2011-4482. Notice of a Project Waiver of Section 1605 (Buy American Requirements) of the American Recovery and Reinvestment Act of 2009 (ARRA) to the Drew County, AR, Memorial Hospital Renovation and Expansion Project

AGENCY:

Rural Housing Service, USDA.

ACTION:

Notice.

SUMMARY:

The United States Department of Agriculture (“USDA”) grants a project waiver of the Buy American Requirements [manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality] of ARRA to Drew County, Arkansas, (“County”) for the purchase of foreign manufactured Heating, Ventilation, Air Conditioning (HVAC) equipment for a hospital renovation and expansion project. This is a project specific waiver under section 1605 (b)(2) of ARRA. This waiver 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 County-proposed HVAC improvements were selected to address the unique conditions presented by the existing building. Based upon information submitted by the County and its consultants, it was determined that the HVAC equipment that will meet the County's design and performance specifications is manufactured only by Daikin and SkyAir of Japan and Thailand, respectively. This determination is based on the review and recommendations of the Rural Development Buy American Coordinator. The County, through its design engineer, has provided sufficient documentation to support its request. The Under Secretary for Rural Development has concurred in this decision to waive Section 1605 of ARRA. This action permits the purchase of a Daikin RXS/FTXS (wall mounted indoor unit) HVAC unit and SkyAir FCQ/RZQ (cassette-style, ceiling mounted indoor unit). These units address the operational requirement to heat and cool simultaneously, perform very efficiently, and are compatible and adaptable to the space restrictions created by the existing facility.

DATES:

Effective Date: March 1, 2011.

ADDRESSES:

Dallas Tonsager, Under Secretary, Rural Development, U.S. Department of Agriculture, 1400 Independence Avenue, Room 205-W, Washington, DC 20250-0107, [phone].

FOR FURTHER INFORMATION CONTACT:

William Downs, Senior Architect, Program Support Staff, [phone], Rural Housing Service, Stop 0761, U. S. Department of Agriculture, 1400 Independence Avenue, SW., Washington, DC 20250-0761.

SUPPLEMENTARY INFORMATION:

In accordance with ARRA Section 1605(c) and pursuant to Section 1605(b)(2), USDA hereby provides notice that it is granting a project specific waiver of the Buy American Requirements of ARRA to Drew County, Arkansas, for the purchase of HVAC equipment, manufactured by Daikin of Japan and SkyAir of Thailand for the hospital renovation and expansion project.

I. Background

Section 1605(a) of 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, or unless a waiver is provided to the recipient by the head of the appropriate department or agency, here the Secretary of USDA. According to section 1605(b) of ARRA, a waiver may be granted if the Secretary determines that (1) applying these requirements would be inconsistent with public interest; (2) iron, steel, and 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 manufactured goods produced in the United States will increase the cost of the overall project by more than 25 percent. The County has requested a waiver from the Buy American Requirement for the purchase of HVAC equipment suitable for the conditions of the existing facility and the expansion area.

The purchase of the new HVAC equipment is intended to provide the specified air conditioning for the existing hospital renovation and expansion. The estimated cost of the HVAC equipment improvements to Drew County's hospital is $12,000. In designing the HVAC equipment the designers of record evaluated the various technologies based on the following factors:

• The project requirements include addressing the limitations of space for HVAC equipment and the associated accessories.
• The project requires a very high efficiency performance for the conditions presented by the region and the requirement for simultaneous heating and cooling.
• The project requires a frost resistant operating system.

As part of an exhaustive review and search for potentially viable HVAC units, the County and their consultants determined that there is no domestic manufacturer of HVAC equipment that provides the specified performance and technical features required for this project.

According to the County, the only HVAC equipment that meets the technical specifications is not manufactured in the United States. As a result, the County requested a waiver of the ARRA Buy American provisions on the basis of nonavailability of a United States manufactured product that will meet the design and performance criteria specified for this HVAC system.

II. Nonavailability Finding

The evaluation by USDA's technical review team and architect supports the County's claim that a suitable HVAC system which meets the specifications for this project is not available in sufficient and reasonably available commercial quantities of a satisfactory quality that is manufactured in the United States. USDA's technical review team and architects reviewed a memorandum submitted by the County describing the foreign equipment that fits the technical specifications for the HVAC equipment and the process the County followed in adopting the HVAC design. USDA's technical review team and architects conducted a nationwide review of equipment vendors, manufacturers' representatives, and associated resources typically relied on by designers of HVAC equipment. The purpose of USDA's review process was to determine whether there was any HVAC equipment manufactured in the United States that meets the County's design specifications and performance requirements. As a result of its review, the Secretary has determined that based on the information available and to the best of USDA's knowledge, there is no HVAC equipment manufactured in the United States that meets the County's design specifications and performance requirements for the County's Memorial Hospital renovation and expansion project.

The Rural Development Buy American Coordinator has reviewed this waiver request and has determined that the supporting documentation provided by the County established a proper basis that the manufactured good was not available from a producer in the United States able to meet the design specifications and performance requirements for the proposed project.

III. Waiver

Having established a proper basis that this manufactured good was not available from a producer in the United States, the County is hereby granted a waiver from the Buy American requirements. This waiver permits use of ARRA funds for the purchase of the specified Daikin VRV III heat recovery system and SkyAir FCQ/RZQ documented in the County's waiver request submittal dated November 1, 2010, as part of its hospital renovation and expansion project. This supplementary information constitutes the detailed written justification required by Section 1605(c) of ARRA for waivers “based on a finding under subsection (b).”

IV. Equal Opportunity and Non-Discrimination Requirements

U.S. Department of Agriculture prohibits discrimination in all of its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at [phone] (voice and TDD). To file a complaint of discrimination, write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, SW., Washington, DC 20250-9410, or call [phone] (voice), or [phone] (TDD). “USDA is an equal opportunity provider, employer, and lender.”

Authority: Public Law 111-5, Section 1605.

Dated: February 17, 2011.

Thomas J. Vilsack,

Secretary of Agriculture.