The Build America, Buy America (BABA) Act was signed into law as part of the Infrastructure Investment and Jobs Act (IIJA) in November 2021. BABA requires the head of each covered federal agency to ensure that “none of the funds made available for a Federal financial assistance program for infrastructure, including each deficient program, may be obligated for a project unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the United States.”
BABA has a direct influence on the manufactured precast concrete industry, which supplies critical infrastructure structures across the United States. NPCA members need to understand the different product classifications, potential impacts and risks to compliance, the waiver process and how BABA compliments the Buy American (BA) Act to stay compliant and competitive.
This is the fourth of a four-part series outlining BABA and what it means to precasters. This article covers who has the authority to issue a waiver to BABA requirements and when they are allowed.
Waivers to the BABA preferences are allowed per section 70914(c). However, only the head of a federal agency may waive the BABA preference and only for one of the following conditions:
- Applying the domestic content procurement preference would be inconsistent with the public interest (a “public interest waiver”).
- Types of iron, steel, manufactured products, or construction materials are not produced in the United States in sufficient and reasonably available quantities or of a satisfactory quality (a “nonavailability waiver”).
- The inclusion of iron, steel, manufactured products or construction materials produced in the United States will increase the cost of the overall project by more than 25 percent (an “unreasonable cost waiver”). (https://www.whitehouse.gov/wp-content/uploads/2022/04/M-22-11.pdf)
Each general applicability waiver has a 15-day or 30-day comment period before a final decision. All submitted wavier requests are available online as well as an agency-specific search.
Office of Budget Management guidance is for waivers to be project-specific whenever possible. However, general applicability waivers are allowed and may be applied across multiple projects. If a general applicability waiver is issued, it must be reviewed no less than every five years to ensure the conditions still exist to support the waiver.
An example of some approved and pending waivers that may impact precast manufacturers include the Department of Transportation waiver for infrastructure projects located in the Commonwealth of Northern Mariana Islands (CNMI), Guam and American Samoa, collectively referred to as the Pacific Island territories, as well as the Freely Associated States in the Pacific (the Republic of Palau, Republic of the Marshall Islands, and Federated States of Micronesia).
Another DOT waiver addresses BABA preferences for projects under a single financial assistance award where either:
- The total value of the non-compliant products is no more than the lesser of $1,000,000 or 5% of total applicable costs for the project.
- The total amount of Federal financial assistance applied to the project, through awards or subawards, is below $500,000.
Finally, the Federal Highway Administration has a long-standing general applicability waiver for manufactured products. As of today, no determination has been made on if this waiver will remain, be revised or discontinued. Until a determination is made, manufactured products for FHWA projects funded under Title 23 U.S.C do not have to meet BABA preference requirements. However, any steel in a precast product must still comply with Buy America provisions.
The Made in America Acts and Executive Orders are intended to bolster American manufacturers when supporting federally funded infrastructure projects. However, for manufacturers along the borders, these requirements can disrupt established and economical supply chains.
Also, any manufacturer not using domestically manufactured cement may be at risk.
NPCA recommends that any manufacturer currently supplying or that may supply product to a federally funded project to take the time now to understand the cost of components breakdown and any potential risks to meetings BABA preferences.
For more information on this topic, NPCA members can call (800) 366-7731.
Brad Chinery is the director of technical services at NPCA.