Public Interest De Minimis, Small Grants, and Minor Components Waiver of Build America, Buy America Provisions as Applied to Certain Recipients of HUD Federal Financial Assistance, 67051-67053 [2022-24296]
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Federal Register / Vol. 87, No. 214 / Monday, November 7, 2022 / Notices
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November 01, 2022, 87 FR 65786.
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[FR Doc. 2022–24203 Filed 11–4–22; 8:45 am]
BILLING CODE 4140–01–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–6331–N–08]
Public Interest De Minimis, Small
Grants, and Minor Components Waiver
of Build America, Buy America
Provisions as Applied to Certain
Recipients of HUD Federal Financial
Assistance
Office of the Secretary, U.S.
Department of Housing and Urban
Development (HUD).
ACTION: Notice.
AGENCY:
In accordance with the Build
America, Buy America Act (‘‘BABA’’ or
‘‘the Act’’) this notice advises that HUD
is proposing a departmentwide public
interest de minimis, Small Grants, and
Minor Components waiver to the Buy
America Domestic Content Procurement
Preference (‘‘Buy America Preference,’’
or ‘‘BAP’’) as applied to the iron, steel,
manufactured products, and
construction materials requirement of
the Act for recipients of Federal
Financial Assistance. For the purposes
of this proposed waiver, HUD is
proposing to waive the application of
the BAP for infrastructure projects
whose total cost is an amount equal to
or less than the Simplified acquisition
threshold, which is currently $250,000.
HUD is also proposing to waive the
application of the BAP for all Small
Grants of Federal Financial Assistance
that are equal to or below the Simplified
acquisition threshold, which is
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SUMMARY:
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currently $250,000. Additionally, HUD
is proposing to waive the application of
the BAP for Minor Components of an
infrastructure project, such that a
cumulative total of no more than a total
of 5 percent of the total cost of the iron,
steel, manufactured products, and
construction materials used in and
incorporated into the infrastructure
project, up to a maximum of $1 million.
In accordance with the Act, HUD has
found that such proposed De Minimis,
Small Grants and Minor Components
waivers are in the public interest. The
waiver will assist HUD and its grantees
and funding recipients in preventing
immediate delays to critically important
projects that serve to ensuring the safety
and health of HUD constituents and
continuing to provide economic
opportunity through housing and
community development projects.
Moreover, this waiver will assist HUD
in working to strengthen the housing
market to bolster the economy and
protect consumers, meet the need for
quality affordable rental homes, utilize
housing as a platform for improving
quality of life, and build inclusive and
sustainable communities free from
discrimination.
DATES: HUD published this proposed
waiver on its website on October 31,
2022. Comments on the proposed
waiver set out in this document are due
on or before November 15, 2022.
ADDRESSES: Interested persons are
invited to submit comments on this
proposed general applicability waiver.
Copies of all comments submitted are
available for inspection and
downloading at www.regulations.gov.
To receive consideration as public
comments, comments must be
submitted through one of two methods,
specified below. All submissions must
refer to the above docket number and
title.
1. Electronic Submission of
Comments. Interested persons may
submit comments electronically through
the Federal eRulemaking Portal at
www.regulations.gov.
HUD strongly encourages commenters
to submit comments electronically.
Electronic submission of comments
allows the commenter maximum time to
prepare and submit a comment, ensures
timely receipt by HUD, and enables
HUD to make them immediately
available to the public. Comments
submitted electronically through the
www.regulations.gov website can be
viewed by other commenters and
interested members of the public.
Commenters should follow the
instructions provided on that site to
submit comments electronically.
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67051
2. Submission of Comments by Mail.
Comments may be submitted by mail to
the Regulations Division, Office of
General Counsel, Department of
Housing and Urban Development, 451
7th Street SW, Room 10276,
Washington, DC 20410–0500.
No Facsimile Comments. Facsimile
(FAX) comments will not be accepted.
3. Public Inspection of Comments. All
properly submitted comments and
communications submitted to HUD will
be available for public inspection and
copying between 8:00 a.m. and 5:00
p.m. weekdays at the above address.
Due to security measures at the HUD
Headquarters building, an advance
appointment to review the submissions
must be scheduled by calling the
Regulations Division at (202) 708–3055
(this is not a toll-free number).
FOR FURTHER INFORMATION CONTACT:
Joseph Carlile, Department of Housing
and Urban Development, 451 Seventh
Street SW, Room 10226, Washington,
DC 20410–5000, at (202) 402–7082 (this
is not a toll-free number). HUD
welcomes and is prepared to receive
calls from individuals who are deaf or
hard of hearing, as well as individuals
with speech and communication
disabilities. To learn more about how to
make an accessible telephone call,
please visit https://www.fcc.gov/
consumers/guides/telecommunicationsrelay-service-trs. HUD encourages
submission of questions about this
document be sent to
BuildAmericaBuyAmerica@hud.gov.
SUPPLEMENTARY INFORMATION:
I. Build America, Buy America
The Build America, Buy America Act
(‘‘BABA’’ or ‘‘the Act’’) was enacted on
November 15, 2021, as part of the
Infrastructure Investment and Jobs Act
(IIJA). Public Law 117–58. The Act
establishes a domestic content
procurement preference, the BAP, for
Federal infrastructure programs. Section
70914(a) of the Act establishes that no
later than 180 days after the date of
enactment, HUD must ensure that none
of the funds made available for
infrastructure projects may be obligated
by the Department unless it has taken
steps to ensure that the iron, steel,
manufactured products, and
construction materials used in a project
are produced in the United States. In
section 70912, the Act further defines a
project to include ‘‘the construction,
alteration, maintenance, or repair of
infrastructure in the United States’’ and
includes within the definition of
infrastructure those items traditionally
included along with buildings and real
property. Thus, starting May 14, 2022,
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67052
Federal Register / Vol. 87, No. 214 / Monday, November 7, 2022 / Notices
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new awards of Federal Financial
Assistance from a program for
infrastructure, and any of those funds
obligated by the grantee, are covered
under BABA provisions of the Act, 41
U.S.C. 8301 note, unless covered by a
waiver.
II. HUD’s Progress in Implementation of
the Act
Since the enactment of the Act, HUD
has worked diligently to implement the
BAP. Consistent with the requirements
of section 70913 of the Act, HUD
produced a report identifying and
evaluating all of HUD’s Federal
Financial Assistance programs for
compliance with the BAP on January 19,
2022, through Federal Register notice
‘‘Identification of Federal Financial
Assistance Infrastructure Programs
Subject to the Build America, Buy
America Provisions of the Infrastructure
Investment and Jobs Act’’. (87 FR 2894)
In order to ensure orderly
implementation of the BAP across
HUD’s programs, HUD published two
general applicability waivers for HUD’s
programs on May 3, 2022. The first
notice, ‘‘General Applicability Waiver of
Build America, Buy America Provisions
as Applied to Recipients of HUD
Federal Financial Assistance’’ (87 FR
26219), extended the implementation
date for the BAP until November 14,
2022, unless covered by a subsequent
waiver. Thus, no funds obligated by
HUD before November 14, 2022, are
subject to the BAP. The second notice,
‘‘General Applicability Waiver of Build
America, Buy America Provisions as
Applied to Tribal Recipients of HUD
Federal Financial Assistance’’ (87 FR
26221), extended the implementation
date for the BAP for Federal Financial
Assistance provided to Tribal recipients
for a period of one year. Additionally,
HUD published a Request for
Information ‘‘Request for Information
Relating to the Implementation of the
Build America, Buy America Act’’ to
gather additional information necessary
to fully implement the BAP for HUD
programs and to adequately prepare
necessary Paperwork Reduction Act
notices relating to such implementation.
(June 1, 2022, 87 FR 33193)
Additional details on HUD’s
implementation of the BABA
requirements can be found at https://
www.hud.gov/programoffices/
generalcounsel/BABA.
III. Waiver Authority
Under section 70914(b), HUD has
authority to waive the application of a
domestic content procurement
preference when (1) application of the
preference would be contrary to the
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Jkt 259001
public interest, (2) the materials and
products subject to the preference are
not produced in the United States at a
sufficient and reasonably available
quantity or satisfactory quality, or (3)
inclusion of domestically produced
materials and products would increase
the cost of completing the Covered
Activities by more than 25 percent.
Section 70914(c) provides that a waiver
under 70914(b) must be published by
the agency with a detailed written
explanation for the proposed
determination and provide a public
comment period of not less than 15
days.
IV. Public Interest in This General
Applicability Waiver of Buy America
Provisions
The Office of Management and
Budget’s April 18, 2022, memorandum,
‘‘Initial Implementation Guidance on
Application of Buy America Preference
in Federal Financial Assistance
Programs for Infrastructure’’ (M–22–11)
encourages agencies to consider
whether it is in the public interest to
waive application of a BAP to awards
below the Simplified Acquisition
Threshold. HUD is proposing this
waiver not as an alternative to
increasing domestic production, but as
an important tool to implement the Buy
American provisions in the most
efficient manner in order to promote
investment in HUD’s domestic
manufacturing base, strengthen critical
supply chains, and position United
States workers and businesses to
compete and lead globally in the 21st
century. HUD understands that
advancing Made in America objectives
is a continuous effort. HUD plans to
move forward to implement the new
requirements in a way that maximizes
coordination and collaboration to
support long-term investments in
domestic production.
Through this notice, HUD is
proposing to waive the application of
the BAP for infrastructure projects
whose total cost is an amount equal to
or less than the 2 CFR 200.1 Simplified
acquisition threshold, which is
currently $250,000. HUD is also
proposing to waive the application of
the BAP for all Small Grants of Federal
Financial Assistance that are equal to or
below the 2 CFR 200.1 Simplified
acquisition threshold, which is
currently $250,000. HUD is also
proposing to waive the application of
the BAP for Minor Components of an
infrastructure project, such that a
cumulative total of no more than a total
of 5 percent of the total cost of the iron,
steel, manufactured products, and
construction materials used in and
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Fmt 4703
Sfmt 4703
incorporated into the infrastructure
project, up to a maximum of $1 million.
For purposes of the Act, an
infrastructure project involves the
undertaking of any ‘‘construction,
alteration, maintenance, or repair’’ of
‘‘infrastructure,’’ which includes, among
other things, the ‘‘structures, facilities
and equipment’’ of ‘‘buildings and real
property.’’
In accordance with the Act, HUD has
found that such proposed De Minimis,
Small Grants and Minor Components
waivers are in the public interest. Such
waivers will allow HUD, grantees and
funding recipients to focus their efforts
on such critical projects. Proposing the
waivers is not an alternative to
increasing domestic production. It is
actually a tool to promote investment in
HUD’s domestic manufacturing base in
the long term. The waivers are in the
interest of efficiency, to ease burdens for
HUD grantees and funding recipients,
will also allow HUD to focus,
particularly in the early phases of BABA
implementation, on key products, and
critical supply chains where increased
U.S. manufacturing can best advance
our economic and national security.
These waivers will allow HUD grantees
and funding recipients to continue with
projects. Without these waivers, HUD
will likely lose grantee and funding
recipient participation, be exposed to
liabilities if HUD forces grantees and
funding recipients to modify their
current plans to come into compliance
or delay critical activities to protect life,
safety and property, and will negatively
impact the most vulnerable Americans
HUD seeks to serve.
For purposes of this waiver, HUD will
evaluate the total cost of the
infrastructure project as it would for
purposes of the review contemplated
under 24 CFR part 58, i.e., by defining
the scope consistent with 24 CFR
58.2(a)(4), as ‘‘the activity, or a group of
integrally related activities, designed by
the recipient to accomplish, in whole or
in part, a specific objective.’’ HUD
believes its grantees and recipients of
Federal Financial Assistance that will
be used for Covered Activities are
familiar with this regulation and
understand the proper application of the
concept in connection with their
activities, or as otherwise defined by
HUD in a notice. However, in
connection with the public housing
program, evaluation of certain
maintenance and repair activities within
the definition of infrastructure projects
under the Act is not appropriate using
this standard. Therefore, for the
purposes of determining the
applicability of this waiver in
connection with the maintenance and
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Federal Register / Vol. 87, No. 214 / Monday, November 7, 2022 / Notices
repair of public housing, HUD will
evaluate the infrastructure project as
including the single relevant
procurement contract for such
maintenance or repairs, or, where
applicable, the collection of
procurements focused on the same
specific objective (e.g., construction of a
resident service space) or limited scope
of work (e.g., lead based paint
abatement).
In fiscal year 2022, HUD grantees will
receive more than $15 billion through
the Department’s programs where
infrastructure is an eligible activity and
may be subject to the BAP. For example,
Community Development Block Grant
(CDBG) funds may be used for
infrastructure projects (e.g., water and
sewer improvements, street
improvements, neighborhood facilities)
or non-infrastructure uses (e.g., senior
services, youth services, operation of
food banks, administrative and planning
expenses). HUD estimates that 40
percent of CDBG funds awarded in 2021
($1.4 billion of $3.5 billion total) were
used on infrastructure projects where
the BAP could apply.
As HUD’s previous Notice advised
and as supported by several comments
received during the comment period,
many of HUD’s programs may be subject
to the BAP and have previously not
required compliance with similar Buy
American preferences. Because the
potential application of BAP mandated
by the Act is new to the majority of
HUD’s programs and Federal Financial
Assistance, this waiver advances BABA
by reducing the administrative burden
to potential assistance recipients where
the costs of compliance with BABA
could distract from the focus on higher
value BABA compliant items. Failure to
provide recipients such flexibilities
could delay the award for infrastructure
projects as grantees and funding
recipients must exert considerable effort
accounting for the sourcing for
miscellaneous, low-cost items.
Moreover, HUD does not believe the
waiver of the BAP for such awards will
undermine the full and robust
implementation of the Act or the ability
of the agency to support the purposes
behind the Act.
HUD expects to review this waiver
every five years from the effective date
of this waiver or more often as
appropriate. No funds obligated by HUD
or the grantee/funding recipient during
the period of the waiver that would be
exempted from compliance with BAP as
a result of the waiver will be required
to apply the BAP.
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67053
V. Impact of This Waiver on Other
Federal Financial Assistance
million appropriate or should it be
capped at some other threshold?
Where the BAP or other BABA
requirements are made applicable to
projects of a grantee or funding recipient
by another Federal agency, the grantee
or funding recipient may not rely on
this waiver as a waiver of any
requirement imposed by the other
Federal agency for the projects, nor is
the grantee or funding recipient exempt
from the application of those
requirements in accordance with the
requirements of the Federal agency
providing such Federal Financial
Assistance.
Marcia L. Fudge,
Secretary.
VI. Assessment of Cost Advantage of a
Foreign-Sourced Product
Under OMB Memorandum M–22–11,
‘‘Memorandum for Heads of Executive
Departments and Agencies,’’ published
on April 18, 2022, agencies are expected
to assess ‘‘whether a significant portion
of any cost advantage of a foreignsourced product is the result of the use
of dumped steel, iron, or manufactured
products or the use of injuriously
subsidized steel, iron, or manufactured
products’’ as appropriate before granting
a public interest waiver.1 HUD’s
analysis has concluded that this
assessment is not applicable to this
waiver, as this waiver is not based in the
cost of foreign-sourced products. HUD
will perform additional market research
during the duration of the waiver to
better understand the market to limit the
use of waivers caused by dumping of
foreign-sourced products.
VI. Solicitation of Comments on the
Waiver
As required under section 70914 of
the Act, HUD is soliciting comment
from the public on the waiver
announced in this Notice. In particular,
HUD invites comments on whether the
reliance on the Simplified acquisition
threshold is an appropriate measure and
if it is set at an appropriate level for
purposes of the waiver. Additionally,
HUD seeks comments on the percentage
of costs excluded from coverage and
whether there should be a cap on the
total amount excluded from coverage.
For example, should the total costs
allowed to be excluded be limited only
by the 5% exclusion, is the cap of $1
1 See OMB Memorandum M–22–08, Identification
of Federal Financial Assistance Infrastructure
Programs Subject to the Build America, Buy
America Provisions of the Infrastructure Investment
and Jobs Act, https://www.whitehouse.gov/wpcontent/uploads/2021/12/M-22-08.pdf.
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[FR Doc. 2022–24296 Filed 11–3–22; 11:15 am]
BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–6331–N–05]
Public Interest Exigent Circumstances
Waiver of Build America, Buy America
Provisions as Applied to Certain
Recipients of HUD Federal Financial
Assistance
Office of the Secretary, U.S.
Department of Housing and Urban
Development (HUD).
ACTION: Notice.
AGENCY:
In accordance with the Build
America, Buy America Act (‘‘BABA’’ or
‘‘the Act’’) this notice advises that HUD
is proposing a departmentwide public
interest waiver to the Buy America
Domestic Content Procurement
Preference (‘‘Buy America Preference,’’
or ‘‘BAP’’) for grantees and recipients of
Federal Financial Assistance from HUD
as applied to the iron, steel,
manufactured products, and
construction materials requirement of
BABA in certain exigent circumstances.
In accordance with the Act, HUD has
found that this proposed
departmentwide exigent circumstances
waiver is in the public interest. The
waiver will assist HUD and its grantees
and funding recipients in preventing
immediate delays to critically important
projects that serve to ensuring the safety
and health of HUD constituents and
continuing to provide economic
opportunity through housing and
community development projects.
Moreover, this waiver will assist HUD
in working to strengthen the housing
market to bolster the economy and
protect consumers, meet the need for
quality affordable rental homes, utilize
housing as a platform for improving
quality of life, and build inclusive and
sustainable communities free from
discrimination.
DATES: HUD published this proposed
waiver on its website on October 31,
2022. Comments on the proposed
waiver set out in this document are due
on or before November 15, 2022.
ADDRESSES: Interested persons are
invited to submit comments on this
proposed general applicability waiver.
Copies of all comments submitted are
available for inspection and
downloading at www.regulations.gov.
SUMMARY:
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Agencies
[Federal Register Volume 87, Number 214 (Monday, November 7, 2022)]
[Notices]
[Pages 67051-67053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-24296]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6331-N-08]
Public Interest De Minimis, Small Grants, and Minor Components
Waiver of Build America, Buy America Provisions as Applied to Certain
Recipients of HUD Federal Financial Assistance
AGENCY: Office of the Secretary, U.S. Department of Housing and Urban
Development (HUD).
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: In accordance with the Build America, Buy America Act
(``BABA'' or ``the Act'') this notice advises that HUD is proposing a
departmentwide public interest de minimis, Small Grants, and Minor
Components waiver to the Buy America Domestic Content Procurement
Preference (``Buy America Preference,'' or ``BAP'') as applied to the
iron, steel, manufactured products, and construction materials
requirement of the Act for recipients of Federal Financial Assistance.
For the purposes of this proposed waiver, HUD is proposing to waive the
application of the BAP for infrastructure projects whose total cost is
an amount equal to or less than the Simplified acquisition threshold,
which is currently $250,000. HUD is also proposing to waive the
application of the BAP for all Small Grants of Federal Financial
Assistance that are equal to or below the Simplified acquisition
threshold, which is currently $250,000. Additionally, HUD is proposing
to waive the application of the BAP for Minor Components of an
infrastructure project, such that a cumulative total of no more than a
total of 5 percent of the total cost of the iron, steel, manufactured
products, and construction materials used in and incorporated into the
infrastructure project, up to a maximum of $1 million. In accordance
with the Act, HUD has found that such proposed De Minimis, Small Grants
and Minor Components waivers are in the public interest. The waiver
will assist HUD and its grantees and funding recipients in preventing
immediate delays to critically important projects that serve to
ensuring the safety and health of HUD constituents and continuing to
provide economic opportunity through housing and community development
projects. Moreover, this waiver will assist HUD in working to
strengthen the housing market to bolster the economy and protect
consumers, meet the need for quality affordable rental homes, utilize
housing as a platform for improving quality of life, and build
inclusive and sustainable communities free from discrimination.
DATES: HUD published this proposed waiver on its website on October 31,
2022. Comments on the proposed waiver set out in this document are due
on or before November 15, 2022.
ADDRESSES: Interested persons are invited to submit comments on this
proposed general applicability waiver. Copies of all comments submitted
are available for inspection and downloading at www.regulations.gov.
To receive consideration as public comments, comments must be
submitted through one of two methods, specified below. All submissions
must refer to the above docket number and title.
1. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
www.regulations.gov.
HUD strongly encourages commenters to submit comments
electronically. Electronic submission of comments allows the commenter
maximum time to prepare and submit a comment, ensures timely receipt by
HUD, and enables HUD to make them immediately available to the public.
Comments submitted electronically through the www.regulations.gov
website can be viewed by other commenters and interested members of the
public. Commenters should follow the instructions provided on that site
to submit comments electronically.
2. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street SW, Room 10276,
Washington, DC 20410-0500.
No Facsimile Comments. Facsimile (FAX) comments will not be
accepted.
3. Public Inspection of Comments. All properly submitted comments
and communications submitted to HUD will be available for public
inspection and copying between 8:00 a.m. and 5:00 p.m. weekdays at the
above address. Due to security measures at the HUD Headquarters
building, an advance appointment to review the submissions must be
scheduled by calling the Regulations Division at (202) 708-3055 (this
is not a toll-free number).
FOR FURTHER INFORMATION CONTACT: Joseph Carlile, Department of Housing
and Urban Development, 451 Seventh Street SW, Room 10226, Washington,
DC 20410-5000, at (202) 402-7082 (this is not a toll-free number). HUD
welcomes and is prepared to receive calls from individuals who are deaf
or hard of hearing, as well as individuals with speech and
communication disabilities. To learn more about how to make an
accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs. HUD encourages submission
of questions about this document be sent to
[email protected].
SUPPLEMENTARY INFORMATION:
I. Build America, Buy America
The Build America, Buy America Act (``BABA'' or ``the Act'') was
enacted on November 15, 2021, as part of the Infrastructure Investment
and Jobs Act (IIJA). Public Law 117-58. The Act establishes a domestic
content procurement preference, the BAP, for Federal infrastructure
programs. Section 70914(a) of the Act establishes that no later than
180 days after the date of enactment, HUD must ensure that none of the
funds made available for infrastructure projects may be obligated by
the Department unless it has taken steps to ensure that the iron,
steel, manufactured products, and construction materials used in a
project are produced in the United States. In section 70912, the Act
further defines a project to include ``the construction, alteration,
maintenance, or repair of infrastructure in the United States'' and
includes within the definition of infrastructure those items
traditionally included along with buildings and real property. Thus,
starting May 14, 2022,
[[Page 67052]]
new awards of Federal Financial Assistance from a program for
infrastructure, and any of those funds obligated by the grantee, are
covered under BABA provisions of the Act, 41 U.S.C. 8301 note, unless
covered by a waiver.
II. HUD's Progress in Implementation of the Act
Since the enactment of the Act, HUD has worked diligently to
implement the BAP. Consistent with the requirements of section 70913 of
the Act, HUD produced a report identifying and evaluating all of HUD's
Federal Financial Assistance programs for compliance with the BAP on
January 19, 2022, through Federal Register notice ``Identification of
Federal Financial Assistance Infrastructure Programs Subject to the
Build America, Buy America Provisions of the Infrastructure Investment
and Jobs Act''. (87 FR 2894) In order to ensure orderly implementation
of the BAP across HUD's programs, HUD published two general
applicability waivers for HUD's programs on May 3, 2022. The first
notice, ``General Applicability Waiver of Build America, Buy America
Provisions as Applied to Recipients of HUD Federal Financial
Assistance'' (87 FR 26219), extended the implementation date for the
BAP until November 14, 2022, unless covered by a subsequent waiver.
Thus, no funds obligated by HUD before November 14, 2022, are subject
to the BAP. The second notice, ``General Applicability Waiver of Build
America, Buy America Provisions as Applied to Tribal Recipients of HUD
Federal Financial Assistance'' (87 FR 26221), extended the
implementation date for the BAP for Federal Financial Assistance
provided to Tribal recipients for a period of one year. Additionally,
HUD published a Request for Information ``Request for Information
Relating to the Implementation of the Build America, Buy America Act''
to gather additional information necessary to fully implement the BAP
for HUD programs and to adequately prepare necessary Paperwork
Reduction Act notices relating to such implementation. (June 1, 2022,
87 FR 33193)
Additional details on HUD's implementation of the BABA requirements
can be found at https://www.hud.gov/programoffices/generalcounsel/BABA.
III. Waiver Authority
Under section 70914(b), HUD has authority to waive the application
of a domestic content procurement preference when (1) application of
the preference would be contrary to the public interest, (2) the
materials and products subject to the preference are not produced in
the United States at a sufficient and reasonably available quantity or
satisfactory quality, or (3) inclusion of domestically produced
materials and products would increase the cost of completing the
Covered Activities by more than 25 percent. Section 70914(c) provides
that a waiver under 70914(b) must be published by the agency with a
detailed written explanation for the proposed determination and provide
a public comment period of not less than 15 days.
IV. Public Interest in This General Applicability Waiver of Buy America
Provisions
The Office of Management and Budget's April 18, 2022, memorandum,
``Initial Implementation Guidance on Application of Buy America
Preference in Federal Financial Assistance Programs for
Infrastructure'' (M-22-11) encourages agencies to consider whether it
is in the public interest to waive application of a BAP to awards below
the Simplified Acquisition Threshold. HUD is proposing this waiver not
as an alternative to increasing domestic production, but as an
important tool to implement the Buy American provisions in the most
efficient manner in order to promote investment in HUD's domestic
manufacturing base, strengthen critical supply chains, and position
United States workers and businesses to compete and lead globally in
the 21st century. HUD understands that advancing Made in America
objectives is a continuous effort. HUD plans to move forward to
implement the new requirements in a way that maximizes coordination and
collaboration to support long-term investments in domestic production.
Through this notice, HUD is proposing to waive the application of
the BAP for infrastructure projects whose total cost is an amount equal
to or less than the 2 CFR 200.1 Simplified acquisition threshold, which
is currently $250,000. HUD is also proposing to waive the application
of the BAP for all Small Grants of Federal Financial Assistance that
are equal to or below the 2 CFR 200.1 Simplified acquisition threshold,
which is currently $250,000. HUD is also proposing to waive the
application of the BAP for Minor Components of an infrastructure
project, such that a cumulative total of no more than a total of 5
percent of the total cost of the iron, steel, manufactured products,
and construction materials used in and incorporated into the
infrastructure project, up to a maximum of $1 million.
For purposes of the Act, an infrastructure project involves the
undertaking of any ``construction, alteration, maintenance, or repair''
of ``infrastructure,'' which includes, among other things, the
``structures, facilities and equipment'' of ``buildings and real
property.''
In accordance with the Act, HUD has found that such proposed De
Minimis, Small Grants and Minor Components waivers are in the public
interest. Such waivers will allow HUD, grantees and funding recipients
to focus their efforts on such critical projects. Proposing the waivers
is not an alternative to increasing domestic production. It is actually
a tool to promote investment in HUD's domestic manufacturing base in
the long term. The waivers are in the interest of efficiency, to ease
burdens for HUD grantees and funding recipients, will also allow HUD to
focus, particularly in the early phases of BABA implementation, on key
products, and critical supply chains where increased U.S. manufacturing
can best advance our economic and national security. These waivers will
allow HUD grantees and funding recipients to continue with projects.
Without these waivers, HUD will likely lose grantee and funding
recipient participation, be exposed to liabilities if HUD forces
grantees and funding recipients to modify their current plans to come
into compliance or delay critical activities to protect life, safety
and property, and will negatively impact the most vulnerable Americans
HUD seeks to serve.
For purposes of this waiver, HUD will evaluate the total cost of
the infrastructure project as it would for purposes of the review
contemplated under 24 CFR part 58, i.e., by defining the scope
consistent with 24 CFR 58.2(a)(4), as ``the activity, or a group of
integrally related activities, designed by the recipient to accomplish,
in whole or in part, a specific objective.'' HUD believes its grantees
and recipients of Federal Financial Assistance that will be used for
Covered Activities are familiar with this regulation and understand the
proper application of the concept in connection with their activities,
or as otherwise defined by HUD in a notice. However, in connection with
the public housing program, evaluation of certain maintenance and
repair activities within the definition of infrastructure projects
under the Act is not appropriate using this standard. Therefore, for
the purposes of determining the applicability of this waiver in
connection with the maintenance and
[[Page 67053]]
repair of public housing, HUD will evaluate the infrastructure project
as including the single relevant procurement contract for such
maintenance or repairs, or, where applicable, the collection of
procurements focused on the same specific objective (e.g., construction
of a resident service space) or limited scope of work (e.g., lead based
paint abatement).
In fiscal year 2022, HUD grantees will receive more than $15
billion through the Department's programs where infrastructure is an
eligible activity and may be subject to the BAP. For example, Community
Development Block Grant (CDBG) funds may be used for infrastructure
projects (e.g., water and sewer improvements, street improvements,
neighborhood facilities) or non-infrastructure uses (e.g., senior
services, youth services, operation of food banks, administrative and
planning expenses). HUD estimates that 40 percent of CDBG funds awarded
in 2021 ($1.4 billion of $3.5 billion total) were used on
infrastructure projects where the BAP could apply.
As HUD's previous Notice advised and as supported by several
comments received during the comment period, many of HUD's programs may
be subject to the BAP and have previously not required compliance with
similar Buy American preferences. Because the potential application of
BAP mandated by the Act is new to the majority of HUD's programs and
Federal Financial Assistance, this waiver advances BABA by reducing the
administrative burden to potential assistance recipients where the
costs of compliance with BABA could distract from the focus on higher
value BABA compliant items. Failure to provide recipients such
flexibilities could delay the award for infrastructure projects as
grantees and funding recipients must exert considerable effort
accounting for the sourcing for miscellaneous, low-cost items.
Moreover, HUD does not believe the waiver of the BAP for such awards
will undermine the full and robust implementation of the Act or the
ability of the agency to support the purposes behind the Act.
HUD expects to review this waiver every five years from the
effective date of this waiver or more often as appropriate. No funds
obligated by HUD or the grantee/funding recipient during the period of
the waiver that would be exempted from compliance with BAP as a result
of the waiver will be required to apply the BAP.
V. Impact of This Waiver on Other Federal Financial Assistance
Where the BAP or other BABA requirements are made applicable to
projects of a grantee or funding recipient by another Federal agency,
the grantee or funding recipient may not rely on this waiver as a
waiver of any requirement imposed by the other Federal agency for the
projects, nor is the grantee or funding recipient exempt from the
application of those requirements in accordance with the requirements
of the Federal agency providing such Federal Financial Assistance.
VI. Assessment of Cost Advantage of a Foreign-Sourced Product
Under OMB Memorandum M-22-11, ``Memorandum for Heads of Executive
Departments and Agencies,'' published on April 18, 2022, agencies are
expected to assess ``whether a significant portion of any cost
advantage of a foreign-sourced product is the result of the use of
dumped steel, iron, or manufactured products or the use of injuriously
subsidized steel, iron, or manufactured products'' as appropriate
before granting a public interest waiver.\1\ HUD's analysis has
concluded that this assessment is not applicable to this waiver, as
this waiver is not based in the cost of foreign-sourced products. HUD
will perform additional market research during the duration of the
waiver to better understand the market to limit the use of waivers
caused by dumping of foreign-sourced products.
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\1\ See OMB Memorandum M-22-08, Identification of Federal
Financial Assistance Infrastructure Programs Subject to the Build
America, Buy America Provisions of the Infrastructure Investment and
Jobs Act, https://www.whitehouse.gov/wp-content/uploads/2021/12/M-22-08.pdf.
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VI. Solicitation of Comments on the Waiver
As required under section 70914 of the Act, HUD is soliciting
comment from the public on the waiver announced in this Notice. In
particular, HUD invites comments on whether the reliance on the
Simplified acquisition threshold is an appropriate measure and if it is
set at an appropriate level for purposes of the waiver. Additionally,
HUD seeks comments on the percentage of costs excluded from coverage
and whether there should be a cap on the total amount excluded from
coverage. For example, should the total costs allowed to be excluded be
limited only by the 5% exclusion, is the cap of $1 million appropriate
or should it be capped at some other threshold?
Marcia L. Fudge,
Secretary.
[FR Doc. 2022-24296 Filed 11-3-22; 11:15 am]
BILLING CODE 4210-67-P