Build America, Buy America Requirements: What Manufacturers Need to Know Before October 2026
Manufacturers whose products are used in federally funded infrastructure projects, or could be in the future, should begin preparing now for new Build America, Buy America (BABA) requirements taking effect in October 2026. These changes may affect how manufacturers source components, assemble products, and document compliance, particularly for companies supporting transportation, construction, and other infrastructure-related projects.
While the new requirements will not apply to every manufacturer or every project, they are expected to impact a wide range of products that may ultimately be incorporated into federally funded infrastructure work. Understanding how these rules apply and planning ahead can help manufacturers reduce compliance risk and avoid disruption as the requirements take effect.
This article outlines what BABA is, how the new requirements are being phased in, which manufacturers are most likely to be affected, and what steps companies should consider taking now.
What Is the BABA Act?
The BABA Act, enacted as part of the Infrastructure Investment and Jobs Act (IIJA) in late 2021, establishes domestic content requirements for infrastructure projects that receive federal financial assistance.
At a high level, BABA requires that iron, steel, manufactured products, and construction materials used in covered projects be produced in the United States, unless a specific waiver or exception applies.
Importantly, these requirements apply only when federal funding is obligated, meaning funds are formally committed to a project through a grant or agreement with a state, local government, or other recipient. Projects that are purely private, or state or local projects with no federal financial assistance, are not subject to BABA requirements.
When Do the New Buy America Rules Apply?
The manufactured-product requirements are being implemented in two phases, based on when federal funds are obligated for a project.
Phase One: Final Assembly Requirement
Effective for projects obligated on or after October 1, 2025
Beginning October 1, 2025, manufactured products used in covered projects must be manufactured in the United States, meaning final assembly must occur domestically. This marks a significant change for manufacturers that previously relied on the FHWA manufactured-products waiver.
Phase Two: 55 Percent Domestic Content Requirement
Effective for projects obligated on or after October 1, 2026
Starting October 1, 2026, the requirements become more stringent. In addition to final assembly occurring in the U.S., more than 55 percent of the total cost of a manufactured product’s components must be mined, produced, or manufactured in the United States.
For manufacturers with complex or global supply chains, meeting this requirement may require careful planning, including:
- Reviewing supplier relationships
- Improving component cost tracking and documentation
- Evaluating sourcing and procurement strategies
Which Manufacturers Are Affected?
The new BABA requirements do not apply to:
- Purely private projects
- State or local projects with no obligated federal funding
However, manufacturers should not assume they are unaffected. If a product could reasonably be incorporated into a federally funded infrastructure project, BABA compliance considerations are important, even if the manufacturer does not sell directly to a government entity.
While the recipient of federal funds is typically responsible for compliance, manufacturers can face risk if they provide inaccurate certifications or market products as BABA-compliant when they are not.
Are There Any Exceptions?
Federal agencies may grant BABA waivers in limited circumstances, including when:
- Applying the requirement would be inconsistent with the public interest
- Domestic materials or components are not reasonably available
- Compliance would increase overall project costs by more than 25 percent
Limited de minimis exemptions may also apply in certain cases, though they should not be relied upon as a primary compliance strategy.
Steps Manufacturers Should Take Now
With October 2026 approaching, manufacturers should consider taking proactive steps, including:
- Identifying products that may be used in federally funded projects
- Evaluating domestic content across supply chains
- Strengthening documentation and cost accounting processes
- Consulting with legal, tax, and advisory professionals to assess compliance risk
Early planning can help manufacturers remain competitive and avoid disruption as the requirements take effect.
How Whittlesey Can Help
Preparing for the Build America, Buy America requirements will likely involve coordination across operations, supply chain management, financial reporting, and compliance.
Whittlesey’s advisors work with manufacturers to evaluate how these new requirements may affect their products, customers, and long-term strategy. We can help you assess readiness, identify potential gaps, and develop a practical plan ahead of the October 2026 deadline.
If you have questions about how the Build America, Buy America requirements may affect your business, or would like assistance preparing for compliance, contact Stacy Farber to start the conversation.
Stacy Farber, CPA, is an Assurance Partner at Whittlesey with more than 25 years of experience advising closely held manufacturing and industrial businesses. She specializes in assurance and advisory services for manufacturers navigating complex operational, supply chain, and compliance challenges, drawing on prior experience as a Chief Financial Officer and Controller to deliver practical, business-focused guidance. Stacy is recognized for her leadership in the profession, including being named to Forbes’ America’s Top 200 CPAs list, and is a trusted advisor to manufacturers preparing for regulatory and operational change.