2010-13225. Notice of a Project Waiver of Section 1605 (Buy American Requirement) of the American Recovery and Reinvestment Act of 2009 (ARRA) to the Canaan Valley Public Service District, West Virginia

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Notice.

SUMMARY:

The Regional Administrator of EPA Region 3 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 Canaan Valley Public Service District (CVPSD) for the purchase of a membrane bioreactor system (MBR), supplied by Enviroquip Inc., that contains a primary component not manufactured in America, at two of its Wastewater Treatment Plants (WWTPs). CVPSD indicates that the MBR treatment process is necessary to achieve the wastewater treatment levels required by the National Pollutant Discharge Elimination System (NPDES) permits issued for these WWTPs. The membrane filtration equipment under consideration is manufactured by a company located in Japan and no United States manufacturer produces an alternative that meets the CVPSD's 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 III, Water Protection Division, Office of Infrastructure and Assistance. The CVPSD 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 membrane filtration cassettes for the proposed project being implemented by the CVPSD.

DATES:

Effective Date: May 17, 2010.

FOR FURTHER INFORMATION CONTACT:

Robert Chominski, Deputy Associate Director, [phone], or David McAdams, Environmental Engineer, [phone], Office of Infrastructure & Assistance (OIA), Water Protection Division, U.S. EPA Region III, 1650 Arch Street, Philadelphia, PA 19103-2029.

SUPPLEMENTARY INFORMATION:

In accordance with ARRA Sections 1605(c) and 1605(b)(2), 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 Canaan Valley Public Service District (CVPSD) for the acquisition of an “Enviroquip MBR system.” CVPSD has been unable to find an MBR system that contains American-made MBR cassettes 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.

CVPSD's waiver request is to allow the purchase of the Enviroquip MBR system with four membrane filtration cassettes, manufactured by Kubota Inc. of Japan, for use in improvements to two existing WWTPs in West Virginia. This project will upgrade two of its existing WWTPs by adding a new MBR treatment process. The membrane filtration cassette is an integral component of the MBR treatment process because it separates the treated wastewater from the mixed liquor which comes from the biological reactors, before the treated wastewater is disinfected and discharged. After an engineering analysis of alternate treatment processes, the CVPSD determined MBR to be the most environmentally sound and cost effective solution. The MBR is an advanced waste water treatment process which is designed to meet the high quality effluent requirements of the waste load allocation under the NPDES permit. In addition, in anticipation of procuring the MBR system, the CVPSD has already incorporated specific technical design requirements for installation of membrane filter cassettes with the MBR treatment process at their WWTPs, including specific tankage footprint, geometry and configuration. To require CVPSD to redesign its project would cause an unacceptable delay to the initiation of construction.

The CVPSD 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. Four companies were considered for the membrane filtration cassettes, none based in the United States. The CVPSD has performed market research but was unsuccessful in its effort to locate any domestic manufacturers of membrane filtration cassettes for WWTPs.

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 CVPSD has incorporated specific technical design requirements for installation of membrane filtration cassettes at its WWTPs.

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 the CVPSD, 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.

Based on additional research conducted by EPA's Office of Infrastructure and Assistance (OIA) in Region 3, and to the best of the Region's knowledge at the time of review, there do not appear to be other membrane filtration cassettes manufactured domestically that would meet the CVPSD's technical specification. EPA's national contractor prepared a technical assessment report dated January 9, 2010 based on the waiver request submitted. This report included a detailed review intended to enable EPA to determine if any company could be considered to substantially transform these cassettes in the United States. However, sufficient information was not available or made available to establish either performance characteristics for any potential alternative product, or the substantial transformation of any such product in the United States. Accordingly, 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 membrane filtration cassettes for use in MBRs in WWTPs.

The OIA has reviewed this waiver request and to the best of our knowledge at the time of review has determined that the supporting documentation provided by the CVPSD is sufficient to meet the 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 CVPSD's technical specifications, 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 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 Canaan Valley Public Service District is hereby granted a waiver from the Buy American requirements of Section 1605(a) of Public Law 111-5 for the purchase of four membrane filtration cassettes using ARRA funds as specified in the CVPSD's request of December 16, 2009. 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.

Dated: May 17, 2010.

W. C. Early,

Acting Regional Administrator, Region III.