Notice2022-24296
Public Interest De Minimis, Small Grants, and Minor Components Waiver of Build America, Buy America Provisions as Applied to Certain Recipients of HUD Federal Financial Assistance
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Published
November 7, 2022
Issuing agencies
Housing and Urban Development Department
Abstract
In accordance with the Build America, Buy America Act ("BABA" or "the Act") this notice advises that HUD is proposing a departmentwide public interest de minimis, Small Grants, and Minor Components waiver to the Buy America Domestic Content Procurement Preference ("Buy America Preference," or "BAP") as applied to the iron, steel, manufactured products, and construction materials requirement of the Act for recipients of Federal Financial Assistance. For the purposes of this proposed waiver, HUD is proposing to waive the application of the BAP for infrastructure projects whose total cost is an amount equal to or less than the Simplified acquisition threshold, which is currently $250,000. HUD is also proposing to waive the application of the BAP for all Small Grants of Federal Financial Assistance that are equal to or below the Simplified acquisition threshold, which is currently $250,000. Additionally, HUD is proposing to waive the application of the BAP for Minor Components of an infrastructure project, such that a cumulative total of no more than a total of 5 percent of the total cost of the iron, steel, manufactured products, and construction materials used in and incorporated into the infrastructure project, up to a maximum of $1 million. In accordance with the Act, HUD has found that such proposed De Minimis, Small Grants and Minor Components waivers are in the public interest. The waiver will assist HUD and its grantees and funding recipients in preventing immediate delays to critically important projects that serve to ensuring the safety and health of HUD constituents and continuing to provide economic opportunity through housing and community development projects. Moreover, this waiver will assist HUD in working to strengthen the housing market to bolster the economy and protect consumers, meet the need for quality affordable rental homes, utilize housing as a platform for improving quality of life, and build inclusive and sustainable communities free from discrimination.
Full Text
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<title>Federal Register, Volume 87 Issue 214 (Monday, November 7, 2022)</title>
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[Federal Register Volume 87, Number 214 (Monday, November 7, 2022)]
[Notices]
[Pages 67051-67053]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-24296]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6331-N-08]
Public Interest De Minimis, Small Grants, and Minor Components
Waiver of Build America, Buy America Provisions as Applied to Certain
Recipients of HUD Federal Financial Assistance
AGENCY: Office of the Secretary, U.S. Department of Housing and Urban
Development (HUD).
ACTION: Notice.
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SUMMARY: In accordance with the Build America, Buy America Act
(``BABA'' or ``the Act'') this notice advises that HUD is proposing a
departmentwide public interest de minimis, Small Grants, and Minor
Components waiver to the Buy America Domestic Content Procurement
Preference (``Buy America Preference,'' or ``BAP'') as applied to the
iron, steel, manufactured products, and construction materials
requirement of the Act for recipients of Federal Financial Assistance.
For the purposes of this proposed waiver, HUD is proposing to waive the
application of the BAP for infrastructure projects whose total cost is
an amount equal to or less than the Simplified acquisition threshold,
which is currently $250,000. HUD is also proposing to waive the
application of the BAP for all Small Grants of Federal Financial
Assistance that are equal to or below the Simplified acquisition
threshold, which is currently $250,000. Additionally, HUD is proposing
to waive the application of the BAP for Minor Components of an
infrastructure project, such that a cumulative total of no more than a
total of 5 percent of the total cost of the iron, steel, manufactured
products, and construction materials used in and incorporated into the
infrastructure project, up to a maximum of $1 million. In accordance
with the Act, HUD has found that such proposed De Minimis, Small Grants
and Minor Components waivers are in the public interest. The waiver
will assist HUD and its grantees and funding recipients in preventing
immediate delays to critically important projects that serve to
ensuring the safety and health of HUD constituents and continuing to
provide economic opportunity through housing and community development
projects. Moreover, this waiver will assist HUD in working to
strengthen the housing market to bolster the economy and protect
consumers, meet the need for quality affordable rental homes, utilize
housing as a platform for improving quality of life, and build
inclusive and sustainable communities free from discrimination.
DATES: HUD published this proposed waiver on its website on October 31,
2022. Comments on the proposed waiver set out in this document are due
on or before November 15, 2022.
ADDRESSES: Interested persons are invited to submit comments on this
proposed general applicability waiver. Copies of all comments submitted
are available for inspection and downloading at <a href="http://www.regulations.gov">www.regulations.gov</a>.
To receive consideration as public comments, comments must be
submitted through one of two methods, specified below. All submissions
must refer to the above docket number and title.
1. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
<a href="http://www.regulations.gov">www.regulations.gov</a>.
HUD strongly encourages commenters to submit comments
electronically. Electronic submission of comments allows the commenter
maximum time to prepare and submit a comment, ensures timely receipt by
HUD, and enables HUD to make them immediately available to the public.
Comments submitted electronically through the <a href="http://www.regulations.gov">www.regulations.gov</a>
website can be viewed by other commenters and interested members of the
public. Commenters should follow the instructions provided on that site
to submit comments electronically.
2. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street SW, Room 10276,
Washington, DC 20410-0500.
No Facsimile Comments. Facsimile (FAX) comments will not be
accepted.
3. Public Inspection of Comments. All properly submitted comments
and communications submitted to HUD will be available for public
inspection and copying between 8:00 a.m. and 5:00 p.m. weekdays at the
above address. Due to security measures at the HUD Headquarters
building, an advance appointment to review the submissions must be
scheduled by calling the Regulations Division at (202) 708-3055 (this
is not a toll-free number).
FOR FURTHER INFORMATION CONTACT: Joseph Carlile, Department of Housing
and Urban Development, 451 Seventh Street SW, Room 10226, Washington,
DC 20410-5000, at (202) 402-7082 (this is not a toll-free number). HUD
welcomes and is prepared to receive calls from individuals who are deaf
or hard of hearing, as well as individuals with speech and
communication disabilities. To learn more about how to make an
accessible telephone call, please visit <a href="https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>. HUD encourages submission
of questions about this document be sent to
<a href="/cdn-cgi/l/email-protection#d193a4b8bdb590bcb4a3b8b2b093a4a890bcb4a3b8b2b091b9a4b5ffb6bea7"><span class="__cf_email__" data-cfemail="aceed9c5c0c8edc1c9dec5cfcdeed9d5edc1c9dec5cfcdecc4d9c882cbc3da">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Build America, Buy America
The Build America, Buy America Act (``BABA'' or ``the Act'') was
enacted on November 15, 2021, as part of the Infrastructure Investment
and Jobs Act (IIJA). Public Law 117-58. The Act establishes a domestic
content procurement preference, the BAP, for Federal infrastructure
programs. Section 70914(a) of the Act establishes that no later than
180 days after the date of enactment, HUD must ensure that none of the
funds made available for infrastructure projects may be obligated by
the Department unless it has taken steps to ensure that the iron,
steel, manufactured products, and construction materials used in a
project are produced in the United States. In section 70912, the Act
further defines a project to include ``the construction, alteration,
maintenance, or repair of infrastructure in the United States'' and
includes within the definition of infrastructure those items
traditionally included along with buildings and real property. Thus,
starting May 14, 2022,
[[Page 67052]]
new awards of Federal Financial Assistance from a program for
infrastructure, and any of those funds obligated by the grantee, are
covered under BABA provisions of the Act, 41 U.S.C. 8301 note, unless
covered by a waiver.
II. HUD's Progress in Implementation of the Act
Since the enactment of the Act, HUD has worked diligently to
implement the BAP. Consistent with the requirements of section 70913 of
the Act, HUD produced a report identifying and evaluating all of HUD's
Federal Financial Assistance programs for compliance with the BAP on
January 19, 2022, through Federal Register notice ``Identification of
Federal Financial Assistance Infrastructure Programs Subject to the
Build America, Buy America Provisions of the Infrastructure Investment
and Jobs Act''. (87 FR 2894) In order to ensure orderly implementation
of the BAP across HUD's programs, HUD published two general
applicability waivers for HUD's programs on May 3, 2022. The first
notice, ``General Applicability Waiver of Build America, Buy America
Provisions as Applied to Recipients of HUD Federal Financial
Assistance'' (87 FR 26219), extended the implementation date for the
BAP until November 14, 2022, unless covered by a subsequent waiver.
Thus, no funds obligated by HUD before November 14, 2022, are subject
to the BAP. The second notice, ``General Applicability Waiver of Build
America, Buy America Provisions as Applied to Tribal Recipients of HUD
Federal Financial Assistance'' (87 FR 26221), extended the
implementation date for the BAP for Federal Financial Assistance
provided to Tribal recipients for a period of one year. Additionally,
HUD published a Request for Information ``Request for Information
Relating to the Implementation of the Build America, Buy America Act''
to gather additional information necessary to fully implement the BAP
for HUD programs and to adequately prepare necessary Paperwork
Reduction Act notices relating to such implementation. (June 1, 2022,
87 FR 33193)
Additional details on HUD's implementation of the BABA requirements
can be found at <a href="https://www.hud.gov/programoffices/generalcounsel/BABA">https://www.hud.gov/programoffices/generalcounsel/BABA</a>.
III. Waiver Authority
Under section 70914(b), HUD has authority to waive the application
of a domestic content procurement preference when (1) application of
the preference would be contrary to the public interest, (2) the
materials and products subject to the preference are not produced in
the United States at a sufficient and reasonably available quantity or
satisfactory quality, or (3) inclusion of domestically produced
materials and products would increase the cost of completing the
Covered Activities by more than 25 percent. Section 70914(c) provides
that a waiver under 70914(b) must be published by the agency with a
detailed written explanation for the proposed determination and provide
a public comment period of not less than 15 days.
IV. Public Interest in This General Applicability Waiver of Buy America
Provisions
The Office of Management and Budget's April 18, 2022, memorandum,
``Initial Implementation Guidance on Application of Buy America
Preference in Federal Financial Assistance Programs for
Infrastructure'' (M-22-11) encourages agencies to consider whether it
is in the public interest to waive application of a BAP to awards below
the Simplified Acquisition Threshold. HUD is proposing this waiver not
as an alternative to increasing domestic production, but as an
important tool to implement the Buy American provisions in the most
efficient manner in order to promote investment in HUD's domestic
manufacturing base, strengthen critical supply chains, and position
United States workers and businesses to compete and lead globally in
the 21st century. HUD understands that advancing Made in America
objectives is a continuous effort. HUD plans to move forward to
implement the new requirements in a way that maximizes coordination and
collaboration to support long-term investments in domestic production.
Through this notice, HUD is proposing to waive the application of
the BAP for infrastructure projects whose total cost is an amount equal
to or less than the 2 CFR 200.1 Simplified acquisition threshold, which
is currently $250,000. HUD is also proposing to waive the application
of the BAP for all Small Grants of Federal Financial Assistance that
are equal to or below the 2 CFR 200.1 Simplified acquisition threshold,
which is currently $250,000. HUD is also proposing to waive the
application of the BAP for Minor Components of an infrastructure
project, such that a cumulative total of no more than a total of 5
percent of the total cost of the iron, steel, manufactured products,
and construction materials used in and incorporated into the
infrastructure project, up to a maximum of $1 million.
For purposes of the Act, an infrastructure project involves the
undertaking of any ``construction, alteration, maintenance, or repair''
of ``infrastructure,'' which includes, among other things, the
``structures, facilities and equipment'' of ``buildings and real
property.''
In accordance with the Act, HUD has found that such proposed De
Minimis, Small Grants and Minor Components waivers are in the public
interest. Such waivers will allow HUD, grantees and funding recipients
to focus their efforts on such critical projects. Proposing the waivers
is not an alternative to increasing domestic production. It is actually
a tool to promote investment in HUD's domestic manufacturing base in
the long term. The waivers are in the interest of efficiency, to ease
burdens for HUD grantees and funding recipients, will also allow HUD to
focus, particularly in the early phases of BABA implementation, on key
products, and critical supply chains where increased U.S. manufacturing
can best advance our economic and national security. These waivers will
allow HUD grantees and funding recipients to continue with projects.
Without these waivers, HUD will likely lose grantee and funding
recipient participation, be exposed to liabilities if HUD forces
grantees and funding recipients to modify their current plans to come
into compliance or delay critical activities to protect life, safety
and property, and will negatively impact the most vulnerable Americans
HUD seeks to serve.
For purposes of this waiver, HUD will evaluate the total cost of
the infrastructure project as it would for purposes of the review
contemplated under 24 CFR part 58, i.e., by defining the scope
consistent with 24 CFR 58.2(a)(4), as ``the activity, or a group of
integrally related activities, designed by the recipient to accomplish,
in whole or in part, a specific objective.'' HUD believes its grantees
and recipients of Federal Financial Assistance that will be used for
Covered Activities are familiar with this regulation and understand the
proper application of the concept in connection with their activities,
or as otherwise defined by HUD in a notice. However, in connection with
the public housing program, evaluation of certain maintenance and
repair activities within the definition of infrastructure projects
under the Act is not appropriate using this standard. Therefore, for
the purposes of determining the applicability of this waiver in
connection with the maintenance and
[[Page 67053]]
repair of public housing, HUD will evaluate the infrastructure project
as including the single relevant procurement contract for such
maintenance or repairs, or, where applicable, the collection of
procurements focused on the same specific objective (e.g., construction
of a resident service space) or limited scope of work (e.g., lead based
paint abatement).
In fiscal year 2022, HUD grantees will receive more than $15
billion through the Department's programs where infrastructure is an
eligible activity and may be subject to the BAP. For example, Community
Development Block Grant (CDBG) funds may be used for infrastructure
projects (e.g., water and sewer improvements, street improvements,
neighborhood facilities) or non-infrastructure uses (e.g., senior
services, youth services, operation of food banks, administrative and
planning expenses). HUD estimates that 40 percent of CDBG funds awarded
in 2021 ($1.4 billion of $3.5 billion total) were used on
infrastructure projects where the BAP could apply.
As HUD's previous Notice advised and as supported by several
comments received during the comment period, many of HUD's programs may
be subject to the BAP and have previously not required compliance with
similar Buy American preferences. Because the potential application of
BAP mandated by the Act is new to the majority of HUD's programs and
Federal Financial Assistance, this waiver advances BABA by reducing the
administrative burden to potential assistance recipients where the
costs of compliance with BABA could distract from the focus on higher
value BABA compliant items. Failure to provide recipients such
flexibilities could delay the award for infrastructure projects as
grantees and funding recipients must exert considerable effort
accounting for the sourcing for miscellaneous, low-cost items.
Moreover, HUD does not believe the waiver of the BAP for such awards
will undermine the full and robust implementation of the Act or the
ability of the agency to support the purposes behind the Act.
HUD expects to review this waiver every five years from the
effective date of this waiver or more often as appropriate. No funds
obligated by HUD or the grantee/funding recipient during the period of
the waiver that would be exempted from compliance with BAP as a result
of the waiver will be required to apply the BAP.
V. Impact of This Waiver on Other Federal Financial Assistance
Where the BAP or other BABA requirements are made applicable to
projects of a grantee or funding recipient by another Federal agency,
the grantee or funding recipient may not rely on this waiver as a
waiver of any requirement imposed by the other Federal agency for the
projects, nor is the grantee or funding recipient exempt from the
application of those requirements in accordance with the requirements
of the Federal agency providing such Federal Financial Assistance.
VI. Assessment of Cost Advantage of a Foreign-Sourced Product
Under OMB Memorandum M-22-11, ``Memorandum for Heads of Executive
Departments and Agencies,'' published on April 18, 2022, agencies are
expected to 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 manufactured products'' as appropriate
before granting a public interest waiver.\1\ HUD's analysis has
concluded that this assessment is not applicable to this waiver, as
this waiver is not based in the cost of foreign-sourced products. HUD
will perform additional market research during the duration of the
waiver to better understand the market to limit the use of waivers
caused by dumping of foreign-sourced products.
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\1\ See OMB Memorandum M-22-08, Identification of Federal
Financial Assistance Infrastructure Programs Subject to the Build
America, Buy America Provisions of the Infrastructure Investment and
Jobs Act, <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>.
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VI. Solicitation of Comments on the Waiver
As required under section 70914 of the Act, HUD is soliciting
comment from the public on the waiver announced in this Notice. In
particular, HUD invites comments on whether the reliance on the
Simplified acquisition threshold is an appropriate measure and if it is
set at an appropriate level for purposes of the waiver. Additionally,
HUD seeks comments on the percentage of costs excluded from coverage
and whether there should be a cap on the total amount excluded from
coverage. For example, should the total costs allowed to be excluded be
limited only by the 5% exclusion, is the cap of $1 million appropriate
or should it be capped at some other threshold?
Marcia L. Fudge,
Secretary.
[FR Doc. 2022-24296 Filed 11-3-22; 11:15 am]
BILLING CODE 4210-67-P
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