FTA Seeks Comments on Proposed Notice of Buy America Waiver for Minivans
FTA seeks comments on a proposed waiver of the Buy America domestic content requirement for non-ADA-accessible minivans used for vanpool programs. Minivans are still subject to the requirement that final assembly take place in the U.S. With certain exceptions, FTA’s Buy America requirements prevent FTA from obligating funds for the purchase of rolling stock unless (i) the cost of components and subcomponets produced in the U.S. is more than 60 percent of the cost of all components for the rolling stock, and (ii) final assembly of the rolling stock has occurred in the U.S. FTA is not aware of any manufacturers of non-ADA-accessible minivans that contain more than 60 percent domestic content and are assembled in the U.S. However, FTA has identified at least four minivan manufacturers who assemble their vehicles in the U.S. Therefore, to maintain U.S. jobs and obtain the benefits of the Buy America statute, FTA proposes to grant a general waiver of only the domestic content requirement for non-ADA-accessible minivans. This waiver would apply to all procurements of non-ADA-accessible minivans and is limited to contracts entered into before September 30, 2019 or until a fully-compliant domestic source becomes available, whichever is earlier.
Because the non-ADA-accessible minivans are production line vehicles sold to the general public (i.e., they are not designed and manufactured specifically to be purchased using Federal funds), and those sales substantially outnumber purchases with Federal funds, manufacturers have been reluctant to subject their vehicles to the pre-award and post-delivery audit requirements in 49 CFR part 663 to verify their domestic content. FTA seeks comments on whether manufacturers would consider submitting to a preaward and post-delivery audit process that was conducted by FTA on each new model year, as opposed to requiring audits for each individual procurement.
To comment on the proposed waiver, go to Regulations.gov before May 31, 2016. FTA will publish a final waiver after reviewing any comments received.
Buy America Overview
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 if FTA finds that: (1) application of Buy America is inconsistent with the public interest; (2) 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 (3) 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 in order to expedite FTA’s review of waiver requests. FTA’s determination on waiver requests will be 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
- 65 percent for FY2018 and FY2019
- 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. Please consult the Buy America FAST Act Fact Sheet for more information.
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 guidance letters discussing manufactured goods. See Waivers & Decision Letters.
- Draft Buy America Handbook; Conducting Pre-Award and Post-Delivery Audits for Rolling Stock Procurements” (PDF) (June 2015)
- Conducting Pre-Award and Post-Delivery Audits for Bus Procurements (May 1995)
- Conducting Pre-Award and Post-Delivery Reviews for Rail Vehicle Procurements (May 1994)
Administrator's Policy Letters
- Buy America (February 17, 2011)
- Buy America re: Rolling Stock (June 10, 2002)
- Components of Rolling Stock (March 30, 2001)
- Pre-Award and Post Delivery Audits (March 18, 1997)
Notices of Waiver Requests and Decisions
- FTA published a proposed general public interest waiver for the following categories of rolling stock contracts: (1) for contracts entered into between the FAST Act’s effective date and date of enactment -- between October 1, 2015 and December 4, 2015; and (2) for contracts entered into after December 4, 2015 as a result of solicitations for bids or requests for proposals that were advertised before December 4, 2015.
- Notice of Request to Rescind Buy America Waiver for Minivans and Minivan Chassis (PDF)
- Decision to Rescind Buy America Waiver for Minivans and Minivan Chassis (PDF)
- FTA proposed policy statement on the implementation of the increase in domestic content under the Buy America provisions for rolling stock. The FAST Act amended the Buy America waiver for rolling stock to provide for a phased increase in the domestic content requirement for rolling stock from the current more than 60 percent to more than 70 percent in FY2020 and beyond. FTA interprets the statute to require that if a recipient enters into a contract for rolling stock after the effective date of the FAST Act -- October 1, 2015 -- then the new FAST Act provisions apply based on the date of delivery of the rolling stock.