Construction Bills: Recent Changes to Construction Laws

• Pages: 91-93
• Date: 01 October 2024
• Author: Brandon R. Clark,Daniel D. Rounds

Published in The Construction Lawyer Volume 43, Number 4, ©2024 by the American Bar Association. Reproduced with

permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any

means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

Forum on Construction LawThe Construction Lawyer Fall 2024

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By Brandon R. Clark and Daniel D. Rounds

Brandon R. Clark is counsel in the Chicago, Illinois, office of Saul Ewing LLP and Daniel D. Rounds is

counsel in the Tysons Corner, Virginia, office of Haynes and Boone, LLP.

Build America, Buy America Introduces New Domestic Content Procurement

Preference

Preference for American-made materials is nothing new in US government construction procurement—

indeed, the Buy American Act (BAA) celebrated its 90th anniversary last year.1 State and local construction

projects funded through the Department of Transportation or the Environmental Protection Agency also

have long been subject to domestic procurement requirements (commonly referred to as “Buy America”

requirements).2 Adding to this list, the 2021 Infrastructure Investment and Jobs Act (IIJA) created a new

domestic content procurement preference through the Build America, Buy America Act (BABA).3 BABA

introduced another similarly named but distinct-in-operation domestic preference regime and greatly

expands the breadth of projects subject to domestic content requirements.

BABA establishes a “Buy America Preference” generally requiring that, absent a waiver or exemption,

“all of the iron, steel, manufactured products, and construction materials” used in infrastructure projects

funded through federal financial assistance must be produced in the United States.4 Through BABA,

Congress directed each federal agency to review its existing domestic content procurement preferences

and determine whether the agency’s preferences (or any existing waiver of its preferences) met BABA

requirements.5 BABA includes a savings provision clarifying that BABA does not affect pre-existing

domestic content procurement preferences already meeting BABA requirements.6 Congress empowered

the Office of Management and Budget (OMB) to issue guidance for applying the BABA Buy America

Preference.7

In August 2023, OMB issued its final BABA implementation guidance, contained in a new part 184

to title 2 of the Code of Federal Regulations and made effective as of October 23, 2023.8 The OMB

guidance confirmed the broad applicability of the BABA Buy America Preference, clarifying that the

preference applies to projects even if infrastructure is not the primary purpose of the funding award.9

Rather, if a project involves “any activity related to the construction, alteration, maintenance, or repair

of infrastructure in the United States,” that is sufficient to implicate BABA.10 Moreover, “infrastructure”

is to be interpreted broadly, with a focus on whether the project “will serve a public function.”11 Award

recipients are to ensure that all subawards and contracts issued under an award contain the BABA Buy

America Preference.12

The OMB guidance defines “iron or steel products,” “manufactured products,” and “construction

materials” and establishes guidelines for determining what constitutes “produced in the United States” for

each category.13 Critically, the guidance explains that, for purposes of determining BABA compliance, an

item to be incorporated into a project should be classified into only one category14 (i.e., an item would be

considered either an iron or steel product or a manufactured product, not both) and that the classification

is to be determined “based on [the item’s] status at the time it is brought to the work site for incorporation

into an infrastructure project.”15

CONSTRUCTION BILLS: RECENT

CHANGES TO CONSTRUCTION LAWS