Exhibit Q BABA_Special_Conditions.pdf

GEORGIA ENVIRONMENTAL FINANCE AUTHORITY

BUILD AMERICA, BUY AMERICA ACT

SPECIAL CONDITIONS AND INFORMATION

for

FEDERALLY ASSISTED

STATE REVOLVING LOAN FUND

CONSTRUCTION CONTRACTS

The following memorandum issued by the U.S. Environmental Protection Agency on November 3, 2022, provides implementation guidance for the Build America, Buy America Act (BABA). Exhibit D of the Georgia Environmental Finance Authority Loan Agreement requires compliance with BABA as needed. The following two links contain the required language for agreements.

Appendix 1 language is required to be inserted into construction contracts to comply with BABA.

Appendix 2 language is incorporated by reference into Exhibit D of GEFA’s State Revolving Fund assistance agreements.

EXHIBIT "Q"

https://gefa.georgia.gov/document/document/baba-special-conditions-appendix-1/download https://gefa.georgia.gov/document/document/baba-special-conditions-appendix-2/download otr$€D s&rc"

UNITED STATBS ENVIRONVIENTAL PROTECTION AGENCY

WASI.IINGTON, D.C. 20460

OFFICE OF WATER

November 3,2022

MEMORANDUM

SUBJECT: Build America, Buy America Act Implementation Procedures for EPA Office of Water

Federal Financial Assistance Programs

FROM: Radhika Fox Assistant Administrator

EPA Regional Water Division Directors, Regions I - X EPA Office of Water Office Directors

OVERVTEW

The Biden-Harris Administration recognizedtheNation's critical need for infrastructure investment, championing the Bipartisan lnfrastructure Law (BIL), which Congress passed on Novembet 15' 2021

(also Lnown as the Infrastructure Investment and Jobs Act (IIJA)). The BIL will provide an unprecedented level of federal investment in water and wastewater infrastructure in communities across

America.

In Title IX of the IIJA, Congress passed the Build America, Buy America (BABA) Act, which establishes strong arrd permanent domestic sourcing requirements across all Federal financial assistance programs for infrastructure. The U.S. Environmental Protection Agency (EPA) Ofhce of Water is honored to help lead the implementation of these provisions and is proud of its near decade of successful implementation of the American Iron and Steel (AIS) provisions for its flagship water infrastructure programs.

This is a transformational opportunity to build a resilient supply chain and manufacturing base for critical products here in the United States that will spur investment in good-paying American manufacturing jobs and businesses. EPA's efforts to implement BABA will help cultivate the domestic manufacturing-bas" for a wide range of products commonly used across the water sector but not currently 1nud" do-.stically. ffris-witt take time, and flexibility will be important to ensure that EPA can leverage critical water investments on time and on budget to protect public health and improve water quality.

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IMPLEMENTATION

Recognizing the opportunity and need for BABA implementation guidance, the Made in America Office (MIAO) of the Office of Management and Budget (OMB) published Initial Implementation Guidance on ca Preference in Federal Financlal Assistance for (OMB Guidance M-22-l l) on April 18,2022. The guidance provides govemment-wide implementation direction for all Federal financial assistance programs for infrastructure . Despite the extensive guidance developed by MIAO, EPA's Office of Water infrastruclure investment programs have received many questions that were not addressed in OMB Guidance M-22-11 or that require further clarification for EPA water infrastructure programs. The following questions and answers serve to supplement OMB Guidance M-22-l1 with implementation procedures specific to EPA's relevant water infrastructure programs.

Section 7091a@) of the IIJA states when a Buy America preference under BABA applies: "Not later than... [May 14,2022], the head of each Federal agency shall ensure that none of the funds made available for a Federal financial assistance program for infrastructure...may be obligated for a project unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the United States." Therefore, Federal financial infrastructure investments obligated on or after May 14,2022, must comply with the BABA requirements. Absent a waiver, all iron, steel, manufactured products, and construction materials permanently incorporated into an infrastructure project subject to the BABA requirements must be produced in the United States. For many of EPA's Office of Water infrastructure investment programs, the vast majority of products permanently incorporated into construction, maintenance, or repair projects must comply with the BABA requirements, with the exception of select construction materials (cement and cementitious materials;

aggregates such as stone, sand, or gravel; or aggregate binding agents or additives), which are specifically excepted by the BABA statute.

EPA's Office of Water implements many infrastrucfure investment programs subject to BABA requirements, including the following:

o Alaska Native Villages and Rural Communities Water Grant Program (ANV) (and any associated Interagency Agreements with the lndian Health Service) r Clean Water and Drinking Water State Revolving Fund Programs (CW and DWSRF) . Clean Water and Drinking Water Grants to U.S. Territories and the District of Columbia . Clean Water Indian and Drinking Water Tribal Infrastructure Grant Set-aside (and any associated

Interagency Agreements with the Indian Health Service) r Coastal Wetlands Planning, Protection and Restoration Act, (CWPPRA) Programs r Congressionally Directed Spending/Community Project Funding (also known as Community

Grants) r Geographic Programsl . Gulf Hypoxia Program o National Estuaries Program (CWA Section 320)

I Geographic Programs include: Great Lakes Restoration Initiative, Chesapeake Bay, San Francisco Bay, Puget Sound, Long Island Sound, Gulf of Mexico, South Florida, Lake Champlain, Lake Pontchartrain, Southern New England Eshraries, Columbia River Basin, Pacific Northwest

. 319 Nonpoint Source Management Program Implementation r Reducing Lead in Drinking water Grant Program (sDwA $ 14598) o Assistance for Small and Disadvantaged Communities Grants: Small, Underserved, and

Disadvantaged Community Grant Program (SUDC), Emerging Contaminants in Small or

Disadvantaged Communities (EC-SDC) and Drinking Water Infrastructure Resilience &

Sustainability (sDwA $ 1459A) r Sewer Overflow and stormwater Reuse Municipal Grants (osc) . USMCA Implementing Legislation (Section 821 and Title IX, USMCA Supplemental

Appropriations, 2020) r U.S.-Mexico Border Water Infrastructure Program o Voluntary School and Child Care Program Lead Testing and Remediation Grant Program

(sDwA r464(d)) o Water Infrastructure Finance and Innovation Act (WIFIA)

The questions and answers in this document apply to the implementation of BABA requirements for the

Office of Water infrastructure programs listed above unless superseded by regulation, statute, or other applicable guidance. For many of the programs listed above which did not have domestic preference

,"l.ri."ments prior to BABA, additional implementation details are pending or may be developed after the issuance of these procedures. In addition, EPA notes that more direction will be helpful to inform the determination and definition of domestic content in manufacfured goods. Supplemental guidance on these and other issues, from either oMB or EPA, may be forthcoming. These implementation procedures may also apply to additional, unlisted EPA programs which may be required to apply BABA subsequent to publication of this memorandum (e.g., future funding programs which have been authorized, but not yet appropriated).

For more information on the BABA requirements, visit the EPA Office of Water' s dedicated website -

- or contact your funding authoritY (such as your grants officer, portfolio manager, or state contact). For information on approved waivers, visit d -am You may also email questions to BABA-OW@ePa. sov.

This Implementation Procedures document is organized to provide responses to questions in the following topic areas:

r Section 1: General..

r Section 2: Product Coverage r Section3: Co-funding............'..

r Section 4: Waivers ""-"""" 10 r Section 5: Documenting Compliance.'.'-....' """""" L2 r Section 6: Programs with American Iron and steel Requirements.........'.....' . ...........-...' 16 r Section 7: Program-Specific Issues """ 17 r Appendix l: Example Build America, Buy America (BABA) Act Construction Contract

Language... """22

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QUESTIONS AND ANSWERS

SECTION l..GENERAL

Ql.1: Will EPA provide documentation for BABA for bid solicitations and suggested contract language? Will EPA provide suggested language for Assistance Agreements?

o Al.I : See Appendix l, which includes suggested language for construction contracts which addresses the BABA requirements. ln addition to the language suggested in Appendix 1, EPA also recommends that assistance recipients prepare contract bid solicitation documents with a statement for the consulting engineers and construction firms as follows: "By signing payment application and recommending payment, Contractor certifies they have reviewed documentation for all products and materials submitted for payment, and the certifications are sufficient to demonstrate compliance with Build America, Buy America Act requirements." In most cases, the assistance recipient's representatives assume the responsibility for their clients to conduct due diligence on compliance with applicable domestic preference requirements.

All Federal Financial infrastructure assistance agreements subject to BABA must have a clause requiring compliance with the requirements. See Appendix 2 for example assistance agreement language.

Q I .2: Would federally-financed infrastructure projects outside of the United States need to comply with the BABA requirements?

o Al.2: No. According to the OMB Guidance (M-22-11), a "project" is defined as "...any activity related to the construction, alteration, maintenance, or repair of infrastructure in the

United States." Therefore, the BABA requirements are not implicated for infrastructure projects occurring outside of the United States, such as projects funded through the United States-Mexico-Canada Agreement with infrastructure activities occurring in Mexico or Canada (that is, outside the United States).

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Q1.3: If most of the project is BABA compliant, and a small portion is not, can an assistance recipient self-fund (i.e., paying with non-federal dollars) the non-compliant products?

a a a o Al.3: Any project that is funded in whole or in part rvith federal assistance must comply with the BABA requirements, unless the requirements are otherw,ise waived. All iron, steel, manufactured products, and construction materials used in a project must meet the BABA requirements unless waived. Absent a waiver, there is no oosmall portion" or product that does not need to satis$r the BABA requirements unless the requirements are waived (or specifically excluded as is the case for cement and cementitious materials; aggregates such as stone, sand, or gravel; aggregate binding agents or additives; or non-peffnanent products). An assistance recipient may request a waiver or inquire as to whether a broad waiver, such as a de minimis waiver, might apply.

a a e 1.4: How do international trade agreements affect the implementation of the BABA requirements?

o Al .4: T1eBABA requirements apply in a manner consistent with United States obligations under intemational trade agreements. Typically, these obligations only apply to direct procurement by the entities that are signatories to these trade agreements. ln general, assistance recipients are not signatories to such agreements, so these trade agreements have no impact on BABA implementation. In the few instances where such an agreement applies to a municipality, that municipality is responsible for determining its applicability and requirements and communicating with the funding authority (such as EPA and/or a state) on the actions taken to comply with BABA.

2..PR VERA

e2.1: For products made of iron and steel, what is the difference between predominantly and primarily iron and steel?

o 42.l: EpA considers the terms "predominantly" and "primarily" to be interchangeable, such that a product is considered predominantly (or primarily) iron and steel if it contains greater than 50 percent iron and steel by material cost.

Q2.2: What is the definition of construction materials (with examples)?

o A2.2: From OMB Guidance M-22-11: "construction materials" include an article, material, or supply (other than an item of primarily iron or steel; a manufactured product; cement and cementitious materials; aggregates such as stone, sand, or gravel; aggregate binding agents or additives; or non-permanent products) that is or consists primarily of:

' non-ferrous metals, , plastic and polymer-based products (including polyvinylchloride, composite building materials, and polymers used in fiber optic cables), (including optic glass), . lumber, and

' drywall'

For example, a plate of glass would be a construction material under BABA, but a framed window that incorporates the glass into a frame would be a manufactured product. Another common construction material for water infrastructure projects would be polyvinyl chloride

(pVC) pipe and fittings. However, if PVC components are incorporated into a more complex product such as instrumentation and control equipment or a water treatment unit, those items would be manufactured Products.

Q2.3: What are manufactured products (with examples)?

o A2.3: From OMB Guidance M-22-11: "...all manufactured products used in the project are produced in the United States-this means the manufactured product was manufactured in the United States; and the cost of the components of the manufactured product that are mined, produced, or manufactured in the United States is greater than 55 percent of the total cost of all components of the manufactured product, unless another standard for determining the minimum amount of domestic content of the manufacfured product has been established under applicable law or regulation..."

The manufactured products category would cover the majority of potential water infrastructure products, including complex products made up of a variety of material lypes and components. For water infrastructure projects, common manufactured products would include, but not be limited to, pumps, motors, blowers, aerators, generators, instrumentation and control systems, gauges, meters, measurement equipment, treatment equipment, dewatering equipment, actuators, and many other mechanical and electrical items.

Q2.4: Which category will valves fall under for BABA? Will it differ from the American Iron and

Steel (AIS) requirements?

o A2.4: For programs that are subject to BABA and AIS (SRF, WIFIA, and Community Project Funding), projects using valves should classiff them as iron and steel products under BABA as long as their material cost is made up of more than 50 percent iron and/or steel.

Valves with 50 percent or less iron and/or steel by material cosl would be considered manufactured products under the BABA requirements.

In accordance with OMB GuidanceM-22-11, an article, material, or supply should be classified into only one of the three categories: iron and steel, manufacfured products, or construction materials. Under the AIS requirements, all valves made primarily of iron and steel (that is, those with iron and/or steel material cost greater than 50 percent) must comply with the AIS requirements. For BABA, EPA interprets Section IV of OMB Guidance M-22-l l to mean that iron and steel products are those items that are primarily iron and steel, the same as for the AIS requirements.

Q2.5: Does EPA have a list of products to be classified as "Iron and Steel" under BABA?

o 42.5: Although this list is not comprehensive, the following products were classified as AIS products if made primarily (more than 50 percent) of iron and/or steel by materials cost (for programs subject to both AIS and BABA, this list would be equivalent for "iron and steel" items or products under either requirement):

Products likely made "primarily" of iron and steel to be classified as Iron and Steel under BABA

Lined and Unlined Pipe Lined and Unlined Fittings Tanks

Flanges Pipe Clamps and Restraints Structural Steei

Valves Hydrants Pre-Cast, Iron/Steel Reinforced

Concrete (ofall types, regardless of iron/steel content percentage)

Manhole Covers and other Municipal Castings

Access Hatches Ballast Screens

Iron or Steel Benches Bollards Cast Bases

Cast Iron Hinged Hatches Cast Iron Riser Rings Catch Basin Inlets

Cleanout/Monument Boxes Construction Covers and Frames Curb and Comer Guards products likely made "primarily" of iron and steel to be classified as Iron and Steel under BABA

Curb StopsCurb OpeningsCurb Boxes Drainage GratesShoesDetectable Warning Plates

Junction BoxesInletsDrainage Grate Frames and Curb Inlets

Manhole RisersManhole Rings and FramesLampposts Steel Hinged HatchesService BoxesMeter Boxes Tree GratesTrashSteel Riser Rings Vaive BoxesTrench GratesTree Guards Aeration Pipes and Fittings fromAccess RampsValve Box Covers and Risers

Baffle CurtainsBackfl ow Preventers/Double Check ValvesAngles

BeamBathroom StallsIron or Steel Bar Coiied SteelClarifier TanksCable Hanging Systems

Condensate Sediment TraPsConcrete Reinforcing Bar, Wire, and FibersColumn Piping

DeckingComrgated Door HardwareDome StructuresCovers

JointsDuctworkDoors

Fencing and Fence TubingFastenersExpansion Tanks (diaphragm, and Flap GatesFlang6dFire Generic H RracketsGate ValvesFraming Ground Test WellsGround T BoxesGrating

JoistsHVAC Registers, Diffusers, and

GrillesGuardrails and Anchors for Concrete Lifting Hooks, J-bar, Connectors

LaddersKnife Gates

Manhole StepsMan Baskets and Material PlatformsLockers

Non-mechanical (aka stationary)

Louvers andMunicipal Casting JunctionsMud Valves

Pipe HangersPipe Connectors Overhead Rolling Doors/ Uplifting Doors (manual oPen, no

Pipe SupportsPipe Spool (pipe, flanges,Pipe Pilings (any type ofsteel

Pre-stressed Concrete CYlinderPre-fab Steel Buildings/Sheds Pitless Adaptors

RoofingReduced Pressure Zone (RPZ) ValvesRailings

Sinks (not part of eYewash Sheet PilingService Saddles

Static MixersStairsSolenoid Valves SleevesSurface DrainsScreens

TrussesBucketsTValves Valve Stems (excluding handwheels andValve Stem ExtensionsTubing

We RodsWall Sleevesff loor SleevesWall Panels WireWell ScreensWell Casing and CablesWireWire RodWire Cloth

Q2.6: Does EPA have a list of products that could be made "primarily" of iron and steel but would be classified as "manufactured products" under BABA?

42.6: Although this list is not comprehensive, the following products would be considered "manufactured products" under the BABA requirements, even if the item might be composed primarily of iron and steel by materials cost (Note: These items are not subject to the AIS requirements.):

Products likely made "primarily" of iron and steel to be classified as Manufactured Products under BABA

Actuator Superstructures/ Support Structures

Aeration Nozzles and Injectors Aerators

Analytical Instrumentation Analyzers (e.g., ozone, oxygen) Automated Water Fill Stations

Blowers/Aeration Equipment Boilers, Boiler Systems Chemical Feed Systems (e.g., polymer, coagulant, treatment chemicals)

Chemical Injection Quills Chemical Injectors Clarifi er Mechanisms/Arms

Compressors Controls and Switches Conveyors

Cranes Desiccant Air Dryer Tanks Dewatering Equipment

Dewatering Roll-offs Disinfection Systems Drives (e.g., variable frequency drives) Elechic/Pneumati c/l\4anual

Accessories Used to Operate Valves (such as electric valve actuators)

Electrical Cabinetry and Housings (such as electrical boxes/enclosures)

Electrical Conduit

Electrical Junction Boxes Electronic Door Locks Elevator Systems (hydraulic, etc.,)

Emergency Life Systems (including eyewash stations, emergency safety showers, fire extinguishers, fi re suppression systems including sprinklers /piping/valves, first aid, etc.)

Exhaust Fans Fall Protection Anchor Points

Fiberglass Tank dAppurtenances Fi lters (and appurtenances, including underdrains, backwash systems)

Flocculators

Fluidized Bed Incinerators Galvanized Anodes/Cathodic

Protection Gear Reducers

Generators Geothermal Systems Grinders

Heat Exchangers HVAC (excluding ductwork) HVAC Dampers (if appurtenances to aerators/blowers)

HVAC Louvers (mechanical) Intake and Exhaust Grates (if appudenances to aerators/blowers) Instrumentation

Laboratory Equipment Ladder Fall Prevention Systems Ladder Safety Posts

Lighting Fixtures Lightning and Grounding Rods Mechanical or Actuated

Louvers/Dampers

Membrane Bioreactor Systems Membrane Filtration Systems Metal Office Fumiture (fixed) Meters (including flow, wholesale, water, and service connection) Motorized Doors (unit) Motorized Mixers

Motorized Screens (such as traveling screens) Motors Pelton Wheels

Pipeline Flash Reactors (similar to iniectors)

Plate Settlers Precast Concrete without

Iron/Steel Reinforcement products likely made "primarily" of iron and steel to be classified as Manufactured Products under BABA

Pressure GaugesPresses (including belt Presses) mechanics inside

Fumished Pre-fab Buildings (such as fumished with pumps, Mechanical RakesPumpsCans/Barrels and Strainers

ScrubbersSampling Stations (unless also act as Safety Climb Cable

Steel Shelving (fixed)Batch Reactors )Sensors Steel Cabinets (fixed interior/fumitureSpray Header UnitsSlide and Sluice Gates

Valve Manual Gears, Actuators, HandlesTracer WireSupervisory Control and Data

Water HeatersWater Electrostatic Precipitators Voltage Transformer

Weir Gates a Q2.7: Is asphalt paving a covered product under BABA?

o A23:No. EPA inrerprets Section 70917(c) of the IIJA to exclude asphalt from BABA requirements. Asphalt paving is a type of concrete composed of an aggregate material mixed with a binder (bitumen). EPA considers asphalt concrete to be excluded by section 70917(c) due to its similarities with cement and cementitious materials.

SECTION 3: CO-FUNDING

o e3.1: If projects are co-funded with funding mechanisms that don't require BABA, must the entire project comply with BABA?

o A3.l : yes. Any project that is funded in whole or in part with federal assistance must comply with the BABA requirements, unless the requirements are otherwise waived. A "project" consists of all construction necess ary to complete the building or work regardless of the number of contracts or assistance agreements involved so long as all the contracts and assistance agreements awarded are closely related in purpose, time, and place- This precludes the intentional splitting of projects into separate and smaller contracts or assistance agreements to avoid BABA's applicability on some portions of a larger project, particularly where the activities are integrally and proximately related to the whole' However' there are many situations in which major construction activities are clearly undertaken in separate phases that are distinct in purpose, time, or place, in which case, separate contracts or assistance agreements would carry separate requirements' a Q3.2: How will project requirements be determined for co-funded projects subject to potentially different general applicability/programmatic waiver conditions (such as different adjustment period waivers)?

o A3.2: OMB Guidance M-22-l I addresses cases with project co-funding from separate programs. EPA would apply the guidance's "cognizant" program determination to projects that are co-funded with different general applicabilitylprogrammatic waivers. For instance, if a project were co-funded between WIFIA and SRF and the majorify of the Federal funding for the project is from WIFIA, then WIFIA would be the "cognizant" program for application and determination of waivers. In that case, any conditions from an applicable WIFIA waiver would apply.

SECTION 4..WAIVERS

. Q4.l: Who may apply for a waiver and how do you apply?

o ,{4.1: Assistance recipients and their authorized representatives may apply for a project-specific waiver. EPA does not accept waiver requests from suppliers, distributors, or manufacturers unless the assistance recipient endorses and submits the request on its own behalf to the funding authority. In the case where multiple programs are providing federal funds to the project, the assistance recipient should submit the waiver request to the cognizant program, the one providing the greatest amount of federal funds for the project.

For information on applying for cost waivers, see questions 4.4 and 4.5. For information on the SRF program roles and responsibilities, see question 7.6.

Project-specific waiver requests should generally include: (1) a brief summary of the project,

(2) a description and explanation of the need for the waiver for the product(s) in question, (3) a brief summary of the due diligence conducted in search of domestic alternatives (which could include correspondence between assistance recipient and supplier/distributors), (4) the quantity and materials of the product(s) in question, (5) all engineering specifications and project design considerations relevant to the product(s) in question, (6) the approximate unit cost of items (both foreign and domestic) in addition to an estimated cost of the materials and overall project, (7) the date any products will be needed on site in order to avoid significant project schedule disruptions, and (8) any other pertinent information relevant to EPA's consideration of the waiver (e.9., if relevant for SRF projects: whether the project is designated as an equivalency project, the date the plans and specifications were submitted to the state, the date of construction initiation, expected date of project completion, any special considerations such as local zoning and building ordinances, seismic requirements, or noise or odor control requirements).

In the case of indirect federalassistance, such as the SRF programs, the state authority reviews and conveys the waiver request to EPA. States should submit waiver requests to the appropriate program waiver request inbox. For SRF projects, please use

CWSRFWaiver@epa. eov or DWSRFWaiver@epa.gov.

l0 a a e4.2: Canan assistance recipient request a waiver based on a specification written for a specific brand or model of product (that is, a specification that names a branded item or model)?

o A4.2: lnmost cases, performance-based specifications are expected and required for the majority of infrastructure projects funded by EPA's financial assistance programs. In rare cases where "branded" or product-specific sourcing may be included in project specifications, it is suggested that the specifications include the item in question (that is, not simply a catalog page, but also materials of construction, sizing, quantities, and applicable engineering p.rfo*un"e design characteristics for the project, etc.) in addition to the standard phrase "or equal." For the purposes of product alternative market research, EPA will evaluate the BABA requirements based on performance-based engineering specifications for the product(s) in question. If the project's specifications do not include performance-based specifications, or at least an "or equal" designation, EPA will base its research on an "or equal" designation using best professional judgment to the extent practicable.

e4.3: If a manufactured product is not readily available domestically, will EPA provide short-term

"limited availability" product waivers?

o A4.3: EpA will address the unavailability of domestic products through the waiver process, including potential national short-term waivers for specific products, if appropriate. To the extent practicable and with the intent to maximize domestic market and supply chain development, EPA intends to address issues of broad product unavailability with targeted, time-limited, and conditional waivers, as prescribed in OMB GuidanceM-22-l l' EPA will follow its robust and thorough product research processes (those put into place for the AIS requirements for the SRF and WIFIA programs and expanded for the new BABA requirements) to identify and determine those products for which proposed national/general applicability waivers may be appropriate.

Q4.4: What information is needed when applying for a cost waiver under BABA?

o A4.4: As part of the cost waiver request, the assistance recipient must demonstrate that implementation of the BABA requirements will increase the overall project cost more than

25 percenl. Depending on the circumstances of the overallproject cost increases, documentation to justiff the cost waiver can vary but may include itemized cost estimates or bid tabulations comparing project costs with and without BABA implementation. Assistance recipients should begin assessing the potential cost impacts of the BABA requirements during the design phase ofa project.

e4.5: Can administrative costs associated with tracking and verification of certifications be considered when determining if the cost of a project increases by 25 percent or more?

o 44.5: yes. Section 7091a@)(3) of the IIJA states that a waiver may be provided if the overall cost of the project increases by more than25 percent due to the "inclusion of iron, steel, manufactured products, or construction materials produced in the United States'" EPA interprets this io mean that the "inclusion" of the BABA-covered products could encompass ll reasonable administrative costs associated with complying with the BABA requirements, such as staf! contractor, and technological resources to collect and track BABA compliance documentation.

Q4.6: How can assistance recipients and construction contractors address product delivery delays?

o 44.6: Assistance recipients should reasonably plan for material procurement to account for known potential supply chain issues or extended lead times and shall noti$r the funding authority well in advance of the issues so that prompt attention can be given to explore options. Where extended lead times for compliant products are impacting project schedules and may significantly impact construction progress, timely communication with the funding agency is important. For products that are unavailable within a reasonable timeframe to meet the objectives and schedule of a project, EPA may consider a non-availability waiver with adequate justification. An assistance recipient would need to apply for the waiver and contact its funding authority (such as EPA and/or a state) to initiate the waiver process.

SECTION 5.. DOCUMENTING COMPLIANCE

a Q5.1: Who will be responsible for BABA enforcement?

o A5.1: Responsibility forBABA implementation applies at all levels, from manufacturers to suppliers and distributors, construction contractors, assistance recipients, and funding authorities.

The manufacturers have responsibility to provide adequate and accurate documentation of the products manufactured. If suppliers and distributors are involved, they are responsible for passing along compliance documentation for products supplied to projects that are subject to the BABA requirements.

The assistance recipient and their representatives are primarily responsible for ensuring the documentation collected for products used on the project is sufficient to document compliance with the BABA requirements.

The funding authority is responsible for providing oversight and guidance as needed to ensure the proper implementation of the requirements. The Uniform Grants Guidance (UGG)

(Title 2 of the Code of Federal Regulations (CFR) Part 200) applies to many Federal financial assistance agreements that will include BABA requirements. The general provisions of 2 CFR Part 200 determine the responsible party for the grant funding authority.

For information on SRF program roles and responsibilities, see question 7.6.

At all levels, where fraud, waste, abuse, or any violation of the law is suspected, the Office of Inspector General (OIG) should be contacted immediately. The OIG can be reached at l-888- 546-8740 or OIG Hotline@,epa.gov. More information can be found at this website:

http://www.epa. /ois/hotline.htm.

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Q5.2: When will the BABA requirements be assessed for compliance? Do assistance recipients need to have waivers for potential non-domestic products before assistance agreements are in place, at the time products are procured or products are incorporated into the project (i'e'' used)?

o A5.2: Compliance is assessed where the domestic product is used (or installed) at the project site. Proper compliance documentation, whether it is a BABA certification letter or a waiver' should u""o-puny a product prior to its "use", in accordance with Section 10914(a) of IIJA'

This may occur prior to assistance agreements being in place but is not necessary'

Additionally, communication of nA-Bn requirements through appropriate Terms and conditions in financial assistance agreements and in project solicitation and contract documents is key in ensuring all pJies involved are infotmed of the requirements for the project before construction is underway'

Q5.3: How can product compliance with the BABA requirements be demonstrated?

o 45.3: Assistance recipients and their representatives should ensure that the products delivered to the construction site are accompanied by proper documentation that demonstrate compliance with the law and be made available to the funding authority upon request' The documentation may be received and maintained in hard copy, electronically' or could be embedded in construction management software. The use of a signed certification letter for the project is the most direct and effective form of compliance documentation for ensuring products used on site are BABA-compliant prior to their installation; however, other forms of documentation are also acceptable as iong as collectively, the following can be demonstrated:

(1) Documentation linked to the project. For example, this can be in the form of the project name, project location, contract number, or project number'

(2) Documeniation linked to the product used on the project' For example' description of product(s) (simple explanation sufficient to identiff the product(s)), or an attached (or electronic link to) purchase order, invoice, or bill of lading.

(3) Documentation includes statement attesting that the products supplied to the assistance recipient are compliant with BABA requirement. Reference to the Infrastructure

Investment and Jobs Act ("IIJA") or the Bipartisan Infrastructure Law (BIL) are also acceptable. For iron and steel items under BABA, references to the American Iron and

Steel (AIS) requirements are also acceptable and reciprocal with BABA for such items'

(4) Documentation that manufacturing o"lurred in the United States, which could include' for example, the location(s) of manufacturing for each manufacturing step that is being certified. It is acceptable for manufactured products to note a single point of manufacturing, documenting that the final point of manufacturing is in the united States'

Note that each BABA category may require different determinations for compliance'

(5) Signature of company representative (on company letterhead and signature can be electronic). the signatory of the certiffing statement affirms their knowledge of the manufacturing proc"sses for the referenced product(s) and attests that the product meets the BABA requirements.

l3 a

In addition to compliance documentation, assistance recipients or their representatives should also conduct a visual inspection of the product when it arrives to the project site, especially for iron and steel products which are often stamped with the country of origin. (Note: A country of origin stamp alone is not sufficient verification of compliance with BABA and assistance receipts should not rely on it to ensure compliance.)

EPA may develop altemative procedures for demonstrating compliance. Additionalproject-or program-specific instructions may be developed on a case-by-case basis in order to meet individual circumstances.

Q5.4: Will EPA provide a form or template for tracking and documenting compliance?

o ,{5.4: EPA does not require a specified format for tracking or documenting compltance.

Assistance recipients are free to develop any system (from simple to complex soffware) for tracking items used on the project and the accompanying compliance documentation, e.g., certification letters, applicable waivers, if it helps with implementation and compliance.

Elements that may help with keeping track of compliance may include: product description, quantity required./used, product category (i.e., iron and steel, manufactured product, or construction material), status of obtaining certification letter, product cost, and whether the item might qualiff as de minimrs, or qualiff under another applicable waiver.

Q5.5: If a manufacfurer claims to comply with the Buy American Act, does it also comply with

BABA?

o A5.5: No. With the exception of the AIS requirements - which EPA interprets to be equivalent to the "iron and steel" requirements under BABA - EPA does not have an interpretation about the comparability of other domestic preference requirements relative to

BABA. Any products that are to be certified as compliant with BABA should include a specific reference to the BABA requirements and appropriate attestation from a responsible manufacturing company official. See Question 5.3 for EPA's recommendations for BABA certification letters.

Q5.6: How will assistance recipients manage certification letters for hundreds, possibly thousands of products?

o A5.6: EPA recognizes that the new BABA requirements will cover most products used in typical water and wastewater infrastructure projects, and that the number of items which may require certification at large and/or complex projects may reach several hundred. EPA is concemed about the potential administrative burden that this would place on assistance recipients. EPA recommends that projects with a high number of potentially covered products meet with their funding authority about potential compliance strategies to minimize burden and streamline compliance activity. Assistance recipients should prepare contract bid solicitation documents with a statement for the consulting engineers and construction firms as follows: "By signing payment application and recommending payment, Contractor certifies they have reviewed documentation for all products and materials submitted for payment, and the documentation is sufficient to demonstrate compliance with Build America, t4 a

Buy America Act requirements." In most cases, the assistance recipient's representatives may assume the responsibility for their clients to conduct due diligence on compliance with applicable domestic preference requirements' e5.7: Who is responsible for documenting the 55 percent content requirement for manufactured products under BABA? What if the final manufacturer cannot trace or verifli domestic origin for all components?

o A5.7: The manufacturer who signs a certification letter is responsible for documenting compliance with any of the three categories of products (iron and steel, manufactured products, or construction materials). For manufactured products' BABA requires that greater than 55 percent of the total cost of all components of the manufactured product be from domestic sources. EpA recommends that the certification letter for manufactured products document whether the item passes the content test in the final product along with a statement attesting to compliance with the BABA requirements for manufactured products' e5.g: How do final product fabricators document compliance when the final step of manufacturing may be simply assembling components?

o A5.8: It is acceptable, in many cases, especially for highly complex manufactured products that utilize many sub-components, for the final point of assembly to certiff without using a

,,step certification" pro"".r. Multiple cefiifications (i.e., step certifications) or a singular certification can be used for a product, as long as the certifying officiai is willing to attest to the product's compliance with BABA requiretnents at all stages of manufacfuring' e5.9: Will Material Test Reports be acceptable in lieu of a BABA certification for iron and steel?

o 45.9: Material Test Reports (MTRs, commonly referred to as "Mill Certifications" or'oMill

Certs,,) provide the chemical composition of steel and iron from a mill or foundry' If an MTR accompanies the delivery of steel or iron to a project site with an invoice or bill of lading, EpA will consider it sufficient to demonstrate compliance (equivalent to a certification letter) as long as the MTR includes a manufacturer representative's signature in addition to the location (city and state) of the mill/foundry. It is common for MTRs to be the first letter in a

"step certification" if the product is further fabricated or painted, etc', by another manufacturer.

Q5.10: Can amanufacturer use a fillable certification letter for products?

A5.10: EPA recommends that certifications be signed by representatives of the manufacturing entity. EPA does not oppose manufacturers using forms to intemally develop letters within their company, thereby providing signed, non-manipulable certification letters to suppliers, distributors, and/or assistance recipients' A fillable form that can be changed by someone outside of the manufactur er aftet signature does not demonstrate compliance and may create compliance concerns for the manufacturer or assistance recipient' a o l5 a o .{5.12: Assistance recipients should apply recordkeeping requirements for the project according to the procedures dictated by the funding authority. For most EPA grant programs, this is prescribed in the UGG at 2 CFR 200.334-200.338; e.g., the SRF programs require a minimum of three years. Other funding programs may require longer documentation retention periods.

SECTION 6.. PROGRAMS WITH AMENCAN IRON AND STEEL REOUIREMENTS

. Q6.1: Does BABA supersede the American Iron and Steel (AIS) Requirements?

o ,4.6.1 : The BABA requirements for items considered "iron and steel" are equivalent to those for covered iron and steel products under the AIS requirements in the Clean Water Act and the Safe Drinking Water Act. These requirements apply to the CWSRF, DWSRF, WIFIA, and Water infrastructure Community Grants. BABA includes a "savings Provision" (Section

70917(b)) that states that BABA does not affect existing domestic content procurement preferences for infrastructure projects funded by Federal financial assistance programs that meet the requirements of section 70914. EPA views the AIS requirements as meeting the "iron and steel" product requirements of BABA Section 70914, as they both include the key requirement that items made of iron and steel be wholly manufactured in the United States from the point of melting and/or pouring the iron or steel components through final manufacfuring step. Because of the "Savings Provision" of Section709l7 , the AIS requirements satisff the "iron and steel" requirements of BABA. For the programs that have

AIS requirements, EPA intends to implement BABA requirements the same way for iron and steel items as it has done for AIS products.

Q6.2: For iron and steel products, does a manufacfurer need to demonstrate compliance from initial melting through the finished product?

Q5.1 1: Are product certifications from suppliers and distributors allowed?

o A5.1 l: EPA recommends that representatives of product manufacturers certiff compliance and discourages suppliers and distributors from creating certification letters. EPA does not rule out the possibilify that a third-party certification process, such as a certification by a distributor, may be viable. However, EPA is currently not aware of a system or proposed system that meets the EPA's recommendations for documentation of product certification.

Q5.12: How long should assistance recipients keep compliance documentation?

o A6.2: For iron and steel products, the BABA requirements are the same as the existing AIS requirements, in that all of the iron and steel in a covered product (that is, the product is comprised of more than 50 percent iron and steel by material cost) must be melted and poured in the United States and all subsequent manufacturing processes (such as grinding, rolling, bending, reheating, and casting) must occur in the United States.

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O e6.3: Will EpA apply the same manufacturing standards for BABA iron and steel products as for the American Iron and Steel (AIS) requirements?

o A6.3: yes. For AIS, EPA did not require raw materials used in the production of steel or iron to be domestically sourced. For BABA, EPA interprets the requirements to be the same'

Hence, like AIS, iaw materials in the production of iron and steel subject to BABA requirements would not need to be domestically sourced. The key step for both AIS and

BABA domestic iron and/or steelproduction is the melting/pouring (that is, the location of the furnace), which must be in the United States' e6.4: Will the certification process be similar to the process established for the American Iron and

Steel requirements?

o A6.4: EpA expects the certification process for the BABA requirements to be very similar to that established for the AIS requirements. For iron and steel products, the process should remain the same for AIS and BABA. EPA recommends for manufacfured products and for construction materials that certification letters include direct reference to the productlmaterial content requirements under BABA, in addition to an affirmative statement veriSring that the product meets the BABA requirements.

e6.5: Will duplicate cerlification letters be required for AIS and BABA for iron/steel products?

o A6.5:No. Compliance with BABA requirements will be sufficient to demonstrate compliance with AIS requirements for iron and steel products. If a project is subject to

BABA, the only demonsiration of compliance necessary is with the BABA requirements, of which the iron and steel requirements are equivalent to those of the AIS statutory requirements: the iron or steel in a product made primarily or predominantly of iron and steel

(comprising more than 50 percent iron and steel by material cost) must be melted and/or poured in the United States and all subsequent manufacturing processes must occur in the

United States.

SECTION 7.. PROGRAM-SPECIFIC ISSUES

. Q7.1.: How do the BABA requirements apply to community Grants?

o A7.1: The Community Project Funding/Congressionally Directed Spending grants for the construction of drinking water, wastewater, and stormwater infrastructure and for water quality protection are subject to the requirements specified in the explanatory statement accompanying the Consolidated Appropriations Act (Explanatory Statement for Division G of p.L. l1:i-l3,the Consolidated Appropriations Act of 2022). The explanatory statement asserts: ,,Applicable Federal requirements that would apply to a Clean Water State Revolving

Fund or Otinti"g Water State Revolving Fund project grant recipient shall apply to a grantee receiving a CpFlrant under this section." Therefore, the federally funded Community project Funding/Congressionally Directed Spending grants are subject to the same requirements that apply to cwsRF or DWSRF projects, including BABA and AIS requirements. See also A1.2.

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Q7.2: Should SRF projects covered by the BABA SRF Projects Design Planning Adjustment Period

Waiver follow the same procedures for demonstrating compliance as outlined for American Iron and

Steel requirements?

o A7.2: Yes. The SRF Design Planning Adjustment Period waiver does not waive the iron and steel requirements under BABA. The SRF programs have existing domestic preference requirements for SRF projects under CWA Section 608 and SDWA Section 1452(a)(a) (AIS requirements) to use iron and steel products that are produced in the United States. Sections

70917(a) and O) of BIL explain the application of BABA to existing domestic preference requirements. Specihcally, the savings provision in Section 70917(b) states that existing domestic preference requirements that meet BABA requirements are not affected by RABA.

The statutory AIS requirements were existing at the time BABA became law and satisff the

BABA iron and steel requirements. Therefore, the statutory AIS requirements that have previously applied to SRF-funded projects will continue to do so, and compliance with AIS requirements will satisff the BABA iron and steel requirements. Demonstration of compliance for iron and steel products will follow the AIS implementation policies for projects subject to the waiver.

Q7.3: For SRF programs, is BABA considered a federal cross-cutting authority? (i.e., do

"equivalency" rules apply?)

o A7.3: Yes, BABA is considered a federal cross-cutting requirement that applies to SRF assistance equivalent to the federal capitalization grant (i.e., "equivalency" projects). EPA's

SRF regulations at 40 CFR 35.3145 and35.3575 require states and recipients of SRF funds equivalent to the amount of the federal capitalization grant to comply with federal cross-cutting requirements. Section '70914 of the IIJA, which states when a Buy America preference applies, explains that "none of the funds made available for a Federal financial assistance program for infrastructure. ..may be obligated for a project unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the United States." Therefore, BABA only applies to projects funded in an amount equivalent to the federal capitalization grant and not to those projects receiving funds in excess of the capitalization grant (i.e., "non-equivalency" projects). (Note: The AIS requirements continue to apply for all SRF projects, including non-equivalency projects, and all WIFIA and

Community Grant projects, because equivalency does not apply.)

Q7.4: Do…