2024-22278. Buy America Waiver Notification

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Department of Transportation

Federal Highway Administration

AGENCY:

Department of Transportation (DOT), Federal Highway Administration (FHWA).

ACTION:

Notice.

SUMMARY:

This notice provides information regarding FHWA's finding that it is appropriate to grant a Buy America waiver to the Illinois Department of Transportation (IDOT) for the procurement of submersible pumps with non-domestic iron and steel components. Specifically, this waiver covers the procurement by IDOT of 4 main, submersible pumps with discharge capacity of 3,000 gallons per minute (gpm) each and 2 low flow submersible pumps with discharge capacity of 921 gpm each (“waiver items”), for the relocation of existing Pump Station No. 37.

DATES:

The applicable date of the waiver is October 1, 2024.

FOR FURTHER INFORMATION CONTACT:

For questions about this notice, please contact Mr. Brian Hogge, FHWA Office of Infrastructure, 202-366-1562, or via email at [e-mail]. For legal questions, please contact Mr. David Serody, FHWA Office of the Chief Counsel, 202-366-1345, or via email at [e-mail]. Office hours for FHWA are from 8:00 a.m. to 4:30 p.m., E.T., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

An electronic copy of this document may be downloaded from the Federal Register 's home page at: www.FederalRegister.gov and the Government Publishing Office's database at: www.GovInfo.gov.

Background

FHWA's Buy America regulation in 23 CFR 635.410 requires a domestic manufacturing process for any steel or iron products (including protective coatings) that are permanently incorporated in a Federal-aid construction project. The FHWA also applies its Buy America requirements to predominantly steel and iron manufactured products and predominantly steel and iron components of manufactured products. This means that for all predominantly steel or iron materials, products, or components delivered to a project site for permanent incorporation into a highway project using Title 23, U.S.C. funds, all manufacturing processes, including application of a coating, must occur in the United States. FHWA's Buy America regulation also provides for a waiver of the Buy America requirements when satisfactory quality domestic steel and iron products are not produced in the United States in sufficient and reasonably available quantities.

Background on the Waiver Items: IDOT requested a Buy America waiver for 4 main submersible pumps with a discharge capacity of 3,000 gpm each ( print page 79686) and 2 low flow submersible pumps with a discharge capacity of 921 gpm each. IDOT requested a nonavailability waiver due to the inability to find domestic manufacturers who could produce a pump that has all predominantly iron and steel components in compliance with FHWA's Buy America requirements. The waiver items are estimated to cost $300,000.

Background on the Project: The waiver items will be used in the relocation of the existing Pump Station No. 37 out of IL 176 over the US 41 bridge abutment and allow IDOT to provide a new pump station consistent with IDOT standards. The new pump station is designed to accommodate future pumping capacity to support the proposed US 41 at IL 176 interchange reconstruction reconfiguration.

Background on Waiver Request: Contracting agencies have historically faced difficulty in procuring Buy America-compliant submersible pumps.^[1] Prior to submitting the waiver request, IDOT sought but failed to identify Buy America-compliant manufacturers for the waiver items over a multi-year period from 2017 to 2020. In 2017, IDOT contacted 12 pump manufacturers, with 4 not responding and the remaining 8 stating that they either do not manufacture submersible pumps with domestic steel components or that they could not otherwise comply with FHWA's Buy America requirements. IDOT contacted the same 12 manufacturers in 2020 as well as an additional 3 pump manufacturers. Out of these 15, 4 did not respond, 9 stated that they could not meet the design intent of the waiver items, and 2 responded that they could meet the design intent of the waiver items but could not comply with FHWA's Buy America requirements. Neither of those two manufacturers could ensure that all predominantly steel components would meet FHWA's Buy America requirements.

In accordance with section 122 of Title I of Division L of the Consolidated Appropriations Act, 2023 (Pub. L. 117-328), section 117 of the SAFETEA-LU Technical Corrections Act of 2008 (Pub. L. 110-244), and 23 U.S.C. 313(g), the notice of waiver request was posted on FHWA's public facing web page on August 28, 2023, soliciting public comment on the intent to issue a waiver of the waiver items for a 15-day period.^[2]

Comments to the Notice of Waiver Request: FHWA received comments from seven different commenters in response to the notice of waiver request. Three commenters broadly supported the waiver and two broadly opposed it. The two commenters opposing the waiver did not offer any specific information on the availability of Buy America-compliant products, nor did they suggest specific, additional actions that IDOT could take to maximize its use of goods, products, and materials produced in the United States.

The remaining two commenters represented two different pump manufacturers. One pump manufacturer incorrectly stated that the waiver items are subject to the manufactured product requirements of the Build America, Buy America Act (BABA), enacted as part of the Bipartisan Infrastructure Law (BIL) (Pub. L. 117-58). BIL, div. G sections 70901-27. Manufactured products permanently incorporated into a highway project using Title 23, U.S.C. funds are subject to FHWA's Buy America requirements, not BABA's manufactured product requirements.^[3] This commenter further stated that it anticipated producing BABA-compliant pumps in mid-2024 but did not state whether these pumps would be Buy America-compliant under FHWA's Buy America requirements at 23 CFR 635.410. The second pump manufacturer commented that it had the ability to produce Buy America-compliant pumps. On September 21, 2023, FHWA requested that this manufacturer provide a letter certifying and verifying that it could produce Buy America-compliant pumps. On October 10, 2023, the manufacturer submitted a letter to IDOT, stating that it could produce the waiver items domestically. However, after additional outreach and discussion with that manufacturer, on January 16, 2024, IDOT informed FHWA that the manufacturer was unable to produce a Buy America-compliant version of the waiver items because the manufacturer could not produce a bare shaft for the pump domestically, meaning that it could not produce a pump where all predominantly iron or steel components were Buy America-compliant. Thus, no comments received in response to the notice of waiver request indicated that the waiver items are available domestically.

FHWA also consulted with the National Institute of Standards and Technology's Hollings Manufacturing Extension Partnership (NIST-MEP) through NIST-MEP's supplier scouting process to consult manufacturers from across the Nation. This search period ended in October 2023. This supplier scouting process also did not identify any companies that could provide compliant pumps.

Timing and Need for a Waiver: The existing Pump Station No. 37 was constructed in the 1930s and can only be accessed from northbound traffic on US 41, making maintenance of the station difficult. In addition, the dry pit is connected to the grade level space, making the entire station a hazardous classified location as there is a direct connection to the below grade pumping in the dry pit. The electrical and controls equipment are also located at grade level, which is also a hazardous classified location, and the electrical and controls equipment are not suitable for the hazardous location. These problems necessitate replacement of the existing station. IDOT further explained that the outlet pipe for the pump station is in very poor condition. Relocating the pump station will require the procurement of new pumps to accommodate future pumping capacity. The letting of the project has been postponed several times as IDOT has been unable to find Buy America-compliant pumps. If a waiver is not approved, the relocation of the pump station will not be able to proceed.

Assessment of Cost Advantage of a Foreign-Sourced Product: Under OMB 24-02, Agencies are expected to assess “whether a significant portion of any cost advantage of a foreign-sourced product is the result of the use of dumped steel, iron, or manufactured products or the use of injuriously subsidized steel, iron, or manufactured products” as appropriate before granting a public interest waiver. FHWA has concluded that this assessment is not ( print page 79687) applicable to this waiver as this waiver is based on nonavailability rather than the cost disadvantage of domestically-sourced products.

Executive Order 14005: Executive Order (E.O.) 14005, entitled “Ensuring the Future is Made in All of America by All of America's Workers,” provides that Federal Agencies should, consistent with applicable law, maximize the use of goods, products, and materials produced in, and services offered in, the United States. 86 FR 7475 (Jan. 28, 2021). Based on the information contained in the waiver request and the lack of responsive comments to the notice of waiver request identifying a domestic source for the waiver items, FHWA concludes that issuing a waiver is not inconsistent with E.O. 14005.

Finding and Request for Comments

Based on all the information available to the Agency, FHWA concludes that there are no Buy America-compliant versions of the waiver items and is waiving its Buy America requirements set forth at 23 U.S.C. 313 and 23 CFR 635.410 for the following products used by IDOT in the relocation of Pump Station No. 37: 4 main submersible pumps with discharge capacity of 3,000 gpm each and 2 low flow submersible pumps with discharge capacity of 921 gpm each. This finding only includes the specified pumps identified in the waiver request and supporting documents included on FHWA's website.

This waiver is limited to applicable purchases by IDOT, IDOT's contractors, or subcontractors (of whatever tier) of the waiver items for the Pump Station 37 Project. The waiver does not apply to purchases made for any other products or projects. The proposed waiver would be effective from the effective date of the final waiver through the period of performance and closeout of FHWA's financial assistance for the project, which is estimated to be in October 2028.

IDOT and its contractors and subcontractors involved in the procurement of the relevant submersible pumps are reminded of the need to comply with the Cargo Preference Act in 46 CFR part 38, if applicable.

In accordance with the provisions of Section 117 of the SAFETEA-LU Technical Corrections Act of 2008 (Pub. L. 110-244), FHWA is providing this notice as its finding that a waiver of Buy America requirements is appropriate. FHWA invites public comment on this finding for an additional 5 days following the effective date of the finding. Comments may be submitted to FHWA's website via the link provided to the waiver page noted above.

Authority:23 U.S.C. 313; Pub. L. 117-328; 23 CFR 635.410.

Kristin R. White,

Acting Administrator, Federal Highway Administration.

Footnotes

1.  For example, IDOT requested and received a waiver for the use of non-domestic main submersible pumps in 2012. See77 FR 72433 (Dec. 6, 2022).

2.   https://www.fhwa.dot.gov/​construction/​contracts/​waivers.cfm?​id=​175. The notice of waiver request was also posted to the DOT Made in America website and Made in America website at https://www.madeinamerica.gov/​waivers/​federal-financial-assistance/​64ee24fcde9c662b02e0a782 on August 29, 2023.

3.  Pursuant to BABA's manufactured product requirements, the manufactured product must be produced in the United States and must have 55 percent of its components, by cost, be mined, produced, or manufactured in the United States. BABA § 70912(6)(B). Under FHWA's Buy America requirements, which apply to iron, steel, and manufactured products, all predominantly steel or iron materials, products, or components must have all manufacturing processes, including application of a coating, occur in the United States; however, FHWA has otherwise waived the application of Buy America to manufactured products. The FHWA applies these Buy America requirements to iron, steel, and manufactured products, not the requirements of BABA. See BABA § 70917(a)-(b). For this reason, to be permanently incorporated in highway projects using title 23, U.S.C. funds, manufactured products must have all manufacturing processes of all predominantly steel or iron components occur in the United States. A manufactured product is not Buy America-compliant if it complies with BABA's manufactured product requirements but has foreign predominantly iron or steel components.