“Buy America” ​​Preference in FEMA Infrastructure Financial Assistance Programs

0

Background

Application

Interpretation

Waivers

As part of President Biden Infrastructure Investment and Employment ActBeginning with awards received on or after May 14, 2022, any infrastructure project receiving federal funding must source iron, steel, manufactured goods, and building materials from the United States.

These requirements apply to new scholarships made on or after May 14, 2022as well as new funding FEMA obligates to existing awards or through renewal scholarships where the new funding is mandatory as of May 14, 2022.

Find out what this means for FEMA grant programs, as well as the waiver application process.

Background

the Build America, Buy America (BABAA) demands that all federal agencies, including FEMA, ensure before May 14, 2022that no federal financial assistance for “infrastructure” projects is provided”unless all iron, steel, manufactured goods, and building materials used in the project are produced in the United States.”

On April 18, 2022, the The Office of Management and Budget (OMB) has issued a note which provides implementation guidance to federal agencies on applying the “Buy America” preference to federal infrastructure financial assistance programs and a transparent process for waiving this preference, if necessary.

Application of the “Buy America” ​​preference

According to OMB Memo M-22-11by May 14, 2022, FEMA must ensure that all of its applicable federal financial assistance programs comply with the BABAA section 70914. This includes incorporating a “Buy America” preference into the terms and conditions of every financial award for an infrastructure project.

The law requires the following “Buy America” ​​preference:

1. All iron and steel used in the project is produced in the United States.

This means that all manufacturing processes, from the initial melting stage to the application of coatings, took place in the United States.

2. All manufactured goods used in the project are made in the USA.

This means that the manufactured product was manufactured in the United States and the cost of the components of the manufactured product that are mined, produced, or manufactured in the United States exceeds 55% of the total cost of all components of the manufactured product. , unless another standard for determining the minimum amount of domestic content of the manufactured product has been established under applicable law or regulation.

3. All building materials are made in the USA.

This means that all manufacturing processes for the building material took place in the United States.

Interpretation of guidelines

These guidelines apply to all FEMA federal financial assistance programs as defined in 2 CFR § 200.1where FEMA is awarding funding for infrastructure projects These requirements apply to new grants awarded on or after May 14, 2022, as well as new funding that FEMA requires to existing grants or through renewal grants where the new funding is mandatory on or after May 14, 2022. According to the advice, “[t]This means agencies must include a Buy America preference in awards issued on or after May 14, 2022, even if the funding opportunity notices for those awards did not include a Buy America preference.

These requirements apply to new scholarships made on or after May 14, 2022as well as new funding FEMA obligates to existing awards or through renewal scholarships where the new funding is mandatory as of May 14, 2022.

According to the advice, “[t]this means that agencies must include a Buy America preference in awards issued on or after May 14, 2022, even if the funding opportunity notices for those awards did not include a Buy America preference.

Programs and definitions

Please see the following links for key definitions of federal financial assistance, as well as complete lists of FEMA federal financial assistance programs to which BABAA does and does not apply.

Submitted to BABAA

NOT subject to BABAA

Definitions

When does a “Buy America” ​​preference apply?

A “Buy America” ​​preference applies only to iron and steel, manufactured goods, and building materials used for infrastructure project. If FEMA determines that no funds from a particular price will be used for infrastructure, a “Buy America” preference does not apply to that price.

Similarly, a “Buy America” ​​preference does not apply to expenditure not related to infrastructure as part of a grant that also includes an infrastructure component. A “Buy America” ​​preference applies to a whole infrastructure projecteven if funded by both federal and non-federal funds through one or more scholarships.

A “Buy America” ​​preference applies only to items, materials, and supplies that are consumed in, incorporated into or attached to an infrastructure project. It does not apply to tools, equipment and supplies, such as temporary scaffolding, brought to the construction site and removed no later than the completion of the infrastructure project.

It also does not apply to equipment and furnishings, such as mobile chairs, desks and portable computing equipment that are used or as part of the finished infrastructure project but are not part of or permanently attached to the structure.

Issuance of “Buy America” ​​Waivers

By BABA Section 70914(c)FEMA may waive the application of a “Buy America” ​​preference under an infrastructure program in any instance where FEMA finds that:

  1. Applying the domestic content sourcing preference would be inconsistent with the public interest (public interest override);
  2. The types of iron, steel, manufactured goods, or building materials are not produced in the United States in sufficient and reasonably available quantities or of satisfactory quality (disclaimer of non-availability); or
  3. The inclusion of iron, steel, manufactured goods, or building materials produced in the United States will increase the cost of the entire project by more than 25% (unreasonable cost waiver).

Public comment period

OMB Memo M-22-11 describes the exceptions for unforeseen and urgent circumstances and the principles and criteria for waiver. However, before issuing a waiver, FEMA must make available to the public on FEMA’s website a detailed written explanation of the proposed decision to issue the waiver and provide at least 15 days for public comment on the proposed exemption.

FEMA will use this website to post proposed waivers for public comment regarding the “Buy America” ​​preference requirement for a FEMA program.

Derogations proposed for public consultation

There are no proposed exemptions for public comment at this time. Waivers will be posted here as they become available.

More information

Additional FEMA Policy Implementation Information OMB Memo M-22-11 is to come.

If you have any questions, please contact your applicable point of contact for further information, including:

Share.

Comments are closed.