Regulatory Alert: DOT to Allow Temporary Waiver of New Buy America Requirements to Expire; Proposes Two New Limited Waivers
November 7, 2022
On November 4, the U.S. Department of Transportation (DOT) announced that the department will not extend its temporary waiver of new Build America, Buy America (BABA) Act requirements that all construction materials used in infrastructure projects be produced in the United States. The new requirements were an expansion of traditional Buy America preferences and included in the Bipartisan Infrastructure Law (BIL) that was passed last year. DOT had issued the temporary, 180-day waiver in May to provide some time for the industry to transition to the new requirements, although AAAE has been requesting a further extension. 
While an extension of the waiver will not occur, DOT is proposing two new waivers that are more limited and targeted in nature. The first proposal would waive the new construction materials requirement for a narrow set of contracts that were entered into or solicited before a certain timeframe to limit disruptions to ongoing and planned infrastructure projects. The second proposal would waive Buy America requirements for steel, iron, manufactured products, and construction materials for de minimis costs, small grants, and minor components. We note that this second proposal would apply to grants below $500,000 and is not limited to construction materials. 
DOT has requested comment on the two new proposed waivers no later than November 20. AAAE will be working with its members to express support for the waivers and respond to DOT's request before the deadline. In the meantime, airports can expect that the new BABA Act requirements regarding construction materials will be incorporated into grant agreements after November 10. 
Background on BABA Act and DOT's Temporary Waiver. Under FAA's long-standing Buy America statute, all steel and manufactured goods used in Airport Improvement Program (AIP) funded projects must be produced in the United States. Under the BIL, Congress expanded the traditional rules and required that iron and “all construction materials“ used in infrastructure projects be manufactured in the United States. In May, DOT issued a temporary public interest waiver of the new BABA requirements for construction materials. The waiver remains in effect and applies to any grants that are awarded to airports and obligated between May 14 and November 10, 2022. 
AAAE's Efforts to Extend Waiver. Since May, we have submitted several regulatory filings, strongly urging DOT to extend the existing waiver and ensure that it remains in effect until at least 180 days after the Federal Aviation Administration (FAA) issues guidance on how airports are expected to comply with the new construction materials requirement. In addition, we have highlighted potential impacts to infrastructure projects if implementation occurs before the industry is prepared and the need for a clear and simplified compliance process. 
Although DOT has signaled in the past few months that a waiver extension was unlikely, on October 28, AAAE President and CEO Todd Hauptli sent a letter to DOT Secretary Pete Buttigieg, again calling for a delayed implementation of the requirements and highlighting potential impacts that would occur if the waiver was not extended. However, on Friday, DOT indicated that they intend the allow the new requirements to go into effect and airports should expect to see the new requirement in grant agreements executed after November 10. 
DOT's Two Newly Proposed Waivers. With the release of November 4, DOT is proposing two new waivers that are more limited and targeted in nature instead of issuing a broad extension of the existing temporary waiver of all BABA requirements pertaining to construction materials. The new waivers include the following: 
• Proposed Waiver of New BABA Requirement for Narrow Category of Contracts and Solicitations: DOT has proposed to issue a general public interest waiver of BABA's domestic preference for construction materials for (1) any contract entered into before November 10, 2022; and (2) any contract entered into March 10, 2023, if the contract results from a solicitation published prior to May 14, 2022. DOT proposed the new, limited waiver to limit the impact of the requirement on projects that have been under development or construction prior to November 10 (the expiration date for the existing temporary waiver). DOT noted that these federal grant recipients have already incurred costs, executed contracts, and conducted procurements with long lead times prior to the new requirements taking effect. 
• Proposed Waiver of Buy America Requirements for De Minimis Costs, Small Grants, and Minor Components: DOT has proposed to issue a waiver of Buy America preferences for iron, steel, manufactured products, and construction materials used in infrastructure projects funded by federal grants for iron, steel, manufactured products, and construction materials under a single grant for which (1) the total value of the non-compliant products is no more than the lesser of $1 million or 5% of total allowable costs under the federal grant; (2) the size of the grant award is below $500,000; or (3) the non-domestically produced miscellaneous minor components comprise no more than 5% of the total material cost of an otherwise domestically produced iron or steel product. The waiver would effectively be valid for 5 years. DOT specifically requested comment on the proposed percentage and dollar thresholds for applying the waiver. 
What's Next? In the notices, DOT indicated that the department has requested feedback on the newly proposed waivers no later than Sunday, November 20. However, keep in mind that once the documents are published in the Federal Register, this deadline may change. DOT also advised that the new BABA construction materials requirement will be incorporated into any grant agreements executed between FAA and airports after November 10. 
AAAE continues to urge FAA to release much-needed guidance for airports on how they are expected to comply with the new rules, including a robust waiver process to ensure that the unavailability or shortage of specific construction materials does not significantly escalate costs and/or delay projects. We will keep members apprised of any ongoing developments with implementation of the new BABA requirements.
On November 4, the U.S. Department of Transportation (DOT) announced that the department will not extend its temporary waiver of new Build America, Buy America (BABA) Act requirements that all construction materials used in infrastructure projects be produced in the United States. The new requirements were an expansion of traditional Buy America preferences and included in the Bipartisan Infrastructure Law (BIL) that was passed last year. DOT had issued the temporary, 180-day waiver in May to provide some time for the industry to transition to the new requirements, although AAAE has been requesting a further extension. 
While an extension of the waiver will not occur, DOT is proposing two new waivers that are more limited and targeted in nature. The first proposal would waive the new construction materials requirement for a narrow set of contracts that were entered into or solicited before a certain timeframe to limit disruptions to ongoing and planned infrastructure projects. The second proposal would waive Buy America requirements for steel, iron, manufactured products, and construction materials for de minimis costs, small grants, and minor components. We note that this second proposal would apply to grants below $500,000 and is not limited to construction materials. 
DOT has requested comment on the two new proposed waivers no later than November 20. AAAE will be working with its members to express support for the waivers and respond to DOT's request before the deadline. In the meantime, airports can expect that the new BABA Act requirements regarding construction materials will be incorporated into grant agreements after November 10. 
Background on BABA Act and DOT's Temporary Waiver. Under FAA's long-standing Buy America statute, all steel and manufactured goods used in Airport Improvement Program (AIP) funded projects must be produced in the United States. Under the BIL, Congress expanded the traditional rules and required that iron and “all construction materials“ used in infrastructure projects be manufactured in the United States. In May, DOT issued a temporary public interest waiver of the new BABA requirements for construction materials. The waiver remains in effect and applies to any grants that are awarded to airports and obligated between May 14 and November 10, 2022. 
AAAE's Efforts to Extend Waiver. Since May, we have submitted several regulatory filings, strongly urging DOT to extend the existing waiver and ensure that it remains in effect until at least 180 days after the Federal Aviation Administration (FAA) issues guidance on how airports are expected to comply with the new construction materials requirement. In addition, we have highlighted potential impacts to infrastructure projects if implementation occurs before the industry is prepared and the need for a clear and simplified compliance process. 
Although DOT has signaled in the past few months that a waiver extension was unlikely, on October 28, AAAE President and CEO Todd Hauptli sent a letter to DOT Secretary Pete Buttigieg, again calling for a delayed implementation of the requirements and highlighting potential impacts that would occur if the waiver was not extended. However, on Friday, DOT indicated that they intend the allow the new requirements to go into effect and airports should expect to see the new requirement in grant agreements executed after November 10. 
DOT's Two Newly Proposed Waivers. With the release of November 4, DOT is proposing two new waivers that are more limited and targeted in nature instead of issuing a broad extension of the existing temporary waiver of all BABA requirements pertaining to construction materials. The new waivers include the following: 
• Proposed Waiver of New BABA Requirement for Narrow Category of Contracts and Solicitations: DOT has proposed to issue a general public interest waiver of BABA's domestic preference for construction materials for (1) any contract entered into before November 10, 2022; and (2) any contract entered into March 10, 2023, if the contract results from a solicitation published prior to May 14, 2022. DOT proposed the new, limited waiver to limit the impact of the requirement on projects that have been under development or construction prior to November 10 (the expiration date for the existing temporary waiver). DOT noted that these federal grant recipients have already incurred costs, executed contracts, and conducted procurements with long lead times prior to the new requirements taking effect. 
• Proposed Waiver of Buy America Requirements for De Minimis Costs, Small Grants, and Minor Components: DOT has proposed to issue a waiver of Buy America preferences for iron, steel, manufactured products, and construction materials used in infrastructure projects funded by federal grants for iron, steel, manufactured products, and construction materials under a single grant for which (1) the total value of the non-compliant products is no more than the lesser of $1 million or 5% of total allowable costs under the federal grant; (2) the size of the grant award is below $500,000; or (3) the non-domestically produced miscellaneous minor components comprise no more than 5% of the total material cost of an otherwise domestically produced iron or steel product. The waiver would effectively be valid for 5 years. DOT specifically requested comment on the proposed percentage and dollar thresholds for applying the waiver. 
What's Next? In the notices, DOT indicated that the department has requested feedback on the newly proposed waivers no later than Sunday, November 20. However, keep in mind that once the documents are published in the Federal Register, this deadline may change. DOT also advised that the new BABA construction materials requirement will be incorporated into any grant agreements executed between FAA and airports after November 10. 
AAAE continues to urge FAA to release much-needed guidance for airports on how they are expected to comply with the new rules, including a robust waiver process to ensure that the unavailability or shortage of specific construction materials does not significantly escalate costs and/or delay projects. We will keep members apprised of any ongoing developments with implementation of the new BABA requirements.
