Buy American Exception Under the American Recovery and Reinvestment Act of 2009; Nationwide Limited Public Interest and Domestic Nonavailability Waivers Under Section 1605, 35447-35449 [2010-15030]

Agencies

• DEPARTMENT OF ENERGY
• Office of Energy Efficiency and Renewable Energy
• Energy Efficiency and Renewable Energy Office

[Federal Register Volume 75, Number 119 (Tuesday, June 22, 2010)]
[Notices]
[Pages 35447-35449]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-15030]


-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy


Buy American Exception Under the American Recovery and 
Reinvestment Act of 2009; Nationwide Limited Public Interest and 
Domestic Nonavailability Waivers Under Section 1605

AGENCY: Office of Energy Efficiency and Renewable Energy (EERE), U.S. 
Department of Energy (DOE).

ACTION: Notice of a determination of inapplicability (waiver).

-----------------------------------------------------------------------

SUMMARY: The U.S. Department of Energy (DOE) is providing notice of a 
determination of inapplicability (waiver) of the American Reinvestment 
and Recovery Act of 2009 (Recovery Act) to EERE-funded projects for 
non-residential programmable thermostats; commercial scale fully-
automatic wood pellet boiler systems; facility and small district wood 
pellet and chip boiler furnaces; variable refrigerant flow zoning and 
inverter-driven ductless mini-split HVAC systems; electrical ``smart'' 
strips/surge protectors; gas or propane tankless water heaters up to 
200,000 BTUs; and fully-enclosed continuous composting systems 
(additional technical information for these items is detailed below).
    DOE is also providing notice of a determination that the 
application of the restrictions of section 1605 of the Recovery Act 
would be inconsistent with the public interest with respect to 
incidental items that comprise in total a de minimis amount of the 
total cost of the iron, steel and manufactured goods used in the 
project; that is, any such incidental items up to a limit of no more

[[Page 35448]]

than 5 percent of the total cost of the iron, steel, and manufactured 
goods used in and incorporated into a project.

FOR FURTHER INFORMATION CONTACT: Benjamin Goldstein, Energy Technology 
Program Specialist, Office of Energy Efficiency and Renewable Energy 
(EERE), (202) 287-1553, Department of Energy, 1000 Independence Avenue, 
SW., Mailstop EE-2K, Washington, DC 20585.

SUPPLEMENTARY INFORMATION: Under the authority of the Recovery Act, 
section 1605(b)(1) and (2), the head of a Federal department or agency 
may issue a ``determination of inapplicability'' (a waiver of the Buy 
American provisions) if the application of the restrictions of section 
1605 would be inconsistent with the public interest, or if the iron, 
steel, or relevant manufactured good is not produced or manufactured in 
the United States in sufficient and reasonably available quantities and 
of a satisfactory quality (``nonavailability''). On November 10, 2009, 
the Secretary of Energy delegated the authority to make all 
inapplicability determinations under the Buy American provisions of the 
Recovery Act to the Assistant Secretary for Energy Efficiency and 
Renewable Energy (EERE) for EERE projects under the Recovery Act.

Waiver for Nonavailability

    Pursuant to the above-referenced delegation the Assistant 
Secretary, EERE, has concluded that non[hyphen]residential programmable 
thermostats; commercial scale fully-automatic wood pellet boiler 
systems; facility and small district wood pellet and chip boiler 
furnaces; variable refrigerant flow zoning and inverter-driven ductless 
minisplit HVAC systems; electrical ``smart'' strips/surge protectors; 
gas or propane tankless water heaters up to 200,000 BTUs; and 
fully[hyphen]enclosed continuous composting systems all qualify for the 
``nonavailability'' waiver determination.
    EERE has developed a process to ascertain in a systematic and 
expedient manner whether domestic manufacturing capacity exists for the 
items submitted for a waiver of the Recovery Act Buy American 
provision. This process involves a close collaboration with the 
National Institute of Standards and Technology (NIST) Manufacturing 
Extension Partnership (MEP), to disseminate the technical 
specifications for the manufactured goods being submitted to EERE for 
waiver consideration, in order to scour the manufacturing landscape in 
search of producers before making any nonavailability determination.
    Many of the items contained in this nonavailability waiver issued 
by the Assistant Secretary, EERE, were submitted to EERE as a result of 
a Request for Information published in the Federal Register on February 
4, 2010, 75 FR 5783. Upon receipt of completed waiver requests in 
response to the RFI or independently, EERE reviewed the information 
provided and submitted the relevant technical information to the 
National Institute of Standards and Technology Manufacturing Extension 
Partnership (NIST MEP). MEP has a network of 59 centers across the 
country that work directly with domestic manufacturers and possess 
extensive knowledge of their specific capabilities. The EERE--MEP 
collaboration draws on these extensive network centers to ``scout'' for 
domestic manufacturers for the items submitted for Buy American waiver 
consideration by EERE Recovery Act grantees. The MEP centers reported 
that their scouting process did not locate any domestic manufacturers 
for these items.
    In addition to the MEP collaboration outlined above, the EERE Buy 
American Coordinator worked with labor unions, trade associations and 
other manufacturing stakeholders to scout for domestic manufacturing 
capacity or an equivalent product for each item contained in this 
waiver. EERE also conducted significant amounts of independent research 
to supplement the MEP's scouting efforts. EERE's efforts revealed that 
the goods included in the waiver issued by the Assistant Secretary, 
EERE, are not produced in the United States in sufficient and 
reasonably available quantities and of a satisfactory quality.
    The nonavailability determination was also informed by the 
communications to EERE from recipients of EERE Recovery Act funds, and 
from suppliers, distributors, retailers and trade associations--all 
stating that their individual efforts to locate domestic manufacturers 
have been unsuccessful. For example, EERE received four separate 
individual waiver requests for the types of HVAC systems included in 
the nonavailability waiver.
    Specific technical information for the manufactured goods included 
in the nonavailability determination is detailed below:
    (1) Programmable Thermostats--Includes devices that permit 
adjustment of heating or air-conditioning operations according to a 
pre-set schedule. Applies only to nonresidential programmable 
thermostat units.
    (2) Commercial Scale Fully-Automatic Wood Pellet Boiler System--
Includes wood pellet boilers featuring a pneumatic conveyance system to 
transport wood pellets to the boiler, an automatic ignition system, 
continuously monitored and optimized combustion, ash removal/management 
system and the ability to control and integrate with other existing 
heat systems.
    (3) Facility and Small District Wood Pellet and Chip Boiler 
Furnaces--Includes high efficiency, ultra-low emission biomass boilers 
for facility and small district heating, ranging from 35,000 Btu to 
15,000,000 Btu.
    (4) Variable Refrigerant Flow Zoning HVAC Systems and Inverter-
Driven Ductless Mini-Split HVAC Systems--Includes variable refrigerant 
flow (VRF) multi-split heat pump (with or without heat recovery) and 
air conditioning systems; and inverter-driven ductless mini-split heat 
pump and air conditioner systems. This waiver includes the main 
condensor and heat pump units, wall and fan coil units, zone 
controllers, remote controls, and any other component of the larger 
HVAC system.
    (5) Electrical ``Smart'' Strips/Surge Protectors--Includes power 
strips that detect activity in the attached equipment and cut power 
during periods of inactivity.
    (6) Gas or Propane Tankless Water Heaters up to 200,000 BTUs--Does 
not apply to electric tankless water heaters, which are widely 
manufactured in the United States.
    (7) Fully-Enclosed Continuous Composting Systems--Includes multi-
zone, continuous loading, odor and moisture controlled composter with 
leachate recirculation and in-situ mixing capabilities.

De Minimis Public Interest Waiver

    Pursuant to the above-referenced delegation the Assistant 
Secretary, EERE, determined that application of section 1605 
restrictions would be inconsistent with the public interest for 
incidental items that comprise in total a de minimis amount of the 
total cost of the iron, steel and manufactured goods used in the 
project; that is, any such incidental items up to a limit of no more 
than 5 percent of the total cost of the iron, steel, and manufactured 
goods used in and incorporated into a project.
    Recovery Act projects funded by EERE typically involve the use of 
literally thousands of miscellaneous, generally low-cost items that are 
essential for, but incidental to, the construction, alteration, 
maintenance or repair of a public building or public work and are 
incorporated into the physical structure of the project, such as nuts, 
bolts, wires, cables, switches, etc. For many of these incidental 
items, the

[[Page 35449]]

country of manufacture and the availability of alternatives are not 
always readily or reasonably identifiable in the normal course of 
business. More importantly, the miscellaneous character of these items, 
together with their low cost (both individually and when procured in 
bulk), characterize them as incidental to the project.
    The Assistant Secretary, EERE, determined that there is a 
compelling case for adopting a de minimis waiver for recipients of EERE 
Recovery Act funding. The EERE waiver is 5 percent of the total iron, 
steel, and manufactured goods as opposed to the total materials cost.
    Issuing the waiver will help EERE grantees avoid unnecessary delays 
in carrying out the Recovery Act. Requiring individual waivers for 
incidental items would be time prohibitive and overly burdensome for 
both applicants and for EERE. Therefore, a nationwide limited de 
minimis waiver of incidental items up to a limit of no more than 5 
percent of the total cost of the iron, steel and manufactured goods 
used in and incorporated into a project is justified in the public 
interest.
    This SUPPLEMENTARY INFORMATION constitutes the detailed written 
justification required by section 1605(c) for waivers based on a 
finding under subsection (b).
    The waiver determination is pursuant to the delegation of authority 
by the Secretary of Energy to the Assistant Secretary for EERE with 
respect to EERE Recovery Act-funded projects. Consequently, the waiver 
applies to EERE projects carried out under the Recovery Act. The 
Assistant Secretary reserves the right to revisit and amend the 
determinations based on new developments or new information.

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

    Dated: June 16, 2010.
Cathy Zoi,
Assistant Secretary for Energy Efficiency and Renewable Energy.
[FR Doc. 2010-15030 Filed 6-21-10; 8:45 am]
BILLING CODE 6450-01-P