The Office and Management and Budget recently issued a 17-page memorandum on April 18 to provide “implementation guidance” to federal agencies and other entities of newly retooled “Buy America” rules for infrastructure projects.
[Above photo by the Maine DOT]
The revamped rules are an outgrowth of President Biden’s Executive Order 14005, issued in January 2021, which launched what the administration dubbed a “whole-of-government” initiative to strengthen the use of federal procurement contracts to support American manufacturing.
As a result, in March 2022, the Department of Defense, General Services Administration, and NASA issued a final rule amending the Federal Acquisition Regulation or FAR to implement the president’s executive order regarding domestic preferences in Government procurement.
Consequently, the memo issued by OMB this week highlights changes made to FAR by that new final rule, which goes into full effect on May 14.
It also outlines how it affects key portions of the $1.2 trillion Infrastructure Investment and Jobs Act or IIJA, enacted in November 2021.
For example, federal agencies must “broadly” interpret the IIJA’s definition of “infrastructure,” which now includes electric vehicle or EV charging networks. To that end, “Buy America” preferences apply to an entire infrastructure project, even if funded by both federal and non-federal funds under one or more awards, the memo said.
The guidance also notes that the IIJA requires a review of all waivers granted to “Buy America” rules issued more than five years before November 15, 2021 – the date of the IIJA’s enactment. And if such reviews justify retaining the waiver, federal agencies are “urged to consider” narrowing those waivers in a manner that would support supply chain resilience and boost incentives to manufacture key products domestically, as appropriate.
Granting such waivers falls into three general categories:
- Applying the domestic content procurement preference would be inconsistent with the public interest – a “public interest waiver.”
- Types of iron, steel, manufactured products, or construction materials not produced in the United States in sufficient and reasonably available quantities or of a satisfactory quality – a “non-availability waiver.”
- The inclusion of iron, steel, manufactured products, or construction materials produced in the United States will increase the cost of the overall project by more than 25 percent – an “unreasonable cost waiver.”
OMB also illustrated both “preliminary” and “non-binding guidance” in its memo to help federal agencies determine the specific types of construction materials that fall under the IIJA’s “Buy America” requirements, such as non-ferrous metals, plastic and polymer-based products, and glass, among others.
“Pending OMB’s issuance of final standards on construction materials, and absent any existing applicable standard in law or regulation that meets or exceeds these preliminary standards, agencies should consider ‘all manufacturing processes’ for construction materials to include at least the final manufacturing process and the immediately preceding manufacturing stage for the construction material,” the agency added.