Buy America Waiver Notification |
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Nicole R. Nason
Federal Highway Administration
7 August 2020
[Federal Register Volume 85, Number 153 (Friday, August 7, 2020)]
[Notices]
[Pages 48059-48061]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17220]
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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
Buy America Waiver Notification
AGENCY: Federal Highway Administration (FHWA), Transportation (DOT).
ACTION: Notice.
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SUMMARY: This notice provides information regarding FHWA's finding that
it is appropriate to grant a Buy America waiver to the Alaska
Department of Transportation and Public Facilities (Alaska DOT&PF) for
procurement of foreign iron and steel components for the lift systems
in the Gustavus Ferry Terminal improvement project in Gustavus, Alaska,
specifically including wire rope assemblies.
DATES: The effective date of the waiver is August 10, 2020.
FOR FURTHER INFORMATION CONTACT: For questions about this notice,
please contact Mr. Gerald Yakowenko, FHWA Office of Program
Administration, (202) 366-1562, or via email at
Gerald.Yakowenko@dot.gov. For legal questions, please contact Mr.
Patrick C. Smith, FHWA Office of the Chief Counsel, 202-366-1345, or
via email at Patrick.C.Smith@dot.gov. Office hours for FHWA are from
8:00 a.m. to 4:30 p.m., E.T., Monday through Friday, except Federal
holidays.
SUPPLEMENTARY INFORMATION:
Electronic Access
An electronic copy of this document may be downloaded from the
Federal Register's home page at: http://www.archives.gov and the
Government Publishing Office's database at: http://www.access.gpo.gov/nara.
Background
FHWA's Buy America regulation in 23 CFR 635.410 requires a domestic
manufacturing process for any steel or iron products (including
protective coatings) that are permanently incorporated in a Federal-aid
construction project. The regulation also provides for a waiver of the
Buy America requirements when the application would be inconsistent
with the public interest or when satisfactory quality domestic steel
and iron products are not produced in the United States in sufficient
and reasonably available quantities. This notice provides information
regarding FHWA's finding that it is appropriate to grant Alaska DOT&PF
a Buy America waiver for procurement of foreign iron and steel
components for the lift systems in the Gustavus Ferry Terminal
improvement project in Gustavus, Alaska, specifically including wire
rope assemblies.
Background on the Gustavus Ferry Terminal: Gustavus is a town in
Southeast Alaska with a population of approximately 554. It is located
on the north shore of the Icy Strait, which separates Chichagof Island
to the south and the Alaska mainland to the north. Although Gustavus is
located on the mainland, it sits on a peninsula surrounded by the
mountains and icefields of Glacier Bay National Park on three sides and
the Icy Strait on the fourth. Given its location, Gustavus is not
connected to any highway system and can only be reached by boat or
plane. Thus, the Gustavus Ferry Terminal and Gustavus Airport provide
the only access between Gustavus and elsewhere.
The Gustavus Ferry Terminal is a multiple-use facility that
provides public transportation via the Alaska Marine Highway System
(AMHS) ferry service plus freight and fuel transfer operations through
private carriers. The terminal consists of an approach trestle, a
movable transfer bridge, mooring and fendering structures, and a
freight dock. The terminal improvements project will realign a portion
of the approach leading to the transfer bridge and modify the bridge
substructure by replacing the existing pontoon float with a hoist-
operated lift system, for which the wire rope assembly is needed.
The AMHS ferries, which operate out of the Gustavus Ferry Terminal,
provide a vital link for Gustavus residents and visitors to reach other
Southeast Alaska communities. The AMHS ferries transport both
passengers and vehicles and furnish access to healthcare, supplies, and
vital services that are not available locally. In addition, passengers
brought to Gustavus from the mainland support the town's tourism
industry. Gustavus receives ferry service from Juneau, Alaska, two days
per week most of the year. By ferry, Juneau is about four-and-a-half
hours away from Gustavus.
Considering the lack of access to Gustavus by road or bridge, the
AMHS system is the only reliable and affordable mode of transportation
for many users. As the only available means for owner-occupied vehicles
to access Gustavus, the AMHS system is more critical to the community
than most Federal-aid-supported ferry systems. Although Gustavus may
also be accessed by air, the AMHS system provides a less costly
alternative that is essential to many of its users (including lower-
income users who cannot afford alternative modes). It also provides
transportation security on days when weather prevents travel by air.
Construction of the terminal improvements project at the Gustavus
Ferry Terminal is currently underway. The community anticipates that
AMHS ferry service will resume in the summer of 2020 following
construction. The wire rope assembly that is the subject of this waiver
request is critical to maintain the schedule of ongoing construction
and restore AMHS ferry service to Gustavus. Delaying project completion
will cause continued loss of AMHS ferry service to Gustavus and its
residents.
Waiver Request and Supporting Information: The Alaska DOT&PF
originally submitted a Buy America waiver request to FHWA for the wire
rope assemblies and certain other parts, including hoists, sheaves,
hanger rod clamps, and bridge control components, on February 2, 2017.
Prior to submitting its waiver request, Alaska DOT&PF sought but failed
to identify domestic manufacturers for these products.
In accordance with the Consolidated Appropriations Act of 2017
(Pub. L. 115-31), FHWA published a notice seeking comment on whether a
waiver was appropriate on its website, https://www.fhwa.dot.gov/construction/contracts/waivers.cfm?id=142, on March 9, 2017. The FHWA
received one comment in response to the publication. That comment did
not offer any information on the availability of compliant products,
nor did it suggest specific, additional actions that Alaska DOT&PF
could take to maximize its use of goods, products, and materials
produced in the United States. Thus, Alaska DOT&PF did not receive any
new information indicating that the subject parts could be produced by
domestic manufacturers.
Following publication of the notice, the President issued Executive
Order 13788 on April 18, 2017. Consistent with Executive Order 13788,
FHWA evaluated Alaska DOT&PF's request to determine whether it had
sought to maximize the use of goods, products, and materials produced
in the U.S. on the project.
Over the next three years, Alaska DOT&PF successfully found Buy
America compliant parts or alternatives for most of the other items in
its original request. Although Alaska DOT&POF initially believed it
also found domestic alternatives for the wire rope assemblies, it
learned in early 2020 that the alternatives it previously identified
were not suitable for use. To establish that Alaska DOT&PF made
adequate efforts to find domestic alternatives or maximize domestic
content for the wire
[[Page 48060]]
rope assemblies, Alaska DOT&PF responded to several iterations of
follow-up questions from FHWA explaining and providing documentation of
Alaska DOT&PF's efforts.
Although Alaska DOT&PF did not identify compliant wire rope
assemblies, it provided information to FHWA supporting its waiver
request, including:
Information describing the domestic content
characteristics of the manufactured products needed, including the
sources and assembly locations of those products;
Information supporting the technical necessity of these
specific products for the project's hoist-operated lift system and
demonstrating that alternative designs were infeasible;
Information documenting efforts to locate compliant
manufactured products, including correspondence with potential domestic
manufacturers;
Information documenting efforts to maximize domestic
content even if full compliance was not possible, including efforts to
have foreign manufacturers incorporate domestic steel; and
Information describing the effects of denying the request.
The following sections summarize relevant information from Alaska
DOT&PF.
Alaska DOT&PF's Efforts to Identify Compliant Products and Maximize
Domestic Content. After first requesting the waiver, Alaska DOT&PF
initially believed it found a domestic supplier for the wire rope
assemblies in August 2017. Pearlson Shiplift Corporation, the
manufacturer of the hoists for the terminal's lift system, notified
Alaska DOT&PF that it could supply compliant wire rope assemblies,
which Alaska believed eliminated the need for a waiver for this part.
Thus, the State let the contract believing that a domestic source for
the rope was available. In May 2019, the terminal improvements project
was awarded to Western Marine Construction for $9,053,100 with the
completion date set for July 1, 2020.
In January 2020, after assessing the strength demand for the higher
capacity hoists \1\ used in the project, Pearlson Shiplift Corporation
notified Alaska DOT&PF that it was unable to provide Buy America
compliant wire rope assemblies. Pearlson determined that only foreign-
sourced assemblies were adequate. In response, the project's
contractor, Western Marine Construction, proposed to use Buy-America-
compliant wire rope assemblies that had been salvaged from a previous
ferry terminal project. However, in February 2020, Western Marine
Construction's salvaged wire rope failed quality assurance testing and,
because the strength of the salvaged wire rope was inadequate, Pearlson
Shiplift Corporation would not permit its use. Pearlson Shiplift
Corporation was unable to furnish Buy-America-compliant wire rope
assemblies and, in March 2020, provided foreign-sourced assemblies to
the contractor instead. The foreign-sourced wire rope assemblies cost
approximately $14,000.
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\1\ In January 2019, Alaska DOT&PF determined that the State-
furnished hoists were structurally inadequate for the project.
Accordingly, Pearlson Shiplift Corporation provided hoists meeting
the higher load capacity requirements.
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In April 2020, Pearlson Shiplift Corporation again confirmed to
Alaska DOT&PF that Buy-America-compliant wire rope assemblies are not
available meeting the needed specifications for the higher capacity
hoists being used on the project. The compliant ropes that are
available are not suitable and will not serve the functions required
for the hoists.
The wire rope assemblies needed for the project must provide
superior strength, corrosion resistance, and durability. More
specifically, they must have properties including: (i) Very high
tensile strength and compactness, providing a 7-to-1 factor of safety,
larger than the 5-to-1 factor commonly used for rigging; (ii) great
corrosion resistance to withstand the corrosive seawater environment,
which is provided by galvanizing each wire before weaving them into
strands; and (iii) more flexibility and fatigue resistance or
durability than standard ropes. Pearlson Shiplift Corporation will
permit only ropes meeting these specifications to be used with its
hoist systems. Pearlson Shiplift Corporation has developed a
specialized rope meeting these specifications in partnership with
Bridon-Bekaert-UK. Pearlson reports that, although it believes that
shiplift wire rope assemblies were produced by manufacturers in the
United States approximately 15 years ago, ropes meeting its specialized
requirements are now produced exclusively at Bridon-Bekaert's facility
in England. Alaska DOT&PF provided documentation of correspondence with
domestic manufacturers supporting Pearlson's statements.
Although ultimately unsuccessful, Alaska DOT&PF made substantial
efforts to find suitable Buy America compliant wire rope assemblies. In
addition to the efforts described above, Alaska DOT&PF also contacted
another domestic manufacturer of shiplift hoists and major domestic
suppliers of wire ropes. Because shiplift hoists are specialized
systems, Alaska DOT&PF was able to locate only one other domestic
manufacturer, Worthington Industries, in Cleveland, Ohio. When
contacted, Worthington Industries reported it does not have a domestic
supplier of the wire rope assemblies. It uses the same foreign vendor
as Pearlson Shiplift Corporation, Bridon-Bekaert-UK.
Bridon-Bekaert USA (BBRG) and WireCo WorldGroup are the major
domestic suppliers of wire ropes. They both reported to Alaska DOT&PF
that they do not have the capacity in the United States to produce a
Buy-America-compliant wire rope to meet or exceed the Pearlson design
specifications.
The BBRG reported to Alaska DOT&PF that it does not have the
capability to draw galvanized wire at its domestic facility, which is a
requirement of the specifications. For BBRG to produce a Buy-America-
compliant wire rope meeting the specifications, it would need to source
the galvanized wires from others. Domestic demand for galvanized wire
ropes of this type is low, leaving few options that are compliant.
Moreover, a finished wire rope is composed of multiple wire diameters
and tensile grades. Not all the wires required to make the finished
rope are available domestically. The very low demand for shiplift ropes
and domestic non-availability of certain required wires precludes any
possibility of sourcing a potential ``special run'' at this time.
WireCo WorldGroup reported that it cannot achieve the strength
requirements using standard steel wire produced domestically. The
project would require a specialty drawing rod from a domestic supplier.
This would take a significant amount of time and is not achievable
without causing significant project delay.
Timing and Need for a Waiver. Given the developments between
January and March 2020 discussed above, Alaska DOT&PF maintains that
approval of a Buy America waiver for the wire rope assemblies is now
critical to maintain the schedule of ongoing construction and restore
AMHS ferry service to Gustavus. Alaska DOT&PF believes it has exhausted
its options for domestic alternatives and has returned to its original
waiver request to procure foreign-sourced components provided by
Pearlson. The request has become urgent due to the construction
schedule and the developments described in the preceding paragraphs.
Delaying project completion will cause continued loss of AMHS ferry
service to and from Gustavus.
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The impacts of loss of AMHS ferry service to Gustavus during the
summer months would be significant. The economy in Gustavus relies
heavily on summer tourism. Because of the large number of tourists who
arrive by boat or plane in the area, Gustavus is considered the gateway
to Glacier Bay National Park. Between 3,000 and 4,000 passengers visit
Gustavus by ferry annually, with about half of that traffic in just
three months between June and August. All of this traffic goes through
the Gustavus Ferry Terminal. Thus, ongoing loss of AMHS ferry service
to Gustavus during the summer months would have a devastating impact on
the economy of the town.
Lack of ferry service also increases costs and economic stress
related to supply deliveries, especially on small businesses. Although
landing craft and fishing vessels may be used for freight deliveries
while ferry service is suspended, many of the small businesses in
Gustavus ordinarily rely heavily on the AMHS ferry service to obtain
supplies. For example, small business owners often travel by ferry in
their vehicles to Juneau, load their vehicles with needed supplies, and
subsequently return to Gustavus by ferry. For these reasons, timely
restoration of the ferry service to Gustavus is an economic necessity
for the town.
Finding and Request for Comments
Based on all the information available to the Agency, FHWA
concludes that there are no domestic manufacturers of the wire rope
assemblies needed for the lift systems in the Gustavus Ferry Terminal
Improvement project. This finding is only for the procurement of non-
domestic iron and steel components for procurement of the wire rope
assemblies for the project. This finding does not apply to other parts
in the original waiver request, including hoists, sheave assemblies,
hanger rod clamps, and bridge control components.
Alaska DOT&PF and its contractors and subcontractors involved in
the procurement of the wire rope assemblies are reminded of the need to
comply with the Cargo Preference Act in 46 CFR part 38, if applicable.
In accordance with the provisions of Section 117 of the SAFETEA-LU
Technical Corrections Act of 2008 (Pub. L. 110-244, 122 Stat. 1572),
FHWA is providing this notice as its finding that a waiver of Buy
America requirements is appropriate. The FHWA invites public comment on
this finding for an additional 5 days following the effective date of
the finding. Comments may be submitted to FHWA's website via the link
provided to the waiver page noted above.
Authority: 23 U.S.C. 313; Pub. L. 110-161; 23 CFR 635.410.
Nicole R. Nason,
Administrator, Federal Highway Administration.
[FR Doc. 2020-17220 Filed 8-6-20; 8:45 am]
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