Buy American WaiversBuy American Waivers

David ChinDavid Chin

&&

Katie ConnorsKatie Connors

$600,000.0$200,000.0

$2,000,000.0

$4,000,000.0$300,000.0

$100,000.0

Brownfields CWSRF DWSRF DERA LUST Superfund

Dollars in ThousandsDollars in Thousands TotalTotal: $7.2 : $7.2 BillionBillion

EPA’s Stimulus EPA’s Stimulus InvestmentsInvestments

(Nationally)(Nationally)

Since 1987 State Clean Water and Drinking Water SRFs have provided more than $84 billion for 30,000 projects

SRFs create a perpetual source of state funding for drinking water and wastewater infrastructure.

ARRA Funding• $4 billion for Clean Water allotted based

on statutory formula• $2 billion for Drinking Water allotted

based on proportional share of national need

• Minimum 50% subsidy• 20% Green Project Reserve• No state match

Clean Water and Drinking Clean Water and Drinking Water State Revolving Fund Water State Revolving Fund (SRF)(SRF)

Stimulus $$ as a CatalystStimulus $$ as a Catalyst(New England)(New England)

$405.6 million $405.6 million in projectsin projects

leveraging, leveraging, other meansother means

$149.7 million$149.7 million

$296 million$296 million

ARRA CWSRF fundsARRA CWSRF funds

ARRA DWSRF funds

$1.1 billion $1.1 billion in projectsin projects

leveraging, leveraging, other meansother means

Buy American ProvisionBuy American Provision

Section 1605(a) of ARRA requires assistance Section 1605(a) of ARRA requires assistance recipients to use domestic iron, steel, and recipients to use domestic iron, steel, and manufactured goods that are produced in the manufactured goods that are produced in the U.S. U.S. This is the expected means of complianceThis is the expected means of compliance..

Section 1605(b) provides for a waiver of this Section 1605(b) provides for a waiver of this requirement under circumstances identified and requirement under circumstances identified and limited in that provision. limited in that provision.

Section 1605(c) provides that this requirement Section 1605(c) provides that this requirement must be implemented “consistent with U.S. must be implemented “consistent with U.S. obligations under international agreements”.obligations under international agreements”.

Buy American ProvisionBuy American Provision

Office of Management & Budget (OMB) Office of Management & Budget (OMB) GuidanceGuidance

http://edocket.access.gpo.gov/2009/pdf/E9-90http://edocket.access.gpo.gov/2009/pdf/E9-9073.pdf73.pdf

Subpart B covers Section 1605 – the Buy American provision

EPA HQ April 28EPA HQ April 28thth Memo Memo Implementation of Buy American provision of Implementation of Buy American provision of

P.L. 111-5, the “American Recovery and P.L. 111-5, the “American Recovery and Reinvestment Act of 2009”Reinvestment Act of 2009”

http://www.epa.gov/ogd/forms/Buy_Am.pdf

Understanding Understanding Everyone’s RoleEveryone’s Role

Assistance Recipients’ RoleAssistance Recipients’ Role

Should have adequate documentation in Should have adequate documentation in project files to demonstrate all applicable project files to demonstrate all applicable means of BA compliancemeans of BA compliance For US made goods: verification of US For US made goods: verification of US

productionproduction For items covered under a national waiver: For items covered under a national waiver:

the documentation must include all elements the documentation must include all elements specified in and required by the waiver for an specified in and required by the waiver for an item or project to be covereditem or project to be covered

Assistance Recipients’ Role (cont.)Assistance Recipients’ Role (cont.)

For any component that has been granted an For any component that has been granted an individual project waiver: Federal Register individual project waiver: Federal Register Notice of project specific waiver is publishedNotice of project specific waiver is published

For items subject to an international For items subject to an international agreementagreement• Communication from applicable state or municipal Communication from applicable state or municipal

party to the agreement that recipient and item(s) party to the agreement that recipient and item(s) are covered, andare covered, and

• Verification of country of originVerification of country of origin

Assistance Recipients’ Role (cont.)Assistance Recipients’ Role (cont.)

Assistance recipients should require Assistance recipients should require certification from contractors to certification from contractors to demonstrate BA compliancedemonstrate BA compliance

Fraud and abuse will be investigated by Fraud and abuse will be investigated by the Office of Inspector General (OIG)the Office of Inspector General (OIG)

State’s RoleState’s Role

Communicate with assistance recipients Communicate with assistance recipients the need to comply with BAthe need to comply with BA

Assist EPA if there is additional Assist EPA if there is additional information needed from the Stateinformation needed from the State

Can be as involved or hands off as each Can be as involved or hands off as each individual State would likeindividual State would like

EPA’s RoleEPA’s Role

Region receives all waiver request packages Region receives all waiver request packages from proposed assistance recipientsfrom proposed assistance recipients

Conducts initial completeness review Conducts initial completeness review Coordinates with national contractor to perform Coordinates with national contractor to perform

technical assessmenttechnical assessment Preliminarily approves/denies waiver request Preliminarily approves/denies waiver request

based on technical assessment report and based on technical assessment report and information provided by the applicant at that timeinformation provided by the applicant at that time

EPA’s Role (cont.)EPA’s Role (cont.)

Region coordinates Waiver Approval Region coordinates Waiver Approval Review Process with EPA HQ (requiring Review Process with EPA HQ (requiring EPA HQ concurrence)EPA HQ concurrence)

Region prepares necessary documents for Region prepares necessary documents for Regional Administrator approvalRegional Administrator approval Waiver Approval MemoWaiver Approval Memo Federal Register Notice (critical component)Federal Register Notice (critical component) Regional Waiver checklistRegional Waiver checklist

OIG’s RoleOIG’s Role

Education, training, outreach, audit, evaluation Education, training, outreach, audit, evaluation and investigative activitiesand investigative activities

Section 1515 of the ARRA allows the OIG:Section 1515 of the ARRA allows the OIG: To examine any records of the contractor or grantee, To examine any records of the contractor or grantee,

any of its subcontractors, or any State or local agency any of its subcontractors, or any State or local agency administering transactions relating to, the contract, administering transactions relating to, the contract, subcontract, grant, or subgrantsubcontract, grant, or subgrant

To interview any officer or employee of the contractor, To interview any officer or employee of the contractor, grantee, subgrantee, or agency regarding such grantee, subgrantee, or agency regarding such transactionstransactions

OIG’s Role (cont.)OIG’s Role (cont.)

OIG has access to EPA files and records, as OIG has access to EPA files and records, as well as those of State, local, tribal and non-profit well as those of State, local, tribal and non-profit agencies, contractors, and sub-contractors, agencies, contractors, and sub-contractors, grantees and sub-grantees, that administer or grantees and sub-grantees, that administer or spend EPA fundsspend EPA funds

EPA Criminal Investigators have the authority to:EPA Criminal Investigators have the authority to: Administer and Take OathsAdminister and Take Oaths Serve SubpoenasServe Subpoenas Make ArrestsMake Arrests Execute Search and Seizure WarrantsExecute Search and Seizure Warrants

DocumentationDocumentation

The April 28, 2009 guidance suggested The April 28, 2009 guidance suggested that assistance recipients require that assistance recipients require certification from contractors to certification from contractors to demonstrate Buy American Compliancedemonstrate Buy American Compliance

Fraud and abuse will be investigated by Fraud and abuse will be investigated by the Office of Inspector General (OIG)the Office of Inspector General (OIG)

Communicate any concerns to Communicate any concerns to www.epa.gov/oig/hotline/how2file.htmwww.epa.gov/oig/hotline/how2file.htm

CertificationCertification

Appendix 5 of the April 28, 2009 Guidance Appendix 5 of the April 28, 2009 Guidance provides a sample certification template that provides a sample certification template that may be used by ARRA assistance recipient.may be used by ARRA assistance recipient.

Addresses: (a) identification of domestic Addresses: (a) identification of domestic manufactured goods; (b) verification of U.S, manufactured goods; (b) verification of U.S, production; (c) documentation regarding non-production; (c) documentation regarding non-American made manufactured goods - American made manufactured goods - identification, verification, information and identification, verification, information and detailed justification of the use of non-American detailed justification of the use of non-American made goodsmade goods

CertificationCertification

November 16, 2009 Qs &As – Part 2, November 16, 2009 Qs &As – Part 2, Section B has a detailed discussion on Section B has a detailed discussion on what is sufficient documentation. The what is sufficient documentation. The ARRA assistance recipient is required to ARRA assistance recipient is required to make every effort to have adequate, make every effort to have adequate, appropriate, project specific and appropriate, project specific and verifiableverifiable documentation to demonstrate compliance documentation to demonstrate compliance with Buy Americanwith Buy American

National WaiversNational Waivers

4 Nationwide Waivers Issued So Far4 Nationwide Waivers Issued So Far Refinancing prior to the ARRA bill signingRefinancing prior to the ARRA bill signing Publishing Bids prior to the ARRA bill signingPublishing Bids prior to the ARRA bill signing De Minimis WaiverDe Minimis Waiver Revised De Minimis WaiverRevised De Minimis Waiver

Refinancing WaiverRefinancing Waiver

For projects with debt obligations incurred For projects with debt obligations incurred on or after October 1, 2008 and prior to on or after October 1, 2008 and prior to February 17, 2009 that are refinanced by February 17, 2009 that are refinanced by the SRF using ARRA fundsthe SRF using ARRA funds

““Debt obligations” cannot include self-Debt obligations” cannot include self-financing or incurring costs alonefinancing or incurring costs alone

Justified by specific ARRA provision that Justified by specific ARRA provision that makes eligible projects initially financed in makes eligible projects initially financed in anticipation of ARRAanticipation of ARRA

Publishing Bids WaiverPublishing Bids Waiver

For projects that solicited bids on or after For projects that solicited bids on or after October 1, 2008 and prior to the signing of October 1, 2008 and prior to the signing of the bill on February 17, 2009the bill on February 17, 2009

To have a project covered, the assistance To have a project covered, the assistance recipient must show that bids were recipient must show that bids were published proactively in anticipation of published proactively in anticipation of ARRA fundingARRA funding

Expanded on the Refinancing waiverExpanded on the Refinancing waiver

De Minimis WaiverDe Minimis Waiver

For incidental components (nuts, bolts, For incidental components (nuts, bolts, tubing, fasteners, etc.) of projects, where tubing, fasteners, etc.) of projects, where they comprise no more than 5% of the they comprise no more than 5% of the total materials cost and the country of total materials cost and the country of origin is not easily identifiable origin is not easily identifiable

Revised De Minimis WaiverRevised De Minimis Waiver

Assistance recipients may decide what Assistance recipients may decide what foreign made goods may be allowed, foreign made goods may be allowed, including incidental components, as long including incidental components, as long as they comprise no more than 5% of the as they comprise no more than 5% of the total materials cost. total materials cost.

Assistance recipients are required to apply Assistance recipients are required to apply for product waivers for any foreign made for product waivers for any foreign made goods that exceed the 5% threshold total goods that exceed the 5% threshold total materials cost. materials cost.

Revised De Minimis waiverRevised De Minimis waiver

Documentation necessary essentially the same Documentation necessary essentially the same as required by the initial De Minimis waiveras required by the initial De Minimis waiver

Assistance recipients would determine and Assistance recipients would determine and retain relevant documentationretain relevant documentation Types/categories of items which this waiver is appliedTypes/categories of items which this waiver is applied Total cost for each typeTotal cost for each type Calculations of the total cost of materials used to Calculations of the total cost of materials used to

determine the dollar value of goods to which they determine the dollar value of goods to which they have applied the waiverhave applied the waiver

If Covered Under a National WaiverIf Covered Under a National Waiver

The assistance recipient does not need to The assistance recipient does not need to apply for an individual project waiverapply for an individual project waiver

Documentation that a project is covered by Documentation that a project is covered by a national waiver must include all a national waiver must include all elements required by the waiverelements required by the waiver

The assistance recipient must maintain The assistance recipient must maintain documentation in their project filesdocumentation in their project files

Individual Project Individual Project WaiversWaivers

Justifications for a Project WaiverJustifications for a Project Waiver

Applying Buy American is inconsistent with Applying Buy American is inconsistent with public interest (public interest (§§1605(b)(1))1605(b)(1))

US iron, steel, and manufactured goods US iron, steel, and manufactured goods are not produced in sufficient and are not produced in sufficient and reasonably available quantities or of reasonably available quantities or of satisfactory quality (satisfactory quality (§§1605(b)(2))1605(b)(2))

Inclusion of US iron, steel, and Inclusion of US iron, steel, and manufactured goods will increase cost of manufactured goods will increase cost of overall project by > 25% (overall project by > 25% (§§1605(b)(3))1605(b)(3))

Availability WaiversAvailability Waivers

Majority or nearly all project waivers will Majority or nearly all project waivers will fall under the availability waiverfall under the availability waiver

EPA’s April 28, 2009 memorandum EPA’s April 28, 2009 memorandum defines “reasonably available quantity” as:defines “reasonably available quantity” as: ““Quantity will be available at the time needed Quantity will be available at the time needed

and place needed, and in the proper form or and place needed, and in the proper form or specification as specified in the project plans specification as specified in the project plans and design.”and design.”

Availability WaiverAvailability Waiver

Reasons to apply for an availability waiver:Reasons to apply for an availability waiver: Only Non-US ManufacturedOnly Non-US Manufactured

• IronIron• Street, orStreet, or• Manufactured Good(s)Manufactured Good(s)

Meet the Project SpecificationsMeet the Project Specifications• PerformancePerformance• Physical CharacteristicsPhysical Characteristics• Timeliness of DeliveryTimeliness of Delivery

Waiver Request Waiver Request Submittal PackageSubmittal Package

BA Waiver Request SubmittalBA Waiver Request Submittal

MUST Include:MUST Include:

Description of the overall projectDescription of the overall project

Provide Estimated/Projected cost of the Provide Estimated/Projected cost of the overall project, including a breakdown of overall project, including a breakdown of projected materials and manufactured goods projected materials and manufactured goods

BA Waiver Request Submittal BA Waiver Request Submittal (Cont.)(Cont.)

Must Include:Must Include: Detailed Description of the foreign made Detailed Description of the foreign made

equipmentequipment• Unit of measureUnit of measure• Quantity requiredQuantity required• Price per unit or total cost of the equipment Price per unit or total cost of the equipment • Time of delivery when needed at the construction Time of delivery when needed at the construction

sitesite• Name, address, and contact information for theName, address, and contact information for the

manufacturermanufacturer

BA Waiver Request (cont.)BA Waiver Request (cont.)

Justification for the use of the foreign goodJustification for the use of the foreign good Provide Assessment of Domestic alternatives Provide Assessment of Domestic alternatives

and why they do not meet the proposed and why they do not meet the proposed project specificationsproject specifications

Assessment includes providing written Assessment includes providing written documentation that you looked at domestic documentation that you looked at domestic companies to buy from and either couldn’t find companies to buy from and either couldn’t find any or couldn’t find any that would be able to any or couldn’t find any that would be able to meet the project design specificationsmeet the project design specifications

BA waiver Request (cont.)BA waiver Request (cont.)

Provide written documentation from domestic Provide written documentation from domestic manufacturer(s) that its product cannot meet manufacturer(s) that its product cannot meet the applicant’s project specs or written the applicant’s project specs or written documentation detailing the level of effort documentation detailing the level of effort conducted by the applicant to seek a conducted by the applicant to seek a domestic supplierdomestic supplier

Provide specs from domestic supplier(s) Provide specs from domestic supplier(s) demonstrating exactly how it (they) do not demonstrating exactly how it (they) do not meet project specsmeet project specs

Waiver Request (cont.)Waiver Request (cont.)

Submit design and technical Submit design and technical specifications and requirements involved specifications and requirements involved with the foreign made good(s)with the foreign made good(s)

Provide detailed drawings, if availableProvide detailed drawings, if available If there was any pre-bid selection committee If there was any pre-bid selection committee

or any other type of process that came up or any other type of process that came up with a list of critical specs or criteria for the with a list of critical specs or criteria for the product, it should be detailed in the request product, it should be detailed in the request packagepackage

Waiver Request (cont.)Waiver Request (cont.)

If the waiver is being requested after If the waiver is being requested after construction has initiated you need to include construction has initiated you need to include a justification as to why it is being requested a justification as to why it is being requested now and not earliernow and not earlier

Provide written documentation that the Buy Provide written documentation that the Buy American provision was included in the bid American provision was included in the bid documents, and if it was not, an explanation documents, and if it was not, an explanation as to why notas to why not

BA Waiver Request (cont.)BA Waiver Request (cont.)

Ensure the project design specifications Ensure the project design specifications do not unnecessarily preclude US do not unnecessarily preclude US produced iron, steel, or manufactured produced iron, steel, or manufactured goods (I/S/MG)goods (I/S/MG)

Waivers should be requested:Waivers should be requested: Prior to or after preparation of bid solicitationPrior to or after preparation of bid solicitation After bids are received and contractors or After bids are received and contractors or

suppliers document that I/S/MG are not suppliers document that I/S/MG are not produced in sufficient quantities or adequate produced in sufficient quantities or adequate quality domesticallyquality domestically

Approved Region 1 Approved Region 1 WaiversWaivers

Auburn, ME - spring loaded manhole Auburn, ME - spring loaded manhole covers and frames made in Canadacovers and frames made in Canada

Franklin, NH – air-bearing turbo aeration Franklin, NH – air-bearing turbo aeration blowers made in South Koreablowers made in South Korea

Hooksett, NH – biofilm polyethylene chip Hooksett, NH – biofilm polyethylene chip carrier elements made in Germanycarrier elements made in Germany

Lewiston, ME – constant flow regulator Lewiston, ME – constant flow regulator made in Germanymade in Germany

Four schools in VT – UV disinfection Four schools in VT – UV disinfection systems made in Canadasystems made in Canada

Plymouth, NH – sludge dewatering Plymouth, NH – sludge dewatering equipment made in Canadaequipment made in Canada

Kennebec, ME – cast iron valve boxes Kennebec, ME – cast iron valve boxes made in Canadamade in Canada

Newburyport, MA – sludge dewatering Newburyport, MA – sludge dewatering equipment made in Canadaequipment made in Canada

Pending Waiver Pending Waiver RequestsRequests

MWRA – hydroelectric generator MWRA – hydroelectric generator North Conway, NH – high efficiency North Conway, NH – high efficiency

boilers made in Germanyboilers made in Germany Troy, VT – valves and actuators for Troy, VT – valves and actuators for

packaged water treatment system made in packaged water treatment system made in CanadaCanada

Old Town, ME – pressure filter media Old Town, ME – pressure filter media made in Brazilmade in Brazil

Gloucester, MA – sludge dewatering Gloucester, MA – sludge dewatering equipment made in Canadaequipment made in Canada

MWRA – wind turbineMWRA – wind turbine

Withdrawn/Denied Withdrawn/Denied Waiver RequestsWaiver Requests

South Burlington, VT – hyperbolic mixer South Burlington, VT – hyperbolic mixer equipment made in Germanyequipment made in Germany

South Burlington, VT – UV disinfection South Burlington, VT – UV disinfection equipment made in Canadaequipment made in Canada

Rochester, NH – catch basin grates made Rochester, NH – catch basin grates made in Great Britain (planning to use domestic)in Great Britain (planning to use domestic)

Barre, VT – packaged heat recovery Barre, VT – packaged heat recovery ventilation units made in Canada (planning ventilation units made in Canada (planning to use domestic)to use domestic)

Lowell, MA – VFD drives made in Taiwan Lowell, MA – VFD drives made in Taiwan (covered under de minimis)(covered under de minimis)

Durham, NH – air bearing turbo aeration Durham, NH – air bearing turbo aeration blowers (pursuing substantial blowers (pursuing substantial transformation angle)transformation angle)

Putnam, CT – AC wall units and drive Putnam, CT – AC wall units and drive shoes for test wells (de minimis)shoes for test wells (de minimis)

Troy, VT – insulated concrete forms (de Troy, VT – insulated concrete forms (de minimis)minimis)

Chatham, MA – submersible mixer wall Chatham, MA – submersible mixer wall recycle pump (domestic alternative recycle pump (domestic alternative available has been identified)available has been identified)

Substantial TransformationSubstantial Transformation

EPA HQ released ST guidance on October 22, EPA HQ released ST guidance on October 22, 20092009 Roles and ResponsibilitiesRoles and Responsibilities Concerns for States and EPAConcerns for States and EPA Basic Principles of ST AnalysisBasic Principles of ST Analysis Analysis to determine whether ST occurred in the Analysis to determine whether ST occurred in the

U.S.U.S. When ST can occur on-siteWhen ST can occur on-site http://www.epa.gov/water/eparecovery/docs/http://www.epa.gov/water/eparecovery/docs/

10_23_09_Substantial_Transformation_memo_Final.10_23_09_Substantial_Transformation_memo_Final.pdfpdf

Substantial TransformationSubstantial Transformation

EPA does not approve/deny claims of EPA does not approve/deny claims of substantial transformation; it is the substantial transformation; it is the responsibility of the assistance recipient to responsibility of the assistance recipient to prove it occurs in the USprove it occurs in the US

Assistance recipient may address a list of Assistance recipient may address a list of three questions…need to answer “Yes” to three questions…need to answer “Yes” to at least one of following questions to have at least one of following questions to have substantial transformation applysubstantial transformation apply

Substantial TransformationSubstantial Transformation

1. Were all of the components of the 1. Were all of the components of the manufactured good in the United States, manufactured good in the United States, and were all of the components and were all of the components assembled into the final product in the assembled into the final product in the US? (If the answer is yes, then this is US? (If the answer is yes, then this is clearly manufactured in the US, and the clearly manufactured in the US, and the inquiry is complete) inquiry is complete)

Substantial TransformationSubstantial Transformation 2. Was there a change or use of the good or the 2. Was there a change or use of the good or the

components in America? (These questions components in America? (These questions apply to the product as a whole, not to individual apply to the product as a whole, not to individual components…need to answer “Yes” to one of components…need to answer “Yes” to one of the following questions ) the following questions ) Was there a change in the physical and/or chemical Was there a change in the physical and/or chemical

properties or characteristics designed to alter the properties or characteristics designed to alter the functionality of the good?functionality of the good?

Did the manufacturing or processing operation result Did the manufacturing or processing operation result in a change of a product(s) with one use into a in a change of a product(s) with one use into a product with a different use? product with a different use?

Did the manufacturing or processing operation result Did the manufacturing or processing operation result in the narrowing of the range of possible uses of a in the narrowing of the range of possible uses of a multi-use product? multi-use product?

Substantial TransformationSubstantial Transformation 3. Was the process performed in the US 3. Was the process performed in the US

(including but not limited to assembly) complex (including but not limited to assembly) complex and meaningful? (need to answer Yes to two of and meaningful? (need to answer Yes to two of the following questions)the following questions) Did the process take a substantial amount of time? Did the process take a substantial amount of time? Was the process costly? Was the process costly? Did the process require a particular high level of Did the process require a particular high level of

skills? skills? Did the process require a number of different Did the process require a number of different

operations? operations? Was substantial value added in the process? Was substantial value added in the process?

Questions and Questions and DiscussionDiscussion