Build America, Buy America (BABA) Compliance: What Contractors Need to Know
More than $700 billion in federal infrastructure spending is now subject to BABA requirements.
💡 Key Takeaways
| • The 55% threshold – Manufactured products must meet a 55% domestic content cost requirement to qualify for federal infrastructure funding. • Documentation is the only proof – Currently, there is no official “BABA sticker” or certification, and compliance is maintained through rigorous self-certification and audit-ready documentation. • Strategic compliance partnerships – ELCON Technologies acts as a BABA-compliant partner by leveraging in-house assembly and waiver management to remove the risk from federal and municipal projects. |
What Is BABA?
The Build America, Buy America Act, or BABA, was enacted in 2021 as part of the Infrastructure Investment and Jobs Act (IIJA). Its goal is to expand domestic sourcing requirements for any project that receives financial assistance from the federal government. This should not be confused with the similarly named Buy American Act of 1933 that requires the federal government to give preference to purchasing goods from American companies.
The bottom line: For BABA, more than $700 billion in potential spending is now subject to the act, and, even though it was enacted in 2021, real enforcement didn’t begin until recently, making compliance the “new normal.”
ELCON Technologies has been committed to being ahead of the curve, so we provide clients with BABA-compliant electrical equipment, designing and assembling components in-house to meet domestic content rules.
The 55% Rule: Understanding Manufactured Products
Under BABA, not every component an organization acquires has to be 100% American made, but the majority of the overall cost will need to fall within BABA-compliant equipment mandates.
For manufactured content, BABA currently imposes a 55% domestic content threshold requirement, meaning the cost of the components produced in the U.S. must exceed 55% of the total cost of all components.
BABA-Compliant Equipment Is Essential, but There Are No Clear Markers
As the Build America, Buy America Act regulations have rolled out, many owners and engineers have gotten confused, not knowing how to recognize compliant equipment.
Key facts about BABA certification:
Navigating the Waiver Process and Non-Availability
In some cases, like for various specialized electrical instruments, the components are simply not manufactured in the U.S.
When this happens, waivers can be granted for:
| Waiver Type | When It Applies |
|---|---|
| Nonavailability | Components are not manufactured in the U.S. |
| Unreasonable Cost | Securing domestic components would increase total cost by more than 25% |
| Public Interest | An urgent need exists, such as during disaster recovery |
These waivers are filed through government channels, being specific to the agency managing a project.
Risk Management: The Cost of Noncompliance
⚠️ Organizations that do not comply with BABA requirements, or supply false certification, can incur penalties under the False Claims Act that could result in the suspension of federal work.
It’s essential for any organization working within the BABA framework to have accurate reporting and compliance tracking in place to avoid such issues, and ELCON Technologies is proud to supply BABA-compliant electrical equipment backed by thorough documentation.
FAQs About Build America, Buy America Compliance
Can a manufacturer or supplier request a BABA waiver from the government?
No, distributors cannot directly request a waiver. Instead, the request must be submitted by the manufacturer, ELCON Technologies. However, manufacturers must provide the technical data and market research needed to support the recipient’s waiver.
Who is responsible for verifying BABA compliance on a project?
ELCON Technologies is ultimately responsible for the entire supply chain, including the self-certification of all components. Because there is no official “BABA sticker,” the contractor must maintain rigorous documentation.
WE PROUDLY WORK WITH
Position Yourself for Success with BABA-Compliant Electrical Equipment
Compliance shouldn’t hold you back – it should be a competitive edge. ELCON has extensive experience providing compliant systems to meet everything from the U.S. Army’s Buy American needs to the new requirements imposed by BABA.
Let our team supply you with the power, automation, and turnkey services that will meet your critical needs and keep you BABA compliant. Contact us today for effective solutions.