[Federal Register Volume 74, Number 185 (Friday, September 25, 2009)]
[Notices]
[Pages 48901-48902]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-23202]
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Notices
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains documents other than rules
or proposed rules that are applicable to the public. Notices of hearings
and investigations, committee meetings, agency decisions and rulings,
delegations of authority, filing of petitions and applications and agency
statements of organization and functions are examples of documents
appearing in this section.
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Federal Register / Vol. 74, No. 185 / Friday, September 25, 2009 /
Notices
[[Page 48901]]
DEPARTMENT OF AGRICULTURE
Rural Utilities Service
Notice of Buy American Exception Under the American Recovery and
Reinvestment Act of 2009
AGENCY: Rural Utilities Service, U.S. Department of Agriculture.
ACTION: Notice.
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SUMMARY: The Rural Utilities Service (RUS) hereby gives notice of a
nationwide exception to the Buy American requirements of Section 1605
of the American Recovery and Reinvestment Act of 2009 (``ARRA'') under
the authority of Section 1605(b)(1) (public interest waiver) for de
minimis incidental components of eligible water infrastructure projects
using assistance provided under ARRA. This action permits the use of
non-domestic iron, steel and manufactured goods when they occur in de
minimis incidental components that may otherwise be prohibited under
Section 1605(a). As used in this Notice, ``de minimis incidental
components'' means those components otherwise prohibited under Section
1605(a) that cumulatively comprise no more than a total of 5 percent of
the total cost of the materials used in a project funded in whole or in
part with ARRA assistance.
DATES: Effective Date: September 25, 2009.
ADDRESSES: Send any correspondence regarding this notice to Jacqueline
M. Ponti-Lazaruk, Assistant Administrator, Water and Environmental
Programs, Rural Utilities Service, U.S. Department of Agriculture, 1400
Independence Avenue, SW., Washington, DC 20250-1548.
FOR FURTHER INFORMATION CONTACT: Benjamin Shuman, Senior Environmental
Engineer, Engineering and Environmental Staff, (202) 720-1784, Rural
Utilities Service, U.S. Department of Agriculture, 1400 Independence
Avenue, SW., Washington, DC 20250-1571.
SUPPLEMENTARY INFORMATION: In accordance with section 1605(c) of ARRA
and Section 176.80 of the rules of the Office of Management and Budget
(OMB) (2 CFR 176.80), RUS hereby provides notice that it is granting a
nationwide exception to Section 1605 of the Recovery Act with respect
to de minimis incidental components of eligible water infrastructure
projects funded under the ARRA. The basis for this waiver is a public
interest determination pursuant to Section 1605(b)(1) of ARRA.
I. Background
The American Recovery and Reinvestment Act of 2009 made available
$3,672,475,732 to RUS to make direct loans and grants for rural water,
wastewater and waste disposal programs authorized by Sections 306 and
310B and described in Section 381E(d)(2) of the Consolidated Farm and
Rural Development Act. Section 1605(a) of ARRA, the ``Buy American''
provision, states that ``none of the funds appropriated or otherwise
made available by this 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.''
Section 1605(b) of ARRA authorizes the head of a Federal department
or agency to waive the Buy American provision by one of the following
three determinations: (1) Applying the Buy American provision would be
inconsistent with the public interest; (2) the iron, steel, and
relevant manufactured 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 iron, steel, and manufactured
goods produced in the United States will increase the cost of the
project by more than 25 percent. If a determination is made to waive
the requirements of Section 1605(a) based on a finding under Section
1605(b), then Section 1605(c) requires the head of the department or
agency to publish a detailed justification in the Federal Register as
to why the provision is being waived. Finally, Section 1605(d) requires
that the Buy American provision must be applied in a manner consistent
with the United States' obligations under international agreements.
II. Public Interest Finding
RUS has determined that, as applied to water and wastewater
projects, the application of the Buy American restrictions to de
minimis situations would be inconsistent with the public interest.
Water and wastewater infrastructure projects typically contain a
relatively small number of high-cost components incorporated into the
project that are iron, steel and manufactured goods, such as pipe,
tanks, pumps, motors, instrumentation and control equipment, treatment
process equipment, and relevant materials to build structures for
facilities such as treatment plants, pumping stations and pipe
networks. In bid solicitations for water and wastewater projects, these
high-cost components are generally described in detail in project-
specific technical specifications, and utility owners and their
contractors are generally familiar with the conditions of availability,
the potential alternatives for each detailed specification, the
approximate cost and, most relevant to this Notice, the country of
manufacture of such components.
Every water or wastewater infrastructure project also involves the
use of thousands of miscellaneous, generally low-cost components that
are essential for, but incidental to, construction of the project.
During construction, these components (for example, nuts, bolts,
fasteners, tubing, and gaskets), are incorporated into the physical
structure of the project. For many of these incidental components, the
country of manufacture and the availability of alternatives are not
always readily or reasonably identifiable. More importantly, the
miscellaneous character of these components, together with their low
cost (both individually and when procured in bulk), characterize them
as incidental to the facility or project.
RUS finds that it would be inconsistent with the public interest to
apply the Buy American requirement to incidental components when they
in total comprise no more than 5 percent of the total cost of the
materials used in and incorporated into a project. While individual
components may have the
[[Page 48902]]
same function (e.g., brackets), the specific manufacturer and
configuration may vary from project to project, making the analysis and
consideration of individual waiver requests for them, including
determining whether or not U.S. made products exist, is expected to be
time-consuming and labor intensive far out of proportion to the
percentage of total project materials they comprise. Further, since the
specific use of these low-cost components can be expected to be widely
varied, formulating categorical waivers for specific types of
components would be impractical. Because the situations described
above, i.e. a high number of low-cost, miscellaneous components, can be
effectively addressed by a comprehensive application of a nationwide de
minimis waiver, RUS finds that it would be inconsistent with the public
interest to apply the Buy American requirement to incidental components
when they in total comprise no more that 5 percent of the total cost of
the materials used in and incorporated into a project.
In some instances, the Rural Utilities Service and the
Environmental Protection Agency's (EPA) Clean Drinking Water State
Revolving Funds (SRF) program jointly fund water infrastructure
projects. The EPA undertook inquiries to identify the approximate scope
of incidental components within its SRF water infrastructure projects.
The responses were consistent and indicated that the percentage of
total costs for drinking water or wastewater treatment infrastructure
projects represented by these incidental components is generally not in
excess of 5 percent of the total costs of the materials used in and
incorporated into a project.
As a result of its research and analysis, EPA published two Federal
Register notices of de minimis waivers. The first was published on
Tuesday, June 2, 2009 (FR Vol. 74, No. 104, pp. 26398 and 26399), and
set forth the EPA's determination with respect to a public interest
finding on de minimis. The second notice, which revised the first, was
published on Monday, August 10, 2009 (FR Vol. 74, No. 152, pp. 39959
and 39960). By these waivers the EPA has also determined that imposing
ARRA's Buy American requirements for the category of de minimis
incidental components is not in the public interest.
While the authorizing statutes and funding sources for the EPA and
RUS borrowers are different, the types of projects that EPA finances
under its SRF program are substantially similar in size, scope and
purpose as those funded by RUS and, as stated above, some projects are
jointly funded by RUS and EPA. The Rural Utilities Service has decades
of experience in financing water and wastewater projects in rural
America and shares the EPA's rationale with respect to incidental
components used in similar projects. With respect to jointly-funded
projects, it is desirable to avoid disparate treatment of components
based on whether or not ARRA funds come from EPA or RUS. Section 1605
should be administered consistently, both within a particular Federal
agency and, to the extent possible, between agencies. Promoting
consistent treatment and avoiding unnecessary delays in committing ARRA
financing to projects around the country are crucial to the success of
ARRA. Requiring individual waivers for incidental components would be
time prohibitive and overly burdensome for applicants and RUS. The
purpose of ARRA is to stimulate economic recovery by funding current
infrastructure construction, not to delay projects that are ``shovel
ready.'' Therefore, a de minimis waiver of incidental components
totaling no more that 5 percent of total project costs is in the public
interest.
III. Waiver
Based on the public interest finding discussed above and pursuant
to Section 1605(c), USDA hereby issues a national waiver from the
requirements of ARRA Section 1605 for any incidental components of the
type described above that comprise in total a de minimis amount of the
project, specifically, for any such incidental components up to a limit
of no more than 5 percent of the total cost of the materials used in
and incorporated into a project.
Assistance recipients who elect to use this waiver shall, in
consultation with their contractors, determine the items to be covered
by this waiver, retain relevant documentation as to those items in
their project files, and be able to summarize in reports to RUS, if so
requested, the types and/or categories of items to which this waiver is
applied, the total cost of incidental components covered by the waiver
for each type or category, and the calculations by which they
determined the total cost of materials used in and incorporated into
the project.
In using this waiver, assistance recipients must consider that
there may be circumstances where there are multiple types of low-cost
components which, when combined with the incidental components
described above, may total more than 5 percent.
Assistance recipients in such cases will have to choose which of
these incidental components will be covered by the waiver and which
will not. Components that the recipient is unable to include within the
5 percent limit of this waiver must comply with the requirements of
section 1605 of ARRA by appropriate means other than reliance on this
waiver.
Further, as described above, in some cases RUS and EPA jointly fund
projects. Both RUS and EPA have issued de minimis waivers that have a
cap of a total of 5 percent of project costs. In the case of a jointly
funded project, these waivers shall not be combined to create a waiver
of greater than 5 percent of total project costs.
This supplementary information constitutes the ``detailed written
justification'' required by Section 1605(c) of ARRA and Section 176.80
of the Office of Management and Budget's rules for waivers of the Buy
American provisions.
Authority: Public Law 111-5, Section 1605.
Dated: September 21, 2009.
Thomas J. Vilsack,
Secretary.
[FR Doc. E9-23202 Filed 9-24-09; 8:45 am]
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