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OMB Announces New Guidance on Buy America Requirements

August 16, 2023

On Aug. 14, the Office of Management and Budget announced final guidance to revise OMB’s Guidance for Grants and Agreements. This guidance defines the rules for federal agencies as they distribute funding through grant programs and other financial assistance. The revisions would aid implementation of the Build America, Buy America Act provisions of the Infrastructure Investment and Jobs Act. This guidance finalizes a proposal issued by the OMB on Feb. 9.  

The IIJA requires the following expanded Buy America preferences and broadens the preferences to include nonferrous metals, such as copper used in electric wiring; plastic- and polymer-based products; glass, including optical fiber; and certain other construction materials, such as lumber and drywall:

• All iron and steel used in the project are produced in the United States. This means all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.
• All manufactured products used in the project are produced in the United States. This means the manufactured 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% of the total cost of all components of the manufactured product, unless another standard for determining the minimum amount of domestic content of the manufactured product has been established under applicable law or regulation.
• All construction materials are manufactured in the United States. This means that all manufacturing processes for the construction material occurred in the United States.

The final guidance largely implements the guidance as proposed, with some limited technical modifications. It codifies the rules outlined above and is intended to clarify several aspects of Buy America implementation:

• Defines “cost of components” for manufactured products as acquisition cost and transportation costs for components purchased by the manufacturer, and all costs associated with manufacture of any components created by the manufacturer;
• Specifies manufacturing standards for various construction materials; and
• Defines “manufactured products” as products that have been processed into a specific form or shape or combined with other materials, “do not consist wholly or predominantly of iron or steel or both” and are not construction materials.

ABC commented on the proposed guidance to urge OMB to balance Buy America requirements with safeguards against increased costs and delays of infrastructure projects funded by taxpayers. While ABC supports strategies to expand domestic jobs and manufacturing to avoid global supply chain disruptions and capture economic benefits within America, ABC continues to have concerns regarding immediate implementation of the guidance’s domestic content requirements.

The guidance will take effect 60 days after publication in the Federal Register.

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