2011-8018. Notice of a Project Waiver of Section 1605 (Buy American Requirement) of the American Recovery and Reinvestment Act of 2009 (ARRA) to the Bayonne Municipal Utilities Authority, Bayonne, NJ

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Notice.

SUMMARY:

The EPA 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 Bayonne Municipal Utilities Authority, New Jersey (Authority), for the purchase of a foreign manufactured wind turbine generator that meets the Authority's design and performance specifications, which is to be installed at its existing Oak Street Pumping Station site. 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 project that may wish to use the same product must apply for a separate waiver based on project specific circumstances. Based upon information submitted by the Authority and its consulting engineer, EPA has concluded that there are currently no domestic manufactured wind turbines available in sufficient and reasonable quantity and of a satisfactory quality to meet the Authority's project design and performance specifications, and that a waiver is justified. The Regional Administrator is making this determination based on the review and recommendations of the State Revolving Fund Program Team. The Assistant Administrator of the Office of Administration and Resources Management has concurred on this decision to make an exception to Section 1605(a) of ARRA. This action permits the purchase of foreign manufactured wind turbine generator by the Authority, as specified in its December 15, 2010 waiver request.

DATES:

Effective Date: April 5, 2011.

FOR FURTHER INFORMATION CONTACT:

Alicia Reinmund-Martínez, Environmental Engineer, [phone], State Revolving Fund Program Team, Division of Environmental Planning and Protection, U.S. EPA, 290 Broadway, New York, NY 10007.

SUPPLEMENTARY INFORMATION:

 

In accordance with ARRA Sections 1605(c) and 1605(b)(2), 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 Authority for the purchase of a Leitwind LTW 77 wind turbine generator, manufactured by Leitner-Poma, that meets the Authority's design and performance specifications to be installed at its existing Oak Street Pumping Station site. EPA has evaluated the Authority's basis for the procurement of a foreign made wind turbine generator. Based upon information submitted by the Authority and its consulting engineer, EPA has concluded that there are currently no domestic manufactured wind turbines available in sufficient and reasonable quantity and of a satisfactory quality to meet the Authority's project design and performance specifications.

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 are produced in the United States, or unless a waiver is provided to the recipient by the head of the appropriate agency, here the EPA. A waiver may be provided under Section 1605(b) of ARRA 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 Authority's waiver request is timely even though the request was made after the construction contract was signed. Consistent with the direction of the Office of Management and Budget (OMB) regulations at 2 CFR 176.120, EPA has evaluated the Authority's request to determine if the request, though made after the contract date, can be treated as if it were timely made. 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 Authority's request may be treated as timely because the need for a waiver was not foreseeable at the time the contract was signed. The Authority submitted this waiver request after the contract date because the domestic manufacturer of a 1.5 megawatt (MW) wind turbine generator that met project specifications ultimately withdrew from the project. The need for a waiver was not determined until on or about November 6, 2010, when the domestic manufacturer notified the Authority that it was unwilling to provide a 1.5 MW wind turbine generator on the basis that the project site did not meet the manufacturer's property setback requirements as well as other siting requirements. The Authority's subsequent research indicated that no other domestic manufactured 1.5 MW wind turbine generators met project specifications. Accordingly, EPA will evaluate the request as a timely request.

The Authority's wind power project includes the installation of a 1.5 MW wind turbine generator at its existing Oak Street Pumping Station, which is the main combined and sanitary pumping station serving all of the City of Bayonne's (City) approximate 62,000 residents. The wind turbine generated electricity will drive the Oak Street Pumping Station, which is operational 24 hours per day and has an average daily dry weather flow of 8 million gallons per day (MGD), and a total capacity of 18 MGD. The wind turbine generator will also be interconnected with the nearby East 5th Street storm water relief pumping station, which has four 150 horsepower (HP) lift pumps and one 60 HP lift pump that help prevent localized flooding in a residential area of the City. The project was designed for a 1.5 MW domestic manufactured wind turbine generator and will be located on a 22.95 acre property owned by the Authority that is situated in a predominantly industrial area.

The Authority is requesting a waiver for the purchase of a Leitwind LTW77 wind turbine, manufactured by Leitner-Poma, because according to the Authority, there is only one domestic manufacturer that produces a wind turbine generator that meets the project design and performance specifications. However, that domestic manufacturer withdrew from the project on November 6, 2010, on the basis of its own internal siting and setback recommendations that could not be met at the project site. Although the site did not meet the domestic manufacturer's setback requirements, the Authority had worked with the domestic manufacturer's engineers to develop other mitigation measures to prevent damage or injury from shedding ice. These measures include, but are not limited to, sensors to detect ice buildup and stop the wind turbine generator when ice is detected with manual restart and the repositioning of the turbine blades to minimize ice shedding issues. Despite the Authority's efforts, the domestic manufacturer was not willing to supply their product and ultimately withdrew from the project.

The Authority examined twenty other available domestic and foreign wind turbine generators and only the Leitwind LTW 77 model meets all project specifications. Of the other five domestic manufacturers contacted, several produce wind turbine generators that are larger than the 1.5 MW allowed by the project specifications. In addition, many of the domestic machines were much heavier than the wind turbine generator produced by the domestic manufacturer that withdrew from the project. The use of a heavier machine would add significantly to project expenses and delay the project schedule because a foundation redesign would be required and the foundation for this project is already under construction. Lastly, the Authority concluded that none of the domestic manufacturers contacted could meet the City's zoning law requirement that the wind turbine generator emit less than 104 decibels of noise.

The Authority states that only the Leitwind LTW 77 foreign manufactured model meets the size and noise requirements for this project. Although the Leitwind LTW 77 does not use the same site consideration limitations that are used by the domestic manufacturer that withdrew from the project and notwithstanding that there are currently no local, State, or Federal requirements regulating the setback distances associated with the operation of wind turbines, the Authority has indicated that it has taken all necessary precautions to eliminate ice shedding. Such mitigation measures include, but are not limited to, the incorporation of controls with three levels of redundancy to shut down the turbine during potential glaze icing events and the restarting of the turbine only after a detailed visual inspection is completed, vibration sensors on the blades that recognize if the blades are out of balance due to ice formation, and the positioning of the shut down turbine to facilitate ice shedding directly into a fenced enclosure with posted warning signs directly below the turbine.

Also, the Federal Aviation Administration (FAA) notified the Authority that its study revealed that a wind turbine generator on the site would not be a hazard to air navigation, provided that the turbine structure is marked and/or lighted, in accordance with FAA Advisory Circular 70/7640-1 K Change 2. The Authority confirmed that the LTW 77 specifications fall within the scope of the FAA's determination and that the Authority will mark and/or light the turbine in accordance with FAA requirements.

Based on the technical evaluation of the Authority's waiver request and supporting documentation conducted by EPA's national contractor, the Authority's claim that no domestic manufacturer can produce and site a 1.5 MW wind turbine generator that meets the project specifications is supported by the available evidence. In addition, the evaluation of the supporting documentation indicates that at least one foreign manufacturer, Leitner-Poma, will provide a 1.5 MW wind turbine generator at the site that can meet project design and performance specifications.

The purpose of the ARRA is to stimulate economic recovery in part by funding current infrastructure construction, not to delay projects that are already “shovel ready” by requiring entities, such as the Authority, to revise their design standards and specifications 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 potentially the cancellation of this project as sited. The delay or cancellation of this construction would directly conflict with the fundamental economic purpose of ARRA, which is to create or retain jobs.

The April 28, 2009, EPA Headquarters Memorandum, “Implementation of Buy American provisions of Public Law 111-5, the `American Recovery and Reinvestment Act of 2009' ” (Memorandum), defines: reasonably available quantity as “the quantity of iron, steel, or the 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,” and satisfactory quality as “the quality of iron, steel, or the relevant manufactured good as specified in the project plans and designs.”

The Region 2 State Revolving Fund Program Team has reviewed this waiver request and has determined that the supporting documentation provided by the Authority establishes both a proper basis to specify the particular good required and that the manufactured good is not available from a producer in the United States to meet the design specifications for the proposed project. The information provided is sufficient to meet the criteria listed under Section 1605(b) of ARRA, OMB regulations at 2 CFR 176.60-176.170, and in the EPA Headquarters April 28, 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 Authority's technical specifications, a waiver from the Buy American requirement is justified.

The Administrator's 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 Authority is hereby granted a waiver from the Buy American requirements of Section 1605(a) of Public Law 111-5 for the purchase of a Leitner-Poma Leitwind LTW 77 1.5 MW wind turbine generator, as specified in its December 15, 2010 waiver request. 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: March 10, 2011.

Judith A. Enck,

Regional Administrator, Environmental Protection Agency, Region 2.