[Federal Register Volume 87, Number 142 (Tuesday, July 26, 2022)]
[Notices]
[Pages 44487-44489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16012]


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DEPARTMENT OF TRANSPORTATION

Maritime Administration


Buy America Waiver Notification

AGENCY: Maritime Administration, U.S. Department of Transportation 
(DOT).

ACTION: Notice.

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SUMMARY: This notice provides information regarding the finding of the 
Maritime Administration (MARAD), in coordination with the Federal 
Highway Administration (FHWA), that it is appropriate to grant a Buy 
America waiver based on nonavailability to the Philadelphia Regional 
Port Authority (PhilaPort) for procurement of foreign iron and steel 
components for the Packer Avenue Marine Terminal (PAMT) Capacity and 
Warehouse Relocation FY2017-2018 Infrastructure for Rebuilding America 
(INFRA) project. The foreign iron and steel components are part of a 
Medium Voltage (MV) Cable Reel System, which is necessary for the 
conversion of two ship-to-shore (STS) cranes' drive power supply from 
diesel to electric. The non-domestic parts include: (i) Drive Gearbox 
and Motors; (ii) Electrical and Communications Collector System; (iii) 
MV cable drum; (iv) MV cable guides and diverter mounted to STS 
structure/legs; and (v) Gantry level bi-directional multi-roller, 
curved cable guide.

DATES: The effective date of the waiver is July 27, 2022.

FOR FURTHER INFORMATION CONTACT: For questions about this notice, 
please contact Robert Bouchard, Director, Office of Port Infrastructure 
Development, 202-366-5076 or via email at [email protected]. For 
legal questions, please contact Lauren Gill, MARAD Office of Chief 
Counsel, 202-366-2150, or via email at [email protected].

SUPPLEMENTARY INFORMATION:

Electronic Access

    An electronic copy of this document may be downloaded from the 
Federal Register's home page at: www.FederalRegister.gov and the 
Government Publishing Office's database at: www.GovInfo.gov.

Background

    PhilaPort's FY2017-2018 INFRA Project is required to follow the 
FHWA's Buy America requirements at 23 U.S.C. 313 and implementing 
regulations at 23 CFR 635.410. 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 MARAD's finding that it is 
appropriate to grant the PhilaPort a Buy America waiver based on 
nonavailability for procurement of foreign iron and steel components 
for the MV Cable Reel System, which is necessary for the conversion of 
two ship-to-shore (STS) cranes' drive power supply from diesel to 
electric. The non-domestic parts include: (i) Drive Gearbox and Motors; 
(ii) Electrical and Communications Collector System; (iii) MV cable 
drum; (iv) MV cable guides and diverter mounted to STS structure/

[[Page 44488]]

legs; and (v) Gantry level bi-directional multi-roller, curved cable 
guide.
    Background on the Project: The DOT awarded PhilaPort \1\ a $25.5M 
FY2017-2018 INFRA grant \2\ for its PAMT Capacity and Warehouse 
Relocation Project, which has a total project cost of roughly $122M.\3\ 
MARAD is designated as the DOT operating agency responsible for 
administering the Project. The Project includes the electrification of 
two existing Hyundai STS diesel cranes (referred to as H-6 and H-7) to 
eliminate air emissions and improve operational reliability. The cranes 
were installed at PAMT in 2004 and are the most utilized cranes on the 
terminal for unloading cargo from container vessels. According to 
PhilaPort, depending on the workload, the cranes can consume between 20 
to 100 gallons of diesel fuel per hour.
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    \1\ PhilaPort's Unique Entity Identifier (UEI) is J4QYLRK4VSR5.
    \2\ The INFRA program is described under the assistance listing 
program title ``Nationally Significant Freight and Highway 
Projects'' (assistance listing number 20.934).
    \3\ The Federal Award Identification Number (FAIN) for the INFRA 
project is 693JF71910026.
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    PhilaPort determined that delivering utility-supplied electric 
power to the STS cranes required a trailing MV Cable Reel System. The 
MV Cable Reel System allows the STS cranes to be mobile along the dock 
by reeling cable in and out from a motorized and synchronized cable 
drum as the crane moves along the berth. The cable also delivers fiber 
communications to and from the cranes and the terminal. PhilaPort 
currently has five other STS cranes that operate alongside the H-6 and 
H-7 cranes that use a similar MV Cable Reel system. Additionally, the 
dock where H-6 and H-7 operate has been retrofitted to allow for the 
electrification of the two cranes via this system.
    The crane electrification project will have substantial 
environmental benefits due to the elimination of harmful air emissions 
after the transition to electric drives. PhilaPort's PAMT has a planned 
annual container throughput that is forecasted to require 4,103 hours 
of operation for both H-6 and H-7. At this level of operation, 
PhilaPort estimates that converting the cranes to utility-supplied 
electricity would eliminate 109,896 of diesel crane hours and over 
100,000 tons of harmful air emissions over their lifetime. 
Additionally, the conversion of the cranes from diesel to electric will 
result in significant cost savings to PhilaPort due to the reduction in 
fuel usage, energy costs, and improvements in efficiency and 
reliability of the cranes.
    Background on the Waiver Request: PhilaPort began designing the 
crane electrification project in April 2020, at which point it became 
apparent that a Buy America-compliant MV Cable Reel System could not be 
sourced domestically. After further discussions with MARAD, PhilaPort 
requested that the design engineer perform a market study among 
potential suppliers. The design engineer contacted three known 
suppliers in the industry and one potential supplier in a related 
industry. All four respondents confirmed that they could not supply a 
fully Buy America-compliant MV Cable Reel System.
    After receiving the results of the market study and discussing with 
MARAD, PhilaPort proceeded to bid the crane electrification project in 
the hope that bidding contractors could engage resources to identify a 
fully Buy America-compliant MV Cable Reel System. On June 28, 2021, 
PhilaPort received bids on the Project from only two contractors, both 
of whom proposed the same non-compliant supplier for the MV Cable Reel 
System.
    After unsuccessfully identifying domestic manufacturers of the MV 
Cable Reel System, on September 8, 2021, PhilaPort submitted a Buy 
America waiver request to MARAD for the procurement of an MV Cable Reel 
System containing foreign iron and steel components needed to complete 
the PAMT INFRA Project. The foreign components \4\ include: (i) Drive 
Gearbox and Motors; (ii) Electrical and Communications Collector 
System; (iii) MV cable drum; (iv) MV cable guides and diverter mounted 
to STS structure/legs; and (v) Gantry level bi-directional multi-
roller, curved cable guide.
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    \4\ Depending on which vendor is selected by PhilaPort, the 
country of origin for these components will most likely be either 
Germany or Italy.
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    The MV Cable Reel System is included under an approximately $5.5 
million contract to complete the crane electrification project. 
PhilaPort estimates that the MV Cable Reel System itself will cost 
$410,000 out of that total project cost. Of the $410,000, approximately 
$110,000, or 2% of the total contract cost, is the cost of the foreign 
steel and iron components contained in the MV Cable Reel System. The 
remaining $300,000 is non-steel/iron electrical trailing cable. All 
other costs associated with this contract are expected to comply with 
Buy America requirements.
    In accordance with the statutory requirement at 23 U.S.C. 313(g), 
MARAD published a notice of intent to issue a waiver on the FHWA 
website on April 27, 2022, at https://www.fhwa.dot.gov/construction/contracts/waivers.cfm?id=165. MARAD received no comments in response to 
the publication. Additionally, the PhilaPort point of contact similarly 
did not receive any comments or inquiries. Thus, PhilaPort did not 
receive any new information indicating that the subject components 
could be produced by domestic manufacturers.
    Although PhilaPort did not identify a Buy America-compliant MV 
Cable Reel System, it provided information to MARAD supporting its 
waiver request, including information:
     Supporting the necessity of the MV Cable Reel System for 
converting the STS cranes from diesel to electric;
     Documenting efforts to locate compliant manufactured 
products;
     Demonstrating that alternative designs were infeasible; 
and
     Describing the effects of denying the request.
    Although ultimately unsuccessful, PhilaPort made substantial 
efforts to find a Buy America-compliant MV Cable Reel System.
    Timing and Need for a Waiver. According to PhilaPort, the approval 
of a Buy America waiver for the MV Cable Reel System is critical to 
maintain the schedule of ongoing construction on the INFRA Project. 
Currently, the lead time for this major component is between 20 to 30 
weeks, so any delay in approving the waiver will result in project 
delays and additional time the STS cranes will operate under diesel 
power. Without the waiver for the relevant system, the crane 
electrification project cannot move forward, and the environmental and 
operational benefits of the project would be lost.
    Executive Order 14005. Executive Order 14005, ``Ensuring the Future 
is Made in All of America by All of America's Workers,'' provides that 
agencies should, consistent with applicable law, maximize the use of 
goods, products, and materials produced in, and services offered in, 
the U.S. 86 FR 7475 (Jan. 28, 2021). Based on the information contained 
in the waiver request from PhilaPort and the lack of comments following 
publication of a notice seeking comment on April 27, 2022, regarding 
available domestic manufacturers for the subject parts, MARAD concludes 
that issuing a waiver is consistent with Executive Order 14005.

Finding and Request for Comments

    Based on all the information available to the Agency, MARAD 
concludes that there are no Buy America-compliant

[[Page 44489]]

relevant components for the MV Cable Reel System needed for the 
Project, including: (i) Drive Gearbox and Motors; (ii) Electrical and 
Communications Collector System; (iii) MV cable drum; (iv) MV cable 
guides and diverter mounted to STS structure/legs; and (v) Gantry level 
bi-directional multi-roller, curved cable guide. This finding only 
includes components identified in the waiver request and supporting 
documents included on FHWA's website.
    The PhilaPort and its contractors and subcontractors involved in 
the procurement of the relevant components are reminded of the need to 
comply with the Cargo Preference Act in 46 CFR part 381, if applicable.
    To avoid the possibility of requiring waivers for these items in 
the future, MARAD will work with industry to better understand the 
demand for these components and the potential for domestic production 
of these items in the future. We will then follow-up with the Office of 
Management and Budget's Made in America Office and the U.S. Department 
of Commerce, as appropriate, to assess the potential for domestic 
production to meet the forecasted demand for these items.
    In accordance with the provisions of Section 117 of the SAFETEA-LU 
Technical Corrections Act of 2008 (Pub. L. 110-244, 122 Stat. 1572), 
MARAD is providing this notice as its finding that a waiver of Buy 
America requirements is appropriate. MARAD 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. 117; 23 U.S.C. 313; Pub. L. 110-244; 23 CFR 
635.410)

    By order of the Maritime Administrator.
T. Mitchell Hudson, Jr.,
Secretary, Maritime Administration.
[FR Doc. 2022-16012 Filed 7-25-22; 8:45 am]
BILLING CODE 4910-81-P