Regulatory Alert: AAAE Responds to DOT's Proposed Waivers of Buy America Requirements; FAA Releases Updated Guidance with Compliance Procedures
November 21, 2022
On November 20, AAAE filed comments in support of two proposals from the U.S. Department of Transportation (DOT) that would waive Buy America and Build America, Buy America (BABA) Act requirements under limited circumstances. The first proposal would waive the new BABA requirements regarding construction materials for a narrow category of contracts, and the second proposal would waive all Buy America requirements pertaining to steel, iron, manufactured products, and construction materials for de minimis costs, small grants, and minor components. 
You can view AAAE's comments in response to the first proposed waiver here and the second proposed waiver here. 
In our comments, AAAE focused on three key recommendations. First, we urged DOT to reissue the temporary waiver of the new BABA requirements regarding construction materials, which recently expired on November 10, and ensure that it remains in effect for at least 180 days after DOT or the Federal Aviation Administration (FAA) issue guidance on how airports are expected to comply. Second, DOT should expand the scope of contracts subject to the proposed waiver to include any contract resulting from a solicitation for bids or proposals that was issued prior to DOT or FAA releasing implementation guidance. Finally, we urged DOT to increase the dollar threshold applicable to small grants from $500,000 to $5 million, which means that Buy America requirements would not apply to any grant awards that are less than $5 million. We expect that DOT will consider the comments filed and finalize the two targeted and more limited waivers in the near term. 
On November 18, FAA published a long-awaited update to existing guidance that provides airports with some details on how to comply with the new BABA requirements regarding construction materials. The updated guidance explains methods for ensuring that contractors comply with the new rules and the process and documentation required for airports to request and receive a waiver. However, we believe that additional guidance and clarity will be needed in other areas, such as differentiating between construction materials and manufactured products. AAAE encourages airport staff that is responsible for Buy America compliance and procurement to review the updated guidance and provide us with any feedback or concerns. 
AAAE's Response to Proposed Waivers of Buy America and BABA Requirements
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 Bipartisan Infrastructure Law (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 that remained in effect and applied to any grants that were awarded to airports and obligated between May 14 and November 10, 2022. 
AAAE's Efforts to Extend Temporary Waiver. Since May, we have submitted several regulatory filings and directed a letter to DOT Secretary Pete Buttigieg, strongly urging DOT to extend the existing waiver and ensure that it remains in effect until at least 180 days after DOT or 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 occurred before the industry is prepared and the need for a clear and simplified compliance process. However, on November 4, DOT indicated that they intended to allow the new requirements to go into effect on November 10. 
DOT's More Targeted Proposed Waivers. Earlier this month, while an extension of the 180-day temporary waiver did not occur, DOT proposed 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 pertaining to 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. 
AAAE's Response to Proposed Waivers. AAAE generally supported both proposed waivers on the basis that they provide airports with some additional flexibility to comply with traditional Buy America and the new BABA requirements. With both comments, AAAE recommended that DOT do the following: 
• Reconsider its decision to allow the temporary waiver of BABA requirements to expire on November 10 and reissue the waiver to remain in effect until at least 180 days after DOT or FAA releases guidance on how airports are expected to comply. 
• Expand the scope of contracts subject to the proposed waiver to include any contract resulting from a solicitation for bids or proposals that was issued prior to DOT or FAA releasing implementation guidance. 
• Adopt the proposed waiver of Buy America and BABA requirements for de minimis costs, small grants, and minor components with one minor modification. That is, DOT should increase the dollar threshold applicable to small grants from $500,000 to $5 million. This would make these requirements inapplicable to grant awards less than $5 million.
Updated Guidance on Compliance with Buy America and BABA Requirements
Background. FAA developed and periodically updates a document, “Contract Provision Guidelines for Obligated Sponsors and Airport Improvement Program Projects“ (Contract Guidelines), which consolidates federal contract provisions and clauses into one resource and helps airports ensure they are compliant with their federal grant obligations when accepting AIP or BIL grant funding. FAA last updated the Contract Guidelines in June 2018. 
Highlights from Updated Contract Guidelines. On November 18, FAA released an updated version of the Contract Guidelines, which contains a significant rewrite of the appendix pertaining to “Buy American Preferences“ (Appendix A4). In the updated document, FAA provides a few key updates regarding implementation of the new BABA requirements: 
• Sample Certification Statements: FAA developed a sample “certification of compliance“ statement that airports can insert into their solicitations for bids or proposals for both construction projects and equipment/building projects. For “construction materials,“ bidders will simply need to “certify“ that all construction materials used in the project are manufactured in the United States; no evidence or documentation as to the source of the materials is necessary. Such evidence, however, is required for iron, steel, and/or manufactured products. 
• Waiver Requests: FAA explained the required documentation that airport sponsors will need to submit to the agency when requesting certain waivers, including a waiver of the new BABA provisions pertaining to iron and construction materials. For example, if an airport sponsor wants to request a Type 2 nonavailability waiver, airports will have to, among other things, conduct market research activities and explain the methods used to identify domestically manufactured items capable of satisfying the requirement. 
AAAE has been urging DOT and FAA to provide guidance to airports on how to comply with the new BABA requirements. The Contract Guidelines are a step in the right direction and provide some answers, such as how to ensure that contractors comply and how to apply for a waiver. However, additional guidance will be needed to provide greater clarity on which construction materials are subject to the new BABA requirements and how to differentiate between construction materials and manufactured products. 
What's Next? DOT will begin reviewing over 125 comments that the department received in response to requests for feedback on the two proposed waivers. We expect that DOT will move forward with finalizing the two waivers in the near term. 
In the meantime, AAAE will continue to support initiatives and efforts to provide airports with additional flexibility and guidance on how they are expected to comply with the new BABA requirements. We encourage airport staff that is responsible for Buy America compliance and procurement to review FAA's updated guidance and provide AAAE with feedback, concerns, or questions. This will help us as we continue to engage with the Biden Administration, DOT, and FAA on implementation.
On November 20, AAAE filed comments in support of two proposals from the U.S. Department of Transportation (DOT) that would waive Buy America and Build America, Buy America (BABA) Act requirements under limited circumstances. The first proposal would waive the new BABA requirements regarding construction materials for a narrow category of contracts, and the second proposal would waive all Buy America requirements pertaining to steel, iron, manufactured products, and construction materials for de minimis costs, small grants, and minor components. 
You can view AAAE's comments in response to the first proposed waiver here and the second proposed waiver here. 
In our comments, AAAE focused on three key recommendations. First, we urged DOT to reissue the temporary waiver of the new BABA requirements regarding construction materials, which recently expired on November 10, and ensure that it remains in effect for at least 180 days after DOT or the Federal Aviation Administration (FAA) issue guidance on how airports are expected to comply. Second, DOT should expand the scope of contracts subject to the proposed waiver to include any contract resulting from a solicitation for bids or proposals that was issued prior to DOT or FAA releasing implementation guidance. Finally, we urged DOT to increase the dollar threshold applicable to small grants from $500,000 to $5 million, which means that Buy America requirements would not apply to any grant awards that are less than $5 million. We expect that DOT will consider the comments filed and finalize the two targeted and more limited waivers in the near term. 
On November 18, FAA published a long-awaited update to existing guidance that provides airports with some details on how to comply with the new BABA requirements regarding construction materials. The updated guidance explains methods for ensuring that contractors comply with the new rules and the process and documentation required for airports to request and receive a waiver. However, we believe that additional guidance and clarity will be needed in other areas, such as differentiating between construction materials and manufactured products. AAAE encourages airport staff that is responsible for Buy America compliance and procurement to review the updated guidance and provide us with any feedback or concerns. 
AAAE's Response to Proposed Waivers of Buy America and BABA Requirements
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 Bipartisan Infrastructure Law (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 that remained in effect and applied to any grants that were awarded to airports and obligated between May 14 and November 10, 2022. 
AAAE's Efforts to Extend Temporary Waiver. Since May, we have submitted several regulatory filings and directed a letter to DOT Secretary Pete Buttigieg, strongly urging DOT to extend the existing waiver and ensure that it remains in effect until at least 180 days after DOT or 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 occurred before the industry is prepared and the need for a clear and simplified compliance process. However, on November 4, DOT indicated that they intended to allow the new requirements to go into effect on November 10. 
DOT's More Targeted Proposed Waivers. Earlier this month, while an extension of the 180-day temporary waiver did not occur, DOT proposed 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 pertaining to 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. 
AAAE's Response to Proposed Waivers. AAAE generally supported both proposed waivers on the basis that they provide airports with some additional flexibility to comply with traditional Buy America and the new BABA requirements. With both comments, AAAE recommended that DOT do the following: 
• Reconsider its decision to allow the temporary waiver of BABA requirements to expire on November 10 and reissue the waiver to remain in effect until at least 180 days after DOT or FAA releases guidance on how airports are expected to comply. 
• Expand the scope of contracts subject to the proposed waiver to include any contract resulting from a solicitation for bids or proposals that was issued prior to DOT or FAA releasing implementation guidance. 
• Adopt the proposed waiver of Buy America and BABA requirements for de minimis costs, small grants, and minor components with one minor modification. That is, DOT should increase the dollar threshold applicable to small grants from $500,000 to $5 million. This would make these requirements inapplicable to grant awards less than $5 million.
Updated Guidance on Compliance with Buy America and BABA Requirements
Background. FAA developed and periodically updates a document, “Contract Provision Guidelines for Obligated Sponsors and Airport Improvement Program Projects“ (Contract Guidelines), which consolidates federal contract provisions and clauses into one resource and helps airports ensure they are compliant with their federal grant obligations when accepting AIP or BIL grant funding. FAA last updated the Contract Guidelines in June 2018. 
Highlights from Updated Contract Guidelines. On November 18, FAA released an updated version of the Contract Guidelines, which contains a significant rewrite of the appendix pertaining to “Buy American Preferences“ (Appendix A4). In the updated document, FAA provides a few key updates regarding implementation of the new BABA requirements: 
• Sample Certification Statements: FAA developed a sample “certification of compliance“ statement that airports can insert into their solicitations for bids or proposals for both construction projects and equipment/building projects. For “construction materials,“ bidders will simply need to “certify“ that all construction materials used in the project are manufactured in the United States; no evidence or documentation as to the source of the materials is necessary. Such evidence, however, is required for iron, steel, and/or manufactured products. 
• Waiver Requests: FAA explained the required documentation that airport sponsors will need to submit to the agency when requesting certain waivers, including a waiver of the new BABA provisions pertaining to iron and construction materials. For example, if an airport sponsor wants to request a Type 2 nonavailability waiver, airports will have to, among other things, conduct market research activities and explain the methods used to identify domestically manufactured items capable of satisfying the requirement. 
AAAE has been urging DOT and FAA to provide guidance to airports on how to comply with the new BABA requirements. The Contract Guidelines are a step in the right direction and provide some answers, such as how to ensure that contractors comply and how to apply for a waiver. However, additional guidance will be needed to provide greater clarity on which construction materials are subject to the new BABA requirements and how to differentiate between construction materials and manufactured products. 
What's Next? DOT will begin reviewing over 125 comments that the department received in response to requests for feedback on the two proposed waivers. We expect that DOT will move forward with finalizing the two waivers in the near term. 
In the meantime, AAAE will continue to support initiatives and efforts to provide airports with additional flexibility and guidance on how they are expected to comply with the new BABA requirements. We encourage airport staff that is responsible for Buy America compliance and procurement to review FAA's updated guidance and provide AAAE with feedback, concerns, or questions. This will help us as we continue to engage with the Biden Administration, DOT, and FAA on implementation.
