Dear Colleague:

Under the relevant Buy America requirements, when procuring rolling stock under 49 U.S.C. Chapter 53, the cost of the components and subcomponents produced in the United States must be at least 60 percent of the cost of all components of the rolling stock. In addition, final assembly of the rolling stock must occur in the United States. 49 U.S.C. 5323(j)(2)(C). Under the regulations, a component is considered of domestic origin if the total cost of its subcomponents meets the 60 percent domestic content requirement mandated by law, and the component is manufactured in the United States. 49 C.F.R. 661.11(g).

To assist grantees with the distinction between the terms "component" and "subcomponent" in the context of rolling stock procurements, the Federal Transit Administration included as appendices to its Buy America regulations, the lists of major components identified by Congress in its committee report accompanying the Surface Transportation and Uniform Relocation Assistance Act of 1987 (STURAA), Pub. L. 97-424. H.R. CONF. REP. 100-27. For example, included in the list of major components of rail rolling stock are traction motors, propulsion gearboxes, acceleration and braking resistors, and propulsion controls. Consequently, the domestic content value of the subcomponents for these components, or any other elements that may be considered components of rolling stock, must be at least 60 percent, and the component must be manufactured in the United States in order to satisfy the Buy America requirements.

In summary, all items included in the list of major components at 49 C.F.R. 661.11, App. B and C, should be considered components, not subcomponents, for the purposes of calculating domestic content for rolling stock procurements.

If you have any questions, please contact our Office of Chief Counsel at (202) 366-4011.

Sincerely,

Hiram J. Walker
Acting Deputy Administrator