Report PDF - US Environmental Protection Agency

TDOT indicated that they only traveled to the sites periodically to observe the progress of
the projects, and only provided help to the grantees on certain activities as requested (e.g.,
preparing for solicitation of competitive bids for work to be performed on-site), but they
did not do the work for them and did not issue the solicitations, etc.. In addition, the
TDOT sub-recipients were also responsible for determining compliance with the Davis-
Bacon wage rate determinations including submission of copies of payrolls by all
subcontractors and were responsible for submitting monthly online wage reports to
TDOT. The sub-recipient roles being performed by each of the TDOT grantees (and also
required by the “TDOT Grant Contract” signed by each of the sub-recipients) provide
clear evidence that TDOT was in an active oversight role as compared to one where
TDOT was actually conducting the project which would meet the criteria of public
works.
OIG Response 3: The OIG disagrees and continues to maintain that TDOT, as the
recipient of the grant award, conducted the project.
5. In order to meet the obvious intent associated with meeting the definition of “Public
building and public work” listed in 2 CFR Section 176.140, one would need to consider
what the purpose of the TDOT awards were for, targeted to “companies with truck stops
in Tennessee and/or TSE companies working in partnership with a Tennessee truck stop”
(language pulled from TDOT TSE Request for Applications (RFA)). If TDOT were
“conducting the project”, the normal mode would be for TDOT to put out an RFA that
included very detailed bid specifications, performance bond requirements, etc. and would
establish a principal purpose of acquiring property or services for direct agency benefit or
use (on behalf of the welfare of the citizens of Tennessee) as part of an acquisition
(procurement action). In that case, TDOT would retain ownership of the public work,
which in this case did not occur. Ownership of the TSE parking spaces is vested with the
grantees. Pursuant to OMB’s Recovery Act web-site, the lack of ownership of the
property and equipment negates the applicability of the Buy American provision. See
http://www.whitehouse.gov/omb/recovery_faqs#g7 (General Recovery Act FAQ –
Question 7), which provides “if the facility is/will be privately-owned, then the ARRA
Buy America provision will not apply to it, because it will not be a ‘public building or
public work.’’’
OIG Response 4: The EPA’s DERA program determination regarding Section 23
states that projects “… are considered to be public works when a governmental entity
is conducting the project.” The determination does not address ownership as the
criteria for making the Buy American determination.
The OIG does not consider the OMB’s FAQs example included above to be
applicable to the situation in question. The example relates to a seemingly unique
scenario involving a state college or university.
6. Further, in an assistance mode, as defined by the Federal Grant and Cooperative
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