Buy America Act Waivers: Grounds, Documentation, and Penalties

A Buy America Act waiver is a formal exception that lets you use foreign-made iron, steel, manufactured products, or construction materials on a federally funded project when domestic sourcing is unavailable, unreasonably expensive, or contrary to the public interest. To get one, you file a documented request through the federal agency funding your project, that agency forwards approved requests to the Made in America Office at OMB, and the proposed waiver goes out for a 15-day public comment period before it becomes final. Skip the process and use foreign materials anyway, and you’re exposed to contract termination, debarment, and treble damages under the False Claims Act.

First, Figure Out Which Law Applies to You

Two different federal statutes create domestic sourcing preferences, and they have separate waiver tracks. Using the wrong one is the fastest way to have a request bounced.

The Buy American Act, codified at 41 U.S.C. §§ 8301–8305, governs direct federal procurement: goods the government itself buys through the normal contracting process.¹ Waivers run through the Federal Acquisition Regulation, primarily FAR Part 25, and are handled by contracting officers with agency-level approval where needed.

The Build America, Buy America Act (BABA), enacted as part of the Infrastructure Investment and Jobs Act in November 2021, covers something different: federal financial assistance flowing to states, municipalities, or private entities for infrastructure work such as water systems, broadband, roads, and transit.² Under BABA, all iron, steel, manufactured products, and construction materials permanently incorporated into the project must be produced in the United States.³ BABA waivers route through the Made in America Office (MIAO) at OMB.

If you’re a grant recipient building infrastructure with federal money, you’re on the BABA track. If you’re selling directly to a federal agency, you’re on the Buy American Act track. The cost thresholds and review procedures below differ accordingly.

The Three Grounds for a Waiver

Both laws recognize the same three justifications, but the numbers behind them are not the same.

Public Interest

An agency head can waive domestic preference when applying it would conflict with a broader policy goal. Under BABA, this covers situations where strict domestic sourcing would undermine the purpose of the program — for instance, a critical public health project that cannot wait for a domestic supply chain to mature.³ Under the Buy American Act, it also picks up situations where the government has blanket agreements with foreign countries.⁴

Nonavailability

This is the ground most applicants use. It applies when the required goods simply are not produced domestically in sufficient quantity or satisfactory quality.⁴ Reviewers treat it as a last resort. You need documented market research showing you genuinely tried to find a domestic source and either couldn’t, or the domestic version couldn’t meet your technical specifications. Two calls and a shrug will not survive review.

Unreasonable Cost

Here the two laws part ways sharply. Under the Buy American Act, a domestic product is unreasonably expensive when it costs more than 20 percent above the foreign alternative for large businesses, or 30 percent above for small businesses.⁵ Under BABA, the standard is measured differently: domestic materials must increase the total cost of the overall project by more than 25 percent.³ Note that 25 percent runs against total project cost, not just the item’s cost, which is a higher bar than it looks.

When You May Not Need a Waiver at All

Before assembling a full application, check whether an existing exception already covers you.

De Minimis and Small Grants

Under BABA, a de minimis exception applies when the total value of non-compliant materials is no more than the lesser of $1,000,000 or 5 percent of total applicable project costs.⁶ A separate small-grant exception covers projects where total federal financial assistance is below $500,000. Two caveats: the de minimis cost waiver does not cover iron and steel on Federal Highway Administration projects, and neither exception covers products already subject to product-specific waivers.

General Applicability Waivers

Agencies have pre-approved broad waivers for certain product classes and recurring situations. If your circumstance falls within an existing general waiver, you document that fact and proceed without a separate application.⁷ Only when no general waiver covers you do you file a project-specific request.

Trade Agreements (Buy American Act Only)

For direct procurement above certain dollar thresholds, trade agreements with dozens of countries automatically override the Buy American Act for eligible products. For 2026, the WTO Government Procurement Agreement waives domestic preference on supply and service contracts at or above $174,000 and construction contracts at or above $6,683,000.⁸ The Korea FTA applies at $100,000 for supply and services. No individual waiver is needed. These overrides do not apply to BABA infrastructure projects.

What Counts as Domestic in 2026

You cannot know whether you need a waiver until you know whether your materials qualify as domestic. The test depends on the category.

For iron and steel, every manufacturing process — melting, refining, forming, rolling, coating — must happen in the United States.³ Downstream cutting, welding, or fabricating can happen anywhere, but the core steelmaking cannot be offshored. An imported slab finished in a U.S. mill is not domestic.

For manufactured products under BABA, final assembly must occur in the United States, and the cost of domestic components must exceed 55 percent of total component costs.⁹ The final assembly requirement took effect October 1, 2025; the 55 percent content requirement applies to federal-aid projects obligated on or after October 1, 2026. Under the Buy American Act, a higher content threshold applies: 65 percent for items delivered in calendar years 2024 through 2028, rising to 75 percent in 2029.¹⁰

For construction materials, BABA defines the category as items consisting primarily of non-ferrous metals, plastic and polymer-based products, glass, fiber optic cable, lumber, engineered wood, or drywall, with all manufacturing processes required to occur in the United States.¹¹ Cement, aggregates, and temporary materials not permanently incorporated into the project are excluded.

Documentation That Actually Survives Review

Waiver requests are decided on paper. Bare assertions that foreign sourcing would be cheaper or easier will not clear review.

The core package needs the exact project location, a detailed description of the items you cannot source domestically, and cost comparisons that include shipping and handling.¹² Each item must carry its NAICS code and Product Service Code so reviewers can independently check whether domestic capacity exists in that market segment.¹³

Market research is where most requests fail. Reviewers want to see communication logs, vendor responses (or documented non-responses), industry database searches, and a summary of what you found. If you contacted two suppliers and stopped, expect the file back with questions.

For BABA projects, manufacturers must supply a self-certification letter on company letterhead that identifies the project by name and location, verifies the specific products supplied, attests to BABA compliance for the relevant product category, and states the manufacturing location by city and state.¹⁴ Vague or generic certifications are a common cause of delay.

How the Application Moves Through the Government

For a BABA infrastructure waiver, the request goes first to the federal agency funding your project. The agency conducts its own review, including independent market research, and forwards approved requests to the Made in America Office at OMB.¹⁵ The agency cannot make an award until MIAO completes its review or waives the review requirement.

MIAO exists as a centralized check on consistency across agencies. Straightforward requests have historically been reviewed within 3 to 7 business days, with more complex or supply-chain-sensitive requests taking up to 15 business days.

Before the waiver becomes final, the agency must post the proposed waiver publicly, both on its own site and on MadeInAmerica.gov, with the justification and the specific products identified.¹⁶ The public comment period is 15 days for both general and project-specific waivers.¹⁷ Domestic manufacturers who see the posting can come forward and claim they can supply the material. If they can, the nonavailability argument collapses, and the agency can reject the waiver in whole or in part based on what emerges.¹⁸ The final decision is published, creating a permanent public record.

Buy American Act procurement waivers move differently. The contracting officer makes the determination under the applicable FAR exception and documents it in the contract file, with higher-level approval for larger or more sensitive determinations. Standard procurement waivers do not route to MIAO.

How Long a Waiver Lasts

Waivers are not permanent, and this is easy to overlook on multi-year projects. Agencies are directed to keep waivers time-limited, targeted, and conditional.⁷ A project-specific waiver typically lasts only for that project or award.

General applicability waivers have broader reach but face mandatory review. FEMA limits time-based waivers to one or two years and reviews all general applicability waivers within five years of issuance.¹⁹ Renewal triggers a fresh 30-day public comment period and Federal Register publication; FEMA estimates the full renewal cycle takes about 75 days. If domestic capacity has grown since the original waiver was issued, renewal is not automatic. Build re-application into your project schedule well before a current waiver expires.

What Happens If You Skip the Process

Using foreign materials without a valid waiver is not just a paperwork problem. Consequences run from lost payment to criminal exposure.

Contract Termination

The government can terminate a contract for default if a contractor fails to meet domestic sourcing requirements. The contracting officer typically issues a cure notice giving the contractor at least 10 days to fix the problem, followed by a show-cause notice.²⁰ If termination proceeds, the contractor loses payment for undelivered work, must repay advances or progress payments, and is liable for the excess cost the government incurs re-procuring from a compliant source.

Debarment and Suspension

Intentionally labeling a foreign product as Made in America is an independent ground for debarment — a ban from all federal contracting that can last years.²¹ The same applies to knowingly false certifications about domestic content. Suspension can be imposed faster, on the strength of suspicion supported by adequate evidence, while investigation proceeds.

False Claims Act Exposure

When a contractor knowingly submits false domestic-content certifications to obtain or keep a federal contract, the False Claims Act applies. Liability means treble damages plus per-claim penalties adjusted annually for inflation.²² Private citizens can bring these cases through qui tam lawsuits and collect a share of the recovery, so enforcement does not depend on the government noticing the violation first. A former employee or losing competitor with evidence of false certifications has a direct financial reason to report it.

1
Office of the Law Revision Counsel. 41 USC 8301 – Definitions
2
U.S. Department of Commerce. Build America Buy America
3
eCFR. 2 CFR Part 184 – Buy America Preferences for Infrastructure Projects
4
eCFR. 48 CFR 25.103 – Exceptions
5
Acquisition.GOV. FAR Part 25 – Foreign Acquisition – Section: 25.106 Determining Reasonableness of Cost
6
Federal Register. Waiver of Buy America Requirements for De Minimis Costs and Small Grants
7
Environmental Protection Agency. Understanding Build America, Buy America General Applicability Waivers
8
Federal Register. Federal Acquisition Regulation: Trade Agreements Thresholds
9
Federal Register. Buy America Requirements for Manufactured Products
10
eCFR. 48 CFR 25.101 – General
11
Environmental Protection Agency. Build America, Buy America Act Implementation Procedures for EPA OTAQ
12
Department of Energy. DOE Buy America Requirement Waiver Requests
13
U.S. Department of Education. Build America, Buy America Act Domestic Content Procurement Preference Requirements Agency Level Waivers and Grantee Waiver Request Procedures
14
U.S. Department of Agriculture. Build America, Buy America FAQs for Manufacturers
15
The White House. Guidance Memo Improving the Transparency of Made in America Waivers
16
Made in America. Buy America Waivers for Federal Financial Assistance
17
Environmental Protection Agency. Build America, Buy America Waivers Open for Public Comment
18
Department of Energy. Build America, Buy America
19
Federal Emergency Management Agency. Buy America Preference in FEMA Financial Assistance Programs for Infrastructure
20
Acquisition.GOV. FAR Subpart 49.4 – Termination for Default
21
Acquisition.GOV. FAR Subpart 9.4 – Debarment, Suspension, and Ineligibility
22
U.S. Department of Justice. The False Claims Act