[Federal Register Volume 76, Number 161 (Friday, August 19, 2011)]
[Notices]
[Pages 51973-51975]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-21230]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-9454-4]


Notice of Regional Waiver Pursuant to Section 1605 (Buy American 
Requirement) of the American Recovery and Reinvestment Act of 2009, to 
Mason County, WA

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The Regional Administrator of EPA Region 10 is hereby granting 
a waiver request from the Buy American requirements of ARRA Section 
1605 under the authority of Section 1605(b)(1). This waiver request is 
being granted because EPA believes it is in the public interest to 
allow Mason County, Washington (the County) to utilize and install six 
specific turbo aeration blower units as part of the County's Belfair 
Wastewater and Water Reclamation Facilities project. This is a project 
specific waiver and only applies to the use of the specified product 
for the ARRA project being proposed. Any other ARRA recipient that 
wishes to use the same product must apply for a separate waiver based 
on project specific circumstances. The Membrane Bioreactor (MBR) system 
was selected and procured by the County in 2008 using non-ARRA funding 
and prior to enactment of ARRA. However, since the MBR equipment is 
being installed by an ARRA funded contract, the new Buy American 
requirements of ARRA apply. As ARRA was enacted after the County's 
procurement actions, the County could not be aware of the need to 
purchase and install a Buy American compliant MBR system and could not 
reasonably foresee the need for a waiver.
    Requiring the installation of domestically manufactured turbo 
aeration blower units will extend the time frame of the project 
significantly (by at least four months), due to the redesign, 
procurement, submittal delivery, submittal review, fabrication, 
delivery, and replacement of the aeration blower installation at the 
construction site. Redesign, reconstruction, and replacement of the 
blowers will likely cost at least an additional $620,000 and could also 
void the three year manufacturer warranty for the MBR that is valid 
only if system components identified in the manufacturer's proposal are 
utilized. A significant delay in the project schedule could push the 
project past the anticipated September 2011 project completion into the 
fall rainy season, and could cause runoff over areas of failing septic 
systems and pose a risk to environmental and water quality protection. 
This additional cost and delay is inconsistent with the public 
interest, and a waiver of the Buy American provisions in these 
circumstances is justified. This action allows the installation of the 
six specified turbo aeration blower units that have already been 
delivered to the construction site as noted in Mason County's May 27, 
2011, request and additional follow up documentation.

DATES: Effective Date: August 9, 2011.

FOR FURTHER INFORMATION CONTACT: Bryan Fiedorczyk, CWSRF ARRA Program 
Management Analyst, Grants and Strategic Planning Unit, Office of Water 
& Watersheds (OWW), (206) 553-0506, U.S. EPA Region 10 (OWW-137), 1200 
Sixth Avenue, Suite 900, Seattle, WA 98101.

SUPPLEMENTARY INFORMATION: In accordance with ARRA Section 1605(c), the 
EPA hereby provides notice that it is granting a project waiver of the 
requirements of Section 1605(a) of Public Law 111-5, Buy American 
requirements, to Mason County, Washington, for the utilization and 
installation of six specific turbo aeration blower units as part of the 
County's Belfair Wastewater and Water Reclamation Facilities project. 
Based on the information provided by the County and its consultant 
project manager, EPA has determined that it is inconsistent with the 
public interest for the County to further delay the project and incur 
significant additional costs to pursue the purchase and installation of 
domestic manufactured turbo aeration blower units.
    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 a public works project unless all of the 
iron, steel, and manufactured goods used in the project are produced in 
the United States, or unless a waiver is provided to the recipient by 
the head of the appropriate agency, in this case, the EPA. A waiver may 
be provided under Section 1605(b) if EPA determines that (1) applying 
these requirements would be inconsistent with the 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.

[[Page 51974]]

    Consistent with the direction of OMB's regulation at 2 CFR 176.120, 
the EPA will generally consider a waiver request with respect to 
components that were specified in the bid solicitation or in a general/
primary construction contract or those made after obligating ARRA funds 
for a project to be a ``late'' request. However, in this case EPA has 
determined that the County's request, though made after the date the 
contract was signed, can be evaluated as timely because of the 
extenuating circumstances surrounding this on-going project.
    The Membrane Bioreactor (MBR) system works using a combination of 
filtration and biological processes and is a critical component of the 
treatment process to remove nutrients (nitrogen) and other pollutants 
from the wastewater. The MBR system is comprised of MBR filtration 
cassettes, aeration and membrane scouring blowers, and several other 
auxiliary components integral to the efficient operation of the system. 
The County decided the MBR process was the most environmentally sound 
and cost effective solution to treat the wastewater to the ``Class A'' 
reuse standards in order to meet the County's water reuse goal and the 
anticipated regulatory and permit requirements. The MBR system was 
procured by the County for use at the new wastewater treatment plant 
prior to enactment of ARRA with non ARRA funding. The KUBOTA Submerged 
Membrane Unit[reg] system and accompanying MBR components were selected 
and contracted with Enviroquip (now Ovivo USA) in March 2008 during the 
early phases of design. The design for the treatment plant was based on 
this pre-selected MBR equipment and continued until project 
construction went to bid in late 2009. As a result of a value 
engineering study during the design process, a change order was signed 
in October 2009 to incorporate specific components including energy-
efficient blowers and feed pumps as part of the MBR system.
    Though the MBR equipment was procured by a pre-ARRA contract before 
ARRA was enacted, the actual installation is being completed through 
Mason County's ARRA Clean Water State Revolving Fund (CWSRF) loan 
(L100026). Due to EPA's ARRA Buy American implementation 
guidance dated April 28, 2009, that defines a project as all work 
``closely related in purpose, time and place,'' this previously 
contracted MBR equipment needs to meet Buy American requirements as an 
integral component of the Belfair Wastewater and Water Reclamation 
Facilities project. There is not a mechanism authorizing previously 
contracted, purchased, or owned equipment as exempt from Buy American 
requirements. As context, the entire project cost is estimated at $28.8 
million--$9.6 million is ARRA funded, $3.8 million is paid by an EPA 
Special Appropriations Act Project grant (for the MBR equipment), and 
$15.4 million is non-federally funded. The KTurbo blowers, which are 
the subject of this waiver, are estimated to cost approximately 
$345,900.
    The initial procurement of the MBR system occurred well in advance 
of ARRA, and the fact that the MBR equipment was not being reimbursed 
by ARRA funds created a complex situation that State, EPA regional and 
EPA headquarters staff had to thoroughly review and research to 
determine the applicability of ARRA. Therefore, it is understandable 
that the County was unaware of the need to purchase and install a Buy 
American compliant MBR system and could not reasonably foresee the need 
for a waiver until recently. Also of note, KTurbo is currently 
suspended from participating in procurement and nonprocurement 
transactions pending the termination of the suspension or 
implementation of a debarment proceeding. However, this suspension does 
not invalidate transactions entered into prior the suspension date of 
April 19, 2011. The KTurbo blowers being utilized in the County project 
were clearly procured well in advance of April 19, 2011, thus the 
procurement transaction is not covered by the temporary suspension. 
Additionally, these blowers were identified as Korean/Canadian made and 
not claimed to be manufactured in the U.S., thus there is no evidence 
of false claim pertaining to the Mason County project.
    The MBR system contract with Enviroquip/Ovivo USA requires 95% 
payment to the supplier (of the $2.1 million contract) for equipment 
delivered. Therefore the County would be obligated to pay for at least 
most of the KTurbo blowers cost, plus an estimated $540,000 extra for 
replacement domestic blowers, an estimated $80,000 for redesign and 
reconstruction costs, and up to $30,000 per month for construction 
delay costs per the prime contractor's agreement. Additionally, the 
three year warranty for the MBR system identified in the project 
specifications would be voided, as the manufacturer stipulated the 
warranty for the MBR system is valid only if system components 
identified in the manufacturer's proposal are utilized.
    Furthermore, not allowing the installation of the six specified 
turbo aeration blower units that have been delivered to the site could 
cause a significant time delay to the project. The County would need to 
completely redesign, procure, and have domestic manufactured turbo 
aeration blower units delivered to the site. According to the County, 
the construction completion date could be delayed by four months or 
more. Of significant note, the County is scheduled to complete the 
project in September 2011. Increased delays in to the project schedule 
could push completion into the rainy season, during which the typical 
wet weather associated with October through January could cause runoff 
over areas of failing septic systems and pose a risk to environmental 
and water quality protection.
    Finally, the purpose of the ARRA is to stimulate economic recovery 
by funding current infrastructure construction, not to delay or require 
the substantial redesign of projects that are ``shovel ready'', such as 
this project in Mason County, Washington. The implementation of the 
ARRA Buy American requirements in this case would result in an 
unreasonable delay in its completion. Such delay would also directly 
conflict with a fundamental economic purpose of ARRA, which is to 
create or retain jobs. More importantly, the imposition of the Buy 
American requirement would result in additional risk to water quality 
protection.
    The Grants and Strategic Planning Unit of EPA has reviewed this 
waiver request and has determined that the supporting documentation 
provided by the County established a proper basis to specify that using 
the domestic manufactured good would be inconsistent with the public 
interest of Mason County, Washington. 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 established both a proper basis to specify the particular 
good required for this project and that using a domestically available 
alternative manufactured good would be inconsistent with the public 
interest, Mason County, Washington, is hereby granted a waiver from the 
Buy American requirements of Section 1605(a) of Public Law 111-5. This 
waiver permits use of ARRA funds for the installation and utilization 
of the six specified turbo aeration blower units that have already been 
delivered to the construction site

[[Page 51975]]

as noted in the County's May 27, 2011 request and additional follow up 
documentation. 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: August 9, 2011.
Dennis J. McLerran,
Regional Administrator, EPA, Region 10.
[FR Doc. 2011-21230 Filed 8-18-11; 8:45 am]
BILLING CODE 6560-50-P