Sensys Networks discusses how manufacturing decisions made years before Build America, Buy America rules existed gave the company a head start on compliance
The May/June 2026 issue of ITS International features a report on Build America, Buy America (BABA) compliance, examining how new federal manufacturing rules are reshaping the US intelligent transportation systems (ITS) market. Sensys Networks was one of several companies interviewed for the piece, alongside Hi-Tek Electronics, Ettifos, Swarco McCain, and Cohda Wireless.
The Federal Highway Administration ended its long-standing general waiver for manufactured products in 2025, meaning ITS equipment used on federally-funded highway projects must now undergo final assembly in the US, with a 55% domestic-content cost threshold following in October 2026.
Sébastian Lodahl of Sensys Networks told the magazine that BABA compliance got off to an uneven start across the industry, with many companies initially assuming that last-mile assembly alone would satisfy the rules rather than their underlying intent. Sensys, he explained, had a real head start: the company had localized much of its manufacturing in the US years before BABA was introduced, originally as a quality-control and lead-time decision rather than a compliance one.
As a result, Lodahl said, “we needed to make very few operational changes to meet compliance requirements.”
Asked how much of a competitive edge that early start provides, Lodahl was measured rather than triumphant: the value is real but hard to put a number on, since a compliance regime is only as strong as its definition and enforcement, and both are still being worked out in practice. What he pointed to concretely was operational: years of US-based manufacturing had already sharpened Sensys’s oversight and quality control, independent of BABA altogether.
He also flagged a bigger structural issue on the horizon for the whole industry, Sensys included: a large share of the electronic components and chips inside ITS hardware simply aren’t manufactured domestically at all. As domestic-content thresholds climb in the years ahead, he suggested, the limited availability of US-sourced components could become a real constraint on how fast manufacturers can bring new innovation to market — a challenge no company’s early start fully insulates it from.
Looking further out, Lodahl encouraged ITS suppliers to design around the intent of BABA rather than the letter of today’s rules, since domestic-content requirements are widely expected to tighten rather than loosen. Companies that keep meaningful portions of their supply chain in the US, he argued, will be far better positioned than those treating final assembly as a box-ticking exercise — and he framed compliance as a baseline expectation industry-wide now, rather than a competitive edge.
Key takeaways
Early mover advantage: Sensys had already localized manufacturing in the US before BABA rules existed, so compliance required few operational changes.
A quality decision first, a compliance one second: the initial motivation was operational — better oversight and faster turnaround — not regulatory pressure.
Semiconductor sourcing is the next constraint: with much of the electronics supply chain still manufactured outside the US, component availability — not assembly location — may be the harder compliance challenge ahead for the whole industry.
Compliance is now table stakes: with the Phase 2 domestic-content threshold arriving in October 2026, Sensys expects BABA compliance to become an industry baseline rather than a point of differentiation.
