Buy America interpretation slows California transportation projects; utilities and FHWA working on phased responses

Brent Green, Caltrans’ chief of right of way and utility relocation, told the California Transportation Commission on June 11 that a post‑MAP‑21 interpretation of the federal Buy America rule is causing immediate delays in projects that require utility relocations and other steel‑ or iron‑intensive work.

“Buy America is only for products that are predominantly of steel and iron, and that's defined as something that's 90% steel or iron content when it's delivered to the job site for installation,” Green said. He added that MAP‑21 expanded Buy America’s reach so that any federally‑eligible contract on a project can pull associated, non‑federally funded contracts (such as utility relocations) into Buy America compliance, even if the utilities themselves do not use federal funds.

Why it matters: Caltrans and regional partners said the interpretation has created a large short‑term compliance and supply‑chain problem. Green said the department has identified nine projects in construction with Buy America impacts and a construction value of about $3.9 billion, plus roughly 39 additional projects valued at about $1.5 billion that either have come before the commission or will shortly. He estimated the total list of affected projects statewide is on the order of 80–90 projects.

PG&E and Southern California Edison told the commission they cannot meet the new interpretation overnight. “We have surveyed 19 of our distributors and suppliers, who provide over 1,200 pieces of equipment that are used in utility relocation projects,” Valerie Wynne, manager of state agency relations for PG&E, said. Wynne said many items can be certified Buy America‑compliant with time and funding, but some critical parts — notably certain gas pipeline valves — currently have no verified domestic source. She said vendors told PG&E that switching supply lines could take “12 weeks or more” to begin delivering domestically sourced parts.

Roderick Brewer of Southern California Edison described a three‑step plan Edison is pursuing: prioritize projects, produce bills of material for affected jobs and identify compliant sources, then implement material separation, certification and accounting in procurement and inventory. Brewer said Edison “cannot meet the Buy America requirements today, but we do intend to meeting those requirements within the very near future.” (Transcript supplied the wording; Caltrans and the utilities are using the phrase “Buy America requirements.”)

Local project sponsors warned of immediate effects. Ray Wolf, representing the Linwood grade‑separation project in San Bernardino County, said his sponsor could not identify a material list to allow a contractor to certify compliance and therefore could not obtain a right‑of‑way certification and an allocation the commission had been asked to approve. “I have $8.8 million of TCIF (Trade Corridor Improvement Fund) money that we may not be able to allocate today,” Wolf said, adding that the region risks losing federal funding if allocations are delayed until the August meeting.

Caltrans and federal officials said they are working multiple tracks to limit funding losses and job impacts: (1) a project‑by‑project review with the Federal Highway Administration to find immediate, compliant solutions where possible; (2) pursuing limited waivers for items that demonstrably have no domestic sources (waivers are time‑consuming and high bar, Caltrans said); and (3) pursuing a phased or ramp‑up approach to give utilities and suppliers time to certify supply chains and to ramp U.S. production where feasible.

Green said FHWA is preparing a decision matrix to help states, regional agencies and utility owners prioritize projects for review and to determine which items truly require waivers or can be resolved through project‑level adjustments. Green also said Southern California Edison had been asked to develop an example phase‑in plan and present it to FHWA; he said the plan was not yet complete.

Utility details offered to the commission: Wynne said PG&E has identified valve items that could cost roughly $20,000 apiece and that, for one Cordelia project, valves accounted for roughly $200,000 of equipment — a small fraction of a $750 million highway job but large enough to stop progress if the valve has no domestic supplier. Brewer said Edison is developing bills of material for 80+ projects to identify items that are and are not Buy America‑compliant, qualify alternative U.S. suppliers where possible, and pursue appropriate waiver requests for items that cannot be sourced domestically.

Several commissioners and local officials urged urgency. Commissioner Dunn and others reported outreach in Washington, D.C., from utilities and trade associations and said the DOT had signaled willingness to consider a phase‑in approach if industry provided concrete, time‑bound plans. Former Congressman William Thomas and Bakersfield Public Works Director Raul Rojas urged practical, short‑term steps to redeploy at‑risk federal money to ready projects until supply‑chain fixes are implemented.

What’s next: Caltrans said it will continue intensive, case‑by‑case work with FHWA, utilities and regional partners. Utilities said they are working with trade groups (EEI) and with Caltrans to provide consolidated, prioritized lists and supplier information; several speakers asked the utilities to accelerate submission of that information to federal officials so a phased path forward can be approved.

Ending: Commissioners said they will re‑visit the lists and priority decisions at upcoming meetings and urged utilities and EEI to provide clear, project‑level bills of material and timeline estimates as soon as possible so federal officials can consider time‑limited relief while domestic capacity and certification are put in place.