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The Environmental Protection Agency (EPA) published two notices June 2 in the Federal Register (FRL-8911-9; FRL-8911-8) announcing two national waivers from the “Buy American” requirements in the American Recovery and Reinvestment Act (ARRA), or stimulus bill. These two waivers and their applicability to clean water utilities using ARRA funds are described in more detail below. Both waivers are effective immediately and were issued in accordance with EPA’s previous guidance on Buy American provisions under the ARRA, which is analyzed in more detail in Legislative Alert 09-11. NACWA worked closely with EPA to secure these two national waivers on behalf of its members and is pleased with their formal issuance. NACWA will continue to track any additional national Buy American waivers from EPA and report to the membership on developments.

Buy American Waiver for Projects That Solicited Bids Between October 1, 2008 and February 17, 2009

This nationwide waiver  of Buy American requirements under the ARRA applies to eligible projects that solicited bids on or after October 1, 2008, and prior to February 17, 2009, and that did so in reasonable, prudent, and specific anticipation of stimulus funding. EPA has determined that requiring these projects to comply with Buy American provisions would require a time-consuming rebidding of the projects and potentially a redesign, thus frustrating the goals of the ARRA to fund infrastructure projects and create jobs. Eligible projects must be funded with ARRA funds through the Clean Water State Revolving Fund (CWSRF). To be included under this waiver, a clean water utility must have solicited a bid between October 1, 2008 and February 17, 2009, and demonstrate a verifiable basis on which the utility believed it was reasonable and prudent to solicit bids for a project prior to completing an assistance agreement with a State SRF. Examples of a verifiable basis may included an affirmative communication from a funding source, such as a binding commitment, high placement on a priority list, or other indicative and verifiable communication from an SRF or other government funding source. Additionally, any affirmative steps taken to secure private bond financing from an appropriate industry entity may also qualify. Projects covered under this waiver do not need to meet any Buy American requirements. NACWA members that believe this waiver may be applicable to their project should carefully review the EPA waiver announcement with their legal counsel and contractor to determine eligibility.

Buy American Waiver for De Minimus Incidental Components

This nationwide waiver  of Buy American requirements covers de minimus incidental components in any ARRA funded projects where such components make up no more than 5 percent of the total cost of the materials used in and incorporated into a project. Such incidental components could include items such as nuts, bolts, fasteners, gaskets, tubing, etc., but in order to qualify for the waiver the total costs of these components must be no more than 5 percent of the total cost of materials used in the project. EPA has determined that requiring these de minimus components to comply with Buy American requirements would be inconsistent with the public interest and the ARRA’s directives to ensure expeditious infrastructure construction. This waiver applies to all de minimus incidental components used in any ARRA funded project where the country of manufacture for the incidental components and the availability of alternatives are not readily or reasonably identifiable prior to procurement.  NACWA members wishing to use this waiver for ARRA projects should first carefully review the EPA waiver announcement with their legal counsel and contractor to determine the specific items in their project that might be covered by the waiver. Additionally, utilities using this waiver must retain relevant documentation as to those covered de minimus items in their project files, and must summarize in reports to the State funding authority the types and/or categories of items to which this waiver applies, the total cost of the 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. Members should consult their State SRF program officials for further details regarding these requirements.