On October 1, 2026, Federal Highway Administration Buy America rules reach their strictest phase. Every manufactured product on a federal-aid highway project obligated on or after that date must clear the BABA 55% domestic component cost test on top of U.S. final assembly. The exposure is concrete: a product at exactly 55.0% fails, and one supplier price increase or a single substituted foreign part can push a previously compliant product under the line with no warning. For manufacturers of lighting, ITS/TMS equipment, guardrail, signage, and precast components, that turns domestic content compliance into a moving target measured across every distinct bill of materials, not once per project. This worked example on the BABA 55% domestic component cost test breaks the calculation down component by component: what counts, what is excluded (final assembly labor, product-level overhead, and profit), how to value purchased versus in-house components, and why an imported subassembly counts
