2011-26330. Notice of a Regional Waiver of Section 1605 (Buy American requirement) of the American Recovery and Reinvestment Act of 2009 (ARRA) to the Nikishka Bay Utilities (the Utility), of Nikiski, AK

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Notice.

SUMMARY:

The Regional Administrator of EPA Region 10 is hereby granting a waiver from the Buy American requirements of ARRA Section 1605(a) 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] to the Utility for the purchase of a magnetic flow meter, manufactured in Mexico. This is a project specific waiver and only applies to the use of the specified products for the ARRA project being proposed. Any other ARRA recipient that wishes to use the same product must apply for a separate waiver based on project specific circumstances. The waiver applicant states that the project requires the magnetic flow meter installation on the main distribution line out of the water treatment plant. The Utility had an existing turbine meter which was currently in use; however, the existing turbine meter failed prior to completion of the project necessitating the Utility to acquire a new meter as a replacement. The Regional Administrator is making this determination based on the review and recommendations of the Drinking Water Unit. The Utility has provided sufficient documentation to support their request.

DATES:

Effective Date: September 29, 2011.

FOR FURTHER INFORMATION CONTACT:

Johnny Clark, DWSRF ARRA Program Management Analyst, Drinking Water Unit, Office of Water & Watersheds (OWW), [phone], U.S. EPA Region 10 (OWW-136), 1200 Sixth Avenue, Suite 900, Seattle, WA 98101.

SUPPLEMENTARY INFORMATION:

In accordance with ARRA Section 1605(c), the EPA hereby provides notice that it is granting a project waiver of the requirements of Section 1605(a) of Public Law 111-5, Buy American requirements, to the Utility for the purchase of a non-domestic manufactured magnetic flow meter. The Utility is replacing an existing turbine meter that failed prior to completion of the project. The construction of this project involves two phases. Phase 1 of this project includes upgrades near the pumping and distribution components of the Utility. Phase 2 of this project includes the design and construction of two 34,000 gallon storage pressure tanks with a metal building enclosure. In addition, the Utility will install high efficiency well pumps and a booster pump along with the installation of associated controls and construction of approximately 887 linear feet of 12″ HDPE water main.

During construction, the Utility had originally designed and planned to relocate an existing turbine meter which was currently installed on the system's main distribution line. The turbine meter relocation would measure total production flow down-stream of the water treatment system. During the course of construction, the turbine meter failed, necessitating a replacement of the meter. Although replacement of the existing meter seemed a likely course of action for the Utility, a new assessment determined that a new meter which could measure low and high flows would allow the Utility to account for the variations in flow rates, thereby making full use of the Utility's water usage monitoring capabilities. The existing turbine meter measured constant flows between 200 gpm and 400 gpm when the wells were in operation and thus low flow monitoring capabilities were not fully assessed and only total volume was measured. The Utility recognizes that measuring total volume is an important indicator for water usage; however, taking advantage of the ability for the Utility to monitor variations between low and high flows is also an important factor for consideration. The Utility decided that instead of replacing the failed turbine meter with an identical unit, a meter which could measure the low and high flow rates based on usage was a better option to improve their ability to capture data associated with low and high flow rates. In addition, while researching and conducting design analysis for the replacement meter, it became known to the Utility that fire flow requirements or other high flow events required the Utility to identify a meter capable of measuring flows over much wider ranges. Because the meter will be used in a fire pump application, a low head loss meter is also required. These requirements for measuring low and high flow rates and the need to identify a meter which met fire flow certification requirements resulted in the Utility identifying a system flow meter for their design specifications. The main specification requirements for the flow meter are as follows;

1. Four to 1,400 gpm flow range measuring,

2. No head loss across the meter,

3. Bi-directional pulse output,

4. 0.5 second sampling rate,

5. ± 55 accuracy,

6. IP68 rated, and

7. FM 1046 approved for fire service metering.

The Utility contacted several manufacturers to identify a flow meter which could meet the design specifications outlined for the project; however, none could provide one that is domestically manufactured.

The EPA has also evaluated the City's request to determine if its submission is considered late or if it could be considered timely, as per the OMB Guidance at 2 CFR 176.120. EPA will generally regard waiver requests with respect to components that were specified in the bid solicitation or in a general/primary construction contract as “late” if submitted after the contract date. However, the EPA could also determine that a request be evaluated as timely, though made after the date that the contract was signed, if the need for a waiver was not reasonably foreseeable. If the need for a waiver is reasonably foreseeable, then the EPA could still apply discretion in these late cases as per the OMB Guidance, which says “the awarding official may deny the request.” For those waiver requests that do not have a reasonably unforeseeable basis for lateness, but for which the waiver basis is valid and there is no apparent gain by the ARRA recipient or loss on behalf of the government, then the EPA will still consider granting a waiver.

In this case, there are no U.S. manufacturers that meet the Utility's requirement for system metering. The waiver request was submitted after contract signing because the existing turbine meter which was going to be relocated, failed during the relocation; therefore, the need for a new meter was reasonably unforeseeable. During the design and bid preparation process, the Utility had planned to use and relocate the existing turbine meter and therefore no waiver was required. After the existing meter failed and the Utility recognized that a new meter was required, the Utility did submit the appropriate waiver request after evaluating domestic manufactured products and found through their research and due diligence that no U.S. manufactured flow meters could meet the design requirements for the project. The EPA will consider the Utility's waiver request as a timely request since it was reasonably unforeseeable.

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”, defines “satisfactory quality” as the quality of iron, steel or the relevant manufactured good as specified in the project plans and design. The Utility has provided information to the EPA representing there are no domestically manufactured magnetic flow meters meeting the project specifications. EPA's contractor reviewed the information and claims provided by the Utility and determined that the project specifications are supported by the evidence and that none of the magnetic meters reviewed could meet all of the project specifications.

Furthermore, the purpose of the ARRA provisions was to stimulate economic recovery by funding current infrastructure construction, not to delay projects that are already shovel ready by requiring entities, like the Utility, to revise their design and potentially choose a more costly and less effective project. The implementation 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 Utility is sufficient to meet the following criteria listed under Section 1605(b) and in the April 28, 2009, Implementation of Buy American provisions of Public Law 111-5, the “American Recovery and Reinvestment Act of 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. The basis for this project waiver is the authorization provided in Section 1605(b)(2), due to the lack of production of this product in the United States in sufficient and reasonably available quantities and of a satisfactory quality in order to meet the Utility's design 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 assistance recipients. Having established both a proper basis to specify the particular good required for this project, and, that this manufactured good was not available from a manufacturer in the United States, the Utility is hereby granted a waiver from the Buy American requirements of Section 1605(a) of Public Law 111-5 for the purchase of a magnetic flow meter, manufactured in Mexico, for the distribution system improvement project specified in the Utility's waiver request of July 27, 2011. 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: September 29, 2011.

Dennis J. McLerran,

Regional Administrator, EPA, Region 10.