About the author:
Bob Crossen is managing editor of WWD. Crossen can be reached at [email protected]
On November 15, U.S. President Joe Biden signed the Infrastructure Investment & Jobs Act into law, officially designating $55 billion in funding for the water industry over the next five years. Water & Wastes Digest (WWD) provided timely reporting on the bill’s passage and signing into law online, and select coverage can be found on pages 36-39 in this issue. These articles break down the funding allocations by market segment and outline industry association responses to the bill’s passage.
While new funding allocations are worthy of celebrating, there are some headwinds that may challenge the industry’s efforts in using it. Between the Buy America language included in the law and current difficulties for original equipment manufacturers (OEMs) to hire and retain employees — let alone shipping delays – and the complexity of distributing it to the utilities that need it most, timely usage of this funding will be difficult but not impossible.
Let’s start first with Buy America. This language indicates that any project using federal funding from this law must show that 50% of equipment used is manufactured in the U.S., and that the iron and steel is domestically produced. This will increase by five points each year until it reaches 75%.
Associations such as the American Water Works Association and the Water & Wastewater Equipment Manufacturer’s Association have noted this will present significant challenges for OEMs to produce legally acceptable equipment for this funding. The primary difficulty they note is supply and demand of domestically produced iron and steel. The funding allocation for water is half the size of the transportation funding, and all infrastructure must adhere to this law’s Buy America language. If American foundries cannot meet the demand, what recourse do OEMs have for supplying accepted equipment for infrastructure projects? Exceptions may be necessary (and have been used for years), but that could result in delays. Those delays are further complicated by supply chain delays felt across all industries.
Additionally, OEMs have noted a real challenge with hiring and retaining employees during what has been termed The Great Resignation, a movement in which workers are quitting jobs en masse.
Despite these headwinds, optimism for the future of water in the U.S. is at an all-time high. The industry has overcome similar and worse challenges before, and WWD firmly believes you and your peers are prepared to handle what will come next. And we’re excited to follow your work in the coming years.
