Federal-aid highway program
FHWA BABA domestic-content rules
Federal Highway Administration funds highways, bridges, roads. These are the three Build America, Buy America standards it applies, each cited to its official source.
The three standards
All iron and steel used in the project must be produced in the United States, meaning all manufacturing processes from the initial melting stage through the application of coatings occurred in the United States.
A manufactured product permanently incorporated into the project must be manufactured in the United States (the final assembly requirement). The 55 percent domestic component-cost test does not apply to projects obligated before October 1, 2026.
All manufacturing processes for the construction material must have occurred in the United States, per the OMB-defined construction materials list.
Waivers FHWA recognises
A line that fails a standard is not automatically the end of the project. These waiver categories can apply, but each must be requested from the agency and granted. A waiver is never a pass on its own.
Public Interest Waiver
A waiver granted when applying the Buy America preference would be inconsistent with the public interest. It may be project-specific or issued as a general applicability waiver, and must be construed to maximize use of US-made goods.
Nonavailability Waiver
A waiver granted when the required iron, steel, manufactured products, or construction materials are not produced in the United States in sufficient and reasonably available quantities or of a satisfactory quality.
Unreasonable Cost Waiver
Objective test: Domestic preference would increase overall project cost by more than 25 percent
A waiver granted when including US-produced materials would increase the cost of the overall project by more than 25 percent.
De Minimis Waiver
Objective test: Cumulative cost of non-domestic components is 5% or less of total material cost
A general applicability public interest waiver that agencies may adopt for infrastructure purchases below a de minimis threshold. OMB gives the example of five percent of applicable project costs up to a maximum of $1,000,000, where applicable project costs are the material costs subject to the Buy America preference.
Small Grants Waiver
Objective test: Total Federal award does not exceed the Simplified Acquisition Threshold (currently $250,000)
A public interest waiver agencies may consider for awards at or below the Simplified Acquisition Threshold. OMB notes the SAT is currently $250,000, and the award, inclusive of other funding sources, is not anticipated to exceed the SAT over the life of the award.
FHWA questions
What is the manufactured-products standard under FHWA?
A manufactured product permanently incorporated into the project must be manufactured in the United States (the final assembly requirement). The 55 percent domestic component-cost test does not apply to projects obligated before October 1, 2026. This standard is phased by the date a project's federal funds were obligated: from 2025-10-01, final assembly in the us (no component-cost test); from 2026-10-01, us component cost greater than 55%.
Does FHWA apply a percentage to iron and steel?
No. Iron and steel and construction materials are all-or-nothing standards: every manufacturing process must occur in the United States, so there is no percentage to hit.
Which waivers does FHWA recognise?
FHWA recognises 5 waiver categories: Public Interest Waiver, Nonavailability Waiver, Unreasonable Cost Waiver, De Minimis Waiver, Small Grants Waiver. A waiver must be requested from the agency and granted; it is never a pass on its own.