Final Guidance on Build America, Buy America Effective October 23, 2023
The Office of Management and Budget (OMB) issued final guidance on how to implement the Build America, Buy America Act (BABA) provisions of the Infrastructure Investment and Jobs Act. The final guidance takes effect on October 23, 2023, and will apply to all federal awards, including infrastructure projects that are obligated on or after this date. Federal awards for infrastructure projects that were obligated on or after May 14, 2022 (the effective date of BABA) but before October 23, 2023, will instead be subject to OMB Memorandum M–22–11.
What does the final guidance do?
The final guidance introduces a new section, Part 184, within Title 2 of the Code of Federal Regulations (2 CFR), which provides clear direction to Federal agencies on applying BABA’s Buy America Preference (Buy America) and revises 2 CFR § 200.322. The Buy America Preference promotes using American-made products and materials for federally funded projects such as infrastructure projects. The following guidance applies to awardees, whether a company is a recipient or subrecipient, of Federal financial assistance and their contractors.
First, the new Part 184 includes definitions for key terms, including iron or steel products, manufactured products, and construction materials. Construction materials include (i) Non-ferrous metals; (ii) Plastic and polymer-based products (including polyvinylchloride, composite building materials, and polymers used in fiber optic cables); (iii) Glass (including optic glass); (iv) Fiber optic cable (including drop cable); (v) Optical fiber; (vi) Lumber; (vii) Engineered wood; and (viii) Drywall.
Part 184 also confirms that “all manufacturing processes” for construction materials must occur in the United States. It explains how the “all manufacturing processes” standard should be satisfied for each construction material. For example, for optical fiber, from the initial preform fabrication stage through the completion of the draw must occur in the United States.
The new Part 184 affects infrastructure projects by imposing certain requirements on using American-made products and construction materials in projects that receive federal funding. If your company has an ARPA, Middle Mile, ReConnect award, or any federal award, including upcoming BEAD awards, the final guidance affects your compliance with Buy America.
Awardees and their contractors must carefully navigate these requirements to ensure compliance and successful project execution. Complying with Buy America may delay project timelines, particularly if there are difficulties in sourcing domestic materials. In some cases, Buy America may limit the range of materials and products available to project managers and contractors, potentially affecting project design and quality, and increasing project costs.
Second, OMB revised text in 2 CFR § 200.322. Instead of stating that “Federal agencies providing Federal financial assistance for infrastructure projects must comply with the Buy America preferences set forth in 2 CFR part 184,” the revised text now states that Federal agencies must “implement” such provisions.
What happens if certain materials are not available?
The final guidance restates the circumstances under which awardees may request Buy America waivers:
1. A public interest waiver, if applying BABA, would be inconsistent with the public interest.
2. An unreasonable cost waiver if the inclusion of iron, steel, manufactured products, or construction materials produced in the U.S. will increase the cost of the overall project by more than 25%.
3. A nonavailability waiver when types of iron, steel, manufactured products, or construction materials are not sufficiently available.
The final guidance outlines the process Federal agencies should implement to allow awardees of federal awards to request waivers.
Contact Andrea Robinson or Barbara Greger with any questions regarding the new rules or if your company needs assistance with BABA or other post-award compliance requirements.