Dayton Superior is your Industry Resource on The Build America, Buy America Act

November 15, 2021, President Biden signed the Infrastructure Investment Jobs Act (IIJA) Pub. L. No. 117-58, which included the Title IX Subtitle A- Build America, Buy America Act (BABA). The following is an excerpt from the Public Law No. 117-85. 

DOMESTIC CONTENT PROCUREMENT PREFERENCE. —The term ‘‘domestic content procurement preference’’ means a requirement that no amounts made available through a program for federal financial assistance may be obligated for a project unless—

(A) all iron and steel used in the project are produced in the United States.

(B) the manufactured products used in the project are produced in the United States; or

(C) the construction materials used in the project are produced in the United States.

PRODUCED IN THE UNITED STATES. —The term ‘‘produced in the United States’’ means—

(A) in the case of iron or steel products, that all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.

(B) in the case of manufactured products, that—

(i) the manufactured product was manufactured in the United States; and

(ii) the cost of the components of the manufactured product that are mined, produced, or manufactured in the United States is greater than 55 percent of the total cost of all components of the manufactured product, unless another standard for determining the minimum amount of domestic content of the manufactured product has been established under applicable law or regulation; and

(C) in the case of construction materials, that all manufacturing processes for the construction material occurred in the United States.

On August 23, 2023, the Office of Management and Budget (OMB) published final Guidance for Grants and Agreements to support the implementation of the BABA Act.

(Revised guidance takes effect on October 23, 2023)

The new regulations implementing the Final Guidance will be published in a new part of the Code of Federal Regulations (“C.F.R.”) (2 C.F.R. Part 184). OMB is intending to replace Memorandum M-22-11 before the October 23, 2023, effective date.

1. Iron and Steel:
   1. Articles, materials, or supplies that consist wholly or predominantly of iron or steel or a combination of both.
      1.  The cost of the iron and steel content exceeds 50% of the total cost of all components.
      2. The cost of iron and steel is the cost of the iron or steel mill products (such as bar, billet, slab, wire, plate, or sheet), castings, or forgings utilized in the manufacture of the product and a good faith estimate of the cost of iron or steel components
   2. Produced in the United States, all manufacturing processes for iron or steel, from the initial melting stage through the application of coatings, must occur in the United States.
2. Manufactured Products:
   1. Articles, materials, or supplies that have been: (i) Processed into a specific form and shape; or (ii) Combined with other articles, materials, or supplies to create a product with different properties than the individual articles, materials, or supplies.
   2. (2) If an item is classified as an iron or steel product, a construction material, or a section 70917(c) material under § 184.4(e) and the definitions outlined in this section, then it is not a manufactured product. However, an article, material, or supply classified as a manufactured product under § 184.4(e) and paragraph (1) of this definition may include components that are construction materials, iron or steel products, or section 70917(c) materials.

       

3. Construction Materials are defined as articles, materials, or supplies that consist of only one of the following items:
   • Non-ferrous metals – “All manufacturing processes, from initial smelting or melting through final shaping, coating, and assembly, occurred in the United States.”
   • Plastic and polymer-based products (including polyvinylchloride, composite building materials, and polymers used in fiber optic cables) – “All manufacturing processes, from an initial combination of constituent plastic or polymer-based inputs, or, where applicable, constituent composite materials, until the item is in its final form, occurred in the United States.”
   • Glass (including optic glass) – “All manufacturing processes, from initial batching and melting of raw materials through annealing, cooling, and cutting, occurred in the United States.”
   • Fiber optic cable (including drop cable) – “All manufacturing processes, from the initial ribboning (if applicable), through buffering, fiber stranding, and jacketing, occurred in the United States. All manufacturing processes also include the standards for glass and optical fiber, but not for non-ferrous metal, plastic, and polymer-based products, or any others.
   • Optical fiber – “All manufacturing processes, from the initial preform fabrication stage through the completion of the draw, occurred in the United States.”
   • Lumber – “All manufacturing processes, from initial debarking through treatment and planning, occurred in the United States.”
   • Drywall – “All manufacturing processes, from initial blending of mined or synthetic gypsum plaster and additives through cutting and drying of sandwiched panels, occurred in the United States.”
   • Engineered wood – “All manufacturing processes from the initial combination of constituent materials until the wood product is in its final form, occurred in the United States.”
4.  Section 70917 (c) Materials: 
   1. cement and cementitious materials; aggregates such as stone, sand, or gravel; or aggregate binding agents or additives

M-24-02 Memorandum for Heads of Executive Departments and Agencies Implementation Guidance on Application of Buy America Preference in Federal Financial Assistance Programs) The following are excerpts from the M-24-02. 

This memorandum rescinds and replaces OMB Memorandum M-22-11.  This memorandum summarizes certain aspects of 2 CFR part 184, and provides supplemental guidance for infrastructure projects subject to BABA. Federal agencies should refer to 2 CFR 184.2 for the effective date and applicability of part 184.

Public Interest Waivers:

Federal agencies may wish to consider issuing a limited number of general applicability public interest waivers in the interest of efficiency and to ease burdens for recipients. The agency remains responsible for determining whether such a waiver is appropriate to apply to any given project; the Made in America Office (MIAO) will not review each application of such a waiver. The following are examples of types of public interest waivers an agency may consider proposing and issuing.  

• De Minimis: Ease of administration is important to reduce the burden for recipients and agencies. Federal agencies may consider whether a general applicability public interest waiver should apply to infrastructure project purchases below a de minimis threshold. An agency may consider whether a public interest waiver should apply when necessary to ensure that recipients and Federal agencies make efficient use of limited resources, especially if the cost of processing the individualized waiver(s) would risk exceeding the value of the items waived. Agencies may consider adopting an agency-wide public interest waiver that sets a de minimis threshold, for example, of five (5) percent of applicable project costs up to a maximum of $1,000,000, where applicable project costs are defined as material costs subject to the Buy America preference. 

• Small Grants: Agencies may wish to consider whether it is in the public interest to waive application of a Buy America preference to awards at or below the Simplified Acquisition Threshold (SAT) that meet the following criteria: (1) the total Federal award does not exceed the SAT, currently set at $250,000; and (2) the Federal award amount, inclusive of other funding sources for the infrastructure project, is not anticipated to exceed the SAT for the life of the Federal award. Federal agencies and the MIAO have found this type of waiver to be consistent with policy in some cases in the initial years after the enactment of IIJA, but it may potentially be phased out over time as agencies develop more efficient award-level or project-level waiver review capabilities. 

• Minor Components: Agencies may wish to consider whether it is in the public interest to allow minor deviations for miscellaneous minor components within iron and steel products. A general applicability, public interest, minor components waiver may allow non-domestically produced miscellaneous minor components comprising no more than five (5) percent of the total material cost of an otherwise domestically produced iron and steel product. This waiver type may not exempt an entire iron and steel product from the Buy America preference; the primary iron and steel components of the product must still be produced domestically. It would not be in the public interest to use a minor components waiver to exempt a whole product from the iron and steel requirements or to allow the primary iron or steel components of the product to be produced other than domestically. 

• International Trade Obligations: If a recipient is a State that has assumed procurement obligations pursuant to the Government Procurement Agreement or any other trade agreement, a waiver of a Made in America condition to ensure compliance with such obligations may be in the public interest. 

• Other Considerations: A waiver may be in the public interest in one circumstance, but not in another, and considerations will depend upon the nature and amount of resources available to the recipient, the value of the items, goods, or materials in question, the potential domestic economic impacts, and other policy considerations, including sustainability, equity, accessibility, performance standards, and the domestic content (if any) of and conditions under which the non-qualifying good was produced.

All proposed waivers citing the public interest as the statutory basis must include a detailed written statement, which must address all appropriate factors, such as potential obligations under international agreements, justifying why the requested waiver is in the public interest. 

Appendix I: Provides an example of Award terms and conditions (sample language).  It also provides definitions of the following: 

• Buy America Preference
• Construction Materials
• Infrastructure
• Infrastructure Project
• Iron or Steel Products
• Manufactured Products
• Predominantly of Iron or Steel or a combination of both
• Section 70917 (c) materials