Kelli Peyton

By requiring the use of domestically produced iron, steel, manufactured products, and construction materials, BABA ensures federal investments directly support U.S. industries and workers.

Introduction

The Build America, Buy America Act (BABA) is transforming how federally-funded infrastructure projects are planned and executed across the United States. By requiring the use of domestically produced iron, steel, manufactured products, and construction materials, BABA ensures federal investments directly support U.S. industries and workers.

However, these requirements add new layers of complexity to project planning, procurement, and budgeting. For many organizations, the challenge lies in balancing compliance with cost efficiency and schedule integrity. The good news: With strategic planning, proactive coordination, and informed partnerships, BABA compliance can shift from being a burden to becoming a source of operational strength and competitive advantage.

Plan for Compliance Costs Early

BABA compliance affects nearly every aspect of a project budget. The cost of domestically sourced materials can fluctuate with market conditions, and limited supplier pools may drive price premiums.

The best approach is to plan for these premiums early—ideally during early design and budgeting. Building a “compliance contingency” into your cost model helps buffer against domestic sourcing markups or unforeseen delays in material availability.

For example, a project that relies on imported HVAC systems or electrical components may need to identify equivalent U.S.-made alternatives or prepare for longer lead times. Conducting early supplier verification ensures your budget reflects realistic procurement options before committing to contracts.

Pro tip: Work with estimating teams familiar with BABA pricing trends. They can benchmark costs based on current market data and identify where domestic substitution may be most cost-effective.

The best approach is to plan for these premiums early — ideally during early design and budgeting.

Understand the Waiver Process

When compliant materials are unavailable, federal agencies may grant waivers—but the process is demanding.

A successful waiver application requires:
– Thorough market research showing domestic alternatives were explored.
– Clear justification that using imported materials won’t undermine project goals.
– Submission to a public comment period, which can add weeks to approval timelines.

Implementation of BABA varies across Federal agencies. Compliance requirements for one agency may not be the same for another. This makes an experienced partner invaluable. With the assistance of a  seasoned general contractor, a compliance consultant can help compile evidence, communicate with the funding recipient, and keep the process moving smoothly.

Example: A multi-family housing project seeking a waiver for electrical distribution equipment will need to demonstrate adequate due diligence efforts to acquire domestically-sourced products that meet Buy America Preference requirements. Additionally, the project team will need to present statements about the project budget, schedule, potential impacts, and technical requirements that substantiate the need for a waiver.

Navigate Shifting Guidance

BABA regulations are still evolving, and guidance can shift as agencies refine their interpretations. The presentation of that guidance varies by agency. These factors make it challenging for developers and contractors to access key compliance information.

To stay aligned:
– Track updates from the Office of Management and Budget (OMB) and the federal funding agency.
– Engage advisors who specialize in federal compliance and monitor ongoing rulemaking.
– Document all internal interpretations and decisions, so your project maintains a clear record if regulations shift midstream.

Organizations that invest in continuous learning and strong documentation are best positioned to adapt to these evolving standards and avoid costly compliance missteps.

Anticipate Federal Dynamics

Federal dollars often come with additional scrutiny. Understanding how agencies define key terms—like “manufactured product” or “construction material”—can help teams prevent compliance violations before they occur.

Federal agencies such as HUD, EPA, and DOT frequently issue clarifying memos and case examples to guide implementers. Incorporating this knowledge into internal checklists or project kickoff meetings ensures all stakeholders—from design to procurement—are on the same page.

Being proactive about these dynamics builds trust with funding agencies and reduces the risk of project delays or rejected reimbursements.

Engage Early and Forecast Impacts

Effective BABA compliance starts long before construction begins. Teams should engage in early coordination sessions to identify which project elements fall under BABA scope and how they affect procurement schedules and cash flow.

Consider implementing:
– A BABA compliance matrix to track materials, suppliers, and documentation requirements.
– Regular supplier check-ins to confirm domestic certification and manufacturing origin.
– Scenario-based forecasting, adjusting schedules and budgets based on potential waiver outcomes.

Proactive communication among owners, contractors, and suppliers helps prevent last-minute surprises and positions the project for smoother reviews during audits or funding draws.

Example: A city housing project that reviewed all material origins before bid day was able to identify domestic substitutes for window systems—saving both time and  budget surprises. The same project is also challenged to source plumbing pumps that meet the Buy America Preference. By conducting early forecasting of potential BABA impacts, the project team can decide whether to pursue a waiver versus using available the project de minimis allowance.

Proactive communication helps prevent last-minute surprises and positions the project for smoother reviews.

Conclusion

By planning early, documenting thoroughly, and engaging experienced partners, organizations can  smooth the use of Federal funding and compliance with the Build America, Buy America Act. As BABA guidance continues to evolve, the most successful teams will be those that anticipate change, collaborate across disciplines, and embed compliance into every phase of their project delivery.

Key Takeaways:

  • Budget & forecast early: Include domestic sourcing premiums in your initial financial model.

  • Know the process: Waivers are possible but require strong research and documentation.

  • Stay informed: BABA guidance continues to evolve. Assign someone to track updates.

  • Engage partners: Experienced contractors and compliance advisors can help streamline reviews.

  • Document everything: Keep clear records for audits and public transparency.

  • Think proactively: Use compliance as a planning tool.

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