2011-2606. 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 Seattle (the City), WA

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Notice.

SUMMARY:

The Regional Administrator of EPA Region 10 is hereby granting a waiver of 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 of Seattle (the City) for the purchase of semi-rigid protection boards (15,600 sheets each measuring 391/2″ × 80″) manufactured in Surrey, British Columbia, for a hot applied membrane waterproofing system for a drinking water reservoir cover. 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 semi-rigid protection boards because the Maple Leaf Reservoir is being covered by a concrete roof as part of the City's reservoir burying program. The City's Parks Department will be constructing a park on the roof of the reservoir. A waterproofing system will provide a watertight seal on the reservoir roof concrete deck. Semi-rigid rubberized asphaltic fiberglass reinforced protection board will be incorporated as part of the roof waterproofing system to provide a barrier over the waterproofing membrane to protect the membrane against damage from the backfill associated with the construction of the park, and from the pedestrian and vehicular activity associated with the use and maintenance of the park.

The Regional Administrator is making this determination based on the review and recommendations of the Drinking Water Unit. The City has provided sufficient documentation to support their request.

DATES:

Effective Date: January 31, 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 City for the semi-rigid protection boards (15,600 sheets each measuring 391/2″ × 80″) manufactured in Surrey, British Columbia, for a hot applied membrane waterproofing system for a drinking water reservoir cover. The applicant indicates that semi-rigid protection board is required on the roof of the drinking water supply reservoir to obtain a twenty (20) year warranty from the waterproofing manufacturer. Semi-rigid protection board is currently being used at three (3) other reservoirs operated by the City. Based upon project specifications, there are no known U.S. manufactures that manufacture comparable products. The ARRA funded project involves water system improvements at the Maple Leaf Reservoir. Enhanced moisture protection is being incorporated into the reinforced hot-applied waterproofing system to allow for pedestrian use and vehicular activity. As part of the reservoir burying program, the City's Parks Department will be constructing a park on the roof of the reservoir. The City currently has three other reservoirs which also have the semi-rigid protection board installed. The City's project specification calls for the reinforced hot applied waterproofing system. In order to provide equivalent waterproofing protection similar to the three other reservoirs within the City, the City changed the project specifications in order to ensure consistency of their reservoir burying program requirements and to ensure the semi-rigid protection board's twenty (20) year warranty. An inquiry by EPA's national contractor (Cadmus) confirmed there are no known domestic manufacturers of comparable semi-rigid protection board that meet all aspects of the project specification, which is supported by the available information. Information received from the manufacturer on behalf of the City indicated that an attempt to locate a domestic manufacturer was done so unsuccessfully. The manufacturer added this product to their inventory and product line some years ago. According to the manufacturer, their two domestic suppliers of protection materials had indicated that they were unable to manufacture a similar/like product and nor did either supplier have knowledge of a similar/like product manufactured in the U.S. Based on available information, it is unlikely that other semi-rigid protection boards would function within the requirement of the project specifications.

EPA has also evaluated the City's request to determine if its submission is considered late or if it could be considered as if it was timely filed, as per the OMB Guidance at 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 contact as “late” if submitted after the contract date. However, 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 EPA could still apply discretion in these late cases as per the OMB Guidance, which says “the award 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 EPA will still consider granting a waiver.

In this case, there are no U.S. manufacturers that meet the City's project specifications for the semi-rigid protection boards. The waiver request was submitted after the contract date due to a design change. The original project specifications for the protection course were developed with a standard design, 80- to 90-mil-(2.0- to 2.3-mm) thickness, fiberglass reinforced asphalt or modified bituminous sheet. The design change and clarification of May 12, 2010 resulted in an upgrade to the existing protective course requirements, in order to provide extra reinforcement and increased puncture resistance, similar to the three other reservoir covers previously installed within the City. The design change was necessary due to the project's size and complexity. The design change also increases performance of the protection board and the potential life expectancy of the project resulting in a twenty year warranty program. The design change required the upgrade of the protection course to a semi-rigid protection board composed of a rubberized asphalt core, reinforced with a non-woven fiberglass mat and sandwiched between two protective polypropylene layers, with a minimum nominal thickness of 4.5 mm. The material supplier and contractor's assumption that the protection board would be acceptable under the North American Free Trade Agreement (NAFTA) or the U.S. and Canada Trade Agreement signed effective February 16, 2010, was made so in error. Therefore, the City did not submit a waiver request until November 10, 2010. The City's Materials Lab consulted with EPA personnel and correctly identified that a waiver would be required for the protection board. There is no indication that the City failed to request a waiver in order to avoid the requirements of the ARRA, particularly since there are no domestically manufactured products that meet the project specification. EPA will consider the City's waiver request, a foreseeable late request, as though it had been timely made since there is no gain by the City and no loss by the government due to the late request.

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 City has provided information to the EPA representing that there are currently no domestic manufacturers of the semi-rigid protection boards that meet the project specification requirements. Based on additional research by EPA's consulting contractor (Cadmus) and to the best of the Region's knowledge at this time, there does not appear to be any other manufacturers capable of meeting the City's 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 City, to revise their design and potentially choose a more costly and less effective project. The imposition 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 City 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 City'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 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 semi-rigid protection boards for a hot applied membrane waterproofing system (15,600 sheets each measuring 391/2″ × 80″) for a reservoir cover, manufactured in Surrey, British Columbia, specified in the City's waiver request of November 10, 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: Dated: January 31, 2011.

Dennis J. Mclerran,

Regional Administrator, EPA, Region 10.