August 21, 2013
Mr. Sam Mayman
Executive Officer, Engineering
Project Transit Delivery
Los Angeles County Metropolitan Transportation Authority
One Gateway Plaza
Los Angeles, CA 90012-2952
Re: Buy America-Subcomponent Compliance Confirmation
Dear Mr. Mayman:
I write in response to your June 10, 2013 request for confirmation on the application of the Federal Transit Administration (FTA) Buy America rules to the utility relocation to be performed by AT&T pursuant to an agreement with the Los Angeles County Metropolitan Transportation Authority (LACMTA). Thank you for taking the time to seek guidance. After a careful and thorough review of your June 10, 2013 letter, FTA agrees with LACMTA's analysis and classification of the materials to be used by AT&T. The following is a summary of FTA's review and conclusions.
LACMTA intends to use FTA funds for the Regional Connector and the Westside Subway Extension projects. Both of these projects require the relocation of AT&T's communications network. The AT&T relocation cost for the Regional Connector project is $ 1.5 million and the AT&T relocation cost for the Westside Subway Extension project is $ 1.4 million.
For several months, FTA, AT&T and LACMTA worked together regarding how to apply FTA's Buy America rules to the AT&T relocation for the Regional Connector and the Westside Subway Extension projects.
By letter dated June 10, 2013, LACMTA provided its analysis on the application of Buy America to the AT&T relocation for the two projects. According to LACMTA, the manholes, conduits, air pipes, copper cables of various sizes, and fiber cables are components (of the communications network) and closure fiber splices, closure copper splices, endplates for the copper splices, ground clamps, ground straps, zip ties, fiber connectors, splicing modules, and sealing tape are subcomponents under Buy America.
In subsequent telephone conversations, an in-person meeting among AT&T, FTA, and Federal Highway Administration lawyers, and a follow up email dated July 19, 2013, LACMTA and AT&T provided additional information regarding the closure fiber splices, the closure copper splices, and the end plate for copper splices. According to the July 19, 2013 email, the closure fiber splices and closure copper splices are types of splice cases or boxes used in the projects and the end plates for copper splices are part of the splice cases.
On August 8, 2013, in a letter for interpretation to the City of Charlotte regarding an AT&T utility relocation project that is part of Charlotte's Blue Line Extension (BLE) project, FTA found that AT&T's communications network is an end product for purposes of Buy America and designated the components and subcomponents of the communications network located in the City of Charlotte (discussed further below). [FN1]
II. Buy America
By law, all contracts needed to complete an FTA-funded project, including utility contracts, must comply with the Buy America rules of 49 U.S.C. § 5323(j), as implemented by 49 C.P.R. Part 661. Buy America requires that all steel, iron, and manufactured products to be produced in the United States. [FN2]
For steel and iron, all manufacturing processes must take place in the United States. [FN3] This requirement applies to all construction materials made primarily of steel or iron, including structural steel or iron, and steel or iron beams, columns, running rail, and contact rail. [FN4] The steel and iron requirements do not apply to steel or iron used as components or subcomponents of other manufactured products. [FN5]
For manufactured products, to be considered produced in the United States:
(1) All of the manufacturing processes for the [manufactured end] product must take place in the United States; and
(2) All of the components of the [manufactured end] 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. [FN6]
FTA regulations define an end product as '"any vehicle, structure, product, article, material, supply, or system, which directly incorporates constituent components at the final assembly location ... and which is ready to provide its intended end function or use without any further manufacturing or assembly change(s) .... " [FN7] Thus, based upon this definition of an end product, a system may also be an end product under Buy America.
A system is a "machine, product, or device, or a combination of such equipment, consisting of individual components, whether separate or interconnected by piping, transmission devices, electrical cables or circuitry, or by other devices, which are clearly intended to contribute together to a clearly defined function .... " [FN8] In determining whether a system is an end product, FTA looks at various factors, including '"whether products performed on an integrated basis with other products in a system, or are operated independently of associated products in the system" [FN9] and carefully examines the system as a whole to determine whether it is, in fact, composed of more than one end product. [FN10]
The following is a list or representative manufactured end products that are subject to the requirements of Buy America. This list is representative, not exhaustive.
Manufactured end products: Infrastructure projects not made primarily of steel or iron, including structures (terminals, depots, garages, and bus shelters), ties and ballast; contact rail not made primarily of steel or iron; fare collection systems, computers; information systems; security systems; data processing systems; and mobile lifts, hoists, and elevators. [FN11]
A component of the end product is "any article, material, or supply, whether manufactured or unmanufactured, that is directly incorporated into the end product at the final assembly location." [FN12]
Based upon the information provided, I agree with your classifications. The utility relocation that AT&T will perform in relation to the Regional Connector and the Westside Subway Extension projects is similar to the utility relocation AT&T will undertake in relation to the City of Charlotte's BLE project. While there may be slight differences due to obvious factors, including geographic location, both are utility relocations for AT&T' s communications networks using similar, if not the same, materials.
In the August 8, 2013 letter to the City of Charlotte, FT A determined that, among other things, AT&T' s communications network is an end product; and the poles, manholes, handholes, conduits, cables, pedestals, and cabinets are components. In that same letter, FTA found that the connectors, clam[p]s, and fittings are subcomponents of the component conduit; the lashing wire, strand, grip strand, terminals, connectors, closures, splice boxes, anchors, clamps, fittings, washers, screws, nuts, and bolts are subcomponents of the component cable; and the electronics, shelves. nuts, screws, bolts, batteries, and concrete pads of the component cabinets.
According to the July 19, 2013 email, the closure fiber splices and closure copper splices used in LACMTA's Regional Connector and Westside Subway Extension projects are types of splice cases and the end plate for copper splices are a part of those splice cases similar to those used in the utility relocation for the City of Charlotte's BLE project.
Therefore, the manholes, conduits, air pipes, copper cables of various sizes, and fiber cables are components of the communications network end product in LACMTA's Regional Connector and Westside Subway Extension projects. The closure fiber splices, closure copper splices, endplates for the copper splices, ground clamps, ground straps, zip ties, fiber connectors, splicing modules, and sealing tape are subcomponents.
Based upon the foregoing, I find AT&T' s communications network is an end product system and the components of this system are the manholes, conduits, air pipes, copper cables, and fiber cables are the components used in the utility relocation for the Regional Connector and Westside Subway Extension projects and must be manufactured in the United States. The closure fiber splices, closure copper splices, endplates for the copper splices, ground clamps, ground straps, zip ties, fiber connectors, splicing modules, and sealing tape are subcomponents and may be manufactured in the United States or elsewhere.
Please contact Mary J. Lee at email@example.com with questions about this decision.
Deputy Chief Counsel
cc. K.N. Murthy
[FN1] Letter from Dorval R. Carter, Jr., Chief Counsel, Federal Transit Administration, to Bradley J. Thomas, Assistant City Attorney, Charlotte Area Transit System (Aug. 8, 2013) (enclosed).
[FN2] 49 U.S.C. § 5323(j)(1); 49 C.F.R. § 661.5(a).
[FN3] 49 U.S.C. § 661.5(b).
[FN4] Id. at § 661.5(c).
[FN6] Id. at § 661.5(d).
[FN7] Id. at § 661.3.
[FN10] See 72 Fed. Reg. 53688, 53693 (Sept. 20, 2007).
[FN11] Appendix A to 49 C.F.R. § 661.3.
[FN12] 49 C.F.R. § 661.3.