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Dive brief:
- A coalition of construction trade groups asked the White House Office of Management and Budget last week to clarify and adjust its implementation of Build America, Buy America requirements for construction materials, saying they run the risk of delaying and inflating the cost of infrastructure works as they are.
- BABA expands existing domestic preference requirements for construction projects that use federal dollars, with the goal of channeling taxpayer dollars into American-made products. It was enacted as part of the Jobs and Infrastructure Investment Act of 2021, but applies to all federally funded construction projects.
- In a Petition of February 15The Associated General Contractors of America, the American Road & Transportation Builders Association, the American Public Transportation Association and the National Association of Home Builders said they support BABA’s goals, but their members “have encountered significant difficulties navigating an opaque and unbalanced implementation of BABA” by the agency and its Made in America office.
Diving knowledge:
Since BABA was signed into law in November 2021, the OMB guidelines have not adequately accounted for a number of headwinds facing the construction industry, the groups said. These include spikes in the costs of key construction materials, interest rates, ongoing supply chain challenges, a tight labor market and an unstable banking industry, they wrote in the letter to OMB Director Shalanda Young. In addition, the building materials market is still adjusting to meet domestic purchasing requirements.
The groups filed the request for new regulations under the Administrative Procedures Act, as well as a request under the Paperwork Reduction Act to review the way the Biden administration collects exemptions from baby
Ty Edmondson, CEO of Goldsboro contractor TA Loving Co. based in North Carolina and president of AGC’s utilities infrastructure division, was among the stakeholders who testified Thursday before the House Transportation and Infrastructure Subcommittee on the implementation of BABA. Transportation officials, other industry groups and union members also weighed in.
Carlos Braceras, executive director of the Utah DOT, said his agency is seeing delays due to industry efforts to comply with regulations and said many states want to shorten the time it takes to process applications for ‘Buy America exemptions.
More transparency, training
In August 2023, the White House issued its own final guidance on BABA, which defines the relevant building materials and local manufacturing process standards for each material. However, construction groups said the existing guidance is not enough and called for a “more informed and transparent schedule for Buy America preferences” in federal infrastructure financial assistance programs. They say regulatory uncertainty could lead to more costly, scaled back and delayed projects, and risks weakening the impact of the IIJA’s historic funding.
Instead, the groups want a bigger role for other agencies, such as the US DOT, which have long experience administering pre-BABA domestic preference requirements.
“Unfortunately, OMB’s approach to managing virtually every aspect of the requirements of the Build America, Buy America Act is impractical and causes confusion and delay with federal agencies that fund construction projects,” the groups wrote in the request
In addition, OMB must exercise greater diligence in notifying the public of the details of BABA implementation, establish a database of BABA-compliant construction materials and manufactured products, and institute a program of solid and free training, among other improvements, the groups said in the petition.
