On February 9, 2023, the Office of Management and Budget (“OMB”) issued proposed guidance and a proposed rule for the implementation of the Infrastructure Investment and Jobs Act (“IIJA”), Build America, Buy America Act (“BABAA”), which, among other things, required all iron, steel, manufactured products, and construction materials (the “materials”) in federally-funded infrastructure projects be produced in the United States.

To be considered “produced in the United States,” the BABAA requires:

• For iron, steel, and construction materials, that all manufacturing processes occurred in the United States; and
• For manufactured products, (1) that the product be manufactured in the United States and (2) that the cost of the components of the product that are mined, produced, or manufactured in the United States is more than 55 percent of the total cost of components.

The OMB’s latest guidance sets standards for domestic manufacturing of the materials in an effort to create cohesion between the BABAA’s requirements for federal financial assistance through Grants and Agreements and the Buy American Act requirements for direct federal procurement.

The proposed guidance invited public comment on:

• The adoption of definitions of “cost of components,” “construction materials,” “predominantly iron or steel items,” and “composite building materials” in the context of the BABAA;
• The inclusion of additional construction materials, such as coatings, brick, and engineered wood products;
• The appropriate classification for items that consist of more than one type of material;
• The application of standards to optical fibers;
• The inclusion of non-enumerated materials in the Buy America Preference requirements; and
• The reduction of burden on recipients.

The public comment period closed on March 13, 2023. Following review of the public comments, OMB will publish a final rule.

For more information, please contact Timothy D. Matheny at 214.523.5100.