BABA Compliance for Transformer Procurement: How to Verify Domestic Content

BABA review starts with the actual federal-assistance award and the product being supplied. A manufacturer name, domestic factory, or generic compliance label does not establish that a transformer meets the requirements of a particular project. Confirm the agency’s terms and retain the required product evidence before procurement.

What the Manufactured Product Test Requires

For covered federal-assistance infrastructure projects, confirm the award terms, product classification and applicable waivers. The general manufactured-product test requires US manufacture and domestic component cost greater than 55% of total component cost, unless another applicable law or regulation sets a standard meeting or exceeding it. There is no general fiscal-year escalation ladder in 2 CFR Part 184. (Checked September 16, 2026.)

Classify the supplied item as it arrives at the work site for incorporation under sections 184.3 and 184.4. Apply the requirements for that one category. A completed manufactured product can contain steel, copper and other components without each component taking a separate product-category test. Do not classify every transformer solely from its name.

Under section 184.5, purchased-component cost includes acquisition, transport to incorporation and applicable duty. Manufacturer-produced component cost includes allocable overhead but excludes profit. Finished-product manufacturing costs do not belong in the component-cost denominator. A selling-price percentage or a domestic-steel weight percentage is not this calculation.

BABA for financial assistance is separate from federal procurement’s Buy American rules in FAR 25.101. Do not carry that regime’s schedule or commercial-item exceptions into a grant award.

FHWA Has an Obligation Date Phase In

For FHWA projects obligated on or after October 1, 2025, manufactured products must be manufactured in the United States. For projects obligated on or after October 1, 2026, the greater-than-55% component-cost test also applies. These are project obligation dates, not purchase-order or delivery dates. See 23 CFR 635.410(c), checked September 16, 2026.

Other agencies and programs have their own implementation and waiver provisions. Check the actual award rather than applying FHWA’s dates to DOE or USDA projects. DOE’s BABA guidance explains its coverage, documentation and waiver process.

Verify Products Rather Than Supplier Labels

A supplier’s US manufacturing footprint does not establish the origin or cost of the components in your order. Request the manufacturing location, model, applicable product category and award-required evidence for the specific product and project. Record any unresolved classification or documentation question before treating an offer as eligible.

This guide does not certify any manufacturer or maintain an approved-product list. A previous supplier statement should be checked again when the model, production facility, bill of materials or governing award changes.

How Manufacturer Self-Certification Works

Use the documentation required by the awarding agency. USDA describes manufacturer self-certification for its awards and does not certify manufacturers or maintain a list of compliant products.

For USDA awards, the guidance (USDA BABA FAQs for Manufacturers) says a manufacturer self-certification letter should include:

• Project identification: the project name, location, and project number
• Product identification: specific products being supplied to the project
• Compliance statement: attestation that the products meet BABA requirements for the applicable category (confirm the classification for the supplied item)
• Manufacturing location: city and state where the product was manufactured
• Company letterhead and authorized signature: from a qualified manufacturer representative

The letter must be product-specific and project-specific. A generic “we are BABA compliant” statement from a manufacturer is not sufficient. You need a letter that names your project and your specific transformer order.

Keep these letters in your project files. If the federal agency audits your project, you will need to produce them.

When Your Supplier Cannot Certify: The BABA Waiver Process

If a proposed product cannot meet the applicable requirements, check the funding agency’s current issued waivers and request process. Do not treat a pending request as permission to incorporate a non-domestic item.

DOE allows three types of waivers (DOE waiver request guidance):

1. Non-Availability Waiver. The product is not produced in the United States in sufficient and reasonably available quantities, or of satisfactory quality. Document availability and quality evidence for the agency to evaluate.

2. Unreasonable Cost Waiver. Using domestic products would increase overall project cost by more than 25%. The comparison is total infrastructure project cost, not only the transformer price. You will need documented quotes from domestic and foreign suppliers to support the claim.

3. Public Interest Waiver. Applying the requirement would be inconsistent with the public interest. Check any claimed general waiver against its published scope and conditions.

What a Waiver Request Requires

Your waiver request must include:

• The specific waiver type you are requesting
• A list of items being waived, with cost and country of origin
• Detailed justification explaining why domestic products are not viable
• Evidence of good-faith efforts to find domestic suppliers (documented quotes, RFP responses, or manufacturer correspondence)

Under 2 CFR 184.7, proposed waivers generally require at least 15 calendar days for public comment; proposals to modify or renew general-applicability waivers require at least 30 days. A submitted request is not an issued waiver. Plan for the waiver process to add weeks to months to your procurement timeline.

Check DOE’s current waiver information for issued waivers covering the actual procurement. Confirm the applicable dates, items and conditions with the award documentation.

Practical Steps for Procurement Teams

Here is what to do if you are managing federally funded transformer procurement right now.

Start with the RFP. After confirming BABA applies, include the actual award requirements and applicable waiver conditions in the specifications. State the applicable product category and award standard; the general manufactured-product component-cost test is greater than 55%. Require manufacturers to provide a self-certification letter with their bid response. Do not make compliance an afterthought that gets discovered during delivery.

Ask the right question early. When you send an RFQ to a manufacturer, do not ask “Are you BABA compliant?” That question is too broad. Ask for the documentation required for the confirmed product category and award. For a manufactured product subject to the general Part 184 test without a waiver, request evidence of US manufacture and domestic components exceeding 55% of total component cost. The specificity matters.

Build your approved supplier list now. Contact manufacturers with U.S. production facilities and ask about BABA compliance for the transformer types you buy most often. Document the responses. Some manufacturers may be compliant for their standard catalog units but not for custom-engineered products that require specialty imported components.

Plan for longer lead times. BABA-compliant transformers may have longer lead times than non-compliant alternatives, especially for large power units where domestic production capacity is limited. Factor this into your project schedules. If you wait until the project kicks off to discover your preferred supplier cannot certify, you have lost months.

Know when to file a waiver. If your project requires a transformer that no domestic manufacturer can produce to spec and on schedule, start the waiver process immediately. Gather quotes from domestic suppliers showing unavailability or unreasonable cost. The 15-day comment period plus DOE review time means waivers are not a last-minute fix.

Track the capacity expansions. Nearly $2 billion in new domestic transformer manufacturing capacity is under construction. Hitachi, Eaton, and Siemens all have major U.S. plants opening in 2027 (POWER Magazine, 2026; NPC Electric, 2026 Outlook). The BABA-compliant supply picture will look different in 18 months than it does today. But you cannot wait for 2027 capacity to solve your 2026 procurement problem.

The Bigger Picture

BABA is not going away. Federal infrastructure spending through the IIJA, IRA, and related programs will continue flowing for years. Part 184 does not set a general escalating manufactured-product percentage schedule. Utilities and cooperatives that build BABA compliance into their standard procurement process now will spend less time scrambling on individual projects later.

The manufacturers investing billions in U.S. production capacity are betting on this same trajectory. Domestic transformer supply is expanding. But demand is expanding faster, driven by data center construction, grid modernization, and the 160-280% increase in distribution transformer demand projected through 2050 (NREL study, referenced in Utility Dive, 2024).

For procurement teams at municipal utilities and cooperatives, the takeaway is straightforward: verify BABA compliance before you issue the PO, not after. Build your qualified supplier list. Keep your certification letters organized. And if you need a waiver, file early.

The rules are clear. The hard part is finding the suppliers who can meet them. Start that work now.

Use the BABA documentation checklist and transformer RFQ to record award requirements and supplier evidence. Subscribe to The Feeder for the weekly utility distribution read.