[Federal Register Volume 75, Number 108 (Monday, June 7, 2010)]
[Notices]
[Pages 32179-32181]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-13529]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-9159-6]


Notice of a Regional Waiver of Section 1605 (Buy American 
Requirement) of the American Recovery and Reinvestment Act of 2009 
(ARRA) to the City of Bridgeport (the City) Washington

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The Regional Administrator of EPA Region 10 is hereby granting 
a late waiver request from the Buy America requirements of ARRA section 
1605(a) under the authority of section 1605(b)(1) [applying subsection 
(a) would be inconsistent with the public interest] to the City for the 
purchase and use of 280 linear feet of large diameter 36'' PVC pipe, 
manufactured in Edmonton, Alberta, Canada and which was used in and 
incorporated into an ARRA project prior to December 3, 2009. This is a 
project specific waiver and only applies to the use of the specified 
product for the ARRA project discussed in this notice. Any other ARRA 
recipient that wishes to use the same product must apply for a separate 
waiver based on project specific circumstances. The City's waiver 
request included a timeline summary from October 3, 2009 thru December 
30, 2009 describing the attempted Buy American compliance by the 
applicant, consulting engineer, contractor and pipeline materials 
supplier. Thus, it appears that the supplier on behalf of the City, the 
ARRA recipient, did an extensive, seemingly comprehensive, and 
ultimately unsuccessful search for a U.S. manufacturer who could meet 
the project specifications.
    The Regional Administrator is making this determination based on 
the review and recommendations of the Drinking Water Unit. The City has 
provided sufficient documentation to support their request.

DATES: Effective Date: May 25, 2010.

FOR FURTHER INFORMATION CONTACT: Johnny Clark, DWSRF ARRA Program 
Management Analyst, Drinking Water Unit, Office of Water & Watersheds 
(OWW), (206) 553-0082, U.S. EPA Region 10 (OWW-136), 1200 Sixth Avenue, 
Suite 900, Seattle, WA 98101.

SUPPLEMENTARY INFORMATION: In accordance with ARRA Section 1605(c) and 
OMB's regulations at 2 CFR Part 176, Subpart B, the EPA hereby provides 
notice that it is granting a late project waiver request of the

[[Page 32180]]

requirements of Section 1605(a) of Public Law 111-5, Buy American 
requirements, to the City for the purchase and use of 280 linear feet 
of large diameter 36'' PVC pipe, manufactured in Edmonton, Alberta, 
Canada, which was incorporated into an ARRA project prior to December 
3, 2009. The City was unable to find an American manufacturer to meet 
the project specific requirements for what by industry's standards is a 
small amount of large diameter 36'' PVC pipe.
    There are several noteworthy factors regarding this waiver 
analysis. First, it is a late request because the waiver request came 
after the goods had been used in the project. Second, under 2 CFR 
176.130(c)(1), the applicable non-compliance provision regarding 
unauthorized use of foreign manufactured goods, EPA is authorized to 
process a waiver under 2 CFR 176.120(a) if ``the need for such 
determination otherwise was not reasonably foreseeable.'' EPA has 
further outlined this process in its April 28, 2009 memorandum: 
Implementation of Buy American provisions of Public Law 111-5, the 
``American Recovery and Reinvestment Act of 2009'' (the April 28 
memorandum). Third, EPA has determined that the reason the City did not 
seek a waiver when they procured the foreign pipe was based on a 
mistaken interpretation of the international agreements provision of 
section 1605(d). However, at the time of that mistake, Bridgeport had 
done all due diligence in seeking a U.S.-made alternative and had 
developed all necessary information to support an availability waiver 
at that time. Fourth, EPA has determined, with the assistance of a 
technical review produced by its national contractor, that the 
documentation the City developed in the course of due diligence 
conducted at the time of that mistake and subsequent due diligence upon 
learning of the mistaken interpretation of section 1605(d) was 
sufficient to support both a determination by EPA that the City 
implemented the requirements of Section 1605 in good faith and the 
grant of a waiver by EPA. Fifth, EPA has determined under these 
circumstances that the need for such a waiver was not reasonably 
foreseeable. Therefore, under the authority of 2 CFR 176.120 and 
176.130(c)(1), and as explained in the April 28 memorandum, EPA will 
process the waiver request as if it was requested in a timely manner. 
Sixth, EPA has determined that it would have evaluated a waiver request 
had the recipient applied for a waiver prior to using the foreign pipe 
in the ARRA project. EPA has determined that granting this waiver will 
serve the public interest because it avoids penalizing the City for the 
use of a non-U.S.-made good for which the City has sufficiently 
established that there were no U.S.-made alternatives. And, this 
determination takes into account the City's due diligence and good 
faith effort to implement the requirements of section 1605.
    The non-compliant pipe was installed due to the City's pipeline 
materials supplier's (United Pipe & Supply) assumption and 
interpretation that the Canadian-manufactured pipe was acceptable under 
the North American Free Trade Agreement (NAFTA). The pipeline materials 
supplier, on behalf of the City, completed an unsuccessful search for a 
U.S. manufacturer that could meet the project specifications and 
timeline after the pipe was installed. The City's waiver request dated 
January 4, 2010, describes actions taken with regards to the attempted 
Buy American compliance by the applicant, consulting engineer, 
contractor, pipeline materials supplier, and EPA Region 10. The 
memorandum notes that ``While an honest oversight was made by the 
supplier, it is apparent that not only could their domestic 
manufacturer not supply the material, but all other American companies 
were and are unable to do so''.
    A Canadian-manufactured 280 linear feet of large diameter 36'' PVC 
pipe was installed as part of the applicant's ARRA project between 
October 13, 2009 and December 3, 2009. Prior to the installation, 
United Pipe & Supply had intended to use pipe manufactured domestically 
and supplied by JM Eagle, based in Los Angeles, California. However, 
the specified pipe was unavailable and JM Eagle required an order of 
5,000 linear feet of pipe to run production. Only 280 feet was needed 
for the project. JM Eagle was able to supply sun bleached pipe, but 
this option would not meet specifications for the project. United Pipe 
& Supply conducted its own search for domestic manufacturers. The 
pipeline material supplier contacted manufacturer representatives from 
five manufacturers: Vinyl Tech, Crestline, Royal Group, and IPEX, based 
in Phoenix, Arizona, Chehalis, Washington, Woodbridge, Ontario, and 
Toronto, Ontario, respectively. Only IPEX, in addition to JM Eagle, had 
the capacity to produce this specific large-diameter pipe, and only 
IPEX had the pipe in stock. The pipe was purchased from IPEX and 
installed prior to December 3, 2009. A subsequent request for a Buy 
American certification uncovered that the specific IPEX pipe was 
manufactured in Edmonton, Alberta, Canada. At that time, United Pipe & 
Supply believed that although the pipe was manufactured in Canada, it 
``would be an acceptable option under NAFTA,'' and that ``the 
interpretation [that] the `obligation' of the act did not apply since 
this project was under the threshold of the [$]7.443 million dollars.'' 
United Pipe & Supply was later informed by its attorney that it 
misunderstood the interaction between ARRA and NAFTA. EPA Region 10 
asked the applicant to research ``the domestic availability of this 
material and gather documentation.'' On December 29, 2009, United Pipe 
& Supply contacted IPEX, in addition to the three domestic suppliers JM 
Eagle, Diamond Plastics (Grand Island, Nebraska), and North American 
Pipe (Houston, Texas), to inquire about the general availability of the 
pipe. Diamond Plastics did not have the requested amount of pipe in 
stock and required a minimum order (approximately 4,000 feet) to run 
production. North American Pipe also did not have any in stock and 
would not produce such a limited amount of pipe. To confirm these 
findings on domestic suppliers, United Pipe & Supply contacted the Uni-
Bell PVC Pipe Association, the North American association of PVC pipe 
manufacturers. A regional representative of the organization confirmed 
these findings.
    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 is produced in the 
United States unless a waiver is provided to the recipient by EPA. A 
waiver may be provided under section 1605(b) 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.
    This ARRA-funded project involved installation of new PVC pipe used 
as a contact chamber in an effort to provide sufficient chlorination to 
the distribution system, thereby allowing the City to continue 
providing water disinfection to the consumers. A primary water supply 
well for the City

[[Page 32181]]

was shown to be hydraulically connected to the Columbia River and 
chlorination was required. Prior to installation of the Canadian-
manufactured PVC pipe and completion of the proposed project, the 
distribution system configuration did not allow for sufficient chlorine 
contact time. Without the appropriate contact time, the disinfection 
process could not have been completed prior to water reaching the 
consumers. The project originally estimated the need for 340 linear 
feet of large diameter 36'' pipe to allow for ample and sufficient 
chlorine contact time to provide treatment and disinfection to the 
water however, after additional engineering analysis, it was noted that 
only 280 linear feet was needed for project specifications. EPA finds 
these considerations as stated by the City provide ample functional 
justification for their specification.
    The April 28 memorandum defines ``public interest'' as those cases 
which possibly involve national implications of such a waiver. Based on 
additional research by EPA's consulting contractor (Cadmus), and to the 
best of the Region's knowledge at this time, the City attempted without 
success, to meet the Buy American requirements. Furthermore, the 
purpose of the ARRA provisions is to stimulate economic recovery by 
funding current infrastructure construction, not to delay projects that 
are already shovel ready by requiring entities, like the City, to 
revise their design or potentially choose a more costly and less 
effective project. The imposition of ARRA Buy American requirements on 
such projects eligible for DWSRF 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 
the most fundamental economic purposes of ARRA; to create or retain 
jobs.
    The Drinking Water Unit has reviewed this waiver request and has 
determined that the supporting documentation provided by the City is 
sufficient to meet the following criteria listed under section 1605(b) 
and in the April 28 memorandum: Applying the Buy American requirements 
of ARRA would be inconsistent with the public interest.
    The basis for this project waiver is the authorization provided in 
section 1605(b)(1), due to the lack of any U.S. production of what by 
industry's standards is a small amount (280 linear feet) of large 
diameter 36'' PVC pipe, in order to meet the City's design schedule and 
specifications. 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 reviewed all available documentation, statements, 
invoices, and related correspondence, EPA has established both a proper 
basis to specify the particular good required for this project, and 
that categorization of similar waiver requests from Gwinnett County, GA 
(granted 12/18/09) and Old Town, ME (granted 2/12/10) when the 
manufactured goods involved there had already been used in and 
incorporated into the ARRA project, that EPA has evaluated and 
considered the City's waiver request as of January 4, 2010 to be 
considered under section 1605(b)(1) authority for public interest 
waivers. The City is hereby granted a waiver from the Buy American 
requirements of section 1605(a) of Public Law 111-5 for the purchase of 
280 linear feet of large diameter 36'' PVC pipe. This supplementary 
information constitutes the detailed written justification required by 
section 1605(c) for waivers based on a finding under subsection (b).

    Authority:  Public Law 111-5, section 1605.

    Dated: May 25, 2010.
Dennis J. McLerran,
Regional Administrator, EPA, Region 10.
[FR Doc. 2010-13529 Filed 6-4-10; 8:45 am]
BILLING CODE 6560-50-P