FHWA publishes Final Rule on Manufactured Products Waiver

FHWA publishes Final Rule on Manufactured Products Waiver

The Federal Highway Administration (FHWA) today published its final rule regarding the longstanding Manufactured Products Waiver related to Build America, Buy America (BABA).

The rule, published in the Federal Register, confirms the decision to rescind the waiver, a decision FHWA had originally proposed as part of its Notice of Proposed Rulemaking (NPRM) released in March of 2024.

Elimination of this waiver – a waiver that has been in place since 1983 – means that permanent roadway safety devices and hardware that fall under the manufactured product guidelines set forth under BABA will no longer be exempt from BABA requirements and must comply with BABA regulations.

Throughout the rulemaking process, ATSSA has advocated against the elimination of this waiver, citing concerns regarding the administrative burden placed on both manufacturers and contractors; the added cost to manufacture and acquire products; the cost of roadway projects greatly increasing; potential product shortages or lack of component availability; and the resulting delay in completing vital lifesaving roadway safety infrastructure projects.

ATSSA President and CEO Stacy Tetschner released the following statement regarding the ruling:

“While ATSSA members support efforts to increase domestic manufacturing capacity, I am profoundly disappointed in the final rule released by FHWA regarding Buy America and the Manufactured Products Waiver. FHWA’s decision to ignore concerns regarding the impact that the elimination of this vital and longstanding waiver will have on roadway safety, as well as with the overall transportation industry, including ATSSA members and their state and local partners, will lead to uncertainty, cost increases and project delays and will only prohibit the advancement of roadway safety. ATSSA will continue to work with our federal partners to explore ways to lessen the impact to much-needed transportation safety investments that will result from this final rule.”

Key points:

• FHWA ruled that the longstanding Manufactured Products Waiver is no longer in the public interest, and thus will be discontinued.
• FHWA will be providing a transitionary period for the elimination of the waiver, with two dates marking different compliance deadlines:
  • October 1, 2025 – Federal-aid highway projects obligated on or after this date must comply with the final assembly requirement, which stipulates that a manufactured product must undergo final assembly in the United States.
  • October 1, 2026 – Federal-aid highway projects obligated on or after this date must comply with the 55% rule, which stipulates that the cost of American-made components of a manufactured product must equal or exceed 55% of the total cost of the product.
• FHWA estimates that the cost of this rule could exceed $8 billion over a 10-year period. Most of this additional cost will fall upon manufacturers, contractors, state departments of transportation (DOTs) and other project sponsors.
• FHWA did not provide any targeted waivers for products discussed in comments submitted by ATSSA and other stakeholders during the Request for Information (RFI) process.
• While ATSSA and its members advocated for the creation of an Approved Product List or Federal Clearinghouse for approved products, FHWA stated it does “not believe that it is in a position to certify compliance or have a list of compliant products”. This places the burden on state DOTs, industry and other project sponsors to provide certification of BABA compliance for each manufactured product on every federal-aid highway project.

What’s Next:

• This is the final rule. The rulemaking on BABA and this waiver is now complete.
• ATSSA will continue to advocate on behalf of its members on this issue.
• ATSSA’s Government Relations Team will be hosting a Town Hall Webinar on Jan. 28 at 2 p.m. to discuss this ruling further.  Register now.