Buy America Policy for Utility Relocations April 1, 2014 Brandie Neemann NDOR Project Scoping & Utilities Engineer

Agenda Buy America… Why Now? Background – The NDOR Utility Coordination Process When does Buy America Apply? When is Buy America NOT Applicable? Certification Process Non-Compliance Conclusion & Questions

Agenda Buy America… Why Now? Background – The NDOR Utility Coordination Process When does Buy America Apply? When is Buy America NOT Applicable? Certification Process Non-Compliance Conclusion & Questions

Buy America… why now? MAP-21 broadened how Buy America is applied to federally funded transportation projects FHWA guidance December 21, 2012 Memo

Buy America… why now? “The FHWA continues to support the Buy America waiver for manufactured products in the 1983 final rule, as clarified by the 1997 memo. In particular, the waiver was intended to apply to all manufactured products except for steel and iron manufactured products… we believe that the scope of the waiver was intended to encompass miscellaneous steel or iron components and subcomponents that are commonly available as off-the-shelf products… for a manufactured product to be subject to Buy America, the product must be manufactured predominantly [90% steel or iron content] of steel or iron…”

Buy America… why now? MAP-21 broadened how Buy America is applied to federally funded transportation projects FHWA guidance December 21, 2012 Memo July 12, 2013 Memo

Buy America… why now? “In Section 1518 of the Moving Ahead for Progress in the 21st Century Act (MAP-21), Congress amended existing law to broaden applicability of Buy America to non FHWA-funded utility relocations… That is, if a project receives FHWA funding for any development of construction activities, including NEPA studies, right-of-way acquisition, preliminary engineering, or construction, Buy America applies to all contracts within the scope…regardless of whether the contract uses FHWA funding.”

Buy America… why now? MAP-21 broadened how Buy America is applied to federally funded transportation projects FHWA guidance December 21, 2012 Memo July 12, 2013 Memo NDOR worked with existing approved policies and, in cooperation with the FHWA, Nebraska Division, has developed the Buy America Policy for Utility Relocations

Agenda Buy America… Why Now? Background – The NDOR Utility Coordination Process When does Buy America Apply? When is Buy America NOT Applicable? Certification Process Non-Compliance Conclusion & Questions

BACKGROUND NDOR Utility coordination process Distribute Program Book

BACKGROUND NDOR Utility coordination process Distribution of NDOR Surface Transportation Program to Utilities NDOR has 4 Utility Coordinators, assigned by District, who carry out duties for projects in their respective Districts Distributed annually Basic description of projects by location that are planned over next 6 years (example, 2014-2019)

BACKGROUND NDOR Utility coordination process Distribute Program Book Preliminary Plans (30%) 32 months

BACKGROUND NDOR Utility coordination process Development of Preliminary Design Plans (NDOR) Completed approximately 32 months before letting Roadway Design develops and distributes preliminary design plans, approximately 30% completion These plans are used to conduct Plan-in-Hand Field Inspection Depending on complexity of project, these plans may be distributed to Utility Owners for information only Utility Owners may be invited to attend the Plan-in-Hand field inspection

BACKGROUND NDOR Utility coordination process Preliminary Utility Inspection Distribute Program Book Preliminary Plans (30%) 32 months 30 months

BACKGROUND NDOR Utility coordination process Preliminary Utility Inspection Occurs approximately 30 months before letting NDOR Utility Coordinator assesses existing utilities in project area Various methods: Field Inspection (typically prior to Plan-in-Hand, determines need to invite Utility Owners) Permit check One-Call check (no ticket filed, One-Call polygon) Develop Utility Inspection Report and provide to Roadway Design and others

BACKGROUND NDOR Utility coordination process Preliminary Utility Inspection Final Design (90% Plans) Final Bridge Plans Right-of-Way Plans (Appraisal) Distribute Program Book Preliminary Plans (30%) 32 months 30 months 21 months 18 months 14 months

BACKGROUND NDOR Utility coordination process Final (90%) Roadway & Bridge Plans, Appraisal Plans Roadway Plans are approximately 90% complete and ready to design right- of-way needs approximately 21 months prior to letting Final bridge plans are complete approximately 18 months prior to letting Right-of-Way Appraisal Plans are complete approximately 14 months prior to letting Plans are usually distributed to Utility Coordinators separately Utility Coordinators compile complete set of plans

BACKGROUND NDOR Utility coordination process Design Plans to Utilities Section Submit Plans to Utility Companies Utility Locations & Computations Preliminary Utility Inspection Final Design (90% Plans) Final Bridge Plans Right-of-Way Plans (Appraisal) Distribute Program Book Preliminary Plans (30%) 32 months 30 months 21 months 18 months 14 months 12 months 11.5 months 11 months

BACKGROUND NDOR Utility coordination process Utility Locations & Computations, Submit Plans to Utilities Upon receipt of all plans, Utility Coordinators compile list of pole locations and computations to determine pay status approximately 11 ½ months before letting Utility coordinators distribute plans package to Utility Owners approximately 11 months before letting Transmittal Letter Plans Package Utilities Questionnaire

BACKGROUND NDOR Utility coordination process Receive Response from Utility Companies Submit Plans to Utility Companies Preliminary Utility Inspection Final Design (90% Plans) Final Bridge Plans Right-of-Way Plans (Appraisal) Design Plans to Utilities Section Utility Locations & Computations Distribute Program Book Preliminary Plans (30%) 32 months 30 months 21 months 18 months 14 months 12 months 11.5 months 11 months 8 months

BACKGROUND NDOR Utility coordination process Receive Responses from Utility Companies Goal is to receive responses from all Utility Companies 8 months prior to letting – this rarely occurs for multiple reasons Receive completed Questionnaire Develop relocation plans, as needed Enter into Agreement for reimbursement, where applicable (or use Blanket Agreement) NDOR provides Utility Owners written authorization to order materials and proceed with relocation (separate letters) When applicable, incorporate plans, specifications and estimates for relocation with NDOR construction plans

BACKGROUND NDOR Utility coordination process Receive Response from Utility Companies Status of Utilities Report Submit Plans to Utility Companies Preliminary Utility Inspection Final Design (90% Plans) Final Bridge Plans Right-of-Way Plans (Appraisal) Design Plans to Utilities Section Utility Locations & Computations Distribute Program Book Preliminary Plans (30%) 32 months 30 months 21 months 18 months 14 months 12 months 11.5 months 11 months 8 months 2 months

BACKGROUND NDOR Utility coordination process Status of Utilities Report Developed by Utility Coordinator approximately 2 months before letting Information available to date is included in report Utilities present and conflict status Schedule of relocation (prior to or concurrent with construction)) Contact Information Used by Project Manager when setting up Pre-Construction Conference

BACKGROUND NDOR Utility coordination process Receive Response from Utility Companies Status of Utilities Report Post-Letting Utility Coordination Submit Plans to Utility Companies Preliminary Utility Inspection Final Design (90% Plans) Final Bridge Plans Right-of-Way Plans (Appraisal) Design Plans to Utilities Section Utility Locations & Computations Distribute Program Book Preliminary Plans (30%) 32 months 30 months 21 months 18 months 14 months 12 months 11.5 months 11 months 8 months 2 months LETTING

BACKGROUND NDOR Utility coordination process Project Letting & Post Letting Utility Coordination Project Manager conducts Pre-Construction Conference to coordinate construction activities with various contractors Utility Owners are typically invited to attend NDOR Utility Coordinators continue to serve as resource for issues that arise during construction Scheduling Problem Solving (Liaison between Field, Design, Utility) Whenever necessary, Utility Coordinator will review and approve invoices for payment for utility relocation

Agenda Buy America… Why Now? Definitions Background – The NDOR Utility Coordination Process When does Buy America Apply? When is Buy America NOT Applicable? Certification Process Non-Compliance Conclusion & Questions

Policy: When do buy America (BA) Requirements apply? NDOR worked with FHWA and other approved policies to develop NDOR Buy America Policy for Utility Relocations. NDOR will implement BA requirements for utility relocation activities required by all federally funded transportation projects FHWA has established that all utility agreements (UAs) executed on or after January 1, 2014 shall have BA provisions except for amendments to UAs that were executed on or before December 31, 2013 are not subject to BA. Generally only applies to costs that are eligible for reimbursement When utility relocation is partially reimbursable, all materials that are not otherwise excluded under the policy and are included within the agreement for the reimbursable utility relocation will be subject to BA

Policy: When do buy America (BA) Requirements apply? Eligible Costs: Reasonable non-betterment relocation of existing utility facilities occupying private right-of-way and are necessitated by the construction project Municipally owned and operated utility facilities, depending on population: Within corporate limits: Non-betterment utility relocation costs Outside corporate limits: Non-betterment utility facility relocation costs for utilities occupying private property Facilities occupying public right-of-way that have retained the right to a future move Preliminary engineering Right-of-way costs to obtain replacement easement for facilities previously occupying private property

Policy: When do buy America (BA) Requirements apply? Eligible Costs: Why are relocations for utilities on public right-of-way not considered eligible? 23 CFR § 645.107 indicates these costs are eligible for reimbursement unless the Utility is required by law or agreement to move at its own expense Nebraska Administrative Rules and Regulations, Tit. 410, Ch. 1, § 001.16 & § 002.16 dictates in Nebraska.

Policy: When do buy America (BA) Requirements apply? “001.16 Should the construction and maintenance of a highway necessitate the moving or relocation of any pole line, the owner shall move or relocate the line at his own expense and as described by the Department…”

Policy: When do buy America (BA) Requirements apply? Materials: (more than 90% steel or iron by weight) Raw steel and iron Mast arms, poles and cross arms, standards, trusses, or supporting structural members for signs, luminaries, or traffic control systems Steel transmission or distribution pole structures Pipe, grates, valves High-strength bolts, anchor bolts, anchor rods Rebar and other reinforcing steel (cast-in-place or pre-cast installations) Conduit and ducting Fire hydrants Manhole covers, risers, rims

Policy: When do buy America (BA) Requirements apply? Policy provides definitions of many of the items that appear on the materials list Material listing and definitions are intended to provide clarity and assist Utility owners as they develop internal processes to discern and track materials that are subject to BA as well as their practical application in the field NDOR will review Bills of Materials for utility projects to determine if those describe adequately result in certification of compliance with BA. Reviews may result in additional items or categories

Policy: When do buy America (BA) Requirements apply? Acceptable MINIMUM use of non-domestic materials NDOR and FHWA agree that there are instances in which minimum use should be permissible Based on cost Does not exceed 0.1% of the total cost of the utility agreement, or $2,500, whichever is greater 𝐶𝑜𝑚𝑏𝑖𝑛𝑒𝑑 𝐶𝑜𝑠𝑡 𝑜𝑓 𝑀𝑎𝑡𝑒𝑟𝑖𝑎𝑙𝑠 𝑡ℎ𝑎𝑡 𝑎𝑟𝑒 𝑛𝑜𝑡 𝐵𝐴 𝐶𝑜𝑚𝑝𝑙𝑖𝑎𝑛𝑡 𝑇𝑜𝑡𝑎𝑙 𝑈𝑡𝑖𝑙𝑖𝑡𝑦 𝑅𝑒𝑙𝑜𝑐𝑎𝑡𝑖𝑜𝑛 𝐶𝑜𝑠𝑡 The cost of BA compliant materials will increase the cost of the work by at least 25%

Agenda Buy America… Why Now? Definitions Background – The NDOR Utility Coordination Process When does Buy America Apply? When is Buy America NOT Applicable? Certification Process Non-Compliance Conclusion & Questions

When is buy America not applicable? Utility relocation that is 100% non-reimbursable No agreement No invoices Materials that have been approved for exclusion Other circumstances Betterment performed under separate contract (i.e., not included in agreement for reimbursable utility relocation) A Utility Owner cannot elect to not be reimbursed to avoid Buy America compliance!

When is buy America not applicable? Materials: Assembly materials (screws, nuts, bolts, washers, clips, etc.) Attachment materials (cross arm bracing, ladders, encasements, guy wire, conductors, etc.) Miscellaneous electronics Manufactured products or assemblies consisting of many components, such as radios, processors, batteries, pre-connectorized terminals, etc. Miscellaneous hardware Assembly of small parts that are compiled to form a finished product, including transformers, regulators, gauges, meters, etc. Fittings

When is buy America not applicable? Materials: (cont’d) Encasements Includes cabinets, housings, boxes, vaults or other items used to protect or house equipment or miscellaneous electronics Associated materials, including spare materials, required for maintenance Materials necessary to repair equipment that was discovered or damaged during construction and requires immediate action to restore safe condition or to minimize adverse public impact Existing utility materials that are relocated from one location to another within project limits Materials associated with temporary relocation needed to allow construction to proceed but is not required to remain in that location

When is buy America not applicable? Betterments Betterment – Any upgrading of the facility being relocated that is not attributable to the highway construction and is made solely for the benefit of and at the election of the utility. (23 CFR § 645.105) Not eligible for reimbursement except under specific circumstances (required to meet government codes or other regulations) Utility Owners are required to pay 100% of the entire relocation effort If Utility Owner wishes to include betterment but does not wish to subject materials to BA provisions, then all betterments must be excluded from the utility agreement that includes work that is eligible for Federal-aid

Agenda Buy America… Why Now? Definitions Background – The NDOR Utility Coordination Process When does Buy America Apply? When is Buy America NOT Applicable? Certification Process Non-Compliance Conclusion & Questions

Buy America certification process NDOR and FHWA desire reasonable assurance Utility Owner will bear responsibility to document that the appropriate materials meet Buy America provisions NDOR and Utility Owner will enter into legally binding agreement for reimbursable relocation work Utility Owner will source materials that comply with BA Utility Owner will certify compliance with BA by provision in the agreement Utility Owner will be required to provide supplier certifications or other Utility Owner-signed certifications with all invoices submitted for payment

Buy America certification process Utility Agreement – Process and Documentation Requirements: Utility: Shall not accept delivery of any iron or steel to be incorporated in the work without a certification from the supplier or provider stating that the iron or steel complies with the federal Buy America requirements Shall immediately notify State if Utility becomes aware that steel or iron was permanently incorporated into the work without a proper certification of compliance with the Buy America requirements Shall take any or all actions deemed necessary by State to remedy non- compliance or to prove compliance with the Buy America provisions Shall retain and make readily available to State or FHWA, all Buy America documentation, including but not limited to, certifications, for ten years following final payment to Utility Does not apply if waiver has been granted or materials are excluded by Policy

Agenda Buy America… Why Now? Definitions Background – The NDOR Utility Coordination Process When does Buy America Apply? When is Buy America NOT Applicable? Certification Process Non-Compliance Conclusion & Questions

Non-compliance NDOR will not pay invoices unless or until certification with Buy America can be proven for materials included on the invoice Non-compliance with Buy America could result in the loss of federal funding for the entire transportation project After the project is final, if non-compliance is discovered by FHWA during audit, NDOR may have to repay all federal funds used to construct the project (not just those associated with utility relocation) Utility Agreement – Non-Compliance: NDOR will not monitor Utility’s project or Utility’s compliance with Buy America during construction If certification cannot be provided, NDOR may require the Utility Owner to remove all non-compliant materials and install compliant materials at the sole cost to the Utility Owner

Agenda Buy America… Why Now? Definitions Background – The NDOR Utility Coordination Process When does Buy America Apply? When is Buy America NOT Applicable? Certification Process Non-Compliance Conclusion & Questions

Conclusion & Questions What has been done so far? Interim strategies have occurred while policy is being developed Notification to Utilities of upcoming policy change Interim language added to utility agreements that need to be executed Transmittal letters have been updated to include Buy America language Development of draft policy Based on guidance from FHWA and other approved policies Has been reviewed by NDOR staff and FHWA Comments have been addressed, and the policy will be re-submitted for approval

Conclusion & Questions Moving forward…. Final policy approval Approved policy will be distributed to Utility Owners, along with revised agreement language New blanket agreements will be signed with Utility owners Where new blanket agreements cannot be obtained, the existing blanket agreement will be supplemented In partnership with Utility Owners, NDOR will revise/supplement policy as needed to meet certification requirements

Conclusion & Questions