EPA Does Not Always Track the Use of Build America, Buy America


The EPA Does Not Always
Track the Use of Build
America, Buy America
Act Waivers for
Infrastructure Projects

May 8, 2024 1 Report No. 24-N-0037

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Report Contributors

Kate August
Megan Hartnett
Scott Martin
Mack Mercer
Elizabeth Schubert

Abbreviations

BABA	Build America, Buy America Act

C.F.R.	Code of Federal Regulations

EPA	U.S. Environmental Protection Agency

FY	Fiscal Year

IIJA	Infrastructure Investment and Jobs Act

OIG	Office of Inspector General

OMB	Office of Management and Budget

Pub. L.	Public Law

Cover Image

Water infrastructure site. (EPA photo)

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At a Gla

24-N-0037
May 8, 2024

The EPA Does Not Always Track the Use of Build America, Buy
America Act Waivers for Infrastructure Projects

Why We Did This Project
To accomplish this objective:

The U.S. Environmental Protection
Agency Office of Inspector General
conducted this project to quantify the
extent to which the EPA is issuing Build
America, Buy America Act waivers for
infrastructure projects. To answer our
objective, we analyzed all approved
and pending EPA Build America, Buy
America Act waivers; reviewed
applicable regulatory guidance and
each waiver decision memorandum
that the Agency published for public
comment; and analyzed Agency data
on infrastructure projects subject to the
Build America, Buy America Act.

The Build America, Buy America Act
focuses on maximizing the federal
government's use of services, goods,
products, and materials produced and
offered in the United States. The Build
America, Buy America Act also allows
for the use of both project-specific and
general applicability waivers in certain
contexts.

What We Found

As of December 2023, the EPA had issued 11 Build America, Buy America Act waivers.
However, the EPA does not always track the use of these waivers across EPA-funded
infrastructure projects. We found that the EPA only tracked the use of the Water
Infrastructure Finance and Innovation Act program waivers. The EPA did not track the use
of the other ten waivers. Build America, Buy America Act waivers can be categorized into
two types: project-specific waivers and general applicability waivers. The Agency was
unable to provide the number of award recipients that fall under either type of waiver and
does not have a method in place to track this information.

Project-specific waivers only apply to one project and are typically initiated by the award
recipient. General applicability waivers apply to multiple projects and are designed in the
interest of efficiency and to ease the administrative burden on award recipients. Generally,
the EPA initiates the general applicability waivers, and any award recipient can use the
waiver as long as the project meets the eligibility requirements. The EPA stated that it had
developed a dashboard to track the approved waivers; however, the dashboard does not
show which or how many projects or award recipients are using each waiver. Therefore,
even with the waiver tracking dashboard, the EPA was unable to identify how many award
recipients had used the approved waivers in their projects or to quantify how many
infrastructure projects were subject to a waiver.

While there is no legal requirement for the EPA to track the use of waivers, Congress has
advised that "every executive agency should scrupulously monitor, enforce, and comply
with Buy American laws, to the extent they apply, and minimize the use of waivers." With
approximately $60.3 billion in Infrastructure Investment and Jobs Act projects potentially
subject to Build America, Buy America Act requirements, the EPA needs to develop and
implement a method to track all waiver use. Without tracking the use of such waivers, the
EPA may not be able to maximize use of U.S. goods, products, and materials in
EPA-funded infrastructure projects.

To support this EPA mission-related
effort:

• Operating efficiently and
effectively.

To address this top EPA
management challenge:

• Managing grants, contracts, and
data systems.

Address inquiries to our public
affairs office at (202) 566-2391 or
OIG.PublicAffairs@epa.gov.

Without tracking the use of waivers, the EPA risks being unable to determine
whether it is meeting the intent of the Build America, Buy America Act—
bolstering America's industrial base, protecting national security, and
supporting high-paying jobs.

Recommendation and Planned Agency Corrective Actions

We recommend that the assistant administrator for Mission Support develop and implement
a method to track all Build America, Buy America Act waiver use across EPA-funded
infrastructure projects. The Office of Mission Support agreed with our recommendation and
provided acceptable proposed corrective actions and estimated completion dates. The
Agency has stated the corrective actions are complete; however, we will continue to work
with the Agency to verify the actions are complete. We consider this recommendation
resolved.

List of OIG reports.

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U.S. ENVIRONMENTAL PROTECTION AGENCY

OFFICE OF INSPECTOR GENERAL

May 8, 2024

MEMORANDUM

SUBJECT: The EPA Does Not Always Track the Use of Build America, Buy America Act Waivers for
Infrastructure Projects
Report No. 24-N-0037

This is our report on the subject audit conducted by the U.S. Environmental Protection Agency Office of
Inspector General. The project number for this audit was QA-FY23-0084. This report contains a finding
that describes the problem the OIG has identified and a corrective action the OIG recommends. Final
determinations on matters in this report will be made by EPA managers in accordance with established
audit resolution procedures.

The Office of Mission Support and the Office of Water are responsible for the issues discussed in this
report.

In accordance with EPA Manual 2750, your office provided acceptable corrective actions in response to
the OIG recommendation. The Office of Water also provided technical comments, which we reviewed
and addressed in this report as appropriate. The recommendation is resolved, and no final response to
this report is required. If you submit a response, however, it will be posted on the OIG's website, along
with our memorandum commenting on your response. Your response should be provided as an Adobe
PDF file that complies with the accessibility requirements of section 508 of the Rehabilitation Act of
1973, as amended. The final response should not contain data that you do not want to be released to
the public; if your response contains such data, you should identify the data for redaction or removal
along with corresponding justification.

We will post this report to our website at www.epaoig.gov.

FROM: Sean W. O'Donnell, Inspector General

TO:

Janet McCabe, Deputy Administrator

Bruno Pigott, Acting Assistant Administrator
Office of Water

Kimberly Patrick, Principal Deputy Assistant Administrator
Office of Mission Support

To report potential fraud, waste, abuse, misconduct, or mismanagement, contact the OIG Hotline at (888) 546-8740 or OIG.Hotline@epa.gov.

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Table of Contents

Purpose	1

Background	1

Build America, Buy America Act	1

Build America, Buy America Act Waivers	2

Responsible Offices	3

Scope and Methodology	3

Prior Reports	4

Results	5

The EPA Has Issued Build America, Buy America Act Waivers	6

The EPA Does Not Always Track Build America, Buy America Act Waiver Use	7

Conclusions	9

Recommendation	9

Agency Response and OIG Assessment	9

Status of Recommendations	10

A EPA-lssued Build America, Buy America Act Waivers	11

B Agency's Response to Draft Report	12

C Distribution	14

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Purpose

The U.S. Environmental Protection Agency Office of Inspector General initiated this project to quantify
the extent to which the EPA is issuing Build America, Buy America Act, or BABA, waivers for
infrastructure projects.

Top management challenge addressed

This audit addresses the following top management challenge for the Agency, as identified in
OIG Report No. 24-N-0008. The EPA's Fiscal Year 2024 Top Management Challenges, issued
November 15, 2023:

• Managing grants, contracts, and data systems.

Background

The Infrastructure Investment and Jobs Act, or IIJA, Pub. L. 117-58, was signed into law on November 15,
2021. Overall, the IIJA appropriates approximately $60.9 billion to the EPA from fiscal year 2022 through
FY 2026, most of which is available until expended. Most of this amount consists of funds that the EPA
will award to nonfederal entities in the form of grants, cooperative agreements, and other financial
assistance for infrastructure projects.

The IIJA appropriates funds to the EPA so that it can make significant investments to advance public
health and safety by improving the nation's drinking water, wastewater, and stormwater infrastructure;
cleaning up pollution; investing in healthier air; increasing the Agency's workforce; and enhancing the
country's climate resilience. The IIJA funding consists of $55.43 billion for state and tribal assistance
grants, $1.96 billion for environmental programs and management, and $3.5 billion for Superfund
remediation and cleanup activities. The IIJA appropriation is a significant increase in funding for the EPA,
which has received annual appropriations ranging from approximately $8.2 billion to $10.1 billion from
FY 2014 through FY 2023.

Build America, Buy America Act

The IIJA includes BABA, which requires that the head of each agency ensure that all funds used in federal
financial assistance programs for infrastructure only be obligated for a project if all iron, steel,
manufactured products, and construction materials used in the project are produced in the United
States. BABA creates demand for domestically produced goods, which helps develop and grow
U.S. manufacturing. BABA applies to all federal government procurement and to financial assistance
programs for infrastructure.1

According to Office of Management and Budget, or OMB, Memorandum M-22-11, Initial
Implementation Guidance on Application of Buy America Preference in Federal Financial Assistance

1 Pub. L 117-58 Sec. 70911(12).

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Programs for Infrastructure, for purposes of BABA, agencies should interpret the term "infrastructure"
broadly; specifically, infrastructure can include structures, facilities, and equipment that are
permanently affixed to the infrastructure project and that serve a public function. In other words, BABA
applies to all materials permanently incorporated in an infrastructure project and does not apply to any
materials that will be removed.

BABA states that U.S. taxpayer dollars should not be spent procuring infrastructure project materials
that were not made in the United States unless there is reasonable justification to do so. Whenever
possible, entities using federal assistance should use materials and products produced in the United
States. Further, BABA advocates for directing government funding toward entities committed to
upholding the same environmental, worker, and workplace safety standards as the United States.

Build America, Buy America Act Waivers

There are two types of BABA waivers: project-specific waivers that apply only to one project or general
applicability waivers that apply to multiple projects. Project-specific waivers are typically initiated by the
award recipient, whereas general applicability waivers are initiated by the Agency and any award
recipient can use the waiver as long as it meets the waiver guidelines. Per OMB Memorandum M-22-11,
federal agencies must follow certain criteria to grant BABA waivers.2 For example, waivers should be
time-limited, targeted, and conditional—meaning that waivers should have short and clearly defined
time frames, should not be overly broad, and should stipulate specific conditions that support BABA
policies and goals. OMB Memorandum M-22-11 further states that "overly broad waivers undermine
market signals designed to boost domestic supply chains, particularly for key articles, materials and
supplies in critical supply chains."

Additionally, agencies must conduct thorough market research and make informed decisions on waiver
requests following the guidelines set forth in BABA, OMB Memorandum M-22-11, 2 C.F.R. part 184,3 and
all other relevant Buy American laws. Specifically, according to the IIJA, the head of a federal agency
must prepare a "detailed justification for the use of goods, products, or materials mined, produced, or
manufactured outside the United States" and verify that there was an adequate search to identify
domestic sources before applying a BABA waiver to an infrastructure project.4 Congress also advised

2 OMB Memorandum M-22-11 provided implementation guidance on the application of a Buy America preference
to federal financial assistance programs for infrastructure and a transparent process to waive such a preference,
when necessary. The OMB rescinded this memorandum and replaced it with OMB Memorandum M-24-02,
Implementation Guidance on Application of Buy America Preference in Federal Financial Assistance Programs for
Infrastructure, on October 25, 2023. Almost all the EPA-issued BABA waivers were issued before the release of
OMB Memorandum M-24-02; therefore, we reference OMB Memorandum M-22-11.

3 On August 23, 2023, the OMB issued a Notification of Final Guidance to add 2 C.F.R. part 184 and revise 2 C.F.R.
section 200.322. Part 184 provides guidance to federal agencies on how to apply the "Build America" preference
set forth in BABA to federal awards for infrastructure projects. The revised section 200.322 clarifies existing
provisions on domestic preferences for procurements made under federal financial assistance awards and specifies
that agencies providing financial assistance for infrastructure projects must implement the Buy America
preferences set forth in 2 C.F.R. part 184.

4 IIJA § 70937(c)(2)(A).

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that "every executive agency should scrupulously monitor, enforce, and comply with Buy American laws,
to the extent they apply, and minimize the use of waivers."5

General applicability waivers

General applicability waivers are designed in the interest of efficiency and to ease the burden on award recipients.

These waivers apply to multiple projects. For example, an agency may waive the Buy America requirements for
grants that do not exceed $250,000. If an agency issues a general applicability waiver, any award recipient with an
eligible project may use the waiver. Award recipients must follow the waiver conditions and document the waiver
use in their project files.

Responsible Offices

The Office of Mission Support leads the Agency's core mission support functions to improve efficiency,
coordination, and customer experience, including grant management, information technology, and
information-management activities. Within the Office of Mission Support, the Office of Resources and
Business Operations oversees the implementation of BABA. This includes participating in BABA
workgroups, drafting programwide waivers, conducting market research, and processing waiver
requests from award recipients. The Office of Water is responsible for ensuring drinking water is safe
and restores and maintains oceans, watersheds, and their aquatic ecosystems to protect human health
and the environment. The Office of Water issued BABA implementation procedures for the Office of
Water's federal financial assistance programs. Similarly, the Office of Land and Emergency Management
issued a frequently asked questions document on BABA applicability for federal financial assistance
programs under the scope of its office.

Scope and Methodology

We conducted this project from June 2023 to March 2024. This project followed the OIG's quality
control procedures to ensure that the information in this report is accurate and supported. Additionally,
the Council of the Inspectors General on Integrity and Efficiency's Quality Standards for Federal Offices
of Inspector General requires that our work adhere to the highest ethical principles of integrity,
objectivity, confidentiality, independence, and professional judgment, and we adhered to these
principles when we performed our work.

To answer our objective, we analyzed all approved EPA BABA waivers on infrastructure projects as of
November 27, 2023. To obtain an understanding of BABA waivers, we reviewed all applicable guidance
documents issued by the OMB and each waiver decision memorandum that the Agency published for
public comment. Additionally, we requested Agency data on all infrastructure projects subject to BABA,
conducted subject-matter expert interviews, and analyzed the requirements and standards for each
approved waiver. We also reviewed all 20 IIJA appropriations to the EPA to determine which programs
were affected by BABA and BABA waivers.

5 IIJA § 70933(2).

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Prior Reports

In our review of EPA OIG reports related to this project, we found four reports that identified EPA
challenges with prioritizing spending and projects; staffing issues, such as turnover and shortages; and
implementing requirements.

In EPA OIG Report No. 23-N-0004. American Recovery and Reinvestment Act Findings for Consideration
in the Implementation of the Infrastructure Investment and Jobs Act, issued December 7, 2022, we
analyzed prior EPA OIG reports related to the EPA's management of its American Recovery and
Reinvestment Act funds to identify findings and lessons learned that may help the Agency prepare,
implement, and oversee programs receiving IIJA appropriations. The report includes three lessons that
the EPA should consider in an attempt to mitigate risks and reduce the likelihood of fraud, waste, and
abuse of IIJA funds. These lessons are to ensure that federal requirements are met; provide clear and
comprehensive guidance; and improve project management, monitoring, and data verification.

In EPA OIG Report No. 22-N-0057, Considerations from Single Audit Reports for the EPA's Administration
of IIJA Funds, issued September 15, 2022, we reviewed OIG memorandums summarizing the findings
from external audits of nonfederal entities, such as states, local governments, and federally recognized
tribes, that expended EPA grant funds. We found that from FY 2019 through 2021, there had been
364 instances of noncompliance with applicable federal laws, regulations, and program requirements by
nonfederal entities expending EPA grant dollars. These instances of noncompliance spanned nine EPA
programs that are expected to receive IIJA funds.

In EPA OIG Report No. 22-N-0055, Considerations for the EPA's implementation of Grants Awarded
Pursuant to the IIJA, issued August 11, 2022, we highlighted previously reported grant administration
and oversight deficiencies from OIG and U.S. Government Accountability Office audit reports issued
from FY 2017 through 2021. The report summarizes deficiencies in three broad areas of improvement
for the Agency to consider when preparing to administer and oversee IIJA grants, which include
enhancing the grants oversight workforce and strengthening monitoring and reporting; establishing and
implementing comprehensive guidance and detailed work plans, as well as improving communications;
and requiring adequate documentation to support grant payments.

In EPA OIG Report No. 24-E-0022. Perspectives on Capacity: Managing Drinking Water State Revolving
Fund Infrastructure Investment and Jobs Act Funding, issued February 27. 2024, we used a survey to
identify state agencies' perspectives on their capacity to manage IIJA funds and any barriers the
agencies' administrators believe limit their capacity to manage those funds. We found that most state
Drinking Water State Revolving Fund administrators agreed that their agencies had the organizational
capacity necessary to manage the IIJA funds. A few states expressed concerns related to financial
capacity, workforce managment, and insufficient guidance on BABA requirements. While we made no
recommendations in this report, the report does provide the EPA with an opportunity to work with state
agencies to address their capacity concerns.

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Results

As of December 2023, the EPA had issued 11 BABA waivers for EPA-funded infrastructure projects.
However, we found that the EPA only tracks waiver use for one out of the 11 waivers. So, although we
were able to quantify the extent to which the EPA has issued BABA waivers for these projects, we were
unable to determine how many times each waiver had been used. The Agency was not able to provide
this information because it does not have a method in place to track BABA waiver use. If the EPA does
not track BABA waiver use, the Agency risks being unable to determine whether it is meeting the intent
of BABA.

5

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The EPA Has Issued Build America, Buy America Act Waivers

As of December 2023, the EPA had issued 11 BABA waivers, ail of which were general applicability
waivers. See Figure 1 and Appendix A for details on each waiver.

Figure 1: Timeline of EPA-issued BABA waivers

EPA BABA Approved Waivers





SIS

i

i



?,i» i

Issued 7/29/22: Clean School Bus Adjustment Period Waiver

Public Interest, General Applicability
(^) Expired 1/29/23

Issued 6/22/22: WIFIA Program Waiverfor Design Planning

Public Interest, General Applicability
(5 No Expiration

Issued 8/31/22: CERCLA Adjustment Period Waiver

Public Interest, General Applicability
(^) Expired 3/1/23

Issued 9/2/22: Office of Water Selected Programs Adjustment Period Waiver

Public Interest, General Applicability
Expired 3/2/23

Issued 9/2/22: SRF Program Waiverfor Design Planning

Public Interest, General Applicability
No Expiration

Issued 9/26/22: Small Projects General Applicability Waiver

Public Interest, General Applicability
Review by 9/26/27

Issued 10/21/22: De Minimis General Applicability Waiver

Public Interest, General Applicability
RHj Review by 10/21/27

Issued 4/11/23: Minor Components of Iron and Steel General Applicability Waiver

Public Interest, General Applicability
O Review by 4/11/28

Issued 7/5/23: Pacific IslandTerritoriesGeneral Applicability Waiver

Public Interest, General Applicability
Expires 1/5/25

Issued 7/21/23: Electric Vehicle Chargers Product Waiver

Temporary, time-limited, public-interest product waiver
(if) Expires 7/1/24

Issued 11/13/23: Amended SRF Program Waiverfor Design Planning

Public Interest, General Applicability
0 No Expiration

Notes: CERCLA = Comprehensive Environmental Response, Compensation and Liability
Act. WIFIA = Water Infrastructure Finance and Innovation Act. SRF = state revolving fund.
Source: OIG analysis of EPA-issued BABA waivers. (EPA OIG image)

6

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The EPA Does Not Always Track Build America, Buy America Act Waiver Use

Except for the Water Infrastructure Finance and Innovation Act Program, we found that the EPA does
not track waiver use across EPA-funded infrastructure projects. Although there is no legal requirement
for the EPA to track BABA waiver use, Congress has advised that "every executive agency should
scrupulously monitor, enforce, and comply with Buy American laws, to the extent they apply, and
minimize the use of waivers."6

Once a general applicability waiver is approved, any award recipient can use the waiver if its project
meets the eligibility requirements of the waiver. However, the recipient is not required to notify the EPA
when it is using a waiver on a specific award or project. Therefore, the EPA is unable to determine how
many recipients are using the waivers on their awards or projects.

Of the 20 IIJA appropriations to the EPA, Agency officials stated that BABA applies to 13 because they
support investments in infrastructure. BABA does not apply to the other seven because they do not
support infrastructure construction. The IIJA provided approximately $60.3 billion to the EPA through
these 13 appropriations. Table 1 lists the programs we reviewed and whether BABA provisions apply to
the program and, if so, whether a BABA waiver applies to projects within that program. Notably,
projects within 12 of the 13 programs subject to BABA are eligible for a BABA waiver.

Table 1: The 20 IIJA appropriations to the EPA and related BABA information



Does BABA apply to this

Does a BABA waiver apply to

IIJA appropriation

appropriation?

projects receiving funds from this appropriation?*

Clean Water State

Yes

Yes, the Amended SRF Program Waiver for Design Planning

Revolving Loan Funds





Drinking Water State
Revolving Loan Funds

Yes

Yes, the Amended SRF Program Waiver for Design Planning

Drinking Water State

Yes

Yes, the Amended SRF Program Waiver for Design Planning

Revolving Loan Funds—





Lead Service Line





Replacement





Clean Water State

Yes

Yes, the Amended SRF Program Waiver for Design Planning

Revolving Loan Funds—
Emerging Contaminants





Drinking Water State

Yes

Yes, the Amended SRF Program Waiver for Design Planning

Revolving Loan Funds—
Emerging Contaminants





Addressing Emerging
Contaminant Grants

Yes

Yes, the Office of Water Selected Programs Adjustment
Period Waiver

UIC Grants

No

Not applicable

Geographic and Related
Water Programs

Yes

Yes, the Office of Water Selected Programs Adjustment
Period Waiver

National Estuary Program
Grants

Yes

Yes, the Office of Water Selected Programs Adjustment
Period Waiver

Gulf Hypoxia Action Plan

Yes

Yes, the Office of Water Selected Programs Adjustment
Period Waiver

6 IIJA § 70933(2).

7

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Does BABA apply to this

Does a BABA waiver apply to

IIJA appropriation

appropriation?

projects receiving funds from this appropriation?*

Drinking Water

Not applicable

Programs—Class VI

Wells

Superfund-Remedial

Yes

Yes, the CERCLA Adjustment Period Waiver

Brownfields

Yes

Yes, the CERCLA Adjustment Period Waiver

Battery Recycling Best
Practices

Not applicable

Voluntary Battery Labeling
Guidelines

Not applicable

Solid Waste Infrastructure

Yes

Financing—Save Our

Seas Act Grants

Recycling Grants

Not applicable

Clean School Bus

Yes

Yes, the Clean School Bus Adjustment Period Waiver

Program

Pollution Prevention

Not applicable

Grants

Inspector Generalt

Not applicable

Notes: CERCLA = Comprehensive Environmental Response, Compensation and Liability Act. SRF = state revolving
fund, UIC = Underground Injection Control. See Appendix A for additional waiver details.

Source: OIG analysis of EPA IIJA appropriations and BABA waivers. (EPA OIG table)

* The De Minimis, Small Projects, and Pacific Island Territories General Applicability Waivers may also apply to the
project.

t The IIJA appropriated a portion of the EPA's IIJA funds to the EPA inspector general to provide oversight of the EPA's
IIJA funds. Because the OIG's IIJA funds are not available to provide federal financial assistance for infrastructure, they
are not subject to BABA.

In June 2023, the EPA stated that it had developed a dashboard to track the ten approved waivers. The
Agency issued another waiver on November 13, 2023. As of March 2024, the Agency had not added this
waiver to the dashboard. The dashboard includes the approved waivers, the approval dates, and a brief
description of each waiver but does not show which or how many projects or grants are using each
waiver. Therefore, even with the waiver-tracking dashboard, the EPA was unable to identify how many
award recipients had used the approved waivers in their projects.

The EPA reported that it does track some waiver use. Specifically, the EPA tracks the use of the Water
Infrastructure Finance and Innovation Act waivers for loans issued after May 14, 2022. The EPA
identified that the waiver has covered 26 Water Infrastructure Finance and Innovation Act projects.
However, the EPA was unable to quantify the covered projects for any of the other waivers. While the
EPA stated that some programs' waiver use is recorded in the project or grant files, EPA officials would
have to review each individual program or grant file to determine whether the program used a waiver.
The EPA did not track all waiver use because the Agency believed that there was no requirement to
track waiver use at the project or grant level. While BABA does not explicitly state that the Agency must
track waiver use, the Agency should monitor waiver use to ensure compliance with BABA.

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Conclusions

Without tracking the use of each waiver, the EPA is not effectively monitoring BABA and minimizing the
use of waivers. Further, without such tracking, the EPA is not able to determine whether award
recipients are maximizing the use of domestic goods, products, and materials. Thus, the EPA risks being
unable to determine whether it is meeting the intent of BABA—bolstering America's industrial base,
protecting national security, and supporting high-paying jobs. With approximately $60.3 billion in IIJA
projects potentially subject to BABA requirements, the EPA needs to develop and implement a method
to track all waiver use.

Recommendation

We recommend that the assistant administrator for Mission Support:

1. Develop and implement a method to track all Build America, Buy America Act waiver use across
EPA-funded infrastructure projects.

Agency Response and OIG Assessment

The Office of Mission Support agreed with the recommendation and provided acceptable proposed
corrective actions and estimated milestone dates. The Agency said that the corrective actions are
complete; however, we will continue to work with the Agency to verify the actions are complete. We
consider this recommendation resolved. The Office of Water also provided technical comments, which
we reviewed and addressed in this report as appropriate. Appendix B contains the Agency's response to
the draft report.

9

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Status of Recommendation











Planned

Rec.

Page







Completion

No.

No.

Recommendation

Status*

Action Official

Date

1	9 Develop and implement a method to track all Build America, Buy R Assistant Administrator for 3/8/24

America Act waiver use across EPA-funded infrastructure	Mission Support,

projects.

* C = Corrective action completed.

R = Recommendation resolved with corrective action pending.
U = Recommendation unresolved with resolution efforts in progress.

10

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Appendix A

EPA-lssued Build America, Buy America Act Waivers

Waiver I

I Applicability I

I Description

Amended SRF Program
Waiver for Design Planning

SRF programs and water
infrastructure projects subject to SRF
requirements for projects underway
before May 14, 2022

Rescinds and replaces the original SRF waiver.
Broadens applicability to include water infrastructure
projects subject to SRF requirements that are
funded separately from SRF appropriations. Applies
to covered projects for which funding was
appropriated in fiscal year 2022 and 2023.

CERCLA Adjustment Period
Waiver

Six-month adjustment period waiver
for Brownfields and Superfund

Waived all BABA requirements for Superfund and
Brownfields Cooperative Agreement projects funded
before March 1, 2023.

Clean School Bus
Adjustment Period Waiver

Six-month adjustment period waiver
for the Clean School Bus Program

Waived all BABA requirements for the Clean School
Bus grants funded before January 29, 2023.

De Minimis General
Applicability Waiver

Agencywide projects

Provides up to a 5-percent cost threshold allowance
for projects.

Electric Vehicle Charger
Product Waiver

Public interest product waiver

Issued by the EPA and Federal Highway
Administration, this is a general applicability, time-
limited product waiver for electric vehicle chargers.

Minor Components of Iron
and Steel General
Applicability Waiver

Agencywide projects

Provides up to a 5-percent component cost
threshold allowance on iron and steel products for
manufacturers.

Office of Water Selected
Programs Adjustment
Period Waiver

Six-month adjustment waiver for
selected Office of Water programs

Waived all BABA requirements for Office of Water
projects except SRF and WIFIA funded before
March 2, 2023.

Pacific Island Territories
General Applicability Waiver

Agencywide projects

Waived BABA requirements for Pacific Island
Territories for 18 months. Will be reviewed one year
after approval to assess whether it is still necessary.

Small Projects General
Applicability Waiver

Agencywide projects

Waives all projects less than $250,000.

SRF Program Waiver for
Design Planning

SRF programs for projects underway
before May 14, 2022

Waives only manufactured products and nonferrous
construction materials; American Iron and Steel still
applies.

WIFIA Program Waiver for
Design Planning

WIFIA Program; Projects underway
before May 14, 2022.

Waives only manufactured products and nonferrous
construction materials; American Iron and Steel still
applies.

Notes: SRF = state revolving fund and WIFIA = Water Infrastructure Finance and Innovation Act

Source: OIG analysis of EPA-issued BABA waivers. (EPA OIG table)

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Appendix B

Agency's Response to Draft Report

£ A L

I®/

PROrt^"

OFFICE OF MISSION SUPPORT

WASHINGTON, D.C. 20460

MEMORANDUM

SUBJECT: Response to Office of Inspector General Draft Report No. OA-FY-0084, "The EPA Does Not
Always Track the Use of Build America, Buy America Act Waivers for Infrastructure
Projects," Project No. OA-FY23-0084 dated March 25, 2024

FROM: Kimberly Y. Patrick, Principal Deputy Assistant Administrator KIMBERLY

PATRICK

TO: Kate August, Project Manager

Special Drinking Water Projects Directorate
Office of Audit

Digrtaiy signed by
KIMBERLY PATRICK
Dale: 2024.04.06
10:00.30 -04¦00'

Thank you for the opportunity to respond to the issues and recommendation in the subject evaluation draft report.
Following is a summary of the agency's overall positions, along with its position on the report's recommendation.
The Office of Mission Support agrees with the recommendation outlined in the Office of Inspector General's Draft
Report. Outlined in the table below are the actions that we have already taken that we believe fully addresses the
recommendation,

AGENCY'S OVERALL POSITION

The Office of Mission Support concurs with the recommendation outlined in the Office of Inspector General's Draft
Report. The corrective action plan below outlines the actions that we have already taken that we believe fully
address the OIG's recommendation. We have attached documentation that demonstrates that the actions have
been completed.

No.

Recommendation

High-Level Intended Corrective
Action(s)

Estimated Corrective Action
Completion Date

Develop and implement a
method to track all Build
America, Buy America Act waiver
use across EPA-funded
infrastructure projects.

EPA agrees with the importance of
tracking Build America, Buy
America Act waivers. In response,
on March 8, 2024, EPA deployed a
new BABA waiver workflow that
requires all EPA programs to
submit and process BABA waivers

Completed

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through an enterprise application.
EPA's enterprise BABA application
will enable the agency to
aggregate data across products
and grant programs for EPA-
funded infrastructure projects.
EPA will also continue to require
recipients to track their use of
waivers in their project files. A
screenshot of the application and a
report from it are attached.



CONTACT INFORMATION

If you have any questions regarding the response, please contact Afreeka Wilson, Audit Follow-up

Coordinator, Office of Resources and Business Operations, (202) 564-0867 or wilson.afreeka@epa.gov

Attachments

cc: Bruno Pigott

Megan Hartnett
Scott Martin
Mack Mercer
Elizabeth Schubert
Daniel Coogan
Jennifer Hublar
Yulia Kalikhman
Gregory Scott
Janice Jablonski
Marilyn Armstrong
Afreeka Wilson
Darryl Perez
Pam Legare
Joan B. Rogers
Celia Vaughn
Susan Perkins
Andrew LeBlanc
Jose Kercado-Deleon
Michael Benton
Jennifer Wilbur
Carla Hagerman
Kecia Thornton
Andrew Sawyers
Jennifer McLain

13

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Appendix C

Distribution

The Administrator

Deputy Administrator

Chief of Staff, Office of the Administrator

Deputy Chief of Staff for Management, Office of the Administrator

Agency Follow-Up Official (the CFO)

Assistant Administrator for Water

Assistant Administrator for Mission Support

Agency Follow-Up Coordinator

General Counsel

Associate Administrator for Congressional and Intergovernmental Relations

Associate Administrator for Public Affairs

Principal Deputy Assistant Administrator for Mission Support

Principal Deputy Assistant Administrator for Water

Chief Information Officer and Deputy Assistant Administrator for Information Technology and

Information Management, Office of Mission Support
Deputy Assistant Administrator for Workforce Solutions and Inclusive Excellence, Office of Mission
Support

Deputy Assistant Administrator for Infrastructure and Extramural Resources, Office of Mission Support
Deputy Assistant Administrators for Water

Director, Office of Resources and Business Operations, Office of Water
Senior Advisors, Office of Water

Director, Office of Continuous Improvement, Office of the Chief Financial Officer
Director, Office of Program Analysis, Regulatory, and Management Support, Office of Water
Director, Office of Resources and Business Operations, Office of Mission Support
Associate Director, Office of Program Analysis, Regulatory, and Management Support, Office of Water
Office of Policy OIG Liaison
Office of Policy GAO Liaison
Audit Follow-Up Coordinator, Office
Audit Follow-Up Coordinator, Office
Audit Follow-Up Coordinator, Office

of the Administrator
of Water

of Mission Support

14

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Whistleblower Protection

U.S. Environmental Protection Agency
The whistleblower protection coordinator's role
is to educate Agency employees about
prohibitions against retaliation for protected
disclosures and the rights and remedies against
retaliation. For more information, please visit
the OIG's whistleblower protection webpage.

Contact us:

Congressional Inquiries: OIG.CoiwessionalAffairs(53epa.gov

Media Inquiries: OIG.PublicAffairs@epa.gov
line EPA OIG Hotline: OIG.Hotline@epa.gov

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