Build America, Buy America (BABA) is a policy that was included in the Infrastructure Investment and Jobs Act (IIJA), also know as the Bipartisan Infrastructure Law (BIL). BABA requires most federally-funded projects to use materials and products made in the United States. BABA covers iron, steel, manufactured products, and construction materials used in infrastructure projects. “Infrastructure” is defined as any construction, alteration, maintenance, or repair, even if it is a secondary purpose of the project. Further, because what constitutes infrastructure is defined broadly in statute, a significant number of grant programs from outside BIL are defined as infrastructure and are subject to BABA¹.
Now that BABA has been law for several years, agencies expect that all grant recipients will plan for and comply with BABA. Cities seeking federal grants should therefore consider BABA requirements going into the application process and develop their project with the law in mind. For those unfamiliar with the requirements, a general fact sheet and FAQ on BABA can be found here and the underlying statute can be read here.
Understanding how to plan for BABA requirements and integrate them into federal grant applications can help prevent projects from being delayed, going over budget, or running into compliance issues once they are underway. Below are some strategies to consider as you incorporate BABA requirements into your federal grant applications.
1. Familiarize yourself with the granting agency’s specific BABA guidance
Though BABA applies across federal agencies, different agencies have produced their own materials about how to implement the law for their grant programs. To help navigate BABA requirements for specific grant programs, each agency maintains their own page on BABA implementation and a list of which programs in their jurisdiction are considered as infrastructure.
Agency heads are responsible for granting waivers to BABA in cases where materials are unavailable, costs are unreasonable, or it is considered in the public interest. Each agency lists relevant waivers on their agency website. There is also a searchable database of all waivers that can be sorted by agency, by waiver purpose, and also by whether the waiver is general (applies to everyone applying for a grant program) or individual (provided to a specific grant recipient).
In searching for waivers, be sure to look at the most recent version of your Notice of Funding Opportunity (NOFO), as many of the waivers that have been granted have been time-limited. For example, the Charging and Fueling Infrastructure program had a general waiver for electric vehicle chargers from March 2023 to July 2024, that was not included in the NOFO for the second round of funding.
2. Develop your budget with BABA in mind
To the extent possible, make sure your grant writers are taking into account the full cost of American-made materials and BABA compliance when developing your project budget. Even if the costs of an American product is above what was initially budgeted, you are still required to buy domestic in most cases in order to comply with federal law. Though a waiver process exists, the bar for obtaining waivers is high, applying for a waiver is a time consuming process, and agencies are unlikely to grant them now that BABA has been law for several years.
Like other federal funding regulations, BABA also applies to projects that are financed by a government program, for example if a city receives a loan for a community solar project through the Greenhouse Gas Reduction Fund. In developing a project’s budget, city leaders should be cognizant that BABA may apply to other parts of the capital stack that are government-supported in addition to federal grant dollars.
Considering BABA as you develop your budget will also allow you to contact the granting agency before you submit your application if you foresee any difficulty complying with BABA requirements. This can be helpful for agencies so that 1) they understand where there may be supply chain gaps that make a waiver necessary and 2) they can point potential applicants toward technical assistance resources that may alleviate their issues. Agencies will provide contact information for questions both in the NOFO and on the grant program website.
3. Plan your procurement strategy: BABA applies to contracts, subawards, and subgrantees
While compliance with BABA is the responsibility of the grantee, the provision’s requirements generally apply to any of the entities that the grantee works with to complete the project. This means that project planning should include planning for how contractors, consultants, sub-awardees, etc. will be expected to understand BABA requirements and provide assurances and documentation of their ability to comply with them throughout the project lifecycle.
The Manufacturing Extension Partnership (MEP) conducts “supplier scouting,” essentially a list that they maintain of domestic suppliers who can meet BABA requirements. Cities interested in understanding which suppliers in their area can provide the goods or services needed for a specific project can contact their local MEP center to learn more about BABA-compliant suppliers in their region and to get information that may be relevant for both their application process and how they develop their procurement process for the project, for example by incorporating BABA information into supplier engagement processes and RFPs. Cities with the capacity may also consider maintaining a similar list of suppliers that are familiar with and able to comply with BABA for their own procurement process.
4. Develop a system for tracking adherence to BABA requirements
Grant applicants should plan to develop and implement a system for tracking the use of American-made products, including for all contracts, subcontractors, etc. Thinking through your tracking and reporting system during the application phase will allow you to detail in your application both how you will monitor compliance and how you will incorporate any costs related to compliance and reporting into your budget.
By considering BABA requirements before you develop and submit your grant application, you can both start your project with the best possible footing and contribute to the revitalization of America’s manufacturing sector.