Notice of Buy American Waiver Under the American Recovery and Reinvestment Act of 2009, 35919-35920 [2011-15294]

Agencies

• NATIONAL SCIENCE FOUNDATION

[Federal Register Volume 76, Number 118 (Monday, June 20, 2011)]
[Notices]
[Pages 35919-35920]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-15294]


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NATIONAL SCIENCE FOUNDATION


Notice of Buy American Waiver Under the American Recovery and 
Reinvestment Act of 2009

AGENCY: National Science Foundation (NSF).

ACTION: Notice.

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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 Heating Ventilating and Air Conditioning (HVAC) system 
steam generators that will be used in the Alaska Region Research Vessel 
(ARRV). Steam generators provide added humidity for the HVAC system.

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 HVAC system steam 
generators that will be used in the ARRV. The basis for this exemption 
is section 1605(b)(2) of the Recovery Act, in that HVAC system steam 
generators of satisfactory quality are not produced in the United 
States in sufficient and reasonably available commercial quantities. 
The cost of the six (6) required HVAC system steam generators 
(~$15,000) 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 
currently under 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

    Section 512.5.4 of the technical specifications for the ARRV (Rev 
E., October 2009) require installation of steam generators in the HVAC 
system. This is necessary to provide needed interior humidity for 
environmental quality and health of personnel in the dry air of the 
Polar regions. The HVAC specifications are based on the Society of 
Naval Architects and Marine Engineers (SNAME) Technical and Research 
Standard R 4-16 and establish the minimum acceptable standards for a 
sustained living and work environment at sea. The resulting technical 
requirements for selecting the HVAC system steam generators include:
    1. Maintain 50% relative humidity at the compartment's interior 
design temperature of 70 [deg]F during winter conditions.
    2. Make steam for humidity from the ship's potable water using 
electricity rather than engine waste heat to save weight with piping 
systems.
    3. Have the required steam generation capacity to maintain the 
specified level of humidity.
    4. Demonstrate a Marine-grade and designed to withstand ship's 
motions
    5. Fit within the required space.
    Failure to meet any of these technical requirements would have 
severe negative consequences for the project. This includes potential 
nonperformance of the HVAC system and the resulting impacts on human 
health. It also includes significant added program cost if replacement 
is required during operations, or if additional space and weight 
allowances are needed to accommodate non-marine equipment. Given the 
availability of the steam generators for shore-side commercial 
applications as described below, the two most important factors quickly 
became the ability to operate at sea with the ship in motion (heave, 
pitch, and roll) and for the unit to fit within the available space. If 
system components are not specifically designed for use on a moving 
platform they can operate improperly and therefore not meet 
specification requirements, wear out pre-maturely and require more 
frequent replacement, or completely malfunction and become a warranty 
or major re-design issue. Most HVAC components designed for stationary 
applications ashore simply cannot be used on board ships. Most vendors 
recognize this and will not accept the risk of installing their systems 
unless they have experience with marine applications. The cost of the 
six steam generators required for the design is relatively low 
($15,000). If non-compliant units were initially installed, the cost to 
re-design the system and re-install proper marine units after the 
compartments are closed and the vessel delivered would likely result in 
additional costs that exceed the

[[Page 35920]]

initial costs of the units themselves. Similarly, making space for non-
compliant units would also lead to significant additional costs: a 
change request with the shipyard at this point in construction to re-
arrange interior walls and other system components in order to make 
space for non-compliant units would be expected to cost on the order of 
$150,000--or roughly 10 times the purchase price of the steam 
generators themselves.
    Space and weight considerations are vitally important for the ARRV 
to ensure the ship comes within acceptable operational limits for draft 
(depth from the waterline to the bottom of the keel), freeboard (height 
from the waterline to the main deck), and stability (the ability for 
the ship to right itself). Space for installation of system components 
was carefully considered in all aspects of the design of the ARRV. It 
is not possible to keep enlarging the spaces, or the vessel itself, 
without impacting other critical spaces or increasing total project 
cost. In most instances, it is far more cost-effective to purchase more 
expensive system components specifically designed for marine 
applications with size and weight limitations in mind, than to keep 
making the vessel larger.
    The market research for availability of steam generators for the 
HVAC system was conducted by the shipyard during late 2010 and early 
2011. A total of twenty eight (28) possible US manufacturers of 
commercial-grade steam generators were located. However, all of these 
manufacturers supplied steam generators for stationary applications in 
the building industry. Recognizing the special requirements involved 
related to the limited space and the mobile, marine operating 
environment, all but one declined to bid. The vendor that chose to 
submit a quote proposed a unit that had never been proven in a marine 
application and was too large to fit in the required space.
    As noted in UAF's request for this exemption, the shipyard and 
their HVAC sub-contractor performed market research in late 2010 and 
early 2011 by reviewing industry publications and the Internet in order 
to assess whether there exists a domestic capability to provide HVAC 
system steam generators that meet the necessary requirements. Based on 
the information acquired, twenty eight (28) potential vendors were sent 
Request for Quotation (RFQ) packages and all were contacted either by 
phone or e-mail to determine suitability with regard to marine 
application and size. This effort reduced the list to one (1) possible 
US manufacturer. Technical review of the product quoted found that it 
had never been used in a marine application, was twice the sized 
required, and was deck-mounted as opposed to bulkhead mounted.
    The project's conclusion is that there are no US manufacturers who 
produce a suitable HVAC system steam generator 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 
requirements-compliant HVAC system steam generators, UAF requested that 
NSF issue a Section 1605 exemption determination with respect to the 
purchase of foreign-supplied, requirements-compliant HVAC system steam 
generators, so that the vessel will meet the specific design and 
technical requirements that, as explained above, are necessary for this 
vessel to be able to perform its mission successfully. Furthermore, the 
shipyard's market research indicated that HVAC system steam generators 
compliant with the ARRV's technical specifications and requirements are 
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 
HVAC system steam generators 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 HVAC system steam generators.

    Dated: June 14, 2011.
Lawrence Rudolph,
General Counsel.
[FR Doc. 2011-15294 Filed 6-17-11; 8:45 am]
BILLING CODE 7555-01-P