2011-13401. Notice of a Regional Project Waiver of Section 1605 (Buy American) of the American Recovery and Reinvestment Act of 2009 (ARRA) to the City of Marathon, FL

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 City of Marathon, Florida for the purchase of nine submerged membrane units (SMUs), as part of an overall membrane bioreactor system (MBR), from Kubota Corporation in Japan. The submerged membrane unit is a specialty product for this project. The membrane bioreactor system for which this SMU will be used is an advanced wastewater treatment process, which is designed to meet the high quality effluent requirements of the waste load allocation, under the National Pollutant Discharge Elimination System (NPDES) permit. Additionally, the City of Marathon facility has specific technical design requirements for the installation of the SMUs with the membrane bioreactor treatment process, including tankage footprint, geometry, and configuration. Only the Kubota Corporation product meets all these requirements. The City stated that there are no apparent domestic manufactured submerged membrane units with the design specifications as required for this project. This is a project specific waiver and only applies to the use of the specified product for the ARRA project being approved. Waivers for these types of products and components have already been published in the Federal Register, however, any other ARRA recipient that wishes to use the same product must apply for a separate waiver based on project specific circumstances. Based on the review of the information provided, EPA has concluded that a waiver of the Buy American provisions is justified. The Regional Administrator is making this determination based on the review and recommendation of the EPA Region 4, Water Protection Division, Grants and Infrastructure Branch. 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 City to purchase nine submerged membrane units manufactured by Kubota, for the proposed project being implemented by the City of Marathon, Florida.

DATES:

Effective Date: May 31, 2011.

FOR FURTHER INFORMATION CONTACT:

Cynthia Y. Edwards, Project Officer, Grants and SRF Section, Water Protection Division (WPD), [phone], USEPA Region 4, 61 Forsyth St., SW., Atlanta, GA 30303.

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 Sections 1605(a) of Public Law 111-5, Buy American requirements, to the City of Marathon, Florida, for the purchase of nine submerged membrane units, manufactured by Kubota of Japan.

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 the 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.

The City has requested a waiver from the Buy American Provision for the purchase of nine submerged membrane units, a specialty product for this project. The membrane bioreactor system for which this SMU will be used is an advanced wastewater treatment process, which is designed to meet the high quality effluent requirements of the waste load allocation, under the NPDES permit. The Marathon Area 5 Waste Water Treatment Plant (WWTP) Upgrade Project is a retrofit of an existing WWTP that will allow it to meet additional flow demands generated by Area 5. There is no additional land available for the expansion of the WWTP. Therefore, it is necessary to use membrane technology to increase capacity without expanding the project site. The membrane modules, as manufactured by Kubota of Japan, are specified for this technology. EPA has determined that the City's waiver request may be treated as timely even though the request was made after the construction contract was signed. Consistent with the direction of the OMB Guidance at 2 CFR 176.120, EPA has evaluated the City's request to determine if the request constitutes a late request. 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 City's request, though made after the date that the contract was signed, can be evaluated as timely because the need for a waiver was not reasonably foreseeable. The Area 5 Wastewater Treatment Plant project initially began design in October of 2008, prior to ARRA funding. After the preliminary design was completed, it was determined that the plant site could not be extended as was previously planned. The design approach was changed from SBR technology to membrane technology due to the limited space available. It was discovered during final design in July of 2010 that similar membranes on the market would also need a waiver, as they were also manufactured outside of the United States. The project specifications, including performance criteria, certification criteria, and design criteria, require that the SMU be a Kubota EK-400 type unit that will be a part of a MBR system provided by Enviroquip/Ovivo.

EPA technical reviews for similar ARRA waiver requests found other manufacturers of submerged membrane filtration systems including Dynatec, Veolia/Kruger, GE Water Technologies, Norit, Pall, Siemens, Toray, and Koch. All manufacturers confirmed that their membrane units were obtained outside the U.S. The technical reviews did not find a membrane unit manufactured in the U.S. The City of Marathon considered Aqua-Aerobic and Zenon technologies, and found that these products are also made outside the U.S. EPA and the City's submissions clearly have provided sufficient documentation that the relevant manufactured goods are not produced in the United States in sufficient and reasonably available quantity and of a satisfactory quality to meet its technical specifications.

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,” defines “satisfactory quality” as “the quality of steel, iron or manufactured goods specified in the project plans and designs.”

EPA's national contractor prepared a technical assessment report dated December 27, 2010 based on the submitted waiver request. The report stated that the waiver request submittal was complete, that adequate technical information was provided, and a waiver was supported by the available evidence. The purpose of the ARRA provisions is 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 efficient project. The imposition of ARRA Buy American requirements on such projects 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 Region 4 Grants and Infrastructure Branch has reviewed this waiver request and has determined that the supporting documentation provided by the City is sufficient to meet the criteria listed under ARRA Section 1605(b), OMB's regulation at 2 CFR 176.100, and the aforementioned EPA Headquarters Memorandum of April 28, 2009. ARRA Section 1605(b)(2) permits a waiver if “Iron, steel, and manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality.” This waiver request meets this criterion and 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 application of the Buy American requirements would be inconsistent with the public interest, the City of Marathon is hereby granted a waiver from the Buy American requirements. 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 City of Marathon, Florida is granted a waiver from the Buy American requirements of Section 1605(a) of Public Law 111-5 for the purchase of nine submerged membrane units as specified in the City's request of December 3, 2010 with supplemental information provided on December 6, 2010. This supplemental information constitutes the detailed written justification required by Section 1605(c) for waivers “based on a finding under subsection 9b.” requirements of Section 1605(a) of Public Law 111-5.

Authority: Pub. L. 111-5, section 1605.

Dated: April 5, 2011.

A. Stanley Meiburg,

Acting, Regional Administrator, Region 4.