2011-17061. 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 Ocean Shores (the City), WA

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Notice.

SUMMARY:

The Regional Administrator of EPA Region 10 is hereby granting a waiver from 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 for the purchase of Greensand Plus pressure filter media, manufactured in Brazil. 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 the Greensand Plus filter media for use in their new shallow aquifer treatment plant. The design specifications of the project require a combination treatment process comprised of greensand filtration and MIEX ® treatment. The greensand filtration process will primarily target the removal of iron and manganese, whereas the proprietary MIEX ® process targets removal of dissolved organic carbon and other anionic species. Greensand Plus is currently used in the City's existing water treatment plant 1. In 2005, the City utilized Greensand Plus for their greensand filter media during pilot testing, and identified that product as the desired filter media for the proposed water treatment plant.

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:

July 14, 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 purchase of non-domestic manufactured Greensand Plus pressure filter media. The City is replacing an existing deep aquifer water treatment plant with a new shallow aquifer water treatment plant. The shallow aquifer water supply contains levels of iron, manganese, and color near or exceeding their secondary maximum contaminant levels, and also has detectable levels of hydrogen sulfide, ammonia, and organic nitrogen, as well as relatively high total organic carbon. The proposed new shallow aquifer treatment plant is designed to accommodate an average day demand of 1 MGD and a maximum day demand of 2 MGD. After conducting a pilot plant treatment study and evaluating three treatment alternatives, the City selected a combination treatment process comprising greensand filtration and MIEX ® treatment. The City previously obtained a Buy American waiver, granted July 24, 2009 for this project for the use of MIEX ® DOC Resin used in the MIEX ® filtration process. The greensand filtration process primarily targets removal of iron and manganese, whereas the proprietary MIEX ® process targets removal of dissolved organic carbon and other anionic species. Greensand Plus media was used by the City during their pilot testing, consistent with existing plant greensand operations. The shallow aquifer treatment plant project will require approximately 900 cubic feet (79,200 lbs) of Greensand Plus filter media.

During the City's recent experience with Greensand Plus, currently used in their existing water treatment plant 1 process, the City utilized this product during greensand filter pilot testing and identified that product as the desired media for the proposed water treatment plan. The shallow aquifer raw water supply is a challenging water source from a water quality perspective; therefore, an extensive effort was made by the City to pilot a number of processes and to select the most suitable combination of treatment processes for effective water treatment. If a traditional greensand filter media, such as Manganese Greensand, is used, it could introduce uncertainty based on the unproven effectiveness of an alternative agent. Greensand Plus has a number of properties that set it apart from traditional greensand media. Key distinguishing points for Greensand Plus media relate to its performance and durability. Greensand Plus has a more robust physical structure and is expected to have a longer service life of 10-15 years compared to traditional greensand, which typically has 5-8 years of service life. Greensand Plus has more of an absorptive capacity over traditional media and a lower headloss profile. This contributes to more effective iron and manganese removal, with less backwashing resulting in higher average plant capacity. Use of a traditional media would likely result in diminished plant performance and plant capacity de-rating. Based on available information, it is unlikely that other traditional greensand filter media would function within the requirement of the project specifications. Additionally, the City was informed that traditional greensand filter media is in short supply because it is no longer commonly used since the advent of Greensand Plus, which is a superior product.

EPA has also evaluated the City's request to determine if its submission is considered late or if it could be considered timely, as per the OMB Guidance at 2 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 requirement for Greensand Plus pressure filter media, which was selected based on their pilot testing. The waiver request was submitted after contract signing; however, it was reasonably unforeseeable. During the design and bid preparation process, this product was understood by the greensand filter vendor Roberts Filter to be manufactured in the United States. A request for ARRA compliance documentation was sent by Roberts Filter to their filter media supplier CEI on January 17, 2010.

Documentation of ARRA compliance was provided; however, the ARRA compliance supplied was for a lesser greensand material, manufactured in New Jersey and not Greensand Plus, a fact which was overlooked at the time even though they have variations in their chemical properties. In a letter dated January 28, 2011, Roberts Filter notified the contractor Pease and Sons that Roberts had determined based on communications about material shipping that Greensand Plus is not manufactured in the United States, but is instead, produced by an American company in Brazil and subsequently imported to the U.S. This was the first time they were notified of the fact that Greensand Plus filter media was not manufactured in the United States. Because ARRA compliance documentation was solicited and thought to be in hand, the circumstance of applying for a waiver after the start of construction was not foreseen. EPA has evaluated this information and recognizes that the responses submitted to the City regarding Buy American compliance were done so in error. EPA will consider the City's waiver request as a timely request since it was reasonably unforeseeable.

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 there are no current domestic manufacturers of the Greensand Plus pressure filter media. EPA's consulting contractor (Cadmus) reviewed the information provided by the City and determined that the project specifications include the option for traditional greensand filter media as well as Greensand Plus and identified traditional greensand mined and produced domestically by Inversand Company (Inversand) as an available alternative. However, the City provided information from Inversand indicating that it has permanently reduced production of traditional greensand as it is no longer commonly used since it does not perform as well as Greensand Plus. The City provided information indicating that the reduced production by Inversand has resulted in extensive lead time and potential project delays for the use of the traditional greensand. Based on the information provided by Inversand, the project engineers began the process of modifying the project specifications to indicate that Greensand Plus be used for the project. Ultimately the project specifications were not modified after the pilot testing showed Greensand Plus to be the selected filter media for this project because all of the project bids were based on Greensand Plus.

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 implementation 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 assistance 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 manufacturer 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 of Greensand Plus pressure filter media, manufactured in Brazil, for a shallow aquifer water treatment plant project specified in the City's waiver request of February 11, 2011. 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: June 13, 2011.

Dennis J. McLerran,

Regional Administrator, EPA, Region 10.