Notice2022-15569
General Applicability Waiver of Build America, Buy America Provisions as Applied to Recipients of Department of Energy Federal Financial Assistance
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 21, 2022
Issuing agencies
Energy Department
Abstract
In accordance with the Build America, Buy America Act ("BABA") this notice advises that the Department of Energy ("DOE" or the "Department") is proposing a limited general applicability waiver ("Waiver") to the Buy America Domestic Content Procurement Preference (as defined below) requirements of the Act. The Waiver will be effective for 180 days after its issuance (the "Effective Period") and will apply only to awards issued as a result of Funding Opportunity Announcements ("FOA") released before May 14, 2022 ("applicable awards"). This Waiver will be effective solely with respect to applicable awards signed during the Effective Period; it will not apply to applicable awards signed before or after the Effective Period. Applicable Awards subject to this Waiver will not be required to incorporate the Buy America Preference, which mandates that all iron, steel, manufactured goods, and construction materials used in the award be manufactured domestically. DOE is seeking public comment as to whether this proposed Waiver is in the public interest, as it will provide the Department and its stakeholders a reasonable adjustment period to implement BABA in a more thorough, effective, and exacting manner.
Full Text
<html>
<head>
<title>Federal Register, Volume 87 Issue 139 (Thursday, July 21, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 139 (Thursday, July 21, 2022)]
[Notices]
[Pages 43506-43509]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-15569]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
General Applicability Waiver of Build America, Buy America
Provisions as Applied to Recipients of Department of Energy Federal
Financial Assistance
AGENCY: Office of the Secretary, U.S. Department of Energy.
ACTION: Notice and request for public comment.
-----------------------------------------------------------------------
SUMMARY: In accordance with the Build America, Buy America Act
(``BABA'') this notice advises that the Department of Energy (``DOE''
or the ``Department'') is proposing a limited general applicability
waiver (``Waiver'') to the Buy America Domestic Content Procurement
Preference (as defined below) requirements of the Act. The Waiver will
be effective for 180 days after its issuance (the ``Effective Period'')
and will apply only to awards issued as a result of Funding Opportunity
Announcements (``FOA'') released before May 14, 2022 (``applicable
awards''). This Waiver will be effective solely with respect to
applicable awards signed during the Effective Period; it will not apply
to applicable awards signed before or after the Effective Period.
Applicable Awards subject to this Waiver will not be required to
incorporate the Buy America Preference, which mandates that all iron,
steel, manufactured goods, and construction materials used in the award
be manufactured domestically. DOE is seeking public comment as to
whether this proposed Waiver is in the public interest, as it will
provide the Department and its stakeholders a reasonable adjustment
period to implement BABA in a more thorough, effective, and exacting
manner.
DATES: Comments on the proposed Waiver set out in this document are due
on or before August 5, 2022. This proposed Waiver applies to applicable
awards for a period of 180 days after its implementation, unless, after
reviewing the public comments, DOE publishes a subsequent notice in the
Federal Register explaining any changes to its determination to issue
this Waiver.
ADDRESSES: Interested persons are invited to submit comments on this
proposed general applicability waiver. To receive consideration as
public comments, comments must be submitted through the method(s)
listed. All submissions must refer to the listed docket number and
title.
1. Submission of Comments by Mail. Comments may be submitted by
mail to <a href="/cdn-cgi/l/email-protection#cc8eb9b58da1a9bea5afada28d9c9bada5baa9be8ca9a9e2a8a3a9e2aba3ba"><span class="__cf_email__" data-cfemail="a2e0d7dbe3cfc7d0cbc1c3cce3f2f5c3cbd4c7d0e2c7c78cc6cdc78cc5cdd4">[email protected]</span></a>.
2. No facsimile comments. Facsimile (FAX) comments will not be
accepted.
FOR FURTHER INFORMATION CONTACT: Mr. Richard Bonnell, U.S. Department
of Energy, Office of Management, 1000 Independence Avenue SW,
Washington, DC 20585-0121. Telephone: (202) 287-1747. Email:
<a href="/cdn-cgi/l/email-protection#4c0e39350d21293e252f2d220d1c1b2d253a293e0c292962282329622b233a"><span class="__cf_email__" data-cfemail="8ac8fff3cbe7eff8e3e9ebe4cbdaddebe3fceff8caefefa4eee5efa4ede5fc">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Build America, Buy America
The Build America, Buy America Act, was enacted under Division G,
Title IX of President Biden's Infrastructure Investment and Jobs Act, a
once-in-a-generation opportunity to fix our crumbling infrastructure.
The President also views this investment as an opportunity to create
domestic manufacturing jobs, strengthen supply chains, and help lower
costs. To that end, BABA attaches a sweeping series of
[[Page 43507]]
requirements to certain Federally-assisted projects, with the goal of
fomenting a resilient domestic supply chain and a manufacturing supply
for a number of critical materials both for nascent and existing
industries in the United States.
Per section 70914 of the IIJA, Agencies may not obligate funds for
an ``infrastructure project'' unless all of the iron, steel,
manufactured products, and construction materials used in the project
are produced in the United States. Further, section 70912 of the IIJA
provides an extensive list of items that fall under the definition of
``infrastructure,'' and defines ``project'' as ``the construction,
alteration, maintenance, or repair of infrastructure in the United
States.'' Effectively, this requirement mandates that Federal agencies
must carefully review the particulars of a proposed project funded by
Federal financial assistance to ensure that any required iron, steel,
manufactured products, and/or construction materials were produced
domestically (``Buy America''). This necessitates the creation of
internal processes to properly vet each funded project to determine Buy
America applicability, as well as external, recipient-facing processes
that will allow recipients to properly understand, comply with, and
report on the obligations established by the Preference. Federal
agencies are standing up processes to implement and track these Buy
America requirements to ensure that Federally-funded infrastructure
projects are carried out using American-made goods.
Advancing these objectives will require a long-term, dedicated
approach; there are gaps in our manufacturing base and product
knowledge base that will not be filled overnight, but which the BABA
will help us fill and strengthen over time. The ultimate measure of
success will be significant investment in America's infrastructure
while contemporaneously maximizing the use of American-made goods.
II. DOE Implementation Progress Thus Far
Since the passage of the IIJA on November 15, 2021, DOE has--
alongside several other Federal agencies--worked closely with OMB's
Made In America Office to meet necessary statutory requirements and to
provide feedback to help OMB generate guidance and scope out the
specific details of BABA's application. This process began with an
attempt to identify--using guidance issued by OMB in its M-22-08
Memorandum, Identification of Federal Financial Assistance
Infrastructure Programs Subject to the Build America, Buy America
Provisions of the Infrastructure Investment and Jobs Act \1\--programs
which could be defined as ``infrastructure programs'' as that term is
defined in the IIJA. Although the Department was able to identify some
programs which would likely include infrastructure projects, the
results of this analysis led to the determination that the Department
does not have any programs which could categorically be defined as
``infrastructure programs.'' Rather, the vast majority of the
Department's operations are structured in such a way that funding
infrastructure projects is possible, but not necessarily predictable.
---------------------------------------------------------------------------
\1\ <a href="https://www.whitehouse.gov/wp-content/uploads/2021/12/M-22-08.pdf">https://www.whitehouse.gov/wp-content/uploads/2021/12/M-22-08.pdf</a>.
---------------------------------------------------------------------------
The Department therefore has been soliciting information from its
internal programs to determine how to best meet the requirements of the
BABA, as well as to determine any unique circumstances present in the
Department's financial assistance programs that would require
adjustments or additional consultation with the Made In America Office.
The Department has attempted to establish some preliminary processes in
an attempt to avoid the need for an adjustment period waiver. However,
because of the nature of the Department's financial assistance
operations, which may, but do not necessarily, involve infrastructure
projects, additional time is needed to not only create processes that
can pinpoint infrastructure projects to be funded through programs
whose primary goal is research and development funding rather than
infrastructure, but also to determine specific items that this waiver
would cover. In other words, application of the Preference at the
Department will need to be done on a case-by-case basis, which
precludes the option of using a ``one size fits all'' approach to Buy
America.
In addition, the Department has a significant number of awards that
are slated to be made in the next several months which stem from
Funding Opportunity Announcements that were released well before May
14, 2022. However, the Department does not want to unfairly burden
applicants given that they were not granted the opportunity to
incorporate the Buy America requirements into the planning of their
award schedules and budgets from the outset.
III. Waivers
The Act provides three bases upon which proposed waivers must be
based, and it authorizes two distinct types of waivers. First, section
70914(b) of BABA permits Agencies or financial assistance recipients to
submit waiver requests based on the following justifications:
1. Applying the domestic content procurement preference would be
inconsistent with the public interest;
2. Types of iron, steel, manufactured products, or construction
materials are not produced in the United States in sufficient and
reasonably available quantities or of a satisfactory quality; or
3. The inclusion of iron, steel, manufactured products, or
construction materials produced in the United States will increase the
cost of the overall project by more than 25 percent.
Furthermore, BABA authorizes two distinct types of waivers:
specific waiver requests, which are tailored to individual projects and
are typically the kind that will be submitted by financial assistance
recipients; and ``general applicability'' waivers (discussed in section
70914(d)), like the one proposed by this notice, which affect whole-
cloth programs or agencies as a class. In the interests of
transparency, any proposed waivers will be required to be submitted for
public comment for a period of at least 15 days.
Any waivers will be narrowly tailored to achieve the specific needs
of the project or projects without diluting the overall goals of BABA
to fill supply chain gaps and focus more Federal funds toward American
manufacturing. As a participant in a global economy, the United States
will continue to rely on its trading partners and allies for products
that either cannot be manufactured domestically at all or cannot be
manufactured domestically without great difficulty. Therefore, the
waivers represent a practical tool to ensure Federally-funded projects
can proceed as normal without disruptions to timeline or budget. These
waivers will also serve to send clear market signals, creating space
for American firms to respond to the gaps identified by the waivers,
eventually obviating the need for the waivers altogether.
IV. Public Interest in a General Applicability Waiver of Buy America
Provisions
As the requirements of BABA are tied to the provision of several
different varieties of Federal financial assistance utilized by the
Department, and the Department obligates billions of dollars to
financial assistance awards each fiscal year, a comprehensive and
[[Page 43508]]
effective implementation of BABA in the Department stands to play a
substantial role in achieving the outcomes for which BABA was created.
Moreover, while the Department is able to identify some programs which
will be more likely to fund projects that include the construction,
alteration, maintenance, or repair of public infrastructure in the
United States, this is not the `exclusively' focus on funding research,
development, and demonstration of energy technology with no dedicated
infrastructure focus. These programs will not be able to definitively
identify the presence of infrastructure projects until: (1)
applications under a funding opportunity announcement are received; and
(2) projects are identified for selection. This is true even for
programs that are more likely to include infrastructure work given that
there are no programs administered by the Department which mandate
infrastructure projects through their enabling statute(s).
The Department's financial assistance programs award approximately
2,000 grants and cooperative agreements each year and anticipate at
least doubling this amount with awards for programs authorized under
the IIJA. These programs span a multitude of industries, stakeholders,
and entity types within the energy sector, which will ensure the
effects of BABA are widespread, but which also presents unique
challenges for the Department, as there is no ``one size fits all''
implementation framework that can be easily inserted into the
Department's operations.
Many of the awards that the Department makes between now and the
end of the FY22 fiscal year, which would be required to include the
Preference, originated in Funding Opportunity Announcements that were
issued long before the May 14, 2022 implementation date of BABA or the
April 18, 2022 issuance of the M-22-11 memorandum from OMB, entitled
Initial Implementation Guidance on Application of Buy America
Preference in Federal Financial Assistance Programs for Infrastructure
<SUP>2</SUP> (``OMB Memorandum M-22-11''), which provided Federal
agencies with expanded implementation guidance on the particulars of
BABA. There is, therefore, a strong public interest in ensuring that
the requirements which those recipients expected as part of their award
execution are not changed mid-stream. Implementing this Waiver would
ensure that awards requiring the Preference would stem from Funding
Opportunity Announcements that provided clear and detailed guidance on
BABA requirements so as to afford applicants an opportunity to properly
integrate those requirements into their project and budget planning.
The Waiver will thus serve to send a signal to recipients and
manufacturers that the Department intends to take application of the
Preference seriously, while also signaling that it understands that
serious application requires appropriate notice and guidance of the
Department's expectations.
---------------------------------------------------------------------------
\2\ <a href="https://www.whitehouse.gov/wp-content/uploads/2022/04/M-22-11.pdf">https://www.whitehouse.gov/wp-content/uploads/2022/04/M-22-11.pdf</a>.
---------------------------------------------------------------------------
In addition to the necessary internal process changes that must be
generated and vetted inside the Department, BABA represents a major
change to how many Federal financial assistance recipients, including
States, local governments, and Tribal governments must plan, scope, and
execute projects that fall under the purview of BABA, requiring
application of the Preference. Many recipients may not be familiar with
the process of conducting appropriate market research and sourcing
products that meet BABA's requirements, creating the risk of
noncompliance and project stops in applicable projects, especially in
cases where no BABA information was provided in the FOA to which those
entities originally applied. Moreover, many DOE recipients include
smaller entities--such as local governmental entities or tribal
governments--which may not have resources to quickly adapt to the
requirement to domestically source iron, steel, manufactured products,
and/or construction materials without significant assistance from DOE.
Prior Department experience working with these entities applying the
Buy America requirement under ARRA may be instructive. However, it
cannot be assumed that many of the entities required to apply the
Preference will be able to easily locate domestic sources of applicable
items or identify instances when international trade agreements
consider foreign products ``domestic'' for purposes of the Preference.
The Waiver is therefore necessary to avoid disruption of projects
when the applicants could not have foreseen the BABA requirements at
the time when they planned their project activities. In addition, it
would allow the Department an opportunity to work with and provide
sufficient notice to its future applicants and recipients to ensure
that the Preference can be effectively and efficiently integrated into
a large swath of the Department's Federal financial assistance
activities without disrupting DOE's primary mission of ensuring
security and prosperity by addressing America's energy, environmental,
and nuclear challenges through transformative science and technology
solutions.
Accordingly, with respect to the challenges discussed previously,
DOE plans on conducting the following activities during the Waiver
period:
1. Consulting with DOE financial assistance programs to ensure that
all programmatic needs and unique requirements are met, consistent with
the requirements of BABA;
2. Designing a process to effectively vet applications submitted to
Funding Opportunity Announcements to determine whether the Preference
must be applied, avoiding unnecessary disruption to the project
selection process and minimizing, where possible, such reviews for
projects that are not likely to be selected for award;
3. Determining what documentation and/or certification processes
will be needed from applicants and/or recipients to demonstrate project
compliance with the Preference, as well as processes to address non-
compliance with the Preference;
4. Crafting comprehensive guidance for applicants and recipients to
assist with the planning and integration of the Preference, as well as
waiver processes so that projects that need a waiver can easily and
efficiency request one; and
5. Investigating the need for a Paperwork Reduction Act approval
for the information collected as part of recipient compliance with
BABA.
At the conclusion of the Waiver period, DOE expects to have
specific guidance for its stakeholders on evaluating their proposed
project for the presence of construction, alteration, maintenance, and/
or repair of infrastructure in the United States, and properly
integrating the domestic procurement of iron, steel, manufactured
products, and/or construction materials into their proposed project
budgets and schedules as part of their project applications. There will
also be an expectation that applicants will seek waivers early and as a
result of legitimate needs, as the Department will also be issuing
clear waiver guidance with a strong focus on the notion that waivers be
issued judiciously.
V. Assessment of Cost Advantage of a Foreign-Sourced Product
Under OMB Memorandum M-22-11, agencies must assess ``whether a
significant portion of any cost advantage of a foreign-sourced product
is the result of the use of dumped steel, iron, or manufactured
products or the use of injuriously subsidized steel, iron, or
[[Page 43509]]
manufactured products,'' before granting a public interest waiver. As
the impetus for this Waiver is not related to the sourcing of foreign
products, DOE has determined that the above-mentioned assessment is not
applicable.
VI. Limited Duration of Waiver
DOE understands and is invested in the successful implementation of
BABA and the Preference in tandem with the Department's core mission.
The Department will therefore work expeditiously to achieve the
objectives discussed in this notice of proposed Waiver. Although the
Waiver will be active for applicable awards during a period of 180 days
after its implementation, the Department reserves the right to
terminate the Waiver early if the objectives of the Waiver are
completed before the planned conclusion of the Waiver period. If the
Department opts to do so, it will provide as much advance notice as
possible.
VII. Solicitation of Comments
As required under section 70914 of the IIJA, DOE is soliciting
comments from the public on this proposed Waiver. In particular, DOE
welcomes comments on the length, purpose, and scope of the Waiver to
allow DOE to make an informed final determination on those aspects of
the Waiver, at a minimum. Please refer to the DATES and ADDRESSES
sections of this notice for information on submission of comments.
Confidential Business Information: Pursuant to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public discourse should submit via
email two well-marked copies: one copy of the document marked
``confidential'' including all the information believed to be
confidential, and one copy of the document marked ``non-confidential''
with the information believed to be confidential deleted. Submit these
documents via email. DOE will make its own determination about the
confidential status of the information and treat it according to its
determination.
Signing Authority: This document of the Department was signed on
July 15, 2022, by John Bashista, Director of Acquisition Management,
pursuant to delegated authority from the Secretary of Energy. That
document, with the original signature and date is maintained by DOE.
For administrative purposes only, and in compliance with requirements
of the Office of the Federal Register, the undersigned DOE Federal
Register Liaison Officer has been authorized to sign and submit the
document in electronic format for publication, as an official document
of the Department of Energy. This administrative process in no way
alters the legal effect of this document upon publication in the
Federal Register.
Signed in Washington, DC, on July 18, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2022-15569 Filed 7-20-22; 8:45 am]
BILLING CODE 6450-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on July 21, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.