Air Force Looks to China When American Manufacturing Falls Short
Michael Mandel, chief economic strategist at the Progressive Policy Institute, was recently doing some research for a textbook he’s revising when he stumbled upon a surprising entry in the Federal Registry. On March 21, the U.S. Air Force waived the “Buy American” provision of the American Recovery and Reinvestment Act of 2009 for a construction project at Eielson Air Force Base in Alaska. As workers tried to build a few stimulus-backed housing units, it became apparent that a number of simple domestic items couldn’t be procured from American manufacturers – namely, ceiling fans, shower rods, towel racks, toilet-paper holders, and all manner of screws and fixtures.
According to the registry entry, a contracting official
has determined that the above items of manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality. The domestic nonavailability determination for these products is based on extensive market research and thorough investigation of the domestic manufacturing landscape. This research identified that these products are manufactured almost exclusively in China.
In fiscal year 2009, more than 44,000 waivers of federal “Buy American” provisions were granted, worth nearly $14 billion. On his blog, Mandel writes that the Air Force waiver in particular “certifies the weakness of domestic manufacturing in America,” though he also questions whether all the household items listed are actually unavailable in the U.S., given that, according to him, the American production of nuts and bolts has been climbing in recent years.
Similarly, the Alliance for American Manufacturing (AAM) wonders whether there isn’t a “single American manufacturer” producing the screws required for the Eielson project.
“There’s a great deal of evidence that many agencies, including the Department of Defense, don’t look very wide or deep for procurement,” AAM’s Executive Director, Scott Paul, told HuffPost. “Some agencies are much more aggressive about enforcing it than others.”
But in this case, it seems the collated screws in question are certifiably unavailable in the States. Jennifer Baker Reid of the Industrial Fasteners Institute, a trade group for nuts-and-bolts manufacturers, says such screws are “largely, if not entirely, imports” from China nowadays. The waiver, Reid says, “appears to have been issued appropriately based on market research.”
That’s not to say Reid’s group hasn’t had other bones to pick with federal agencies over the stimulus package’s “Buy American” stipulation. Her group complained to the Environmental Protection Agency over some 2009 waivers granted for fasteners for stimulus-funded wastewater treatment upgrades. In that case, Reid says her group had two U.S. manufacturers who could have supplied the necessary fasteners. “These waivers have come out fast and furious without checking to see if a U.S. supplier is available,” she says.
In the case of the Eielson project, it may be more troubling that the Air Force did its due diligence and still couldn’t find a supplier. “It’s not like China has a competitive advantage in making screws,” says Paul. “Shame on us if we can’t make them.”
Correction: This story originally identified Mandel as chief economist at BusinessWeek. In fact, Mandel left BusinessWeek in December 2009.
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First Posted: 04/20/11 07:48 PM ET Updated: 06/20/11 06:12 AM ET