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HUD Releases 3 Proposed Build America, Buy America Waivers

Waives BABA Provisions, for some Federal Assistance, for 90 Additional Days

Late last week, the Department of Housing and Urban Development (HUD) released three proposed Build, America, Buy America (BABA) waivers. One of the three proposed waivers extends the phased implementation of provisions of the Act by ninety (90) days, except for those funded by CDBG formula grants obligated by HUD on or after November 15, 2022. A short description of each proposed waiver, and when comments are due, is included below:

 

Waivers Proposed on October 31 – Comments Due November 15

  • Public Interest De Minimis, Small Grants, and Minor Components Waiver of BABA Provisions as Applied to Certain Recipients of HUD Federal Financial Assistance
    • HUD proposes to waive the application of the BAP (Buy America Preference) for infrastructure projects whose total cost is an amount equal to or less than the Simplified acquisition threshold, which is currently $250,000. 
    • Additionally, the Department is proposing to waive the application of the BAP for Minor Components of an infrastructure project, such that a cumulative total of no more than a total of 5 percent of the total cost of the iron, steel, manufactured products, and construction materials used in and incorporated into the infrastructure project, up to a maximum of $1 million.
    • These waivers will assist HUD and housing authorities (HAs) in preventing immediate delays to critically important projects, ease burdens on funding recipients, and allow the Department to focus on key products and critical supply chains.
  • Public Interest Exigent Circumstances Waiver of BABA Provisions as Applied to Certain Recipients of HUD Federal Financial Assistance
    • The ability to quickly respond and address the need is critical to ensuring the protection of life, safety, and property of residents and community members. The ability to respond quickly in such situations could be compromised if the recipient is required to navigate BAP requirements during exigent circumstances.
    • The Department recognizes that often there are exigent circumstances, particularly with respect to the conduct of maintenance and other rehabilitation and repair activities in connection with affordable housing, and proposes the exigent circumstances to be excluded from the application of the BAP.

 

Waiver proposed on November 3, 2022 – Comments Due  November 17, 2022

  • Public Interest Phased Implementation Waiver of BABA as Applied to Certain Recipients of HUD Federal Financial Assistance
    • In order to fully focus on the successful implementation of the BAP in CDBG formula grants, HUD has determined that it is in the public interest to propose a new public interest waiver of the application of the BAP for all other FFA (Federal Financial Assistance) provided by HUD.
    • HUD is proposing that this waiver cover all FFA obligated by HUD during the ninety (90) day period after its effective date except for those funds utilized in connection with the purchase of iron or steel products in infrastructure projects funded by CDBG formula grants obligated by HUD on or after November 15, 2022.

PHADA appreciates the efforts that HUD has taken to better ensure adverse effects of BABA on the core mission of providing affordable rental housing and related services to residents. The waivers detailed above will be helpful as the Department, and HAs, navigate the implementation of these new regulations over the next ninety days.

While PHADA supports the laudable goals of BABA and recognizes the long-term benefits of establishing and supporting American industries, these waivers should be just the start of a long-term phase-in strategy. The Association hopes that the Department will work with OMB and other Administration stakeholders to alleviate its concerns, including the lack of a mature manufacturing and sourcing marketplace and compliance structure for the reporting and regulatory requirements associated with BABA. 

Proceeding cautiously with adequate time to consider potential impacts and to gather additional information will result in a greater likelihood of reduced risks, like decreased housing supply, lower occupancy rates, and increased capital backlog. Therefore, allowing HAs and the Department to serve more families more effectively in the current environment of historically high inflation, supply chain disruptions, and the ongoing effects of the COVID-19 pandemic. 

A more detailed analysis of these waivers, including areas of concern to assist members in their comments to the Department, will be found in the next edition of the newsletter. Agencies are highly encouraged to submit comments to: www.regulations.gov. Please reach out to Crystal Wojciechowski at: cwojciechowski@phada.org with questions, comments, or assistance. For additional information on PHADA-specific BABA concerns, please view our full comments here.

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