The five BABA waivers, and why none of them is a pass
Build America, Buy America recognises five waiver categories: public interest, nonavailability, unreasonable cost, de minimis, and small grants. Here is what each one requires, the objective tests where they exist, and why a waiver is never the same as compliance.
A bill of materials that fails the Build America, Buy America (BABA) domestic-content standards is not automatically the end of a federally funded project. BABA and OMB M-24-02 recognise a set of waiver categories that let a non-compliant item proceed when a defined condition is met. The single most important thing to understand about all of them: a waiver is not compliance. It is a request the funding agency has to grant, and until it is granted the item is non-compliant, full stop.
Public interest
Granted when the head of the Federal agency finds that applying the domestic-content preference would be inconsistent with the public interest. It can be project-specific or issued as a general applicability waiver, and it must be construed to maximise the use of US-made goods. There is no numeric test here; it is a qualitative finding by the agency.
Nonavailability
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 are not of a satisfactory quality. This is the category for the case where a compliant product simply does not exist in the domestic market at the volume or quality the project needs.
Unreasonable cost
Granted when including US-produced materials would increase the cost of the overall project by more than 25 percent. This one has an objective test: the 25 percent differential is measured against overall project cost, not against the price of the single item, so a modest cost gap on one component rarely clears the bar on its own.
De minimis
A general applicability public interest waiver that agencies may adopt for purchases below a de minimis threshold. OMB gives the example of 5 percent of applicable project costs, up to a maximum of 1,000,000 dollars, where applicable project costs are the material costs subject to the preference. It is designed so that small, unavoidable amounts of non-domestic content do not sink an otherwise compliant project.
Small grants
A public interest waiver agencies may consider for awards at or below the Simplified Acquisition Threshold, which OMB notes is currently 250,000 dollars. The award, inclusive of other funding sources, must not be anticipated to exceed that threshold over the life of the award.
Two of these five carry a hard number you can test yourself: unreasonable cost at a 25 percent project-cost increase, and de minimis at 5 percent of applicable project costs capped at 1,000,000 dollars. The other three turn on an agency finding, so plan for a lead time on the request.
| Waiver | Test | Type |
|---|---|---|
| Public interest | Agency finding, no number | Qualitative |
| Nonavailability | Not available at quantity or quality | Qualitative |
| Unreasonable cost | Over 25% project-cost increase | Objective |
| De minimis | Example: 5% of costs, cap $1,000,000 | Objective |
| Small grants | At or below the $250,000 threshold | Objective |
How a waiver sits next to a verdict
In a determination, an item that fails its standard but matches a recognised waiver category is marked waiver-eligible, not compliant. That label is a prompt to act: identify the right category, assemble the evidence the category requires, and file the request with the funding agency. Treating waiver-eligible as a green light is exactly the mistake that shows up in an audit, because the file will show an item that was used without a granted waiver behind it.
See which waiver categories your funding agency recognises, applied to your own bill of materials.
Run the calculatorFrequently asked questions
- What are the five BABA waiver categories?
- Public interest, nonavailability, unreasonable cost, de minimis and small grants. Each has a distinct trigger, and each must be requested from and granted by the funding agency.
- Is a BABA waiver the same as being compliant?
- No. A waiver lets a non-compliant item proceed only once the funding agency grants it. Until then the item is non-compliant, and a determination marks it waiver-eligible rather than compliant.
- What is the unreasonable cost waiver threshold?
- It applies where including US-produced materials would increase the overall project cost by more than 25 percent, measured against total project cost rather than the price of a single item.
- What is the de minimis waiver example figure?
- OMB gives the example of 5 percent of applicable project costs, up to a maximum of 1,000,000 dollars, where applicable project costs are the material costs subject to the preference.
This guide is compliance guidance, not legal advice or a binding determination by any funding agency. To see the cited verdict for your own bill of materials, use the free BOM calculator, or see how the same engine works from your own code or an AI agent.
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