2010-33043. Notice of Buy American Waiver Under the American Recovery and Reinvestment Act of 2009

AGENCY:

National Science Foundation (NSF).

ACTION:

Notice.

SUMMARY:

NSF is hereby granting a limited exemption of section 1605 of the American Recovery and Reinvestment Act of 2009 (Recovery Act), Public Law 111-5, 123 Stat. 115, 303 (2009), with respect to the purchase of the anti-roll tank control system that will be used in the Alaska Region Research Vessel (ARRV). An anti-roll tank is a system that is built into a vessel's hull to reduce rolling motion when operating at sea.

DATES:

January 3, 2011.

ADDRESSES:

National Science Foundation, 4201 Wilson Blvd., Arlington, Virginia 22230.

FOR FURTHER INFORMATION CONTACT:

Mr. Jeffrey Leithead, Division of Acquisition and Cooperative Support, 703-292-4595.

SUPPLEMENTARY INFORMATION:

In accordance with section 1605(c) of the Recovery Act and section 176.80 of Title 2 of the Code of Federal Regulations, the National Science Foundation (NSF) hereby provides notice that on October 22, 2010, the NSF Chief Financial Officer, in accordance with a delegation order from the Director of the agency, granted a limited project exemption of section 1605 of the Recovery Act (Buy American provision) with respect to the anti-roll tank control system that will be used in the ARRV. The basis for this exemption is section 1605(b)(2) of the Recovery Act, in that a “passive-controlled” anti-roll tank control system of satisfactory quality is not produced in the United States in sufficient and reasonably available commercial quantities. The cost of the anti-roll tank control system (~$130,000) represents less than 0.1% of the total $148 million Recovery Act award provided toward construction of the ARRV.

I. Background

The Recovery Act appropriated $400 million to NSF for several projects being funded by the Foundation's Major Research Equipment and Facilities Construction (MREFC) account. The ARRV is one of NSF's MREFC projects. Section 1605(a) of the Recovery Act, the Buy American provision, states that none of the funds appropriated by the Act “may be used for a project 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 in the United States.”

The ARRV has been developed under a cooperative agreement awarded to the University of Alaska, Fairbanks (UAF) that began in 2007. UAF executed the shipyard contract in December 2009 and the project is proceeding toward construction. The purpose of the Recovery Act is to stimulate economic recovery in part by funding current construction projects like the ARRV that are “shovel ready” without requiring projects to revise their standards and specifications, or to restart the bidding process again.

Subsections 1605(b) and (c) of the Recovery Act authorize the head of a Federal department or agency to waive the Buy American provision if the head of the agency finds that: (1) Applying the provision would be inconsistent with the public interest; (2) the relevant goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or (3) the inclusion of the goods produced in the United States will increase the cost of the project by more than 25 percent. If the head of the Federal department or agency waives the Buy American provision, then the head of the department or agency is required to publish a detailed justification in the Federal Register. Finally, section 1605(d) of the Recovery Act states that the Buy American provision must be applied in a manner consistent with the United States' obligations under international agreements.

II. Finding That Relevant Goods Are Not Produced in the United States in Sufficient and Reasonably Available Quality

Installation of an anti-roll tank system is included in the construction specifications to improve the ARRV's response to roll motion. Anti-roll tanks are a relatively simple and efficient way to improve the comfort and safety of personnel sailing aboard the ship. They consist of a tank filled with fluid (usually seawater) that is designed to slow the rate of water transfer from one side of the vessel to the other, trapping the larger amount of water on the higher side of the vessel. The water is trapped by either a series of baffles (internal vertical plates), air pressure across the top of the tank, or machinery (i.e. a pump). There are generally two types of systems, “passive” and “active” depending on the mechanism used to trap the water. “Active” generally refers to systems that use machinery such as pumps. These can be complex and require higher amounts of electrical power to operate. “Passive” systems generally use baffles and require no power or other control systems. Between the two is “passive-controlled” which uses cross-over vent pipes fitted with valves that control the flow of air across the top of the tank. The air pressure at the top slows the transfer of water at the bottom.

The ARRV will operate as a global class ship within the U.S. academic research vessel fleet. As such, it is expected to deploy worldwide where it will encounter a wide variety of sea conditions. Over the vessel's service life, the ARRV is likely to be deployed to Arctic and Antarctic waters, the north Pacific and north Atlantic where the average wave lengths and heights can be extreme as well as vary dramatically. Vessels working in these high latitudes are subject to demanding and often dangerous conditions due to low temperatures, high winds, and rough seas.

The addition of the anti-roll tank was a high priority recommendation from the Final Design Review (FDR) held in October 2008. The review panel recognized the need for the vessel to periodically work well beyond the Arctic waters that the hull was initially optimized for. At that time, the design of the ARRV was fairly well advanced. Besides the addition of hull length to incorporate the tank structure itself, the type of anti-roll tank specified must meet the following technical requirements based on the status of the project:

• Ability to minimize ship's roll response in a wide variety of sea states (either “Active” or “Passive-controlled”).
• Minimize impact on construction cost (low complexity, low additional power).
• Minimize operating cost (low complexity).

Failure to meet any of these technical requirements would have severe negative consequences for the project with regard to nonperformance and significant added program cost. It would also result in a vessel that could not successfully support open water science equipment deployments over the anticipated operating range which includes the high polar regions (north and south), as well as the Gulf of Alaska, the north Pacific and the north Atlantic. The average wave lengths and heights encountered in these areas are widely different which means the vessel motions produced will be widely different.

Following FDR, the project conducted a detailed anti-roll tank study to assess alternatives. A passive-controlled anti-roll tank system was determined to be the best option over a simpler passive system because of its ability to be “tuned” to a wide variety of sea conditions. Since the ARRV will operate as a global-ranging vessel with an emphasis on the high latitudes, an anti-roll tank that can respond to the widely varying sea states encountered is essential. Otherwise, vessel motions will not be adequately reduced to permit safe and effective science operations. All global research vessels are fitted with similar anti-roll tanks. In addition, the system has low power requirements and compared to a fully “active” system has a minimal design impact. In short, the passive-controlled system provides the best performance for the least impact on the existing design.

Reducing the vessel's roll response decreases the number of days per year that the ship would have to halt science operations because of excessive ship's motion. At a certain point, the vessel motions become severe enough that the crew and science party are no longer effective due to seasickness or fatigue. Once this occurs, the ability to complete the science mission goes down dramatically either causing cancellation of science objectives or extension of the mission to fully complete the objectives. The chance of injuring personnel and/or damaging equipment also goes up dramatically. The daily rate for the ARRV is estimated at $45,000 per day in 2014 dollars. Given that the vessel will operate mainly in the high latitudes, losing 10% of the ship's schedule (30 days) annually due to weather would be likely if a technically compliant anti-roll tank were not fitted in the vessel. In as little as two years the lost science time to the agency could easily exceed the entire cost of the anti-roll tank addition (~$2.2 million).

For the purposes of this exemption request, the “anti-roll tank system” includes only the manufactured goods that make up the control portion of the system; namely the control panel, control valves, safety valves, air filters, switches, accumulators, sensors, and spare parts. This request does not include the fabrication of the tanks and cross-over piping which are part of the ship structure being fabricated by the shipyard (~$2.0 million) all of which will be U.S. steel and U.S. manufacture.

The market research for this exemption was done by the shipyard in the summer of 2010 and verified by the UAF project team in September 2010. As noted in UAF's request for this exemption, the shipyard performed market research by reviewing industry publications and the Internet in order to assess whether there exists a domestic capability to provide an anti-roll tank system that meets the necessary requirements for safe and successful operation in high latitudes and multiple ocean environments. Only three (3) potential suppliers were identified; two (2) were foreign-owned and the third was domestic. The shipyard compared the existing product lines for compliance with the anti-roll tank technical specifications and requirements as identified above. Following a presentation at the shipyard, it was determined that the one domestic supplier did not provide a system with the required passive-controlled capability. They supplied only a passive system which cannot be tuned to various sea conditions. Furthermore, although domestically-owned it was determined that the system from the single domestic supplier was not actually manufactured domestically. The result of the shipyard's independent market research is consistent with a determination made by the project team in early 2009 when conducting the anti-roll tank study.

The project's conclusion is there are no US manufacturers who produce a suitable anti-roll system that meets all of the ARRV requirements so an exemption to the Buy American requirements is necessary.

In the absence of a domestic supplier that could provide a requirements-compliant anti-roll tank system, UAF requested that NSF issue a Section 1605 exemption determination with respect to the purchase of a foreign-supplied, requirements-compliant anti-roll tank system, so that the vessel will meet the specific design and technical requirements which, as explained above, are necessary for this vessel to be able to perform its mission safely and successfully. Furthermore, the shipyard's market research as verified by UAF indicated that an anti-roll tank system compliant with the ARRV's technical specifications and requirements is commercially available from foreign vendors within their standard product lines.

NSF's Division of Acquisition and Cooperative Support (DACS) and other NSF program staff reviewed the UAF exemption request submittal, found that it was complete, and determined that sufficient technical information was provided in order for NSF to evaluate the exemption request and to conclude that an exemption is needed and should be granted.

III. Exemption

On October 22, 2010, based on the finding that no domestically produced anti-roll tank system met all of the ARRV's technical specifications and requirements and pursuant to section 1605(b), the NSF Chief Financial Officer, in accordance with a delegation order from the Director of the agency, granted a limited project exemption of the Recovery Act's Buy American requirements with respect to the procurement of a passive-controlled anti-roll tank control system.

Dated: December 23, 2010.

Lawrence Rudolph,

General Counsel.