We are tasked with ensuring that materials, products, and equipment sourced for construction and infrastructure projects meet the complex regulatory requirements set forth by the Buy America, Build America (BABA) Act.
Navigating these regulations on behalf of our Owner clients is key to ensuring that we deliver high-quality, compliant materials without disrupting project timelines or budgets.
February 2025
Enacted as part of the Infrastructure Investment and Jobs Act (IIJA) in 2021, BABA mandates that federally funded infrastructure projects use materials sourced primarily from U.S. manufacturers. While this legislation directly impacts sectors like construction, its reach extends to the life sciences industry, especially for those of us supplying advanced medical equipment, pharmaceutical products, and specialized manufacturing tools.
In this article, I will explore how BABA impacts the life sciences sector and share insights into how we can navigate the Act’s requirements on behalf of our Owner clients. Our goal is to ensure compliance while maintaining efficiency and minimizing disruptions in the procurement process.
BABA compliance is not a one-time task but an ongoing responsibility. We must ensure that all materials and products continue to meet the Act’s standards throughout the entire lifecycle of the project. This requires rigorous oversight of our suppliers and continuous verification of compliance from initial procurement through to the completion of the project.
This oversight is critical to ensuring that materials and equipment are delivered on time and in compliance with all federal regulations. It is important to be prepared for inspections by project owners or funding agencies, who may request proof of compliance at any point. Should any noncompliant materials be found, they must be replaced without delay and at no additional cost to the project, emphasizing the importance of meticulous quality control throughout the procurement process.
Under BABA, materials used in federally funded projects must meet specific domestic content requirements — at least 55% must be produced in the United States.
The Buy America, Build America (BABA) Act was designed to ensure that U.S. taxpayer dollars allocated for federal infrastructure projects benefit domestic manufacturers and U.S. workers. Under BABA, materials used in these projects must meet specific domestic content requirements—at least 55% must be produced in the U.S. For life sciences companies, particularly those providing medical equipment, pharmaceuticals, and scientific products, this has direct implications on how we source materials for federally funded projects.
As procurement executives representing the interests of our Owner clients, we must carefully evaluate and adjust our sourcing strategies to align with these requirements. Ensuring compliance with BABA involves not only sourcing from U.S. manufacturers but also ensuring that all products meet the domestic content standards set forth by the Act.
BABA compliance is not a one-time task but an ongoing responsibility. As procurement executives, we must ensure that all materials and products continue to meet the Act’s standards throughout the entire lifecycle of the project. This requires rigorous oversight of our suppliers and continuous verification of compliance from initial procurement through to the completion of the project.
For our Owner clients, this oversight is critical to ensuring that materials and equipment are delivered on time and in compliance with all federal regulations. It is important to be prepared for inspections by project owners or funding agencies, who may request proof of compliance at any point. Should any non-compliant materials be found, they must be replaced without delay and at no additional cost to the project, emphasizing the importance of meticulous quality control throughout the procurement process.
One of the more complex aspects of the BABA Act is its recognition of global trade agreements, which allows for certain exceptions. As life sciences professionals, we often source advanced medical technologies or pharmaceutical products from countries with which the U.S. has Free Trade Agreements (FTAs), such as Canada, Mexico, and European Union (EU) member states.
Under these agreements, products from FTA-participating countries can still be eligible for BABA compliance if they meet specific criteria established by those trade agreements. For instance, medical devices or pharmaceutical products manufactured in EU countries may qualify as compliant under BABA if they satisfy the requirements for substantial transformation or if a certain percentage of the product’s content is sourced from within the U.S.
Navigating these exceptions is an intricate process that requires us to have a deep understanding of both BABA and the provisions of relevant FTAs.
We must carefully assess whether products sourced from international suppliers meet the standards set forth by both BABA and the applicable FTAs. We must also ensure that we maintain the proper documentation to substantiate these claims.
Understanding how BABA intersects with Free Trade Agreements (FTAs) is crucial for us as we manage sourcing for our Owner clients. These agreements offer greater flexibility in sourcing materials from international suppliers, particularly when it comes to highly specialized equipment or pharmaceutical products that are often produced abroad. Countries such as Canada, Mexico, and various EU nations benefit from FTAs that make their products eligible for BABA compliance, as long as they meet the specific transformation and content
thresholds outlined by the agreements. As procurement executives, it is essential that we evaluate these products thoroughly to ensure they meet both BABA’s requirements and the provisions of the relevant FTAs. This may require us to secure additional documentation, such as certificates of origin or detailed descriptions of the manufacturing process, to ensure compliance.
The BABA Act presents both opportunities and challenges for life sciences companies. On the one hand, it offers a chance to support U.S. manufacturing, while on the other, it requires us to carefully manage sourcing strategies to comply with domestic content requirements. This is particularly important when we rely on global supply chains to source advanced medical devices, research equipment, and pharmaceutical products.
For our Owner clients, ensuring BABA compliance may require us to make adjustments to procurement strategies. This could involve refining supplier vetting processes, enhancing documentation practices, and strengthening relationships with domestic manufacturers. As procurement leaders, we must remain agile and responsive to changes in the regulatory landscape to ensure that we continue to meet the evolving needs of our clients.