OMB Issues Proposed Rule To Implement Buy America Requirements
February 15, 2023
On Feb. 9, the Office of Management and Budget released a proposed rule to revise OMB’s Guidance for Grants and Agreements. This guidance defines the rules for federal agencies as they distribute funding through grant programs. The revisions would aid implementation of the Build America, Buy America Act provisions of the Infrastructure Investment and Jobs Act.
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 proposed rule codifies the rules outlined above and is intended to clarify several aspects of Buy America implementation:
- Defines “cost of components” as acquisition cost and transportation costs for components purchased by the contractor and all costs associated with the manufacture of the component, including transportation costs, for those manufactured by the contractor;
- Specifies manufacturing standards for various construction materials; and
- Defines “manufactured products” as products that “do not consist wholly or predominantly of iron or steel or both” and are not construction materials.
ABC previously commented on an OMB Request for Information and will again be participating in the regulatory process. Comments on the proposed rule are due by March 13, and may be submitted via regulations.gov.
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