HUD is requesting public input on the implementation of the Build America, Buy America Act (“BABA”) as it applies to HUD’s Federal Financial Assistance. The Build America, Buy America Act (“BABA”) was enacted in November, 2021 as part of the larger Infrastructure Investment and Jobs Act.

The Act establishes a domestic content procurement preference (Buy American Preference or BAP) for Federal infrastructure programs, including HUD housing. Under the requirement, HUD must ensure that none of the funds made available by the Department through a Federal financial assistance program that provides funding for infrastructure projects (construction, repair, and maintenance) may be obligated unless it has taken steps to ensure that all of the iron, steel, manufactured products, and construction materials used in a project are produced in the United States.

Currently, HUD programs are operating under a temporary waiver from the new BAP requirement. The waiver is set to expire on November 15, 2022, and all infrastructure funds awarded after that date will be subject to the new requirement, pending any further general or specific waivers from HUD.

Request for Stakeholder Input

Because the Buy America Preference, or BAP, for construction materials is new to HUD’s programs and Federal Financial Assistance, HUD is seeking input on existing mechanisms for demonstrating compliance with the Act’s domestic content procurement preference, potential costs of compliance for recipients and contractors, and the potential impact on projects funded by HUD Federal Financial Assistance.

In a recent listening session with HUD, LeadingAge expressed concerns about the potential negative impacts of the new BAP on next round Section 202 Capital Advance projects, on COVID-19 Supplemental Payment capital projects, and the impacts on CDBG and HOME projects. Many Section 202 current round awardees are struggling with construction cost increases and supply chain disruptions without extra material sourcing requirements in place.

Comments are due to HUD by July 1, 2022. LeadingAge is working with members to compile feedback for the agency. Any questions or comments on HUD’s Request for Information below can be sent to Juliana (jbilowich@leadingage.org).

Specifically, HUD is seeking comment on the following questions:

• 1. What HUD Federal Financial Assistance is used to fund infrastructure as defined under the Build America, Buy America Act? Specifically, HUD is seeking input from recipients on what forms of HUD’s Federal Financial Assistance are used to fund infrastructure projects in those programs identified in HUD’s report to Congress and OMB on January 19, 2022 (87 FR 2894) or in any other program through which HUD’s Federal Financial Assistance may be used to fund infrastructure projects.
• 2. How can HUD document what projects serve a “public function,” thus qualifying as infrastructure under OMB’s guidance and falling within the scope of the Act? When determining if a program has infrastructure expenditures, OMB guidance indicates that Federal agencies should interpret the term “infrastructure” broadly and consider the definition provided as illustrative and not exhaustive. Agencies are advised to consider whether the project will serve a public function, including whether the project is publicly owned and operated, privately operated on behalf of the public, or is a place of public accommodation, as opposed to a project that is privately owned and not open to the public. Projects with the former qualities have greater indicia of infrastructure, while projects with the latter quality have fewer. How should HUD consider infrastructure projects more broadly? How can HUD determine if the ultimate recipient of the funding is a covered non-Federal entity?
• 3. Are the entities utilizing Federal Financial Assistance to fund infrastructure doing so independently or in partnership with other entities? If used in partnership with other entities, how often are these private entities or other individuals that would not be covered by the definition of non-federal entities under 2 CFR 200.1?
• 4. What activities are undertaken by recipients of HUD Federal Financial Assistance that fall within the Act’s BAP? To the extent that these infrastructure projects are disaster-related, can the projects be clearly defined as undertaken in response to either (1) non-imminent future emergency or disaster mitigation/preparedness or (2) disaster or emergency response/imminent threats? How often would projects be designed to address both long term and imminent threats? How often would projects be designed to address current recovery needs along with future long term mitigation needs? What portions of infrastructure projects involve the use of iron, steel, manufactured products, or construction materials? How do recipients currently differentiate between infrastructure spending and non-infrastructure spending, such as administrative costs? What types of mitigation activities are conducted utilizing HUD Federal Financial Assistance that are not related to an imminent threat of a future emergency or disaster? How, if at all, will activities be limited such as funding fewer projects?
• 5. How do recipients currently determine sourcing for materials? Are there existing mechanisms to locate American made iron, steel, manufactured products, or construction materials? Furthermore, how do recipients currently track contractor sourcing? How often are materials recycled from other products such that the origin of such materials may be unknown?
• 6. Are recipients currently subjected to Buy American requirements from other Federal, state, local, or Tribal entities? If yes, are there any existing de minimus thresholds exceptions in place and what are those exceptions? If yes, how have recipients ensured compliance with these preferences? What steps have Federal, state, local, or Tribal entities taken to ensure compliance? What type of contractual language has been utilized to ensure compliance? If contractual language has been utilized to ensure compliance with a Buy American requirement, when was it first added? Is the suggested language in Appendix I of OMB’s “Memorandum for Heads of Executive Departments and Agencies” ^[4] issued April 18, 2022, consistent with other Buy American language in award terms? Are there ways to improve this suggested award language for HUD’s Federal Financial Assistance programs? What is the burden and impact, either based in prior experience or as an estimate based on OMB’s suggested language, associated with inserting Buy American language into contracts for infrastructure projects?
• 7. Are there any plans in the iron, steel, manufactured products, or construction materials industries to provide documentation regarding materials’ compliance with BABA? Are there existing forms of documentation that would demonstrate BABA compliance? How, if at all, will BABA compliance impact energy efficiency efforts pursuant to Executive Order 14008?
• 8. What are contractor’s administrative costs associated with complying with BABA? What forms of maintenance and guarantee costs will be necessary to confirm compliance? Will there be any construction timeline delays associated with BABA compliance? Is there a need for standard contractual provisions to deal with potential delays arising from BABA compliance? If there is a need for a product specific waiver, when would contractors know about the need?
• 9. What, if any, are the specific concerns, either from recipients or contractors, about a potential waiver process? Considering agency requirements associated with waiver processing, what would be the ideal and realistic timeline for waiver processing that would minimize impact on affected projects? What documentation is currently available, either from contractors or recipients, to demonstrate the need for a waiver in line with the requirements in section 70914 of the Act?
• 10. Where applicable, how will BABA requirements affect relocation plans, transfer procedures, and/or reasonable accommodation or modifications procedures for existing occupants? What if any changes are required for your agency’s Administrative Plan or Admissions and Continued Occupancy Plan? Are there any other potential impacts on current residents of projects supported by HUD Federal Financial Assistance?
• 11. What situations would require expedited or general waivers? How can HUD develop its waiver criteria in a way that identifies these expedited or general waivers? Are there situations where the cost of the materials would always meet the standards for waivers established under Section 70914 of the Act, whether a cost, public interest, or nonavailability waiver?
• 12. How, if at all, would the Act’s BAP affect contractor’s willingness to accept infrastructure contracts subject to BABA’s requirements? How would contractors need to build in additional costs when bidding for infrastructure contracts?