Contract Surety

BABA? The Rules!



Since passage of the Infrastructure Investment and Jobs Act in 2021, contractors have awaited clarification on what exactly Build America, By America encompasses. After an extensive public comment period, final guidance has been issued. Here’s the deal.


Boosting Domestic Production

With the aim of boosting “the amount of domestically manufactured goods, including steel, iron and other construction materials, used on federal infrastructure projects,” the Build America, Buy America (BABA) guidance pertains to all federally funded infrastructure work. As Julie Strupp reports in Construction Dive, the finalized guidance will be published in the Federal Register “in the coming weeks” and will officially be effective 60 days after publication:


The final guidance defines relevant construction materials and local manufacturing process standards for each material … .The IIJA significantly expanded standards that require government-funded infrastructure projects to use more U.S.-made products. The BABA preference applies to three categories: iron and steel products, manufactured products and construction materials. OMB expanded the list of materials to include engineered wood but opted to leave out coatings, paint and bricks after reviewing feedback. To qualify as Made in America, a product must be manufactured in the U.S., with 55% of the cost of its components fabricated domestically.


Specifically, according to the final guidance, construction materials include:


  • Non-ferrous metals.
  • Plastic and polymer-based products, including polyvinyl chloride, composite building materials and polymers used in fiber-optic cables.
  • Glass, including optic glass and optical fiber.
  • Fiber-optic cable, including drop cable.
  • Engineered wood.
  • Cement and cementitious materials; aggregates such as stone, sand or gravel; or aggregate binding agents or additives are not included. The rules also do not apply to tools, equipment and supplies brought to the jobsite and removed at the end of the project, according to OMB.



Along with the clarity on the scope of Build America, Buy America, comes details about allowable exceptions (aka waivers). Essentially, awarding agencies can issue three types of waivers:


  • A public interest waiver, if applying BABA would be inconsistent with the public interest.
  • A nonavailability waiver, when U.S. manufactured products are not sufficiently available.
  • An unreasonable cost waiver, if the use of U.S. materials will increase the cost of the overall project by more than 25%.


Success Ahead…

For contractors, the answer likely lies in whether or not you are getting in on publicly funded work related to manufacturing and infrastructure. Chief economist for Dodge Construction Network, Richard Branch has put it this way: “Public dollars are flooding into the manufacturing and infrastructure sectors, leading to significant growth over the last year. Meanwhile, the mostly private sectors of the building market like offices, multifamily and retail are struggling.” With roads and bridges representing the biggest area of infrastructure effort, the Department of Transportation (DOT) is administering the lion’s share of the infrastructure funding. Contractors will want to keep in mind, however, that many other agencies are involved in awarding contracts for a diversity of infrastructure projects, including: the Federal Communications Commission which is overseeing broadband infrastructure; the Environmental Protection Agency, which is focused on water infrastructure; the Department of Energy, which is upgrading the electric grid, including EV charging stations; and, the Department of Commerce which is overseeing “regional innovation strategies and entrepreneurship.”


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