The opinion of the court was delivered by: Judge Rambo
Before the court is Defendant Allen D. Biehler's, Secretary of Transportation of the Commonwealth of Pennsylvania ("PennDOT"), motion for summary judgment, (Doc. 11), pursuant to Federal Rule of Civil Procedure 56. The motion has been fully briefed and is ripe for disposition.
A. Pennsylvania Steel Act and Buy America Act
On March 3, 1978, Pennsylvania enacted the Steel Products
Procurement Act ("Steel Act"), 73 Pa. Cons. Stat. § 1881, et seq.*fn2 (Def.'s Statement of Material Facts, ¶ 1; Pl.'s Statement of Material Facts, ¶ 1.) The Steel Act was designed to be within the police powers of the state of Pennsylvania and was formed to "protect the health, safety and general welfare of the citizens of the Commonwealth." 73 Pa. Cons. Stat. § 1882. The General Assembly, in enacting the Steel Act, determined that Pennsylvania was one of the leading states in the production of steel, as such, the Steel Act would promote the general welfare and stimulate the economies of both Pennsylvania and the United States. See 73 Pa. Cons. Stat. § 1883. Furthermore, the Steel Act is designed to be remedial in nature, and each provision is to be liberally construed to best promote the general welfare and stimulate the economy. 73 Pa. Cons. Stat. § 1887.
Specifically, the Steel Act requires that Every public agency shall require that every contract document for the construction, reconstruction, alteration, repair, improvement or maintenance of public works contain a provision that, if any steel products are to be used or supplied in the performance of the contract, only steel products as herein defined shall be used or supplied in the performance of the contract or any subcontracts thereunder.
73 Pa. Cons. Stat. § 1884(a). The parties agree that the Pennsylvania Department of Transportation ("PennDOT") is a "public agency" as defined by the Steel Act. (Def.' Statement of Material Facts, ¶ 6.)
The Steel Act defines "public works" as:
Any structure, building, highway, waterway, street, bridge, transit system, airport or other betterment, work or improvement whether of a permanent or temporary nature and whether for governmental or proprietary use. The term includes, but is not limited to, any railway, street railway, subway, elevated and monorail passenger or passenger and rail rolling stock, self-propelled cars, gallery cars, locomotives, passenger buses, wires, poles and equipment for electrification of a transit system, rails, tracks, roadbeds, guideways, elevated structures, buildings, stations, terminals, docks, shelters and repairs to any of the foregoing.
73 Pa. Cons. Stat. § 1886 (emphasis added).
"Steel products" is defined as "[p]roducts rolled, formed, shaped, drawn, extruded, forged, cast, fabricated or otherwise similarly processed, or processed by a combination of two or more of such operations, from steel made in the United States . . . ." 73 Pa. Const. Stat. § 1886.
In addition to the Steel Act, the United States Congress has passed the Buy American Act, 23 U.S.C. 313 et seq. (the "BAA"), which provides:
(a) Notwithstanding any other provision of law, the Secretary of Transportation shall not obligate any funds authorized to be appropriated to carry out the Surface Transportation Assistance Act of 1982 (96 Stat. 2097) or this title and administered by the Department of Transportation, unless steel, iron, and manufactured products used in such project are produced in the United States.
(b) The provisions of subsection (a) of this section shall not apply where the Secretary finds--
(1) that their application would be inconsistent with the public interest;
(2) that such materials and products are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or
(3) that inclusion of domestic material will increase the cost of the overall project contract by more than 25 percent.
(d) The Secretary of Transportation shall not impose any limitation or condition on assistance provided under the Surface Transportation Assistance Act of 1982 (96 Stat. 2097) or this title that restricts any State from imposing more stringent requirements than this section on the use of articles, materials, and supplies mined, produced, or manufactured in foreign countries in projects carried out with such assistance or restricts any recipient of such assistance from complying with such State imposed requirements.
23 U.S.C. § 313(a)(b) & (d).
The United State Code of Federal Regulations has two sections relevant to this case which attempt to clarify both the requirements and the restrictions imposed on steel products by the BAA. Section 635.409 states:
No requirement shall be imposed and no procedure shall be enforced by any State transportation department in connection with a project which may operate:
1)(a) To require the use of or provide a price differential in favor of articles or materials produced within the State, or otherwise to prohibit, restrict or discriminate against the use of articles or materials shipped from or prepared, made or produced in any State, territory or possession of the United States; or
(b) To prohibit, restrict or otherwise discriminate against the use of articles or materials of foreign origin to any greater extent than is permissible under policies of the Department of Transportation as evidenced by requirements and procedures prescribed by the FHWA Administrator to carry out such policies.
23 C.F.R. § 635.409 (emphasis added).
In addition, Section 635.410, states, in relevant part:
(a) The provisions of this section shall prevail and be given precedence over any requirements of this subpart which are contrary to this section. However, nothing in this section shall be construed to be contrary to the requirements of § 635.409(a) of this subpart.
(b) No Federal-aid highway construction project is to be authorized for advertisement or otherwise authorized to proceed unless at least one of the following requirements is met:
(1) The project either: (i) Includes no permanently incorporated steel or iron materials, or (ii) if steel or iron materials are to be used, all manufacturing processes, including application of a coating, for these materials must occur in the United States. Coating includes all processes which protect or enhance the value of the material to which the coating is applied.
(2) The State has standard contract provisions that require the use of domestic materials and products, including steel and iron materials, to the same or greater extent ...