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Delta Composites LLC - January 23, 2015

Alais L. M. Griffin
Greenberg Traurig
77 W. Wacker Drive, Suite 3100
Chicago, Illinois 60601

Re: Request for Interpretation of Buy America Regulations for Fiberglass Structural Platform System

Dear Ms. Griffin:

I write in response to your request for a letter of interpretation to clarify whether Delta Composites, LLC’s (Delta) fiberglass structural platform system is properly categorized as a component of the Wilson Station Project and whether the use of the fiberglass structural platform system in the Wilson Station Project complies with the Buy America regulations. The fiberglass structural platform system consists of fiberglass columns, fiberglass beams and vertical diagonals, fiberglass stairs and stair treads, and fiberglass grating and handrails. These items make up the platform walkway, stairway, and handrails.

Legal Standard

With certain limited exceptions, FTA may not obligate funds for a project unless the manufactured products used in the project are produced in the United States. 49 U.S.C. § 5323(j); 49 C.F.R. § 661.5(a). Whether a manufactured product is considered produced in the United States is determined by a two-part test: “(1) All of the manufacturing processes for the product must take place in the United States; and (2) All of the components of the product must be 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 C.F.R. § 661.5(d).

Discussion

A. Fiberglass Structural Platform System as a Manufactured End Product

In order to determine whether the manufacturing processes for a particular item must take place in the United States, one must evaluate the item in light of FTA’s regulatory treatment of end products, components, and subcomponents. Under Section 661.5(d) of FTA’s regulation, the manufacturing process for end products and components must take place in the United States, but the manufacturing process for subcomponents (including raw materials) need not take place in the United States.

FTA defines a manufactured “end product” as “any vehicle, structure, product, article, material, supply, or system, which directly incorporates constituent components at the final assembly location, that is acquired for public use under a federally-funded third-party contract, and which is ready to provide its intended end function or use without any further manufacturing or assembly change(s).” 49 C.F.R. § 661.3 (emphasis added).

FTA defines “system” to mean “a machine, product, or device, or a combination of such equipment, consisting of individual components, whether separate or interconnected by piping, transmission devices, electrical cable or circuitry, or by other devices, which are intended to contribute together to a clearly defined function.” 49 C.F.R. § 661.3. In determining whether a system constitutes a manufactured end product, FTA considers factors such as “[w]hether performance warranties apply to an integrated system (regardless of whether components are separately warranteed); whether products perform on an integrated basis with other products in a system, or are operated independently of associated products in the system; or whether transit agencies routinely procure a product separately (other than as replacement or spare parts).” 49 C.F.R. § 661.3

FTA defines “component” as “any article, material, or supply, whether manufactured or unmanufactured, that is directly incorporated into the end product at the final assembly location.” 49 C.F.R. § 661.3. Subcomponents, in turn, are those lower-level items that are incorporated into a component through a manufacturing process.

In 2005, FTA initiated a rulemaking to amend its Buy America regulations by adding a “representative list” of manufactured end products. In 2007, FTA issued its Final Rule. Pursuant to that Final Rule, the representative list “was not meant to be all-inclusive, instead describe[ed] general ‘representative’ categories of end products consistent with the legislation,” which included several types of systems, such as fare collection systems, computer systems, information systems, security systems, and data processing systems that might be housed within a larger transit facility or structure. 72 Fed. Reg. 53,693 (September 20, 2007).

The issue here is whether a fiberglass structural platform system is a manufactured end product. To be a manufactured end product, the good must be a product that directly incorporates constituent components at the final assembly location, it must be acquired for public use, and it must be ready to provide its intended use when assembled.

Delta’s fiberglass structural platform system is composed of three elements, which include fiberglass plated walkways, fiberglass 3-rail top mounted handrails, and fiberglass stairs. These elements typically are assembled together onsite, and after they are assembled, a transit agency may utilize the system to access the track level of the station. In other words, after the components of the system are assembled, the system is ready to provide its intended purpose in the public domain.

Each of these elements of the system work together to perform a function, similar to the way in which the elements of other systems, or “manufactured end products,” work together to perform various functions, such as fare collection systems, computer systems, information systems, security systems, and data processing systems that might be housed within a larger transit facility or structure. The characteristics of the fiberglass structural platform system lend it to a classification of a “manufactured end product,” rather than a component of a facility.

Your suggestion that the fiberglass structural platform system is a component of the station manufactured end product, relying on FTA’s 2010 letter regarding escalators, is misplaced. In the amendments to the Buy America Rule in 2007, FTA determined that a permanently affixed elevator is a feature of a facility that is interrelated to and incorporated into the physical structure of the facility, and therefore, functions more like a component of the facility rather than an independently manufactured end product. See 72 Fed. Reg. 53,694. FTA analogized a permanently affixed escalator to a permanently affixed elevator in its 2010 letter. These components serve as single fixtures of a larger facility, whereas the fiberglass structural platform system is a comprehensive system that is more characteristic of a manufactured end product.

FTA recently discussed its position on systems as manufactured end products in a July 11, 2014, letter to McCarthy Building Companies, Inc. for the Bob Hope Airport’s Regional Intermodal Transportation Center Project. In that letter, FTA explained that systems—such as electrical systems, fire alarm systems, and data systems—are manufactured end products and not components of a larger transit facility.

B. Delta’s Compliance with Buy America

To satisfy the manufactured end product standard, a component must be produced as a result of a manufacturing process that occurs in the United States. A manufacturing process requires the alteration of materials or elements resulting in either added value or transformation of those materials or elements into a functionally different end product. 49 C.F.R. § 661.3. FTA has stated that sufficient alteration activities include “forming, extruding, material removal, welding, soldering, etching, plating, material deposition, pressing, permanent adhesive joining, shot blasting, brushing, grinding, lapping, finishing, vacuum impregnating and, in electrical and electronic pneumatic, or mechanical products, the collection, interconnection, and testing of various elements.” [1]

Subcomponents are one level removed from the component and integrated into the component through the manufacturing processes. The origin of a subcomponent is significant to the extent that the manufacturing processes of the component must materially alter and transform the subcomponent during the incorporation of the subcomponent into the component. Thus, while subcomponents may be foreign sourced, the manufacturing processes at the component level with respect to the foreign-sourced subcomponent must take place in the United States.

1. Fiberglass Plated Walkways

To manufacture the fiberglass plated walkways, Delta uses raw fiberglass grating panels and gritted fiberglass plate. The raw fiberglass grating panels are manufactured in China, while the gritted fiberglass plate is manufactured in the United States. The fiberglass panels come in stock sizes, they are not provided in a useable size or form. Consequently, Delta first engineers the fiberglass panels to ensure that the fiberglass plated panels will conform to the contract drawing requirements and engineering specifications. Then, using a chemical bonding process, Delta bonds the gritted fiberglass plate to the fiberglass grating. The custom engineering design of the materials and bonding of the plate to the grating panels substantially alter the appearance, fit, form, and function of the original raw materials – both the fiberglass grating panels and the fiberglass plate.

2. Fiberglass 3-Rail Top Mounted Handrail System

Delta also designs and manufactures complete fiberglass handrail systems that can be attached to both the concrete curbs and the timber ties in the station. The handrail system consists of fiberglass vertical posts, fiberglass horizontal rails, and stainless steel stanchions. Delta first engineers the fiberglass tubes and then cuts the stock length tubes to the lengths defined in Delta’s construction drawings. Delta places end caps on the tubes to prevent water penetration and seals the cut tubes. It then connects the horizontal rails to the vertical posts using stainless steel bolts. The manufacturing process is complete when Delta attaches fiberglass vertical posts of the fiberglass handrail panel to the stainless steel stanchion bases using stainless steel bolts.

3. Fiberglass Stair System

Delta manufactures the stairways using fiberglass channel stringers (to which the stair treads and handrails attach); fiberglass angle stair tread supports (upon which the stair treads affix); fiberglass stair treads with a solid gritted nosing; fiberglass handrails; stainless steel tread attachment clips; fiberglass clip angles to attach the top and bottom of the stairs to flooring at the base and to the platform on the top; and stainless steel bolts for making all of the connections. First, Delta manufactures the stair treads by taking raw sheets of fiberglass grating and cutting them to custom dimensions shown on the Delta construction drawings. Delta then manufactures a fiberglass nosing of contrasting color and affixes it to the front of each tread. Using U.S.-sourced materials, Delta creates the nosing in its Houston facility and applies an aggregate grit in compliance with OSHA regulations. Second, Delta manufactures the fiberglass channel stair stringers and the stair tread support angles from raw materials. Delta cuts, copes (shapes pieces so they can be joined), drills, slots, and seals the raw materials. Third, Delta manufactures the fiberglass stair handrail system. Delta performs the engineering, designing, drafting, cutting, drilling, bolting, fabrication and assembly of the tubes into a usable stair handrail system in Houston, Texas. Finally, Delta manufactures project specific custom grills at the underside of each stair to prevent one from walking under the stairs.

Conclusion

Based upon the foregoing, I find that Delta will comply with Buy America requirements as long as it does not deviate from the manufacturing process you have described above and all of the manufacturing processes take place in the United States.

Please note that this decision is based solely on the representations made by your client, Delta Composites, LLC. This decision will not apply if the actions of Delta deviate from the manufacturing processes that were communicated to FTA. In addition, FTA reserves the right to verify that Delta does, in fact, comply with FTA’s Buy America rules and with the manufacturing plan outlined in its communication with FTA.

If you have any questions, please contact Assistant Chief Counsel Cecelia Comito at 202-366-2217 or cecelia.comito@dot.gov.

Sincerely,

Dana Nifosi
Acting Chief Counsel


[1] This explanation of the nature of “manufacture” is made in 56 Fed. Reg. 926 (January 9, 1991) with reference to rolling stock, but is applicable to manufactured products as well.

Updated: Wednesday, March 16, 2016
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