2010-27429. Notice of a Regional Waiver of Section 1605 (Buy American Requirement) of the American Recovery and Reinvestment Act of 2009 (ARRA) to the City of Palmer (the City) Alaska

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Notice.

SUMMARY:

The Regional Administrator of EPA Region 10 is hereby granting a waiver request 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 City for the purchase and use of four rotary screw air compressors to provide aeration for the wastewater treatment facility's biological treatment lagoons. This is a project specific waiver and only applies to the use of the specified product for the ARRA project discussed in this notice. Any other ARRA recipient that wishes to use the same product must apply for a separate waiver based on project specific circumstances. These rotary compressors, which are supplied by Atlas Copco, are manufactured in England and Belgium, and meet the City's performance specifications and requirements. The Regional Administrator is making this determination based on the review and recommendations of the Grants & Strategic Planning Unit. The City has provided sufficient documentation to support their request. 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 purchase of rotary screw air compressors for Palmer's activated wastewater treatment project that may otherwise be prohibited under Section 1605(a) of the ARRA.

DATES:

Effective Date: October 20, 2010.

FOR FURTHER INFORMATION CONTACT:

Bryan Fiedorczyk, CWSRF ARRA Program Management Analyst, Grants and Strategic Planning Unit, Office of Water & Watersheds (OWW), [phone], U.S. EPA Region 10 (OWW-137), 1200 Sixth Avenue, Suite 900, Seattle, WA 98101.

SUPPLEMENTARY INFORMATION:

In accordance with ARRA Section 1605(c) and OMB regulations at 2 CFR Part 176, Subpart B, the EPA hereby provides notice that it is granting a project waiver request of the requirements of Section 1605(a) of Public Law 111-5, Buy American requirements, to the City for the purchase and use of four Atlas Copco rotary screw air compressors manufactured outside of the U.S. The compressors will be incorporated as part of a wastewater treatment system upgrade project that includes lagoon insulation covers and a high-efficiency aeration system, which will reduce energy consumption by more than 40 percent. The City received $2,500,000 of ARRA funding through the Clean Water State Revolving Fund to complete this project. The City was unable to find a supplier that could provide American manufactured rotary screw compressors to meet the project specifications and performance 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 is produced in the United States unless a waiver is provided to the recipient by EPA. A waiver may be provided under Section 1605(b) 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.

EPA has determined that the City's waiver request can be processed as timely even though the request was made after the construction contract was signed. Consistent with the direction of the OMB guidance at 2 CFR 176.120, EPA has evaluated the City's request to determine if the request constitutes a late request. 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, in this case EPA has determined that the City's request, though submitted after the contract date, may be processed as if it were timely. EPA has determined that the City needed to complete installation of insulated lagoon covers and complete testing to verify that the aeration system assumptions would be accurate. This data was necessary to justify the blower modifications that give rise to the need for the air compressors that are subject to this waiver. The applicant could not reasonably foresee they would need to request a waiver for a foreign made product before the data sampling was completed, which occurred after the contract was signed. EPA is authorized under 2 CFR 176.120 to process a waiver request as if it were timely if the need for the waiver was not reasonably foreseeable. Accordingly, EPA has evaluated the request as a timely request.

These manufactured goods will provide aeration for the City's treatment process. The City selected the specified rotary screw compressor technology because of: (1) Well documented energy-efficiency in wastewater operations; (2) necessary efficiency for energy modeling and to meet Green Project Reserve requirements; (3) oil free operation characteristics to reduce risk of pollutant discharges into a fish-bearing stream; (4) reduced life cycle cost of operation and maintenance; (5) small footprint required by project space constraints, and; (6) low noise emission characteristics. Additionally, in the bid specifications for the rotary screw blowers, the City identified performance testing criteria to evaluate power consumption of the aeration system's components, including the main drive motor, Variable Speed Drives (VSD), filters, etc. The specifications also required the performance test to be witnessed by the senior wastewater treatment plant operator and an independent engineer.

Between February and July of 2010, the City's engineering consultant conducted an extensive investigation into all possible sources for American made rotary screw compressors. Based on the investigation, several companies were found to manufacture these machines, but only one, Universal Blower Pac (UBP), claimed to be able to meet the required performance specifications. EPA's national contractor prepared a technical assessment report dated August 26, 2010, based on the submitted waiver request. The report indicated that UBP confirmed the EE-Pac compressor could comply with performance specification requirements, and the EPA contractor concluded that no other U.S. manufacturers produced rotary screw blowers that would meet the project specifications. Over the course of several months, the City and engineering consultant attempted to gather energy performance and independent engineering testing results from UBP to validate UBP's claim that the EE-Pac compressor would meet the project specifications. Responses from UBP have not included the required information to consider system energy loss and independent engineering testing as identified in the performance specifications. Therefore, UBP's claim to produce an acceptable compressor does not meet the project specifications. Thus, the City has demonstrated due diligence in their efforts and were ultimately unable to identify an available domestic product of satisfactory quality.

The April 28 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. Based on additional research by the City and EPA's national contractor, and to the best of the Region's knowledge at this time, the City attempted without success, to meet the Buy American requirements. 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 City, to halt construction pending manufacture of domestically produced goods. To further delay construction is in direct conflict with the most fundamental economic purposes of ARRA; to create or retain jobs.

The Grants and Strategic Planning Unit has reviewed this waiver request and has determined that the supporting documentation provided by the City is sufficient to meet the following criteria listed under Section 1605(b) and in the April 28 memorandum:

Iron, Steel, and 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 U.S. production of rotary screw air compressors, in order to meet the City's design specifications and performance requirements. 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 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, the City is hereby granted a waiver from the Buy American requirements of Section 1605(a) of Public Law 111-5 for the purchase and use of four rotary screw air compressors manufactured by Atlas Copco outside of the U.S. This supplementary information constitutes the detailed written justification required by Section 1605(c) for waivers based on a finding under subsection (b).

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

Dated: October 20, 2010.

Michelle L. Pirzadeh,

Acting Regional Administrator, EPA, Region 10.