[Federal Register Volume 75, Number 108 (Monday, June 7, 2010)]
[Notices]
[Pages 32179-32181]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-13529]
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ENVIRONMENTAL PROTECTION AGENCY
[FRL-9159-6]
Notice of a Regional Waiver of Section 1605 (Buy American
Requirement) of the American Recovery and Reinvestment Act of 2009
(ARRA) to the City of Bridgeport (the City) Washington
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice.
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SUMMARY: The Regional Administrator of EPA Region 10 is hereby granting
a late waiver request from the Buy America requirements of ARRA section
1605(a) under the authority of section 1605(b)(1) [applying subsection
(a) would be inconsistent with the public interest] to the City for the
purchase and use of 280 linear feet of large diameter 36'' PVC pipe,
manufactured in Edmonton, Alberta, Canada and which was used in and
incorporated into an ARRA project prior to December 3, 2009. This is a
project specific waiver and only applies to the use of the specified
product for the ARRA project discussed in this notice. Any other ARRA
recipient that wishes to use the same product must apply for a separate
waiver based on project specific circumstances. The City's waiver
request included a timeline summary from October 3, 2009 thru December
30, 2009 describing the attempted Buy American compliance by the
applicant, consulting engineer, contractor and pipeline materials
supplier. Thus, it appears that the supplier on behalf of the City, the
ARRA recipient, did an extensive, seemingly comprehensive, and
ultimately unsuccessful search for a U.S. manufacturer who could meet
the project specifications.
The Regional Administrator is making this determination based on
the review and recommendations of the Drinking Water Unit. The City has
provided sufficient documentation to support their request.
DATES: Effective Date: May 25, 2010.
FOR FURTHER INFORMATION CONTACT: Johnny Clark, DWSRF ARRA Program
Management Analyst, Drinking Water Unit, Office of Water & Watersheds
(OWW), (206) 553-0082, U.S. EPA Region 10 (OWW-136), 1200 Sixth Avenue,
Suite 900, Seattle, WA 98101.
SUPPLEMENTARY INFORMATION: In accordance with ARRA Section 1605(c) and
OMB's regulations at 2 CFR Part 176, Subpart B, the EPA hereby provides
notice that it is granting a late project waiver request of the
[[Page 32180]]
requirements of Section 1605(a) of Public Law 111-5, Buy American
requirements, to the City for the purchase and use of 280 linear feet
of large diameter 36'' PVC pipe, manufactured in Edmonton, Alberta,
Canada, which was incorporated into an ARRA project prior to December
3, 2009. The City was unable to find an American manufacturer to meet
the project specific requirements for what by industry's standards is a
small amount of large diameter 36'' PVC pipe.
There are several noteworthy factors regarding this waiver
analysis. First, it is a late request because the waiver request came
after the goods had been used in the project. Second, under 2 CFR
176.130(c)(1), the applicable non-compliance provision regarding
unauthorized use of foreign manufactured goods, EPA is authorized to
process a waiver under 2 CFR 176.120(a) if ``the need for such
determination otherwise was not reasonably foreseeable.'' EPA has
further outlined this process in its April 28, 2009 memorandum:
Implementation of Buy American provisions of Public Law 111-5, the
``American Recovery and Reinvestment Act of 2009'' (the April 28
memorandum). Third, EPA has determined that the reason the City did not
seek a waiver when they procured the foreign pipe was based on a
mistaken interpretation of the international agreements provision of
section 1605(d). However, at the time of that mistake, Bridgeport had
done all due diligence in seeking a U.S.-made alternative and had
developed all necessary information to support an availability waiver
at that time. Fourth, EPA has determined, with the assistance of a
technical review produced by its national contractor, that the
documentation the City developed in the course of due diligence
conducted at the time of that mistake and subsequent due diligence upon
learning of the mistaken interpretation of section 1605(d) was
sufficient to support both a determination by EPA that the City
implemented the requirements of Section 1605 in good faith and the
grant of a waiver by EPA. Fifth, EPA has determined under these
circumstances that the need for such a waiver was not reasonably
foreseeable. Therefore, under the authority of 2 CFR 176.120 and
176.130(c)(1), and as explained in the April 28 memorandum, EPA will
process the waiver request as if it was requested in a timely manner.
Sixth, EPA has determined that it would have evaluated a waiver request
had the recipient applied for a waiver prior to using the foreign pipe
in the ARRA project. EPA has determined that granting this waiver will
serve the public interest because it avoids penalizing the City for the
use of a non-U.S.-made good for which the City has sufficiently
established that there were no U.S.-made alternatives. And, this
determination takes into account the City's due diligence and good
faith effort to implement the requirements of section 1605.
The non-compliant pipe was installed due to the City's pipeline
materials supplier's (United Pipe & Supply) assumption and
interpretation that the Canadian-manufactured pipe was acceptable under
the North American Free Trade Agreement (NAFTA). The pipeline materials
supplier, on behalf of the City, completed an unsuccessful search for a
U.S. manufacturer that could meet the project specifications and
timeline after the pipe was installed. The City's waiver request dated
January 4, 2010, describes actions taken with regards to the attempted
Buy American compliance by the applicant, consulting engineer,
contractor, pipeline materials supplier, and EPA Region 10. The
memorandum notes that ``While an honest oversight was made by the
supplier, it is apparent that not only could their domestic
manufacturer not supply the material, but all other American companies
were and are unable to do so''.
A Canadian-manufactured 280 linear feet of large diameter 36'' PVC
pipe was installed as part of the applicant's ARRA project between
October 13, 2009 and December 3, 2009. Prior to the installation,
United Pipe & Supply had intended to use pipe manufactured domestically
and supplied by JM Eagle, based in Los Angeles, California. However,
the specified pipe was unavailable and JM Eagle required an order of
5,000 linear feet of pipe to run production. Only 280 feet was needed
for the project. JM Eagle was able to supply sun bleached pipe, but
this option would not meet specifications for the project. United Pipe
& Supply conducted its own search for domestic manufacturers. The
pipeline material supplier contacted manufacturer representatives from
five manufacturers: Vinyl Tech, Crestline, Royal Group, and IPEX, based
in Phoenix, Arizona, Chehalis, Washington, Woodbridge, Ontario, and
Toronto, Ontario, respectively. Only IPEX, in addition to JM Eagle, had
the capacity to produce this specific large-diameter pipe, and only
IPEX had the pipe in stock. The pipe was purchased from IPEX and
installed prior to December 3, 2009. A subsequent request for a Buy
American certification uncovered that the specific IPEX pipe was
manufactured in Edmonton, Alberta, Canada. At that time, United Pipe &
Supply believed that although the pipe was manufactured in Canada, it
``would be an acceptable option under NAFTA,'' and that ``the
interpretation [that] the `obligation' of the act did not apply since
this project was under the threshold of the [$]7.443 million dollars.''
United Pipe & Supply was later informed by its attorney that it
misunderstood the interaction between ARRA and NAFTA. EPA Region 10
asked the applicant to research ``the domestic availability of this
material and gather documentation.'' On December 29, 2009, United Pipe
& Supply contacted IPEX, in addition to the three domestic suppliers JM
Eagle, Diamond Plastics (Grand Island, Nebraska), and North American
Pipe (Houston, Texas), to inquire about the general availability of the
pipe. Diamond Plastics did not have the requested amount of pipe in
stock and required a minimum order (approximately 4,000 feet) to run
production. North American Pipe also did not have any in stock and
would not produce such a limited amount of pipe. To confirm these
findings on domestic suppliers, United Pipe & Supply contacted the Uni-
Bell PVC Pipe Association, the North American association of PVC pipe
manufacturers. A regional representative of the organization confirmed
these findings.
Section 1605 of the ARRA requires that none of the appropriated
funds may be used for the construction, alteration, maintenance, or
repair of a public building or public work unless all of the iron,
steel, and manufactured goods used in the project is produced in the
United States unless a waiver is provided to the recipient by EPA. A
waiver may be provided under section 1605(b) if EPA determines that:
(1) applying these requirements would be inconsistent with public
interest; (2) iron, steel, and the relevant manufactured goods are not
produced in the United States in sufficient and reasonably available
quantities and of a satisfactory quality; or (3) inclusion of iron,
steel, and the relevant manufactured goods produced in the United
States will increase the cost of the overall project by more than 25
percent.
This ARRA-funded project involved installation of new PVC pipe used
as a contact chamber in an effort to provide sufficient chlorination to
the distribution system, thereby allowing the City to continue
providing water disinfection to the consumers. A primary water supply
well for the City
[[Page 32181]]
was shown to be hydraulically connected to the Columbia River and
chlorination was required. Prior to installation of the Canadian-
manufactured PVC pipe and completion of the proposed project, the
distribution system configuration did not allow for sufficient chlorine
contact time. Without the appropriate contact time, the disinfection
process could not have been completed prior to water reaching the
consumers. The project originally estimated the need for 340 linear
feet of large diameter 36'' pipe to allow for ample and sufficient
chlorine contact time to provide treatment and disinfection to the
water however, after additional engineering analysis, it was noted that
only 280 linear feet was needed for project specifications. EPA finds
these considerations as stated by the City provide ample functional
justification for their specification.
The April 28 memorandum defines ``public interest'' as those cases
which possibly involve national implications of such a waiver. Based on
additional research by EPA's consulting contractor (Cadmus), and to the
best of the Region's knowledge at this time, the City attempted without
success, to meet the Buy American requirements. Furthermore, the
purpose of the ARRA provisions is to stimulate economic recovery by
funding current infrastructure construction, not to delay projects that
are already shovel ready by requiring entities, like the City, to
revise their design or potentially choose a more costly and less
effective project. The imposition of ARRA Buy American requirements on
such projects eligible for DWSRF assistance would result in
unreasonable delay and thus displace the ``shovel ready'' status for
this project. To further delay construction is in direct conflict with
the most fundamental economic purposes of ARRA; to create or retain
jobs.
The Drinking Water Unit has reviewed this waiver request and has
determined that the supporting documentation provided by the City is
sufficient to meet the following criteria listed under section 1605(b)
and in the April 28 memorandum: Applying the Buy American requirements
of ARRA would be inconsistent with the public interest.
The basis for this project waiver is the authorization provided in
section 1605(b)(1), due to the lack of any U.S. production of what by
industry's standards is a small amount (280 linear feet) of large
diameter 36'' PVC pipe, in order to meet the City's design schedule and
specifications. The March 31, 2009, Delegation of Authority Memorandum
provided Regional Administrators with the authority to issue exceptions
to section 1605 of ARRA within the geographic boundaries of their
respective regions and with respect to requests by individual grant
recipients. Having reviewed all available documentation, statements,
invoices, and related correspondence, EPA has established both a proper
basis to specify the particular good required for this project, and
that categorization of similar waiver requests from Gwinnett County, GA
(granted 12/18/09) and Old Town, ME (granted 2/12/10) when the
manufactured goods involved there had already been used in and
incorporated into the ARRA project, that EPA has evaluated and
considered the City's waiver request as of January 4, 2010 to be
considered under section 1605(b)(1) authority for public interest
waivers. The City is hereby granted a waiver from the Buy American
requirements of section 1605(a) of Public Law 111-5 for the purchase of
280 linear feet of large diameter 36'' PVC pipe. This supplementary
information constitutes the detailed written justification required by
section 1605(c) for waivers based on a finding under subsection (b).
Authority: Public Law 111-5, section 1605.
Dated: May 25, 2010.
Dennis J. McLerran,
Regional Administrator, EPA, Region 10.
[FR Doc. 2010-13529 Filed 6-4-10; 8:45 am]
BILLING CODE 6560-50-P