On January 1, HUD published PIH Notice 2024-01, Implementation Guidance for the Public Housing Program on Build America, Buy America (BABA) 2024. While BABA is currently limited to the purchase of iron or steel in some HUD grant programs, like CDBG and Choice Neighborhoods implementation, its application will expand more broadly for housing authorities (HAs), becoming effective as early as February 22, 2024, for some agencies, and August 23, 2024, for most.
The notice details a variety of important topics, including:
- Implementation of BABA with ongoing projects.
- Determining the scope of an infrastructure project to determine whether existing public interest waivers apply.
- Documentation of Compliance with the Buy American Preference (BAP).
- Procurement strategies in compliance with BABA.
- Minimum due diligence search requirements.
- Safe harbor procurement strategies.
PHADA will provide a deeper analysis on HUD’s guidance, but a few key points for HAs are detailed below:
Applicability of BABA
- BABA does NOT apply for projects exclusively utilizing funds obligated by HUD prior to November 14, 2022.
- Any Federal Financial Assistance (FFA) that HUD obligates after the implementation point dates described in the table below, as determined by HUD’s Phased Implementation Waiver, WILL be subject to BABA.
Documentation of Compliance
- Agencies are authorized to follow different approaches calibrated to the level of complexity of the Infrastructure Projects they are implementing when documenting compliance with BABA.
- HAs must maintain compliance records in such a way as to cover all product purchases related to projects until 3 years after completion.
- Agencies can provide adequate confirmation that a product was purchased in compliance with the BAP through, certificates from the manufacturer or reseller, labels indicating made in the United States, or product specification that provide sufficient detail to conclude that the product complies with BABA (see the notice for specific details).
- The Department expects product purchasers to use standard methods to seek BABA compliant products, and further searching is required prior to seeking a waiver if standard methods are unsuccessful, as detailed in the notice.
Implementation Waivers
- HUD may grant additional waivers of the BAP to avoid unnecessary disruption of HUD’s programs in the future and will publish any future waivers by notice.
- Grantees seeking a waiver will be required to document compliance with the minimum search requirements detailed in the notice.
- HAs should utilize the available waivers when necessary. A complete list of available BAP waivers, and how agencies may request additional waivers, are published here.
PHADA is appreciative of the Department for providing more specific information related to how agencies can comply with BABA. The Department has carefully considered many of the Association’s primary implementation concerns as detailed in a letter sent to HUD on October 6, 2023.
While HUD’s guidance is helpful, a great deal of uncertainty remains. For example, HUD recommends on multiple occasions in the notice that grantees/funding recipients send inquiries to the Department if they are considering taking action on an Infrastructure Project that might impact the applicability of BABA describing the situation so that HUD can provide specific advice about how to proceed. This underscores the complexity of BABA requirements and how compliance will be applied project by project. PHADA is concerned that this will create confusion and unnecessary delays on the ground for agencies.
Additionally, while some definitions have been clarified in HUD’s guidance, others have been created that could cause confusion for agencies. For example, who at HUD defines “…different approaches calibrated to the level of complexity of the Infrastructure Projects they are implementing…” when documenting whether an agency is in compliance with BABA requirements. Lastly, while the Association applauds HUD’s intent to incorporate safe harbor procurement strategies, PHADA is concerned that these strategies may reduce competitive contractor solicitations and increase the cost of infrastructure projects.
PHADA will provide a deeper analysis of the guidance, after further discussions with the Department and our members at the Commissioners’ Conference in San Diego, in the next edition of this newsletter. For questions, please contact Crystal Wojciechowski at: cwojciehowski@phada.org. The Department states that it will provide additional materials and training in the coming weeks, and is accepting comments on the notice, or other aspects of BABA implementation at: BuildAmericaBuyAmerica@hud.gov.