The Build America, Buy America Act (“BABA”), enacted as part of the Infrastructure Investment and Jobs Act (“IIJA”), was intended to strengthen domestic manufacturing and increase the use of American-made materials in federally funded infrastructure projects. While the policy objective is understandable and broadly supported, the implementation of BABA within HUD-assisted affordable housing has unintentionally created a compliance environment increasingly incompatible with the realities of multifamily construction, affordable housing finance, and modern building supply chains.
Affordable housing developments operate within tightly coordinated financing and construction schedules involving tax credit allocations, bond financing, lender draw requisitions, subcontractor payment cycles, procurement deposits, and long-lead material ordering. At the same time, public housing authorities, municipal funding entities, and state housing agencies are increasingly requiring BABA compliance documentation for every construction draw requisition, despite HUD waiver processing timelines that may extend 6 to 9 months or longer. This creates a structural conflict between construction finance timelines and federal administrative review timelines.
The result is no longer merely an administrative inconvenience. It is a form of constructive obstruction in which administrative delay effectively interferes with lawful project delivery despite the absence of a formal waiver, denial, or approval.
The Emerging BABA Compliance Crisis
Affordable housing developments rely upon fragmented subcontractor procurement, evolving material sourcing, phased purchasing schedules, and compressed financing timelines. Meanwhile, many critical building systems remain difficult or impossible to source domestically within commercially reasonable lead times.
Examples repeatedly identified by developers and contractors include electrical switchgear, branch panelboards, high-efficiency HVAC systems, mini-split systems, fire protection piping, lighting packages, bathroom accessory kits, select plumbing fixtures, and specialized energyefficiency equipment.
Administrative Delay as Constructive Obstruction
Federal administrative law has long recognized that agency silence may itself create legal consequences. Under the Freedom of Information Act (“FOIA”), agencies must respond within statutory timelines. Failure to respond creates what is commonly known as constructive exhaustion of administrative remedies. Within affordable housing BABA administration, a more operationally accurate concept has emerged: constructive obstruction.
Constructive obstruction occurs when administrative delay effectively prevents lawful program participation despite the absence of a formal agency denial. HUD may neither formally deny nor approve a waiver request, yet prolonged administrative delay may still halt procurement, interrupt lender disbursements, delay contractor payments, jeopardize tax credit deadlines, and freeze construction progress, which can ultimately pose life-safety issues for low-income seniors and renters who need permanent housing solutions.
The Draw Requisition Problem
We are seeing an alarming trend in which public housing authorities, municipal funding entities, and state housing agencies increasingly require BABA certifications, sourcing documentation, country-of-origin verification, waiver evidence, and procurement tracking with every construction draw requisition. This transforms BABA from a procurement compliance framework into a continuous payment authorization system and administrative paperwork nightmare. Developers are therefore forced into impossible choices, such as:
- Delay procurement and risk construction shutdowns;
- Procure materials and risk future reimbursement denial;
- Or avoid Federal Financial Assistance (FFA) funding altogether.
One important fact to understand is that LIHTC funding is released in stages based on construction milestones such as substantial completion or certificates of occupancy. Missing these deadlines can trigger penalties, delays in credit disbursement, or even forfeiture of the credits. This outcome directly undermines affordable housing production, HUD program utilization, and even BABA’s own domestic manufacturing objectives. In practice, the current implementation framework risks turning BABA compliance into a construction liquidity constraint.
The D3G Preconstruction Compliance Framework
D3G’s Preconstruction BABA Compliance Review framework offers a practical, scalable administrative solution that modernizes BABA implementation while preserving construction continuity. Under the framework, the developer, general contractor, subcontractors, suppliers, architects, and consultants coordinate during preconstruction to identify BABAcovered materials, classify products, verify domestic sourcing, document manufacturer certifications, and identify likely waiver categories before procurement begins. The process creates a documented baseline compliance structure before active construction commences.
Controlled Change Order Management
One of the most important aspects of the D3G framework is the Change Order Log system. Construction supply chains inevitably evolve during active development due to material shortages, procurement delays, pricing volatility, substitutions, and manufacturer availability. Rather than repeatedly re-auditing an entire project at every draw cycle, the D3G model enables controlled, exception-based compliance management.
Under this structure, only material substitutions, procurement deviations, or sourcing changes require enhanced secondary review. This transforms BABA administration from repetitive document collection into controlled compliance management.
The Need for a 30-Day Deemed Approval Standard
HUD should adopt a 30-day deemed approval framework, under which any complete BABA Non-Availability Waiver request not approved or denied within 30 calendar days becomes effective by operation of law. Under this framework, if HUD fails to approve or deny a complete waiver request within 30 days of receipt, the waiver would automatically become effective.
Under many federal programs, federal agencies must respond to requests within statutory timelines. When agencies fail to respond within the required period, federal law recognizes that the requester has constructively exhausted administrative remedies and may proceed directly to federal court under 5 U.S.C. § 552(a)(6)(C). The significance of this legal framework lies beyond mere procedural timing. It establishes an important principle of federal administrative fairness: Government silence cannot indefinitely suspend the rights or actions of the requesting party. And the same principle applies directly to BABA waiver administration.
The legal and policy rationale for this approach derives from longstanding federal administrative law principles, including:
- Freedom of Information Act (“FOIA”) constructive exhaustion doctrines;
- Administrative Procedure Act (“APA”) protections against unreasonable agency delay;
- Due process principles require timely governmental action;
- and existing “deemed approved” frameworks already used throughout federal and state administrative systems.
This proposal does not weaken BABA. Instead, it restores predictability, accountability, and procedural fairness to affordable housing finance while preserving HUD’s authority to review waiver requests within a reasonable timeframe. Nor does this proposal eliminate oversight. Rather, it preserves agency review authority while restoring financing predictability, procurement certainty, and construction continuity. The purpose of the 30-day deemed approval standard in federal administrative systems is to prevent administrative paralysis from disrupting the delivery of critically needed federally funded housing.
Conclusion
The interaction between prolonged waiver review, repeated draw-level compliance demands, and limited domestic product availability has created a system of constructive obstruction that threatens affordable housing delivery nationwide. The solution is not abandonment of BABA. Rather, in the absence of universal affordable housing waivers, the solution is simplification.
The combination of predictable waiver administration, 30-day deemed approval standards, preconstruction supply chain certification, and controlled exception-based compliance management offers a practical framework capable of preserving BABA’s policy objectives while protecting affordable housing production and construction liquidity
Author’s Note: This paper was prepared in support of advancing practical and administratively workable BABA compliance solutions for affordable housing development nationwide. D3G’s Preconstruction BABA Compliance Review framework demonstrates that compliance and housing production need not be in conflict.