BABA Waiver Eaton Electrical Equipment.pdf

DRAFT FINDINGS FOR A WAIVER OF

ORS 279C.303 BUY AMERICA REQUIREMENTS

OregonBuys# S-10700-00013976

Before the State Chief Procurement Officer of the

Department of Administrative Services of the State of Oregon

Request for Waiver of ORS 279C.303 ) Buy America Requirements for ) Draft Findings Procurement of Eaton Electrical Equipment )

Department of Administrative Services, State Procurement Services, is conducting a Public Improvement Solicitation on behalf of DAS Enterprise Asset Management (EAM) for modernizing electrical equipment in the Revenue Building. The Solicitation is currently posted to OregonBuys and has an estimated price exceeding $250,000. The project includes steel and iron coatings as part of the electrical equipment modernization.

ORS 279C.303 requires, unless a waiver is granted, that the Department of Administrative Services (“DAS”) must:

1) Require in each Public Improvement Contract or Contract for Public Works with an estimated contract price of $250,000 or more that steel, iron, coatings for steel and iron and manufactured products that a contractor purchases for or uses in the Public Improvement or Public Works, and that become part of a permanent structure, must be produced in the United States;

2) Note clearly and conspicuously in all Solicitation documents for any Procurement related to the Public Improvement Contract or Contract for Public Works, that any Public Improvement Contract or Contract for Public Works that results from the Procurement will include the ORS 279C.303 Buy America requirement; and

3) Must reject any Bid or Proposal that does not affirmatively attest that the Bidder or Proposer read and understood the requirement.

ORS 279C.303 permits the Director of the Department of Administrative Services (“DAS”), as the primary public contract review authority for the State of Oregon, to grant a waiver from the ORS 279C.303 Buy America requirement if the Director finds in writing that:

• The requirement is inconsistent with the public interest;

• Steel, iron, coatings for steel and iron and manufactured products required for the Public

Improvement or Public Works are not produced in the United States in sufficient and reasonably available quantities and with satisfactory quality; or

• Using steel, iron, coatings for steel and iron or manufactured products produced in the United States for the Public Improvement, or the Public Works will increase the cost of the Public Improvement or Public Works by more than 25 percent.

Before making the finding, the Director must:

• Issue a draft finding that includes a detailed written explanation of the basis for waiving the requirement;

• Give public notice of the draft finding at the earliest practicable time, in a manner that the director determines will give adequate notice to the public and to Contractors that intend to submit, or have submitted, Bids for the Public Improvement or Public Works;

• Allow seven (7) calendar days for public comment on the draft finding; and

• If, after considering any public comment, the Director determines to waive the requirement set forth in the rule, the Director shall provide public notice of the Director’s finding using the same method the Director used to provide public notice of the draft finding.

The Director must:

• Indicate the duration and applicability of the finding in the document that waives the requirement; and

• Review any waiver, at least every five years.

The Director may:

• make a finding under ORS 279C.303 and OAR 125-249-0170 that applies to a single Public Improvement Contract or Contract for Public Works, to a class of Public Improvement Contracts or Contracts for Public Works, or to a class of iron or steel products, coatings, or manufactured products; and

• review and continue, amend, or rescind the finding at any time.

Before continuing, amending, or rescinding a waiver, the Director must provide for public notice and comment using the same method used to provide public notice of the waiver.

Under OAR 125-246-0170(3)(a)(S) the Director has delegated the Direct’s authority under ORS 279C.303 to the State Chief Procurement Officer of DAS Procurement Services (“DAS PS”).

Background The research conducted by DAS EAM with the assistance of the electrical engineering consultant, MKE & Associates, shows the electrical equipment manufactured by Eaton, will be capable of meeting some BABA compliance, but not able to meet the full 55 percent of the total cost of all components of the product, as required by items Produced in the United States, as defined by ORS 279C.303 and OAR 125-249-0170 (1)(b), specifically (B)(ii).

(b) “Produced in the United States” means:

(A) For iron and steel products, other than manufactured products, that all manufacturing processes, from the initial melting stage through the application of coatings, occurred within the United States; and

(B) For manufactured products, that:

(i) The manufacture of the product occurred within the United States; and

(ii) The cost of the components of the product that are mined, produced or manufactured in the United States is more than 55 percent of the total cost of all components of the product. The Oregon Department of Administrative Services or the Oregon Department of Transportation may establish, by Rule, a different standard for determining the minimum amount of the product that must be manufactured within the United States.

Proposed Findings

• The following findings support an ORS 279C.303 Buy America public interest waiver for Eaton and other products that are compatible with electrical equipment specified and used in a Public Improvement or Public Works project for the Revenue Building modernization under DAS Procurement Authority for the next five years.

• The existing electrical panels in the Revenue Building are Eaton. The scope of this project is to replace components of the existing Eaton brand panels. Using the Eaton brand components to upgrade electrical equipment is the most cost effective and time efficient to modernize the electrical equipment in the building due to compatibility with the existing panel and new components. Other manufacturers’ electrical components are not compatible with the Eaton electrical panels. Considering use of other electrical components to fit in the Eaton equipment to source the products/components/materials under OAR 125-249- 170(1)(b)(B)(ii) is out of scope of the project, and it would result in redesigning and developing new scopes and plans for the project to conduct a formal solicitation to award a contract that would significantly delay the entire project timeline and cost, compared to retrofitting and installing new components in the existing electrical panels.

• Types of electrical equipment required for DAS properties must meet the standards and specifications in the plan and specifications of Public Improvement and Public Works projects, and these products undergo extensive testing to meet the standards required in the plans and specifications. In addition to Eaton, Agency also conducted research to determine if other compatible electrical equipment in the market could meet BABA requirements.

Electrical equipment manufacturers such as, Schneider and Siemens, were solicited to respond with a breakdown of each component of alternative electrical equipment to show the country of origin and the percentage of U.S.-produced and U.S.-manufactured contents for meeting Buy America standards and project plans and specifications; however, these manufacturers responded that some components of their equipment would not meet the OAR 125-249-0170 Buy America requirements.

• The electrical consultant, MKE & Associates, requested BABA requirement and product information with Eaton since Eaton electrical equipment has been used in existing building structures. Retrofitting existing electrical equipment in addition to adding new switchboards in the modernization would result in greater cost savings. Disregarding retrofit of the existing part and changing the entire plans and drawings to apply BABA requirements would be out of scope for this project and inconsistent with the public interest due to creating unnecessary delays and increasing project cost involved in modernization projects.

• Based on Agencies’ industry assessment of compatible electrical equipment, a waiver for electrical equipment is required for the Revenue Building modernization project under DAS procurement authority.

Proposed Findings and Waiver Procedure:

1) DAS PS will issue a public notice of these proposed findings on the OregonBuys eProcurement system for a period of at least seven (7) calendar days.

2) The public notice will include that any affected party may comment on the proposed findings by contacting Jay Jackson, Procurement Policy Officer at:

Jay.Jackson@das.oregon.gov.

3) After considering any public comment received, DAS PS will issue a public notice of any approved findings on the OregonBuys eProcurement system for a period of at least seven (7) calendar days.

mailto:Jay.Jackson@das.oregon.gov