Biden Administration Finalizes Buy America Rule Guidance
In August, the Biden administration issued its final guidance for the implementation of Build America, Buy America (BABA) Act provisions that are included in the Infrastructure Investment and Jobs Act. AFS supported BABA and its strong domestic content requirements for government-funded infrastructure projects.
While Buy America preferences have been around for decades, BABA ensures all federally-funded infrastructure projects adhere to Buy America. It also broadens the types of products and materials that are covered by Buy America, including copper, aluminum, glass, lumber, drywall, and fiber optic cable. Before BABA, domestic preferences typically covered only iron, steel, and some manufactured products.
Key provisions of the guidance that are of interest to U.S. metalcasters include:
(1) Definitions for Key Terms: Part 184 includes definitions of key terms, including iron or steel products, manufactured products, and construction materials.
“Predominantly of Iron or Steel or a Combination of Both.” Section 184.3 adopts the Federal Acquisition Regulation (FAR) test for iron or steel—meaning wholly or predominantly made of iron or steel (more than 50%). This is different from the Federal Transit Administration (FTA) regulation that applies to structural iron or steel. Labor costs are also not included when determining whether the product meets the applicable threshold.
“Manufactured products.” OMB added a definition of manufactured products in the final guidance, which is “[a]rticles, materials, or supplies that have been: (i) Processed into a specific form and shape; or (ii) Combined with other articles, materials, or supplies to create a product with different properties than the individual articles, materials, or supplies.” Nonferrous castings fall into this category.
(2) Domestic Content Thresholds: In March 2022, the Biden administration separately issued rules to raise domestic content thresholds. Products previously qualified as Made in America for federal purchases when 55% of the value of their component parts were manufactured in the United States. The rule increased the threshold to 60% for calendar years 2022 and 2023, 65% for calendar years 2024 through 2028, and 75% starting in 2029.
(3) Buy America Waivers: Agencies can issue waivers if needed when U.S.-made products are not sufficiently available. Agencies can also seek a waiver if the use of U.S. materials will increase the cost of the overall infrastructure project by more than 25%. The guidance clarifies in the preamble, but not in Part 184, that state and local governments that are parties to trade agreements can seek public interest waivers to procure from trade agreement countries.
The final guidance will become effective 60 days after publication in the Federal Register but provides a wind-down period for ongoing or previously planned products. The Final Guidance applies to federal grants issued after their effective date. For grants issued between May 14, 2022 (the effective date of BABA), and the effective date of the final guidance (60 days after publication), previously published guidance in Memorandum M-22-11 (Initial Guidance) may still apply. As agencies begin implementing the new guidance, foundries selling castings for federally funded infrastructure projects should understand these new compliance obligations and their contract requirements.
Biden Administration Proposes Sustainable Procurement Policy
The Biden administration recently announced its Sustainable Products and Services procurement rule, a proposal to further prioritize American-made sustainable products and services in its purchasing, including recycled content. The proposal is expected to help the government achieve its net zero emissions from federal procurement by 2050 under the administration’s Federal Sustainability Plan.
Of interest to the U.S. metalcasting industry, the proposed rule would strengthen existing requirements by directing federal buyers to purchase sustainable products to the “maximum extent possible,” and includes creating a recovered materials preference program and a program “for requiring reasonable estimates and certification of recovered material used in the performance of contracts.” Agencies will be instructed to reference the Environmental Protection Agency’s (EPA)
“Recommendations on Specifications, Standards, and Ecolabels,” which contains ecolabels and standards for over 30 categories for federal purchasing. Under the same set of recommendations, agencies are advised not to use products containing perfluoroalkyl or polyfluoroalkyl (PFAS) chemicals. EPA intends to examine its existing recommendations and may add labels to healthcare, laboratories, professional services, food service ware/cookware, and uniforms and clothing categories.
The rule also asks agencies to intensify purchases of multiattribute goods, such as products that meet the requirements of both statutory purchasing programs (e.g., EPA’s Comprehensive Procurement Guideline program and Energy Star) and EPA purchasing programs (e.g., WaterSense and Safer Choice).
This proposed rule has the potential to impact virtually all federal contractors. It can be accessed online and is open for public comment until Oct. 2. A final rule is expected in 2024. If you have any questions regarding these new procurement rules, contact Stephanie Salmon the AFS Washington office, email@example.com.