Do you know what Buy American means?

There’s some confusion when it comes to the question of Buy American and about requirements for compliance certification. This shouldn’t come as a surprise to anyone, as the laws and regulations that come into play really do appear to have done their best to turn a relatively simple concept into a convoluted quagmire of law titles, numbers and exceptions. So when a specifying engineer or rep puts in a request for compliance certification, do they really know what they’re asking for, or why?

Titus has plants in the U.S. and Mexico and is able to comply with Buy American requirements with all of our products, but it’s important to note that some electrical components are not made by any manufacturer in the U.S. these days. 

Let’s take a closer look at what it all really means.

Way back in 1933, in the darkest days of the Great Depression, President Herbert Hoover signed into law a bill called the Buy American Act. This law required that the federal government buy only American-made products wherever possible. Of course, even way back then, before the onset of the global economy that we have today, it was necessary to define what “American-made” actually meant. The definition, according to the 1933 law, was that at least 50% of the product or its materials must originate in the U.S. The law also allowed for products in countries with trade agreements with the U.S., if the federal project’s contract value was greater than $7,443,000. So under the Buy American Act, a federal government project exceeding that amount can purchase products made in America or any country with a trade agreement with the U.S. This would include NAFTA.

Still with me? Stick around, it gets even better. 

In 2009, President Obama signed into law the American Recovery and Reinvestment Act. This law included a Buy American clause — quite separate from the 1933 law — which stipulated that no economic stimulus grants should be made unless ALL the manufactured goods on the project are made in the U.S., with just a very few exceptions relating to cost and availability. However, this clause relates only to purchases made using funds provided by this law’s stimulus grants. As these grants are quickly becoming a thing of the past, this type of Buy American compliance is also becoming less and less relevant. 

More and more complicated

When engineers ask for Buy American Compliance Certification, the question is, which type of Buy American do they mean? Do they mean according to the 1933 Buy American law, or the 2009 Buy American clause in the American Recovery and Reinvestment Act? For the sake of clarity, we can talk about the 1933 Buy American Act by the acronym BAA, and the 2009 Buy American clause in the American Recovery and Reinvestment Act as ARRA. 

It should come as a surprise to nobody that the American economy has changed since the 1930s. Eighty-five years ago, manufacturing was still very much a domestic business. Today, companies buy components of all kinds from all corners of the world for assembly, together with components produced here at home. A company like Titus manufactures complex machinery that includes everything from steel casings, control boards, switches, sensors, tubing , motors and blowers. Occasionally, there are components — for example, some special electronic parts — that simply aren’t available from domestic manufacturers. In these cases, neither the Buy American definitions in the BAA or ARRA can apply unless the component meets the exceptions. 

Treaties and trade agreements under discussion 

There’s plenty of discussion these days about trade treaties, and specifically about NAFTA. The current administration has talked about renegotiating aspects of the treaty to secure terms more favorable to the U.S. Until this renegotiation takes place, NAFTA is still in place. There’s little support in the industrial community for any unilateral withdrawal from NAFTA. In fact, the U.S. Chamber of Commerce has gone on record as being firmly against any disturbance of the current treaty. We can be cautiously optimistic that under any circumstance, the trade agreement will either remain in place or conceivably be improved upon from the U.S. point of view.

Compliance and more compliance

The point of this article is simply to help those purchasing commercial HVAC equipment — and even those reps selling that equipment — better understand what compliance means, and which laws they’re trying to comply with. At Titus, we can provide Buy American Certificates of Compliance regarding both ARRA (2009) and BAA (1933) where requested. In other words, Titus is a proud American manufacturer of commercial HVAC systems. So when you’re ready to Reinvent Your Comfort Zone, you need look no further than to your friendly, local Titus manufacturing plant. For more information, you can check with your local Titus representative.

Until next time,

Jenny Abney Sivie, LEED AP BD+C - Director of Advanced Business Development, Titus HVAC

This article as written can be found on LinkedIn's website https://www.linkedin.com/. For information on this topic, please contact Jenny Sivie at jsivie@titus-hvac.com or Titus Communications at communications@titus-hvac.com.