M-24-02 Gives Agencies a Clearer Path To Implementing Buy America Preference
Keep your eyes open for more guidance to come out from federal agencies on the application the Buy America preference identifying which grant programs would be included as covered infrastructure programs.
Under the Build America, Buy America (BABA) Act (Pub. L. 117-58), federal agencies should ensure that none of the funds made available for a federal financial assistance program for infrastructure are obligated for a project unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the U.S. The Office of Management and Budget (OMB) codified this within its guidance at 2 C.F.R. Part 184, which became effective on Oct. 23.
To assist federal agencies with implementing the Buy America preference under 2 C.F.R. Part 184, as well as to better understand when to apply previous guidance to agencies under OMB Memorandum M-22-11, OMB recently issued Memorandum M-24-02. This new guidance also provides information on the process for applying for waivers from the Buy America preference. Appendices included in the guidance offer an example of an award term that agencies can include to meet the Buy America requirements, along with details for agencies on how to apply M-22-11 to projects still subject to this guidance.
The guidance adds information not included in Part 184, going into further detail as to what is included under the requirements. For example, it states that the Buy America preference only applies to articles, materials and supplies that are consumed in, incorporated into, or affixed to an infrastructure project. As such, it does not apply to tools, equipment and supplies, such as temporary scaffolding brought to the construction site and removed at or before the completion of the infrastructure project. Nor does a Buy America preference apply to equipment and furnishings, such as movable chairs, desks, and portable computer equipment, that are used at or within the finished infrastructure project, but are not an integral part of the structure or permanently affixed to the infrastructure project.
It also emphasizes that the Buy America preference applies to an entire infrastructure project, even if it is funded by both federal and nonfederal funds under one or more awards. In other words, if an infrastructure project receives a federal award, the Buy America preference applies to both the federal funds and nonfederal funds used for the infrastructure project. Lastly, M-24-02 provides extensive details on Buy America waivers, including the waiver principles and criteria, nonavailability waivers, unreasonable costs waivers, public interest waivers and general applicability waivers.
Some agencies have already issued guidance to their recipients on which of their financial assistance programs are subject to the Buy America preference. For example, Thompson Grants recently published an article on guidance from the Department of Housing and Urban Development’s Office of Community Planning and Development that cited the guidance in M-24-02 to address programs applicable to Part 184 (and the previous M-22-11) and which waivers apply. Other agencies may likely issue similar guidance to update their recipients on applicable programs. If none such agency guidance has been provided and you still have question that cannot be answered via M-24-02, contact your program manager to determine whether your program must follow these provisions.
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