BABA Compliance
BABA applies to HUD’s recipients of “Federal Financial Assistance” (FFA), meaning grants, cooperative agreements, direct assistance, loan guarantees, and other financial assistance, which were obligated by HUD after the relevant implementation date for BABA. BABA requires that all iron, steel, manufactured products, and construction materials used in an “infrastructure project” with any FFA must be produced in the United States, unless the awarding Federal Agency has issued an applicable waiver.
Does BABA apply to me?
HUD’s Phased Implementation Schedule
While BABA became effective on May 14, 2022, HUD has published a series of waivers to allow for a phasing-in of the BAP with respect to HUD’s FFA programs. Specifically, HUD has waived application of the BAP until the below effective dates depending on the program and the product listed in HUD’s Phased Implementation Waiver. Please refer to HUD’s Phased Implementation Schedule below.
Resources to find BABA compliant vendors is different.
January 18, 2025 Memorandum Notes
Helpful Definitions
5. Construction Materials is defined in 2 CFR § 184.3 and means articles, materials, or supplies that consist of only one of the items listed in paragraph (1) of this definition, except as provided in paragraph (2) of this definition. To the extent one of the items listed in paragraph (1) contains as inputs other items listed in paragraph (1), it is nonetheless a construction material. (1) The listed items are:
i. Non-ferrous metals;
ii. Plastic and polymer-based products (including polyvinylchloride, composite building materials, and polymers used in fiber optic cables);
iii. Glass (including optic glass);
iv. Fiber optic cable (including drop cable);
v. Optical fiber;
vi. Lumber;
vii. Engineered wood, and
viii. Drywall.
12. Iron and Steel Products The term “iron and steel products” is defined in 2 CFR 184.3 and means articles, materials, or supplies that consists wholly or predominantly of iron or steel, or a combination of both.
14. Made in America Office. The term “Made in America Office” or “MIAO” means the office at the Office of Management and Budget, established by section 70923 of BABA, that is charged with implementing the BAP and establishing the procedures to review waiver requests.
18. Not Listed Construction Materials The term “not listed construction materials” refers to the category of construction materials that are subject to the BAP, but not included in HUD’s specifically listed construction materials, as defined in the Phased Implementation Waiver. This includes:
i. plastic and polymer-based products other than composite building materials or plastic and polymer-based pipe or tube;
ii. glass (including optic glass); and
iii. drywall.
22. Produced in the United States is defined in 2 CFR 184.3 and means:
i. In the case of iron or steel products, all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.
ii. In the case of manufactured products:
1. The product was manufactured in the United States; and
2. The cost of components of the manufactured product that are mined, produced, or manufactured in the United States is greater than 55 percent of the total cost of all components of the manufactured product, unless another standard that meets or exceeds this standard has been established under applicable law or regulation for determining the minimum amount of domestic content of the manufactured product. See 2 CFR 184.2(a). The costs of components of a manufactured product are determined according to 2 CFR 184.5. iii. In the case of construction materials, all manufacturing processes for the construction material occurred in the United States. See 2 CFR 184.6 for more information on the meaning of “all manufacturing processes” for specific construction materials.
23. Section 70917(c) Materials. The term “section 70917(c) materials” is defined in 2 CFR 184.3 and means:
cement and cementitious materials;
aggregates such as stone, sand, or gravel,
or aggregate binding agents or additives.
The Federal Register Notice implementing new BABA regulations at 2 CFR 184 (88 FR 57787) clarifies that all categorizations of Covered Materials should be made based on the status of the material when it arrives at the work site. Section 70917(c) materials that are used at the work site, such as wet concrete or hot asphalt, are not subject to the BAP. However, Section 70917(c) materials may be components of manufactured products if, for example, they are used to produce precast concrete products before being transported to the work site.
24. Specifically listed construction materials. The term “specifically listed construction materials” for HUD programs includes:
a. non-ferrous metals;
b. lumber;
c. composite building materials;
and d. plastic and polymer-based pipe and tube.
III. Applicability of the BAP to CPD Programs and Projects. The BAP applies to the purchase of iron, steel, manufactured products, and construction materials for Covered CPD Programs when funds are used for the construction, alteration, maintenance, or repair of public infrastructure, as defined by BABA. This list of Covered CPD Programs is subject to change if there are any changes to the eligible uses of funds or the establishment of new programs that fund public infrastructure projects and are covered by BABA. Covered CPD Programs currently include: · Community Development Block Grant Formula Programs (CDBG) · Section 108 Loan Guarantee · HOME Investment Partnerships Program (HOME) · Housing Trust Fund (HTF) · Recovery Housing Program (RHP) · Emergency Solutions Grants (ESG) · Continuum of Care (CoC) · Housing Opportunities for Persons With AIDS (HOPWA) · · Self-Help Homeownership Opportunity Program (SHOP) · Special NOFA for unsheltered and rural homeless · Veterans Housing Rehabilitation and Modification Program (VHRMP) · Community Project Funding (CPF)/Economic Development Initiatives (EDI) · Section 4 Capacity Building · Rural Capacity Building · Pathways to Removing Obstacles to Housing (PRO Housing) · Preservation and Reinvestment Initiative for Community Enhancement (PRICE) · Continuum of Care Builds Notice of Funding Opportunity (CoCBuilds NOFO)
IV. CPD Programs and Funding Not Covered by the BAP The BAP does not apply to Federal funds for “pre and post disaster or emergency response.” The following list of CPD funds are administered for disaster or emergency-related purposes and therefore the BAP does not apply to them. · Community Development Block Grant – Disaster Recovery Funds (CDBG-DR) · Community Development Block Grant – Mitigation (CDBG-MIT) · Community Development Block Grant – National Disaster Resilience Competition (CDBGNDR) · Community Development Block Grant CARES Act (CDBG-CV) · HOME Investment Partnerships American Rescue Plan Program (HOME-ARP) · Housing Opportunities for Persons With AIDS CARES Act (HOPWA-CV) · Emergency Solutions Grants CARES Act (ESG-CV) · Rapid Unsheltered Survivor Housing (RUSH)
Waivers
Public Interest Waiver for Exigent (pressing/demanding) circumstances. In effect 11/23/22 + 5 years 11/23/27 unless announced by HUD via Notice.
III. Waiver Authority Under section 70914(b), HUD has authority to waive the application of a domestic content procurement preference when (1) application of the preference would be contrary to the public interest, (2) the materials and products subject to the preference are not produced in the United States at a sufficient and reasonably available quantity or satisfactory quality, or (3) inclusion of domestically produced materials and products would increase the cost of the overall project by more than 25 percent. Section 70914(c) provides that a waiver under 70914(b) must be published by the agency with a detailed written explanation for the proposed determination and provide a public comment period of not less than 15 days.
Section X. Required Documentation. If the project is subject to the BAP requirements, the following are examples of information and documentation that the grantee may retain to demonstrate compliance. This is not an exhaustive or mandatory list and simply provides examples of documentation that can be maintained to support the conditions outlined above.
A. Project budget specifying the total project cost and the cost of Covered Materials.
B. Procurement list(s) of Covered Materials purchased for the public infrastructure project, either by the grantee, subrecipient, or contractor. This list(s) should reflect, for example: a. Type of covered material, (iron, steel, manufactured product, or construction material); b. Product or Material; c. FFA Source(s); d. FFA Obligation Date(s); e. Costs per unit; f. Total cost of product purchase or contract; g. Manufacturer or Vendor; h. Actual purchaser (grantee, sub-recipient, contractor); i. Special Quality Standards, if applicable; and j. U.S. Made verification, if available (Made in the USA label, product specifications, vendor or contractor certification, etc.).
C. Documentation supporting the Covered Materials incorporated into the public infrastructure were made in the United States, for example: a. A copy of the label indicating the product was made in the United States; b. A copy of the product description or technical specifications that provides sufficient detail to conclude that the Covered Materials comply with BABA; c. A certificate or other documentation from the manufacturer demonstrating that the Covered Materials comply with BABA; d. A signed certification from the contractor of a project certifying compliance with BABA. (See Appendix 3 for an example.); e. A signed certification from the manufacturer of the Covered Materials certifying compliance with BABA.
X. Documentation. Good Faith Efforts for Sourcing Include:
Results of market research and product sourcing to include, for example, the following:
a. Results of a supplier scouting search conducted by NIST MEP or another supplier scouting service;
b. Copies of web searches used (e.g., PDF/JPEG copies of web pages showing search terms and results including sources considered, eliminated, and chosen for further research);
c. Copies of email, fax, or mail correspondence with Covered Materials manufacturers or suppliers; and . Records of phone communications with Covered Materials manufacturers or suppliers, including: i. Dates and times of phone calls, ii. Phone numbers used, iii. Whether the phone communication was successful in making it possible to reach a staff person manufacturer or supplier able to respond to questions about BABA compliance, or whether the attempt at communication was 14 unsuccessful (e.g., left a message, phone line was busy, or phone line was disconnected), iv. If the phone communication resulted in reaching someone, the name of the person contacted, v. Notes describing the substance of the conversation (e.g., manufactured product is assembled in U.S., but the manufacturer is uncertain whether 55% of the value of the materials/components are sourced in the United States).