Today (April 18, 2022), the Office of Management and Budget (OMB) issued a Memorandum providing guidance to federal agencies regarding implementing the Build America, Buy America (BABA) title¹ of the Infrastructure Investment and Jobs Act (IIJA) (P.L. 117-58).

The U.S. Department of Transportation (DOT) will apply this guidance to the criteria, processes, and procedures of its public transit and passenger rail Buy America requirements. It is most likely that DOT will add construction materials requirements to its current Buy America requirements for infrastructure grants, including public transit and passenger rail grants.²

BABA requires that no later than May 14, 2022, each federal agency shall 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, and manufactured products and construction materials used in the project are produced in the United States.”³

A federal agency may waive the application of the domestic content procurement preference where:

• applying the preference would be inconsistent with the public interest;
• the types of iron, steel, manufactured goods, or construction materials are not produced in sufficient and reasonably available quantities or satisfactory quality; or
• the inclusion of the materials produced in the United States will increase the cost of the project by more than 25 percent.

This guidance applies to all funds made available for infrastructure, whether the funds are provided through the IIJA or other legislation. Awards made on or after May 14 must incorporate these Buy America requirements. The guidance also outlines waiver principles, criteria, and necessary information for such requests. Any waiver of any type should be time-limited, targeted, and conditional.

Importantly, the Memorandum provides preliminary guidance for the BABA requirement for construction materials. Construction materials include an article, material, or supply that consists primarily of non-ferrous metals; plastic and polymer-based products; glass; lumber; or drywall. For construction materials, the IIJA requires that, by May 14, OMB must issue standards that define the term “all manufacturing processes” and that the standards must require that each manufacturing process required for the manufacture of the construction material and the inputs of the construction material occurs in the United States. Under this preliminary guidance, OMB states that “all manufacturing processes” should include at least the final manufacturing process and the immediately preceding manufacturing stage for the construction material. OMB is seeking additional stakeholder input before issuing further guidance identifying initial manufacturing processes for construction materials that should be considered part of “all manufacturing processes”.

To view OMB’s April 18, 2022 Buy America Memorandum, please click here.

To view APTA’s March 7, 2022 Build America, Buy America Fact Sheet, please click here.

[1] This title builds on Executive Order 14005, Ensuring the Future is Made in All of America by All of America’s Workers (Order); signed by President Joseph Biden on January 25, 2021; see also APTA Fact Sheet, Executive Order on Ensuring the Future is Made in All of America by All of America’s Workers (January 25, 2021).

[2] In DOT’s Buy America report submitted to OMB pursuant to the BABA title, DOT finds that none of its programs, including public transit and passenger rail programs, is currently fully consistent with BABA requirements. DOT states:

…the mode-specific Buy America(n) statutes applied by most DOT agencies cover iron, steel and manufactured products, in ways that are generally consistent (or that in some cases exceed) that standards found in the BABA. However, none of those statutes specifically cover construction materials, other than to the extent that such materials would already be considered iron, steel, or manufactured products. (emphasis added)

DOT’s Identification of Federal Assistance Programs Subject to the Build America, Buy America Provisions of the Infrastructure Investment and Jobs Act, at 19, 87 Fed. Reg. 6943 (Feb. 7, 2022).

[3] IIJA, § 70914(a).