Stateside versus overseas manufactures

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Author Message Kathy Greenway (Unregistered Guest) Unregistered guest Posted on Friday, September 03, 2004 - 02:06 pm:    For state and public bid jobs are there any advantages for a manufacture located in the states? Do any "Buy America" clauses pertain anymore? Richard Howard, AIA CSI CCS Senior Member Username: rick_howard Post Number: 31 Registered: 07-2003 Posted on Friday, September 03, 2004 - 02:21 pm:    Ohio Revised Code, section 153.011, requires domestically produced steel on projects funded by the state. Lynn Javoroski Senior Member Username: lynn_javoroski Post Number: 145 Registered: 07-2002 Posted on Friday, September 03, 2004 - 02:46 pm:    When I worked for Milwaukee County, (2+ years ago), federally funded projects had to include a "buy America" clause. Federal funds were involved with projects at the airport. John Bunzick, CCS, CCCA Senior Member Username: bunzick Post Number: 263 Registered: 03-2002 Posted on Friday, September 03, 2004 - 03:29 pm:    The Buy America clause is required by FAA Federal Acquistion Regulations, and includes other products in addition to steel. When you really start to look all of the text very closely, however, Buy America does not necessarily mean that the items were manufactured within the United States. Due, I assume, to various trade agreements around the world, there are dozens of countries whose products are acceptable under the Buy America program. In addition, there are "content" percentages that apply, since nearly any product may have raw materials of foreign destinations. It is hard for me to imagine how any of the typical modest sized contractors (by that I mean revenues in the $500 million range or less) or small sub-contractors could possibly hope to really know if their materials complied with the act. But to Kathy's original question: Advantages acrue to manufacturers who can supply product at a competitive price, in a timely manner, and with an appropriate level of service (depending on the product). Surely many manufacturers in Mexico or Canada would have no particular geographic advantage than parts of the US. Other types of products are partially produced and processed overseas, and finished here. Custom-made complex products produced entirely overseas could have unacceptable lead times, especially when US manufacturers can produce comparable products. I can't imagine a European window maker, for example, being competitive. On the other hand, stone fabrication is done mostly overseas, and not necessarily where the stone is quarried. So I think the answer to the question is "maybe, maybe not". Kathy Greenway (Unregistered Guest) Unregistered guest Posted on Tuesday, September 07, 2004 - 02:09 pm:    I apprecitate the info. It is hard to accept that we spend the time and money to support the organizations, (CSI, AIA, local affiliations) and an importer can enter into the market, send information to architectural firms and be included on the specs. No track record required; just has to "meet the spec". I had one firm tell me that if it saves tax payers money than it is good for the districts. I don't think unemployment and loosing the tax money that a stateside manufacturer contributes "saves the tax payers money". Anne Whitacre, CCS CSI Senior Member Username: awhitacre Post Number: 120 Registered: 07-2002 Posted on Tuesday, September 07, 2004 - 04:07 pm:    Its more complicated than it appears -- there are TWO acts, both used on projects that receive FTA (transit) money. There is a "Buy America" act and also a "Buy AMERICAN" act. The "Buy American " act requires that even if the product is assembled in the USA, it has to be also owned by a USA-owned company. We ran into that on some roofing products -- turned out the roofing company itself was Canadian owned, and even thoug the materials were from a Chicago-area plant, the products did not qualify for installation on this project. This particular project was rail transit and I think the Buy American Act comes into play with railroad monies. This is getting tougher to comply with -- so many of the holding companies for basic construction products (sealants, etc) are now German, Swiss, French or Italian owned that you really have to sort through the materials to make sure that everything qualifies for these purchase requirements. John McGrann Senior Member Username: jmcgrann Post Number: 28 Registered: 03-2002 Posted on Wednesday, September 08, 2004 - 07:52 am:    Anne raises an interesting point. Cement and construction chemicals come to mind as products where non-U.S. producers are a major part of the industry. I also wonder about U.S. organizations such as Ingersoll-Rand that have incorporated themselves off-shore for tax reasons. Would their products now be excluded? D. Marshall Fryer Senior Member Username: dmfryer Post Number: 34 Registered: 09-2003 Posted on Wednesday, September 08, 2004 - 09:16 am:    That would appear to be one intent of the various "Buy American" acts. If a manufacturer exploits tax loopholes to avoid paying U.S. taxes on their profits, we shouldn't use U.S. tax dollars to buy their products. Vivian Volz Member Username: vivianvolz Post Number: 3 Registered: 06-2004 Posted on Wednesday, September 08, 2004 - 04:23 pm:    California also has a Buy American type act, which I had to research recently. In researching it, I found that many states have legislation either passed or in process. It's very important that you check with the State Architect (or similar institution) to see what applies to your project. In California, it's complicated: public agencies like school districts aren't allowed to directly procure products made by "offshored" companies, but A/Es are permitted to specify them for projects for those same public agencies. We definitely needed help interpreting that one! And yes, Ingersoll-Rand is definitely one of the intended targets; to be forbidden, a company has to be incorporated overseas but do most of its business outside the country in which it's incorporated. Kathy Greenway (Unregistered Guest) Unregistered guest Posted on Wednesday, September 08, 2004 - 04:54 pm:    Vivian, in California the school districts must buy stateside manufactured products as long as they are purchasing direct? When the A/E's specify an overseas product, public bids go out- offshore awarded bid - offshoe product supplied to school district. Is that considered "direct" or since the GC's have subs, does that go under the radar? Vivian Volz Advanced Member Username: vivianvolz Post Number: 5 Registered: 06-2004 Posted on Thursday, September 09, 2004 - 01:23 pm:    Yes, Kathy, that's exactly how it's interpreted by the Office of the State Architect. The idea seems to be that the school districts can't go out and purchase a whole school's worth of Schlage locksets to retrofit all the classroom doors. On the other hand, for a new school, they can't be expected to control their architect's specs, their GC's subs, and the publicly bid subcontracts, so they're not considered responsible for any offshore products that end up on the job. Remember, some of the first performance specs were written for California school districts, and most publicly held projects have to be specified non-proprietary or with at least three named manufacturers; so there's a long tradition of not controlling the manufacturer in the contract documents for state projects. Apparently the State Architect's interpretation of the law is not to interfere with competetively bid projects. Richard L Matteo Senior Member Username: rlmat Post Number: 62 Registered: 10-2003 Posted on Thursday, September 09, 2004 - 01:50 pm:    The strange thing is that many of the School Districts we work with have IR as a "District Standard" and in many cases we are required to use IR/SSC to write our hardware specs. I grew up in the hardware manufacturing capitol, Connecticut (Sargent & Ives in New Haven, Corbin-Russwin & Stanley in New Britain, to mention a few) Sargent and Ives still have manufacturing facilities in New Haven, Stanley was one of the big ones to move completely offshore (China & Cayman Islands). Problem is most door hardware today is manufactured offshore, so there isn't a lot we can do about it. Tobin Oruch, CDT Advanced Member Username: oruch Post Number: 6 Registered: 04-2003 Posted on Friday, September 10, 2004 - 04:44 pm:    References I found quickly: Buy Am Act(41 U.S.C. 10a - 10d)http://www4.law.cornell.edu/uscode/41/ch1.html -- and Executive Order 10582, December 17, 1954. Art 10d of Act ends "unless the head of the department or independent establishment concerned shall determine their purchase to be inconsistent with the public interest or their cost to be unreasonable." I think my institution interprets this as any time the cost penalty is 6% or more for American. Kathy Greenway (Unregistered Guest) Unregistered guest Posted on Friday, September 10, 2004 - 05:26 pm:    I can't thank you enough for all your help. This discussion group is the BEST! John Bunzick, CCS, CCCA Senior Member Username: bunzick Post Number: 287 Registered: 03-2002 Posted on Wednesday, November 17, 2004 - 07:08 pm:    I couldn't resist adding a bit to this thread. According to FAR (48 CFR 52), these are the "designated countries" as of October 2003 -- which we have trade agreements with -- from which construction materials may come from and comply with the "Buy American Act". The length of the list speaks for itself. It will be interesting to see what the list will look like at next revision: Aruba, Austria, Bangladesh, Belgium, Benin, Bhutan, Botswana, Burkina Faso, Burundi, Canada, Cape Verde, Central African Republic, Chad, Comoros, Denmark, Djibouti, Equatorial Guinea, Finland, France, Gambia, Germany, Greece, Guinea, Guinea-Bissau, Haiti, Hong Kong, Iceland, Ireland, Israel, Italy, Japan, Kiribati, Republic of Korea, Lesotho, Liechtenstein, Luxembourg, Malawi, Maldives, Mali, Mexico, Mozambique, Nepal, Netherlands, Niger, Norway, Portugal, Rwanda, Sao Tome and Principe, Sierra Leone, Singapore, Somalia, Spain, Sweden, Switzerland, Tanzania U.R., Togo, Tuvalu, Uganda, United Kingdom, Vanuatu, Western Samoa, Yemen. Some have mentioned in this thread how different states have their own "Buy American" types of laws. I wonder if these are still legal if we have Federal trade agreements that prohibit us from hindering certain foreign trade. John Bunzick, CCS, CCCA Senior Member Username: bunzick Post Number: 292 Registered: 03-2002 Posted on Wednesday, December 15, 2004 - 09:32 am:    Finally, I have another piece of this puzzle to share with the group. The second piece of regulation that Anne refers to is probably Title 49 of the Code of Federal Regulations, Part 30: "Denial of Public Works Contracts to Suppliers of Goods and Services of Countries that Deny Procurement Market Access to U.S. Contractors." Essentially, this regulation says that if a country denies access to our contractors, we will not do business with any firm owned by someone from that country. The list of countries is maintained by the US Trade Representative. Ownership is carefully defined in terms of legal structure and percentages. This particular CFR applies to all design (yes, architects too!) and construction perform on DOT projects, including all of its various agencies. However, I have been unable to find the list purportedly maintained by the USTR on their web site. We'll see if my e-mail to them is ever answered. Kathy Greenway (Unregistered Guest) Unregistered guest Posted on Wednesday, December 15, 2004 - 01:44 pm:    Interesting that China is not a designated country.