Sneak Preview: BABA Guidance, Davis-Bacon Update Now Effective
(The following was excerpted from a recent Thompson Grants Compliance Expert article.) Recipients of federal financial assistance should be aware that the Office of Management and Budget’s (OMB) Build America, Buy America (BABA) final guidance, as well as the Department of Labor’s amended Davis-Bacon Act regulations, both became effective Oct. 23, necessitating that they update internal policies and procedures to comply with these amended provisions for federal awards received after that date. The two updates were issued as final guidance/regulations in August.
The BABA guidance establishes a new Part 184 under Title 2 of the Code of Federal Regulations, as well as a related provision within the uniform guidance (2 C.F.R. Part 200) at §200.322(c) (see “OMB Issues Final Guidance on Buy America Preference,” October 2023).
The Infrastructure Improvement and Jobs Act (IIJA) (Pub. L. 117-58) included Build America, Buy America Act provisions at §§70901-70952 designed to strengthen the Made in America laws. It required that no later than May 14, 2022, covered federal agencies must ensure that “none of the funds made available for a federal financial assistance program for infrastructure may be obligated for a project unless the iron, steel, manufactured products and construction materials used in the project are produced in the U.S.” The act affirms, consistent with Executive Order (EO) 14005, Ensuring the Future Is Made in All of America by All of America’s Workers, the Biden administration’s priority to use the terms and conditions of federal financial assistance awards to maximize the use of U.S. goods, products and materials.
In April 2022, OMB issued initial, nonbinding implementation guidance — OMB Memorandum M-22-11 — for federal agencies on how to apply the BABA preference in grants and cooperative agreements for infrastructure (see “Guidance Details New Build/Buy America Preference,” June 2022). In February, OMB issued proposed guidance to support implementation of the BABA provisions that, once finalized, would codify this guidance in federal regulations at 2 C.F.R. Part 184. OMB then finalized the BABA domestic preference guidance on Aug. 23, making it applicable to all federal financial assistance — as defined in the uniform guidance (§200.1) — whether or not the source of the funds is the IIJA, and regardless as to when the funds are appropriated or otherwise made available and used, for an infrastructure project.
While the new Part 184 guidance will apply to federal awards obligated after Oct. 23, awards obligated on or after May 14, 2022, and before Oct. 23 will continue to be subject to OMB Memorandum M-22-11. Federal agencies, in directly implementing BABA, may issue further guidance and provide information to their recipients and other stakeholders on their own financial assistance programs for infrastructure. OMB has stated that it may issue additional guidance later as it receives feedback on this guidance from federal agencies, award recipients, contractors, manufacturers, labor organizations, suppliers, industry associations and others.
(The full version of this story has now been made available to all for a limited time here.)
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