BABA and BAA compliance
Summary
BABA: 55% domestic content with self-certification - This is aligned with 2026 domestic content requirement under IRA.
BAA: 65% domestic content with self-certification, including completing the standard Federal Acquisition Regulation (FAR) Clause 52.225-2, Buy American Certificate.
1. BABA compliance (Build America, Buy America Act)
What it is: A U.S. law, enacted as part of the Infrastructure Investment and Jobs Act (IIJA) of 2021.
The Goal: To boost domestic manufacturing by ensuring that federal financial assistance for infrastructure projects is used to purchase American-made goods.
Where it Applies:
Federally funded infrastructure projects (roads, bridges, broadband, water systems, etc.).
Requires the use of U.S.-produced iron, steel, manufactured products, and construction materials.
Compliance Requirement (Simplified): Generally, all manufacturing processes for iron and steel must occur in the U.S. Manufactured products must be manufactured in the U.S., and the cost of U.S.-sourced components must exceed a certain percentage (currently 55%, scheduled to increase).
2. BAA compliance
The Buy American Act of 1933 (BAA) is the primary U.S. domestic preference statute that governs direct purchases by the Federal Government. It requires federal agencies to prefer U.S.-made products when procuring goods for government use within the United States.
It is distinct from the newer Build America, Buy America Act (BABA), which applies to federally funded infrastructure projects (like roads, bridges, and broadband).
BAA Compliance Test for Manufactured Products: To qualify as a "Domestic End Product" under the BAA (for most contracts), a manufactured item must meet a two-part test:
Manufactured in the U.S.: The final product must be manufactured in the United States.
Domestic Component Cost: The cost of the product's domestic components must exceed a specified percentage of the total cost of all its components.
Note: The component cost threshold has been increasing under recent regulatory changes. It rose to 65% on January 1, 2024, and is set to increase to 75% in 2029.
3. Does a Manufacturer Get Government Certification for BABA/BAA Compliance?
No. A manufacturer is not recognized by an external authority; they declare their compliance through self certification at the time of the bid, which then becomes a legal requirement of the contract.
The Document: The manufacturer provides a written certification letter or affidavit to the contractor, subrecipient, or federal fund recipient for the specific products being delivered to the infrastructure project for BABA. It must complete the standard Federal Acquisition Regulation (FAR) Clause 52.225-2, Buy American Certificate, for BAA.
The Attestation: By submitting this certificate, the contractor legally attests that the product meets the specific BABA requirements (e.g., all manufacturing processes for iron/steel occurred in the U.S., or the manufactured product was made in the U.S. and meets the current domestic component cost threshold) or the products being offered are "Domestic End Products" and meet the BAA's requirements (the two-part test mentioned above).
The Risk: Manufacturers sign these certifications at the risk of federal penalty for any fraudulent or false claims.