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February 05.2026

2 Minutes Read

Build America Update Takes Effect: What Construction Companies Need to Know

Build America Update: Trucks carrying oversized loads on a highway.

Major Changes Ahead for Federal Aid Highway Projects

The recent update from the Federal Highway Administration (FHWA) on the Build America, Buy America Act is set to create substantial shifts in how construction projects are executed across the United States. Starting in 2025, the elimination of waivers for manufactured products will require projects funded by federal aid to primarily source materials domestically, a move that aims to invigorate the American manufacturing sector.

Understanding the Implications of the Update

Under the new guidelines, manufacturers must ensure that at least 55 percent of the components used in their products are domestically sourced. This change has sparked diverse reactions across the construction industry, with some experts like Lane Kimble from the Wisconsin Transportation Builders Association warning of rising costs—estimating a potential impact of $8.5 billion over the next decade due to these stricter regulations.

Balancing Domestic Production with Project Timelines

As the FHWA aims to bolster domestic manufacturing, concerns arise about the timeliness and feasibility of compliance. Sean McMaster, the FHWA Administrator, emphasizes the need for a balanced approach that limits waivers strategically. This could mean significant adjustments for contractors, who may face challenges in documentation and certification for compliance, complicating their project timelines and budgets.

Why This Matters to the Construction Industry

The construction sector stands at a crossroads. With more stringent requirements to use domestically produced materials, contractors must adapt to what could be a slippery slope of increased costs and delays. These developments, while promoting local manufacturing, also risk burdening smaller firms that may struggle with such transitions amid already tight profit margins.

Engaging with the Changes

For those in the building and construction industry, being aware of these regulatory shifts is crucial. The adjustments outlined can impact everything from bidding processes to project management strategies. Engaging proactively with the FHWA and staying updated on subsequent developments will be essential for navigating this evolving landscape.

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Build America Update Takes Effect: What Construction Companies Need to Know

Major Changes Ahead for Federal Aid Highway Projects

Understanding the Implications of the Update

Balancing Domestic Production with Project Timelines

Why This Matters to the Construction Industry

Engaging with the Changes

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