

Many general discussions of the Buy American Act focus on supply contracts with the U.S. Government. But the BAA also applies to another large subset of the U.S. Government contracting universe: construction contracts.
In this post, we’ll provide an overview of the BAA’s mandates vis-à-vis construction materials incorporated into U.S. Government construction projects.
In the construction context, the BAA has a far reach. It applies to all contracts for the construction, alteration, or repair of any public building or public work in the United States. That means many contracts will trigger BAA’s requirements, considering that the federal government owns about 270,000 buildings and constantly builds new ones.
The BAA requires contractors to use only domestic construction materials in all construction contracts, unless an exception applies. Construction materials include all articles, materials, or supplies that a contractor or subcontractor (yep, the BAA applies to all subcontractors too) brings to the construction site and incorporates into the building or work.
So, how does one determine whether an item is domestic construction material? There are two tests: one for construction materials not predominantly made of iron/steel and one for construction materials that are made predominantly of iron/steel (i.e., the cost of the iron/steel content exceeds 50% of the cost of all the material’s components).
Test for construction material not made predominantly of iron/steel:
Test for construction material made predominantly of iron/steel:
The BAA relieves a contractor from using domestic construction materials in a few situations:
Unreasonable cost is probably the most frequently exploited exception. To justify this exception, a contractor must provide the agency with supporting market information and a price comparison table. If the agency agrees a domestic construction material satisfies the unreasonable cost exception, the contract must specifically identify the permissible foreign construction material.
Contractors should pursue an unreasonable cost exception before submitting proposals, if possible. If the CO does not make a decision before proposals are due, offerors can submit alternate bids (i.e., one consisting of domestic materials and another consisting of foreign construction materials that the offeror believes satisfy the unreasonable cost exception).
Take the BAA’s mandates seriously; otherwise, you face the prospect of serious consequences. For example, an agency could require that a contractor remove foreign construction material after it’s been incorporated into the project. Or it could terminate the contract for default. In addition, an agency could refer a contractor for suspension or debarment proceedings or even criminal investigation.
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If you have any questions about these provisions or other domestic preference statutes, give us a call at 913-354-2230.