Clean Water SRF and Drinking Water SRF
EPA State Revolving Funds BABA rules for manufactured product
How the Build America, Buy America manufactured product standard applies to a project funded by Environmental Protection Agency Clean and Drinking Water State Revolving Funds. The cited rule, a worked example, and the waiver options.
Run it in the calculatorA manufactured product must be manufactured in the United States, and the cost of its US-made components must be greater than 55 percent of the total cost of all components.
A worked example
Take a packaged pump skid supplied to a EPA State Revolving Funds project, quoted at a total component cost of $10,000. The test is on component cost, so the final-assembly step, overhead and profit are excluded. Split the components by origin and sum each column.
| Component | Origin | Cost |
|---|---|---|
| Pump casing | US | $2,600 |
| Baseplate | US | $1,400 |
| Impeller | US | $1,100 |
| Fasteners and gaskets | US | $600 |
| Motor | Imported | $3,200 |
| Control valve | Imported | $1,100 |
| Total component cost | $10,000 | |
| US component cost | $5,700 | |
| Domestic content | 57.0% |
US component cost divided by total component cost is 57.0 percent, which is greater than 55 percent. If the skid was also assembled in the United States, it is compliant. Move one US component of about $400 to an imported source and domestic content falls to 53.0 percent, and the same skid is non-compliant. A single sourcing decision decides the line, which is why the math belongs in sourcing, not at the end.
How to check a line
- 1
Sum the component costs
Add the cost of every component in the product, domestic and imported. Exclude final-assembly labor, overhead and profit; the test is on component cost.
- 2
Total the US component cost
Add the cost of only the components mined, produced, or manufactured in the United States.
- 3
Divide and compare
Divide US component cost by total component cost. The product passes only if the result is greater than 55 percent and the product was assembled in the United States.
- 4
Handle any shortfall
If it falls at or below the threshold, the item is non-compliant. Check whether a waiver category applies before relying on it.
EPA State Revolving Funds manufactured product questions
What is the manufactured product standard for a EPA State Revolving Funds project?
A manufactured product must be manufactured in the United States, and the cost of its US-made components must be greater than 55 percent of the total cost of all components.
How is the 55 percent calculated?
It is US component cost divided by total component cost. The final-assembly step, overhead and profit are not components and are excluded from both figures. The product passes only if the result is greater than 55 percent.
What if a manufactured product line fails the standard?
It is non-compliant unless a recognised waiver applies and is granted by the agency. EPA State Revolving Funds recognises 5 waiver categories. A waiver is never a pass on its own.