Question 1

Does BABA apply to direct federal contracts, or only grant-funded projects?

Accepted Answer

BABA applies to infrastructure projects funded through federal financial assistance, meaning grants, loans, loan guarantees, and cooperative agreements given to non-federal recipients such as states, cities, tribes, and school districts. Direct federal procurement contracts are instead governed by the older Buy American Act of 1933, and transportation infrastructure specifically by the Buy America Act of 1982. A contractor working SLED construction should check the funding source, not just who signed the contract, before assuming which law applies.

Question 2

What percentage of a manufactured product must be domestic content under BABA?

Accepted Answer

A manufactured product is BABA-compliant if it was manufactured in the United States and more than 55 percent of the total cost of its components was mined, produced, or manufactured domestically, unless a different domestic content standard has been established for that product category under applicable law or regulation. Iron and steel face a stricter standard: every manufacturing stage, from initial melting through any coating process, must occur in the United States.

Question 3

Is HVAC equipment exempt from BABA?

Accepted Answer

No, HVAC equipment is not automatically exempt, but it is one of the categories most frequently granted project-specific nonavailability waivers because certain equipment types, particularly variable refrigerant flow systems, ductless mini-splits, and heat pumps, are not consistently produced in the United States in sufficient quantity to meet BABA's domestic content standard. Contractors specifying this equipment on a covered project should confirm domestic availability early, since a waiver can take weeks to months to process.

Question 4

How does a contractor request a BABA waiver, since only the grantee can submit one?

Accepted Answer

Only the direct recipient of the federal financial assistance, such as the city, school district, or housing authority, can formally submit a BABA waiver request to the funding agency. A contractor who identifies a nonavailability, cost, or public-interest issue should raise it with the project owner early and supply the supporting documentation, such as vendor quotes and evidence of a documented search for domestic suppliers, since the project owner needs that material to build the waiver application.

Question 5

Does BABA apply to a small construction project under $350,000?

Accepted Answer

Generally no. BABA includes a general applicability threshold exempting projects receiving less than $250,000 in federal financial assistance, though individual agencies can set a different figure, and HUD's own Small Grants waiver uses the Simplified Acquisition Threshold of $350,000 instead. Contractors should confirm the specific dollar threshold that applies to their funding agency rather than assuming the $250,000 figure applies universally.

Build America Buy America Act: 2026 Contractor Guide