2010-10908. Notice of a Project Waiver of Section 1605 (Buy American Requirement) of the American Recovery and Reinvestment Act of 2009 (ARRA) to the City of Faribault, MN (Faribault)

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 of a satisfactory quality] to Faribault for the purchase of high-speed, high-efficiency magnetic bearing turbo-compressors to be used in the city's sludge treatment process. 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 project-specific circumstances. These turbo-compressors, which are supplied by ABS USA of Meriden, Connecticut, are manufactured in Finland, and meet Faribault's performance specifications and requirements. The Acting Regional Administrator is making this determination based on the review and recommendations of EPA Region 5's Water Division. Faribault has provided sufficient documentation to support its request. The Assistant Administrator of the 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 high-speed, high-efficiency magnetic bearing turbo-compressors for Faribault's activated sludge project that may otherwise be prohibited under Section 1605(a) of the ARRA.

DATES:

Effective Date: January 13, 2010.

FOR FURTHER INFORMATION CONTACT:

Andrew Lausted, SRF Program Manager [phone], or Puja Lakhani, Regional Counsel, [phone], U.S. EPA Region 5, 77 W. Jackson Blvd., Chicago, IL 60604.

SUPPLEMENTARY INFORMATION:

In accordance with ARRA Section 1605(c) and pursuant to Section 1605(b)(2) of Public Law 111-5, Buy American requirements, EPA hereby provides notice that it is granting a project waiver to Faribault for the acquisition of high-speed, high-efficiency magnetic bearing turbo-compressors that are manufactured in Finland.

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, or unless a waiver is provided to the recipient by the head of the appropriate agency, here EPA. A waiver may be provided 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.

These manufactured goods will provide aeration for Faribault's activated sludge treatment process. The city selected the magnetic bearing technology because of its ability to avoid overheating and its track record of providing long-standing reliable service—key advantages over the competing airfoil bearing technology. Also, the project specifications required a 322 horsepower capacity turbo-compressor. Faribault's submissions clearly articulated functional reasons that justified their technical specifications and requirements.

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 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.”

The applicant met the procedures specified for the availability inquiry as appropriate to the circumstances by conducting an extensive investigation into all possible sources for high-speed, high-efficiency turbo-compressors. Five companies were found to manufacture these machines, but only two (ABS and one other company) used magnetic bearings. This other company was presented in Faribault's submission as a U.S. firm that had bid on the project, but had never manufactured a turbo-compressor the size of the 322-hp models required for the project. Because of this, Faribault believed that there was no domestic product of satisfactory quality available.

EPA's national contractor prepared a technical assessment report dated August 14, 2009, based on the submitted waiver request. 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. In the report's examination of this submittal, it originally appeared that the U.S. firm might be able to meet the bid specifications for the turbocompressor, i.e., could potentially be “available.” This report did indicate some uncertainty as to the characteristics and quality of the turbocompressor that could be made available by the U.S. firm. After substantial further inquiry, EPA determined that while a turbo-compressor of characteristics and quality responsive to Faribault's specifications might be available from this U.S. firm, such a turbo-compressor was not in fact made in the U.S. by this firm, but was manufactured abroad. This conclusion confirmed the waiver applicant's claim that there are no comparable domestic products that can meet the specific power and performance needs of the project Therefore, based on the information provided to EPA and to the best of our knowledge at this time, the high-speed, high-efficiency magnetic bearing turbo-compressors necessary for this project are not manufactured in the United States, and no other U.S. manufactured product can meet Faribault's project performance specifications and requirements.

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 communities such as Faribault to revise their standards and specifications and to start the bidding process again. The imposition of ARRA Buy American requirements on such projects otherwise eligible for ARRA State Revolving Fund assistance would result in unreasonable delay and thus displace the “shovel ready” status for this project. To further delay project implementation is in direct conflict with a fundamental economic purpose of the ARRA, which is to create or retain jobs.

The State and Tribal Programs Branch has reviewed this waiver request and has determined that the supporting documentation provided by Faribault is sufficient to meet the criteria listed under Section 1605(b) of the ARRA 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) of the ARRA. 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 Faribault's project performance specifications and requirements, a waiver from the Buy American requirement is justified.

The March 31, 2009, Delegation of Authority Memorandum provided Regional Administrators with the authority to issue exceptions to Section 1605 of the 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, Faribault is hereby granted a waiver from the Buy American requirements of Section 1605(a) of Public Law 111-5 for the purchase of high-speed, high efficiency magnetic bearing turbo-compressors using ARRA funds as specified in the community's request of August 3, 2009. 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: January 13, 2010.

Walter W. Kovalick,

Acting Regional Administrator, Region 3.