Buy America Requirements for Federally Funded Airports

Abstract

Federal airport development grant programs include statutory preferences for domestic goods, commonly known as Buy America, Buy American, or Buy National provisions. These provisions have evolved from the 1933 Buy American Act ("BAA"), which applied to direct procurements of goods by federal government agencies such as the Federal Aviation Administration ("FAA"). Buy America provisions in transportation grant programs, on the other hand, apply to procurements made by recipients of federal grants, including state and local governments and airport authorities. The Buy America provision in the Airport Improvement Program (“AIP”), enacted in 1990, appears to have been designed as a particularly strict domestic preference requirement. However, there is no requirement in the AIP Buy America provision (as there is in other transportation grant provisions) for the FAA to publish the Buy America waivers that it grants. As a result, until recent years, the AIP Buy America provision has been the subject of very little scrutiny, guidance, or enforcement. Congressional oversight was expanded with passage of the American Reinvestment and Recovery Act ("ARRA") economic stimulus program in 2009, which required the FAA to publish Buy America waivers for projects that received ARRA funds. Consequently, the FAA has published some waivers of the Buy America requirements, and has also published expanded guidance to help AIP grant recipients comply with the requirements. Although guidance and enforcement of the AIP Buy America provision is still evolving, there is now sufficient information publicly available to provide compliance guidance for most situations encountered by AIP grant recipients. This paper synthesizes all available information, including statutory and regulatory language, legislative history, administrative and judicial opinions, and agency guidance, to help airport sponsors and their contractors understand and comply with the Buy America requirements. The paper identifies areas where the FAA has directly adopted compliance tests used by other federal agencies in enforcing the BAA or other transportation grant Buy America provisions. The paper also identifies ways in which the AIP Buy America provision differs from its predecessors, where the FAA and its grant recipients should not rely on guidance provided by other agencies (involving similar but different statutes). Finally, the paper identifies areas where the FAA’s interpretation of airport Buy America requirements may deviate from the Congressional intent or from the interpretation of nearly identical statutory language by other federal agencies.