OMB Publishes Final BABA Guidance

On August 14, the Office of Management and Budget (OMB) pre-published final guidance for the Build America, Buy America Act (BABA). Final guidance will be published to the Federal Register in a forthcoming publication. The OMB states that the Final Rule, entitled, “Guidance for Grants and Agreements,” supports the implementation of the BABA provisions of the Infrastructure Investment and Jobs Act, clarifies existing provisions related to domestic preferences, and provides further guidance on implementing the statutory requirements.

The pre-published Final Rule can be found here. The Final Rule (1) adds a new 2 CFR Part 184 and (2) revises 2 CFR Part 200.322.

1. The new 2 CFR Part 2 includes:
   1. guidance to Federal agencies about how to apply the domestic content procurement preference,
   2. definitions for key terms of BABA,
   3. guidance for determining the cost of components of manufactured goods, and
   4. guidance on proposing and issuing Buy America waivers.
2. The revised 2 CFR Part 200.322 specifies that Federal agencies providing Federal financial assistance for infrastructure projects must implement the required Buy America preferences as of the effective date of the Final Rule (to be determined following official publication).

The OMB notes that, 2 CFR Part 184 is not intended as comprehensive guidance on all topics related to the implementation of BABA. Rather, it is intended to be high-level coordinating guidance for Federal agencies to use in their own direct implementation of BABA. It is unclear if or when the Department of Housing and Urban Development (HUD) will issue its own guidance in the context of directly implementing BABA within Federal financial assistance programs, like public housing. 

Of note, the OMB does address commenters’ statements that affordable housing should not be covered by BABA, and that there should be broad exemption for Federal financial assistance utilized to construct or rehabilitate single-family and multifamily residential housing projects. The OMB states that Federal agencies should consider whether the project will serve a public function, and if so, it would constitute as an infrastructure project subject to BABA requirements. Though, the Final Rule states that Federal agencies will have more specific information on how BABA applies to their specific programs. 

PHADA will request additional information and updates on this from the Department and will provide a further analysis of the OMB’s Final Rule in the next edition of the newsletter.