2 CFR 184 Build America Buy America Act BABA Compliance – BABA Lawyers

Avoid Costly Legal Mistakes – Are Your Products BABA Compliant? – Our BABA Services Help To Reduce Indictments and Criminal Liability

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US AND INTERNATIONAL REACH

The Build America Buy America Act, (BABAA or BABA Compliance) creates a domestic content preference for all Federal financial assistance obligated for public infrastructure projects after May 14, 2022.  With regard to percentages, the domestic content procurement preference requires that all iron, steel, manufactured BABA compliant products, and construction materials used in covered infrastructure projects are produced in the United States.

The Build America Buy America Preference applies to Federal awards where funds are appropriated or otherwise made available for infrastructure projects in the United States, regardless of whether infrastructure is the primary purpose of the Federal award.

BABA now expands application of domestic preferences to also include federal financial assistance programs for infrastructure. The BABA requirements demand that companies to use iron, steel, manufactured products and construction materials produced in the United States on all federally funded infrastructure projects.

At Watson & Associates, LLC, our government contracting and 2 CFR 184 BABA Act compliance attorneys, with law offices throughout the United States provide BABA services to help companies, manufacturers, and prime and subcontractors across the United States and overseas reduce exposure and liability.  Non-Compliance With Build America Buy America Act requirements under 2 CFR Part 184 and other applicable statutes causes severe Civil and Criminal Penalties.

Becoming BABA Compliant

If you are new to the public procurement world, and seeking Buy America compliance, you will quickly find that becoming BABA compliant is very time-consuming and meticulous. Companies that simply request a compliance letter after a few minutes of conversation should understand that their processes and sources of materials is critical and starts before the company is involved. Prime contractors should make sure that their subcontractors meet the Build America Buy America Act requirements.

The BABA establishes “Buy America” sourcing requirements for three main categories  of key products and materials used in infrastructure projects (as defined in the IIJA):

• Iron and Steel — requiring that “all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.”
• Manufactured Products — requiring that “(i) the manufactured product was manufactured in the United States; and (ii) the cost of the components of the manufactured product that are mined, produced, or manufactured in the United States is greater than 55 percent of the total cost of all components of the manufactured product.”
• Construction Materials — requiring that “all manufacturing processes for the construction material occurred in the United States.

Build America, Buy America Contract Compliance & Flow-Down Clauses

Contractors (prime and subs) should carefully review their contracts to assess whether BABA requirements apply.   BABA requirements must be passed dow to their lower-tier subcontractors, those lower-tier contractors must flow down the requirement to those at even lower tiers, even down to the product manufacturer. 

The Build America, Buy America Act (BABA or BABAA) does not require that recipients and their lower-tier contractors use specific language to establish a flow-down. Therefore, it is essential that product purchasers review each contract closely to determine whether BABA applies. 

When companies are under federal investigation for Build America Buy America fraud or being charged or indicted, our law firm can help with criminal defense and legal representation.

What We Do To Help You With Buy America Compliance.

When you decide to become BABA compliant, we work with your designated team to:

• Provide us with detailed information about your material and procurement process
• Develop sources of components, materials and parts
• Compile detailed costs of all BABA compliant products contributing to the end product
• Applying statutory requirements to assess whether your process is BABA compliant or not.
• Defend OIG, DOJ, FBI investigations and litigation defense for Build America Buy America False Claims Act cases

What You Need to Know About BABA Compliance

• Build America Buy America Act requires all iron, steel, manufactured products, and construction materials permanently installed on federally assisted infrastructure projects to be produced in the United States.

• BABA compliance requirements apply to all recipients of Federal Financial Assistance who are:

1. Non-Federal Entities as defined as 2.CFR 200.1
2. Requesting funding for an infrastructure project
3. The project involves the construction, alteration, maintenance, or repair of infrastructure in the United States.

Manufacturer BABA Certification

For each product to which BABAA applies (every item permanently installed on the project, except for aggregate and aggregate binding materials), a manufacturer’s certification letter or other document demonstrating compliance is mandatory. It must identify the item being BABA certified (short written description as well as part number, if applicable) and affirm that the item complies with Build America Buy America Act regulations. This document must be signed by an authorized company representative and NOT lawyers

Non Compliance and BABA Penalties

Non-compliance with 2 CFR 184 BABA requirements can result in civil and criminal penalties. This includes suspension and debarment, penalties for violation of the False Claims Act, and severe criminal sanctions. If in doubt, seek resolution through the BABBA waiver process.

What We Do?

The law firm helps small businesses, large contractors, subcontractors, manufacturers and resellers to comb their existing BABA compliance policies and controls. If you are new to the public procurement market place our Build America Buy America Act compliance attorneys can help by:

• Performing corporate Build America Buy America analysis
• Developing initial internal BABA compliance programs to introduce BABA compliant products
• Build America Buy America requirement investigations
• Civil and criminal defense for allegations of Non – Build America Buy America Act compliance

 

Watch the video below for additional BABA requirements information:

 

The Build America Buy America Act compliance rule (BABAA Compliance) mandates that all iron and steel, construction materials, and manufactured products that are supplied as part of federally-funded infrastructure projects must be produced in the United States.

This applies to building roads and bridges, materials used, and various local aspects. Each company bidding on BABAA projects must be able to certify and prove, if necessary, that their products meet BABA requirements.

The Build America Buy America rule establishes a Domestic Content Procurement Preference requiring that:

• all iron and steel used in the Federal financial assistance project be produced in the United States;

• the manufactured BAA compliant products used in the Federal financial assistance project be produced in the United States; and

• the construction materials used in the project be produced in the United States.

At the Department, infrastructure programs and activities are limited to only construction, and broadband infrastructure.

If you are seeking to implement a Build America Buy America Act compliance program or avoid civil or criminal liability, call our Buy America BABA lawyers at 1.866.601.5518. Speak to Theodore Watson.

What are BABA Compliance Products &. Buy America Build America Requirements?

Generally, BABA Compliance and Buy America Build America requirements apply to all infrastructure projects receiving federal funding. In other words, if state or local governments are parties to the contract, the Build America Buy America Act applies.  The material BABAA requirements for these public projects  and the work  “infrastructure” projects are broadly defined to include:

• Roads, tunnels and bridges
• Railways (both passenger and freight) 
• Dams, ports, harbors and other maritime facilities
• Airports 
• Water systems 
• Electrical transmission facilities and systems
• Utilities 
• Broadband infrastructure 
• Buildings appurtenant to all of the above, including train and bus stations, toll facilities and even office facilities

Other matters

• Along with iron, steel and manufactured products, BABA compliant products extend for the first time to construction materials, which must also be U.S.-sourced. Construction materials are defined to include commodities such as glass, drywall, fiber-optic cable, nonferrous metals like copper and aluminum, and PVC and other plastic or polymer-based products. Aggregates and cement are excluded. 
• BABA material percentages increase over time. The required domestic content threshold requirements (by cost) of manufactured goods increase from 55% to 60% on October 2022, up to 65% by 2024, and will top out at 75% in 2029.
• Commercially available off-the-shelf items made abroad can be used if they are not modified. 

What are the BABA Requirement Percentages?

The domestic content BABA threshold increased to 60 percent on October 25, 2022, and further increased to 65 percent in the calendar year 2024, and 75 percent in the calendar year 2029. If no domestic products can meet the new thresholds or the cost to acquire them would be unreasonable, there is a 55 percent fallback threshold in effect from October 25, 2022, through December 31, 2029.

What are the Buy America Requirements?

Public contractors must meet two conditions for the Build America Buy America Act 2 CFR 184 requirements to apply: (1) the procurement must be intended for public use within the United States; and (2) the items to be procured or the materials from which they are manufactured must be present in the United States in sufficient and reasonably available commercial quantities of a satisfactory quality.

Waiver of BABA requirements: The provisions of the act may be waived if the head of the procuring agency determines the act to be inconsistent with the public interest or the cost of acquiring the domestic product is unreasonable.

Get Immediate Help Today and Avoid Civil and Criminal Liability. Call Our Build America Buy American BABA Lawyers at 1.866.601.5518

2 CFR 184.3 Definitions.

Acronyms used in this part have the same meaning as provided in 2 CFR 200.0. Terms not defined in this part have the same meaning as provided in 2 CFR 200.1. As used in this part:

Build America Buy America Act means division G, title IX, subtitle A, parts I–II, sections 70901 through 70927 of the Infrastructure Investment and Jobs Act (Pub. L. 117–58).

Buy America Preference means the “domestic content procurement preference” set forth in section 70914 of the Build America, Buy America Act, which requires the head of each Federal agency to ensure that none of the funds made available for a Federal award for an infrastructure project may be obligated unless all of the iron, steel, manufactured products, and construction materials incorporated into the project are produced in the United States.

Component means an article, material, or supply, whether manufactured or unmanufactured, incorporated directly into: a manufactured product; or, where applicable, an iron or steel product.

Construction materials means articles, materials, or supplies that consist of only one of the items listed in paragraph (1) of this definition, except as provided in paragraph (2) of this definition. To the extent one of the items listed in paragraph (1) contains as inputs other items listed in paragraph (1), it is nonetheless a construction material.

(1) The listed items are:

(i) Non-ferrous metals;

(ii) Plastic and polymer-based products (including polyvinylchloride, composite building materials, and polymers used in fiber optic cables);

(iii) Glass (including optic glass);

(iv) Fiber optic cable (including drop cable);

(v) Optical fiber;

(vi) Lumber;

(vii) Engineered wood; and

(viii) Drywall.

Differences Between Buy America Requirements And Buy American Act

What is the Buy American Act?

The Buy American Act of 1933 implemented a program covering specific products and required the federal government to purchase domestic construction materials. The Building America as it applies to the Buy American Act implements a national preference for the government to procure only domestic materials used for public construction unless a waiver is issued by statute or by the procuring agency when making your internal assessments, please carefully look at the difference between buy American vs buy America statutes

What is the Buy America Act?

The Buy America Act was established within Section 165 of the Surface Transportation Assistance Act of 1982, which was a transportation funding and policy act. The Act targets procurement and projects related to the transportation of highways and bridges. BABA Act or Buy America requirements give preference for the use of domestically produced materials on any Procurements funded at least in part with federal funds government. If you are seeking help under the Federal Highway or Department of Transportation DOT America, our BABA Compliance lawyers can help.

Buy America Act Exceptions & BABA Requirements Waivers

BABAA Certification and Exceptions When necessary, your company may apply for a waiver from Build America Buy America Act requirements. The Agency may waive the application of the domestic content procurement preference in the case of one of three BABA exceptions:

1. Public interest.
2. Non-availability.
3. Unreasonable cost.

Many agencies are responsible for processing and approving your waiver requests.  This applies to both the prime contractor level and subcontractor level.   In many cases the prime contractor would submit its subcontractor exception / waiver request.  by prime award recipients and at the sub-award level. The prime award recipient must submit any sub-award waivers to the USDA agency.

Note: When comparing the Buy American Act vs Buy America (BABA), waivers or exceptions to BABAA requirements are less likely to be issued. Exceptions or waivers with your BABA certification letter are looked at on a case-by-case basis.

At Watson & Associates, our BABAA compliance lawyers. Work with managers and CEOs to examine their internal processes and Procurements to assess compliance and noncompliance.

When contractors face investigations for violating Buy America Build America requirements and efforts for building America, indictments and criminal liability our Federal defense BABA lawyers can help.

DOWNLOAD CRITICAL GUIDANCE FOR BAA COMPLIANCE - MINIMIZE INVESTIGATIONS AND JAIL TIME

For immediate help with Build America Buy America Act compliance requirements, call our national BABA lawyers at 1.866.601.5518. Speak to Theodore Watson.