Proposed Rule Still Appears to Be ‘Work in Progress’

RULE from page 80 are “not adequately covered by a domestic content procurement preference.”

However, it exempts “cement and cementitious materials, aggregates such as stone, sand or gravel, or aggregate binding agents or aggregates.”

Construction Sector

Not Amused

When the proposed rule was published, OMB solicited feedback on a laundry list of issues from a wide range of stakeholders. Comments include criticism about the expansive scope of the rule, ambiguities and internal inconsistencies in the proposed standards.

Those stakeholder comments also pointed to possible deviations from the parameters established by Congress.

“The proposed rule still appears to be a work in progress and leaves open a number of important questions,” said Abbott, Fleming and Means. “Contractors and state and local authorities continue to face regulatory uncertainty about how the BABA restrictions apply to their infrastructure projects.”

In fact, the AGC and ARTBA registered their criticisms of BABA last spring when OMB asked for comment. AGC wrote OMB’s director Shalanda Young that the association believes rushing BABA could backfire.

“Arushed implementation could unnecessarily delay projects,” said James Christianson, AGC vice president, government relations. “AGC members are eager to deliver on rebuilding the nation’s infrastructure. However, with construction material shortages and supply chains constraints, it is vital that we do not exacerbate these conditions.”

He pointed out that conditions have already made it challenging to ensure IIJA’s success. Industry wants to ensure that theAmerican people see the benefits of the “historic” IIJ law.

But Christianson said AGC worries that OMB has decided to not use a phased implementation to allow all stakeholders a much-needed adjustment period.

ARTBA also commented in March on the proposed guidance, saying the association had several concerns and objections. The “lack of clarity and logical timing” concerns ARTBA: “Buy America coverage took effect Nov. 10 for five categories of construction materials.

“And yet a proposed ‘de minimis’ waiver, which would exempt smaller projects and a project’s first million dollars of federal funding, is still pending after more than four months.”

Another issue for ARTBA: Not using federal transportation agencies’ expertise in administering BABA requirements. The Made in America Office, created to oversee the federal government’s domestic preference programs, should incorporate existing DOT Buy America policies,” said the association.

ARTBAbelieves that’s a more logical move than modifying or overriding DOT policies, which would delay imple- mentation.

Extending Buy America coverage to materials beyond — or in conflict with — Congress’intentions bothers the group.

“The IIJA exempts ‘cement and cementitious materials, aggregates such as stone, sand or gravel or aggregate binding agents or additives’ from construction materials covered by Buy America,” noted ARTBA

But OMB’s draft guidance suggests these items can be covered if combined to make another product.

“ARTBA strongly opposes this potential policy and OMB’s proposed expansion of covered materials beyond the five categories Congress specified.”

The association plans to fully review and analyze the final OMG guidance, even though the date of its release remains a mystery.

“The association will also submit comments supporting the manufactured products waiver and asks for input from members and chapters.”

ARTBA also is collaborating with other associations on potential administrative petitions that seek more transparency and efficiency in BABA implementation.

What Contractors Can Do Now

The IAT Surety specialists say if a contractor is working on a federally funded project, compliance with applicable Buy American requirements is critical.

The surety firm suggests staying on top of the rule by following a protocol of best practices:

• Get certification from your suppliers. IAT Surety suggests a contractor obtain confirmation that the construction materials or manufactured products comply with BABA requirements.

• Share liability. Construction contracts with subs and suppliers should include language making them responsible for the cost of BABA non-compliance, said the firm.

• Stay current with requirement changes. “Laws change frequently. Pay close attention to bulletins issued by federal agencies such as the OMB,” said IAT Surety. “Conditions for waivers could change along with the types of construction materials subject to BABA” Though exceptions may also change, they said.

•Don’tcountonawaiver. BABAis in place for a reason, so waivers will not be easy to obtain and are likely to be project or even product specific. “Perform your due diligence, be aware that the timing to implement BABA requirements is not uniform for all federally funded infrastructure projects,” said IAT. “And make sure BABArequirements applicable to the project are met,” the surety firm added.

• Consider dedicating a person to BABA oversight. Make sure you record all facts surrounding the job and BABA compliance. Task someone with tracking documentation. Instead, have a dedicated person in charge of compliance with BABA. “Whenever in doubt, seek legal advice,” said IAT.

Finally, keep in mind that failure to comply with applicable BABA requirements can result in the need for removing and replacing completed work. That happens at your cost, said the surety firm, and may include termination from the contract and potentially even debarment from federally funded work.

“In addition, knowingly failing to comply with Buy American requirements can lead to liability under the False ClaimsAct, penalties under which includes treble damages,” the firm said.  CEG