Dive Brief:
- A coalition of building trade groups petitioned the White House Office of Management and Budget last week to clarify and adjust its implementation of Build America, Buy America requirements for construction materials, saying that they risk delaying and inflating the cost of infrastructure work as-is.
- BABA expands existing domestic preference requirements for construction projects that use federal dollars, with the goal of funneling taxpayer money into American-made products. It was enacted as part of the 2021 Infrastructure Investment and Jobs Act but applies to all federally funded building projects.
- In a Feb. 15 petition, the Associated General Contractors of America, American Road & Transportation Builders Association, American Public Transportation Association and National Association of Home Builders said they support BABA’s aims, but their members “have encountered significant difficulty in navigating an opaque and unbalanced implementation of BABA” by the agency and its Made in America Office.
Dive Insight:
Since BABA was signed into law in November 2021, OMB’s guidance has not adequately accounted for a range of headwinds facing the construction industry, the groups said. These include cost spikes for key construction materials, interest rates, continuing supply chain challenges, a tight labor market and an unsettled banking industry, they wrote in the letter to OMB Director Shalanda Young. Plus, the construction materials market is still adjusting to meet the domestic purchasing requirements.
The groups filed the petition for a new rulemaking under the Administrative Procedures Act as well as a request under the Paperwork Reduction Act to review the way the Biden administration collects BABA waivers.
Ty Edmondson, CEO of Goldsboro, North Carolina-based contractor T. A. Loving Co. and chair of the AGC’s Utility Infrastructure Division, was among the stakeholders who testified Thursday to the House Transportation and Infrastructure Subcommittee about BABA’s implementation. Transportation officials, other industry groups and union members also weighed in.
Carlos Braceras, executive director of Utah DOT, said his agency is seeing delays due to industry efforts to comply with the regulations, and said that many states want to shorten the time it takes to process applications for Buy America waivers.
More transparency, training
In August 2023, the White House issued its final guidance on BABA, which defines relevant construction materials and local manufacturing process standards for each material. However, the building groups said that existing guidance is not sufficient, and called for a “more informed and transparent timeline for Buy America preferences” in federal financial assistance programs for infrastructure. They say the regulatory uncertainty can result in costlier, pared-down and delayed projects, and risks weakening the impact of the historic IIJA funding.
Instead, the groups want a greater role for other agencies, such as the U.S. DOT, which have longstanding experience administering pre-BABA domestic preference requirements.
“Unfortunately, OMB’s focus on managing virtually every aspect of the Build America, Buy America Act requirements is not practical and causes confusion and delay with federal agencies that fund construction projects,” the groups wrote in the petition.
In addition, OMB needs to exercise greater diligence in providing the public with notice of the particulars of BABA implementation, establish a database of BABA-compliant construction materials and manufactured products and institute a robust, no-cost training program, among other improvements, the groups said in the petition.
