Wednesday, June 17, 2009
Contractors are complaining about a key provision of the Obama administration’s stimulus package requiring materials for new infrastructure projects to be made in the United States. Associated General Contractors of America (AGC) says the “Buy American” mandate is slowing down projects and raising costs, owing to the fact that builders have often turned to foreign suppliers in certain instances.
One example cited by AGC pertains to water treatment facilities, which involve materials that are either made only overseas, or cost considerably less. The situation is forcing contractors to decide between accepting stimulus funds, and paying more for domestically-made parts, or opting out of the assistance provided by the American Recovery and Reinvestment Act. Other problems cited involve contractors being unable to get certification that all components of equipment used are U.S.-made.
The protectionist provision is also rankling officials in Canada, home to suppliers for American builders, and could provoke a “full-blown trade war” if Canadians decide to counter with their own barriers, argues AGC.
-Noel Brinkerhoff
Stimulus Threatens to Cause ‘Full-Blown Trade War’ (by Michael Grabell and Amanda Michel, ProPublica)
Stimulus Is Helping Contractors, But Buy American Poses Threats (Simonson Says, Associated General Contractors of America)
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