EPA risks “being unable to determine whether it is meeting the intent of the Build America, Buy America Act — bolstering America’s industrial base, protecting national security, and supporting high-paying jobs.”
The Environmental Protection Agency’s (EPA) own internal watchdog is warning in a new report that the agency “does not always” track waivers for Build America, Buy America (BABA) requirements, which means EPA “may not be able to maximize use of U.S. goods, products, and materials” in taxpayer-funded infrastructure projects.
The EPA Inspector Office of Inspector General found that EPA approved 11 BABA waivers for infrastructure projects as of December 2023, but only tracked use for one of them, a waiver that has been used for 26 infrastructure projects. No tracking has been done for the other 10 waivers, which means the IG cannot determine how many times those waivers have been applied to infrastructure projects.
Considering that the EPA was allocated $60 billion for projects via the Infrastructure Investment and Jobs Act, it’s vital that the agency get a handle on its waiver use in order to meet the Congressional intent of the law to “maximize the use of U.S. goods, products, and materials” in infrastructure projects, the IG said.
“EPA oversight of waivers is vital, regardless of legal obligation, to hold infrastructure projects accountable for growth in American jobs and markets,” said EPA IG Sean W. O’Donnell.
In its press release unveiling the report, the EPA IG noted that while “waivers to the Made in America requirement are allowable, they are intended to be time-limited, targeted, and conditional.”
Unfortunately, that’s not typically what happens at the EPA.
There are two types of Buy America waivers: Project-specific and general waivers. As their name implies, project-specific waivers are designed to apply to a single infrastructure project, and are thus limited in scope. General waivers, meanwhile, apply to projects across the board. The EPA IG report states that the agency generally “initiates the general applicability waivers, and any award recipient can use the waiver as long as the project meets the eligibility requirements.”
Without tracking in place, the EPA IG noted that it is unclear how often the general applicability waivers are being used for taxpayer-funded infrastructure projects, undermining congressional intent that “every executive agency should scrupulously monitor, enforce, and comply with Buy American laws, to the extent they apply, and minimize the use of waivers.”
The Alliance for American Manufacturing and other organizations have been critical of EPA’s use of general waivers. For example, we wrote to the EPA in April to warn that an overly broad proposed waiver for the EPA’s $3 billion Clean Ports Program is “inconsistent with both the letter and spirit of the BABA,” as it “undermines the utility of Buy America to domestic port equipment supply chains because it renders immaterial for BABA compliance all stages of production of port equipment and component content.”
We also were stunned by EPA’s decision to not apply Buy America to the Clean School Bus Program, which meant that a whole lot of buses purchased using taxpayer dollars could very well end up being imported.
The EPA IG officially recommended that the EPA’s assistant administrator for Mission Support “develop and implement a method to track” its BABA waiver use across EPA-funded infrastructure project, and the Office of Mission Support “agreed with our recommendation and provided acceptable proposed corrective actions and estimated completion dates,” according to the report. EPA reported back to the IG’s office that “corrective actions are complete,” and the IG pledged to “continue to work with the Agency to verify the actions are complete.”
It’s a start. Tracking its use of BABA waivers is a small step forward for EPA; the agency needs to do far more to comply with the congressional intent of BABA to incentivize domestic production. We strongly encourage the EPA to avoid using general waivers of BABA and seek to implement project-specific waivers only if absolutely necessary. And at the very least, EPA needs to make good on its promise to track the BABA waivers it puts into place.