2010-31335. 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 Astoria (the City), OR

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 under the authority of Section 1605(b)(1) [inconsistent with the public interest] to the City for the utilization and installation of one (1) Slide Gate in the influent control structure and two (2) Stop Logs/Guides sets in access manholes as part of an overall Combined Sewage Overflow (CSO) control project. This is a project specific waiver and only applies to the use of the specified product 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 City had the contractual obligation of the contractor and written verification from the manufacturer that the Slide Gate and Stop Logs/Guides would comply with Buy American requirements and be produced in a U.S. facility. However, the contractor observed that the Slide Gate and Stop Logs/Guides delivered to the site for installation had “Made in Canada” labeling. The contractor confirmed with the manufacturer that goods were actually manufactured in Canada, not in the U.S., and shipped to the project site in error. Due to contractual requirements, the contractor and manufacturer will absorb the costs of the Slide Gate and Stop Logs/Guides. Re-ordering the Slide Gate and Stop Logs/Guides and having them manufactured in a U.S. facility would delay project completion by at least nine to ten weeks. Of significant note, the City has a contractual obligation to the Oregon Department of Environmental Quality (DEQ) to begin project testing and start up by December 1, 2010 in order for the completed project to properly control CSOs and provide water quality protection during the typical wet weather associated with December and January, when CSOs are highest. Based upon information submitted by the City, EPA has concluded that requiring the installation of the domestic manufactured Slide Gate and Stop Logs/Guides, which would extend the project schedule by at least nine to ten weeks, would be inconsistent with the public interest, and that a waiver of the Buy American provisions is justified. The Regional Administrator is making this determination based on the review and recommendations of the Grants and Strategic Planning Unit. The Assistant Administrator of the Office of Administration and Resources Management has concurred on this decision to make an exception to the requirements of Section 1605(a) of ARRA. This action allows the installation of the foreign manufactured Slide Gate and Stop Logs/Guides, as specified in the City's October 28, 2010 request.

DATES:

Effective Date: December 3, 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), 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 City of Astoria, Oregon for the installation of one (1) Slide Gate in the influent control structure and two (2) Stop Logs/Guides sets in access manholes as part of an overall Combined Sewage Overflow (CSO) control project. Based on the information provided by the City, EPA has determined that it is inconsistent with the public interest for the City to further delay the project and pursue the purchase of a domestically made Slide Gate and Stop Logs/Guides.

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 recipient by the head of the appropriate agency, in this case, the EPA. A waiver may be provided under Section 1605(b) 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.

Consistent with the direction of OMB's regulation at 2 CFR 176.120, EPA will generally consider a waiver request with respect to components that were specified in the bid solicitation or in a general/primary construction contract or those made after obligating ARRA funds for a project to be a “late” request. However, in this case EPA has determined that the City's request, though made after the date the contract was signed, can be evaluated as timely because the contractor informed the City that due to an oversight, the Slide Gate and Stop Logs/Guides that were delivered to the construction site had been manufactured in a Canadian facility. The need for a waiver was not determined until after the contractor observed and verified the delivery of the foreign manufactured Slide Gate and Stop Logs/Guides. The recipient could not reasonably have foreseen the need for a determination until informed of the error. Accordingly, EPA will evaluate the request as if it were timely.

The City is requesting a waiver of the Buy American provision for installation of one (1) Slide Gate in the influent control structure and two (2) Stop Logs/Guides sets in access manholes, which are necessary components of an overall Combined Sewage Overflow (CSO) control project. As context, the project cost is estimated at $8.8 million, of which $4 million is ARRA funded, and the Slide Gate and Stop Logs/Guides are estimated to cost $20,000 or less.

The City's general contractor submitted the Slide Gate and Stop Logs/Guides shop drawings for review by the City Engineer; there was no indication in the shop drawings that equipment would be manufactured in Canada. Additionally, correspondence from the manufacturer for the equipment description proposal and purchase order were from a U.S. address in New Hampshire. Finally, in the additional quotation and delivery conditions, the manufacturer certified that its quotation complies with all specifications, which include ARRA Buy American requirements. For these reasons, the City had no reason to suspect that foreign made goods would be delivered to the project site.

However, the contractor noticed that the Slide Gate and Stop Logs/Guides delivered to the site for installation had “Made in Canada” labeling and verified with the manufacturer that they were actually manufactured in Canada, and not in the U.S. Due to contractual requirements, the contractor and manufacturer will absorb the costs of the Slide Gate and Stop Logs/Guides; thus, the cost of this equipment will not be paid by the City. The City, which could not reasonably foresee the need for a waiver to the Buy American provision of the ARRA, immediately contacted DEQ after they were informed by the contractor of the delivery oversight, and submitted a waiver request (October 29, 2010) after discussing the necessary course of action with DEQ and EPA Region 10.

Re-ordering the Slide Gate and Stop Logs/Guides and having them manufactured in a U.S. facility would delay project completion by at least nine to ten weeks. Of significant note, the City has a contractual obligation to DEQ to begin project testing and start up by December 1, 2010 in order for the completed project to properly control CSOs and provide water quality protection during the typical wet weather associated with December and January, when CSOs are highest.

Furthermore, the purpose of the ARRA is to stimulate economic recovery by funding current infrastructure construction, not to delay or require the substantial redesign of projects that are “shovel ready”, such as this project in Astoria, Oregon. The implementation of the ARRA Buy American requirements in this case would result in an unreasonable delay in its completion. Such delay would also directly conflict with a fundamental economic purpose of ARRA, which is to create or retain jobs. More importantly, the imposition of the Buy American requirement would result in additional risk to water quality protection.

The Grants and Strategic Planning Unit has reviewed this waiver request and has determined that the supporting documentation provided by the City established a proper basis to specify that using the domestic manufactured good would be inconsistent with the public interest of the City of Astoria, Oregon. The information provided is sufficient to meet the following criteria listed under Section 1605(b)(1) of the ARRA and in the April 28, 2009 Memorandum: Applying these requirements would be inconsistent with the public interest.

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 using a domestically available alternative manufactured good would be inconsistent with the public interest, the City of Astoria, Oregon is hereby granted a waiver from the Buy American requirements of Section 1605(a) of Public Law 111-5. This waiver permits use of ARRA funds for the installation and utilization of foreign manufactured Slide Gate and Stop Logs/Guides as documented in the City's waiver request submittal dated October 28, 2010. 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.

Issued on: December 3, 2010.

Dennis J. McLerran,

Regional Administrator, EPA, Region 10.