FAA skipped Buy American checks on $272.7M in IIJA contracts

DOT's Office of Inspector General⧉ -- the Transportation Department's independent watchdog, whose audit recommendations agencies must formally accept or contest -- reviewed the nine largest contracts into which FAA had funneled money from the 2021 Infrastructure Investment and Jobs Act (IIJA).▸ Those nine contracts carried $405,179,666 in IIJA funding combined. Five were missing at least one of the contract clauses FAA's own rules require to make Buy American law enforceable -- a gap OIG valued at approximately $272.7 million. Buy American requirements exist to keep federally funded construction and equipment purchases flowing to U.S. manufacturers rather than foreign suppliers; a missing clause means the government has no contractual hook to make a contractor prove, or a court to enforce, that it complied.

FAA received $25 billion in IIJA money between fiscal years 2022 and 2026, $5 billion of it for the facility-and-equipment contracts that are the only IIJA funding FAA can spend directly.▸ The Build America, Buy America Act⧉, enacted alongside IIJA, was written to push that money toward domestic manufacturers and raises the minimum share of U.S.-made content a project must use in stages -- 55% to 60% in 2022, 60% to 65% in 2024, 65% to 75% by 2029. FAA's Contracting Officers are supposed to write specific clauses into every IIJA-funded contract that hold contractors to those thresholds. In one case, FAA added $71.7 million in IIJA funding to a National Airspace System construction contract between August 2023 and May 2024 without ever adding the clause covering Canadian and Mexican construction materials -- and left in place a different, looser domestic-content clause the contract didn't need.

The most expensive single gap involved a reporting requirement, not a domestic-content rule.▸ Three contracts added a combined $174.5 million in IIJA funds between February 2022 and May 2024 without the clause requiring contractors to itemize any foreign products they used. FAA eventually added the clause to two of the three contracts -- 12 and 22 months late, and only after this audit prompted it. On the third, worth $48.3 million in IIJA funds, FAA never added the clause at all. FAA staff told OIG the gaps traced to unclear internal guidance and staff turnover: the Contracting Officers running four of the nine contracts said they lacked the tools to identify which clauses applied, and officials who originally awarded some of the contracts had since left the agency, leaving successors without full institutional memory of what each contract required.

A waiver is the government's approved exception to Buy American rules -- it lets an agency use a foreign product when domestic supply is unavailable or unreasonably costly, but only after a specific internal review-and-approval process.▸ OIG confirmed FAA used foreign products in three of the nine sampled contracts, together carrying $115.9 million in IIJA funds, and found a different failure mode on each: on a $26.5 million power-supply contract, FAA never documented a waiver at all for $2.6 million in foreign-made electrical equipment supporting critical air-traffic communications. On a $48.3 million technical-support contract, a Contracting Officer approved a waiver request for $60,000 in Chinese-made stainless steel fittings without completing the required review template or getting sign-off from legal, FAA's Acquisition Executive, or the White House's Made in America Office. And on a $41.1 million engine-generator contract first awarded in 2012, FAA kept relying on a Buy American waiver issued in 2014 -- eight years old, never reassessed against IIJA's tighter rules even after IIJA funds were added to the contract in 2022.

Those same three contracts also miscoded their own paperwork.▸ FAA's Federal Procurement Data System listed 9 of 10 task orders on the power-supply contract as U.S.-origin even though $2.6 million of foreign purchases sat inside them, and DOT's own May 2024 report to the White House's Made in America Office claimed 'high confidence' that only $7.7 million -- 0.7% -- of FAA's $1.18 billion in obligated funds went to foreign products, a figure that excluded the $2.6 million this audit found. DOT never explained the basis for that 'high confidence' claim. On the $48.3 million contract, the Contracting Officer told auditors he'd coded the fittings as domestic because the Chinese-made components made up less than 1% of the contract's total value -- a threshold FAA's own manual doesn't actually set.

FAA's formal written response, included in the report, partially concurred with OIG's recommendation to fix the missing-clause process but disputed that up to $272.7 million was properly at risk.▸ On one clause, FAA's argument amounts to a technicality: it says the missing USMCA construction-materials clause actually loosens the domestic-content standard rather than tightening it, so its absence shouldn't count as risk at all. On a second clause, FAA offered a competing number. OIG's table ties $67,587,752 in IIJA funds to two contracts missing the Balance of Payments Program clause, which applies only to work performed outside the U.S. FAA said only one order under one of those contracts was actually performed abroad -- a Bahamas job worth $120,481.78 -- and argued that figure, not the full $67.6 million, is what belongs in the finding. That leaves the two sides about $67.5 million apart on a single clause.

OIG did not back down: it noted the USMCA clause still exposes the U.S. to a risk of breaching its own trade-agreement obligations, and that three of the five noncompliant contracts also had confirmed waiver problems independent of any clause dispute.▸ Both recommendations were closed as 'resolved but open,' with FAA committing to fix its written procedures by November 30, 2026.