatory 

Flexibility Act (Pub. L. 96–354, 5 U.S.C. 

601–612), FHWA has evaluated the 

effects of this rule on small entities and 

has determined that it is not anticipated 

to have a significant economic impact 

on a substantial number of small 

entities. This rule would impose Buy 

America requirements for manufactured 

products on recipients of FHWA 

financial assistance, including States, 

local governments, and other grant 

recipients. These recipients are 

primarily States, who receive 

apportioned funding from FHWA, and 

who are not included in the definition 

of small entity set forth in 5 U.S.C. 601. 

FHWA believes the projected impact 

on small entities that utilize FHWA 

funding would be negligible. This final 

rule will require such small entities to 

purchase manufactured products that 

are manufactured in the United States 

and have the cost of components that 

are mined, produced, or manufactured 

in the United States be greater than 55 

percent of the total cost of all 

components of the manufactured 

product under contracts subject to 

FHWA’s Buy America requirements. 

FHWA acknowledges that some Buy 

America-compliant manufactured 

products may be more expensive than 

manufactured products that are noncompliant. Thus, this final rule may 

result in increased project costs. To the 

extent this rule requires expenditures by 

State, local governments, and other 

grant recipients on Federal-aid projects, 

they are reimbursable. In addition, to 

the extent that small governmental 

jurisdictions expend additional funds to 

purchase Buy America-compliant 

manufactured products, based on 

FHWA’s regulatory impact analysis, 

FHWA does not believe that any 

additional expenditure would be 

economically significant. 

FHWA recognizes that small 

businesses, as defined by 5 U.S.C. 

601(3), who are also considered small 

entities, may be affected indirectly by 

this final rule when they seek to provide 

manufactured products to recipients of 

FHWA financial assistance who are 

subject to the new Buy America 

requirements. For small businesses not 

currently compliant with FHWA’s Buy 

America requirements for manufactured 

products who wish to provide Buy 

America-compliant products, they may 

need to change manufacturing processes 

or component suppliers. Small entities 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 2957 

that may be impacted indirectly by a 

rulemaking, however, are not subject to 

analysis under the Regulatory 

Flexibility Act. See Mid-Tex Electric 

Cooperative, Inc. v. Federal Energy 

Regulatory Commission, 773 F.2d 327 

(D.C. Cir. 1985). 

Therefore, FHWA certifies that the 

action would not have a significant 

economic impact on a substantial 

number of small entities. 

C. Unfunded Mandates Reform Act of 

1995 

This rule does not impose unfunded 

mandates as defined by the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4, 109 Stat. 48). Section 202(a) of 

the Unfunded Mandates Reform Act of 

1995 requires Federal agencies to 

prepare a written statement, which 

includes estimates of anticipated 

impacts, before proposing ‘‘any rule that 

includes any Federal mandate that may 

result in the expenditure by State, local, 

and Tribal governments, in the 

aggregate, or by the private sector, of 

$100 million or more (adjusted annually 

for inflation) in any one year.’’ The 

current threshold after adjustment for 

inflation is $177 million, using the most 

current (2022) Implicit Price Deflator for 

the Gross Domestic Product. The 

definition of ‘‘Federal mandate’’ in the 

Unfunded Mandates Reform Act 

excludes financial assistance of the type 

in which State, local, or Tribal 

governments have authority to adjust 

their participation in the program in 

accordance with changes made in the 

program by the Federal Government. 

The Federal-aid highway program 

permits this type of flexibility. 

D. Executive Order 13132 (Federalism 

Assessment) 

The E.O. 13132 requires agencies to 

ensure meaningful and timely input by 

State and local officials in the 

development of regulatory policies that 

may have a substantial, direct effect on 

the States, on the relationship between 

the National Government and the States, 

or on the distribution of power and 

responsibilities among the various 

levels of government. FHWA has 

analyzed this rule in accordance with 

the principles and criteria contained in 

E.O. 13132. FHWA has determined that 

this rule would not have sufficient 

federalism implications to warrant the 

preparation of a federalism assessment. 

FHWA has also determined that this 

rule would not preempt any State law 

or State regulation or affect the States’ 

ability to discharge traditional State 

governmental functions. 

E. Paperwork Reduction Act of 1995 

Under the Paperwork Reduction Act 

of 1995 (PRA) (44 U.S.C. 3501, et seq.), 

Federal Agencies must obtain approval 

from OMB for each collection of 

information they conduct, sponsor, or 

require through regulations. FHWA has 

determined that this rule does not 

contain collection of information 

requirements for the purposes of the 

PRA. 

F. National Environmental Policy Act 

FHWA has analyzed this rule 

pursuant to the NEPA and has 

determined that it is categorically 

excluded under 23 CFR 771.117(c)(2), 

which applies to the promulgation of 

rules, regulations, and directives. 

Categorically excluded actions meet the 

criteria for categorical exclusions under 

the Council on Environmental Quality 

regulations and under 23 CFR 

771.117(a) and normally do not require 

any further NEPA approvals by FHWA. 

This rule will establish Buy America 

requirements for manufactured 

products. FHWA does not anticipate 

any adverse environmental impacts 

from this final rule, and no unusual 

circumstances are present under 23 CFR 

771.117(b). 

G. Executive Order 13175 (Tribal 

Consultation) 

FHWA has analyzed this rule in 

accordance with the principles and 

criteria contained in E.O. 13175, 

‘‘Consultation and Coordination with 

Indian Tribal Governments.’’ FHWA 

does not believe that the final rule 

would have substantial direct effects on 

one or more Indian Tribes, would not 

impose substantial direct compliance 

costs on Indian Tribal governments, and 

would not preempt Tribal laws. 

Therefore, a Tribal summary impact 

statement is not required. 

H. Executive Order 12898 

(Environmental Justice) 

The E.O. 12898 requires that each 

Federal Agency make achieving 

environmental justice part of its mission 

by identifying and addressing, as 

appropriate, disproportionately high 

and adverse human health or 

environmental effects of its programs, 

policies, and activities on minorities 

and low-income populations. FHWA 

has determined that this rule does not 

raise any environmental justice issues. 

I. Regulation Identifier Number 

A RIN is assigned to each regulatory 

action listed in the Unified Agenda of 

Federal Regulations. The Regulatory 

Information Service Center publishes 

the Unified Agenda in the spring and 

fall of each year. The RIN contained in 

the heading of this document can be 

used to cross reference this action with 

the Unified Agenda. 

List of Subjects in 23 CFR Part 635 

Grant programs—transportation, 

Highways and roads, Reporting and 

recordkeeping requirements. 

Issued under authority delegated in 49 CFR 

1.85. 

Gloria M. Shepherd, 

Executive Director, Federal Highway 

Administration. 

For the reasons stated in the 

preamble, FHWA amends title 23, Code 

of Federal Regulations, part 635, as set 

forth below: 

PART 635—CONSTRUCTION AND 

MAINTENANCE 

■ 1. The authority citation for part 635 

continues to read as follows: 

Authority: Sections 1525 and 1303 of 

Public Law 112–141, Sec. 1503 of Public Law 

109–59, 119 Stat. 1144; 23 U.S.C. 101 (note), 

109, 112, 113, 114, 116, 119, 128, and 315; 

31 U.S.C. 6505; 42 U.S.C. 3334, 4601 et seq.; 

Sec. 1041(a), Public Law 102–240, 105 Stat. 

1914; 23 CFR 1.32; 49 CFR 1.85(a)(1). 

Subpart D—General Material 

Requirements 

■ 2. Amend § 635.410 by: 

■ a. Removing the words ‘‘steel or iron 

materials’’ and adding, in their place, 

the words ‘‘iron or steel products’’ in 

paragraph (b)(1); 

■ b. Removing the word ‘‘State’’ and 

adding in its place the word ‘‘recipient’’ 

in paragraphs (b)(2) and (3); 

■ c. Removing the words ‘‘steel and iron 

materials’’ and adding, in their place, 

the words ‘‘iron or steel products’’ in 

paragraphs (b)(2), (3), and (4); 

■ d. Revising paragraph (c); and 

■ e. Removing the word ‘‘State’’ and 

adding in its place the word ‘‘recipient’’ 

in paragraph (d). 

The revision reads as follows: 

§ 635.410 Buy America requirements. 

* * * * * 

(c) No Federal-aid highway 

construction project is to be authorized 

for advertisement or otherwise 

authorized to proceed unless the 

manufactured products used and 

permanently incorporated in such 

project are produced in the United 

States. To meet the requirement in this 

paragraph (c), the manufactured product 

must meet the following: 

(1) The following definitions apply to 

this section: 

(i) Component means an article, 

material, or supply, whether 


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2958 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

manufactured or unmanufactured, 

incorporated directly into a 

manufactured product or, where 

applicable, an iron or steel product. 

(ii) Excluded materials means section 

70917(c) materials as defined in 2 CFR 

184.3. 

(iii) Iron or steel products means 

articles, materials, or supplies that 

consist wholly or predominantly of iron 

or steel or a combination of both. 

(iv) Manufactured products means 

articles, materials, or supplies that have 

been processed into a specific form and 

shape, or combined with other articles, 

materials, or supplies to create a 

product with different properties than 

the individual articles, materials, or 

supplies. If an item is classified as an 

iron or steel product, an excluded 

material, or other product category as 

specified by law or in 2 CFR part 184, 

then it is not a manufactured product. 

However, an article, material, or supply 

classified as a manufactured product 

may include components that are iron 

or steel products, excluded materials, or 

other product categories as specified by 

law or in 2 CFR part 184. Mixtures of 

excluded materials delivered to a work 

site without final form for incorporation 

into a project are not a manufactured 

product. 

(v) Manufacturer, in the case of 

manufactured products, means the 

entity that performs the final 

manufacturing process that produces a 

manufactured product. 

(vi) Predominantly of iron or steel or 

a combination of both means that the 

cost of the iron and steel content 

exceeds 50 percent of the total cost of 

all its components. The cost of iron and 

steel is the cost of the iron or steel mill 

products (such as bar, billet, slab, wire, 

plate, or sheet), castings, or forgings 

utilized in the manufacture of the 

product and a good faith estimate of the 

cost of iron or steel components. 

(vii) Produced in the United States, in 

the case of manufactured products, 

means: 

(A) For projects obligated on or after 

October 1, 2025, the product was 

manufactured in the United States; and 

(B) For projects obligated on or after 

October 1, 2026, the product was 

manufactured in the United States and 

the cost of the components of the 

manufactured product that are mined, 

produced, or manufactured in the 

United States is greater than 55 percent 

of the total cost of all components of the 

manufactured product. 

(2) An article, material, or supply 

shall only be classified as an iron or 

steel product, a manufactured product, 

or other products as specified by law or 

in 2 CFR part 184. An iron or steel 

product must meet the requirements of 

paragraph (b) of this section. Except as 

otherwise provided in this paragraph 

(c), an article, material, or supply shall 

not be considered to fall into multiple 

categories. In some cases, an article, 

material, or supply may not fall under 

any of the above-listed categories. The 

classification of an article, material, or 

supply as falling into one of the 

categories listed in this paragraph (c) 

must be made based on its status at the 

time it is brought to the work site for 

incorporation into an infrastructure 

project. In general, the work site is the 

location of the infrastructure project at 

which the iron or steel product or 

manufactured product will be 

incorporated. 

(i) With respect to precast concrete 

products that are classified as 

manufactured products, components of 

precast concrete products that consist 

wholly or predominantly of iron or steel 

or a combination of both shall meet the 

requirements of paragraph (b) of this 

section. The cost of such components 

shall be included in the applicable 

calculation for purposes of determining 

whether the precast concrete product is 

produced in the United States. 

(ii) With respect to intelligent 

transportation systems and other 

electronic hardware systems that are 

installed in the highway right of way or 

other real property and classified as 

manufactured products, the cabinets or 

other enclosures of such systems that 

consist wholly or predominantly of iron 

or steel or a combination of both shall 

meet the requirements of paragraph (b) 

of this section. The cost of cabinets or 

other enclosures shall be included in 

the applicable calculation for purposes 

of determining whether systems referred 

to in the preceding sentence are 

produced in the United States. 

(3) In determining whether the cost of 

components for manufactured products 

is greater than 55 percent of the total 

cost of all components, recipients shall 

determine the cost as follows: 

(i) For components purchased by the 

manufacturer, the acquisition cost, 

including transportation costs to the 

place of incorporation into the 

manufactured product (whether or not 

such costs are paid to a domestic firm), 

and any applicable duty (whether or not 

a duty-free entry certificate is issued); or 

(ii) For components manufactured by 

the manufacturer, all costs associated 

with the manufacture of the component, 

including transportation costs as 

described in paragraph (c)(3)(i) of this 

section, plus allocable overhead costs, 

but excluding profit. Cost of 

components does not include any costs 

associated with the manufacture of the 

manufactured product. 

(4) The provisions of this paragraph 

(c) are separate and severable from one 

another and from the other provisions of 

this section. If any provision is stayed 

or determined to be invalid, the 

remaining provisions shall continue in 

effect. 

* * * * * 

[FR Doc. 2024–31350 Filed 1–13–25; 8:45 am] 

BILLING CODE 4910–22–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 10028] 

RIN 1545–BR07 

Certain Partnership Related-Party 

Basis Adjustment Transactions as 

Transactions of Interest 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final rule. 

SUMMARY: This document contains final 

regulations that identify certain 

partnership related-party basis 

adjustment transactions and 

substantially similar transactions as 

transactions of interest, a type of 

reportable transaction. Material advisors 

and certain participants in these 

transactions are required to file 

disclosures with the IRS and are subject 

to penalties for failure to disclose. The 

final regulations affect participants in 

these transactions as well as material 

advisors. 

DATES: 

Effective date: These regulations are 

effective on January 14, 2025. 

Applicability date: For the date of 

applicability, see § 1.6011–18(h) and (i). 

FOR FURTHER INFORMATION CONTACT: 

Concerning these final regulations, 

contact Elizabeth Zanet of the Office of 

Associate Chief Counsel (Passthroughs 

and Special Industries), (202) 317–6007 

(not a toll-free number). 

SUPPLEMENTARY INFORMATION: 

Authority 

This document amends the Income 

Tax Regulations (26 CFR part 1) by 

adding final regulations under section 

6011 of the Internal Revenue Code 

(Code). The document adds § 1.6011–18 

to identify certain partnership relatedparty basis adjustment transactions and 

substantially similar transactions as 

transactions of interest, a type of 


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