Notice of Buy American Waiver Under the American Recovery and Reinvestment Act of 2009

AGENCY:

National Science Foundation (NSF).

ACTION:

Notice.

SUMMARY:

NSF is hereby granting a limited project-specific exemption of section 1605 of the American Recovery and Reinvestment Act of 2009 (Recovery Act), Public Law 111-5, 123 Stat. 115, 303 (2009), with respect to incidental items costing $10,000 or less used in and incorporated into the Alaska Region Research Vessel (ARRV) project.

DATES:

July 26, 2011.

ADDRESSES:

National Science Foundation, 4201 Wilson Blvd., Arlington, Virginia 22230.

FOR FURTHER INFORMATION CONTACT:

Mr. Jeffrey Leithead, Division of Acquisition and Cooperative Support, 703-292-4595.

SUPPLEMENTARY INFORMATION:

In accordance with section 1605(c) of the Recovery Act and section 176.80 of Title 2 of the Code of Federal Regulations, the National Science Foundation (NSF) hereby provides notice that on July 6, 2011 the NSF Chief Financial Officer, in accordance with a delegation order from the Director of the agency on 27 May 2010, granted a de minimis exemption of section 1605 of the Recovery Act (Buy American provision) with respect to each incidental item costing $10,000 or less that is used in and incorporated into the ARRV project. The basis for this exemption is section 1605(b)(1) of the Recovery Act, in that executing individual exemptions for incidental items costing $10,000 or less is not in the public interest. The total cost of incidental items requiring use of this limited exemption is expected to be less than $750,000, which represents less than 0.5% of the total Recovery Act award.

I. Background

The Recovery Act appropriated $400 million to NSF for several projects being funded by the Foundation's Major Research Equipment and Facilities Construction (MREFC) account. The ARRV is one of NSF's MREFC projects. Section 1605(a) of the Recovery Act, the Buy American provision, states that none of the funds appropriated by the Act “may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States.”

The ARRV has been developed under a cooperative agreement awarded to the University of Alaska, Fairbanks (UAF) that began in 2007. UAF executed the shipyard contract in December 2009 and the project is currently under construction. The purpose of the Recovery Act is to stimulate economic recovery in part by funding current construction projects like the ARRV that are “shovel ready” without requiring projects to revise their standards and specifications, or to restart the bidding process.

Subsections 1605(b) and (c) of the Recovery Act authorize the head of a Federal department or agency to waive the Buy American provision if the head of the agency finds that: (1) Applying the provision would be inconsistent with the public interest; (2) the relevant goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or (3) the inclusion of the goods produced in the United States will increase the cost of the project by more than 25 percent. If the head of the Federal department or agency waives the Buy American provision, then the head of the department or agency is required to publish a detailed justification in the Federal Register.

Finally, section 1605(d) of the Recovery Act states that the Buy American provision must be applied in a manner consistent with the United States' obligations under international agreements.

NSF has previously granted exemptions for purchase of the bow thruster [75 FR 9256 (March 1, 2010)], anti-roll tank control system [76 FR 184 (January 3, 2011)], weather fax [76 FR 186 (January 3, 2011)], ultrasonic antifouling system [76 FR 35920 (June 20, 2011)], and HVAC generators [76 FR 35919 (June 20, 2011)]; all of which were in excess of this $10,000 de minimus waiver and not produced in the United States in sufficient and reasonably available commercial quantities.

II. Finding That Individual Exemptions for Incidental Items Are Not in the Public Interest

Ship construction projects typically involve the use of literally hundreds of miscellaneous, generally low-cost items that are essential for, but incidental to, the construction of the vessel. These items are permanently incorporated into the physical structure and connected to other sub-systems in the ship and include such things as galley appliances, stateroom furnishings, fixtures, and electronic equipment. For many of these incidental items, U.S. manufactured alternatives are not always readily or reasonably available. The miscellaneous character of these manufactured goods, together with their low individual cost, characterize them as items incidental to the project. Requiring individual exemptions for low cost, incidental items would be time prohibitive and overly burdensome for the awardee (University of Alaska, Fairbanks), subcontractor (shipyard) and for NSF. Such a de minimis exemption allows the award recipients to focus their efforts on the major manufactured goods within the ARRV project. The terms and conditions of the award still require UAF to Buy American to the extent practicable for items less than $10,000. Therefore, a limited project-specific de minimis exemption for any such incidental item costing $10,000 or less used in and incorporated into the ARRV project is justified in the public interest. The Department of Energy has issued a similar type of de minimis exemption, relating to its Office of Energy Efficiency and Renewable Energy [75 FR 35447 (June 22, 2010)].

At this phase in the ARRV project, it is estimated that only $750,000 of incidental items will require use of the de minimis exemption. To ensure proper oversight with regard to use of this exemption within the project, the agency hereby establishes an allowable ceiling of $1.5M for the application of this de minimis exemption; this represents approximately 2.5% of the total value of materials used in the vessel. (Since the previously-granted exemptions for the purchase of ARRV equipment were not granted on this de minimis basis, but instead because there was not a domestic manufacturer of the qualifying equipment, those purchases do not fall within the $1.5M ceiling for the use of this de minimis exemption.)

Issuance of this limited project-specific exemption recognizes NSF's commitment to expeditious spending of Recovery Act dollars balanced against the need for efficient implementation of the Recovery Act provision while still maintaining the Buy American requirements for manufactured goods that are greater than the de minimis amount of $10,000.

III. Exemption

On July 6, 2011, and under the authority of section 1605(b)(1) of the Public Law 111-5 and delegation order dated 27 May 2010, with respect to the Alaska Region Research Vessel Project funded by NSF, the NSF Chief Financial Officer granted a limited project exemption for any incidental item costing $10,000 or less used in and incorporated into the project. With this exemption, the agency hereby establishes a $1.5M ceiling for the total allowable value of de minimis exemptions used on this project.