[Federal Register Volume 85, Number 153 (Friday, August 7, 2020)]
[Notices]
[Pages 48059-48061]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17220]



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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration


Buy America Waiver Notification

AGENCY: Federal Highway Administration (FHWA), Transportation (DOT).

ACTION: Notice.

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SUMMARY: This notice provides information regarding FHWA's finding that 
it is appropriate to grant a Buy America waiver to the Alaska 
Department of Transportation and Public Facilities (Alaska DOT&PF) for 
procurement of foreign iron and steel components for the lift systems 
in the Gustavus Ferry Terminal improvement project in Gustavus, Alaska, 
specifically including wire rope assemblies.

DATES: The effective date of the waiver is August 10, 2020.

FOR FURTHER INFORMATION CONTACT: For questions about this notice, 
please contact Mr. Gerald Yakowenko, FHWA Office of Program 
Administration, (202) 366-1562, or via email at 
[email protected]. For legal questions, please contact Mr. 
Patrick C. Smith, FHWA Office of the Chief Counsel, 202-366-1345, or 
via email at [email protected]. Office hours for FHWA are from 
8:00 a.m. to 4:30 p.m., E.T., Monday through Friday, except Federal 
holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

    An electronic copy of this document may be downloaded from the 
Federal Register's home page at: http://www.archives.gov and the 
Government Publishing Office's database at: http://www.access.gpo.gov/nara.

Background

    FHWA's Buy America regulation in 23 CFR 635.410 requires a domestic 
manufacturing process for any steel or iron products (including 
protective coatings) that are permanently incorporated in a Federal-aid 
construction project. The regulation also provides for a waiver of the 
Buy America requirements when the application would be inconsistent 
with the public interest or when satisfactory quality domestic steel 
and iron products are not produced in the United States in sufficient 
and reasonably available quantities. This notice provides information 
regarding FHWA's finding that it is appropriate to grant Alaska DOT&PF 
a Buy America waiver for procurement of foreign iron and steel 
components for the lift systems in the Gustavus Ferry Terminal 
improvement project in Gustavus, Alaska, specifically including wire 
rope assemblies.
    Background on the Gustavus Ferry Terminal: Gustavus is a town in 
Southeast Alaska with a population of approximately 554. It is located 
on the north shore of the Icy Strait, which separates Chichagof Island 
to the south and the Alaska mainland to the north. Although Gustavus is 
located on the mainland, it sits on a peninsula surrounded by the 
mountains and icefields of Glacier Bay National Park on three sides and 
the Icy Strait on the fourth. Given its location, Gustavus is not 
connected to any highway system and can only be reached by boat or 
plane. Thus, the Gustavus Ferry Terminal and Gustavus Airport provide 
the only access between Gustavus and elsewhere.
    The Gustavus Ferry Terminal is a multiple-use facility that 
provides public transportation via the Alaska Marine Highway System 
(AMHS) ferry service plus freight and fuel transfer operations through 
private carriers. The terminal consists of an approach trestle, a 
movable transfer bridge, mooring and fendering structures, and a 
freight dock. The terminal improvements project will realign a portion 
of the approach leading to the transfer bridge and modify the bridge 
substructure by replacing the existing pontoon float with a hoist-
operated lift system, for which the wire rope assembly is needed.
    The AMHS ferries, which operate out of the Gustavus Ferry Terminal, 
provide a vital link for Gustavus residents and visitors to reach other 
Southeast Alaska communities. The AMHS ferries transport both 
passengers and vehicles and furnish access to healthcare, supplies, and 
vital services that are not available locally. In addition, passengers 
brought to Gustavus from the mainland support the town's tourism 
industry. Gustavus receives ferry service from Juneau, Alaska, two days 
per week most of the year. By ferry, Juneau is about four-and-a-half 
hours away from Gustavus.
    Considering the lack of access to Gustavus by road or bridge, the 
AMHS system is the only reliable and affordable mode of transportation 
for many users. As the only available means for owner-occupied vehicles 
to access Gustavus, the AMHS system is more critical to the community 
than most Federal-aid-supported ferry systems. Although Gustavus may 
also be accessed by air, the AMHS system provides a less costly 
alternative that is essential to many of its users (including lower-
income users who cannot afford alternative modes). It also provides 
transportation security on days when weather prevents travel by air.
    Construction of the terminal improvements project at the Gustavus 
Ferry Terminal is currently underway. The community anticipates that 
AMHS ferry service will resume in the summer of 2020 following 
construction. The wire rope assembly that is the subject of this waiver 
request is critical to maintain the schedule of ongoing construction 
and restore AMHS ferry service to Gustavus. Delaying project completion 
will cause continued loss of AMHS ferry service to Gustavus and its 
residents.
    Waiver Request and Supporting Information: The Alaska DOT&PF 
originally submitted a Buy America waiver request to FHWA for the wire 
rope assemblies and certain other parts, including hoists, sheaves, 
hanger rod clamps, and bridge control components, on February 2, 2017. 
Prior to submitting its waiver request, Alaska DOT&PF sought but failed 
to identify domestic manufacturers for these products.
    In accordance with the Consolidated Appropriations Act of 2017 
(Pub. L. 115-31), FHWA published a notice seeking comment on whether a 
waiver was appropriate on its website, https://www.fhwa.dot.gov/construction/contracts/waivers.cfm?id=142, on March 9, 2017. The FHWA 
received one comment in response to the publication. That comment did 
not offer any information on the availability of compliant products, 
nor did it suggest specific, additional actions that Alaska DOT&PF 
could take to maximize its use of goods, products, and materials 
produced in the United States. Thus, Alaska DOT&PF did not receive any 
new information indicating that the subject parts could be produced by 
domestic manufacturers.
    Following publication of the notice, the President issued Executive 
Order 13788 on April 18, 2017. Consistent with Executive Order 13788, 
FHWA evaluated Alaska DOT&PF's request to determine whether it had 
sought to maximize the use of goods, products, and materials produced 
in the U.S. on the project.
    Over the next three years, Alaska DOT&PF successfully found Buy 
America compliant parts or alternatives for most of the other items in 
its original request. Although Alaska DOT&POF initially believed it 
also found domestic alternatives for the wire rope assemblies, it 
learned in early 2020 that the alternatives it previously identified 
were not suitable for use. To establish that Alaska DOT&PF made 
adequate efforts to find domestic alternatives or maximize domestic 
content for the wire

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rope assemblies, Alaska DOT&PF responded to several iterations of 
follow-up questions from FHWA explaining and providing documentation of 
Alaska DOT&PF's efforts.
    Although Alaska DOT&PF did not identify compliant wire rope 
assemblies, it provided information to FHWA supporting its waiver 
request, including:
     Information describing the domestic content 
characteristics of the manufactured products needed, including the 
sources and assembly locations of those products;
     Information supporting the technical necessity of these 
specific products for the project's hoist-operated lift system and 
demonstrating that alternative designs were infeasible;
     Information documenting efforts to locate compliant 
manufactured products, including correspondence with potential domestic 
manufacturers;
     Information documenting efforts to maximize domestic 
content even if full compliance was not possible, including efforts to 
have foreign manufacturers incorporate domestic steel; and
     Information describing the effects of denying the request.
    The following sections summarize relevant information from Alaska 
DOT&PF.
    Alaska DOT&PF's Efforts to Identify Compliant Products and Maximize 
Domestic Content. After first requesting the waiver, Alaska DOT&PF 
initially believed it found a domestic supplier for the wire rope 
assemblies in August 2017. Pearlson Shiplift Corporation, the 
manufacturer of the hoists for the terminal's lift system, notified 
Alaska DOT&PF that it could supply compliant wire rope assemblies, 
which Alaska believed eliminated the need for a waiver for this part. 
Thus, the State let the contract believing that a domestic source for 
the rope was available. In May 2019, the terminal improvements project 
was awarded to Western Marine Construction for $9,053,100 with the 
completion date set for July 1, 2020.
    In January 2020, after assessing the strength demand for the higher 
capacity hoists \1\ used in the project, Pearlson Shiplift Corporation 
notified Alaska DOT&PF that it was unable to provide Buy America 
compliant wire rope assemblies. Pearlson determined that only foreign-
sourced assemblies were adequate. In response, the project's 
contractor, Western Marine Construction, proposed to use Buy-America-
compliant wire rope assemblies that had been salvaged from a previous 
ferry terminal project. However, in February 2020, Western Marine 
Construction's salvaged wire rope failed quality assurance testing and, 
because the strength of the salvaged wire rope was inadequate, Pearlson 
Shiplift Corporation would not permit its use. Pearlson Shiplift 
Corporation was unable to furnish Buy-America-compliant wire rope 
assemblies and, in March 2020, provided foreign-sourced assemblies to 
the contractor instead. The foreign-sourced wire rope assemblies cost 
approximately $14,000.
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    \1\ In January 2019, Alaska DOT&PF determined that the State-
furnished hoists were structurally inadequate for the project. 
Accordingly, Pearlson Shiplift Corporation provided hoists meeting 
the higher load capacity requirements.
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    In April 2020, Pearlson Shiplift Corporation again confirmed to 
Alaska DOT&PF that Buy-America-compliant wire rope assemblies are not 
available meeting the needed specifications for the higher capacity 
hoists being used on the project. The compliant ropes that are 
available are not suitable and will not serve the functions required 
for the hoists.
    The wire rope assemblies needed for the project must provide 
superior strength, corrosion resistance, and durability. More 
specifically, they must have properties including: (i) Very high 
tensile strength and compactness, providing a 7-to-1 factor of safety, 
larger than the 5-to-1 factor commonly used for rigging; (ii) great 
corrosion resistance to withstand the corrosive seawater environment, 
which is provided by galvanizing each wire before weaving them into 
strands; and (iii) more flexibility and fatigue resistance or 
durability than standard ropes. Pearlson Shiplift Corporation will 
permit only ropes meeting these specifications to be used with its 
hoist systems. Pearlson Shiplift Corporation has developed a 
specialized rope meeting these specifications in partnership with 
Bridon-Bekaert-UK. Pearlson reports that, although it believes that 
shiplift wire rope assemblies were produced by manufacturers in the 
United States approximately 15 years ago, ropes meeting its specialized 
requirements are now produced exclusively at Bridon-Bekaert's facility 
in England. Alaska DOT&PF provided documentation of correspondence with 
domestic manufacturers supporting Pearlson's statements.
    Although ultimately unsuccessful, Alaska DOT&PF made substantial 
efforts to find suitable Buy America compliant wire rope assemblies. In 
addition to the efforts described above, Alaska DOT&PF also contacted 
another domestic manufacturer of shiplift hoists and major domestic 
suppliers of wire ropes. Because shiplift hoists are specialized 
systems, Alaska DOT&PF was able to locate only one other domestic 
manufacturer, Worthington Industries, in Cleveland, Ohio. When 
contacted, Worthington Industries reported it does not have a domestic 
supplier of the wire rope assemblies. It uses the same foreign vendor 
as Pearlson Shiplift Corporation, Bridon-Bekaert-UK.
    Bridon-Bekaert USA (BBRG) and WireCo WorldGroup are the major 
domestic suppliers of wire ropes. They both reported to Alaska DOT&PF 
that they do not have the capacity in the United States to produce a 
Buy-America-compliant wire rope to meet or exceed the Pearlson design 
specifications.
    The BBRG reported to Alaska DOT&PF that it does not have the 
capability to draw galvanized wire at its domestic facility, which is a 
requirement of the specifications. For BBRG to produce a Buy-America-
compliant wire rope meeting the specifications, it would need to source 
the galvanized wires from others. Domestic demand for galvanized wire 
ropes of this type is low, leaving few options that are compliant. 
Moreover, a finished wire rope is composed of multiple wire diameters 
and tensile grades. Not all the wires required to make the finished 
rope are available domestically. The very low demand for shiplift ropes 
and domestic non-availability of certain required wires precludes any 
possibility of sourcing a potential ``special run'' at this time.
    WireCo WorldGroup reported that it cannot achieve the strength 
requirements using standard steel wire produced domestically. The 
project would require a specialty drawing rod from a domestic supplier. 
This would take a significant amount of time and is not achievable 
without causing significant project delay.
    Timing and Need for a Waiver. Given the developments between 
January and March 2020 discussed above, Alaska DOT&PF maintains that 
approval of a Buy America waiver for the wire rope assemblies is now 
critical to maintain the schedule of ongoing construction and restore 
AMHS ferry service to Gustavus. Alaska DOT&PF believes it has exhausted 
its options for domestic alternatives and has returned to its original 
waiver request to procure foreign-sourced components provided by 
Pearlson. The request has become urgent due to the construction 
schedule and the developments described in the preceding paragraphs. 
Delaying project completion will cause continued loss of AMHS ferry 
service to and from Gustavus.

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    The impacts of loss of AMHS ferry service to Gustavus during the 
summer months would be significant. The economy in Gustavus relies 
heavily on summer tourism. Because of the large number of tourists who 
arrive by boat or plane in the area, Gustavus is considered the gateway 
to Glacier Bay National Park. Between 3,000 and 4,000 passengers visit 
Gustavus by ferry annually, with about half of that traffic in just 
three months between June and August. All of this traffic goes through 
the Gustavus Ferry Terminal. Thus, ongoing loss of AMHS ferry service 
to Gustavus during the summer months would have a devastating impact on 
the economy of the town.
    Lack of ferry service also increases costs and economic stress 
related to supply deliveries, especially on small businesses. Although 
landing craft and fishing vessels may be used for freight deliveries 
while ferry service is suspended, many of the small businesses in 
Gustavus ordinarily rely heavily on the AMHS ferry service to obtain 
supplies. For example, small business owners often travel by ferry in 
their vehicles to Juneau, load their vehicles with needed supplies, and 
subsequently return to Gustavus by ferry. For these reasons, timely 
restoration of the ferry service to Gustavus is an economic necessity 
for the town.

Finding and Request for Comments

    Based on all the information available to the Agency, FHWA 
concludes that there are no domestic manufacturers of the wire rope 
assemblies needed for the lift systems in the Gustavus Ferry Terminal 
Improvement project. This finding is only for the procurement of non-
domestic iron and steel components for procurement of the wire rope 
assemblies for the project. This finding does not apply to other parts 
in the original waiver request, including hoists, sheave assemblies, 
hanger rod clamps, and bridge control components.
    Alaska DOT&PF and its contractors and subcontractors involved in 
the procurement of the wire rope assemblies are reminded of the need to 
comply with the Cargo Preference Act in 46 CFR part 38, if applicable.
    In accordance with the provisions of Section 117 of the SAFETEA-LU 
Technical Corrections Act of 2008 (Pub. L. 110-244, 122 Stat. 1572), 
FHWA is providing this notice as its finding that a waiver of Buy 
America requirements is appropriate. The FHWA invites public comment on 
this finding for an additional 5 days following the effective date of 
the finding. Comments may be submitted to FHWA's website via the link 
provided to the waiver page noted above.

    Authority: 23 U.S.C. 313; Pub. L. 110-161; 23 CFR 635.410.

Nicole R. Nason,
Administrator, Federal Highway Administration.
[FR Doc. 2020-17220 Filed 8-6-20; 8:45 am]
BILLING CODE 4910-22-P