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Buy America(n) Acts: Sector Specific Information

Other Key Information

1. Buy America(n) Essentials

1.1 American Recovery and Reinvestment Act

1.2 Canada-U.S. Agreement on Government Procurement

1.3 Sector Specific Information

1.4 Exceptions and Waivers

For a complete discussion of the information relevant to specific market sectors noted in the chart below, visit the individual pages for the market sector of interest:

Buy America(n) Sector Specific Chart
SectorProcurement InformationHow Canadians Can CompeteAdditional Resources

Supplies and Buy American: applies to all supplies acquired for use in the U.S. not otherwise covered by trade or defense agreements.

Price differentials: 6% added to offer price when being compared to a U.S. large business; 12% for small business.

Apply for waivers.

When any project from any department, agency or for any sector is federally-funded and executed by the federal government or a WTO GPA signatory state, Canadians can compete equally when the total project cost is over the designated thresholdsFootnote 1.

Construction and Buy American: applies to any prime contract when the total material and service value is less than NAFTA thresholds; additional restrictions may apply if the executing party is at the sub-federal level.

Canadians face barriers on:

  1. Prime contracts below the threshold;
  2. Some state and local government contracts;
  3. Federally-funded projects not directly contracted by the federal government.

When comparing bids, 6% (against large businesses) or 12% (against small businesses) will be added to the cost of the Canadian offer.

Canadians compete equally for U.S. federal construction contracts when the U.S. federal government is the direct client, the prime contract is for construction services and the estimated worth of the prime contract is over the NAFTA threshold.

When this is not the case, waivers may apply, or Canadians can consider sub-contracting opportunities or are encouraged to speak with the contracting officer.

Aviation and Buy American: administering agency is the Federal Aviation Administration (FAA), part of the Department of Transport (DOT)

BAA provisions require that the cost of components and subcomponents produced in the U.S. is more than 60% of the cost of all components used in the project and that final assembly occurs in the U.S.

Contracts to expand airports, build runways, install ground communication and terminals or purchase maintenance equipment, are often managed by state or local governments or the private sector receiving funds, which may mean additional BAA provisions are attached.

Direct FAA procurement is covered by NAFTA Chapter 10 rules: Canadians are treated as U.S. firms when the prime contract is worth more than the NAFTA thresholds.

The FAA generally encourages participation of Canadian firms in direct purchases, contact procuring officers.

Small business set-asides and other similar programs may however still impede Canadian participation.

Civil Aircraft: BAA does not apply to the acquisition of civil aircraft and related articles from Canada.

Highway Projects and Buy America: administering agency is the Federal Highway Administration (FHWA), funding is sourced from the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU).

SAFETEA-LU funded projects have Buy American restrictions that require all iron and steel materials to be U.S. made.

There are also aggressive set-asides for small disadvantaged (minority) and women-owned businesses.

When FHWA projects are executed by state or local governments, Canadians are not covered by free trade obligations.

When FHWA projects are executed directly by the FHWA and on federal land, free trade obligations apply.

Most highway projects are procured by state or local governments.

Canadian marketing efforts should be directed towards the sub-federal level.

BAA FAR requirements do not apply if the cost of the iron and steel materials does not exceed 1/10 of 1% of the total contract cost, or US$2,500, whichever is greater.

Waivers may apply.

FHWA engineers and general counsel are often willing to discuss ways in which companies can meet requirements. Companies may forward technical information and seek waivers ahead of time. Arrange a meeting with the FHWA to discuss compliance in advance.

Transit Projects and Buy America: administering agency is the Federal Transit Administration (FTA); funding is sourced from SAFETEA-LU.

At present time, the U.S. has no international trade commitments to open federal or sub-federal transportation contracts to Canadian firms.

Amtrak is a passenger railroad owned and operated through the DOT. Amtrak is a for-profit corporation, not an agency or department. It has specific BAA rules and exemptions (see BAA and Transit Projects for issues specific to Amtrak).

Rolling stock:Footnote 2 cost of components produced in the U.S. must be 60% of the total cost of components and final assembly must take place in the U.S.

General waivers do exist for some products, such as microprocessors and software; other waivers can apply.

Competition in non-rolling stock transit projects will likely be difficult as these projects require 100% U.S. origin content and all manufacturing must be done in the U.S.

Information Technology and Buy American: multiple administering departments and agencies.

BAA Supplies provisions apply, as found in the U.S. Code of Federal Regulations.

Certain commercial IT items are exempt from BAA requirements.

For IT items that do not qualify, such as medical equipment, waivers may still apply.

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