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New Buy America rules raise costs and uncertainty for Vermont projects, agency officials warn
Summary
Agency witnesses and the chief engineer told the House Transportation Committee a January rule narrowing Buy America waivers will increase administrative costs, may make suppliers less willing to disclose origins, and could put dozens of pay items at risk of noncompliance.
The House Transportation Committee heard Jan. 24 that recent Buy America regulatory changes and the winding down of long-standing waivers will complicate Vermont Agency of Transportation projects and likely raise costs.
Jeremy (chief engineer for the Agency of Transportation) told the committee Buy America developments are politically driven but will have practical consequences for materials sourcing and project delivery. “Starting October 1, 2025, manufactured products will need to be finally assembled in the United States,” he said, summarizing a January rule change that removed a manufactured‑products waiver long in place.
Under the revised implementation schedule Jeremy described, final assembly in the United States is required by Oct. 1, 2025; a 55% domestic‑content test for constituent components was to take effect Oct. 1, 2026. The agency previously relied on a general waiver for many manufactured products; that waiver was removed after IIJA.
Jeremy said the agency reviewed its project pay items and found 1,200 distinct pay items on contracts, of which 425 include manufactured products. For 309 pay items the agency could not confirm whether material sourcing would meet Buy America requirements. “As I sit here today, we don't know if we can meet the Buy America requirements for those pay items,” he said.
The agency identified three common waiver pathways: public interest findings, non‑availability waivers, and unreasonable cost waivers. Jeremy cautioned that obtaining waivers can be unpredictable because waivers require federal review and public comment and can be denied if another party claims to be able to supply the product.
Committee members asked how states will verify vendor certifications and whether costs will rise. Jeremy said the agency will require contractors and vendors to provide certification and provenance documentation and that compliance will raise administrative costs; Federal Highway’s regulatory analysis estimated additional state administrative costs and material cost increases in some scenarios.
Members also asked about specific product categories, including EV charging equipment and precast concrete sourced from Canada. Jeremy said certain construction materials (sand, cement) are exempt but that precast components that combine inputs may be treated as manufactured products and thus become subject to new requirements.
Lawmakers and agency staff said the change increases project risk and could delay some work if domestic sources are unavailable or more expensive. The chief engineer and members agreed the department will need to track vendor responses, pursue waivers where appropriate, and prepare for higher administrative workload as the rule takes effect.
