OMB issues final guidance on Made in America provisions

On August 14, 2023, OMB issued final guidance on requirements for all infrastructure projects using federal financial assistance. The final guidance requires preferences for American-made steel and iron products, manufactured products, and construction materials. The release of the final guidance follows the signing in November 2021 of the Bipartisan Infrastructure Law (BIL), which includes the Build America, Buy America Act (BABA).

The guidance is directed toward heads of federal agencies, who must ensure that no federal funds be awarded for infrastructure projects unless “all of the iron, steel, manufactured products, and construction materials incorporated into the project are produced in the United States.”

The guidance is specific about what “produced in the United States” means. Regarding iron or steel products, “all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.” In the case of manufactured products, “the product was manufactured in the United States, and the cost of the components of the manufactured product that are mined, produced, or manufactured in the United States is greater than 55 percent of the total cost of all components of the manufactured product….” “In the case of construction materials, all manufacturing processes for the construction material occurred in the United States.”

There is also a detailed definition of “infrastructure.” The guidance says that “infrastructure projects include “the structures, facilities, and equipment for roads, highways, and bridges; public transportation; dams, ports, harbors, and other maritime facilities; intercity passenger and freight railroads; freight and intermodal facilities; airports; water systems, including drinking water and wastewater systems; electrical transmission facilities and systems; utilities; broadband infrastructure; and buildings and real property; and structures, facilities, and equipment that generate, transport, and distribute energy including electric vehicle (EV) charging.” However, the guidance says that this is not a comprehensive list and that the awarding agency should consider “whether the project will serve a public function, including whether the project is publicly owned and operated, privately operated on behalf of the public, or is a place of public accommodation, as opposed to a project that is privately owned and not open to the public.”

The document also provides detailed guidance for determining whether the produced in America components amount to greater than 55 percent of the total cost of components.

The components that come under the produced in America guidelines are:

(1) Non-ferrous metals

(2) Plastic and polymer-based products

(3) Glass

(4) Fiber optic cable (including drop cable)

(5) Optical fiber

(6) Lumber

(7) Drywall

(8) Engineered wood

The guidance also explains the circumstances under which a waiver may be justified:

Applying the Buy America Preference would be inconsistent with the public interest (a “public interest waiver”);

• Types of iron, steel, manufactured products, or construction materials are not produced in the United States in sufficient and reasonably available quantities or of a satisfactory quality (a "nonavailability waiver") or
• including iron, steel, manufactured products, or construction materials produced in the United States will increase the cost of the overall infrastructure project by more than 25 percent (an "unreasonable cost waiver").

For additional information on this final guidance, click here.

The final guidance text is available here.