What is Build America, Buy America (BABA)?

On November 15, 2021, the Build America, Buy America (BABA) Act, was enacted under Division G, Title IX of the Infrastructure Investment and Jobs Act (IIJA), BABA established a domestic content procurement preference requirement (BABA Requirement or Buy America Requirement) to Federally funded public “infrastructure projects” with the goal of increasing a resilient domestic supply chain and manufacturing supply for critical materials both for emerging and existing industries in the United States. 

What materials, specifically, does the BABA Act apply to? And what items are exempt from BABA?

  • The BABA Requirement applies to three separate product categories purchased under financial assistance awards for infrastructure projects:
    • (i) iron or steel products;
      • All iron and steel items used in covered projects must be produced in the United States. This means all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.
    • (ii) manufactured products; and
    • (iii) construction materials.
  • The Buy America Requirement only applies to articles, materials, and supplies that are consumed in, incorporated into, or permanently affixed to an infrastructure project. As such, it does not apply to tools, equipment, and supplies, such as temporary scaffolding, brought into the construction site and removed at or before the completion of the infrastructure project.
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The BABA cost of components percentage with determination equation.

  • The Build America, Buy America Act requires that more than 55% of the cost of components for a manufactured product to be manufactured in the United States and the product itself must be manufactured in the United States. This does not require all components to be produced in the United States.
  • Determination steps:
    1. Determine the components manufactured in the United States.
    2. Determine the cost of those components manufactured in the United States.
    3. Determine the cost of all components.
    4. Divide the cost determined in step 2 by the cost determined in step 3. If the fraction is more than 55%, the manufactured product complies with the Buy America requirements as long as the manufactured product is, itself, manufactured in the United States.

Can award recipients request a BABA requirement waiver?

  • When necessary, prime recipients may apply for, and DOE may grant, a project-specific waiver from the Buy America Requirement. Requests to waive the application of the Buy America Requirement must be submitted by the prime recipient in writing to DOE, and in accordance with the terms and conditions of the award. DOE may request, and the recipient must provide, additional information for consideration of a submitted wavier. 
  • Waiver requests are subject to review by DOE and the Office of Management and Budget (OMB), as well as a public comment period of no less than 15 calendar days. Recipient’s waiver requests will be made publicly available on DOE’s and OMB’s websites. DOE may reject or grant waivers in whole or in part depending on its review, analysis, and/or feedback from OMB or the public. DOEs final determination regarding approval or rejection of the recipient’s waiver request may not be appealed. Waiver requests may take up to 90 calendar days to process.
  • Recipients should reach out to the cognizant DOE Contracting or Grants Officer with questions concerning requests to waive the Buy America Requirement included in an award.
    • Waiver requests will need to be coordinated through the Utah Office of Energy Development (OED).
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What are the 3 BABA Act waiver types?

  • DOE may waive the application of a Buy America Requirement under a project/award in any case in which it determines that: 
    1. Applying the domestic content procurement preference would be inconsistent with the public interest (“Public Interest waiver”); 
    2. The 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 (“Non-Availability waiver”); or 
    3. 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 (“Unreasonable Cost waiver”).