On June 20, 2018, OMB issued memorandum OM-18-18, "Implementing Statutory Changes to the Micro-Purchase and the Simplified Acquisition Thresholds for Financial Assistance." In accordance with recent statutory changes set forth in the National Defense Authorization Acts (NDAA) for fiscal years 2017 and 2018, this memorandum raises the threshold for micro-purchases under federal financial assistance awards to $10,000 and raises the threshold for simplified acquisitions to $250,000 for all recipients. The increases for micro-purchases and the simplified acquisition threshold apply to FTA-funded procurements made on or after June 20, 2018.
However, the increase in the simplified acquisition threshold to $250,000 does not apply for Buy America purposes, as the small purchase amount is established at $150,000 in FTA’s statute at 49 U.S.C. 5323(j)(13) and is no longer tied to the simplified acquisition threshold. See FTA’s September 2016 guidance letter.
FTA’s Buy America requirements prevent FTA from obligating an amount that may be appropriated to carry out its program for a project unless "the steel, iron, and manufactured goods used in the project are produced in the United States" (49 U.S.C. § 5323(j)(1)). FTA’s Buy America requirements apply to third-party procurements by FTA grant recipients. A grantee must include in its bid or request for proposal (RFP) specification for procurement of steel, iron or manufactured goods (including rolling stock) an appropriate notice of the Buy America provision and require, as a condition of responsiveness, that the bidder or offeror submit with the bid or offer a completed Buy America certificate in accordance with 49 CFR §§661.6 or 661.12.
Under limited circumstances, FTA may waive Buy America requirements if the agency finds that:
- application of Buy America is inconsistent with the public interest;
- the steel, iron, and goods produced in the U.S. are not produced in a sufficient and reasonably available amount or are not of a satisfactory quality; or
- including domestic material will increase the cost of the overall project by more than 25 percent for rolling stock.
The process for seeking a waiver is set forth in 49 CFR part 661. Grantees are encouraged to apply for a waiver as soon as possible and to provide detailed requests to expedite FTA’s review. FTA’s determinations on waiver requests are published in the Federal Register for notice and comment.
When procuring rolling stock, which includes train control, communication, traction power equipment, and rolling stock prototypes, the cost of the components and subcomponents produced in the U.S. must be:
- more than 60 percent for FY2016 and FY2017
- more than 65 percent for FY2018 and FY2019
- more than 70 percent for FY2020 and beyond
Final assembly for rolling stock also must occur in the U.S. Additionally, rolling stock procurements are subject to the pre-award and post-delivery Buy America audit provisions set forth in 49 U.S.C. § 5323(m) and 49 CFR part 663.
The phased increase in domestic content was included in the FAST Act. See our Buy America FAST Act Fact Sheet.
Unlike rolling stock, manufactured goods must be 100-percent produced in the U.S. A manufactured good is considered produced in the United States if: (1) All of the manufacturing processes for the product take place in the United States; and (2) All of the components of the product are of U.S. origin. A component is considered of U.S. origin if it is manufactured in the United States, regardless of the origin of its subcomponents. 49 CFR 661.5(d). FTA has issued a number of Buy America guidance letters discussing manufactured goods.