On or after May 14, new contract awards for infrastructure projects with federal funds will include expanded domestic manufacturing requirements for steel, iron, manufactured products and construction materials under new White House guidance. These expanded requirements were included as a part of the $1.2T Bipartisan Infrastructure Law in a provision entitled the “Build America, Buy America Act” (BABA).
While AGC supports sensible efforts to effectively incentivize the growth of America’s domestic manufacturing capacity, the association fought in Congress against the unfunded, across-the-board BABA mandates and did secure exemptions for concrete, asphalt and aggregates from the definition of “construction materials.” In addition, the association met in March with the White House Made in America Office (MIAO) to convey its concerns with its implementation of BABA and worked with federal agencies to inform MIAO of the issues they will face if implemented in an unrealistic fashion.
The expansion of this domestic preference to “construction materials” includes, but is not limited to:
- non-ferrous metals;
- plastic and polymer-based products (including polyvinylchloride, composite building materials, and polymers used in fiber optic cables);
- glass (including optic glass);
- lumber; or
As contractors review solicitations that include federal funds, they should be sure to check in with their suppliers to ensure they can be compliant and relay any issues to owners as soon as possible and request clarity and flexibility. OMB will request and AGC will provide feedback on the definition of “construction materials,” as the guidance merely sets “preliminary standards” and not “final standards” for that definition.
The guidance details that 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.”