Build America, Buy America Act (BABA)

BABA is the broadest domestic content requirement in US history. Signed into law November 15, 2021, as part of the Infrastructure Investment and Jobs Act (IIJA), it applies a Buy America preference to all federal financial assistance used for infrastructure. Not just highways. Not just steel. Every federal agency, every grant program, every infrastructure project.

Before BABA, domestic content rules were a patchwork. FHWA had Buy America for iron and steel since 1982. FTA had its own rules. EPA had AIS. Other agencies had nothing. BABA unified these into a single government-wide framework under 2 CFR Part 184, effective October 23, 2023.

Three product categories, three different standards. Iron and steel must be 100% domestic from initial melt through coating. Manufactured products must be assembled in the US with at least 55% domestic component cost. Construction materials must be entirely manufactured in the US. The thresholds and deadlines vary by agency, but the direction is clear: domestic content requirements are getting stricter, not looser.

BABA sits within the IIJA, specifically Sections 70901 through 70927. Section 70914 is the core provision that establishes the domestic content preference for infrastructure projects. It directs every federal agency to apply Buy America requirements to any financial assistance program for infrastructure.

OMB Memorandum M-24-02, issued in October 2023, replaced the earlier M-22-11 as the primary implementation guidance. This memo established 2 CFR Part 184 as the regulatory framework and set uniform standards across all agencies. Before M-24-02, agencies were operating under interim guidance with inconsistent definitions and timelines.

The law defines "infrastructure" broadly: roads, highways, bridges, transit, water systems, wastewater treatment, broadband, energy transmission, airports, ports, dams, public buildings, and related facilities. If it is a physical structure built or improved with federal financial assistance, BABA almost certainly applies.

BABA applies across every federal agency that provides financial assistance for infrastructure. Here are the major programs:

All manufacturing processes from initial melting through application of coatings must occur in the US. "Initial melting" means the first stage where raw ore, scrap, or other virgin materials are melted and cast into a semi-finished product such as ingots, blooms, billets, or slabs. You cannot start with imported billets and re-melt them in a US facility. The domestic chain starts at the initial melt.

Examples of iron and steel products under BABA: structural beams, rebar, steel pipe, steel safety cabinets, fire hydrants, steel tanks, steel doors, bollards, guardrails, steel lockers, manhole covers, and steel grating.

Two requirements apply. First, the product must be manufactured (final assembly) in the US. Second, the cost of domestic components must exceed 55% of the total cost of all components. Component cost includes the price of the part, transportation to the assembly plant, duties, and allocated overhead.

FHWA has a phase-in schedule. For projects with funds obligated between October 1, 2025 and September 30, 2026, only US final assembly is required. Starting October 1, 2026, the full 55% domestic component cost threshold applies.

Examples of manufactured products: fire extinguishers, HVAC equipment, fire alarm panels, electrical switchgear, pumps, generators, emergency eyewash stations (plumbed-in), traffic signal controllers, EV chargers, and water meters.

All manufacturing processes must occur in the US. Construction materials are single-category products where one material type predominates. The standard is 100% domestic manufacturing from raw material processing through final form.

• Non-ferrous metals: from smelting or melting through final shaping, coating, and assembly

• Glass: from batching and melting through annealing, cooling, and cutting

• Fiber optic cable: from fiber draw through assembly

• Plastics and polymers: from resin production through molding or extrusion

• Lumber: from debarking through treatment and planing

• Engineered wood: from debarking through pressing and cutting

• Drywall: fromite blending through cutting and drying

Cement and cite products, aggregates (stone, sand, gravel), and natural gas are currently exempt from BABA construction materials requirements. These exemptions exist because domestic supply cannot meet demand across all federally funded projects.

BABA only applies to products "consumed in, incorporated into, or affixed to" infrastructure. The canonical OMB/FEMA example: a table lamp is NOT subject to BABA, but a hard-wired light fixture IS. The line is whether the product becomes part of the permanent structure.

OMB Memorandum M-24-02 (October 2023) is the primary implementation guidance. 2 CFR Part 184 provides the regulatory framework. Each federal agency publishes its own implementation procedures on top of these baseline requirements.

Certification is based on manufacturer self-certification. There is no federal certification program, no approved-products list, and no third-party verification requirement at the federal level. The manufacturer signs a letter certifying that a specific product meets the applicable BABA standard for a specific project.

Agencies may impose additional requirements beyond the baseline. Some agencies require certifications to include a component-cost breakdown. Others require identification of manufacturing facilities. Check your specific agency's implementation guidance before preparing documentation.

BABA allows three types of waivers. Each requires a written request, a 15-day public comment period, agency approval, and review by OMB's Made in America Office. The trend is toward fewer and narrower waivers.

BABA enforcement carries real consequences. The primary enforcement mechanism is the False Claims Act, which allows the government to recover treble damages plus per-claim penalties of $14,308 to $28,619. In FY2025, the DOJ recovered $6.8 billion under the False Claims Act across all categories, with 1,297 qui tam (whistleblower) lawsuits filed.

Beyond financial penalties, a BABA violation can trigger government-wide debarment for up to three years. Debarment is not limited to the agency that caught the violation. It bars the contractor from all federal contracts and grants across every agency.

Non-compliant products must be removed and replaced at the contractor's expense. This is the "rip and replace" scenario: if a product that fails BABA is discovered after installation, the contractor pays for removal, disposal, and installation of a compliant replacement. On large infrastructure projects, this can cost more than the original product by an order of magnitude.