The BABA Act, also known as the Build America Buy American Act, is a proposed legislation that aims to strengthen domestic manufacturing and promote the procurement of American-made products for federal infrastructure projects. The act was passed as a law on November 15, 2021, and formally went into effect on May 14, 2022.
The Act will help maintain high-paying jobs while rebuilding our critical infrastructure. Although there are many unanswered questions, Trident Solution’s expertise in safety and damage prevention can help ensure you and your business comply with the Build America, Buy America Act requirements.
Questions & Answers
Why is the BABA Act important?
The Build America, Buy America Act applies to Federal financial assistance programs for infrastructure projects by requiring the domestic content procurement process. The act seeks to strengthen domestic industries, support local businesses, enhance supply chain resilience, improve quality assurance, and potentially reduce the carbon footprint associated with long-distance transport.
What infrastructure projects does the BABA Act apply to?
The BABA Act would apply to federal infrastructure projects, such as those funded by the government through taxpayer dollars. For example, roads, public transportation, airports, water systems, utilities, and freight railroads just to name a few. According to the law, any project receiving as much as $1 in government funding must be BABAA compliant.
How would the BABA Act impact international trade?
Section 70914(e) of the BABA Act states that the Buy America provisions “shall be applied in a manner consistent with the obligations of the United States under international agreements.” The Office of Management & Budget provides further clarification that if “a recipient is a State that has assumed procurement obligations pursuant to the Government Procurement Agreement or any other trade agreement, a waiver of a Made in America condition to ensure compliance with such obligations may be in the public interest.”
Will the BABA Act increase costs?
The focus of the BABA Act on American-made products may stimulate domestic manufacturing and competition, leading to potential cost savings. In the event of cost increases, agencies will have the ability to issue waivers in limited and strategic applications with the goal that Made in America goods will be used after companies make investments to expand domestic production. While a condition for a waiver is an increase in cost of 25%, this refers to the OVERALL project cost and NOT the individual product cost.
Will the BABA Act limit product choices?
The OBM states, “With the concurrence of the Made in America Office, a Federal agency may waive the application of a Buy America Preference when the agency finds that:
- one or more iron or steel items, manufactured products, or construction materials are not produced in the United States in sufficient and reasonably available quantities or of a satisfactory quality (a “nonavailability waiver”),
- the inclusion of one or more iron or steel items, manufactured products, or construction materials produced in the United States will increase the cost of the overall project by more than 25 percent (an “unreasonable cost waiver”),
- applying the domestic content procurement preference for one or more iron or steel items, manufactured products, or construction materials would be inconsistent with the public interest (a “public interest waiver”)—public interest waivers are the most flexible type of waiver, but, like all waivers, must be necessary and appropriately justified.”
How will the BABA Act impact job creation?
The requirement of the BABA Act will stimulate private sector investments in domestic manufacturing and bolster critical supply chains, thus supporting the creation of jobs for American workers and companies.