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As federal agencies begin to roll out the funding and solicitations for infrastructure grants under the provisions of the Infrastructure Investment and Jobs Act (IIJA), one of the lingering questions for manufacturers has been the manner in which the Biden Administration would implement the "Buy America" sourcing requirements of the IIJA, requirements due to take effect on May 14, 2022. On Monday, the Biden Administration began to answer some of those questions, in the form of guidance from the Office of Management and Budget (OMB) to all Executive Departments and Agencies regarding the implementation and requirements of the Build America, Buy America (BABA) provisions of the IIJA.
As discussed below, the new OMB Guidance addresses several key questions regarding the Buy America requirements that will apply, starting May 14, 2022, to all infrastructure projects receiving federal funding, such as:
The BABA provisions of the IIJA require federal agencies to ensure that, for any infrastructure project receiving federal financial assistance on or after May 14, 2022, "all of the iron, steel, manufactured products, and construction materials used in the project are produced in the United States."
The OMB Guidance provides initial direction to federal agencies on (i) how to implement a "Buy America" preference in Federal financial assistance programs for infrastructure and (ii) the process to follow when considering or issuing a waiver of the "Buy America" preference. The OMB Guidance makes clear that this is initial implementation guidance, and that additional guidance will be forthcoming. Despite the preliminary nature of the OMB Guidance, there are several key takeaways for manufacturers interested in supplying products on federally funded infrastructure projects.
The OMB Guidance will be particularly instructive for agencies that do not have existing Buy America requirements or whose existing Buy America requirements are not as extensive as the ones required by the IIJA. It remains to be seen whether and how agencies with existing Buy America requirements will adjust those requirements in light of the OMB Guidance.
As the May 14, 2022 effective date approaches, manufacturers should play close attention to the specific Buy America requirements imposed by the agencies providing funding to infrastructure projects, as the requirements—and the public interest waivers—may well vary from agency to agency. If you have questions about the OMB Guidance or about Buy America or Buy American requirements applicable to federal and federally funded projects generally, contact Frank Murray (fmurray@foley.com).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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