Clean Water Current
Final Buy America Infrastructure Project Guidance Released
The White House Office of Management and Budget (OMB) issued final guidance to federal agencies on August 18th on how to implement the Build America, Buy America (BABA) requirements in the Bipartisan Infrastructure Law (BIL).
As previously reported by NACWA, the BIL significantly expanded BABA requirements to cover construction materials and manufactured goods and applied these new requirements to all federal infrastructure financing programs – including water, transportation, energy, and many other areas receiving federal government investment.
Recognizing that BABA is a “new and complex statute,” OMB notes that this guidance is “not intended as comprehensive guidance on all topics related to the implementation of BABA,” but instead is intended to supplement the guidance OMB issued on April 18, 2022, Memorandum M-22-11, by providing high-level information to federal agencies as they implement their agency specific BABA requirements.
Importantly, several key terms were further defined in the final guidance (see section 184.3) and should provide greater clarity for utilities, contractors and infrastructure project managers going forward:
“Infrastructure Project” - any activity related to the construction, alteration, maintenance, or repair of infrastructure in the United States regardless of whether infrastructure is the primary purpose of the project. This definition combines the definitions of “infrastructure” and “project” provided in Memorandum M-22-11.
“Predominantly of Iron or Steel or a Combination of Both” – OMB clarifies that the Federal Acquisition Regulation (FAR) test for iron or steel applies to BABA—meaning wholly or predominantly made of iron or steel (e.g., more than 50%).
“Manufactured products” - (1) articles, materials or supplies that have been: (i) processed into a specific form and shape; or (ii) combined with other articles, materials or supplies to create a product with different properties than the individual articles, materials or supplies. (2) If an item is classified as an iron or steel product, a construction material, or a section 70917(c) material, then it is not a manufactured product.
“Construction Materials” - OMB revised the proposed guidance to apply to construction materials that contain only one of the listed materials. OMB also added three new construction materials—fiber optic, optical fiber and engineered wood – in the final guidance. OMB declined to add several materials (paint, coatings and brick) to the list of construction materials.
Among the list of terms further defined in the final guidance, OMB also included clarifying language related to the determination of the cost of manufactured components, in addition to specific metrics that apply to the “produced in the United States” requirements.
OMB offered several minor changes to circumstances that would warrant a BABA waiver. Under BABA, the following would justify such a waiver:
Applying the Buy America Preference would be inconsistent with the public interest, referenced as a Public Interest Waiver;
Types of iron, steel, manufactured products, or construction materials are not produced in the US in sufficient/reasonably available quantities or of a satisfactory quality, or;
The inclusion of iron, steel, manufactured products, or construction materials produced in the US will increase the cost of the overall infrastructure project by more than 25%
NACWA was largely pleased with the final BABA waivers issued previously by EPA for the WIFIA and SRF programs, which waived projects from the expanded BABA requirements if utilities can demonstrate that the project’s design planning was initiated prior to May 14, 2022. However, as previously reported, EPA issued a proposed decision memorandum that would reduce this BABA flexibility for SRF funded projects. The proposed memorandum creates an end date of September 30, 2024, for waiving projects that initiated design prior to May 14, 2022.
In addition to submitting comments urging EPA to reconsider the need for a sunset date, NACWA will continue to monitor EPA BABA implementation and will inform members of any future changes that apply to the SRF, WIFIA and other EPA funding programs. A list of current approved EPA BABA waivers can be found on EPA’s website.
Please contact Danielle Cloutier, NACWA Director of Legislative Affairs, with questions or to discuss further.