E9-25171. Notice of a Project Waiver of Section 1605 (Buy American Requirement) of the American Recovery and Reinvestment Act of 2009 (ARRA) to the Village of Ruidoso/City of Ruidoso Downs, NM

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Notice.

SUMMARY:

The Acting Regional Administrator of EPA Region 6 is hereby granting a project 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) to the Village of Ruidoso/City of Ruidoso Downs—Joint Use Board (“Ruidoso”) for the purchase of a membrane bioreactor system (MBR), supplied by Enviroquip, Inc., that contains two primary components not manufactured in America, at the proposed Wastewater Treatment Plant (WWTP). Ruidoso indicates that the MBR system is necessary to achieve the wastewater treatment levels required by the National Pollutant Discharge Elimination System (NPDES) permit issued for this WWTP. This is a project specific waiver and only applies to the use of the specified product for the ARRA funded project being proposed. Any other ARRA project that opts to use the same product must apply for a separate waiver based on the specific project circumstances. The Acting Regional Administrator is making this determination based on the review and recommendations of the EPA Region 6 Water Quality Protection Division. Ruidoso has provided sufficient documentation to support its request. The Assistant Administrator of the EPA's Office of Administration and Resources Management has concurred on this decision to make an exception to Section 1605 of ARRA. This action permits the purchase of the MBR containing goods not manufactured in American from Enviroquip, Inc., for the proposed project being implemented by Ruidoso. It should be noted that for purposes of this action, the MBR, while treated as a single system, is not itself a manufactured good, but is an assembly of manufactured goods.

DATES:

Effective Date: August 24, 2009.

FOR FURTHER INFORMATION CONTACT:

Rajen Patel, Buy American Coordinator, [phone], SRF & Projects Section, Water Quality Protection Division, U.S. EPA Region 6, 1445 Ross Avenue, Dallas, Texas 75202-2733.

SUPPLEMENTARY INFORMATION:

In accordance with ARRA Section 1605(c), EPA hereby provides notice that it is granting a project waiver of the requirements of Section 1605(b)(2) of Public Law 111-5, Buy American requirements to the Village of Ruidoso/City of Ruidoso Down—Joint Use Board, New Mexico, for the acquisition of an “Enviroquip MBR system.” Ruidoso has been unable to find an MBR system that contains American-made MBR cassettes and aeration blowers (as specified in Ruidoso's specifications for Enviroquip MBR system) to meet its specific wastewater requirements.

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 are produced in the United States unless a waiver is provided to the recipient by EPA. A waiver may be granted 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.

The Enviroquip MBR system is comprised of MBR filtration cassettes, aeration blowers, and several other auxiliary components integral to the efficient operation of the system. The MBR system is a packaged product that has undergone complex biological design, hydraulic modeling, control automation, fabrication and integration of specialized product components. The Enviroquip MBR system—as a whole, is designed to remove nutrients (Phosphorus and Nitrogen) to a level specified in Ruidoso's NPDES permit.

The purpose of Ruidoso's waiver request is to allow the purchase of the Enviroquip MBR system with forty-eight MBR cassettes, manufactured by Kubota Inc., of Japan, and eight Aerzen Generation 5 aeration blowers, manufactured by Aerzen, Germany.

The new WWTP would incorporate the entire MBR system to meet the effluent requirements of the National Pollutant Discharge Elimination System (NPDES) permit. The MBR cassettes are designed to provide increased nutrient removal capabilities, which will allow the City to meet their nutrient waste-load allocation for the Rio Ruidoso. Aerzen Generation 5 blowers are integral components of the MBR system because they maintain the critically important oxygen levels and membrane scouring capabilities through out the MBR system.

Ruidoso chose the MBR treatment process after an engineering analysis of various treatment alternatives. Ruidoso determined this to be the most environmentally sound and cost effective solution because it meets the high quality effluent required by its waste load allocation under its Total Maximum Daily Limit, when compared to other considered solutions. In addition, in anticipation of procuring the MBR system, Ruidoso has already incorporated specific technical design requirements for installation of MBR system at their proposed WWTP, including specifics on MBR system footprint and configuration.

Ruidoso has provided information to the EPA demonstrating that there are no MBR cassettes manufactured in the United States in sufficient and reasonable quantity and of a satisfactory quality to meet the required technical specification. Two companies were considered for the purchase of filtration cassettes, none based in the United States. Ruidoso has performed rigorous market research, but was unsuccessful in its effort to locate any domestic manufacturers of MBR cassettes for the MBR system.

Based on additional research conducted by EPA Region 6, there does not appear to be any domestic MBR cassette manufacturers that would meet Ruidoso's technical specifications. EPA's national contractor prepared a technical assessment report dated August 3, 2009 based on the waiver request submittal. The report determined that the waiver request submittal was complete, that adequate technical information was provided, and that there were no significant weaknesses in the justification provided. The report confirmed the waiver applicant's claim that there are no American-made MBR cassettes available for use in the proposed MBR system.

Ruidoso could only identify three aeration blowers (Aerzen Generation 5, Aerzen Delta IV, and Dresser Roots) that could provide the oxygen levels and membrane scouring capabilities required by Enviroquip's process guarantee. Ruidoso disqualifies the use of Aerzen Delta IV blower on the grounds that its noise level, at 81 dB, is substantially higher than that of Aerzen Generation 5 models (72 dB for pre-air supply and 76 dB for MBR air supply) and that such a noise level would interfere with the system operators and with occupants of nearby offices. Noise levels of 72 dB and 76dB are included in the original specifications for the respective air supplies. Ruidoso disqualifies the Dresser Roots blowers on the grounds that they run at substantially higher revolutions per minute (RPM) rates (4,000 RPM for pre-air and 3,300 for MBR air) than called for in the specifications (3,244 RPM for pre-air and 2,740 RPM for MBR air).

Ruidoso included a performance guarantee in the request for proposal (RFP) as well as the original specification. Enviroquip's performance guarantee applies to the entire MBR system, including all components supplied by Enviroquip, which would be voided by substitution of other components. The potential voiding of the performance raises a valid issue regarding availability of alternative aeration blowers. The existence of such a performance guarantee supports treating the entire MBR system as a unitary whole, rather than a collection of individual components. Therefore, EPA Region 6 concludes that only the “Enviroquip MBR System—as a whole” meets the “specifications in project plans and design.”

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 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.” Ruidoso has incorporated specific technical design requirements for the installation of the MBR system at its WWTP.

The purpose of the ARRA is to stimulate economic recovery, in part, by funding current infrastructure construction, not to delay projects that are “shovel ready” by requiring utilities, such as Ruidoso, to revise their standards and specifications, institute a new bidding process, and potentially choose a more costly, less efficient project. The imposition of ARRA Buy American requirements on such projects otherwise eligible for State Revolving Fund 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 fundamental economic purpose of the ARRA, which is to create or retain jobs.

The Region 6 Water Quality Protection Division has reviewed this waiver request, and to the best of my knowledge at the time of review, has determined that the supporting documentation provided by Ruidoso is sufficient to meet the criteria listed under ARRA, Section 1605(b), Office of Management and Budget (OMB) regulations at 2 CFR 176.60-176.170., 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 ARRA, 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 Ruidoso's technical specifications, a waiver from the Buy American requirement is justified.

EPA headquarters' 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 established both a proper basis to specify the particular good required for this project, and that this manufactured good was not available from a producer in the United States, Ruidoso is hereby granted a waiver from the Buy American requirements of ARRA, Section 1605(a) of Public Law 111-5 for the purchase of “Enviroquip MBR system” using ARRA funds, as specified in Ruidoso's request of July 6, 2009. This supplementary information constitutes the detailed written justification required by ARRA, Section 1605(c), for waivers “based on a finding under subsection (b).”

Authority: Public Law 111-5, section 1605.

Dated: August 24, 2009.

Lawrence E. Starfield,

Acting Regional Administrator, Region 6.