[Federal Register Volume 87, Number 139 (Thursday, July 21, 2022)]
[Notices]
[Pages 43506-43509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-15569]


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DEPARTMENT OF ENERGY


General Applicability Waiver of Build America, Buy America 
Provisions as Applied to Recipients of Department of Energy Federal 
Financial Assistance

AGENCY: Office of the Secretary, U.S. Department of Energy.

ACTION: Notice and request for public comment.

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SUMMARY: In accordance with the Build America, Buy America Act 
(``BABA'') this notice advises that the Department of Energy (``DOE'' 
or the ``Department'') is proposing a limited general applicability 
waiver (``Waiver'') to the Buy America Domestic Content Procurement 
Preference (as defined below) requirements of the Act. The Waiver will 
be effective for 180 days after its issuance (the ``Effective Period'') 
and will apply only to awards issued as a result of Funding Opportunity 
Announcements (``FOA'') released before May 14, 2022 (``applicable 
awards''). This Waiver will be effective solely with respect to 
applicable awards signed during the Effective Period; it will not apply 
to applicable awards signed before or after the Effective Period. 
Applicable Awards subject to this Waiver will not be required to 
incorporate the Buy America Preference, which mandates that all iron, 
steel, manufactured goods, and construction materials used in the award 
be manufactured domestically. DOE is seeking public comment as to 
whether this proposed Waiver is in the public interest, as it will 
provide the Department and its stakeholders a reasonable adjustment 
period to implement BABA in a more thorough, effective, and exacting 
manner.

DATES: Comments on the proposed Waiver set out in this document are due 
on or before August 5, 2022. This proposed Waiver applies to applicable 
awards for a period of 180 days after its implementation, unless, after 
reviewing the public comments, DOE publishes a subsequent notice in the 
Federal Register explaining any changes to its determination to issue 
this Waiver.

ADDRESSES: Interested persons are invited to submit comments on this 
proposed general applicability waiver. To receive consideration as 
public comments, comments must be submitted through the method(s) 
listed. All submissions must refer to the listed docket number and 
title.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to [email protected].
    2. No facsimile comments. Facsimile (FAX) comments will not be 
accepted.

FOR FURTHER INFORMATION CONTACT: Mr. Richard Bonnell, U.S. Department 
of Energy, Office of Management, 1000 Independence Avenue SW, 
Washington, DC 20585-0121. Telephone: (202) 287-1747. Email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

I. Build America, Buy America

    The Build America, Buy America Act, was enacted under Division G, 
Title IX of President Biden's Infrastructure Investment and Jobs Act, a 
once-in-a-generation opportunity to fix our crumbling infrastructure. 
The President also views this investment as an opportunity to create 
domestic manufacturing jobs, strengthen supply chains, and help lower 
costs. To that end, BABA attaches a sweeping series of

[[Page 43507]]

requirements to certain Federally-assisted projects, with the goal of 
fomenting a resilient domestic supply chain and a manufacturing supply 
for a number of critical materials both for nascent and existing 
industries in the United States.
    Per section 70914 of the IIJA, Agencies may not obligate funds for 
an ``infrastructure project'' unless all of the iron, steel, 
manufactured products, and construction materials used in the project 
are produced in the United States. Further, section 70912 of the IIJA 
provides an extensive list of items that fall under the definition of 
``infrastructure,'' and defines ``project'' as ``the construction, 
alteration, maintenance, or repair of infrastructure in the United 
States.'' Effectively, this requirement mandates that Federal agencies 
must carefully review the particulars of a proposed project funded by 
Federal financial assistance to ensure that any required iron, steel, 
manufactured products, and/or construction materials were produced 
domestically (``Buy America''). This necessitates the creation of 
internal processes to properly vet each funded project to determine Buy 
America applicability, as well as external, recipient-facing processes 
that will allow recipients to properly understand, comply with, and 
report on the obligations established by the Preference. Federal 
agencies are standing up processes to implement and track these Buy 
America requirements to ensure that Federally-funded infrastructure 
projects are carried out using American-made goods.
    Advancing these objectives will require a long-term, dedicated 
approach; there are gaps in our manufacturing base and product 
knowledge base that will not be filled overnight, but which the BABA 
will help us fill and strengthen over time. The ultimate measure of 
success will be significant investment in America's infrastructure 
while contemporaneously maximizing the use of American-made goods.

II. DOE Implementation Progress Thus Far

    Since the passage of the IIJA on November 15, 2021, DOE has--
alongside several other Federal agencies--worked closely with OMB's 
Made In America Office to meet necessary statutory requirements and to 
provide feedback to help OMB generate guidance and scope out the 
specific details of BABA's application. This process began with an 
attempt to identify--using guidance issued by OMB in its M-22-08 
Memorandum, Identification of Federal Financial Assistance 
Infrastructure Programs Subject to the Build America, Buy America 
Provisions of the Infrastructure Investment and Jobs Act \1\--programs 
which could be defined as ``infrastructure programs'' as that term is 
defined in the IIJA. Although the Department was able to identify some 
programs which would likely include infrastructure projects, the 
results of this analysis led to the determination that the Department 
does not have any programs which could categorically be defined as 
``infrastructure programs.'' Rather, the vast majority of the 
Department's operations are structured in such a way that funding 
infrastructure projects is possible, but not necessarily predictable.
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    The Department therefore has been soliciting information from its 
internal programs to determine how to best meet the requirements of the 
BABA, as well as to determine any unique circumstances present in the 
Department's financial assistance programs that would require 
adjustments or additional consultation with the Made In America Office. 
The Department has attempted to establish some preliminary processes in 
an attempt to avoid the need for an adjustment period waiver. However, 
because of the nature of the Department's financial assistance 
operations, which may, but do not necessarily, involve infrastructure 
projects, additional time is needed to not only create processes that 
can pinpoint infrastructure projects to be funded through programs 
whose primary goal is research and development funding rather than 
infrastructure, but also to determine specific items that this waiver 
would cover. In other words, application of the Preference at the 
Department will need to be done on a case-by-case basis, which 
precludes the option of using a ``one size fits all'' approach to Buy 
America.
    In addition, the Department has a significant number of awards that 
are slated to be made in the next several months which stem from 
Funding Opportunity Announcements that were released well before May 
14, 2022. However, the Department does not want to unfairly burden 
applicants given that they were not granted the opportunity to 
incorporate the Buy America requirements into the planning of their 
award schedules and budgets from the outset.

III. Waivers

    The Act provides three bases upon which proposed waivers must be 
based, and it authorizes two distinct types of waivers. First, section 
70914(b) of BABA permits Agencies or financial assistance recipients to 
submit waiver requests based on the following justifications:
    1. Applying the domestic content procurement preference would be 
inconsistent with the public interest;
    2. Types of iron, steel, manufactured products, or construction 
materials are not produced in the United States in sufficient and 
reasonably available quantities or of a satisfactory quality; or
    3. The inclusion of iron, steel, manufactured products, or 
construction materials produced in the United States will increase the 
cost of the overall project by more than 25 percent.
    Furthermore, BABA authorizes two distinct types of waivers: 
specific waiver requests, which are tailored to individual projects and 
are typically the kind that will be submitted by financial assistance 
recipients; and ``general applicability'' waivers (discussed in section 
70914(d)), like the one proposed by this notice, which affect whole-
cloth programs or agencies as a class. In the interests of 
transparency, any proposed waivers will be required to be submitted for 
public comment for a period of at least 15 days.
    Any waivers will be narrowly tailored to achieve the specific needs 
of the project or projects without diluting the overall goals of BABA 
to fill supply chain gaps and focus more Federal funds toward American 
manufacturing. As a participant in a global economy, the United States 
will continue to rely on its trading partners and allies for products 
that either cannot be manufactured domestically at all or cannot be 
manufactured domestically without great difficulty. Therefore, the 
waivers represent a practical tool to ensure Federally-funded projects 
can proceed as normal without disruptions to timeline or budget. These 
waivers will also serve to send clear market signals, creating space 
for American firms to respond to the gaps identified by the waivers, 
eventually obviating the need for the waivers altogether.

IV. Public Interest in a General Applicability Waiver of Buy America 
Provisions

    As the requirements of BABA are tied to the provision of several 
different varieties of Federal financial assistance utilized by the 
Department, and the Department obligates billions of dollars to 
financial assistance awards each fiscal year, a comprehensive and

[[Page 43508]]

effective implementation of BABA in the Department stands to play a 
substantial role in achieving the outcomes for which BABA was created. 
Moreover, while the Department is able to identify some programs which 
will be more likely to fund projects that include the construction, 
alteration, maintenance, or repair of public infrastructure in the 
United States, this is not the `exclusively' focus on funding research, 
development, and demonstration of energy technology with no dedicated 
infrastructure focus. These programs will not be able to definitively 
identify the presence of infrastructure projects until: (1) 
applications under a funding opportunity announcement are received; and 
(2) projects are identified for selection. This is true even for 
programs that are more likely to include infrastructure work given that 
there are no programs administered by the Department which mandate 
infrastructure projects through their enabling statute(s).
    The Department's financial assistance programs award approximately 
2,000 grants and cooperative agreements each year and anticipate at 
least doubling this amount with awards for programs authorized under 
the IIJA. These programs span a multitude of industries, stakeholders, 
and entity types within the energy sector, which will ensure the 
effects of BABA are widespread, but which also presents unique 
challenges for the Department, as there is no ``one size fits all'' 
implementation framework that can be easily inserted into the 
Department's operations.
    Many of the awards that the Department makes between now and the 
end of the FY22 fiscal year, which would be required to include the 
Preference, originated in Funding Opportunity Announcements that were 
issued long before the May 14, 2022 implementation date of BABA or the 
April 18, 2022 issuance of the M-22-11 memorandum from OMB, entitled 
Initial Implementation Guidance on Application of Buy America 
Preference in Federal Financial Assistance Programs for Infrastructure 
2 (``OMB Memorandum M-22-11''), which provided Federal 
agencies with expanded implementation guidance on the particulars of 
BABA. There is, therefore, a strong public interest in ensuring that 
the requirements which those recipients expected as part of their award 
execution are not changed mid-stream. Implementing this Waiver would 
ensure that awards requiring the Preference would stem from Funding 
Opportunity Announcements that provided clear and detailed guidance on 
BABA requirements so as to afford applicants an opportunity to properly 
integrate those requirements into their project and budget planning. 
The Waiver will thus serve to send a signal to recipients and 
manufacturers that the Department intends to take application of the 
Preference seriously, while also signaling that it understands that 
serious application requires appropriate notice and guidance of the 
Department's expectations.
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    In addition to the necessary internal process changes that must be 
generated and vetted inside the Department, BABA represents a major 
change to how many Federal financial assistance recipients, including 
States, local governments, and Tribal governments must plan, scope, and 
execute projects that fall under the purview of BABA, requiring 
application of the Preference. Many recipients may not be familiar with 
the process of conducting appropriate market research and sourcing 
products that meet BABA's requirements, creating the risk of 
noncompliance and project stops in applicable projects, especially in 
cases where no BABA information was provided in the FOA to which those 
entities originally applied. Moreover, many DOE recipients include 
smaller entities--such as local governmental entities or tribal 
governments--which may not have resources to quickly adapt to the 
requirement to domestically source iron, steel, manufactured products, 
and/or construction materials without significant assistance from DOE. 
Prior Department experience working with these entities applying the 
Buy America requirement under ARRA may be instructive. However, it 
cannot be assumed that many of the entities required to apply the 
Preference will be able to easily locate domestic sources of applicable 
items or identify instances when international trade agreements 
consider foreign products ``domestic'' for purposes of the Preference.
    The Waiver is therefore necessary to avoid disruption of projects 
when the applicants could not have foreseen the BABA requirements at 
the time when they planned their project activities. In addition, it 
would allow the Department an opportunity to work with and provide 
sufficient notice to its future applicants and recipients to ensure 
that the Preference can be effectively and efficiently integrated into 
a large swath of the Department's Federal financial assistance 
activities without disrupting DOE's primary mission of ensuring 
security and prosperity by addressing America's energy, environmental, 
and nuclear challenges through transformative science and technology 
solutions.
    Accordingly, with respect to the challenges discussed previously, 
DOE plans on conducting the following activities during the Waiver 
period:
    1. Consulting with DOE financial assistance programs to ensure that 
all programmatic needs and unique requirements are met, consistent with 
the requirements of BABA;
    2. Designing a process to effectively vet applications submitted to 
Funding Opportunity Announcements to determine whether the Preference 
must be applied, avoiding unnecessary disruption to the project 
selection process and minimizing, where possible, such reviews for 
projects that are not likely to be selected for award;
    3. Determining what documentation and/or certification processes 
will be needed from applicants and/or recipients to demonstrate project 
compliance with the Preference, as well as processes to address non-
compliance with the Preference;
    4. Crafting comprehensive guidance for applicants and recipients to 
assist with the planning and integration of the Preference, as well as 
waiver processes so that projects that need a waiver can easily and 
efficiency request one; and
    5. Investigating the need for a Paperwork Reduction Act approval 
for the information collected as part of recipient compliance with 
BABA.
    At the conclusion of the Waiver period, DOE expects to have 
specific guidance for its stakeholders on evaluating their proposed 
project for the presence of construction, alteration, maintenance, and/
or repair of infrastructure in the United States, and properly 
integrating the domestic procurement of iron, steel, manufactured 
products, and/or construction materials into their proposed project 
budgets and schedules as part of their project applications. There will 
also be an expectation that applicants will seek waivers early and as a 
result of legitimate needs, as the Department will also be issuing 
clear waiver guidance with a strong focus on the notion that waivers be 
issued judiciously.

V. Assessment of Cost Advantage of a Foreign-Sourced Product

    Under OMB Memorandum M-22-11, agencies must assess ``whether a 
significant portion of any cost advantage of a foreign-sourced product 
is the result of the use of dumped steel, iron, or manufactured 
products or the use of injuriously subsidized steel, iron, or

[[Page 43509]]

manufactured products,'' before granting a public interest waiver. As 
the impetus for this Waiver is not related to the sourcing of foreign 
products, DOE has determined that the above-mentioned assessment is not 
applicable.

VI. Limited Duration of Waiver

    DOE understands and is invested in the successful implementation of 
BABA and the Preference in tandem with the Department's core mission. 
The Department will therefore work expeditiously to achieve the 
objectives discussed in this notice of proposed Waiver. Although the 
Waiver will be active for applicable awards during a period of 180 days 
after its implementation, the Department reserves the right to 
terminate the Waiver early if the objectives of the Waiver are 
completed before the planned conclusion of the Waiver period. If the 
Department opts to do so, it will provide as much advance notice as 
possible.

VII. Solicitation of Comments

    As required under section 70914 of the IIJA, DOE is soliciting 
comments from the public on this proposed Waiver. In particular, DOE 
welcomes comments on the length, purpose, and scope of the Waiver to 
allow DOE to make an informed final determination on those aspects of 
the Waiver, at a minimum. Please refer to the DATES and ADDRESSES 
sections of this notice for information on submission of comments.
    Confidential Business Information: Pursuant to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public discourse should submit via 
email two well-marked copies: one copy of the document marked 
``confidential'' including all the information believed to be 
confidential, and one copy of the document marked ``non-confidential'' 
with the information believed to be confidential deleted. Submit these 
documents via email. DOE will make its own determination about the 
confidential status of the information and treat it according to its 
determination.
    Signing Authority: This document of the Department was signed on 
July 15, 2022, by John Bashista, Director of Acquisition Management, 
pursuant to delegated authority from the Secretary of Energy. That 
document, with the original signature and date is maintained by DOE. 
For administrative purposes only, and in compliance with requirements 
of the Office of the Federal Register, the undersigned DOE Federal 
Register Liaison Officer has been authorized to sign and submit the 
document in electronic format for publication, as an official document 
of the Department of Energy. This administrative process in no way 
alters the legal effect of this document upon publication in the 
Federal Register.

    Signed in Washington, DC, on July 18, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2022-15569 Filed 7-20-22; 8:45 am]
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