1. When Do BABA Requirements Apply to Your Project?
The Buy America Preference generally applies when Federal financial assistance supports an infrastructure project in the United States.
Part 184 generally applies to Federal awards obligated on or after October 23, 2023. Awards obligated between May 14, 2022 and October 22, 2023 generally remain subject to earlier OMB implementation guidance, subject to the transition rules in 2 CFR §184.2.
Federal Financial Assistance and Direct Federal Procurement
BABA and the Buy American Act are not the same domestic-sourcing regime.
Under 2 CFR Part 184, BABA generally applies to covered iron or steel products, manufactured products, and construction materials incorporated into infrastructure projects receiving Federal financial assistance.
Domestic sourcing under direct Federal government contracts may instead follow the Buy American Act, FAR Part 25, or another applicable procurement regime.
The thresholds also differ. A BABA manufactured product generally must be manufactured in the United States and have domestic component costs greater than 55% of total component costs.
The Buy American Act currently uses a 65% domestic-content threshold for many covered manufactured end products delivered from 2024 through 2028, with a scheduled increase to 75% beginning in 2029.
Before applying a general standard, the project should check the awarding agency's program rules and the Federal award's obligation date.
For Federal-aid highway construction projects obligated on or after October 1, 2026, covered manufactured products permanently incorporated into the project generally must be manufactured in the United States and satisfy the greater-than-55% domestic-component cost requirement.
Award Terms, Flow-Downs, and Mixed Funding
BABA requirements can reach companies that have no direct contract with a Federal agency.
Applicable award terms generally flow through:
Federal award → recipient → prime contractor or developer → subcontractor → supplier
The Buy America Preference must be included in covered subawards, contracts, and purchase orders.
The preference generally covers articles, materials, and supplies consumed in, incorporated into, or affixed to the infrastructure project.
Temporary tools and equipment removed by project completion, such as construction scaffolding, generally fall outside that scope. Movable furnishings or portable equipment that are not integral to or permanently affixed to the completed infrastructure also ordinarily fall outside the preference.
For a covered infrastructure project, the preference applies to covered products and materials even when individual purchases are financed with non-Federal funds.
2. Product Classification and Domestic Sourcing Requirements
An item generally must be placed into one BABA category based on its status when it is brought to the work site for incorporation into the infrastructure project.
The category determines which U.S. .anufacturing or domestic-content rule applies.
| Category | Core BABA Rule |
|---|---|
| Iron or steel products | If iron and steel exceed 50% of total component cost, required manufacturing processes from initial melting through coatings generally must occur in the United States |
| Manufactured products | Manufactured in the United States and domestic component cost is greater than 55% |
| Construction materials | Applicable manufacturing processes under 2 CFR §184.6 generally must occur in the United States |
| Section 70917(c) materials | No direct BABA preference applies to standalone materials in this category; a finished product containing them may fall into another category |
Iron or steel products
- Core BABA RuleIf iron and steel exceed 50% of total component cost, required manufacturing processes from initial melting through coatings generally must occur in the United States
Manufactured products
- Core BABA RuleManufactured in the United States and domestic component cost is greater than 55%
Construction materials
- Core BABA RuleApplicable manufacturing processes under 2 CFR §184.6 generally must occur in the United States
Section 70917(c) materials
- Core BABA RuleNo direct BABA preference applies to standalone materials in this category; a finished product containing them may fall into another category
Iron, Steel, and Construction Materials
An item is predominantly iron or steel when the cost of its iron and steel content exceeds 50% of the total cost of all components.
That 50% threshold is a classification test based on cost. It is separate from the greater-than-55% domestic-component test used for manufactured products.
Once an item is classified as an iron or steel product, the required manufacturing processes generally must occur in the United States from initial melting through the application of coatings.
Construction materials use material-specific manufacturing standards. Covered categories include:
Non-ferrous metals;
Plastic and polymer-based products;
Glass;
Fiber optic cable;
Optical fiber;
Lumber;
Engineered wood;
Drywall.
Each category has specified U.S. .anufacturing processes under 2 CFR §184.6.
Section 70917(c) materials include cement and cementitious materials, aggregates such as stone, sand, or gravel, and aggregate binding agents or additives. These standalone materials are not directly subject to the BABA preference.
A finished product containing them can fall into another category. Precast concrete brought to the work site as a completed manufactured product, for example, should not automatically be treated the same as standalone cement or aggregate.
Manufactured Products and Component Costs
A manufactured product generally satisfies BABA when:
It is manufactured in the United States; and
Components mined, produced, or manufactured in the United States account for more than 55% of the total component cost.
For purchased components, cost includes the acquisition cost, transportation to the point where the component is incorporated into the manufactured product, and applicable duties.
For components manufactured by the product manufacturer, the calculation includes costs associated with manufacturing the component, transportation, and allocable overhead, but excludes profit.
Costs associated with manufacturing the finished manufactured product itself are excluded from component cost.
Final assembly or other finished-product manufacturing costs therefore should not be added to the component-cost calculation merely to increase the domestic-content percentage.
3. Certifications and Records before Product Approval
A compliance file should connect the product actually purchased to the category, manufacturing process, component calculation, and contract requirement relied upon for BABA compliance.
Manufacturer Certifications and Supporting Records
Manufacturer certifications and model information can establish whether the certification corresponds to the item actually delivered.
Manufacturing locations, mill records, and production records can show whether the required U.S. .anufacturing stages occurred.
Bills of materials and component-cost support can substantiate the component mix and greater-than-55% calculation for a manufactured product.
Purchase orders, invoices, shipping records, and substitution approvals can connect the certified item to the product actually procured and installed.
There is no single universal Federal certification form required for every BABA program. Agency and program documentation procedures can differ.
A country-of-origin marking or "Made in USA" label alone does not establish compliance with the applicable BABA manufacturing or component-content test.
Substitutions and Contract Terms
A substitute product can require a new BABA analysis even when it performs the same function as the originally approved item.
Before approval, the project should compare the substitute's classification, manufacturing location, component-cost support, certification, and any applicable waiver against the contract requirements.
A procurement contract can allocate responsibility for:
BABA representations;
Supporting records;
Subcontract and purchase-order flow-downs;
Product substitutions;
Notice of noncompliance;
Record retention;
Corrective action.
The compliance record should demonstrate that the item actually supplied and installed matches the item and domestic-sourcing basis approved through the procurement process
4. Waivers and Noncompliant Products
A pending waiver request does not make a noncompliant product eligible for covered expenditures before the waiver becomes effective.
A project should identify the applicable agency process, available domestic alternatives, existing waivers, and expenditure timing before relying on a waiver.
Waiver Eligibility and Agency Review
A Federal agency may issue a BABA waiver based on:
Public interest;
Nonavailability;
Unreasonable cost.
A nonavailability waiver can address products not produced in the United States in sufficient and reasonably available quantities or satisfactory quality.
An unreasonable-cost waiver can apply when using compliant U.S. .roducts would increase the cost of the overall infrastructure project by more than 25%.
The responsible Federal agency issues the waiver. A contractor or supplier cannot self-approve one.
A recipient may submit a written waiver request under the agency's procedures. Before issuing a final waiver, an agency generally must allow at least 15 calendar days for public comment on the proposed waiver.
A proposal to modify or renew a general-applicability waiver requires at least 30 days for public comment.
These comment periods are not the same as the total time required for the agency to approve or deny a waiver.
Projects should also determine whether an existing general-applicability waiver actually covers the relevant program, product, purchase, or project. De minimis and similar waivers are not universal BABA exceptions.
Expenditure Timing and Corrective Action
A waiver may be issued after a Federal award is made. Under OMB guidance, however, it does not cover BABA-covered expenditures incurred before the waiver's effective date.
When a compliance problem is discovered, the project should determine:
Whether the product has already been purchased or installed;
When the covered expenditure was incurred;
Whether the product was classified correctly;
Whether the certification and component calculation can be substantiated;
Whether an existing waiver applies;
Whether a compliant substitute is available;
What notice or corrective action the award and contract require.
Depending on the applicable award and contract terms, consequences can include replacement or substitution requirements, withheld payment, disallowed costs, audit findings, corrective action, or other Federal award remedies.
A knowingly false certification presents a separate issue. If a false statement or record is knowingly used and is material to a government payment or claim, the facts may require a False Claims Act analysis.
BABA noncompliance alone does not automatically establish False Claims Act liability. Falsity, knowledge, materiality, and the relationship to a government claim or payment must be evaluated separately.
5. Frequently Asked Questions
Yes, it can when the overall infrastructure project is subject to the Buy America Preference.
OMB guidance applies the preference to covered products and materials in a covered infrastructure project even when part of the project is financed with non-Federal funds.
The general BABA rule requires the product to be manufactured in the United States and domestic component costs to exceed 55% of total component costs.
That rule should not be confused with the Buy American Act's current 65% threshold for many direct Federal procurements. Agency-specific or other qualifying domestic-content standards can also affect a project.
No. Under OMB guidance, a waiver issued after an award cannot cover BABA-covered expenditures incurred before the waiver's effective date.
A project relying on a pending waiver should therefore resolve the timing issue before incurring additional covered expenditures.
H2: BABA Compliance Review Before Purchase or Product Substitution
A contractor facing a rejected substitution or corrective-action notice, or a supplier asked to certify a product without adequate component-cost records, may need to resolve the issue before approving a purchase order or incurring additional covered expenses.
Similar concerns can arise when a project must make a procurement decision before a waiver is issued or when the accuracy of an already-submitted manufacturer certification is questioned.
An attorney can review the applicable award terms, agency rules, product classification, manufacturer records, component-cost calculation, waiver coverage, and contractual responsibility for corrective action. If a certification has already been submitted, the review can also distinguish incomplete supporting documentation from facts that may create false-statement or government-payment exposure.
08 Oct, 2026
