What Are New Rules in the Build America, Buy America Act?

The Build America, Buy America Act (BABAA) was enacted as part of the Infrastructure Investment and Jobs Act passed in November 2021. The requirements for compliance are in effect as of Feb. 3, 2023.

In order to be subject to BABAA rules, a federally-funded project must meet three criteria. The first is that it is for a non-federal entity such as a local government. The second is that it must be for infrastructure, including but not limited to projects for transportation and utilities. Third, the project must be for either new construction or altering, maintaining, or repairing existing infrastructure through construction work.

Specifically, BABAA requires all iron and steel used in a project be produced in the United States, from initial melting stage through application of coating. Additionally, all manufactured products and construction materials must be made in America as well. This does not include construction equipment used to perform construction or related activities.

As with many publicly funded projects, BABAA rules require specific documentation practices from design through construction closeout. That means architecture and engineering (A/E) firms must obtain and maintain documentation from manufacturers or provide sworn statements to establish products used are domestic. This requires A/E firms to coordinate with manufacturers, resident project representatives/resident inspectors, and contractors to ensure compliance.

If project teams run into challenges sourcing domestic products, they may request a waivers for three specific exceptions: public interest, non-availability, and unreasonable cost. USDA Rural Development will review waiver requests at both the program and department level to determine whether or not to grant them. Waivers will be limited, targeted and, where appropriate, conditional.

According to USDA Rural Development, BABAA is intended to promote investment in the domestic manufacturing base, strengthen critical supply chains, and position U.S. workers and businesses to compete and lead globally in the 21st century.

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