The Build America, Buy America Act (BABA) provides federal financial assistance to award recipients domestic manufacturing and infrastructure. Understanding who qualifies and how to apply may be confusing, but Cherry Bekaert’s Risk & Accounting Advisory professionals are here to help. Please read our FAQs below to learn more about the BABA Act and how it might affect your organization.
Q: What is BABA?
A: BABA stands for the Build America Buy America Act, which was signed into law with the Bipartisan Infrastructure Law (BIL) on November 15, 2021.
Q: What is the goal of BABA?
A: BABA aims to prioritize the domestic manufacturing and procurement of infrastructure products and components. Infrastructure projects may be eligible for Federal financial assistance if they adhere to domestic content preference as defined in BABA.
Q: How does BABA benefit my company?
A:
- Potential to qualify for Federal financial assistance for funds appropriated through BIL and other appropriated funds that are available and used for infrastructure projects
- Preferential provider status for being a domestic supplier
- Differentiation in the marketplace and customer pricing advantages
Q: Who regulates BABA?
A: The Federal Emergency Management Agency (FEMA) awards financial assistance to qualifying recipients. All related documents must be submitted to FEMA.
Q: How do I know if I qualify for BABA?
A: Recipients must comply with the following domestic preference requirements:
- All iron and steel items used in a project must be produced in the United States from the initial melting stage through the application of coatings.
- All construction materials used in a project must be manufactured in the United States, including:
- Non-ferrous materials
- Plastic and polymer-based products
- Glass
- Fiber optic cable
- Lumber
- Engineered wood
- Drywall
- All manufactured products used in a project must be produced in the United States. To be considered produced in the United States, the cost of the components of the manufactured product must be greater than 55% of the total cost of all components of the manufactured product.
- FEMA may waive Build America, Buy America requirements for domestic content preference and issue a waiver under the certain circumstances.
Q: In what cases could FEMA waive BABA requirements for domestic content preference?
A: FEMA may waive the requirements in the following circumstances:
- When the requirement is inconsistent with the public interest, FEMA may issue a public interest waiver
- If the types of iron, steel, manufactured products, or construction materials needed for the project are not produced in the United States in sufficient and reasonably available quantities or of satisfactory quality, FEMA may issue a nonavailability waiver
- If 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%, FEMA may issue an unreasonable cost waiver
Q: How do I apply for BABA?
A: Recipients and subrecipients must submit a contract provision, contract documents, and contractor self-certifications of compliance with BABA to FEMA. Although not required, FEMA recommends, as a best practice, that award recipients submit a certification letter from product manufacturers to demonstrate BABA compliance requirements.
Q: How can Cherry Bekaert help?
A: Our experienced team of professionals can help:
- Perform analysis of products and suppliers to determine the likelihood the client will meet the domestic content preferences outlined in BABA
- Prepare the required contract provision that explains BABA’s requirements and is required to be submitted to FEMA
- Select, prepare and send self-certifications as outlined by BABA to the client’s suppliers
- Accumulate and review self-certifications to verify the domestic content preference requirements were met as outlined in BABA
- Prepare waiver letters for circumstances that may waive the application of the domestic preference requirements outlined in BABA
- Assist with Federal financial assistance submission to FEMA
Your Guide Forward
Our Risk & Accounting Advisory team regularly interprets and offers guidance on federal financial assistance so clients understand their award eligibility and requirements. We also have the industry insight and experience to act as an independent source of knowledge and practical advice for our clients. For further information on Build America, Build America guidance, please get in touch with one of our advisors today.
