Notice of a Project Waiver of Section 1605 (Buy American Requirement) of the American Recovery and Reinvestment Act of 2009 (ARRA) to the Newport Borough Water Authority, Pennsylvania, 66373-66375 [2010-27279]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 75, Number 208 (Thursday, October 28, 2010)]
[Notices]
[Pages 66373-66375]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-27279]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-9218-5]


Notice of a Project Waiver of Section 1605 (Buy American 
Requirement) of the American Recovery and Reinvestment Act of 2009 
(ARRA) to the Newport Borough Water Authority, Pennsylvania

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The Regional Administrator of EPA Region 3 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 Newport Borough Water 
Authority (NBWA) for the purchase of membrane filtration cassettes, 
supplied by GE Water & Process Technologies (GE), that contains a 
primary component not manufactured in America, at its new Water 
Treatment Plant (WTP). NBWA indicates that the membrane filtration 
cassettes at its new WTP are necessary to replace groundwater wells 
that cannot meet the system demands during drought conditions and 
provide for the removal of Cryptosporidium and Giardia. The membrane 
cassettes under consideration are manufactured by a company located in 
Hungary and no United States manufacturer produces an

[[Page 66374]]

alternative that meets the NBWA's technical specifications. This is a 
project specific waiver and only applies to the use of the specified 
product for the ARRA funded project being proposed. Any other ARRA 
project that may wish to use the same product must apply for a separate 
waiver based on the specific project circumstances. The Regional 
Administrator is making this determination based on the review and 
recommendations of the EPA Region III, Water Protection Division, 
Office of Infrastructure and Assistance. The NBWA has provided 
sufficient documentation to support its request.
    The Assistant Administrator of the EPA's Office of Administration 
and Resources Management has concurred on this decision to make an 
exception to Section 1605 of ARRA. This action permits the purchase of 
membrane filtration cassettes for the proposed project being 
implemented by the NBWA.

DATES: Effective Date: October 7, 2010.

FOR FURTHER INFORMATION CONTACT: Robert Chominski, Deputy Associate 
Director, (215) 814-2162, or David McAdams, Environmental Engineer, 
(215) 814-5764, Office of Infrastructure & Assistance (OIA), Water 
Protection Division, U.S. EPA Region III, 1650 Arch Street, 
Philadelphia, PA 19103-2029.

SUPPLEMENTARY INFORMATION: In accordance with ARRA Sections 1605(c) and 
1605(b)(2), 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 Newport Borough Water Authority (NBWA) for 
the acquisition of a ``GE ZeeWeed[reg] 500 D membrane cassettes.'' NBWA 
has been unable to find membrane filtration equipment that contains 
American-made membrane cassettes to meet its specific water 
requirements.
    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 unless a waiver is provided to the recipient by EPA. A 
waiver may be provided if EPA determines that (1) applying these 
requirements would be inconsistent with 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.
    EPA has determined that NBWA'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 NBWA's request to determine if the 
request, though made after the contract date, can be treated as if it 
were timely made. 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 
NBWA's request may be treated as timely because the need for a waiver 
was not foreseeable at the time the contract was signed. The project 
was bid and the general contractor for the NBWA project submitted 
documentation that the equipment utilized in preparing their bid met 
the ARRA Buy American provisions. Contracts were awarded in December 
2009. GE initially believed that its ZeeWeed[reg] 500 D membrane 
cassettes, though manufactured outside of the United States, would 
fulfill the Buy American provisions through the Substantial 
Transformation test. In May 2010, GE sent a letter to the General 
Contractor stating that the membrane cassettes would not be 
substantially transformed in the United States. NBWA responded back to 
GE inquiring if the cassettes were the only piece of equipment in the 
ZeeWeed[reg] 500 D ultra filtration membrane system that would require 
a Buy American waiver if the product was used. GE responded back on 
July 14, 2010 that only the cassettes required the Buy American waiver. 
The need for a waiver was not determined until after the contractor had 
completed their review of information provided by GE and had confirmed 
that there were no domestically made membrane cassettes available to 
meet project specifications. Accordingly, EPA will evaluate the request 
as a timely request.
    NBWA's waiver request is to allow for the purchase of the GE 
ZeeWeed[reg] 500 D ultra filtration membrane system with thirty-two 
membrane filtration cassettes, manufactured by GE Water & Process 
Technologies of Hungary, for use in a new WTP in Pennsylvania. The 
membrane filtration cassettes are an integral component of the ultra 
filtration membrane process because it achieves the 4 log removal of 
Cryptosporidium and Giardia from drinking water. After an engineering 
analysis of alternate treatment processes, the NBWA determined that the 
ultra filtration membrane system to be the most environmentally sound 
and cost effective solution. The ultra filtration membrane system is an 
advanced water treatment process which is designed to achieve 4 log 
removal of Cryptosporidium and Giardia. In addition, in anticipation of 
procuring the ultra filtration membrane system, the NBWA has already 
incorporated specific technical design requirements for installation of 
membrane filter cassettes with the ultra filtration membrane process at 
their WTP, including specific tankage footprint, geometry and 
configuration. To require NBWA to redesign its project would cause an 
unacceptable delay to the completion of the project.
    The NBWA has provided information to the EPA demonstrating that 
there are no membrane filtration cassettes manufactured in the United 
States in sufficient and reasonable quantity and of a satisfactory 
quality to meet the required technical specification. Three companies 
were considered for the membrane filtration cassettes that either 
manufactured their membranes outside the United States or did not meet 
the specifications of the project. The NBWA has performed market 
research but was unsuccessful in its effort to locate any domestic 
manufacturers of membrane filtration cassettes for its WTP.
    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 reasonably available quantity as 
``the quantity of iron, steel, or relevant manufactured good that is 
available or will be available at the time needed and place needed, and 
in the proper form or specification as specified in the project plans 
and design.'' The NBWA has incorporated specific technical design 
requirements for installation of membrane filtration cassettes at its 
WTP.
    The purpose of the ARRA is to stimulate economic recovery in part 
by funding current infrastructure construction, not to delay projects 
that are ``shovel ready'' by requiring utilities, such as the NBWA, to 
revise their standards and specifications, institute a new bidding 
process, and potentially choose a more costly, less efficient project. 
The imposition of ARRA Buy American requirements on such projects 
otherwise eligible for State Revolving Fund 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 
a fundamental

[[Page 66375]]

economic purpose of the ARRA, which is to create or retain jobs.
    Based on additional research conducted by EPA's Office of 
Infrastructure and Assistance (OIA) in Region 3, and to the best of the 
Region's knowledge at the time of review, there do not appear to be 
other membrane filtration cassettes manufactured domestically that 
would meet the NBWA's technical specification. EPA's national 
contractor prepared a technical assessment report dated August 18, 2010 
based on the waiver request submitted. This report included a detailed 
review intended to enable EPA to determine if any company could be 
considered to substantially transform these cassettes in the United 
States. However, sufficient information was not available or made 
available to establish either performance characteristics for any 
potential alternative product, or the substantial transformation of any 
such product in the United States. Accordingly, the report determined 
that the waiver request submittal was complete, that adequate technical 
information was provided, and that there were no significant weaknesses 
in the justification provided. The report confirmed the waiver 
applicant's claim that there are no American-made membrane filtration 
cassettes available from a domestic manufacturer in the proper form or 
specification as specified in the project plans and design, and the 
quality specified in the project plans and designs.
    The OIA has reviewed this waiver request and to the best of our 
knowledge at the time of review has determined that the supporting 
documentation provided by the NBWA is sufficient to meet the 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 NBWA's 
technical specifications, a waiver from the Buy American requirement 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 this manufactured 
good was not available from a producer in the United States, the 
Newport Borough Water Authority is hereby granted a waiver from the Buy 
American requirements of Section 1605(a) of Public Law 111-5 for the 
purchase of thirty-two membrane filtration cassettes using ARRA funds 
as specified in the Newport Borough Water Authority's request of August 
4, 2010. 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: October 7, 2010.
W.C. Early,
Acting Regional Administrator, U.S. Environmental Protection Agency, 
Region III.
[FR Doc. 2010-27279 Filed 10-27-10; 8:45 am]
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