The Office of Management and Budget (OMB) on Aug. 23 released a notification of final guidance requirements under the Build America, Buy America Act (BABA), part of the Infrastructure Investment and Jobs Act (IIJA).
According to OMB, a new section of the guidance provides “clearer, more consistent guidance about how federal agencies can apply the domestic content procurement preference for infrastructure projects.” There is also information about determining the cost of components of manufactured products and proposing and issuing Buy America waivers. The effective date for this revised guidance is Oct. 22.
As required by BABA, the new part of 184 in title 2 of the Code of Federal Regulations (2 CFR)includes definitions for key terms, including iron or steel products, manufactured products, construction materials, and materials identified in section 70917(c) of BABA. These definitions, OMB says, “provide a common system for Federal agencies to distinguish between the product categories established under the statutory text in BABA.” The new part also offers standards that define “all manufacturing processes” in the case of construction materials.
According to OMB, the new part 184 also includes guidance for determining the cost of components of manufactured products. The part 184 text uses a modified version of the “cost of components” test found in the Federal Acquisition Regulation (FAR) at 48 CFR 25.003, which is used for Federal procurement. Using this approach for determining the cost of components of manufactured products in the context of Federal financial assistance “aims to provide a consistent approach for industry, with only minor modifications which are explained in this document,” according to OMB.
The new part 184 also includes guidance on proposing and issuing Buy America waivers. For example, based on the statutory text of BABA, it restates the circumstances under which a waiver may be justified. The new part also includes guidance on the type of process that a Federal agency should implement to allow recipients to request waivers, including the process a Federal agency should follow in issuing proposed and final waivers.
According to OMB, the revised provision in 2 CFR part 200 specifies that Federal agencies providing Federal financial assistance for infrastructure projects must implement the Buy America preferences set forth in 2 CFR part 184, as required under section 70914(a) BABA, as of the effective date of the guidance, unless specified otherwise.
Recipients of federal funding like Consolidated Rail Infrastructure and Safety Improvements (CRISI) grants and Railroad Crossing Elimination (RCE) grants are subject to the BABA provisions, according to OMB. The Federal Railroad Administration (FRA) has a Buy America website meant to help railroads understand the law’s requirements. Included on the site are answers to frequently asked questions and a link to a webinar presentation made in June.
On November 15, 2021, President Biden signed into law IIJA, Public Law 117–58, which includes BABA, at sections 70901 through 70927. BABA establishes a domestic content procurement preference for Federal financial assistance obligated for infrastructure projects.
