January/February 2024 - 107

JOSEPH HAUGHNEY, ASSOCIATE
SMITH CURRIE
LEGALLY SPEAKING
Build America, Buy America Act Final Guidance
Th e O f f i c e o f
Management and Budget's (OMB)
August 14, 2023, final guidance for the
" Build America, Buy America " (BABA)
Act requirements went into effect on
October 23, 2023. OMB's final guidance
has far-reaching implications for
government contractors in the infrastructure
sector, and includes a new
category of " construction materials "
that must be produced in the U.S.
BABA is a federal law promoting
domestic economic growth by requiring
government contractors to use domestically
produced products on federally
funded infrastructure projects. BABA
expands on existing statutes and
regulations created in the last 50 years
requiring the use of American-sourced
products on federally funded state and
municipal infrastructure projects.
OMB published interim guidance
for BABA (OMB Memorandum M-2211)
on April 18, 2022, and final guidance
on August 14, 2023, to become effective
on October 23, 2023. Projects awarded
between May 14, 2022, through October
22, 2023, fall under OMB's April interim
guidance, while projects awarded on or
after October 23, 2023, fall under OMB's
final guidance, codified at 2 C.F.R. § 184.
OMB's final guidance critically
defines three categories of BABA
products: (1) a new category of construction
materials, (2) iron and steel
products and (3) manufactured products.
New Category - Construction
Materials
BABA is the first domestic preference
law to address a broad new category for
materials that must be produced in the
U.S. For a " construction material " to be
considered produced in the U.S., all
manufacturing of the product must take
place in the U.S. Under OMB's final
guidance, " construction materials " are
defined as:
(I) Non-ferrous metals
(ii) Plastic and polymer-based products
(including polyvinylchloride, composite
building materials and polymers
used in fiber optic cables)
(iv) Fiber optic cable (including drop cable)
(iii) Glass (including optic glass)
(v) Optical fiber
(vi) Lumber
(viii) Drywall
(vii) Engineered wood
Significantly, this list omits aggregate
and cement products, which are not
considered construction materials for
BABA purposes. Aggregates, stone and
cement are referred to as Section
70917(c) materials, and are exempt
from BABA requirements and therefore
do not have to be produced in the U.S.
Iron and Steel Products
BABA requires iron and steel products to
be produced in the U.S.; however, this
has a few qualifiers. First, although iron
and steel products require manufacturing,
they are not inherently
considered " manufactured products "
under BABA. Iron and steel products will
only be considered " manufactured
products " under BABA if subsequently
incorporated (or manufactured) into
another, wholly different product. Next,
OMB's final guidance defines iron and
steel products as " articles, materials or
supplies that consist wholly or predominantly
of iron or steel or a
combination of both. " To be defined as
" predominantly of iron or steel " for
BABA purposes, the cost of iron and or
steel content must exceed 50% of the
total cost of the product's components.
Lastly, for iron and steel products to
be considered produced in the U.S., all
manufacturing processes, " from the
initial melting stage through the
application of coatings " must take place
domestically. This " poured and bent "
requirement is the same as the previous
Buy America Act requirements.
Manufactured Products
OMB ' s f i na l gu i danc e de f i ne s
" manufactured products " as those that
are manufactured in the U.S., and the
U.S.-produced material in the product
must exceed 55% of the cost of the
product's components. Determining
whether a product is manufactured in
the U.S. requires a four-step process:
1. Determine the components manufactured
in the U.S.
2. Determine the cost of those components
manufactured in the U.S.
3. Determine the cost of all components.
4.
Divide the cost determined in step 2
by the cost determined in step 3.
Waiver
If the fraction in step 4 is greater than
To address the possibility that a necessary
product or material cannot
comply with BABA requirements, both
BABA and OMB's final guidance allow
for BABA waivers in three scenarios:
public interest; nonavailability;
and cost.
* Public Interest: A contractor may
request a public interest waiver if
following BABA requirements
would be considered inconsistent
with public interest.
DEEP FOUNDATIONS * JAN/FEB 2024 * 107
55%, the manufactured product
complies with BABA requirements.
January/February 2024

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