If you are having difficulty understanding the differences between the Buy American Act (BAA) and Build America Buy America Act (BABAA), and how to ensure you comply with their requirements, you are not alone. Similar names and overlapping purposes make it easy to be confused about which law applies to you and how to ensure the products you purchase are in compliance with the law.
As a global manufacturer of industrial pressure and temperature instrumentation for industries serving customers in the United States, Ashcroft understands how these laws affect our company and our customers. To help guide you, we’ve compiled a list of some of our customers’ frequently asked questions and documented our responses in this article.
Read on for a high-level review of the BAA Act and BABAA Act, including similarities and differences between, the considerations for purchasing products for use in U.S.-based projects and how Ashcroft can help you find pressure and temperature instrumentation that meet your specific needs.
FAQ about the Buy American Act
Q. What is the Buy American Act (BAA)?
A. The BAA traces its origins back to 1933. It requires the U.S. government to prioritize the purchase of products that are made in America by American workers for their use inside the United States. This Act is more specific to iron, steel, and related manufactured products.
Q. What constitutes an American-made product under BAA?
A. The BAA requires that any goods purchased by the government for domestic use meet the 65% criteria as defined below:
-
65% of component content (parts that make up the finished good) must be made in the U.S. (After 2028, this will increase to 75%.)
NOTE: The 65% calculation cannot include any other costs associated with building the product, such as labor costs and standard burden costs to name a few.
Q. Why was this law created?
A. The primary goal of the BAA is to prioritize goods, products, materials, and services made in the United States whenever possible to boost domestic businesses and support American workers. It is part of a broader strategy to enhance domestic production, strengthen supply chains, and address vulnerabilities highlighted by the COVID-19 pandemic. Learn more.
Q. Is the BAA the same as the BABAA?
A. No, but there is some overlap between the two laws. Both the BAA and the BABAA require the goods and services you purchase for U.S.-based government projects to be manufactured in the United States by U.S. workers and made with materials/components of U.S. origin.
The primary differences include the percentage of the materials/components required to meet the U.S. origin definition, and the rules that govern the origin of the components used to make finished goods.
FAQ about the Build America Buy America Act (BABAA)
Q. What is the Build America Buy America Act (BABAA)?
A. The Build America, Buy America Act was enacted as part of the Infrastructure Investment and Jobs Act in November of 2021. It focuses on maximizing the federal government's use of services, goods, products, and materials produced and offered in the United States.
Q. What constitutes American-made for the BABAA?
A. BABAA requires all iron, steel, manufactured components, and all construction materials used in federally-funded infrastructure projects be made in the United States and meet the component content criteria outlined below:
- 55% of the component content of the iron and steel must be made in the U.S. with U.S. labor and for public use within the U.S. borders. This means everything from the melting process through the coating application must occur in the United States.
NOTE: The 55% calculation cannot include any other costs associated with building the product, such as labor costs and standard burden costs to name a few.
Q. What are the designated countries that are allowed to be added to the U.S. component content percentage?
A. The BAA and BABAA both allow the following designated World Trade Organization Government Procurement Agreement (WTO GPA) countries to be included in the U.S. component content percentage:
Figure 1: BAA and BABAA designated WTO GPA countries.
Q. Are there exemptions to the BAA and BABAA laws?
A. Yes. there are Commercial Off-The-Shelf (COTS) exemptions to both the BAA and BABAA that may apply to products that are manufactured with components that contain less than 50% steel and iron. See “What is a commercial product” below for more information. Learn more about COTS.
Q. What is a commercial off-the-shelf product?
A. A commercial product refers to goods used by the public or nongovernmental entities that are either sold or offered for sale to the general public. It excludes items primarily made of iron or steel, where iron and steel costs exceed 50% of total component costs. Exclusions apply.
Q. What do these laws mean for you?
A. Contractors who purchase goods from companies that provide BAA and/or BABAA certifications/declarations will receive, whenever possible, preference when submitting bids for U.S. government contracts.
Q. How do I verify if a product I purchase has BAA or BABAA certification?
A. When submitting a request to confirm compliance with either BAA or BABAA, you will need to provide a complete model number for the instrument being requested. Different options or additions to a model code may change where a component part is sourced. Each instrument will then be verified in a Bill of Materials which includes a country-of-origin listing. Compliance then is verified, and a certificate is issued to verify compliance.
Q. Are Ashcroft instruments BAA or BABAA certified?
A. It depends on the part number. Based on the criteria outlined above, let a product specialist know which certification you need and provide the complete part number. Using that information, we will run a report to confirm (within minutes) whether the product meets the BAA or BABAA certification requirements.
Q. What kind of verification will Ashcroft provide?
A. Ashcroft will provide you with the certification paperwork for your reference.
About Ashcroft
Ashcroft was founded by Edward Ashcroft in 1852 to provide safe, accurate and reliable pressure and temperature instruments to workers in the steam-powered industry. Today, Ashcroft continues to keep our customers’ operations running with confidence. Our products can be found in thousands of critical applications around the world such as water/wastewater, oil and gas, power generation and more.
We offer numerous resources that can help you learn more about the industries we serve and the topics that matter most to our customers. Here are a few examples of top-performing articles for your reference:
Understanding Absolute, Vacuum and Compound Pressure
Accurate and Reliable Isolation Ring Assemblies for Water/Wastewater Applications
How to Select the Right Pressure Gauge Range
If you have questions, please contact one of our industry experts. In the meantime, download our water/wastewater industry solutions guide.
