Build America, Buy America (BABA) Act

Build America, Buy America (BABA) Act requirements - Public Law No. 117-58, Sections 70901-52 - regarding the requirement that iron, steel, manufactured products, and construction materials used in the project must be produced in the United States.

BABA applies to all "equivalency" State Revolving Fund (SRF) projects funded beginning with the State Fiscal Year 2023 Clean Water State Revolving Fund and Drinking Water State Revolving Fund Intended Use Plans, which use federal fiscal year 2022 grant funding, and subsequent state fiscal years.

BABA applies to the SRF capitalization grant awards from the federal annual appropriations and the awards from the supplemental funding from the Infrastructure Investment and Jobs Act (IIJA) of 2021, including the special funding for Lead Service Line Replacements (LSLR) and addressing Emerging Contaminants (EC).

A recipient of an applicable CWSRF or DWSRF program equivalency project must ensure that the project remains in full compliance with the BABA Act. All of the iron, steel, manufactured products, and construction materials used in the project must be produced in the United States or the project must comply with waivers granted by the U.S. Environmental Protection Agency (EPA) under the BABA Act.

See Build America, Buy America (BABA) Act Guidance (TWDB-0559) for Clean Water and Drinking Water State Revolving Fund (Equivalency) Projects.

Key Notes for SRF Projects (both DW and CW):

1. BABA Act defines Made in America as:
   • 100% of the iron and steel used (this is the same as the American Iron and Steel Act).
   • 55% of the manufactured products.
   • 100% of construction materials.
2. BABA applies:
   • To any project without an approved waiver, started after May 14, 2022.
   • All equivalency SRF Projects (equivalency projects follow various federal laws, regulations and executive orders relating to architectural and engineering procurement, surveillance services and equipment procurement, federal cross-cutting authorities, National Environmental Protection Act (NEPA) environmental review, disadvantaged business enterprises, and the Single Audit Act, as applicable).
3. American Iron and Steel requirements are equivalent to iron and steel requirements in BABA. However, a project will only be subject to BABA or AIS requirements.

Waivers

EPA has issued several nationwide waivers applicable to water/wastewater infrastructure projects. These waivers are briefly described as:

• Small Project Waiver (total project cost is less than $250,000)
• De minimis Waiver (iron, steel, manufactured products, and construction materials make up less than 5% of the total project cost)
• Adjustment Period Waiver, applies to projects that initiated project design phases prior to May 14, 2022 as identified by the TWDB.
• Program Waiver that applies to projects financed through Water Infrastructure Finance and Innovation Act (WIFIA).
• Minor (Ferrous) Components of Iron and Steel Products Waiver, allows manufacturers to utilize up to 5% by product material cost of nondomestic/unknown origin iron and steel

Projects applying under the current waivers must be identified by the Applicant. Applicant must provide detailed justification as to applicability of the waiver.

Applicant can request waivers for projects under the following options:

1. Applying the domestic content procurement preference would be inconsistent with the public interest (a “public interest waiver”);
2. Types of iron, steel, manufactured products, or construction materials are not produced in the United States in sufficient and reasonably available quantities or of a satisfactory quality (a “nonavailability waiver”); or
3. 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 percent (an “unreasonable cost waiver”).

It is the responsibility of the Applicant to document detailed justification for the requested waiver. TWDB cannot grant waivers but can provide requests to the EPA for review, required public comment, and approval. A new guidance document is under development and will be posted on this site when available.

Compliance Requirements

It is the Applicant's responsibility to:

• Ensure all construction and purchase contracts are executed in compliance with BABA Act;
• Maintain records of all forms/certifications necessary to document compliance; and
• Be able to provide compliance documentation upon request.

The TWDB monthly BABA Certification in fillable PDF format, TWDB-1110-A, is found under Program Guidance and Manuals. This form is required for funded projects.

Final BABA Act Certification, TWDB-1110-B, is required at the end of the project.

Additional External Guidance

Guidance from the federal Office of Management and Budget (OMB) and EPA:

1. EPA's main Build America, Buy America (BABA) webpage.
2. Made in America Office (MIAO) webpage
3. EPA's main Build America, Buy America (BABA) approved waivers webpage.
4. EPA's main Build America, Buy America (BABA) list of resources webpage.
5. Final Rule by Management and Budget Office (8/23/2023).