Buy America Requirements, Waivers, and Exceptions

Buy America requirements say that every piece of iron, steel, manufactured product, and construction material used on a federally funded infrastructure project has to be produced in the United States, and the rule applies to the whole project rather than just the federally paid portion.¹ The framework is the Build America, Buy America Act (BABAA), enacted as part of the Infrastructure Investment and Jobs Act in 2021, and it reaches nearly every category of public infrastructure the federal government helps fund.²

What Projects Buy America Covers

BABAA attaches to federal financial assistance — grants, loans, and other non-procurement awards — for infrastructure. Covered categories include roads, bridges, public transit, water and wastewater systems, broadband, airports, electrical transmission, ports, and buildings, among others.²

Two features of the scope deserve attention up front. First, the statute says none of the funds made available for a covered program may be obligated for a project unless all iron, steel, manufactured products, and construction materials used in that project are produced in the United States.¹ The word “all” is doing heavy lifting. Second, the requirement covers everything used on the project, not only the materials paid for with federal dollars. A single non-compliant material in an otherwise conforming project puts the whole award at risk.

What “Produced in the United States” Means

BABAA defines domestic production differently for each material category, and the standard you have to hit depends on which bucket your product falls into.

Iron and Steel

Every manufacturing process, from the initial melting stage through the application of coatings, must occur in the United States. Reheating imported billets or ingots does not qualify. A minor components allowance lets up to 5% of the total material cost consist of non-domestic miscellaneous iron or steel components.²

Manufactured Products

The product must be manufactured in the United States, and more than 55% of the cost of its components must be domestically mined, produced, or manufactured. This 55% component cost threshold took full effect for projects obligated on or after October 1, 2026.³

Construction Materials

All manufacturing processes for the construction material must occur in the United States.¹ The category sits between iron and steel (every step domestic, no component test) and manufactured products (final assembly plus a component percentage), and knowing which bucket a given input falls into is often the first compliance question on a project.

The Three Waivers

BABAA provides three grounds on which a federal agency can waive the domestic preference for a project or a class of materials.

Public interest waiver, granted when applying the domestic preference would be inconsistent with the public interest.
Non-availability waiver, granted when the required iron, steel, manufactured products, or construction materials are not produced domestically in sufficient quantities or of satisfactory quality.
Unreasonable cost waiver, granted when using domestically produced materials would increase the overall project cost by more than 25%.⁴

A waiver is issued by the agency administering the funding, not by the grant recipient or contractor. If you cannot source a material domestically, your path is to work with the funding agency to seek one of these three waivers.

How the Waiver Process Runs

Getting a BABAA waiver is not quick. Requests move through the Office of Management and Budget’s Made in America Office (MIAO), and the sequence involves public notice, comment, and documentation.

Before an agency sends a waiver request to MIAO, it must publish the proposed waiver with a detailed written explanation and allow a public comment period. For project-specific waivers based on public interest, non-availability, or unreasonable cost, the minimum comment period is 15 days. General applicability waivers, which cover an entire category of materials across multiple projects, require at least 30 days and must be published in the Federal Register.⁵

After comments close, the agency forwards the proposed waiver to MIAO, which evaluates whether it is consistent with applicable law and policy and notifies the agency of its determination. The request itself has to include substantial documentation: the type of waiver sought, the project description and location, a list of each material proposed for exception with its cost and country of origin, and a certification that the applicant made a good-faith effort to find domestic products, supported by evidence such as terms in requests for proposals and communications with contractors.⁵

The practical implication: if you know at the design stage that a required component has no domestic source, start the waiver conversation with the funding agency then, not once construction is underway.

What Non-Compliance Costs

For a grant recipient, non-compliance with BABAA can result in the federal agency withholding or clawing back the grant funds. Because the requirement attaches to the entire project, one non-compliant material can jeopardize funding for the whole award, not just the cost of that item.

Buy America Is Not the Buy American Act

Contractors and grant recipients often mix up two separate regimes. Buy America (BABAA) governs materials in federally assisted infrastructure projects. The Buy American Act, codified at 41 U.S.C. Chapter 83, governs what federal agencies buy for their own use, and it operates through a price penalty on foreign offers rather than a flat requirement that everything be domestic.⁶

The distinctions that matter most for planning:

Trigger. The Buy American Act applies when the federal government purchases supplies or construction materials for its own use. Buy America applies when federal money passes to a state, locality, utility, or other recipient to build infrastructure.
Foreign products. Under the Buy American Act, a foreign product can still win the contract if it beats a domestic offer after a price evaluation penalty is applied. Under BABAA, all covered materials must be domestic unless a waiver is granted.
Component thresholds for manufactured products. The Buy American Act requires 65% domestic components by cost through 2028, rising to 75% in 2029. BABAA requires more than 55% domestic components by cost for manufactured products on projects obligated on or after October 1, 2026.⁷³
Trade agreements. The Trade Agreements Act can override the Buy American Act for contracts above certain dollar thresholds, giving products from designated countries equal footing. BABAA has no equivalent trade agreement carve-out.
Unreasonable cost. The Buy American Act uses a 20% price factor for construction materials; BABAA’s unreasonable cost waiver requires that domestic sourcing raise overall project cost by more than 25%.⁴

If your project is a federal grant-funded bridge, water plant, transit line, or broadband build, assume every material has to be domestic under BABAA, identify anything you cannot source in the United States as early as possible, and work with the funding agency on a waiver rather than assuming a Buy American Act exception or trade agreement will cover you. Those tools belong to a different statute.

1
eCFR. 2 CFR Part 184 Buy America Preferences for Infrastructure Projects
2
US EPA. Build America, Buy America (BABA) Overview
3
Federal Register. Buy America Requirements for Manufactured Products
4
US EPA. Understanding BABA Applicability Waivers
5
U.S. Department of Labor. Made in America Buy America Waivers for Federal Financial Assistance Awards
6
Office of the Law Revision Counsel. 41 USC 8302 American Materials Required for Public Use
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Acquisition.GOV. Subpart 25.1 Buy American-Supplies