[Federal Register Volume 76, Number 81 (Wednesday, April 27, 2011)]
[Notices]
[Pages 23596-23598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10235]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-9299-4]


Notice of a Regional Waiver of Section 1605 (Buy American 
Requirement) of American Recovery and Reinvestment Act of 2009 (ARRA) 
to the Virginia Department of Environmental Quality (VADEQ)

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The Regional Administrator of EPA Region III is hereby 
granting a waiver of the Buy American requirement of the American 
Recovery and Reinvestment Act of 2009 (U.S. Pub. L. 111-5) (ARRA) 
Section 1605(a) under the authority of Section 1605(b)(1) (public 
interest waiver) to VADEQ for de minimis incidental components of 
eligible water infrastructure projects funded under

[[Page 23597]]

VADEQ's ARRA Leaking Underground Storage Tank (LUST) grant. This action 
permits the use of non-domestic iron, steel, and manufactured goods 
when they occur in de minimis incidental components of such projects 
that would otherwise be prohibited under Section 1605(a).

DATES: Effective Date: April 27, 2011.

FOR FURTHER INFORMATION CONTACT: Rick Rogers, Associate Director, Land 
and Chemicals Division, Office of State Programs, U.S. EPA Region III, 
1650 Arch Street, Mail Code: 3LC50, Philadelphia, PA 19103-2029, 
Telephone: 215-814-5711, E-mail: [email protected].

SUPPLEMENTARY INFORMATION: In accordance with ARRA Section 1605(c), the 
EPA hereby provides notice that it is granting a waiver of the 
requirements of Section 1605(a) of Public Law 111-5, Buy American 
requirements, to VADEQ for projects funded under their ARRA LUST grant, 
based on the public interest authority of Section 1605(b)(1). EPA 
issued a Nationwide ``public interest'' Buy American waiver on May 22, 
2009 to allow the use of de minimis incidental components of eligible 
projects for Clean or Drinking Water State Revolving Fund (SRF) 
projects where such components comprise no more than 5 percent of the 
total cost of the materials used in and incorporated into a project. 
EPA Region III believes that the justifications applied to the SRF Buy 
American waiver pertain to equivalent drinking water infrastructure 
projects being completed under VADEQ's ARRA LUST grant, that are being 
used to extend public water lines to properties with petroleum-
contaminated drinking water wells.
    Among the General Provisions of ARRA, Section 1605(a) requires that 
``all of the iron, steel, and manufactured goods used in'' a public 
works project built with ARRA funds must be produced in the United 
States unless the head of the respective Federal department or agency 
determines it necessary to waive this requirement based on findings set 
forth in Section 1605(b). In implementing ARRA Section 1605, EPA must 
ensure that the Section's requirements are applied consistent with 
congressional intent in adopting this Section and in the broader 
context of the purposes, objectives, and other provisions of ARRA 
applicable to projects funded under the Underground Storage Tank funds. 
Further, Congress' overarching directive to

``[t]he President and the heads of Federal departments and agencies 
[is that they] shall manage and expend the funds made available in 
this Act so as to achieve the purposes [of this Act], including 
commencing expenditures and activities as quickly as possible 
consistent with prudent management.'' [ARRA Section 3(b)].

    Water 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 pipes, tanks, pumps, 
motors, instrumentation and control equipment, treatment process 
equipment, and relevant materials to build structures for such 
facilities as treatment plants, pumping stations, pipe networks, etc. 
In bid solicitations for a project, these high-cost components are 
generally clearly described via project specific technical 
specifications. For these major components, utility owners and their 
contractors are generally familiar with the conditions of availability, 
the approximate cost, and the country of manufacture of available 
components.
    Every water infrastructure extension project also involves the use 
of literally thousands of miscellaneous, generally low-cost components 
that are essential for but incidental to the construction, and are 
incorporated into the physical structure of the project, such as nuts, 
bolts, other fasteners, tubing, gaskets, etc. These incidental 
components are subject to the Buy American requirement of ARRA Section 
1605(a), as stated above.
    In contrast with the situation applicable to major components with 
regard to country of manufacture, availability, and procurement 
process, the situation applicable to these incidental components is one 
where the country of manufacture and the availability of alternatives 
are not readily or reasonably identifiable prior to procurement in the 
normal course of business. Particularly under the time constraints 
outlined above, it would be laborious, likely unproductive as to 
feasible alternatives, and disproportionate to the costs and time 
involved for an owner or its contractor to pursue such inquiries.
    While evaluating the SRF waiver in 2009, EPA undertook multiple 
inquiries to identify the approximate scope of de minimis incidental 
components within water infrastructure projects. EPA consulted 
informally with many major associations representing equipment 
manufacturers and suppliers, construction contractors, consulting 
engineers, and water and wastewater utilities, and a contractor 
performed targeted interviews with several well-established water 
infrastructure contractors and firms who work in a variety of project 
sizes, and regional and demographic settings. The contractor asked the 
following questions:

--What percentage of total project costs were consumables or incidental 
costs?
--What percentage of materials costs were consumables or incidental 
costs?
--Did these percentages vary by type of project (drinking water vs. 
wastewater; treatment plant vs. pipe)?

    The responses were consistent across the variety of settings and 
project types, and indicated that the percentage of total costs for 
drinking water or wastewater infrastructure projects comprised by these 
incidental components is generally not in excess of 5 percent of the 
total cost of the materials used in and incorporated into a project. 
Additionally, VADEQ investigated costs of LUST projects comprised by 
these components, and reports that the components will not exceed 5 
percent of the total cost of those projects. In drafting this waiver, 
EPA has considered the de minimis proportion of project costs generally 
represented by each individual type of these incidental components 
within the hundreds or thousands of types of such components comprising 
those percentages, the fact that these types of incidental components 
are obtained by contractors in many different ways from many different 
sources, and the disproportionate cost and delay that would be imposed 
on projects if EPA did not issue this waiver.
    Under such specific circumstances associated with these particular 
types of incidental components, EPA has found that it would be 
inconsistent with the public interest--and particularly with ARRA's 
directives to ensure expeditious water infrastructure construction 
consistent with prudent management, as cited above--to require that the 
national origins of these components be identified in compliance with 
Section 1605(a). Pursuant to ARRA Section 1605(b)(1), EPA is hereby 
issuing a waiver to VADEQ from the requirements of ARRA Section 1605(a) 
for the incidental components described above as a de minimis factor in 
the ARRA LUST projects, where such components comprise no more than 5 
percent of the total cost of the materials used in and incorporated 
into a project.
    VADEQ should, in consultation with their contractors, determine the 
items to be covered by this waiver, must retain relevant documentation 
of those items in their project files, and must summarize in reports to 
EPA 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

[[Page 23598]]

calculations by which they determined the total cost of materials used 
in and incorporated into the project.
    For the foregoing reasons, imposing ARRA's Buy American 
requirements for the category of de minimis incidental components 
described herein is not in the public interest. This supplementary 
information constitutes the ``detailed written justification'' required 
by Section 1605(c) for waivers ``based on a finding under subsection 
(b).''

    Authority: Pub. L. 111-5, Section 1605.

    Dated: April 16, 2011.
W.C. Early,
Acting Regional Administrator, Region III.
[FR Doc. 2011-10235 Filed 4-26-11; 8:45 am]
BILLING CODE 6560-50-P