Published date: 11/20/2025
Frederick Pfaeffle is an experienced energy and environmental attorney currently serving as President and CEO of EPS LLC Energy Partners Solutions (EPS). EPS specializes in providing expert legal and advisory services for energy projects, including assisting with domestic supply chain and energy tax credit requirements and challenges.
Mr. Pfaeffle previously served as Senior Legal Advisor at the United States Department of Energy (DOE). His portfolio included advising the Secretary of Energy and DOE senior leadership on energy policy, including implementing over $170 billion in funding for grants and loans through funding made available by BIL and IRA.
Preface from LCPtracker
With recent attention on the One Big Beautiful Bill Act (OBBBA) and its potential impact on domestic-content criteria for certain clean-energy tax credits, some readers may understandably wonder how these developments relate to the Build America, Buy America Act (BABA). To help avoid confusion, we want to offer brief clarification.
OBBBA concerns domestic-content rules for specific tax-credit bonus eligibility, whereas BABA is a separate statute that governs domestic-sourcing requirements for federally funded infrastructure projects. The article below, contributed by Energy Partners Solutions (EPS), focuses solely on BABA and its implications.
The U.S. Government wants to align its massive purchasing power of over $2 trillion per year with national priorities to strengthen domestic manufacturing and supply chains, support high-quality U.S. jobs, and reduce reliance on foreign suppliers for critical materials.
The Build America, Buy America Act (BABA) is an important tool reshaping how federal funds are spent across U.S. infrastructure, energy, and manufacturing projects. Enacted as part of the Infrastructure Investment and Jobs Act (IIJA) in November 2021, BABA expands longstanding “Buy America” principles to ensure that taxpayer-funded projects rely on U.S.-produced materials, products, and components—from steel and iron to manufactured goods and construction materials.
BABA requires that all federal infrastructure programs—whether funded through grants, loans, or other forms of financial assistance—apply consistent domestic content preferences. This means that any project receiving federal support must, with limited exceptions, use materials produced in the United States.
Beyond compliance, BABA represents a strategic shift in U.S. economic policy: using federal investments to drive industrial competitiveness. By linking public spending with domestic production, BABA seeks to rebuild manufacturing capacity, create resilient supply chains, and ensure that the benefits of America’s infrastructure renewal are felt at home.
What is infrastructure?
BABA defines infrastructure broadly. It includes traditional public works like roads, bridges, and water systems, but also extends to:
- Energy infrastructure (grid modernization, renewables, pipelines)
- Broadband networks
- Public transportation and airports
- Buildings and other community facilities supported by federal funding
If a project improves or supports public infrastructure, it’s likely subject to BABA.
What supply chains are subject to BABA?
Under BABA, three major categories of materials are subject to domestic preference rules:
- Iron and Steel – All manufacturing processes, from melting to coating, must occur in the United States.
- Manufactured Products – The product must be manufactured in the U.S., and at least 55% of the cost of its components must be of U.S. origin (thresholds may increase in future years).
- Construction Materials – This includes materials like glass, drywall, lumber, plastics, composites, and non-ferrous metals that are produced in the U.S.
When can BABA requirements be waived?
BABA recognizes that some materials or products may not be available domestically or may significantly increase project costs. In such cases, agencies can issue a waiver if one of the below conditions are met:
- Applying the requirement is inconsistent with the public interest,
- The materials are not produced in sufficient and reasonably available quantities or quality, or
- Using U.S. materials would increase project costs by more than 25%.
However, waivers are not automatic. Agencies must submit proposed waivers to the Made in America Office (MIAO) within the Office of Management and Budget (OMB) for review and public posting on MadeinAmerica.gov, promoting transparency and accountability.
The Made in America Office, created by the 2001 Executive Order 14005 and later codified in the IIJA, oversees implementation across all federal agencies. The MIAO reviews waivers, issues guidance, and promotes consistency across programs. Each federal agency is responsible for updating its own policies and ensuring recipients of federal funds (states, local governments, utilities, universities, etc.) comply with BABA requirements.
What does BABA mean for grantees and contractors?
For organizations that receive federal infrastructure funds—such as state transportation departments, utilities, and local governments—BABA compliance is now a core eligibility requirement.
Entities should:
- Review funding agreements for BABA clauses;
- Track sourcing for iron, steel, manufactured products, and construction materials;
- Maintain supplier certifications and supporting documentation; and
- Develop internal processes to manage potential waiver requests.
Energy Partners Solutions specializes in providing expert legal and advisory services, training and guidance to optimize federal and state compliance for energy infrastructure and related projects and products.
EPS expertise includes: BABA Customized compliance plans with guidance and training for Build America Buy America Act (BABA); Support for federal agency engagement, BABA waivers and risk management; Supplier sourcing strategies to include verification; IRA Tax Credits Domestic Content Adder, Foreign Entity of Concern (FEOC) and Apprenticeship requirements; and Legal Services Regulatory analysis and representation to ensure energy policies align with legal framework and industry standards.
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