2011-19. Notice of Nationwide Waiver of Section 1605 (Buy American Requirement) of the American Recovery and Reinvestment Act of 2009 (ARRA) for the Use of Small Horsepower Vertical Hollow Shaft Electric Motors (Less Than 40 Horsepower) for Projects ...

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Notice.

SUMMARY:

The EPA is hereby granting a nationwide waiver of the Buy American requirements of ARRA Section 1605 under the authority of Section 1605(b)(2) [manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality] for small-horsepower (HP) vertical hollow shaft (VHS) electric motors (less than 40 HP). This nationwide waiver applies to the use of the specified products and is applicable only for their purchase and installation for one-year subsequent to the effective date of the waiver. Based upon information gathered from multiple waiver request submittals and further research by its contractor, EPA has determined that domestically manufactured small-HP VHS electric motors (less than 40 HP) are not reasonably available. The Assistant Administrator for the Office of Water is making this determination based on the review and recommendations of the Office of Ground Water and Drinking Water and the Office of Wastewater Management. The Assistant Administrator of the Office of Administration and Resources Management has concurred on this decision to make an exception to Section 1605 of ARRA. This action permits the nationwide purchase and installation of non-domestic VHS electric motors less than 40 HP up to one-year subsequent to the effective date of the waiver. EPA reserves the right to withdraw or amend this nationwide waiver based on new developments or changes in the domestic manufacturing capacity for these items.

DATES:

Effective Date: December 29, 2010.

FOR FURTHER INFORMATION CONTACT:

Timothy Connor, Chemical Engineer, [phone], Office of Wastewater Management (OWM) or Kirsten Kroner, Civil Engineer, [phone], Office of Ground Water and Drinking Water (OGWDW), U.S. Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460.

SUPPLEMENTARY INFORMATION:

In accordance with ARRA Section 1605(c), the EPA hereby provides notice that it is granting a nationwide waiver of the requirements of Section 1605(a) of Public Law 111-5, Buy American requirements, for the purchase and installation of non-domestic vertical hollow shaft electric motors less than 40 horsepower for one-year subsequent to the effective date for projects financed through the Clean or Drinking Water State Revolving Funds (SRF) using assistance provided under ARRA.

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 a public works project unless all of the iron, steel, and manufactured goods used in the project is produced in the United States, or unless a waiver is provided to the assistance recipient by the head of the appropriate agency, here the EPA. A waiver may be provided if EPA determines that (1) applying these requirements would be inconsistent with the 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.

As part of the implementation of the Buy American requirements of the ARRA, EPA reserved the right to issue national waivers that apply to particular categories of manufactured goods. A national categorical waiver may be developed based on the need to issue a waiver as discerned by the number of project specific waiver requests for a particular item that have been submitted by assistance recipients to one or more EPA region(s), and the detailed justifications for such requests. National waivers may be issued by EPA based on a determination that a particular item is not produced domestically in reasonably available quantities or of a sufficient quality. To date, no nationwide waivers for a particular category of manufactured goods have been issued by EPA.

During August through October 2010, seven applications have been presented to five Regions (3, 5, 6, 7, and 10) requesting waivers for small-horsepower vertical hollow shaft (VHS) electric motors. The specific VHS electric motors included in the waiver requests range in size from 15 HP to 30 HP. Detailed justifications provided by the applicants (and verified by EPA and its contractor, as described below) reveal that there are no VHS electric motors less than 40 HP that are produced domestically in reasonably available quantities. As a result of these waiver requests, EPA and its contractor reviewed current technical knowledge regarding availability and location of manufacturers of VHS electric motors less than 40 HP.

EPA found that currently, there are no known domestic manufacturers of VHS electric motors less than 40 HP. Waiver applicants and EPA's contractor identified and evaluated more than twenty electric motor manufacturers in the search for domestic sources. The waiver applicants and EPA's contractor conducted independent research and manufacturer outreach in order to possibly identify a domestic manufacturer of small VHS electric motors. EPA further contacted the Water and Wastewater Equipment Manufacturers Association (WWEMA), a national association. At least four foreign manufacturers produce and sell VHS electric motors less than 40 HP. Much of the current manufacturing capability for the VHS electric motor technology appears to be located in China with additional manufacturing capability located in Mexico and Taiwan. Currently, there are no known manufacturers planning and/or considering offering VHS electric motors less than 40 HP that are/will be manufactured in the U.S. The only VHS electric motor manufacturer with manufacturing capability in the U.S., who does not manufacture nor intend to manufacture VHS electric motors less than 40 horsepower, estimates that a 1 year minimum timeframe would be required to set up manufacturing capability in their domestic manufacturing facility for small (i.e., less than 40 HP) VHS electric motors. Those companies contacted with VHS electric motor manufacturing capability located overseas estimate that it would require between 2 and 3 years to construct and commission new production facilities in the U.S. to manufacture VHS electric motors in sizes less than 40 HP. While EPA did learn from the manufacturer's association that one-time, special-order VHS motors may be available from a domestic source, EPA's research revealed that current manufacturing capacity and availability do not exist and special orders could cause delay and displace the “shovel ready” status of projects.. Based on the time constraints and current lack of manufacturing capacity, one-time special-order small VHS motors do not meet the standard of being produced in the U.S. in sufficient and reasonably available quantity.

It is critical to move forward with a national categorical waiver for these products because there is clearly domestic unavailability, and lack of a waiver is currently impeding the progress of several Recovery Act projects funded by both the Clean Water and Drinking Water State Revolving Funds. The April 28, 2009 EPA HQ Memorandum, “Implementation of Buy American provisions of Public Law 111-5, the `American Recovery and Reinvestment Act of 2009' ” (“Memorandum”), defines reasonably available quantity as “the quantity of iron, steel, or relevant manufactured good is available or will be available at the time needed and place needed, and in the proper form or specification as specified in the project plans and design.”. To curtail the speed with which construction is completed by requiring that assistance recipients place one-time special orders or request individual waivers, when it is known that domestic products are simply not reasonably available, would directly conflict with a fundamental economic purpose of ARRA, which is to create or retain jobs.

EPA has conducted a thorough review of the domestic manufacturing practices for small-HP VHS electric motors and has determined that domestically manufactured goods are not currently available. The information provided is sufficient to meet the following criteria listed under Section 1605(b) of the ARRA and in the April 28, 2009 Memorandum: Iron, steel, and the manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality. Therefore, EPA has determined that a nationwide categorical waiver for this product is appropriate.

This waiver expires one year from the day it takes effect. Furthermore, EPA reserves the right to withdraw or amend this nationwide waiver based on new developments or changes in the domestic manufacturing capacity for these items.

Authority: Pub. L. 111-5, section 1605.

Dated: December 29, 2010.

Michael H. Shapiro,

Acting Assistant Administrator for Water.