[Federal Register Volume 87, Number 105 (Wednesday, June 1, 2022)]
[Notices]
[Pages 33193-33196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-11729]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6331-N-03]


Request for Information Relating to the Implementation of the 
Build America, Buy America Act

AGENCY: Office of the Secretary, U.S. Department of Housing and Urban 
Development (HUD).

ACTION: Notice; request for information.

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SUMMARY: This Request for Information (RFI) seeks public input on the 
implementation of the Build America, Buy America Act (``BABA'' or ``the 
Act'') as it applies to HUD's Federal Financial Assistance. In this 
RFI, HUD is seeking input on several topics relating to the potential 
information collection burden on recipients, including existing 
mechanisms for demonstrating compliance with the Act's domestic content 
procurement preference (``Buy America Preference,'' or ``BAP''), 
potential costs of compliance for recipients and contractors, and the 
potential impact on projects funded by HUD Federal Financial 
Assistance.

DATES: Comment Due Date: July 1, 2022.

ADDRESSES: Interested persons are invited to provide responses to this 
RFI. Copies of all comments submitted are available for inspection and 
downloading at www.regulations.gov. To receive consideration as public 
comments, comments must be submitted through one of two methods, 
specified below. All submissions must refer to the above docket number 
and title.
    1. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov. HUD strongly

[[Page 33194]]

encourages commenters to submit comments electronically. Electronic 
submission of comments allows the commenter maximum time to prepare and 
submit a comment, ensures timely receipt by HUD, and enables HUD to 
make them immediately available to the public. Comments submitted 
electronically through the www.regulations.gov website can be viewed by 
other commenters and interested members of the public. Commenters 
should follow the instructions provided on that site to submit comments 
electronically.
    2. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW, Room 10276, 
Washington, DC 20410-0500.
    No Facsimile Comments. Facsimile (FAX) comments will not be 
accepted.
    Public Inspection of Comments. All properly submitted comments and 
communications submitted to HUD will be available for public inspection 
and copying between 8:00 a.m. and 5:00 p.m. weekdays at the above 
address. Due to security measures at the HUD Headquarters building, an 
advance appointment to review the submissions must be scheduled by 
calling the Regulations Division at (202) 708-3055 (this is not a toll-
free number). Individuals with speech or hearing impairments may access 
this number via TTY by calling the Federal Information Relay Service at 
(800) 877-8339 (this is a toll-free number). Copies of all submissions 
are available for inspection and downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Joseph Carlile, Senior Advisor, Office 
of the Secretary, Department of Housing and Urban Development, 451 
Seventh Street SW, Room 10226, Washington, DC 20410-5000, at (202) 402-
7082 (this is not a toll-free number. Persons with hearing or speech 
impairments may access this number through TTY by calling the toll-free 
Federal Relay Service at 800-877-8339. Questions about this document 
also be sent to [email protected].

SUPPLEMENTARY INFORMATION:

I. Build America, Buy America

    The Build America, Buy America Act (the Act) was enacted on 
November 15, 2021, as part of the Infrastructure Investment and Jobs 
Act (IIJA). Public Law 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 by the Department through a Federal financial assistance 
program that provides funding for infrastructure projects may be 
obligated unless it has taken steps to ensure that all of 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.

II. HUD's Progress in Implementation of the Act

A. Initial Report

    Since the enactment of the Act, HUD has worked diligently to 
implement the BAP. Consistent with the requirements of Section 70913 of 
the Act, HUD has produced a report that identifies and evaluates all of 
HUD's Federal Financial Assistance programs with potentially eligible 
uses of funds that include infrastructure as defined by the Act to 
determine which programs would be in compliance with the BAP and which 
would be considered inconsistent with Section 70914 of the Act and thus 
``deficient'' as defined by Section 70913(c) of the Act. The report was 
submitted to Congress and the Office of Management and Budget (OMB) and 
published in the Federal Register within 60 days after the date of 
enactment of the Act, on January 19, 2022 (87 FR 2894). Specifically, 
HUD published the required report in a notice entitled ``Identification 
of Federal Financial Assistance Infrastructure Programs Subject to the 
Build America, Buy America Provisions of the Infrastructure Investment 
and Jobs Act'' in compliance with Section 70913. In the report, HUD 
erred on the side of over-inclusiveness in accordance with Office of 
Management and Budget (OMB) guidance,\1\ finding that none of HUD's 
discretionary funding programs reviewed to date fully meet the BAP 
requirements outlined in Section 70914 of the Act and are considered 
``deficient'' under the definition in Section 70913(c). Since issuing 
the report, HUD has held regular meetings with Departmental offices and 
consulted administrative and economic data to plan to implement the 
Act.
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    \1\ See OMB Memorandum M-22-08, Identification of Federal 
Financial Assistance Infrastructure Programs Subject to the Build 
America, Buy America Provisions of the Infrastructure Investment and 
Jobs Act, www.whitehouse.gov/wp-content/uploads/2021/12/M-22-08.pdf.
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B. OMB Initial Implementation Guidance

    On April 18, 2022, OMB issued guidance to heads of Executive 
Departments and Agencies on the application of a BAP in Federal 
Financial Assistance programs for infrastructure.\2\ This guidance laid 
out the current interpretation of the Act and key terminology, how to 
apply the BAP to Federal Financial Assistance programs for 
infrastructure, and how agencies should be constructing a transparent 
waiver process.
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    \2\ See OMB Memorandum M-22-11, Initial Implementation Guidance 
on Application of Buy America Preference in Federal Financial 
Assistance Programs for Infrastructure, www.whitehouse.gov/wp-content/uploads/2022/04/M-22-11.pdf.
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    The guidance defined ``infrastructure'' to include public 
infrastructure projects such as the structures, facilities, and 
equipment for, in the United States, roads, highways, and bridges; 
public transportation; dams, ports, harbors, and other maritime 
facilities; intercity passenger and freight railroads; freight and 
intermodal facilities; airports; water systems, including drinking 
water and wastewater systems; electrical transmission facilities and 
systems; utilities; broadband infrastructure; and buildings and real 
property. However, infrastructure should be interpreted broadly, and 
agencies should assess whether a project will serve a public function. 
``Federal Financial Assistance'' is funds that are appropriated or 
otherwise made available and used for infrastructure by a ``non-
Federal'' entity, which includes States, local governments, 
territories, Tribes, Tribally Designated Housing Entities, and other 
Tribal entities, institutions of higher education, and nonprofit 
organizations, but does not include ``for-profit organizations.''
    The guidance also clarifies the extent to which disaster, emergency 
response, or mitigation expenditures are exempt from the Act's BAP. 
Pre- and post-disaster expenditures that are ``made in anticipation of 
or response to an event or events that qualify as an `emergency' or 
`major disaster' within the meaning of the Stafford Act'' are not 
included within the BAP. However, ``[a]wards made to support the 
construction or improvement of infrastructure to mitigate the damage 
that may be caused by a non-imminent future emergency or disaster'' are 
included within the Act's BAP.

[[Page 33195]]

    Under the guidance, agencies should consider if an existing 
domestic content requirement meets the standards in the Act, as the BAP 
applies to a Federal Financial Assistance program for infrastructure 
only to the extent that an existing preference does not apply. As a 
result, policies and provisions that already meet or exceed the Act's 
standards should be preserved, while existing requirements that do not 
meet the Act's standards must be brought into compliance with the BAP.
    The guidance also clarified that the BAP ``only applies to 
articles, materials, and supplies that are consumed in, incorporated 
into, or affixed to an infrastructure project,'' and does not apply if 
an agency has determined no funds in the project will be used for 
infrastructure. The BAP ``does not apply to tools, equipment, and 
supplies . . . brought to the construction site and removed at or 
before'' completion, nor does it apply to equipment and furnishings 
that are not an ``integral part of or permanently affixed to the 
structure.'' Furthermore, items should only be classified as (1) iron 
or steel, (2) a manufactured product, or (3) a construction material, 
and agencies should apply the iron and steel test to items that are 
predominantly iron or steel.
    The guidance emphasized that Federal agencies are responsible for 
processing and approving all waivers, including requests from 
recipients for their own projects and on behalf of subrecipients. 
Waivers should generally be targeted to specific products and projects 
where feasible. Agencies must submit to OMB for coordination when a 
waiver is a general applicability waiver but should notify OMB before 
posting a proposed waiver for comment. The agency is responsible for 
evaluating the proposed waiver to determine its consistency with the 
Act, and should attempt to maximize the use of goods, products, and 
materials produced in the United States to the greatest extent 
possible. Agencies must also develop standard criteria for determining 
whether to grant a waiver in each circumstance.
    The guidance also provided five examples of potential general 
applicability public interest waivers: (1) De minimis, (2) small 
grants, (3) minor components, (4) adjustment period, and (5) 
international trade obligations. These categories are not exclusive, 
and other public interest waivers may be appropriate. Before a public 
interest waiver is granted, agencies must assess if a significant 
portion of any cost advantage of a foreign-sourced product is the 
result of dumped or injuriously subsidized materials and will integrate 
any findings from the assessment into the waiver.
    The guidance provided a list of information that should be included 
within each waiver, including the recipient's name and identifier, the 
funding amount, total cost of infrastructure expenditures, a 
certification that the Federal official or recipient made a good faith 
effort to solicit bids for domestic products that fall within the BAP, 
and a statement justifying the waiver.
    OMB also provided initial, nonbinding guidance on the definition of 
``all manufacturing processes'' for construction materials. OMB's 
guidance clarified the distinction between manufactured product and 
construction materials, stating that if two of the materials identified 
by the Act are combined with a third material through a manufacturing 
process, the product should be treated as manufactured products. For 
construction materials, agencies should consider ``all manufacturing 
processes'' to include at least the ``final manufacturing process and 
the immediately preceding manufacturing stage for the construction 
material. OMB is seeking additional feedback on this guidance.
    Finally, OMB provided a sample award term that would ensure the use 
of American iron, steel, manufactured products, and construction 
materials for infrastructure projects complies with the Act's BAP. This 
sample award term incorporates key definitions and outlines the 
necessary steps to ensure compliance with the Act. The sample award 
term includes additional information about the waiver process and could 
be altered to reflect agency specific procedures.

C. HUD's Public Interest Waivers of the Act's BAP Until the Completion 
of a Paperwork Reduction Act Package and Tribal Consultation Process

    On April 29, 2022 (87 FR 26219), HUD proposed a general 
applicability waiver of the BAP to HUD's Federal Financial Assistance 
awards to provide the Department with sufficient time to comply with 
the requirements of the Paperwork Reduction Act (PRA). HUD outlined the 
need to impose additional information collection requirements on 
recipients of HUD Federal Financial Assistance to ensure full 
compliance with the BAP. HUD stated that recipients of Federal 
Financial Assistance from HUD are unfamiliar with the BAP and 
additional information collection requirements, as HUD's programs have 
not previously been subject to a similar Buy American preference. As a 
result, HUD found that the proposed general applicability waiver of the 
BAP until HUD had the opportunity to fully review public comments on 
how to effectively reduce the burden on the public arising from 
information collection necessary to implement the Act would be in the 
public interest.
    In addition, on April 29, 2022 (87 FR 26221), HUD proposed a 
general applicability waiver of the BAP to HUD's Federal Financial 
Assistance awards for Tribes, Tribally Designated Housing Entities 
(TDHEs), and other Tribal Entities to provide the Department with 
sufficient time to comply with HUD's Tribal consultation process. HUD's 
Tribal Government-to-Government Consultation Policy \3\ was adopted in 
compliance with Executive Order 13175, ``Consultation with Indian 
Tribal Governments,'' and outlines the internal procedures and 
principles HUD must follow when communicating and coordinating on HUD 
programs and activities that affect Native American Tribes. Given that 
the BAP is new to HUD's Federal Financial Assistance directed to 
Tribes, TDHEs, and other Tribal Entities and the potential impact of 
the BAP on Tribal recipients, HUD found a general applicability waiver 
was in the public interest to ensure HUD has sufficient time to 
complete the Tribal consultation process in recognition of Tribe's 
right to self-government and inform a tailored implementation for 
Tribal recipients.
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    \3\ www.hud.gov/program_offices/public_indian_housing/ih/regs/govtogov_tcp. See also 81 FR 40893.
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    More information about HUD's proposed waivers is available here: 
www.hud.gov/program_offices/general_counsel/BABA.

III. Request for Information

    HUD is requesting input from interested parties on the potential 
documentation and information collection necessary to estimate the 
information collection burden and assist HUD in the development of the 
PRA package. As discussed above and in HUD's prior notices regarding 
the implementation of the Act, because the BAP is new to HUD's programs 
and Federal Financial Assistance, HUD currently does not have 
sufficient data about the compliance and monitoring burden on 
recipients required to implement the BAP. As a result, input is 
necessary to create a meaningful estimate of the information collection 
burden in compliance with the PRA.
    1. What HUD Federal Financial Assistance is used to fund 
infrastructure

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as defined under the Build America, Buy America Act? Specifically, HUD 
is seeking input from recipients on what forms of HUD's Federal 
Financial Assistance are used to fund infrastructure projects in those 
programs identified in HUD's report to Congress and OMB on January 19, 
2022 (87 FR 2894) or in any other program through which HUD's Federal 
Financial Assistance may be used to fund infrastructure projects.
    2. How can HUD document what projects serve a ``public function,'' 
thus qualifying as infrastructure under OMB's guidance and falling 
within the scope of the Act? When determining if a program has 
infrastructure expenditures, OMB guidance indicates that Federal 
agencies should interpret the term ``infrastructure'' broadly and 
consider the definition provided as illustrative and not exhaustive. 
Agencies are advised to consider whether the project will serve a 
public function, including whether the project is publicly owned and 
operated, privately operated on behalf of the public, or is a place of 
public accommodation, as opposed to a project that is privately owned 
and not open to the public. Projects with the former qualities have 
greater indicia of infrastructure, while projects with the latter 
quality have fewer. How should HUD consider infrastructure projects 
more broadly? How can HUD determine if the ultimate recipient of the 
funding is a covered non-Federal entity?
    3. Are the entities utilizing Federal Financial Assistance to fund 
infrastructure doing so independently or in partnership with other 
entities? If used in partnership with other entities, how often are 
these private entities or other individuals that would not be covered 
by the definition of non-federal entities under 2 CFR 200.1?
    4. What activities are undertaken by recipients of HUD Federal 
Financial Assistance that fall within the Act's BAP? To the extent that 
these infrastructure projects are disaster-related, can the projects be 
clearly defined as undertaken in response to either (1) non-imminent 
future emergency or disaster mitigation/preparedness or (2) disaster or 
emergency response/imminent threats? How often would projects be 
designed to address both long term and imminent threats? How often 
would projects be designed to address current recovery needs along with 
future long term mitigation needs? What portions of infrastructure 
projects involve the use of iron, steel, manufactured products, or 
construction materials? How do recipients currently differentiate 
between infrastructure spending and non-infrastructure spending, such 
as administrative costs? What types of mitigation activities are 
conducted utilizing HUD Federal Financial Assistance that are not 
related to an imminent threat of a future emergency or disaster? How, 
if at all, will activities be limited such as funding fewer projects?
    5. How do recipients currently determine sourcing for materials? 
Are there existing mechanisms to locate American made iron, steel, 
manufactured products, or construction materials? Furthermore, how do 
recipients currently track contractor sourcing? How often are materials 
recycled from other products such that the origin of such materials may 
be unknown?
    6. Are recipients currently subjected to Buy American requirements 
from other Federal, state, local, or Tribal entities? If yes, are there 
any existing de minimus thresholds exceptions in place and what are 
those exceptions? If yes, how have recipients ensured compliance with 
these preferences? What steps have Federal, state, local, or Tribal 
entities taken to ensure compliance? What type of contractual language 
has been utilized to ensure compliance? If contractual language has 
been utilized to ensure compliance with a Buy American requirement, 
when was it first added? Is the suggested language in Appendix I of 
OMB's ``Memorandum for Heads of Executive Departments and Agencies'' 
\4\ issued April 18, 2022, consistent with other Buy American language 
in award terms? Are there ways to improve this suggested award language 
for HUD's Federal Financial Assistance programs? What is the burden and 
impact, either based in prior experience or as an estimate based on 
OMB's suggested language, associated with inserting Buy American 
language into contracts for infrastructure projects?
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    \4\ www.whitehouse.gov/wp-content/uploads/2022/04/M-22-11.pdf.
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    7. Are there any plans in the iron, steel, manufactured products, 
or construction materials industries to provide documentation regarding 
materials' compliance with BABA? Are there existing forms of 
documentation that would demonstrate BABA compliance? How, if at all, 
will BABA compliance impact energy efficiency efforts pursuant to 
Executive Order 14008?
    8. What are contractor's administrative costs associated with 
complying with BABA? What forms of maintenance and guarantee costs will 
be necessary to confirm compliance? Will there be any construction 
timeline delays associated with BABA compliance? Is there a need for 
standard contractual provisions to deal with potential delays arising 
from BABA compliance? If there is a need for a product specific waiver, 
when would contractors know about the need?
    9. What, if any, are the specific concerns, either from recipients 
or contractors, about a potential waiver process? Considering agency 
requirements associated with waiver processing, what would be the ideal 
and realistic timeline for waiver processing that would minimize impact 
on affected projects? What documentation is currently available, either 
from contractors or recipients, to demonstrate the need for a waiver in 
line with the requirements in section 70914 of the Act?
    10. Where applicable, how will BABA requirements affect relocation 
plans, transfer procedures, and/or reasonable accommodation or 
modifications procedures for existing occupants? What if any changes 
are required for your agency's Administrative Plan or Admissions and 
Continued Occupancy Plan? Are there any other potential impacts on 
current residents of projects supported by HUD Federal Financial 
Assistance?
    11. What situations would require expedited or general waivers? How 
can HUD develop its waiver criteria in a way that identifies these 
expedited or general waivers? Are there situations where the cost of 
the materials would always meet the standards for waivers established 
under Section 70914 of the Act, whether a cost, public interest, or 
nonavailability waiver?
    12. How, if at all, would the Act's BAP affect contractor's 
willingness to accept infrastructure contracts subject to BABA's 
requirements? How would contractors need to build in additional costs 
when bidding for infrastructure contracts?

Marcia L. Fudge,
Secretary.
[FR Doc. 2022-11729 Filed 5-31-22; 8:45 am]
BILLING CODE 4210-67-P