What's the Difference between BAA and BABAA?
At the beginning of 2021, Congress passed an executive order to help assist Americans with their businesses and jobs. The Made In America Office is working to support American businesses by enforcing Made in America Laws. One of the laws the Office is enforcing is the Buy American Act (BAA). The other law the Office is enforcing is the Build America, Buy America Act (BABAA).
These regulations are both mandated to use American-made products in federally funded projects. While these laws appear similar, they are different in many ways. In this blog, we provide you information on each and show the differences.
Buy American Act
Congress passed the Buy American Act (BAA) in 1933. This law applies to the Federal Government for purchases it makes for itself. The BAA requires the Federal Government to buy domestic end products and materials worth over $10,000. This amount can increase for emergency relief.
If a product lacks iron and steel, it must meet certain criteria to qualify as a domestic product:
- The manufacturer must make the product in the U.S.
- They also need to source over 60 percent of the parts from the U.S.
The standard for domestic products increased to 60 percent in 2022 and will increase to 65 at the end of this year. By 2029, the standard for domestic products will increase to 75 percent.
The Federal Acquisition Regulation (FAR) can waive the above requirements for unreasonable cost, public interest, and commercial information technology.
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Build America Buy America
In 1982, lawmakers created the Buy America Act as part of The Surface Transportation Assistance Act. The addition of the Buy America Act helped address concerns over the surface transportation of highways and bridges. Then in 2021, congress expanded the Buy America Act and created the Build America, Buy America Act (BABAA). This led to the Buy America requirements to expand to include Federal financial assistance programs.
While the Buy America Act does not have any requirements, the BABAA does have one key requirement. That requirement is financial assistance programs for infrastructure to utilize American-made iron, steel, construction materials, and manufactured products.
To qualify under BABAA requirements, items must meet infrastructure projects criteria by either being the following:
- iron and steel
- manufactured products
- construction materials
Iron and Steel
The requirements for iron and steel are simple. All manufacturing processes must happen in the U.S. This includes everything from melting to applying coatings.
Manufactured Products
Manufactured products must come from the U.S. and the cost of their components must be over 55 percent.
Construction Materials
The requirements for construction materials are that all manufacturing processes occurred in the U.S.
In certain cases, authorities can also waive the Buy America Act. Federal agencies can waive this act when there is domestic non-availability, unreasonable cost, and public interest.
BAA and BABAA in practice today
Our vendors are closely following the above acts as well. For example, our vendor Industrial Lighting Products (ILP) has a list of BAA and BABAA products. At HomElectrical, we offer a wide selection of BAA and BABAA certified items.
These offerings include ILP's Endeavour 2.0 Highbay. ILP's ILP-EDV4100LU30NDFRL Linear High Bay is under the Buy American (BAA) Certification.
These offerings also include ILP's SQ Curved Wide Base Wrap. ILP's ILP-SQ812LU40 Curved Wide Base Wrap is under the Build America, Buy America Act (BABAA) Certification.
Buy America vs Buy American Act
Overall, the Buy American and Build America Buy America programs have many differences, even though their names are similar.
- The Buy American Act states a product is domestic if made entirely in the United States. It must also contain at least 50% domestic content.
- The Build America Buy America law states that a product must be 100% produced in the United States. Mines must extract all steel and iron parts, and factories must melt and manufacture them in the United States as well.
- Another fact is the Buy American Act is less expensive and easier to follow than the Buy America Act.
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