ASA Offers Input to the Office of Management and Budget on Buy America Act
On March 13, 2023, ASA, along with the Transportation Construction Coalition (TCC), submitted comments to the Office of Management and Budget (OMB) regarding the implementation of the Build America, Buy America Act (BABAA) provisions of the Infrastructure Investment and Jobs Act (IIJA). We fully support the twin objectives of maximizing the benefits from the IIJA’s historic investments, while growing domestic manufacturing, which is BABAA’s particular focus. To that end, members of our coalition have reviewed the draft guidance published by the OMB and we identified two areas in which we request clarification, so as not to diverge from Congress’ intentions in enacting BABAA. Those two areas are:
- OMB Should Reiterate BABAA Does Not Apply to Temporary Products
Section VI of the OMB Memorandum for Heads of Executive Departments and Agencies (M-22-11), published on April 18, 2022, states:
“The Buy America preference only applies to articles, materials, and supplies that are consumed in, incorporated into, or affixed to an infrastructure project. As such, it does not apply to tools, equipment, and supplies, such as temporary scaffolding, brought to the construction site and removed at or before the completion of the infrastructure project.”
The new OMB guidance does not yet include an equivalent provision. There is no indication in the IIJA that Congress intended to change longstanding policy and extend Buy America coverage to temporary products, equipment and other such items used in constructing projects, but not permanently incorporated in them. Therefore, we respectfully request that OMB restate this clarification in the final guidance.
- OMB Should Exclude Aggregates and Related Materials from Buy America Preferences, Consistent with Congress’ Clear Intent
In Section 70917(c)(1) of the IIJA, Congress established an important limitation to the term “construction materials” as used in BABAA. Congress explicitly exempted “cement and cementitious materials, aggregates such as stone, sand, or gravel, or aggregate binding agents or additives” from the “construction materials” covered under BABAA. This limitation makes clear no domestic content procurement preference under BABAA applies to aggregates and these related materials.
Section 70915(b)(1) of the IIJA requires OMB to “issue standards that define the term ‘all manufacturing processes’ in the case of construction materials” to which BABAA applies a domestic content procurement preference. These standards will help determine whether particular products comply with BABAA requirements. In Section 70917(c)(2), Congress reiterated the exemption for the above-listed materials in this additional context. The subsection states that OMB’s standards for “all manufacturing processes” “shall not include cement and cementitious materials, aggregates such as stone, sand, or gravel, or aggregate binding agents or additives as inputs of the construction material.”
The draft OMB guidance inquires as to whether a combination of these exempt materials could somehow form an end product subject to Buy America coverage. First, BABAA does not provide authority for the listed materials being considered manufactured products because only the combination of construction materials not included in the limitation produces a “manufactured product” under OMB’s proposed guidance.
Second, the combination of the listed items as concrete or asphalt mix are not a construction material for which BABAA establishes a domestic content procurement preference. Congress understood that the materials they were excluding from the term “construction materials” are, when combined, concrete and asphalt mix construction materials. Congress included Section 70917(c)(2) to ensure that the combination of construction materials in Section 70917(c)(1) into concrete and asphalt mix construction materials did not create a domestic content procurement preference for concrete or asphalt mixes.
Finally, no one disputes that aggregates and these related items are construction materials in the generic sense. However, as cited above, Congress enacted the language in these portions of the IIJA to explicitly exclude them from the “construction materials” for which BABAA establishes a domestic content procurement preference.