Build America Buy America Act

Government

Background

BABA requires each Federal agency to ensure none of the funds available for infrastructure projects would utilize iron and steel products, manufactured products, and construction materials that were not made in America. BABA required OMB to issue guidance to the Federal agencies to assist in applying these new domestic content procurement requirements. Consequently, OMB issued Memorandum M -22-11 on April 18, 2022, which provided preliminary and non-binding guidance on the definition of “construction materials” and standards for determining when all manufacturing processes of the material occur in the United States. On February 9, 2023, OMB issued a Notice of Proposed Guidance to support implementation of BABA and clarify existing provisions.

In a final rule issued on August 23, 2023, the Office of Management and Budget (OMB) revised its guidance to add a new part 184 to title 2 of the Code of Federal Regulations to implement the requirements of the Build America, Buy America Act (BABA). The final rule becomes effective on October 23, 2023.

Under BABA’s Buy America requirements, “none of the funds made available for a Federal financial assistance program for infrastructure may be obligated for a project unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the United States.” BABA 70914(a). The manufacturing standard that will apply to coatings used on these infrastructure projects will depend on whether the coating is:

(1) applied to a “construction material;”
(2) applied to an “iron or steel product;”
(3) brought to the work site as a coating for incorporation into an infrastructure project (i.e., the coating is the “manufactured product”); or
(4) applied to a “manufactured product” before the product is brought to the work site (i.e., the coating is a component of the “manufactured product”).

In the Final Guidance, OMB makes it clear that coatings are not a “construction material” and that a coating on an iron or steel product is not covered by BABA. However, coatings brought to the worksite to be applied to an infrastructure project will likely be deemed a “manufactured product” and will have to meet the domestic procurement requirements of BABA.

Where supply chain issues make it extremely difficult or impossible to comply with the “Buy America” content thresholds, a waiver may be issued by the contracting agency. The agency can issue a waiver for the following reasons:

(1) applying the domestic content procurement preference would be inconsistent with the public interest;
(2) the types of iron, steel, manufactured products, or construction materials are not produced in the United States in sufficient and reasonably available quantities or of a satisfactory quality; or
(3) the inclusion of iron, steel, manufactured products, or construction materials produced in the United States will increase the cost of the overall project by more than 25 percent.

 

ACA Action

Draft guidance for the coatings industry has been prepared and is in the process of finalization.

In addition, in response to a hearing conducted by the U.S. House Committee on Transportation and Infrastructure Subcommittee on Highways and Transit, ACA expressed support for efforts to better understand the current administration’s implementation of Build America, Buy America, including those provisions that were in the Infrastructure Investment and Jobs Act.

 

ACA Staff

Heidi McAuliffe
Senior Vice President, Government Affairs

Riaz Zaman
Senior Counsel, Government Affairs