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OMB Releases Guidance for “Build America, Buy America” as Part of the Infrastructure and Jobs Acts

The $1.2 trillion bipartisan Infrastructure and Jobs Act (IIJA) included the “Build America, Buy America Act” which applies a domestic preference to all taxpayer-funded infrastructure projects. The Office of Management and Budget released new guidance on these rules on April 18th, 2022. The new guidelines are meant to assist federal agencies in the application of “Buy America” requirements and the waiver processes for all federally funded infrastructure projects and not just those funded by the IIJA. The requirements are currently set to be in effect starting May 14th.

Domestic sourcing requirements as stated in the guidance are:

  1. Steel and Iron – manufacturing processes from the melting stage to applying coatings occurs in the U.S.
  2. Manufactured Products – an end product must be manufactured in the U.S. and that 55% of the total cost of components are sourced from the U.S.
  3. Construction Materials – all processes for manufacturing construction materials are taking place in the U.S. These items include non-ferrous metals, plastic and polymer-based products, glass, lumber, drywall and more. Final guidance on the exact meaning of the term “construction material” has not yet been released.

Waivers can be issued under certain circumstances. These include if they are inconsistent with the public interest, if the material is not produced in the U.S. in sufficient quantities, or if the cost of the materials would increase the overall cost of a project by more than 25%. Waiver requests must be in writing and will be available for public comments for at least 15 days. The waiver requests must also be reviewed by the Made in America Office.

The CEO of AGC of America, Steve Sandherr, released a statement on the issued guidance stating that “It makes no sense to place unrealistic limitations on firms’ ability to source key materials at a time when prices for those products are skyrocketing and supplies are limited.” AGC of America also strongly opposes the new waiver processes that require “the highest office in the land verifies them. This is like asking the U.S. Department of Education to verify every child’s permission slip to miss a day of school.”