E9-30046. Notice of a Project Waiver of Section 1605 (Buy American Requirement) of the American Recovery and Reinvestment Act of 2009 (ARRA) to the Town of Taos, NM

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Notice.

SUMMARY:

The 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 Town of Taos (“Taos”) for the purchase of membrane filtrations cassettes, which are an integral component of the Membrane Bioreactor (MBR) system, proposed for the expansion of its existing Wastewater Treatment Plant (WWTP). Taos indicates that the MBR system is necessary to achieve the tertiary wastewater treatment levels at the proposed 4 million gallons per day WWTP. The membrane filtration equipment under consideration is manufactured by a company located in Canada and no United States manufacturer produces an alternative that meets Taos' technical specifications. 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 may wish to use the same product must apply for a separate waiver based on the specific project circumstances. The Regional Administrator is making this determination based on the review and recommendations of the EPA Region 6, Water Quality Protection Division. Taos 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 MBR system containing goods not manufactured in America, for the proposed project being implemented by Taos. It should be noted that for purposes of this action, the MBR system, while treated as a single system, is not itself a manufactured good, but is an assembly of manufactured goods.

DATES:

Effective Date: December 9, 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 Taos for the acquisition of a GE/Zenon Zeeweed 500D MBR system's (MBR system) membrane filtration cassettes, manufactured by GE Water and Process Technologies, Canada. Taos has been unable to find an American made membrane filtration cassette manufacturer 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 provided 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.

Taos' waiver request is to allow the purchase of sixteen membrane filtration cassettes for use in improvements to its existing WWTP in Taos, New Mexico. This project will replace its existing secondary wastewater treatment processes with a new MBR system to meet the effluent requirements of the NPDES permit. The membrane filtration cassette is an integral component of the MBR system because it separates the treated wastewater from the mixed liquor which comes from the biological reactors, before the treated wastewater is disinfected and discharged. Taos chose the MBR system after an engineering analysis of treatment alternatives. Taos determined this to be the most environmentally sound and cost effective solution because it meets the strict NPDES tertiary treatment standards for Total Suspended Solids, Biological Oxygen Demand, and turbidity, when compared to other considered solutions. In addition, in anticipation of procuring the MBR system, Taos has already incorporated specific technical design requirements for installation of membrane filter cassettes with the MBR system at its WWTP, including specific tank footprint, geometry and configuration.

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

Based on additional research conducted by EPA Region 6, there does not appear to be any domestic MBR cassette manufacturers that would meet Taos' technical specifications. EPA's national contractor prepared a technical assessment report dated November 19, 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. Taos included a performance guarantee in the request for proposal (RFP) as well as the original specification. GE's performance guarantee applies to the entire MBR system, including all components supplied by GE. The existence of the 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 the “GE/Zenon Zeeweed 500D 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 P.L. 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.” Taos has incorporated specific technical design requirements for installation of membrane filtration cassettes 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 Taos, 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 a 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 Taos 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 Taos' 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, Taos is hereby granted a waiver from the Buy American requirements of ARRA, Section 1605(a) of Public Law 111-5 for the purchase of “GE/Zenon Zeeweed 500D MBR system” using ARRA funds, as specified in Taos' request of October 23, 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: December 9, 2009.

Al Armendariz,

Regional Administrator, U.S. Environmental Protection Agency, Region 6.