Notice2023-05698
Public Interest Phased Implementation Waiver for FY 2022 and 2023 of Build America, Buy America Provisions as Applied to Recipients of HUD Federal Financial Assistance
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Published
March 21, 2023
Issuing agencies
Housing and Urban Development Department
Abstract
In accordance with the Build America, Buy America Act ("BABA" or "the Act") this notice advises that HUD has issued a public interest waiver of the Buy America Domestic Content Procurement Preference ("Buy America Preference," or "BAP") for recipients of Federal Financial Assistance ("FFA") provided by HUD as set forth below. This notice provides a waiver and sets forth an updated implementation schedule for application of the BAP to HUD FFA. HUD is also announcing its BAP implementation schedule for all HUD FFA used to purchase iron or steel products in infrastructure projects in HUD programs, other than the CDBG formula grants addressed in the November 23, 2022, waiver. HUD is also announcing its BAP implementation schedule for the purchase of four specifically-listed construction materials: non-ferrous metals; lumber; composite building materials; and plastic and polymer-based pipe and tube (herein after referred to as "specifically-listed construction materials"), all manufactured products, and all other construction materials.
Full Text
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<title>Federal Register, Volume 88 Issue 54 (Tuesday, March 21, 2023)</title>
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[Federal Register Volume 88, Number 54 (Tuesday, March 21, 2023)]
[Notices]
[Pages 17001-17004]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-05698]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. 6331-N-10A]
Public Interest Phased Implementation Waiver for FY 2022 and 2023
of Build America, Buy America Provisions as Applied to Recipients of
HUD Federal Financial Assistance
AGENCY: Office of the Secretary, U.S. Department of Housing and Urban
Development (HUD).
ACTION: Notice.
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SUMMARY: In accordance with the Build America, Buy America Act
(``BABA'' or ``the Act'') this notice advises that HUD has issued a
public interest waiver of the Buy America Domestic Content Procurement
Preference (``Buy America Preference,'' or ``BAP'') for recipients of
Federal Financial Assistance (``FFA'') provided by HUD as set forth
below. This notice provides a waiver and sets forth an updated
implementation schedule for application of the BAP to HUD FFA. HUD is
also announcing its BAP implementation schedule for all HUD FFA used to
purchase iron or steel products in infrastructure projects in HUD
programs, other than the CDBG formula grants addressed in the November
23, 2022, waiver. HUD is also announcing its BAP implementation
schedule for the purchase of four specifically-listed construction
materials: non-ferrous metals; lumber; composite building materials;
and plastic and polymer-based pipe and tube (herein after referred to
as ``specifically-listed construction materials''), all manufactured
products, and all other construction materials.
DATES: March 15, 2023. This waiver is effective as stated herein for
FFA obligated by HUD on or after the effective date of the waiver until
the implementation deadlines for the BAP as specifically shown below.
FOR FURTHER INFORMATION CONTACT: Faith Rogers, Department of Housing
and Urban Development, 451 Seventh Street SW, Room 10126, Washington,
DC 20410-5000, at (202) 402-7082 (this is not a toll-free number). HUD
welcomes and is prepared to receive calls from individuals who are deaf
or hard of hearing, as well as individuals with speech and
communication disabilities. To learn more about how to make an
accessible telephone call, please visit <a href="https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>. HUD encourages submission
of questions about this document be sent to
<a href="/cdn-cgi/l/email-protection#8bc9fee2e7efcae6eef9e2e8eac9fef2cae6eef9e2e8eacbe3feefa5ece4fd"><span class="__cf_email__" data-cfemail="5a182f33363e1b373f2833393b182f231b373f2833393b1a322f3e743d352c">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Build America, Buy America
The Build America, Buy America Act (``BABA'' or ``the Act'') was
enacted on November 15, 2021, as part of the Infrastructure Investment
and Jobs Act (``IIJA'') (Pub. L. 117-58). The Act establishes a
domestic content procurement preference, the BAP, for Federal
infrastructure programs. Section 70914(a) of the Act establishes that
no later than 180 days after the date of enactment, HUD must ensure
that none of the funds made available for infrastructure projects may
be obligated by the Department unless it has taken steps to ensure that
the iron, steel, manufactured products, and construction materials used
in a project are produced in the United States. In section 70912, the
Act further defines a project to include ``the construction,
alteration, maintenance, or repair of infrastructure in the United
States'' and includes within the definition of infrastructure those
items traditionally included along with buildings and real property.
Thus, starting May 14, 2022, new awards of HUD FFA, and any of those
newly obligated funds by HUD then obligated by the grantee for
infrastructure projects, are covered under BABA provisions of the Act,
41 U.S.C. 8301 note, unless covered by a waiver.
II. HUD's Progress in Implementation of the Act
Since the enactment of the Act, HUD has worked diligently to
implement the BAP. HUD understands that advancing Made in America
objectives is a continuous effort and believes this transparent
schedule of future implementation will provide industry partners and
FFA recipients with the time and notice necessary to efficiently and
effectively implement the BAP. HUD's plans to move forward with the
implementation of the new BAP requirements as set forth in this notice
are designed to maximize coordination and collaboration to support
long-term investments in domestic production. HUD will continue its
efforts to implement the Act consistent with the guidance and
requirements of the Made in America Office of the Office of Management
and Budget, including anticipated guidance concerning appropriate
compliance with the BAP.
In order to ensure orderly implementation of the BAP across HUD's
programs, HUD has provided public interest, general applicability
waivers in order to implement the BAP in phases in connection with the
application of the BAP across HUD's FFA programs and to provide HUD
with sufficient time to solicit information from the public relating to
the agency's implementation of the BAP in connection with FFA awards
made by HUD. HUD has previously published general applicability, public
interest waivers to the BAP to provide the agency with sufficient time
to solicit information from the public relating to the agency's
implementation of the BAP in connection with FFA awards made by HUD. On
November 23, 2022, HUD issued a separate waiver covering all HUD FFA
obligated by HUD on or before February 21, 2023, with the exception of
the BAP as to the purchase of iron and steel for infrastructure
projects funded by Community Development Block Grant (``CDBG'') formula
grants on or after November 15, 2022. Separately, HUD waived the
application of the BAP in connection with HUD FFA provided to Tribes,
Tribally Designated Housing Entities (``TDHE''), and other Tribal
Entities (referred to herein as ``Tribal FFA'') to allow time for HUD
to complete the Tribal consultation process regarding implementation of
the BAP in connection with infrastructure projects. This Notice does
not apply to Tribal FFA covered by that separate waiver.\1\
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\1\ General Applicability Waiver of Build America, Buy America
Provisions as Applied to Tribal Recipients of HUD Federal Financial
Assistance (Effective until May 14, 2023) address Tribes, Tribally
Designated Housing Entities (``TDHE''), and other Tribal Entities'
implementation of BABA. (May 5, 2022, 87 FR 26221).
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Details on HUD's implementation of the BABA requirements, including
two public interest waivers covering Exigent Circumstances and De
Minimis and Small Grants and a separate public interest waiver for all
Tribal FFA, can be found at <a href="https://www.hud.gov/program_offices/general_counsel/BABA">https://www.hud.gov/program_offices/general_counsel/BABA</a>.
III. Waiver Authority
Under section 70914(b), HUD and other Federal agencies have
authority to waive the application of a domestic content procurement
preference when (1) application of the preference would be contrary to
the public interest, (2) the materials and products subject to the
[[Page 17002]]
preference are not produced in the United States at a sufficient and
reasonably available quantity or satisfactory quality, or (3) inclusion
of domestically produced materials and products would increase the cost
of the overall project by more than 25 percent. Section 70914(c)
provides that a waiver under 70914(b) must be published by the agency
with a detailed written explanation for the proposed determination and
provide a public comment period of not less than 15 days.
IV. Public Interest, General Applicability Waiver of Buy America
Provisions
The Office of Management and Budget's April 18, 2022 memorandum,
``Initial Implementation Guidance on Application of Buy America
Preference in Federal Financial Assistance Programs for
Infrastructure'' (M-22-11), encourages agencies to consider ways to
provide the assistance to funding recipients that is necessary and
effective for the implementation of the BAP, including consideration of
phased implementation of BAP where appropriate. Strategic and phased
steps toward full BABA compliance refines the scope for what is exempt
from BAP while providing a clear timeline for full implementation,
consistent with the Congressional intent and stakeholder interest. It
also allows HUD grantees and stakeholders the time needed to construct
stronger supply channels to include new or amended vendor contracts
that comply with BABA requirements.
In fiscal year 2023, HUD grantees will receive $14 billion through
the Department's programs where infrastructure is an eligible activity
and may be subject to the BAP. For example, Choice Neighborhoods
(``CN'') funds may be used for infrastructure projects (e.g., transform
severely distressed public and assisted properties with high-quality
mixed-income) or non-infrastructure uses (e.g., business services,
safety, children's education and to improve employment, income, and
health outcomes). HUD estimates that up to 85 percent of Choice
Neighborhoods Implementation Grant funds to be awarded in 2023 ($289
million of $340 million total) will be used on housing and
infrastructure projects where the BAP may apply.
As HUD's previous Notices advised and as supported by several
comments received during the comment period, many of HUD's programs may
be subject to the BAP and have previously not required compliance with
similar Buy American preferences. Because the potential application of
BAP mandated by the Act is new to the majority of HUD's programs and
FFA, HUD chose to implement the BAP first with respect to all iron and
steel products used in infrastructure projects funded with HUD FFA on
or after November 15, 2022, through its CDBG formula grants.
As required under section 70914 of the Act, HUD published a
proposed waiver on its website on February 15, 2023. In addition, HUD
published the proposed waiver in the Federal Register. Comments on the
proposed waiver were due on or before March 2, 2023. Through this Final
Notice, HUD is announcing that it has issued this waiver effective
March 15, 2023. This waiver is effective as stated herein for FFA
obligated by HUD in listed programs on or after the effective date of
the waiver until the implementation deadlines for the BAP as
specifically shown below. In addition, in the case of FFA obligated by
HUD in listed programs on or after February 22, 2023 but prior to the
effective date of this Final Waiver, the waiver applies to all
expenditures incurred on or after the effective date of the Final
Waiver, except for FFA obligated by HUD after the deadline for
implementation of the BAP with respect to the purchase of iron or steel
products in infrastructure projects in CDBG formula grants, Choice
Neighborhood, Lead Hazard Reduction, and Healthy Homes Production
Grants.
As such, through this Final Notice, HUD is expanding the
application of the BAP to iron and steel products used in
infrastructure projects funded with new Choice Neighborhood, Lead
Hazard Reduction, and Healthy Homes Production Grants obligated by HUD
on or after February 22, 2023. This waiver advances BABA by targeting
the next phase of implementation to include Choice Neighborhoods
(``CN''), a place-based grant program which helps communities develop
and implement locally driven comprehensive plans to transform
neighborhoods. In Fiscal Year 2023, HUD received $350 million for CN,
which Public Housing Authorities and local jurisdictions apply for
competitively. CN provides planning grants, which provide for the
development of comprehensive plans, and implementation grants, which
allow communities to implement their plans--including for use on
infrastructure activities. This allows for efficient phased
implementation while reducing the administrative burden to potential
grantees and funding recipients where the costs of uncertainties
surrounding compliance with BABA could distract from the focus on
higher value BABA compliant items. Failure to provide recipients such
flexibilities could delay the award for infrastructure projects as
grantees and funding recipients must exert considerable effort
accounting for the sourcing for miscellaneous, low-cost items.
In connection with Choice Neighborhood grants, HUD is clarifying
that this new required application of the BAP in connection with new
Choice Neighborhood grants obligated by HUD on or after February 22,
2023, will not extend to supplemental awards obligated by HUD to enable
the completion of ongoing, pre-existing projects funded by Choice
Neighborhood grants obligated by HUD prior to February 22, 2023. HUD is
continuing to waive the application of the BAP in connection with any
obligation of supplemental Choice Neighborhood grants because they are
merely serving to add additional resources to allow completion of
projects well underway with funding obligated prior to the application
of the BAP and any application of the BAP at this late stage of the
project would be inconsistent with the public interest and could
jeopardize completion of those projects. HUD believes that this
application is consistent with the intent of the proposed waiver and
clarifies that previous awards are not subject to conversion to BAP
applicability merely by the addition of minimal funding needed to
complete projects funded primarily with previous FFA Choice
Neighborhood grant awards.
To focus its efforts on the implementation of the BAP for new FFA
obligated by HUD on or after the dates shown below for each of the
programs and for the items shown below, HUD is proposing to waive the
application of the BAP: (1) as to FFA obligated by HUD and used to
purchase iron and steel before the BAP implementation point shown
below; (2) as to FFA obligated by HUD and used to purchase
specifically-listed construction materials before the BAP
implementation point shown below; (3) as to FFA obligated by HUD and
used to purchase all construction materials not listed before the BAP
implementation point shown below; and (4) as to FFA obligated by HUD
and used to purchase any manufactured products before the BAP
implementation point shown below. For purposes of HUD FFA, the BAP
implementation point shall be the point shown in schedule set forth
below. The table's columns describe four separate elements of the BAP
and the rows describe various HUD FFA programs. The cells in the table
set forth the point at which this waiver expires, and each element of
the BAP becomes effective,
[[Page 17003]]
for the various HUD FFA programs for each BAP element. Regarding the
second column, the specifically listed construction materials under
this waiver are: (1) non-ferrous metals; (2) lumber; (3) composite
building materials; and (4) plastic and polymer-based pipe and tube.
Regarding the two rows that reference new FFA HUD obligates from the
appropriations for a particular fiscal year (i.e., CDBG formula grants
and RHP grants), except for iron and steel, the waiver will not expire
on a single date for the entire program for any element of the BAP;
instead, the waiver will remain effective and continue to waive the BAP
for any FFA HUD obligates from the appropriations for prior fiscals
years for the relevant element, but the waiver will not be effective
for any FFA HUD obligates from the appropriations for the fiscal year
referenced in the cell and following fiscal years, to which the
relevant element of the BAP will apply. The implementation schedule
established by HUD in this final waiver is as follows:
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Construction
Iron and steel-- Construction materials-- materials--not Manufactured
BAP specifically-listed--BAP listed--BAP products--BAP
implementation implementation point implementation implementation
point point point
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Tribes, Tribally Designated Not Addressed in Not Addressed in this Not Addressed in Not Addressed in
Housing Entities, and Tribal this Notice. See Notice. See note 1. this Notice. this Notice.
Entities. note 1. See note 1. See note 1.
CDBG Formula Grants........... November 15, As of the date HUD As of the date As of the date
2022--as obligates new FFA from HUD obligates HUD obligates
described in the Fiscal Year 2024 new FFA from new FFA from
November 23, appropriations. Fiscal Year Fiscal Year
2022 Final 2025 2025
Waiver. appropriations. appropriations.
Choice Neighborhood, Lead New FFA obligated New FFA obligated by HUD New FFA New FFA
Hazard Reduction, and Healthy by HUD on or on or after August 23, obligated by obligated by
Homes Production Grants. after February 2024. HUD on or after HUD on or after
22, 2023. August 23, 2024. August 23,
2024.
Recovery Housing Program New FFA obligated As of the date HUD As of the date As of the date
(``RHP'') Grants. by HUD on or obligates new FFA from HUD obligates HUD obligates
after August 23, Fiscal Year 2024 new FFA from new FFA from
2023. appropriations. Fiscal Year Fiscal Year
2025 2025
appropriations. appropriations.
All other HUD FFA except HOME, New FFA obligated New FFA obligated by HUD New FFA New FFA
Housing Trust Fund, and by HUD on or on or after August 23, obligated by obligated by
Public Housing FFA used for after February 2024. HUD on or after HUD on or after
maintenance projects. 22, 2024. August 23, 2024. August 23,
2024.
HOME, Housing Trust Fund, and New FFA obligated New FFA obligated by HUD New FFA New FFA
Public Housing FFA used for by HUD on or on or after August 23, obligated by obligated by
maintenance projects. after August 23, 2024. HUD on or after HUD on or after
2024. August 23, 2024. August 23,
2024.
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This phased implementation of the BAP advances the goals of BABA by
providing transparency in HUD's implementation of the BAP, reducing the
administrative burden to potential assistance recipients where the
costs of uncertainty in compliance with BABA could distract from the
focus on the efficient and effective implementation of BABA in an
orderly and efficient manner, and provides transparency concerning the
full implementation plans in connection with HUD FFA used in
infrastructure projects. Failure to provide recipients such
flexibilities and transparency could delay the award for infrastructure
projects as grantees and funding recipients must exert considerable
effort in changing their plans and accounting for the sourcing of
materials in construction projects without the benefit of complete
guidance on the Act's requirements.
Additionally, HUD believes that this coordination in the
implementation of BABA will avoid unnecessary and undue hardship that
could jeopardize the timely and cost-effective completion of such
projects as grantees and funding recipients that have previously not
been subject to requirements similar to BAP react to anticipated
guidance on how to come into full compliance. This implementation
schedule and corresponding waiver allows grantees and funding
recipients to focus their efforts in beginning the implementation of
the BAP and allows HUD to focus its training and technical assistance
on those grantees beginning the implementation process. This waiver is
not an alternative to increasing domestic production, but rather serves
as a tool to assist HUD in its implementation of the Buy American
provisions in the most efficient manner in order to promote investment
in HUD's domestic manufacturing base, strengthen critical supply
chains, and position United States workers and businesses to compete
and lead globally in the 21st century. The implementation schedule is
designed to ensure that domestic manufacturers have sufficient time to
become aware of and respond to the market signals from HUD recipients
that additional BABA compliant construction materials and manufactured
products will be in demand. This waiver is in the interest of
efficiency, to ease burdens for HUD grantees and funding recipients,
avoid unnecessary costs, and avoid delays to projects that are critical
and time sensitive. This waiver allows HUD to focus, particularly in
the early phases of BABA implementation, on key products and critical
supply chains where increased U.S. manufacturing can best advance our
economic and national security. This waiver allows grantees and funding
recipients to continue with projects in connection with iron and steel
products where Made in America requirements have long been
contemplated--providing greater ease of implementation for HUD's
grantees. Without this waiver, HUD could lose grantee and funding
recipient participation, be exposed to liabilities if HUD forces
grantees and funding recipients to modify their current plans to come
into compliance, or delay critical activities to protect life, safety
and property, and could negatively impact the most vulnerable Americans
we seek to serve.
V. Public Comments on the Waiver
As required under section 70914 of the Act, HUD solicited comment
from the public on the public interest waiver announced in this Notice
on its website
[[Page 17004]]
and then published the proposed waiver in the Federal Register. A total
of 16 comments were received in response to the proposed waiver and
implementation plan. HUD thoroughly reviewed and considered each of the
comments in determining to move forward with the issuance of this
waiver and implementation plan as published in this Final Notice.
Several commenters were supportive of the orderly implementation of the
BAP but requested further time and guidance prior to proceeding with
such implementation. A few commenters again expressed support for a
waiver of broader scope that could potentially exclude all affordable
single and multifamily housing programs from the requirements of BABA.
Additional commenters requested further delays in the implementation
schedule, citing resource constraints and cost uncertainties in support
of further delays in implementation. Other commenters expressed concern
that the agency is not moving forward with the full implementation of
the BAP across all programs immediately.
HUD appreciates the comments from both perspectives, but given the
totality of the comments, believes its implementation schedule and
corresponding waiver of the application of the BAP as set forth in this
Final Notice is appropriate and in the public interest.\2\
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\2\ HUD has and will continue to provide training sessions with
grantees to increase grantees' knowledge about Build America, Buy
America and the Buy America Preference requirements as they relate
to HUD programs and HUD FFA used by Non-Federal entities to purchase
iron and steel, construction materials, and manufactured products to
be used infrastructure projects.
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HUD has expressed its desire to move forward with the full
implementation of the BAP across its FFA programs, but believes that
the public interest is served best by a measured approach to
implementation of the Act, allowing for the appropriate balancing of
the intent of the Act with the public interest in the continued
efficiency and success of infrastructure projects funded through HUD's
affordable housing and community development programs. HUD therefore
declines to alter the proposed phased implementation plan and
corresponding waiver at this time, but is taking this opportunity to
clarify that the application of the BAP for iron and steel will apply
to new awards of FFA in connection with Choice Neighborhood grants and
will not retroactively convert ongoing projects to required compliance
with the BAP merely because additional supplemental funding awards have
been made to facilitate orderly completion of those ongoing projects.
HUD will continue to monitor the implementation of the BAP across its
programs to ensure the most robust application possible in light of the
important public interests discussed above.
Several proponents of the waiver requested that HUD provide further
guidance regarding the implementation of the BAP and HUD commits to
developing robust guidance regarding the implementation of the BAP
across its programs. HUD further recognizes that proposed guidance \3\
has been issued by the Office of Management and Budget (OMB) concerning
the implementation of BABA across FFA programs and will continue to
monitor the outcome of the proposed effort to update OMB's guidance in
connection with the development of its own guidance for grantees and
funding recipients. HUD remains committed to reviewing its plans to
provide for the effective and efficient implementation of the Act
across its programs and providing timely and appropriate guidance but
believes that further extension of its waiver of application of the BAP
beyond the implementation points provided in this Final Notice is not
necessary at this time.
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\3\ <a href="http://Regulations.gov">Regulations.gov</a>.
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VI. Impact of This Waiver on Other FFA
HUD will not require compliance with the BAP in connection with the
use of any HUD FFA obligated by HUD before November 14, 2022, or during
the pendency of any other applicable BABA waiver issued by HUD,
including this waiver, as applicable, after it is finalized. However,
where the BAP or other ``Buy American'' requirements are made
applicable to a project of a grantee or funding recipient by another
Federal agency, those requirements are not waived by this waiver, nor
is the grantee or funding recipient exempt from the application of
those requirements in accordance with the requirements of the Federal
agency providing such FFA.
VII. Assessment of Cost Advantage of a Foreign-Sourced Product
Under OMB Memorandum M-22-11, ``Memorandum for Heads of Executive
Departments and Agencies,'' published on April 18, 2022, agencies are
expected to assess ``whether a significant portion of any cost
advantage of a foreign-sourced product is the result of the use of
dumped steel, iron, or manufactured products or the use of injuriously
subsidized steel, iron, or manufactured products'' as appropriate
before granting a public interest waiver. HUD's analysis has concluded
that this assessment is not applicable to this waiver, as this waiver
is not based in the cost of foreign-sourced products. HUD will perform
additional market research during the waiver period to better
understand the market and to limit the use of waivers caused by dumping
of foreign-sourced products.
Marcia L. Fudge,
Secretary.
[FR Doc. 2023-05698 Filed 3-20-23; 8:45 am]
BILLING CODE 4210-67-P
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