Making BABA Work for American Manufacturers
The Build America, Buy America Act (BABA) was signed into law by President Biden as part of the Bipartisan Infrastructure Law (BIL)—also known as the Infrastructure Investment and Jobs Act of 2021. BABA strengthens and expands “Buy America” requirements for federally financed infrastructure projects. Specifically, it requires that the iron, steel, construction materials, and manufactured products used in all federally assisted infrastructure projects be produced in the United States.
The idea behind BABA is simple: when taxpayer money is used to build infrastructure, the constituent products and materials should be made in the United States. The law will help strengthen U.S. businesses and their domestic supply chains and create opportunities for America’s workers to thrive. It will prevent inadvertently using tax dollars to support environmental, labor, and human rights violations that are unfortunately present in some foreign supply chains. It will ensure workers and manufacturers in the U.S. get the first shot at taxpayer funded contracts for federally financed projects. It will also help strengthen domestic supply chains and ensure economic resilience in the face of international supply constraints that are becoming increasingly common.
BABA doesn’t just support the existing manufacturing base and workforce—it provides a powerful market signal to expand it. The certainty of ongoing infrastructure investments being subject to BABA means that manufacturers have a clearer understanding of the long-term demand for the products they produce, and a powerful incentive to expand their U.S. production. In cases where important infrastructure components are not currently manufactured domestically, the law allows commonsense waivers of the requirement. In limited cases, waivers of general applicability—such as those applied to a specific product—is appropriate so long as they are targeted, time-limited, and transparent. Far from circumventing the intent of BABA, narrowly applied and transparent waivers afford meaningful market insights. They can indicate the potential scope of demand for specific products and the absence—at present—of domestic manufacturers producing them. If implemented correctly, Buy America waivers are the mechanism to alert manufacturers to a major market opportunity if they can make a product domestically to fill the gap, while allowing projects to move forward in the meantime.
Congress has recently directed hundreds of billions of dollars in clean energy and other decarbonization infrastructure through the BIL and Inflation Reduction Act. BABA’s application to these investments supports manufacturing communities and workers, and in turn, will create a durable constituency of support from these communities and workers to ensure investments in clean infrastructure continue.
For America’s workers, strong Buy America policies are essential to making the transition away from fossil fuels to cleaner, renewable energy sources. Absent these requirements, our nation risks creating new dependencies on foreign sources for these critical sectors.
For American manufacturers, the passage of BABA means that billions of dollars are ready to be spent on the products you produce in the United States. This set of BABA questions and answers from the BlueGreen Alliance (BGA) is designed to guide you through the law, help you certify your products, and take advantage of this new opportunity.