[Federal Register Volume 75, Number 114 (Tuesday, June 15, 2010)]
[Notices]
[Pages 33818-33820]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-14347]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Indian Health Service
Nationwide Limited Public Interest Waiver of Section 1605 (Buy
American Requirement) of American Recovery and Reinvestment Act of 2009
(ARRA) For De Minimis Incidental Components of Sanitation Facilities
Construction Projects Financed With Funds Provided Under ARRA
AGENCY: Indian Health Service, HHS.
ACTION: Notice.
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SUMMARY: The Indian Health Service (IHS) hereby gives notice of
granting a nationwide limited waiver of the Buy American requirements
of the American Recovery and Reinvestment Act of 2009 (ARRA) Section
1605 under the authority of Section 1605(b)(1) (public interest waiver)
for de minimis incidental components of sanitation facilities
construction projects funded by ARRA. This action permits the use of
non-domestic iron, steel, and manufactured goods when they occur in de
minimis incidental components of projects funded by ARRA that may
otherwise be prohibited under section 1605(a). As used in this Notice,
``de minimis incidental components'' means those components otherwise
prohibited under Section 1605(a) that cumulatively comprise no more
than a total of 5 percent of the total of the materials used in a
project funded in whole or in part with ARRA assistance.
DATES: Effective Date: Upon signature.
SUPPLEMENTARY INFORMATION: In accordance with ARRA Section 1605(c) and
Section 176.80 of the rules of the Office of Management and Budget
(OMB) (2 CFR 176.80), the IHS hereby provides notice that it is
granting a nationwide limited waiver of the requirements of section
1605(a) of Public Law 111-5, Buy American requirements, based on the
public interest authority of section 1605(b)(1), to allow the use of
non-domestic iron, steel, and manufactured goods when they occur in de
minimis incidental components of eligible sanitation facilities
construction projects, where such components cumulatively comprise no
more than a total of 5 percent of the total cost of the materials used
in and incorporated into a project funded in whole or in part by ARRA.
ARRA 1605(a) prohibits the use of recovery funds 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 are produced
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in the United States, or unless a waiver is granted by the head of the
Federal department or agency. ARRA 1605(b) provides that the Buy
American requirement shall not apply in any case or category in which
the head of a Federal department or agency finds that: (1) Applying the
Buy American requirement would be inconsistent with the public
interest; (2) iron, steel, and the relevant manufactured goods are not
produced in the U.S. in sufficient and reasonably available quantities
or of satisfactory quality; or (3) inclusion of iron, steel, and
manufactured goods will increase the cost of the overall project by
more than 25 percent. ARRA 1605(c) provides that if the head of a
Federal department or agency makes a determination under 1605(b), the
head of the department or agency shall publish a detailed written
justification in the Federal Register. The finding relevant to this
waiver is at ARRA 1605(b)(l), that applying the Buy American
requirement would be inconsistent with the public interest.
The IHS's sanitation facilities construction projects typically
contain a relatively small number of high-cost components incorporated
into the project that are iron, steel, and manufactured goods, such as
pipe, tanks, pumps, motors, instrumentation, control equipment,
treatment process equipment, and relevant materials to build structures
for treatment plants, pumping stations, pipe networks, etc. In bid
solicitations for a project, these high cost components are generally
described in detail via project specific technical specifications. For
these major components, Tribes, utility owners and their contractors
are generally familiar with the conditions of availability, the
potential alternatives for each detailed specification, the approximate
cost, and the country of manufacture of the available components.
Every sanitation facilities construction project also involves the
use of thousands of miscellaneous, generally low-cost components that
are essential for, but incidental to, the construction and incorporated
into the physical structure of the project, such as nails, nuts, bolts,
other fasteners, tubing, gaskets, etc. For many of these incidental
components, the country of manufacture and the availability of
alternatives is not always readily or reasonably identifiable prior to
procurement in the normal course of business; for other incidental
components, the country of manufacture may be known but the
miscellaneous character in conjunction with the low cost, individually
and (in total) as typically procured in bulk, characterize them as
incidental to the facility or project.
In drafting this waiver, because the majority of IHS sanitation
facilities construction projects occur in remote locations, IHS
considered the fact that these types of incidental components are
obtained by contractors in many different ways from many different
sources, and the disproportionate cost and delay that would be imposed
on projects if the IHS did not issue this waiver. Such delays would
jeopardize project completion and related jobs in remote areas
including Alaska villages where the only means of transporting such
components is by air.
Due to the diverse characteristics of the specific configurations
of these individually low-cost components, the analysis and
consideration of waiver requests for them--and particularly of
ascertaining whether U.S.-made products exist or can be made to meet
these diverse configurations--have been a demanding and time consuming
task far out of proportion to the percentage of total project materials
cost they comprise. Further, since the specific use of these low-cost
components can be expected to be widely varied, formulating categorical
waivers for specific types of components would be impractical.
Recipients who do not have their compliance with respect to section
1605 clarified may in many cases be unable to initiate or continue
constructing their projects resulting in the loss of jobs that were a
result of the project. Because the situations described above can be
effectively addressed by a comprehensive application of a nationwide de
minimis waiver, the IHS finds that it would be inconsistent with the
public interest to apply the Buy American requirement to incidental
components when they in total comprise no more that 5 percent of the
total cost of the materials used in and incorporated into a project.
For many years, the IHS and the Environmental Protection Agency's
(EPA) Clean Water Act lndian Set Aside and Drinking Water
Infrastructure Grants-Tribal Set Aside programs jointly funded water
infrastructure projects. The EPA undertook inquiries to identify the
approximate scope of incidental components within its water
infrastructure projects. The responses were consistent and indicated
that the percentage of total costs for drinking water or wastewater
treatment infrastructure projects represented by these incidental
components is generally not in excess of 5 percent of the total costs
of the materials used in and incorporated into a project.
As a result of its research and analysis, EPA published two Federal
Register notices of de minimis waivers. The first was published on
Tuesday, June 2, 2009 (FR Vol. 74, No. 104, pp. 26398 and 26399), and
set forth the EPA's determination with respect to a public interest
finding on de minimis. The second notice, which revised the first, was
published on Monday, August 10, 2009 (FR Vol. 74, No. 152, pp. 39959
and 39960). By these waivers the EPA has also determined that imposing
ARRA's Buy American requirements for the category of de minimis
incidental components is not in the public interest.
While the authorizing statutes and funding sources for the EPA and
IHS recipients are different, the types of projects that EPA finances
under its programs are substantially similar in size, scope and purpose
as those funded by the IHS and, as stated above, some projects are
jointly funded by the IHS and the EPA. The IHS has decades of
experience in constructing water and waste disposal facilities in rural
Indian country and shares the EPA's rationale with respect to
incidental components used in similar projects. With respect to
jointly-funded projects, it is desirable to avoid disparate treatment
of components based on whether or not ARRA funds come from the EPA or
the IHS. Section 1605 should be administered consistently, both within
a particular Federal agency and, to the extent possible, between
agencies. Promoting consistent treatment and avoiding unnecessary
delays in committing ARRA financing to projects around the country are
crucial to the success of ARRA. Requiring individual waivers for
incidental components would be time prohibitive and overly burdensome
for applicants and the IHS. Therefore, a de minimis waiver of
incidental components totaling no more that 5 percent of the total cost
of the materials used in and incorporated into a project is in the
public interest.
Based on the public interest finding discussed above and pursuant
to Section 1605(c), the IHS has found that it would be inconsistent
with the public interest--and particularly with ARRA's directives to
ensure expeditious construction consistent with prudent management, as
cited above--to apply the Buy American requirement to incidental
components when they in total comprise no more than 5 percent of the
total cost of the materials used in and incorporated into a project.
Accordingly, IHS is hereby issuing a national waiver from the
requirements of ARRA Section 1605(a) for any components described above
as incidental that comprise in total a de
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minimis amount of the project, that is, for any such incidental
components up to a limit of no more than 5 percent of the total cost of
the materials used in and incorporated into a project.
Recipients who wish to use this waiver should in consultation with
their contractors determine the items to be covered by this waiver.
They must retain relevant documentation as to those items in their
project files, including the types and/or categories of items to which
this waiver is applied, the total cost of incidental components covered
by the waiver for each type or category, and the calculations by which
they determined the total cost of materials used in and incorporated
into the project.
In using this waiver, recipients should consider that all
sanitation facilities construction projects by definition require the
expenditure of a certain amount of project funds on the literal ``nuts
and bolts''-type components whose origins cannot readily be identified
prior to procurement. The IHS has determined the 5 percent limit based
on the previously mentioned EPA inquiries, its 50-year experience
constructing sanitation facilities for American Indian and Alaska
Native communities, and informed professional engineering judgment as
to the maximum total amount of incidental goods used in most sanitation
facilities construction projects. In a few, exceptional cases,
recipients using this waiver may have multiple types of low-cost
components which, when combined and in conjunction with those literal
``nuts and bolts''-type components, may total more than 5 percent.
Recipients in such cases will have to choose which of these incidental
components will be covered by the waiver and which will not, and will
document the type and amount of such items covered. Components which
the recipient is unable to include within the 5 percent limit of this
waiver must comply with the requirements of section 1605 by appropriate
means other than coverage under this waiver.
Further, as described above, in some cases projects are jointly
funded by IHS and the EPA. Both the IHS and the EPA have issued de
minimis waivers that have a cap of a total of 5 percent of the total
cost of the materials used in and incorporated into a project. In the
case of a jointly funded project, these waivers shall not be combined
to create a waiver of greater than 5 percent of total project costs.
This supplementary information constitutes the ``detailed written
justification'' required by Section 1605(c) of ARRA and Section 176.80
of OMB's rules for waivers of the Buy American provisions.
Authority: Public Law 111-5, Section 1605.
FOR FURTHER INFORMATION CONTACT: Ms. Betty Gould, Regulations Officer,
801 Thompson Avenue, TMP, Suite 450, Rockville, MD 20852-1627; call
non-toll free (301) 443-7899; send via facsimile to (301) 443-9879; or
send your e-mail requests, comments, and return address to:
[email protected].
Dated: June 9, 2010.
Yvette Roubideaux,
Director, Indian Health Service.
[FR Doc. 2010-14347 Filed 6-14-10; 8:45 am]
BILLING CODE 4165-16-P