Nonavailability Waiver of Build America Buy America Act Provisions for HVAC Equipment Used in the Ranleagh Court and Waverly Winds Affordable Housing Projects in Howard County, Maryland

Procurement Summary

Waiver Justification Summary: The Grantees are requesting a nonavailability waiver for certain HVAC equipment required for construction of the Ranleagh Court and Waverly Winds affordable housing project. In the case of the VRF HVAC system, the Grantees are seeking a full waiver of the BAP to allow the purchase of a system manufactured in South Korea. In the case of the heat pumps and mini-split systems, the Grantees have identified products that are produced in the United States but do not meet the standard established at 2 CFR 184.3 that the cost of the components of the manufactured product that are produced in the United States is greater than 55 percent of the total cost of all components of the manufactured product. For those two products, this waiver would only apply to that portion of the BAP compliance requirements. The Grantees have made extensive efforts to comply with BABA requirements, including adjusting project specifications to use BABA-compliant products where feasible. The Grantees have conducted market research beginning in October 2024 to identify BABA-compliant products where possible and narrow the scope of this non-availability waiver to only those items that cannot be sourced domestically. The project is not covered under any existing HUD general waivers, and the Grantees have applied the five percent de minimis limit allowed under HUD’s “Public Interest De Minimis and Small Grants Waiver of Build America, Buy America Provisions as Applied to Recipients of HUD Federal Financial Assistance” (87 FR 76502) to other non-compliant materials used in the project. Pursuant to HUD’s “Public Interest Phased Implementation Waiver for FY 2022 and 2023 of Build America, Buy America Provisions as Applied to Recipients of HUD Federal Financial Assistance” (“HUD Phased Implementation Waiver”) (88 FR 17001), the FY24 CPF funds are subject to the BAP only for iron and steel products. However, the project’s Section 108 loan commitment date, which is the date of obligation for Section 108 funds, was September 24, 2024. Therefore, the BAP applies to all iron and steel, construction materials, and manufactured products used in the project, unless a project-specific waiver is granted. Anticipated Impact if No Waiver is Issued: Failure to grant a waiver for these products would result in project delays and increased costs. Project financing could be rendered non-viable, resulting in the loss of 205 units of affordable housing that will primarily serve low- and moderate-income families in Howard County. Description of Efforts Made to Identify Domestic Products: The Grantees made substantial efforts to meet 2 CFR Part 184 requirements, including reasonable searches with multiple manufacturers and suppliers. For each of the items listed, the Grantees consulted a minimum of 3 suppliers or manufacturers for each product listed. None of the contacted suppliers or manufacturers located products that met the technical specifications of the project and were compliant with BABA. The market research provided by the Grantees was reviewed by HUD and is consistent with HUD Office of Community Planning and Development (CPD) guidance to demonstrate the need for a non-availability waive.

Description of items, products and materials or categories of such anticipated to be covered by this waiver

• HVAC Equipment o NAICS: 333415 Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing o PSC: N041 Installation of Equipment: Refrigeration, Air Conditioning, and Air Circulating Equipment o Quantity:  1 VRF HVAC System  216 heat pumps  6 mini split systems o Cost: $324,000 o Country of Origin:  South Korea (VRF system)  United States (Heat pumps, mini split systems) o Technical Specifications:  VRF System: The heat recovery VRF system shall have a minimum SEER2 rating of 15.2, a minimum HSPF2 rating of 7.2 and meet Energy Star performance requirements. Wall-mounted, Cassette, and horizontal ducted(pancake) style indoor or terminal units must be available between ½-ton and 2-½ tons nominal capacity. The system shall be capable of operation down to 0 degrees Fahrenheit outdoor temperature. System refrigerant must contain A2L style refrigerant in compliance with EPA regulations. Heat recovery units shall be available for single unit and multi-unit connections.  Heat Pumps: The split-system heat pumps (Indoor/Air Handling Units and outdoor/condensing units) must be Energy Star certified. They must have a minimum SEER2 rating of 15.2 and a minimum HSPF2 rating of 7.8. They must be available in 1-½ , 2, 2-½ , and 3 ton nominal capacity systems. They must use A2L refrigerants in compliance with EPA regulations. Indoor unit must include variable speed fan. Additional specification requirements are available in the project plans and specifications upon request.  Mini Split Systems: The ductless split-system heat pumps (Indoor/Air Handling Units and outdoor/condensing units) must be Energy Star certified. They must have a minimum SEER2 rating of 15.2 and a minimum HSPF2 rating of 7.8. They must be available in 1-½ ton nominal capacity systems. They must use A2L refrigerants in compliance with EPA regulations.

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