Federal Agencies Release Build America, Buy America Guidance

Two federal agencies released guidance on August 14 and 15 for the implementation of the Buy America requirements adopted by Congress as part of the 2021 Infrastructure Investment and Jobs Act (IIJA). The White House’s Made in America Office (MIAO) released updated guidance for multiple federal agencies administering domestic preference requirements under the IIJA Build America, Buy America Act (BABA).  The following day, the U.S. Department of Transportation (USDOT) issued final language for its waiver exempting specific de minimis costs and smaller projects from Buy America requirements.

VTCA has been working with the American Road and Transportation Builders Association (ARTBA), who has taken the lead in advocating our industry’s position with the federal agencies responsible for developing and implementing the requirements of the IIJA act.  ARTBA has summarized several key elements of the two versions released by MIAO and USDOT.

• The MIAO document “is intended to be high-level coordinating guidance for Federal agencies to use in their own direct implementation of BABA.”
• As requested by ARTBA and the Transportation Construction Coalition, MIAO clarifies that Buy America does not apply to “tools, equipment, and supplies, such as temporary scaffolding, brought to the construction site and removed at or before” the project’s completion.
• The guidance reaffirms the IIJA’s congressional intent that covered “construction materials” include non-ferrous metals, plastic and polymer-based products, glass (including optic glass), lumber, and drywall. At the same time, it adds three new separate categories of covered materials: fiber optic cable (including drop cable), optical fiber and engineered wood.
• Similarly, MIAO reiterates that covered “construction materials” do not include “cement and cementitious materials, aggregates such as stone, sand, or gravel, or aggregate binding agents or additives.” However, the guidance will not exempt these materials from coverage if they are part of a manufactured product brought to the job site, such as precast concrete. Wet concrete and hot mix asphalt will remain exempt.
• The guidance delineates required, specific domestic manufacturing processes for all eight categories of covered construction materials.
• The new document notes that any particular item incorporated into a project will fall under just one category for purposes of Buy America compliance: iron, steel, construction materials and manufactured products.
• Finally, the guidance recaps the policy for Buy America waivers, which the appropriate federal agency must post for public comment and submit to MIAO for review. Justifications for waivers include “unreasonable costs” (i.e. domestic products will increase a project’s cost by 25 percent or more), ”nonavailability” of domestically-manufactured products needed for the project, and “public interest.”

The USDOT has finalized language for their waiver, first proposed and supported by ARTBA last fall. Key provisions include:

• Exemption from all Buy America requirements for non-compliant products that total the lesser of $1 million or five percent of a project’s “total applicable costs.” The latter term represents the total cost of materials and manufactured products subject to Buy America on the project, minus iron and steel, which are already covered by very small de minimis exemptions, including on federal-aid highway projects.
• Exemption from Buy America for an entire project when its total federal funding is below $500,000. (Previously, U.S. DOT stated that almost half of its relevant project awards in FY2022 fell under this threshold.)

The Build America, Buy America Act (BABA) was enacted on November 15, 2021 as part of the Infrastructure Investment and Jobs Act. The act requires that all iron, steel, manufactured products, and construction materials used in infrastructure projects are produced in the United States. The act applies to all federal financial assistance programs.

Following the release of the new guidance VTCA will be engaging VDOT in determining specifics regarding interpretation, execution, and impact of BABA on VDOT projects.