Manufacturers urge engagement with Build America, Buy America

Luis Alemañy, president of SJT Manufacturing and vice president for Puerto Rican Industries at the Puerto Rico Manufacturers Association

By The Star Staff

Luis Alemañy, president of SJT Manufacturing and vice president for Puerto Rican Industries at the Puerto Rico Manufacturers Association, is urging local manufacturing companies to learn about and engage with the Build America, Buy America Act (BABAA).

The act aims to strengthen the U.S. economy by prioritizing products and materials manufactured in the United States, including Puerto Rico. Enacted as part of the Infrastructure Investment and Jobs Act on Nov. 15, 2021, BABAA established a preference policy for purchasing domestically sourced products for all federal financial assistance related to infrastructure projects, starting May 14, 2022. The requirement mandates that all iron, steel, manufactured products, and construction materials used in covered infrastructure projects be produced in the United States.

“Build America, Buy America presents a significant opportunity for Puerto Rican manufacturers to enter value chains that were previously dominated by international suppliers,” Alemañy said. “In practical terms, it requires all public works projects or procurements for public use, funded by the government (regardless of the source of funding), to prioritize the use of construction materials and products manufactured in the United States.”

He noted that while some segments of the local construction sector have taken advantage of the incentive, there is still considerable potential for other sectors and industries to benefit. Despite the Puerto Rico government announcing the opportunity through the Central Office for Recovery, Reconstruction, and Resilience in January 2024, few sub-recipients of federal funds under the Hazard Mitigation and FEMA Public Assistance programs have fully embraced it, Alemañy said.

“There is a significant lack of awareness within both the private sector and the government regarding the requirements and benefits of this program,” he said. “As a representative of the industrial sector, I want to ensure that local industries can harness these available federal funds. Therefore, through the Industrial Association, I will help identify alternatives to guide and connect qualifying manufacturing SMEs.”

Alemañy encouraged local companies with domestic production capabilities to evaluate how they can align their operations with BABAA requirements to access new government-funded supply chains.

“This legal framework has a direct and strategic impact on the island’s manufacturing sector,,” he said. “For example, at SJT Manufacturing, we are producing hundreds of electrical components for a client with a global presence located in Puerto Rico. These products, which were manufactured in Saltillo and Monterrey, Mexico, for decades, are now developed and produced in Bayamón, Puerto Rico. This shift has generated millions in revenue and created both direct and indirect jobs.”

The program not only benefits the construction sector -- where at least 55% of metal components must come from the United States -- but also opens opportunities for complementary industries, such as electrical, electronics, plastics, and other manufacturing areas, the executive said.

Alemañy emphasized that the key to benefiting from the BABAA program lies in strict adherence to domestic manufacturing requirements, proper registration of components and materials, and including those requirements in all government contracts related to public works.