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March 31, 2014
Buy American requirement for CWA funding

Under the Consolidated Appropriations Act of 2014, any recipient of Clean Water State Revolving Funds (CWSRFs) or Drinking Water State Revolving Funds (DWSRFs) must use iron and steel products produced in the United States for projects involving the construction, alteration, maintenance, or repair of a public water system or treatment works if the project is funded through an assistance agreement executed beginning January 17, 2014, through the end of fiscal year 2014.  

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That general requirement comes with a significant number of additional provisions that the EPA addresses in an implementation memo released March 20, 2014. 

Waivers

The memo notes that the Agency will consider a request for a waiver from the “Buy American” requirement under three conditions:  >

  • If applying the requirement would be inconsistent with the public interest
  • If iron and steel products are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality
  • If inclusion of iron and steel products produced in the United States will increase the cost of the overall project by more than 25 percent

Only waiver requests submitted by states on behalf of funding recipients will be considered by the EPA.  The Agency says that evaluation of a public interest waiver request may be more complicated than that of other waiver requests, so more time may be needed for a decision.  

An example of a public interest waiver that might be issued could be for a community that has standardized on a particular type or manufacturer of a valve because of its performance to meet their specifications.  Switching to an alternative valve may require staff to be trained on the new equipment, and additional spare parts would need to be purchased and stocked, existing valves may need to be unnecessarily replaced, and portions of the system may need to be redesigned.  Therefore, requiring the community to install an alternative valve would be inconsistent with public interest.

Product types

Under the memo, an iron or steel product is one of the following made primarily of iron or steel that is permanently incorporated into the public water system or treatment works:

  • Lined or unlined pipes or fittings
  • Manhole covers
  • Municipal castings (28 examples are included)
  • Hydrants
  • Tanks
  • Flanges
  • Pipe clamps and restraints
  • Valves
  • Structural steel (defined in the memo)
  • Reinforced precast concrete
  • Construction materials (defined in the memo) 

For one of these products to be considered subject to the requirements, it must be made of greater than 50 percent iron or steel, measured by material cost.  Other than the products listed above, no other product is subject to the requirements.

Timing

The memo also discusses how a number of timing issues affect the requirements.  For example, any project with engineering plans that were approved by the responsible state authority before January 17, 2014, is excluded from the requirement.  Also, the requirement applies to entities that receive partial CWSRF or DWSRF funding and partial funding from states or other providers. 

The memo discusses the meaning of “produced in the U.S.”  Specifically, all manufacturing processes, including melting, refining, forming, rolling, drawing, finishing, fabricating, and coating, must be performed domestically.  However, raw materials such as iron ore, limestone, and iron and steel scrap are not covered by the requirement, and the material(s), if any, being applied as a coating are similarly not covered.

EPA’s implementation memo

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