2011-15295. Notice of Buy American Waiver Under the American Recovery and Reinvestment Act of 2009

AGENCY:

National Science Foundation (NSF).

ACTION:

Notice.

SUMMARY:

NSF is hereby granting a limited exemption of section 1605 of the American Recovery and Reinvestment Act of 2009 (Recovery Act), Public Law 111-5, 123 Stat. 115, 303 (2009), with respect to the purchase of the ultrasonic antifouling system that will be used in the Alaska Region Research Vessel (ARRV). An ultrasonic antifouling system prevents the harmful growth of marine organisms in the ship's sea water inlets and piping systems.

DATES:

June 20, 2011.

ADDRESSES:

National Science Foundation, 4201 Wilson Blvd., Arlington, Virginia 22230.

FOR FURTHER INFORMATION CONTACT:

Mr. Jeffrey Leithead, Division of Acquisition and Cooperative Support, 703-292-4595.

SUPPLEMENTARY INFORMATION:

In accordance with section 1605(c) of the Recovery Act and section 176.80 of Title 2 of the Code of Federal Regulations, the National Science Foundation (NSF) hereby provides notice that on May 25, 2011, the NSF Chief Financial Officer, in accordance with a delegation order from the Director of the agency, granted a limited project exemption of section 1605 of the Recovery Act (Buy American provision) with respect to the ultrasonic antifouling system that will be used in the ARRV. The basis for this exemption is section 1605(b)(2) of the Recovery Act, in that an ultrasonic antifouling system of satisfactory quality is not produced in the United States in sufficient and reasonably available commercial quantities. The cost of the ultrasonic antifouling system (~$21,000) represents less than 0.1% of the total $148 million Recovery Act award provided toward construction of the ARRV.

I. Background

The Recovery Act appropriated $400 million to NSF for several projects being funded by the Foundation's Major Research Equipment and Facilities Construction (MREFC) account. The ARRV is one of NSF's MREFC projects. Section 1605(a) of the Recovery Act, the Buy American provision, states that none of the funds appropriated by the Act “may be used for a project 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.”

The ARRV has been developed under a cooperative agreement awarded to the University of Alaska, Fairbanks (UAF) that began in 2007. UAF executed the shipyard contract in December 2009 and the project is proceeding toward construction. The purpose of the Recovery Act is to stimulate economic recovery in part by funding current construction projects like the ARRV that are “shovel ready” without requiring projects to revise their standards and specifications, or to restart the bidding process again.

Subsections 1605(b) and (c) of the Recovery Act authorize the head of a Federal department or agency to waive the Buy American provision if the head of the agency finds that: (1) Applying the provision would be inconsistent with the public interest; (2) the relevant goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or (3) the inclusion of the goods produced in the United States will increase the cost of the project by more than 25 percent. If the head of the Federal department or agency waives the Buy American provision, then the head of the department or agency is required to publish a detailed justification in the Federal Register. Finally, section 1605(d) of the Recovery Act states that the Buy American provision must be applied in a manner consistent with the United States' obligations under international agreements.

II. Finding That Relevant Goods Are Not Produced in the United States in Sufficient and Reasonably Available Quality

Installation of an ultrasonic antifouling system is included in the construction specifications of the ARRV to prevent the growth of marine organisms in the ship's sea water inlets and piping systems. Harmful marine organisms for ships include barnacles, shellfish and grasses and are known collectively as “biofouling.” There are five inlets and piping systems on the ARRV that require protection; two that supply seawater for scientific purposes, and three that supply cooling water to the main machinery and auxiliary systems. Main machinery includes diesel engines on the generators and main electric propulsion motors. Auxiliary machinery includes fire fighting, ballast and heating ventilating and air conditioning systems. If the growth of these organisms goes un-checked, the water flow to the machinery will decrease to the point where they will not perform as required or damage will occur as a result of overheating. Science seawater systems include uncontaminated seawater for sampling as the ship is underway, and incubator water for keeping samples at the current sea surface temperature. If the flow to the science seawater systems is reduced, or contaminated with undesirable marine growth or chemicals from a different kind of antifouling system, the data collected could be severely compromised and not meet scientific data quality requirements.

Design drivers for selecting the type of anti-fouling system used include:

1. Proven ability to control marine growth in inlets and piping

2. No chemical contamination of the seawater itself. Failure to meet either of these technical requirements would have severe negative consequences for the project with regard to nonperformance and significant added program cost.

An ultrasonic antifouling system produces low level sound waves in the water of a certain frequency that discourages marine organisms from growing in the area. Specifying such a system prevents the vessel from having to use other methods that potentially contaminate the water with biocides, such as anti-fouling paints (which generally contain copper) or other systems which inject chemicals. Both of these chemical-based methods would have a detrimental effect on the uncontaminated science seawater system by introducing chemicals that would skew the natural elements being studied and thus produce erroneous data. An ultrasonic system has zero discharges into the water and is proven technology that offers excellent protection against marine biofouling in localized areas. Use of such a system will help ensure that science samples are taken from “pure” sea water to the maximum extent possible.

The daily cost of operations for the ARRV is estimated at $45,000 per day in 2014 dollars, or $12.6M/year for 280 days at sea. Given that the science seawater system is employed on nearly every multi-disciplinary science cruise, the loss to science and the federal ship funding agencies could be significant if samples were found to be contaminated or otherwise compromised. A main machinery casualty from overheating could result in the loss or re-scheduling of weeks of ship time and cost hundreds of thousands of dollars in repairs.

The initial market research for availability of an ultrasonic antifouling system was done by UAF in 2009. Only two sources were identified world-wide and none were manufactured in the U.S. As noted in UAF's request for this exemption, the shipyard performed market research in late 2010 by reviewing industry publications and the internet in order to assess whether there exists a domestic capability to provide an ultrasonic antifouling system that meets the necessary requirements. None were found. The result of the shipyard's independent market research remains consistent with a determination made by the UAF project team in 2009.

The project's conclusion is there are no U.S. manufacturers who produce a suitable ultrasonic antifouling system that meets all of the ARRV requirements so an exemption to the Buy American requirements is necessary.

In the absence of a domestic supplier that could provide a requirements-compliant ultrasonic antifouling system, UAF requested that NSF issue a Section 1605 exemption determination with respect to the purchase of a foreign-supplied, requirements-compliant ultrasonic antifouling system, so that the vessel will meet the specific design and technical requirements which, as explained above, are necessary for this vessel to be able to perform its mission safely and successfully. Furthermore, the shipyard's market research was consistent with UAF's and indicated that an ultrasonic antifouling system compliant with the ARRV's technical specifications and requirements is commercially available from foreign vendors within their standard product lines.

NSF's Division of Acquisition and Cooperative Support (DACS) and other NSF program staff reviewed the UAF exemption request submittal, found that it was complete, and determined that sufficient technical information was provided in order for NSF to evaluate the exemption request and to conclude that an exemption is needed and should be granted.

III. Exemption

On May 25, 2011, based on the finding that no domestically produced ultrasonic antifouling system met all of the ARRV's technical specifications and requirements and pursuant to section 1605(b), the NSF Chief Financial Officer, in accordance with a delegation order from the Director of the agency signed on May 27, 2010, granted a limited project exemption of the Recovery Act's Buy American requirements with respect to the procurement of an ultrasonic antifouling system.

Dated: June 14, 2011.

Lawrence Rudolph,

General Counsel.