Federal Register / Vol. 74, No. 152 / Monday, August 10, 2009 / Notices 39959 

receiving a draft meeting agenda may 

contact Ginger Potter via any of the 

contact methods listed in the FOR

FURTHER INFORMATION CONTACT section 

below. 

Dated: July 31, 2009. 

Ginger Potter, 

Designated Federal Officer. 

[FR Doc. E9–19067 Filed 8–7–09; 8:45 am] 

BILLING CODE 6560–50–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

[FRL–8939–1] 

Notice of Revised Nationwide Waiver 

of Section 1605 (Buy American 

Requirement) of American Recovery 

and Reinvestment Act of 2009 (ARRA) 

Based on Public Interest for de 

minimis Incidental Components of 

Projects Financed Through the Clean 

or Drinking Water State Revolving 

Funds Using Assistance Provided 

Under ARRA 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Notice. 

SUMMARY: The EPA is hereby granting a 

nationwide waiver of the Buy American 

requirements of ARRA Section 1605 

under the authority of Section 

1605(b)(1) (public interest waiver) for de 

minimis incidental components of 

eligible water infrastructure projects 

funded by ARRA This action revises the 

terms under which incidental 

components qualify for coverage under 

the public interest de minimis waiver 

signed and effective on May 22, 2009, 

and permits the use of non-domestic 

iron, steel, and manufactured goods 

when they occur in de minimis 

incidental components of such projects 

funded by ARRA that may otherwise be 

prohibited under section 1605(a). 

DATES: Effective Date: July 24, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Jordan Dorfman, Attorney-Advisor, 

Office of Wastewater Management, (202) 

564–0614, or Philip Metzger, Attorney 

Advisor, Office of Ground Water and 

Drinking Water, (202) 564–3776, 

Environmental Protection Agency, 1200 

Pennsylvania Avenue, NW., 

Washington, DC 20460. 

SUPPLEMENTARY INFORMATION: In 

accordance with ARRA Section 1605(c), 

the EPA hereby provides notice that it 

is granting a nationwide waiver of the 

requirements of section 1605(a) of 

Public Law 111–5, Buy American 

requirements, based on the public 

interest authority of section 1605(b)(1), 

to allow the use of non-domestic iron, 

steel, and manufactured goods when 

they occur in de minimis incidental 

components of eligible projects for 

which a Clean or Drinking Water State 

Revolving Fund (SRF) has concluded or 

will conclude an assistance agreement 

using ARRA funds where such 

components cumulatively comprise no 

more than a total of 5 percent of the 

total cost of the materials used in and 

incorporated into a project. 

Among the General Provisions of the 

American Recovery and Reinvestment 

Act of 2009 (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 addition, 

expeditious construction of SRF projects 

is made a high priority by a provision 

in the ARRA Title VII appropriations 

heading for the SRFs, which states 

‘‘[t]hat the Administrator shall 

reallocate funds * * * where projects 

are not under contract or construction 

within 12 months of’’ ARRA enactment 

(February 17, 2010). The finding 

relevant to this waiver is that ‘‘applying 

[ARRA’s Buy American requirement] 

would be inconsistent with the public 

interest’’ (1605(b)(l)). 

EPA originally issued this waiver on 

May 22, 2009. This notice revises the 

terms under which that waiver may be 

applied, and, in accordance with the 

requirements of Section 1605(c) that all 

waivers granted must include a 

‘‘detailed written justification’’, adds 

new information and repeats relevant 

information that continues to justify this 

revised waiver. 

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 Clean 

Drinking Water State Revolving Funds 

(SRF), particularly considering the 

SRFs’ 12 month ‘‘contract or 

construction’’ requirement. Further, in 

the context of ARRA’s SRF ‘‘contract or 

construction’’ deadline, 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 pipe, 

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 highcost components are generally described 

in detail via project specific technical 

specifications. For these major 

components, utility owners and their 

contractors are generally familiar with 

the conditions of availability, the 

potential alternatives for each detailed 

specification, the approximate cost, and 

the country of manufacture of the 

available components. 

Every water infrastructure 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. For many 

of these incidental components, the 

country of manufacture and the 

availability of alternatives is not always 

readily or reasonably identifiable prior 

to procurement in the normal course of 

business; for other incidental 

components, the country of manufacture 

may be known but the miscellaneous 

character in conjunction with the low 

cost, individually and (in total) as 

typically procured in bulk, mark them 

as properly incidental. 

EPA undertook multiple inquiries to 

identify the approximate scope of these 

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 wellestablished 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 


rmajette on DSK29S0YB1PROD with NOTICES
39960 Federal Register / Vol. 74, No. 152 / Monday, August 10, 2009 / Notices 

total costs for drinking water or 

wastewater infrastructure projects 

represented 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. 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. 

Subsequent to the issuance of the 

original public interest de minimis 

waiver on May 22, 2009, EPA has 

received many, similar waiver requests 

from numerous assistance recipients 

(located in a few States that have issued 

a substantial number of SRF assistance 

agreements funded by ARRA) on a 

variety of low-cost components whose 

national origin can be identified. Even 

as typically procured in bulk (several 

dozen for small projects), the total cost 

of these components is much less than 

5 percent of the total materials cost of 

these projects. These types of 

components would properly be 

considered subject to the previous 

nationwide public interest de minimis 

waiver but for the requirement in that 

waiver that the national origin of these 

low-cost, miscellaneous components 

‘‘not [be] readily or reasonably 

identifiable prior to procurement in the 

normal course of business.’’ It also 

appears that when EPA inquired of 

various parties to develop the 

percentage limit on the waiver, the 

percentages were identified with the 

inclusion of these types of components 

in mind. 

Due to the diverse characteristics of 

the specific configurations of these 

individually low-cost components, the 

analysis and consideration of waiver 

requests for them—and particularly of 

ascertaining whether U.S.-made 

products exist or can be made to meet 

these diverse configurations—is already 

becoming a demanding and timeconsuming task far out of proportion to 

the percentage of total project materials 

cost they comprise. As a rapidly 

increasing number of States begin to 

issue numerous assistance agreements, 

EPA recognizes the prospect of 

considering dozens of differently framed 

waivers in most if not all States for each 

of these types of components, in 

addition to those for major components 

that are most appropriately the focus of 

the waiver process set forth in Section 

1605. Because the established practices 

of specification and use of these lowcost components appear to be widely 

varied by Region and to some extent by 

State and individual recipient, it is 

unlikely to be practicable to formulate 

categorical waivers for such 

components, even if justified. If this 

pattern of waiver requests is allowed to 

expand to a national scale, the resources 

and capacities of the waiver program, 

for EPA and assistance recipients alike, 

will be so consumed by necessary 

analysis of the minute variations in 

circumstances among these low-cost 

items that this will become a serious 

obstacle to ensuring that all recipients 

will be able to sign construction 

contracts by February 17, 2010. 

Assistance recipients who do not have 

their compliance with respect to section 

1605 clarified may in many cases be 

unable to sign contracts by the February 

17, 2010 date, causing these 

communities to lose their ARRA 

assistance and requiring EPA to 

reallocate to other States all ARRA 

funds not under contract by that date. 

This in turn will lead to further delay 

in placing the reallotted funds into other 

projects, which is inconsistent with the 

public interest and the intent and 

purpose of ARRA. It would be further 

inconsistent with ARRA to deprive of 

ARRA assistance these States and 

communities whose funds are 

reallocated due to a waiver process that 

would have become backlogged under 

the complexity of investigating waiver 

requests for incidental components 

costing a fraction of the 5 percent of the 

materials cost of a project. 

Under these circumstances, EPA must 

place the highest priority on enabling 

States and their assistance recipients to 

meet this February 17, 2010 deadline set 

by Congress for the SRFs specifically. 

As the situations described above would 

be effectively addressed by a more 

comprehensive application of the de 

minimis waiver, EPA has found that it 

would be inconsistent with the public 

interest—and particularly with ARRA’s 

directives to ensure expeditious SRF 

construction consistent with prudent 

management, as cited above—to apply 

the Buy American requirement to 

incidental components when they in 

total comprise no more than 5 percent 

of the total cost of the materials used in 

and incorporated into a project. 

Accordingly, EPA is hereby issuing a 

national waiver from the requirements 

of ARRA Section 1605(a) for any 

components described above as 

incidental that comprise in total a de 

minimis amount of the project, that is, 

for any such incidental components up 

to a limit of no more than 5 percent of 

the total cost of the materials used in 

and incorporated into a project. 

Assistance recipients who wish to use 

this waiver should in consultation with 

their contractors determine the items to 

be covered by this waiver, must retain 

relevant documentation as to those 

items in their project files, and must 

summarize in reports to the State 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 calculations by which they 

determined the total cost of materials 

used in and incorporated into the 

project. 

In using this waiver, assistance 

recipients should consider that all SRFfunded construction projects by 

definition require the expenditure of a 

certain amount of project funds on the 

literal ‘‘nuts and bolts’’-type 

components whose origins cannot 

readily be identified prior to 

procurement. As described above, EPA 

has determined the 5 percent limit 

based on research and informed 

professional judgment as to the 

maximum total amount of incidental 

goods used in most water and 

wastewater projects. In a few, 

exceptional cases, assistance recipients 

using this waiver may have multiple 

types of low-cost components which, 

when combined and in conjunction 

with those literal ‘‘nuts and bolts’’-type 

components, may total more than 5 

percent. Assistance recipients in such 

cases will have to choose which of these 

incidental components will be covered 

by the waiver and which will not, and 

will include the type and amount of 

such items covered in the reports to the 

State as required above. Components 

which the recipient is unable to include 

within the 5 percent limit of this waiver 

must comply with the requirements of 

section 1605 by appropriate means other 

than coverage under this waiver. 

Therefore, 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: Public Law 111–5, section 1605. 

Dated: July 24, 2009. 

Michael H. Shapiro, 

Acting Assistant Administrator for Water. 

[FR Doc. E9–19069 Filed 8–7–09; 8:45 am] 

BILLING CODE 6560–50–P 


rmajette on DSK29S0YB1PROD with NOTICES