Loading ...Understand the requirements for projects funded by the act.
Funds from the American Recovery and Reinvestment Act of 2009 (ARRA), the $787 billion economic stimulus package enacted and signed into law in February 2009, are now being disbursed. According to www.recovery.gov, the U.S. government’s official ARRA spending Web site, $25 billion of ARRA funds had been awarded as of December 2009. Only $18 billion of this sum has already been disbursed, however.
A significant portion of ARRA funds is earmarked to 28 federal agencies to finance contracts, grants and loans around the country. This translates into construction jobs being financed through the federal agencies. If your company is involved in the construction industry, it is important that you understand that there are “strings” attached to these funds. Although many of the restrictions are technical in nature, keep in mind these pointers to better understand how the fire and life safety systems market fits into the scope.
How is funding directed?
There are three main avenues in which a project can receive funding from the federal agencies. Because much of the funding went directly to state and local governments, the first opportunities are state/local government projects. Other possibilities include current federal program initiatives or open or new solicitations/grants from the federal agency. The point to remember is that any project is a potential recipient of ARRA money. Make sure you find out from your customer whether it has received ARRA money, and what ARRA requirements apply to the project.
ARRA requirements
The ARRA requirements create challenges for building contractors and suppliers that hope to work on ARRA-funded projects.
Reporting: Because the ARRA promised accountability and transparency into how money would be spent, it requires quarterly reporting of certain information regarding an ARRA-funded project. The reporting is required from two types of ARRA recipients: direct grant recipients and prime contractors to a federal agency. While it is very unlikely that a fire and life safety system contractor would be a direct recipient of grant money, it will still have to submit some routine administrative information to the grant recipient, such as name and address of the business, and its DUNS number.
If a fire and life safety contractor is a prime contractor to a federal government agency, it will need to do full ARRA reporting. Prime contractors also must report certain information on their first-tier subcontractors.
Reporting is done through the online reporting tool available at www.FederalReporting.gov, where the contractor must register in advance. Either manually enter the information or upload Microsoft Excel® or XML templates. Keep in mind that the first reports are due at the end of the third quarter 2010.
Prevailing Wages: All construction projects receiving ARRA funds must pay Davis-Bacon wages; all standard Davis-Bacon requirements apply. This is true whenever the project receives any funding, in whole or in part, from ARRA. This is a significant expansion of the reach of the Davis-Bacon Act, as it formerly applied only to projects owned by federal government agencies.
If you have ever worked on a project for a federal government agency, you are already familiar with Davis-Bacon requirements. If not, a good place to start is the Web site of the Wage and Hour Division of the Department of Labor at http://www.dol.gov/whd/contracts/index.htm
“Buy American” Provisions: One of the more complicated provisions of the ARRA is the Buy American requirements. On its face, it sounds simple: all iron, steel and manufactured products used in ARRA-funded projects must be manufactured in the U.S. In reality, the application of this to an individual project is very complicated. The key point to remember is: Don’t assume a product can’t be used just because it isn’t made in the U.S. Numerous conditions and exceptions may allow the use of foreign-made products. Your supplier sales representative should be able to help you determine what products can be used. For example, System Sensor sales representatives have access to extensive resources to help explain Buy American requirements.
To start, it is important to know that the Buy American requirements apply to “manufactured goods.” Each item of manufactured goods must be manufactured in the U.S. Importantly, there is no requirement for the origin of the components. A manufactured good is compliant if it is manufactured in the U.S, even if all of its components are non-U.S.
What is a “manufactured good”? It is anything that is brought to a project site for installation into the project. This is an important point for fire alarm panels. If a panel can be assembled offsite and brought to the site and installed as a single item, it is probably compliant. Remember, there is no requirement for the origin of its components.
Here are some very general guidelines to follow: First, the Buy American requirements only apply to projects for public works or buildings. If your project is on a commercial or private building rather than a government-owned building, the requirements may not apply. Ask your customer.
Next, if a product is not available from a U.S. source, it may qualify for an unavailability exception. In most cases, these must be requested before a contract is awarded. If the product you are considering is not made in the U.S., ask your supplier sales representative for help on this.
In addition, if the total project value is over $7,804,000.00, the project owner might be required to follow U.S. trade agreements and allow products from certain countries, notably Mexico, Canada and most European countries. Ask your customer whether any trade agreements apply. If they are unsure, your supplier sales representative might be able to help.
There also is an exception that applies when the use of U.S. products would increase the cost of the overall project by 25 percent or more. This would be unlikely in most projects, but if the project scope is primarily a life safety system, it could happen. Coordinate this with the project owner to find out if it might apply.
If the project owner is a federal government agency, there is a very important caveat to the rules. The Federal Acquisition Regulation treats an entire life safety system as a single product, no matter how the individual components or devices are brought to the project site. That means that when a project is ARRA-funded, the system is automatically compliant because the components can come from anywhere. (NOTE: This only works for an ARRA-funded project owned by a federal agency. For non-ARRA-funded projects, the traditional Buy American Act applies, which has a component test.)
In short, you can’t disqualify a product just because it is made outside the U.S. In fact, because of the many rules and exceptions, a non-U.S. product might be compliant on one project but not on another. Never assume that the answer on one project will be the same on the next. Your supplier sales representative should be able to help you determine the use of products on any particular project.
Other ARRA Requirements: There are other ARRA requirements that the project owner will be required to insert in all contracts. These include:
• Audit and Oversight: The federal government has extensive powers to audit contractor and subcontractor records and investigate any allegations of misuse of money.
• Registration in Central Contractor Registration: All grant recipients and prime contractors must register in a federal government database of contractors.
• Whistleblower Protection: Employers are limited in the actions they can take against employees who report any fund fraud or misuse.
• Mandatory Disclosure: All contractors are required to report any suspected misconduct or wrongdoing related to the performance of an ARRA project.
• Subcontracts and purchase orders must include ARRA obligations.
Here are some tips if you are working on an ARRA-funded project:
• Notify your sourcing function as early as possible when ARRA-funded contracts or contract modifications are being considered. They should include ARRA requirements in all RFQs and RFPs. Consider pre-screening key suppliers.
• Add ARRA obligations to all affected purchase orders
Three Key Steps
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Although ARRA-funded projects include many provisions, being prepared for the numerous restrictions will enable contractors to better understand expectations and make informed decisions on pursuing ARRA-funded jobs. Your supplier sales representative will likely have access to resources to help in analyzing ARRA requirements. Don’t hesitate to ask for assistance if you are unsure about any requirements.
Tags: Code, Government
Posted in FIRE/LIFE SAFETY CODES, Summer 2010