Buy American Act Compliance for Federally-Funded Medical Equipment Purchases

“We’re a federal grant” gets used loosely to mean at least three different, non-interchangeable procurement regimes, and which one actually governs a given medical equipment purchase determines what “Buy American compliance” even requires. This guide separates the three real frameworks — the Buy American Act (BAA), the domestic-preference clause in the Uniform Guidance, and the Build America, Buy America Act (BABA) — explains the genuine waiver process each one offers, and covers how all three differ from the Trade Agreements Act (TAA) rules that apply on a GSA Schedule purchase. It does not tell you whether a specific product line is domestic-content compliant — that status varies by manufacturer, model, and even production run, and has to be verified against the specific item and the specific award’s terms, not assumed from a category.

Three different domestic-preference regimes, not one “Buy American” rule

The phrase “Buy American Act” gets applied colloquially to all federal domestic-sourcing preference, but only one of the three regimes below is actually the Buy American Act. Which one (if any) applies to a given medical equipment purchase depends on how the purchase is funded and by whom, not on the word “federal” appearing anywhere in the paperwork:

• The Buy American Act (BAA) — a 1933 statute (41 U.S.C. §§8301–8305) implemented through FAR Part 25, Subparts 25.1–25.2. It governs direct federal procurement — a federal agency buying supplies for its own use, such as a VA medical center or a military treatment facility purchasing equipment directly under a federal contract.
• 2 CFR 200.322 (Domestic preferences for procurement) — part of the Uniform Guidance that governs how grant recipients spend federal award funds. This is the regime that actually applies to most university, hospital, and nonprofit research institutions buying equipment on federal grants and cooperative agreements — and it is meaningfully weaker than the BAA, as covered below.
• The Build America, Buy America Act (BABA) — enacted November 15, 2021 as part of the Infrastructure Investment and Jobs Act, now codified in regulation at 2 CFR Part 184. It imposes BAA-strength, mandatory domestic content requirements on infrastructure projects funded through federal financial assistance (grants) to non-federal entities — a materially stricter regime than 200.322’s general preference, but one that only bites when the funded project meets the applicable agency’s definition of “infrastructure.”

A federally funded medical equipment purchase can sit under any of these, or under none of them at full mandatory strength — get the funding mechanism right first, because it determines whether “domestic preference” means a hard percentage test with a waiver process, or a “should, to the greatest extent practicable” instruction with no enforcement mechanism beyond the award terms themselves.

The Buy American Act: domestic content thresholds, and who it actually binds

The BAA applies when two conditions are both met: the procurement is for public use within the United States, and it is a direct federal purchase — an agency acquiring supplies for itself under a federal contract, not a grant recipient spending award funds. For a purchase the BAA does cover, FAR Subpart 25.1 sets a “domestic end product” test with two parts:

• Manufactured in the United States, and
• Domestic content threshold met: under the current FAR 25.101(a)(2)(i) schedule, a non–iron/steel end product’s domestic components must exceed 65% of total component cost for calendar years 2024–2028, rising to 75% starting calendar year 2029. For iron and steel end products, foreign iron/steel content must stay under 5% of total component cost — unchanged across that same schedule. Components of unknown origin are treated as foreign by default under FAR 25.003, which matters directly for equipment with a multi-tier supply chain (subassemblies, electronic components, castings) where a vendor may not itself know every input’s origin.

The BAA applies to procurements over a $10,000 threshold and does not outright bar foreign products — it works through a price evaluation preference instead: under FAR 25.106, a foreign offer is evaluated with an added 20% factor for a large-business offeror or 30% for a small business, effectively requiring the foreign product to be significantly cheaper before it can win on price against a qualifying domestic offer. A domestic offer isn’t automatically selected; it’s evaluated on more favorable terms.

For most research institutions buying equipment on a federal grant, this whole framework is largely academic — the BAA binds the federal agency doing direct procurement, not the university or hospital spending award funds. It becomes directly relevant only where an institution is itself acting as (or contracting with) a federal agency for direct-use equipment, which is uncommon for grant-funded research and clinical equipment purchasing.

2 CFR 200.322: the rule that actually governs most grant-funded equipment purchases

For the far more common case — a university, hospital, or nonprofit buying equipment with federal grant funds — the operative provision is 2 CFR 200.322, part of the Uniform Guidance procurement standards covered in CASRAI’s 2 CFR 200 Procurement Standards guide. Its text is deliberately softer than the BAA’s:

“As appropriate and to the extent consistent with law, the non-Federal entity should, to the greatest extent practicable under a Federal award, provide a preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States (including but not limited to iron, aluminum, steel, cement, and other manufactured products).”

Three things follow directly from that wording, and each one is a common source of confusion:

• “Should,” not “must.” 200.322 is a preference the recipient is expected to apply where practicable — it does not impose a mandatory domestic-content percentage or a formal waiver process the way the BAA does. Nothing in 200.322 itself blocks purchasing a genuinely foreign-sourced piece of equipment.
• It flows down to subawards and contracts. The regulation is explicit that “the requirements of this section must be included in all subawards, contracts, and purchase orders under Federal awards” — so a pass-through entity has to carry the same preference language into its subrecipient agreements and purchase orders, even though the underlying obligation stays a preference rather than a mandate.
• It can be elevated by the specific award. A funding agency’s Notice of Award, program-specific terms and conditions, or a statute governing that particular funding stream can convert 200.322’s general preference into a binding requirement for that award — at which point the award document itself, not 200.322, is what actually has to be checked for the exact standard. Some HHS, HRSA, and CDC award mechanisms that fund facility-adjacent equipment as part of a broader infrastructure or construction project are the most common place this happens, which is the BABA connection covered next.

In practice, this means the honest default answer for most federally-funded medical equipment purchases is: domestic sourcing is a preference to document good-faith effort toward, not a compliance gate that blocks the purchase — unless the specific award’s terms say otherwise. Read the Notice of Award and any incorporated program terms before assuming either way.

Build America, Buy America Act (BABA): when a grant becomes a hard mandate

BABA, enacted under the Infrastructure Investment and Jobs Act and now codified at 2 CFR Part 184, is where a federal grant can carry BAA-strength, mandatory domestic content requirements — a materially different posture than 200.322’s soft preference. BABA applies to infrastructure projects funded in whole or in part through federal financial assistance to a non-federal recipient, and it sets domestic content requirements for iron and steel, manufactured products, and construction materials used in the covered project.

The load-bearing question for a medical equipment purchaser is whether the specific project counts as “infrastructure” under BABA and the funding agency’s implementation of it. That is a fact-specific determination made by the funding agency, not a default assumption: a facility construction or renovation grant that happens to include equipment procurement as part of the scope is far more likely to trigger BABA than a standalone equipment-only award. Do not assume BABA applies (or doesn’t) without checking the specific Notice of Funding Opportunity and award terms — agencies have issued their own applicability determinations and, in some cases, general applicability waivers for categories of purchases that don’t functionally involve construction materials. Where BABA does apply, its waiver process runs in parallel to the BAA’s, described below, but is administered by the funding agency rather than a procuring contracting officer.

The waiver process: nonavailability, unreasonable cost, and public interest

Both the BAA and BABA offer the same three categories of waiver, though the administering body and documentation path differ (a contracting officer for BAA-covered direct procurement; the funding agency, often through a formal public-interest waiver process with a comment period, for BABA):

• Nonavailability — the item, or a domestic version meeting the required content threshold, is not produced in the United States in sufficient commercial quantities of satisfactory quality. This is the waiver most relevant to specialized medical and diagnostic equipment, where a genuinely domestic-content-compliant option may not exist for a given device category. It has to be documented, not assumed — a good-faith market search showing no qualifying domestic source is the typical evidentiary basis.
• Unreasonable cost — a qualifying domestic product exists, but its price (after applying the BAA’s evaluation preference factor, where applicable) is unreasonably higher than a foreign alternative. This waiver requires an actual cost comparison, not a general belief that domestic equipment costs more.
• Public interest — a broader, agency-head-level determination that applying the domestic preference would be inconsistent with the public interest in a specific case. This is used sparingly and is the least commonly available basis for a routine equipment purchase.

None of these waivers is self-executing. A purchaser who believes a domestic-content requirement applies and cannot be met still has to request and receive the waiver through the correct channel (contracting officer for direct BAA procurement; the funding agency for BABA-covered awards) before proceeding on a non-compliant basis — assuming a waiver would obviously be granted is not the same as having one.

How this differs from the Trade Agreements Act and GSA Schedule purchases

A separate statute, the Trade Agreements Act of 1979 (TAA) (19 U.S.C. §2501 et seq.), implemented through FAR Subpart 25.4, governs a different situation: federal procurements at or above the applicable trade-agreement dollar threshold (roughly $174,000 for supply contracts under the WTO Government Procurement Agreement and most free trade agreements as of the current adjustment cycle — the exact figure is revised periodically and should be checked against the current FAR 25.402 table before relying on it for a specific procurement). Above that threshold, the BAA’s domestic preference is suspended for products of a WTO GPA or FTA “designated country,” which then compete on equal terms with U.S. products. Country of origin under the TAA is determined by a substantial transformation test — where the product was last substantially transformed into a new article with a different name, character, or use — not by the BAA’s percentage domestic-content calculation. A product can be BAA-noncompliant on content percentage and still be fully TAA-eligible if it was substantially transformed in a designated country.

The TAA framework is also where GSA Schedule (Federal Supply Schedule) purchases sit: Schedule contracts, ordered under FAR Subpart 8.4, are generally structured around TAA-compliant products precisely because most Schedule buys clear the trade-agreement threshold in aggregate contract value, even if a single order does not. But this only matters to an institution that is actually eligible to order against a GSA Schedule in the first place — and as CASRAI’s GSA Schedule vs. Open-Market Purchasing for Medical and Lab Equipment guide covers in detail, most grant-funded universities, hospitals, and nonprofit research institutions are not GSA “ordering activities” under FAR 8.401 and instead purchase equipment under open-market procurement governed by 2 CFR 200.317–200.327. For that majority of grant-funded buyers, TAA/GSA-Schedule rules simply aren’t the operative framework at all — 200.322 (and, where the project is BABA-covered infrastructure, BABA) is what actually governs, not TAA.

A practical sequence for a federally-funded equipment purchase

1. Identify the funding mechanism. Is this a direct federal contract (BAA/FAR governs) or federal financial assistance — a grant or cooperative agreement to your institution (2 CFR 200.322, and possibly BABA, governs)? Most research and clinical equipment purchases at universities and hospitals are the latter.
2. Read the specific award’s terms and conditions, not just the general regulation. Check the Notice of Award, any incorporated program-specific terms, and the funding announcement for language that elevates 200.322’s preference to a mandatory requirement, or that flags the award as BABA-covered infrastructure funding.
3. If a mandatory domestic-content standard applies (BAA-covered direct procurement, or a BABA-covered award), request domestic-content documentation from the vendor for the specific model and configuration being purchased — not a general claim about the manufacturer’s country. Domestic-content status is set at the product/model/production-run level and can differ between two configurations of the same equipment line.
4. If the vendor cannot document compliance and no qualifying domestic alternative exists, document the nonavailability (or unreasonable-cost) basis and route a waiver request through the correct channel before completing a non-compliant purchase.
5. Keep the documentation with the procurement file. Whether the applicable standard is BAA, BABA, or a 200.322 preference, the underlying determination (which regime applies, what was checked, and any waiver granted) is exactly the kind of procurement-file documentation reviewed in a Single Audit — see CASRAI’s Federal Grant Compliance Checklist for the broader documentation discipline this sits inside.

This guide describes the frameworks and process; it does not, and cannot responsibly, assert that any particular manufacturer or product line is domestic-content compliant. Compliance status is set at the specific model and configuration level, changes as manufacturers shift sourcing, and has to be verified against current vendor documentation for the actual item being purchased — not inferred from a brand name, a “Made in USA” marketing claim (which uses a different FTC standard than any of the regimes above), or what a similar item was found to be on a prior purchase.

Frequently asked questions

Does the Buy American Act apply to a university buying equipment on an NIH or NSF grant?

Generally, no — not the BAA specifically. The BAA governs direct federal procurement (a federal agency buying for itself), not federal financial assistance spent by a grant recipient. A university or research institute spending NIH or NSF grant funds is instead subject to 2 CFR 200.322’s domestic preference, which is a “should, to the greatest extent practicable” standard, not the BAA’s mandatory percentage test — unless the specific award’s terms impose something stricter.

Is 2 CFR 200.322 actually enforceable?

It’s a required preference, not a mandate with a compliance percentage. There’s no statutory penalty in 200.322 itself for purchasing a foreign-sourced item where a domestic one was available. It becomes enforceable in the stricter sense only if a specific award’s terms and conditions convert the preference into a binding requirement for that award — which is exactly why the award document, not just the regulation, has to be checked.

How do I know if my project is covered by the Build America, Buy America Act?

Check whether the funding agency has classified the specific project as “infrastructure” under its BABA implementation, and check the award’s terms and conditions and any funding-opportunity guidance directly — this determination is made project-by-project by the funding agency, not inferred from the general subject matter of the grant. A standalone research-equipment award is less likely to trigger BABA than a facility construction or renovation project that includes equipment as part of its scope, but neither should be assumed without checking the specific award.

If a piece of equipment isn’t TAA-compliant, does that mean it also fails the Buy American Act?

No — they’re different tests entirely, and can point in different directions for the same product. TAA compliance turns on where the product was last “substantially transformed,” while BAA compliance turns on a domestic-content percentage of components plus U.S. final assembly. A product can pass one test and fail the other. They also apply to different situations in the first place: TAA/GSA Schedule rules mainly matter to institutions eligible to order against a Federal Supply Schedule contract, which most grant-funded research institutions are not.

Can a vendor’s “Made in USA” claim substitute for BAA or 2 CFR 200.322 documentation?

Not reliably. The FTC’s “Made in USA” standard (requiring the product be “all or virtually all” made in the U.S.) is a separate legal test from both the BAA’s component-cost-percentage calculation and 2 CFR 200.322’s preference language. A product can carry a legitimate FTC-compliant “Made in USA” label without necessarily meeting the specific domestic end product test a federal procurement regulation requires, or vice versa. Ask the vendor for documentation against the specific regulatory standard that actually applies to your purchase, not a general marketing claim.