UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
17 FEB 19/8
OFFICE OF WATER AND
HAZARDOUS MATERIALS
Construction Grants
Program Requirement Memorandum
<"Pm No. 78-3
SUBJECT: Buy American
FROM: John T. Rhett, Deputy Assistant Administrator y
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which have been mined, produced, or manufactured in the United States
exceeds 50 percent of the cost of all of its components. "Component" means
any article, material, or supply directly incorporated in a construction
material.
A component shall be considered to have been "mined, produced, or
manufactured in the United States" (regardless of its source in fact), if
the article, material, or supply in which it is incorporated was manufactured
in the United States and the component is of a class or kind determined
by the Regional Administrator to be not mined, produced, or manufactured in the
United States in sufficient and reasonably available commercial quantities
and of a satisfactory quality.
Bidding documents for construction work which is funded by a
Step 3 grant for which application is made after February 1, 1978, must
include the following statement:
INFORMATION REGARDING BUY AMERICAN PROVISION
(a) The Buy American Provision of Public Law 95-217 (section 215
of Public Law 92-500 as amended) as implemented by EPA
regulations and guidance, generally requires that preference
be given to the use of domestic construction material in the
performance of this contract.
(b) Bids or proposals offering use of nondomestic construction
material may be acceptable for award if the Regional Administrator
waives the Buy American provision based upon those factors that
are deemed relevant, including: (i) such use is not in the public
interest; (ii) the cost is unreasonable; (iii) the available
resources of the Agency are not sufficient to implement the provision;
or (iv) the articles, materials, or supplies of the class
or kind to be used or the articles, materials, or supplies from
which they are manufactured are not mined, produced, or
manufactured, as the case may be, in the United States in
sufficient and reasonably available commercial quantities and
of a satisfactory quality for the particular project. The
Regional Administrator may also waive the Buy American provision if
it is determined that application of this provision is contrary to
multilateral government procurement agreements. Such evidence as
the EPA Regional Administrator may deem relevant shall be furnished
to justify use of nondomestic construction material.
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Step 3 contracts must include the following paragraph in addition
to Appendix C-2:
BUY AMERICAN
In accordance with the Buy American provision
in Public Law 95-217 (section 215 of Public Law 92-500
as amended) and implementing EPA regulations and
guidelines, the Contractor agrees that preference
will be given to domestic construction material
by the contractor, subcontractors, materialmen,
and suppliers in the performance of this contract.
The Regional Administrator may waive the Buy American provision
based upon those factors that are deemed relevant, including: (i) such
use is not in the public interest; (ii) the cost is unreasonable; (iii)
the available resources of the Agency are not sufficient to implement the
provision (subject to the concurrence of the Deputy Administrator); or
(iv) the articles, materials, or supplies of the class or kind to be
used or the articles, materials, or supplies fron which they are manufactured
are not mined, produced, or manufactured, as the case may be, in the
United States in sufficient and reasonably available commercial quantities
and of a satisfactory quality for the particular project.
If the Regional Administrator believes that application of the Buy
American provision would be contrary to multilateral government procurement
agreements, the Regional Administrator may request the Deputy Administrator
to waive the provision.
The amount of cost differential by which domsstic construction
material may be given preference shall generally be the sum determined
by computing up to six percent of the bid or offered price of
materials of foreign origin including all costs of delivery to the
construction site, including any applicable duty, whether or not
assessed. Computations will normally be based on costs on the date
of opening of bids or proposals.
The Regional Administrator may utilize the appropriate procedures
of 40 CFR 35.939 in making determinations, and the "Buy-American"
procedures, regulations, precedents and requirements of other Federal
departments and agencies shall generally be observed.
The Buy American provision is new to the EPA municipal wastewater
construction grants program, and no specific EPA precedents exist. To
help create such precedents, where it is determined that the Buy American
provision should be waived, or when problems or questions arise, it should
be brought to the attention of the Director of the Municipal Construction
Division and the Assistant General Counsel-Grants.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
17 FEB 1978 Construction Grants
Program Requirements Memorandum
PRM No. 78-4
SUBJECT: Grant Eligibility of Land Acquired for Storage in
Land Treatment Systems
FROM: John T. Rhett, Deputy Assistant Administrator
for Water Program Operations (WH-546)
TO: Regional Administrators
Regions I thru X
PURPOSE
This memorandum provides additional guidance concerning grant
eligibility of land acquired by purchase, leasing, or easements for use
in land treatment systems.
DISCUSSION
The Agency has previously issued three PRM's on acquiring land for
use in land treatment of wastewaters and sludges. PRM 75-25 (formerly
PGM-49) covers the interpretation of the eligibility of land acquisition
costs for land treatment processes (wastewaters). PRM 75-39 (formerly
PGM-67) covers the eligibility of land acquisition costs for the ultimate
disposal of residues from wastewater treatment processes (sludges). PRM
77-5 covers the eligiblity of leasing or easements in lieu of fee simple
purchase for use in either wastewater treatment alternatives or sludge
management systems. The Clean Water Act of 1977 (P.L. 95-217) requires
changes in Section 35.905-23 (definition of treatment works) and 35.940-
3 (costs allowable, if approved) of the construction grants regulations
(40 CFR Part 35). These changes in the construction grants regulations
require a change in eligibility of land costs as described by PRM 75-25,
but do not affect PRM 75-39 or PRM 77-5.
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POLICY
The Federal Water Pollution Control Act Amendments of 1977 (P.L.
95-217) make the land that will be used for storage of treated wastewater
in land treatment systems prior to land application an eligible cost as
of December 27, 1977. Previously, the cost of land for the temporary
storage of effluent was not eligible (PRM 75-25). Acquirement of land
for storage purposes must be by purchase rather than lease or easement.
There are two approaches for providing temporary storage that will
be cost eligible.
1. The cost of land will be eligible for all ponds constructed
specifically to meet storage needs due to climate or a seasonal
imbalance between wastewater supply and application schedules.
The period and total volume of storage provided should be
commensurate with the discussion in Section 5.3 (pages 5-30
thru 5-38) of the Design Manual on Land Treatment of Municipal
Wastewater (EPA 625/1-77-008). These storage ponds should be
designed with the maximum depth appropriate for site conditions.
2. All or part of the land will be eligible for ponds which are
constructed for combination treatment and storage purposes if
such combination ponds meet the definitions and criteria as
listed in (a) through (d) below:
(a) Storage volume is defined as that portion of the pond
desicmed to provide the total storage needs due to climate or
a seasonal imbalance between wastewater supply and application
schedules as for (1) above. Storage volume could represent
the entire volume of a separate cell or that portion above the
treatment volume in a combined treatment/storage cell.
(b) Treatment volume is that portion of the pond specifically
designed for biological stabilization of the wastewater. It
may be the entire volume of a treatment cell or the depth
below the liquid level that was designed for treatment in a
combined treatment/storage cell.
(c) If the volume provided for storage is greater than the
volume provided for treatment in any cell of the pond, then
the total land area for that cell is eligible.
(d) If the volume provided for storage is equal to or less
than the volume provided for treatment in any cell of the
pond, then the eligible area will be determined as the ratio
of the storage volume to the total volume of that cell.
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IMPLEMENTING PROCEDURE
The provisions of this program requirements memorandum apply to all
projects which had not been given Agency approval of the Step 1 facilities
plan as of December 27, 1977. These provisions supplement PRM #75-25,
which remains in effect.
REFERE.NCES
Program Requirements Memorandum 75-25 of July 18, 1975
(formerly PGM-49)
Program Requirements Memorandum 75-39 of April 2, 1975
(formerly PGM-67)
Program Requirements Memorandum 77-5 of December 15, 1976
40 CFR 35.905-23
40 CFR 35.940-3
EPA 625/1-77-008: Land Treatment of Municipal Wastewater
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
17 FEB 1978
Construction Grants
Program Requirements Memorandum
PRM No. 78-5
SUBJECT: Interim Management of FY 1978 State Priority Lists
Under the 1977 Amendments
FROi'1: John T. Rhett, Deputy Assistant Administrator
for Water Program Operations (WH-546)
TO: Regional Administrators
PURPOSE
This memorandum outlines EPA policy concerning annual State project
priority list management for the remainder of FY 1270 under the Clean
Water Act Amendments of 1C77. Except as indicated herein, the policy
and procedures for priority list management are still reflected in PRil
77-7, i-'.anagenent of State Project Priority Lists.
BACKGROUND
The Clean Water Act of 1977 included several amendments to P.L. 92-
500 that could potentially affect existing State priority systems and
State priority list management. The scope of these changes will not be
known until interim regulations implementing the priority list provisions
are published. The current situation is as follows:
1. The FY 1978 priority lists are the basis for considering
project fundisig through September 30, 1978. Host FY 1978 priority
lists, under the $4.5 billion expected appropriation, have been submitted
and reviewed by EPA pursuant to the policies and procedures outlined in
PRM 77-7. r-iany FY 1978 lists have been approved or are approvable,
pending receipt of the FY 1978 funds.
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2. The FY 1978 authorization for $4.5 billion, contained in the
1977 Amendments, has been allotted (subject to appropriation) in accordance
with the regulation published in the Federal Register on January 10,
1978. An appropriation of $4.5 billion is expected to be enacted in the
next couple of months.
3. Regulations in response to the 1977 Amendments are currently
in formulation, and will not be published in interim final form before
liay, 1978.
4. l-.o projects may be funded using the expected FY 1978 appropriation
until a FY H78 priority list has been approved by the Regional Administrator
under current policy and procedures.
POLICY
1. States and Regions are to continue to process grant applications
up to the point of grant award for projects which reasonably can be
expected to receive grants during FY 78, either because the projects are
on or expected to be on an approved or approvabla priority list. States
may submit out not actually certify the application to EPA for award,
however, until funds are available and the priority list approved.
2. Nothing in the 1977 Pimendr.ients mandates ir,ir.iediate changes to
current State priority planning for the FY 1970 planning year. States
raay elect to propose changes based on the 1977 Amendments for FY 1978,
but should be advised that such changes cannot be considered by EPA
until publication of inter!.: regulations in ilsy, 1278. As a general
policy, the Regions should follow ti;e procedures for interim Management
of the FY 1978 priority lists as outlined below:
o For those States with currently approved or approvable FY 78
priority lists, no modification for compliance with the 1977
Amendments is required or expected.
o States which are currently without an approved or approvable
FY 1978 priority list should be directed to comply with the
State program planning regulations (40 CFR 35.563 through
35.556) and the existing procedures in PRM 77-7 to avoid delay
in making awards once funds are made available. The Region
should be ready to approve all FY 1978 lists under the existing
policy as soon as funds are appropriated. Projects may not be
funded in any State in the absence of an approved priority
list.
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IMPLEMENTATION
All States should immediately be informed of this interim priority
list policy. States should continue to process grant applications as
provided above. Guidance on preparation of FY 1979 priority systems and
lists under the proposed priority list regulations will be issued by
Headquarters no later than May, 1978.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
CONSTRUCTION GRANTS
» p.-D UJWbTKUCTJ.UlM (jKANTS
• ftB 797£ PROGRAM REQUIREMENTS MEMORANDUM
PRM No. 78-6
SUBJECT: Industrial Cost Recovery—Interim Guidance
FROM: John T. Rhett, Deputy Assistant Administrator
for Water Program Operations (WH-546)
TO: Regional Administrators, Regions I thru X
ATTN: Water Division Directors
I. ISSUE;
This memorandum establishes interim guidance on the implementation
of industrial cost recovery (ICR) requirements under the Clean Water Act
of 1377.
II. DISCUSSION:
Section 24 of the Clean Water Act exempts from ICR requirements,
any industrial user which discharges 25,000 gpd or less of sanitary
waste or a volume of process waste, or combined process and sanitary
waste equivalent to 25,000 gpd or less, of sanitary waste if the discharge
does not contain pollutants which interfere, or are incompatible with,
or contaminate, or reduce the utility of sludge. Regardless of any
subsequent change in the Act which might lower the volume of discharge
exenpted from ICR, industrial users exempt under the current law will
never be liable for payments which might have been due after December 31,
1977, until a change in the Act. In addition, an ICR system can be
based on a system wide approach, instead of being based on each individual
project (regulations to be issued in I lay will provide guidance on this
provision).
Section 75 of the Clean Water Act requires EPA to study the efficiency
of, and the need for, the payment by industrial users. A report of
findings from this study must be submitted to the Congress by December
27, 1978. Until June 30, 1979, EPA can not require grantees to enforce
provisions which require industrial users to make ICR payments. Any
payment by industrial users which is due after December 31, 1977, but
before July 31, 1979, (the moratorium) shall be paid after the moratorium
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in accordance with the applicable ICR requirenent at that time. The
payment may be made in equal annual installments prorated over the
retaining useful "life of the treatment works.
The Conference Report on section 75 states that:
(1) EPA is to continue to make grants and not to withhold any
funding due to failure to comply with current ICR requirements.
(2) The moratorium on ICR payments does not exempt any grantee
from the requirement to develop an ICR systen.
(3) At the end of the moratorium, if the Congress has not changed
the ICR provisions, grantees must begin to collect ICR.
Regulations implenenting these sections and detailed guidelines
will be issued at a later time, but the following policies are established
for immediate use.
III. POLICY;
1. Any grant payments withheld due to ICR requirenents shall be
released. (However, grant payments being withheld for any other requirenents
are not to be released.)
2. Grantees should be advised that they are not exempt from the
requirement to develop ICR systems during the moratorium, and that the
cost of developing the systen is grant eligible. Any ICR system approved
by the Regional Administrator must exenpt users discharging the equivalent
of 25,000 gpd or less of sanitary waste.
3. EPA officials shall not require grantees to enforce the payoent
of ICR by industrial users for the period between Decenber 28, 1977,
and June 30, 1979. Grantees may collect ICR from users discharging more
than the equivalent of 25,000 gpd of sanitary waste, but no payment
to the Federal government shall be made. If grantees choose to collect
ICR they shall hold 50 percent (the portion which would be sent to EPA
in the absence of a moratorium) of the amounts they collect until June 30,
1979, or until EPA provides disbursenent guidance, and shall invest those
amounts in accordance with ICR Guidelines.
4. Grantees must continue to monitor industrial users during the
moratorium to determine their ICR payment obligation in case ICR payments
resume after June 30, 1979.
5. Any ICR due for the grantee's ICR year ending before January 1,
1978, must be collected and disbursed in accordance with current ICR
r equiretients.
IV. IMPLEMENTATION;
These policies are effective retroactive to December 27, 1977.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF WATER AND
HAZARDOUS MATERIALS
17FEB 1978
Construction Grants
Program Requirements Memorandum
PRM No. 78-7
SUBJECT: Combined Step 2 and Step 3 Construction Grant
Awards (Step 2+3)
FROM: John T. Rhett, Deputy Assistant Administrate
for Water Program Operations (WH-546)
TO: Regional Administrators
ATTN: Water Division Directors
I. PURPOSE
This memorandum establishes Agency policy on award of Step 2+3
construction grants during FY 1978 as provided in the Clean Water Act of
1977, prior to the promulgation of regulations implementing the combined
grant provisions of the Act.
II. DISCUSSION
Section 203(a) of the Clean Water Act of 1977 provides for award of
a single construction grant for the combination of Step 2 and Step 3 work
for construction of treatment works for communities with populations of
25,000 or less and an estimated total Step 3 construction cost of
$2,000,000 or less ($3,000,000 or less in States with unusually high costs
of construction as determined by the Administrator). The effect of this
provision on construction grant funds is to obligate the funds for both
design and construction at the time of award of the Step 2+3 grant.
III. POLICY
Municipal applicants that meet the minimum requirements set forth in
this memorandum are eligible for award of a Step 2+3 construction grant,
and the Regional Administrators are authorized to make such an award upon
their determination that these requirements have been satisfactorily met.
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In most cases, separate contracts are entered into for Step 2 and
for Step 3 work. A grantee may continue to do so when it receives a
Step 2+3 grant. A grantee is not required to enter into a single contract
for preparation of plans and specifications along with construction when
it receives a Step 2+3 grant.
IV. MINIMUM REQUIREMENTS
EPA Regional Offices will review all Step 2+3 applications for
compliance with the following:
1. Population. The population of the applicant municipality must
be 25,000 or less as determined by most recent United States
Census information.
2. Cost. The total estimated Step 3 construction cost of treatment
works necessary to comply with the requirements of the Clean
Water Act of 1977 must not exceed $2,000,000 (the cost is
exclusive of supporting costs such as technical or administrative
services) or $3,000,000 in States determined by the Deputy
Assistant Administrator for Hater Program Operations to have
unusually high costs of construction. At the present time,
Alaska, California, Hawaii, Illinois, Minnesota and New York are
so designated. Based upon Heeds Survey standard cost curves,
cost in these States were determined to be more than one standard
deviation from the norm.
3. Priority Certification. The States must provide priority
certification for the combined Step 2 and 3 project. Projects
which appear on an approved priority list for Step 2 funding
but not for Step 3 funding are not eligible for a Step 2+3
award. States may amend their project priority list to provide
priority for the combined steps; however, such amendments must
be consistent with the approved State priority system.
The total amount of the Step 2+3 award must derive from the current
State allocation.
V. GRANT CONDITIONS
Step 2+3 grants are subject to all requirements that apply to separate
Step 2 and Step 3 grants except that only a single application is required
and plans and specifications are not required prior to grant award.
Additional requirements of a Step 2+3 grant award are:
1. That the grantee identify and maintain a firm schedule for the
submission of construction plans and specifications, suitable
for bidding purposes, Operation and Maintenance Manual, and an
approvable user charge/industrial cost recovery system (UC/ICR); and
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2. Plans and specifications and the UC/ICR systems must be submitted
and approved in writing by the Regional Administrator prior to
advertisement for bids for the Step 3 construction work; and
3. The cost of all Step 3 construction work initiated prior to
approval of plans and specifications shall be disallowed with
the exception of the cost of those items specifically authorized
in accordance with procedures established under S35.925-18(b)
of the current construction grant regulation.
VI. IMPLEMENTATION
States are to be advised at once of the Agency's policy with regard
to this subject area and are to be requested to begin immediately review-
ing individual grant applications to implement the requirements set forth
above. This policy shall not apply to Step 2 grant applications received
by the Regions prior to the effective date of this PRM.
GPO 927 009
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