The Build America, Buy America (BABA) Act, a key part of the Infrastructure Investment and Jobs Act (IIJA) signed into law on November 15, 2021, stipulates domestic preference for materials used in federally funded infrastructure projects.
Understanding the BABA Act
BABA requires that all the iron, steel, manufactured products, and construction materials used in infrastructure projects be produced in the United States.
- Iron and Steel: All manufacturing processes, from initial melting to coating, must occur in the U.S.
- Manufactured Products:
- the manufactured product was manufactured in the United States; and
- 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
- Construction Materials: All manufacturing processes for the construction material occurred in the United States.
Click here to learn more about which agencies participate in these projects:
Waivers and Exceptions
Federal agencies may grant waivers for the following conditions:
- Public Interest: Applying the domestic content procurement preference would be inconsistent with the public interest;
- Non-availability: 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; or
- Unreasonable Cost: 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%.
Waivers must be requested in writing, justified with supporting data, and are subject to public comment before approval.
To determine if a waiver exists for the product you are supplying, you can go to the Made In America website and find the agency that is funding the project.
Best Practices for Compliance
- Understand who is funding the project. Is it a federal infrastructure project? BABA may apply.
- Understand your supply chain: Identify the origins of all materials and ensure they meet domestic content standards.
- Collaborate with subcontractors: Communicate compliance requirements, incorporate clauses into agreements, and collect certificates of compliance.
- Document and Audit: Keep detailed records of sourcing and production processes, and regularly audit your supply chain to ensure continued compliance.
FAQs: Build America, Buy America (BABA) Compliance
- What types of projects does BABA cover?
BABA applies broadly to all federally funded infrastructure projects, including roads, bridges, water systems, and energy infrastructure. - How do I stay updated on compliance changes and find resources to help?
CIRAS and APEX Accelerators are excellent resources for navigating BABA requirements. They provide expert guidance on compliance and identifying opportunities. Stay informed by attending webinars and monitoring updates from federal agencies. - How do I apply for a waiver?
First, look at the Madeinamerica.gov site to see if the agency funding your project has an approved waiver for the product you are supplying. If not, then you will need to submit a written request to the federal agency funding the project, including detailed justifications. - What’s the difference between BABA and the Buy American Act (BAA)?
- BABA: Applies to federally funded infrastructure projects.
- BAA: Governs federal procurement contracts.
How CIRAS Can Help
The Center for Industrial Research and Service (CIRAS) is a trusted partner in helping businesses succeed in government contracting. They provide services such as:
- Assessing your readiness for federal contracts.
- Guiding proposal development.
- Offering on-demand content in compliance with domestic preference requirements like BABA.
- BABA Decision Tree
By following best practices and leveraging CIRAS resources, you can confidently navigate this market and thrive in the government contracting.
For more information, visit CIRAS or contact your local MEP or APEX Accelerator.