Mr. Bob Franklin
San Francisco Bay Area Rapid Transit District
300 Lakeside Drive, P.O. Box 12688
Oakland, CA 94604-2688
Dear Mr. Franklin:
I am responding to your letter dated September 9, in which you describe the California Assembly Bill, AB 1097, that was passed in the California State Assembly in May 2011 and the California State Senate in August 2011. If signed into law by Governor Edmund Brown, AB 1097 would authorize a transit agency like the San Francisco Bay Area Rapid Transit District (BART) to provide a bidding preference to a bidder in a federally funded procurement if the bidder exceeds Federal Buy America requirements. You have asked whether BART could implement such a preference without placing its funding provided by the Federal Transit Administration (FTA) at risk.
On February 16, 2011, I sent a "Dear Colleague" letter (copy enclosed) to all recipients of FTA funding reminding our industry of the importance of ensuring that purchases made with FTA funds be used to preserve and create jobs and to promote economic recovery. The Buy America requirements are paramount to achieving this goal.
FTA's Buy America rules of 49 U.S.C. § 5323(j), as implemented at 49 C.F.R. Part 661, prohibit FTA from obligating funds for a project unless all steel, iron, and manufactured products used on that project are produced in the United States. There is a statutory waiver for rolling stock procurements that allows rolling stock to satisfy the Buy America requirement of U.S. production as long as at least 60 percent of the components of each vehicle are produced in the United States and final assembly is performed in the United States. Thus, for rolling stock procurements, FTA's rules set a floor, not a ceiling.
I am pleased at the prospect that BART and other recipients of FTA funds in California may be authorized by AB 1097 to exceed the minimum requirement set forth in FTA's Buy America rules. There are no FTA rules that would prohibit BART from providing a bidding preference to a bidder in a federally funded procurement if the bidder exceeds Federal Buy America requirements. Please note, however, that in keeping with Federal rules requiring full and open competition, this evaluation factor must be communicated to all prospective bidders in advance.
Feel free to contact FTA's lead Buy America attorney Jayme L. Blakesley if you have further questions at email@example.com.