Fed Funded Highway Projects Facing Impact of Cargo Act Changes

January 28, 2016

Contractors must now consider whether federal-aid projects will require Cargo Preference Act (CPA) compliance, including associated logistical coordination and cost implementation into bids and proposals.

A change to the Cargo Preference Act (CPA) which requires “at least 50 percent of any equipment, materials or commodities procured, contracted for or otherwise obtained with funds granted, guaranteed, loaned, or advanced by the U.S. Government . . . [to] be transported on privately owned United States-flag commercial vessels, if available,” isn't interpreted as applying to federally-financed highways.

But there is an exception if the goods or materials are independently acquired. As example, fabricated steel, tunnel boring machines, large-capacity cranes, and other goods or materials bought specifically for FHWA funded projects must comply with the CPA transportation requirements.

Read Neil Lowenstein's explanation of the CPA changes here:

Source: Virginia Construction Law Blog