Notice of a Project Waiver of Section 1605: (Buy American Requirement) of the American Recovery and Reinvestment Act of 2009 (ARRA) to the Inland Empire Utilities Agency, 2683-2684 [2011-754]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 76, Number 10 (Friday, January 14, 2011)]
[Notices]
[Pages 2683-2684]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-754]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-9252-9]


Notice of a Project Waiver of Section 1605: (Buy American 
Requirement) of the American Recovery and Reinvestment Act of 2009 
(ARRA) to the Inland Empire Utilities Agency

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The EPA is hereby granting a project waiver of the Buy 
American requirements of ARRA Section 1605(a) 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 Inland Empire Utilities Agency (IEUA), a 
Clean Water State Revolving Fund (CWSRF)/ARRA loan recipient, for the 
purchase of Air Release Vacuum (ARV) Valves manufactured by A.R.I. in 
Israel, for Project 5176-140 funded by the California CWSRF/
ARRA Loan 08-851. This is a different project than Project 
5176-110/5176-130 which was previously issued a waiver for 
this same product. The IEUA indicates that the design for the Church 
Street lateral project includes A.R.I. valves, which are the standard 
air relief structures used within the regional pipeline system, and 
that currently there is not a comparable domestic equivalent that meets 
the IEUA 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 project-specific 
circumstances. The Assistant Administrator of the Office of 
Administration and Resources Management has concurred with this 
decision to make an exception under section 1605(b)(2) of ARRA.

DATES: Effective Date: November 30, 2010.

FOR FURTHER INFORMATION CONTACT: Abimbola Odusoga, Environmental 
Engineer, Water Division, Infrastructure Office (WTR-4), (415) 972-
3437, U.S. EPA Region 9.

SUPPLEMENTARY INFORMATION: In accordance with ARRA Sections 1605(c) and 
1605(b)(2), EPA hereby provides notice it is granting a project waiver 
of the requirements of Section 1605(a) of Public Law 111-5, Buy 
American requirements, to the IEUA for the acquisition of the ARV 
valves manufactured in Israel by A.R.I. The head of each federal agency 
is authorized to issue project waivers pursuant to Section 1605(b) of 
ARRA. Section 1605(a) of the ARRA requires that none of the funds 
appropriated or otherwise made available by the ARRA 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. Pursuant 
to Section 1605(b), a waiver from this requirement may be provided if 
EPA determines: (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.
    A Delegation of Authority Memorandum was issued by the EPA 
Administrator on March 31, 2009 which provided EPA Regional 
Administrators with the authority to issue waivers to Section 1605(a) 
of ARRA within the geographic boundaries of their respective regions 
and with respect to requests by individual recipients of ARRA financial 
assistance.
    The IEUA provides drinking water and waste water treatment services 
to municipalities in the Chino Basin. The Church Street lateral project 
consists of approximately 4,200 linear feet of 12-inch diameter 
recycled water pipeline that will convey recycled water to serve 
customers in the 1430 and 1630 pressure zones. Project specifications 
provided by the applicant state that acceptable products are A.R.I. 
Flow Control Accessories, Ltd. (Model D-060) or an approved equal.
    The functional justification for these specifications advanced by 
the IEUA was that the IEUA had, in years prior to the enactment of 
ARRA, made the ARI valves their standard air relief structures used 
within the regional pipeline system based on the IEUA's determination 
that these valves had a superior design, functionality, and ease of 
maintenance. Specifically:
     ARI combination valves (D-060's) have the air release on 
the top of the valve, whereas alternative valves have the air release 
on the side. A side release creates an internal air pocket on the 
valve, which allows the rubber seal for the vacuum component to dry out 
and leak over time.
     The 316SS float for the ARI vacuum component stops against 
a 316SS ring. The alternative valves have a float that stops against a 
flat rubber seal on the top of the valve, and constant pounding during 
closure tends to crack the seal and cause leaks.
     The ARI valves are half the weight and size of the 
alternative valves, which makes installation and maintenance easier. 
Also, as the valves are smaller, the enclosures for the valves are less 
expensive.
    The consequences of finding the IEUA's specifications not justified 
would include the following:

     Additional design costs would be incurred to change all 
ARV valves, including re-calculating the size of the valves based on 
the competitors design criteria, modifying valve and enclosure details, 
and modifying the pipeline profiles to accommodate larger valves. 
Alternative ARV valves that must be buried would require lowering the 
pipeline depth several feet on each side of the valves to accommodate a 
deeper valve vault.
     Construction costs would be higher due to the increase in 
valve sizes, larger enclosures, and a deeper pipeline. The pricing 
through the change order process would be significantly higher than 
prices for a competitive bid. The cost for the material and 
installation of the valves is approximately $198,708. If the ARI valves 
are replaced with alternative valves, the estimated cost for the 
material and installation would be approximately $100,000 more.
     IEUA staff would have to be trained on the different types 
of valves installed and additional spare parts would need to be ordered 
and stocked. Since the IEUA has moved forward with implementing the ARI 
valves as the

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standard air relief structure, all valves that do not meet this 
standard would need to be replaced.
    Use of alternative valves that do not meet the IEUA's 
specifications would thus require a substantial redesign of, delay in, 
and higher costs for the project. Because of the IEUA's current, 
extensive installations of ARI valves, the use of alternative, 
incompatible valves would impose continuing high costs into the future 
to change spare parts and staff training in operations and maintenance, 
as well as in inferior performance of the alternative valves. 
Procurement of alternative valves would be inconsistent with basic 
principles of sustainable infrastructure and effective asset management 
that EPA has consistently promoted. For all these reasons, EPA finds 
that the IEUA's specifications for these ARV valves were justified.
    EPA also conducted research to find potential domestic 
manufacturers who can supply ARV valves that meet IEUA's technical 
specifications. Five domestic manufacturers of ARV valves were 
identified by the applicant. EPA's national contractor contacted the 
domestic manufacturers and inquired as to whether their products could 
meet the IEUA's specifications. All five manufacturers indicated that 
they could provide similar products, but could not meet all of the 
IEUA's specifications, particularly with regard to manufacturing 
materials and product design.
    Based on these findings, EPA concludes the IEUA's claim that there 
are no known American manufacturers of ARV valves meeting the IEUA's 
specifications is supported by the available information.
    The April 28, 2009 EPA Memorandum for implementation of the ARRA 
Buy American provisions of P.L. 111-5, states the quantity of iron, 
steel, or relevant manufactured good is ``reasonably available'' if it 
is available at the time and place needed, and in the proper form or 
specification as specified in the project plans and design. The IEUA's 
waiver request articulates a reasonable and appropriate basis for 
choosing the type of technology it chose for this project in 
environmental objectives and performance specifications. Further, it 
provides sufficient documentation to conclude the relevant manufactured 
goods are not produced in the United States of a satisfactory quality 
to meet its technical specifications. The IEUA has incorporated 
specific technical design specifications for the proposed project based 
on their needs and provided information to the EPA indicating there are 
currently no ARV valves manufactured in the United States that have 
equivalent product specifications. The IEUA has also provided 
certification indicating there are no systems of comparable quality 
available from a domestic manufacturer to meet its specifications. 
Based on additional inquiry by EPA's national contractor, there do not 
appear to be other ARV valves available to meet the IEUA's 
specifications.
    EPA has also evaluated IEUA's request to determine if its 
submission is considered late or if it could be considered timely, as 
per the OMB Guidance at 2 CFR 176.120. 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, EPA could also determine 
that a request be evaluated as timely, though made after the date that 
the contract was signed, if the need for a waiver was not reasonably 
foreseeable. If the need for a waiver is reasonably foreseeable, then 
EPA could still apply discretion in these late cases as per the OMB 
Guidance, which says ``the award official may deny the request.'' For 
those waiver requests that do not have a reasonably unforeseeable basis 
for lateness, but for which the waiver basis is valid and there is no 
apparent gain by the ARRA recipient or loss on behalf of the 
government, then EPA will still consider granting a waiver.
    In this case, there are no U.S. manufacturers that meet IEUA's 
project specification for these ARV valves. The waiver request was 
submitted after the contract date due to a realignment of a portion of 
the project which was discovered in April, 2010. This realignment led 
to a project redesign which wasn't completed until May 26, 2010, thus 
leading to the waiver request on July 15, 2010. Although it was known 
that ARV valves would be needed for this project, it was unknown how 
many would be needed and the associated cost until after the 
realignment. There is no indication that IEUA failed to request a 
waiver in order to avoid the requirements of the ARRA, particularly 
since there are no domestically manufactured products available that 
meet the project specifications. EPA will consider IEUA's waiver 
request, a foreseeable late request, as though it had been timely made 
since there is no gain by IEUA and no loss to the government due to the 
late request.
    Furthermore, the purpose of the ARRA is to stimulate economic 
recovery by funding current infrastructure construction, not to delay 
shovel ready projects by requiring entities, like the IEUA, to revise 
their design and potentially choose a more costly and less efficient 
project. The imposition of ARRA Buy American requirements on such 
projects eligible for CWSRF assistance would result in unreasonable 
delay and thus displace the ``shovel ready'' status for this project. 
Further delay of this project would contravene the most fundamental 
economic purposes of the ARRA: To create or preserve jobs in the United 
States.
    The EPA Region 9 Water Division, Office of Regional Counsel, EPA's 
Buy American consultant, and EPA's Office of Administration and 
Resource Management have reviewed this waiver request and have 
determined the supporting documentation provided by the IEUA is 
sufficient to meet the criteria listed under ARRA Section 1605(b) (2) 
and the EPA April 28, 2009, memorandum for implementation of ARRA Buy 
American provisions of Public Law 111-5.
    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 IEUA is hereby 
granted a waiver from the Buy American requirements of Sections 1605(a) 
of Public Law 111-5, for the purchase of the A.R.I. valves, specified 
in the IEUA's request of July 21, 2010. This supplementary information 
constitutes the detailed written justification required by Section 
1605(c) for waivers based on a finding under Section 1605(b)(2).

    Authority:  Public Law 111-5, Section 1605.

    Dated: November 30, 2010.
Jared Blumenfeld,
Regional Administrator, EPA Pacific Southwest, Region 9.
[FR Doc. 2011-754 Filed 1-13-11; 8:45 am]
BILLING CODE 6560-50-P