OMB Releases Additional BABAA Guidance

On October 25, OMB released a memo following up on BABAA requirements, which details the process of obtaining waivers and adds additional requirements that could potentially delay the process of waiver approval.

Since taking effect on October 23, 2023, the new Build America, Buy America Act (BABAA) requirements have been followed up with a memorandum by the Office of Management and Budget (OMB) on October 25, providing supplementary information and requirements pertaining to BABAA.

While the memorandum generally conforms to the recent regulatory changes that have come into force, it incorporates additional details and requirements that are not included in the rules themselves. The primary emphasis of the memorandum pertains to the process of obtaining waivers for BABAA, introducing supplementary stipulations that are likely to delay the process of waiver approval.

For instance, OMB is requiring that a federal agency must engage in consultation with the Made in America Office (MIAO) prior to posting a broadly applicable waiver for public comment. OMB's intent in this regard is to ensure that waivers encompass the most minimal spectrum of materials possible. However, this procedure runs the risk of creating greater delays, given the necessity for more time to communicate among agencies prior to a determination regarding waiver requests.

Furthermore, there are requirements for the public interest and unreasonable cost waivers to identify, among various other points of data, whether the cost advantage of foreign products is due to unfair trade practices, such as dumping or subsidizing of iron, steel, or manufactured products. This requirement will now tie the International Trade Administration (ITA) into the waiver process, potentially further protracting the process. OMB is encouraging consultation with ITA as they have stated that there is not currently a single resource for recipients to determine this information on their own.

OMB has also specified that agencies may request a waiver for small grants, provided they adhere to the Simplified Acquisition Threshold, currently established at $250,000. This guidance creates a cap on the maximum an agency can determine is appropriate for their projects and what they consider to be small grants. Presently, it remains unclear how this requirement will interact with existing waivers for small grants that surpass this threshold, such as the Department of Transportation's waiver encompassing all federal assistance below $500,000.

The new guidance introduces a provision to streamline the process to a limited extent, allowing a singular federal agency to represent a project for the purposes of waiver requests in cases where multiple federal agencies are involved. Unfortunately, this measure is markedly insufficient in offsetting the numerous potential delays that are likely to result from the new requirements.

AGC is diligently working towards a more reasonable implementation and waiver process. Nevertheless, AGC members should be prepared to comply with the final guidance and check with their owners on how they plan to implement the requirements. Click HERE to learn more about the latest information and resources that AGC provides regarding BABAA.

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