Build America Buy America: Key 2025 and 2026 Rule Changes for Construction and Manufacturing

November 24, 2025 — The 2025/2026 Build America Buy America (BABA) rule changes require final assembly of manufactured products in the U.S. beginning October 1, 2025, and at least 55 percent U.S.-sourced component cost beginning October 1, 2026. These rules apply to manufactured products permanently incorporated into Federal Highway Administration (FHWA) infrastructure projects.

Understanding the BABA regulatory shift

BABA, part of the Infrastructure Investment and Jobs Act, raises the bar on what qualifies as “Made in America” for federally funded infrastructure projects. The biggest change is the end of FHWA’s long‑standing Manufactured Products Waiver, which means products permanently incorporated into eligible projects now face new domestic‑content requirements. According to recent Buy America guidance, FHWA final assembly requirements shifted significantly beginning last month.

Two key milestones define the BABA regulations shift:

• As of October 1, 2025, FHWA defines that manufactured products must be finally assembled in the United States.
• Projects obligated after October 1, 2026 must meet both FHWA final assembly requirement and a minimum 55 percent U.S.‑sourced component‑cost threshold.

Understanding the 55 percent component-cost requirement

These rules reshape how manufacturers, contractors and project owners source materials, plan schedules and manage risk in 2026 and beyond. BABA requires that manufacturers must know where every component comes from and how each piece factors into the 55 percent cost calculation. If a product cannot meet these requirements, it may be rejected for federally funded work, creating delays, added cost or forced supplier changes.

Procurement teams will also face growing expectations to show clear documentation, including component origin breakdowns, supplier certifications and domestic‑content verification. Because obligations depend on federal funding timelines, even small schedule shifts can determine which set of rules applies.

Participants rely on compliant products to maintain eligibility for federal reimbursement and keep schedules on track. Even though contractors don’t calculate the 55 percent component-cost ratio themselves, they are responsible for verifying supplier compliance and absorbing the downstream impacts of delays, substitutions or bid protests tied to BABA requirements.

What leadership teams should do now

Contractors may encounter increased exposure related to non-compliant materials, change orders, sourcing disruptions, or challenges from competitors during the procurement phase. Strengthening supplier documentation and improving early sourcing verification can help limit these risks and maintain project continuity.

How Truss Faber helps businesses navigate BABA regulations

Truss Faber works with manufacturers, contractors and project leaders to clarify which domestic‑content rules apply to their projects, strengthen procurement and documentation practices, and strategically allocate contract risks. We also help teams prepare for potential claims, disputes and federal audits before they become costly problems. Our approach turns regulatory changes into a practical strategy to help leaders make decisions and keep projects moving.

In summary, the 2025/2026 BABA rule changes require U.S. final assembly for manufactured products and at least 55 percent U.S.-sourced component cost for federally funded FHWA projects. Early planning, supplier engagement, and stronger documentation practices help manufacturers and contractors reduce risk and stay competitive. With early planning and proper guidance, businesses can turn compliance into a competitive edge rather than a burden. If you want to stay ahead of the 2026 changes, now is the time to bring in a partner who can help you navigate them with confidence.