On November 15, 2021, President Biden signed into law the Infrastructure Investment and Jobs Act (IIJA) (Public Law 117-58). The IIJA includes the Build America, Buy America Act which declares that “none of the funds made available for a federal financial assistance program for infrastructure may be obligated for a project unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the United States.” The Office of Management and Budget (OMB) released its initial guidance on how to implement the new law and define certain terms in the Buy America Act on April 18, 2022. The OMB provided additional guidance on February 9, 2023. Such guidance is contained in a new 2 CFR Part 184 amendment which is poised to broaden the scope of the Buy America Act requirements on federally-funded infrastructure projects to include an ever-growing list of construction materials.
OMB’s initial guidance in 2022 defined “construction materials” as articles, materials, or supplies incorporated into an infrastructure project that consist of one or more of the following materials: non-ferrous metals, plastic and polymer-based products, glass, lumber, or drywall. OMB has defined “infrastructure project” as “any activity related to the construction, alteration, maintenance, or repair of infrastructure in the United States regardless of whether infrastructure is the primary purpose of the project.” OMB also defines the term “infrastructure” to cover all public infrastructure work as broadly as possible.
OMB’s most recent guidance added three more types of construction materials to be covered under the Buy America Act: composite building materials, fiber optic cable, and optical cable. Each of the eight materials are provided a standard for the material to be considered “produced in the United States.” In addition, OMB seeks feedback on whether to include three more construction materials: coatings (paint, stain, and other coatings applied at the work site); brick and engineered wood products; and a catchall request for any other construction materials which may need to be covered.
Lastly, OMB’s guidance also includes a procedure by which federal awarding agencies can waive the Buy America Act requirements. There are three types of potential waivers: a public interest waiver, a non-availability waiver, and an unreasonable cost waiver.
Wherever they end up, the Buy America Act requirements must be included in all the terms and conditions for all federal awards with infrastructure projects, including all subawards, contracts, and purchase orders for the work performed or products supplied under the award. Given the technical complexity of many federal projects, the more construction materials covered, the more difficult it will be to ensure compliance with the act. While more funding for infrastructure projects is needed, the additional strings within which to be entangled are not. As a result, federal government projects will become increasingly more complicated and expensive to bid on and to perform.