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Has the grantee included a Buy America provision for all
procurements of steel, iron, and manufactured products, except products with a
waiver or small purchases of $100,000 or less?
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Has the grantee obtained and retained Buy America
certifications from successful vendors for purchases of more than $100,000?
Explanation
Buy America regulations require that all procurements for steel, iron, and
manufactured products contain the Buy America provisions. The only exception is
for items subject to a waiver. General waivers are listed in Appendix A to 49
CFR 661.7. The general waiver for final assembly in the United States of 15
passenger vans and 15 passenger wagons produced by Chrysler Corporation was
repealed as a result of SAFETEA-LU. Small purchases were added to the general
waiver effective July 24, 1995, and include all purchases with capital,
planning, or operating assistance costing $100,000 or less. The small purchase
limitation is based on the value of the procurement, not the price of the item.
For example, a purchase of four vans that totals $120,000, even though each van
costs $30,000, must follow the Buy America procedures.
Buy America provisions apply to all purchases of steel, iron, and manufactured
goods exceeding $100,000, regardless of whether they involve capital,
operating, or planning funds. The requirements apply to subcontractors,
regardless of the size of their contract, if the prime contract is more than
$100,000. The requirements apply when a grantee uses an intergovernmental
agreement or otherwise jointly purchases manufactured products. Grantees are
required to pass the requirements down to management or service contractors
when the contractor is making FTA funded procurements on the grantee’s
behalf.
The grantee needs to include a clause citing the Buy America requirement in its
Invitations for Bids (IFB) and Requests for Proposals (RFP). A Buy America
certification also should be included. There are different certifications
required for procurements of rolling stock and procurements of other steel,
iron, or manufactured products. The specific text for each is contained in the
FTA Best
Practices Procurement Manual.
The grantee must obtain a signed certification from each successful bidder
providing steel, iron, or manufactured products when the total purchase price
exceeds $100,000. The contractor is required to certify that the materials
provided either comply or do not comply with Buy America requirements. The
grantee is required to retain these certifications in the contract file and
make them available for inspection upon request. If the contractor certifies
that it does not comply with the Buy America requirements, then the grantee
must request, receive, and retain a waiver from the FTA.
Reason for the Question
49 CFR 661.6
and 661.13
Federal Register Vol. 71, No. 54, pp. 14112-14118
Sources of Information
Grantee procurement procedures and procurement files will provide this
information. The reviewer should check the grantee’s written purchasing
procedures and determine if the Buy America provisions have been included.
While not specifically required, FTA recommends that grantees include the Buy
America requirements in purchasing procedures. Grantee purchase solicitations,
i.e., IFBs and RFPs, as well as responses from vendors, should be examined to
determine if Buy America provisions have been included (clauses and
certifications) and proper certifications have been executed by bidders and
proposers and submitted to the grantee.
Determination
IIf the grantee is applying Buy America requirements to all applicable
procurements, and obtaining the proper certifications, it is not deficient. If
it failed to include the requirement in its procurement contracts for steel,
iron, or manufactured products not subject to a waiver, the grantee is
deficient. If the grantee cannot provide original, signed Buy America
certifications, the grantee is deficient.
Suggested Corrective Action
The grantee must revise its procurement procedures to include the Buy America
provisions, including the requirement to obtain signed Buy America
certifications from vendors when purchasing covered items. The grantee should
submit a copy of the revised procedures to the FTA. For purchases in progress,
the grantee may need to obtain signed Buy America certifications from the
contractors and provide a copy to the FTA regional office.
Back to Questions
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Did the grantee conduct pre-award and post-delivery audits for
its purchases of rolling stock over $100,000? Does the grantee have properly
completed pre-award and post-delivery certifications in its contract files?
Explanation
Any grantee that purchases revenue service rolling stock with a procurement
contract that exceeds $100,000, must certify to FTA that it will conduct or
cause to be conducted pre-award and post-delivery audits verifying compliance
with Buy America provisions. Besides the certification that must be filed with
the FTA as part of the Annual List of Certifications and Assurances, the
grantee is required to keep records including pre-award and post-delivery audit
certifications that show that the regulations have been followed.
IIf a grantee is using another grantee’s procurement contract to
purchasing revenue vehicles (i.e., “piggybacking”), the purchaser
may rely on the pre-award audit completed prior to the original contract.
However, the grantee must review the audit and prepare its own signed
certifications.
The grantee’s contract files should contain the following documents and
supporting papers for each procurement of rolling stock:
Pre-Award Buy America
Certification of Compliance - The grantee has reviewed (either
by itself or with an audit prepared by someone other than the manufacturer)
that the manufacturer intends to build vehicles that meet the Buy America
content and final assembly requirements.
Pre-Award Purchaser's
Requirement Certification - The vehicles are consistent with
the grantee’s specifications and the proposed manufacturer is responsible
and capable of producing the vehicles.
The grantee purchasing revenue service rolling stock with FTA funds must ensure
that a pre-award audit is completed before entering into a formal contract with
the manufacturer. The grantee uses the pre-award audit as a basis for the
Pre-Award Buy America Certification. The Pre-Award Buy America Certification
and the Pre-Award Purchaser’s Requirements Certification must be prepared
and retained by the grantee.
Post-Delivery Buy America
Certification of Compliance - The vehicle either meets Buy
America domestic content and final assembly requirements or the FTA has granted
a Buy America waiver for the vehicle.
Post-Delivery Purchaser's
Requirements Certification - For vehicle orders of more than
ten buses or rail vehicles for urbanized areas over 200,000 in population and
more than 20 buses for urbanized areas 200,000 or less in population, the
grantee must certify that an on-site inspector was present throughout the
manufacturing period and the grantee has received an inspector’s report
that accurately records the construction process and explains how construction
and operation of the vehicle meets specifications.
For all other vehicle orders, the grantee must certify that it has visually
inspected and road tested the delivered vehicles and determined that the
vehicles meet contract specifications.
Following construction of the vehicles, the grantee must complete a
post-delivery audit before title to the rolling stock can be transferred to
ensure that the manufacturer has complied with the Buy America requirements.
The grantee shall use the post-delivery audit as a basis for completing the
Post-Delivery Certification. The Post-Delivery Certification and the
Post-Delivery Purchaser’s Requirements Certifications must be completed
and retained on file by the grantee.
Certification of Compliance
with the Federal Motor Vehicle Safety Standards - The grantee
has received from the vehicle manufacturer at both the pre-award and
post-delivery stage a certification that the vehicles comply with the Federal
Motor Vehicle Safety Standards (FMVSS) issued by the National Highway Traffic
Safety Administration (49 CFR Part 555).
If the vehicle purchased is subject to FMVSS, the grantee shall obtain a copy of
the manufacturer’s self-certification at the pre-award and post-delivery
stage. Both the pre-award and post-delivery audits must include the
grantee’s review of the manufacturer’s FMVSS self-certification
information. The grantee should keep on file the certification that it received
at both the pre-award and post-delivery stage, and a copy of the
manufacturer’s self-certification information that the vehicle complies
with relevant FMVSS. While it is suggested that the grantee complete separate
certifications of FMVSS compliance at both the pre-award and post-delivery
stage, it is acceptable for the grantee to use one certification of FMVSS
compliance as long as the certification covers both audits.
All of these certifications are to be completed by the grantee.
The FTA has published two guidance manuals to assist grantees conducting
pre-award and post-delivery audits.
Conducting Pre-Award and
Post-Delivery Audits for Bus Procurements, FTA T-90-7713-93-1,
Rev. B.
Conducting Pre-Award and
Post-Delivery Audits for Rail Vehicle Procurements, FTA
DC-90-7713-94-1, Rev. B.
Reason for the Question
49 CFR
661.11, Appendices B and C
49 CFR 663.21
and 663.31
Dear
Colleague letter of March 30, 2001.
Federal Register Vol. 71, No. 54, pp. 14112-14118
Sources of Information
The grantee should provide the documents to show that it has complied with the
pre-award and post-delivery requirements.
Determination
The grantee is not deficient if the required pre-award and post-delivery audits
have been conducted, have been documented, and all of the required
certifications have been completed and are on file. If the grantee did not
conduct all of the required reviews and audits for any rolling stock
procurement, the grantee is deficient. If the grantee has conducted the
required pre-award and post-delivery audits and documented the procedures, but
does not have all required certifications, the grantee is deficient.
Suggested Corrective Action
The grantee needs to execute all required certifications. Direct the grantee to
conduct after-the-fact pre-award and post-delivery audits to prove that the
vehicles comply with the domestic content and final assembly requirements.
Back to Questions
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If the grantee purchases rolling stock with multiple delivery
dates using either options or multi-year procurements, has the grantee
performed and certified a pre-award and post-delivery audit for each group of
vehicles before placing them into service?
Explanation
Grantees may be purchasing vehicles in several groups over several years using
either vehicle procurement contracts with options or multi-year vehicle
procurement contracts. The FTA requires that each group of vehicles purchased,
i.e., each “order” of vehicles, must have a valid pre-award and
post-delivery audit before it is placed into service. One pre-award audit may
suffice provided that there is no change in vehicle configuration between
successive deliveries of vehicles.
Reason for the Question
49 CFR 663.21
and 663.31
FTA Dear Colleague Letter,
March 18, 1997
Sources of Information
Examine contract files, invoices, and other procurement documentation available
at the site visit to identify delivery dates and obtain information on options.
Determination
This question applies only to grantees executing options or multi-year
procurements of rolling stock. The grantee is not deficient if it has completed
these requirements for each group of vehicles prior to the vehicles being
placed in service. If the grantee has placed a group of vehicles into service
before the pre-award and post-delivery audits were completed, the grantee is
deficient.
Suggested Corrective Action
The grantee must provide the FTA with an explanation and complete the required
audits without delay. The FTA should be furnished with copies of the audit
documentation and work papers. The grantee should ensure that changes in
procedures have been made so that future procurements will comply with this
requirement.
Back to Questions
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What process did the grantee use to verify the domestic content
of the vehicle, its components, and its subcomponents prior to awarding the
contract?
Explanation
The purpose of the pre-award audit process is to substantiate that the
manufacturer intends to construct a vehicle that meets the domestic content
limitations of the Buy America requirement. The manufacturer is required to
provide the grantee with a listing of the components and subcomponents in the
vehicle. The list must contain either the cost of each component or the
percentage that each contributes to the total cost of the materials required to
build the vehicle, as well as the country of origin of each component. The
percentages of those components identified as manufactured in the United States
must total a minimum of 60 percent. The grantee is required to review this
information and verify that it is accurate. Per the Dear Colleague letter of
March 30, 2001, the domestic content requirements should comply with 49 CFR
661.11, Appendices B and C, by designating those items listed as components.
The FTA allows grantees flexibility in meeting these requirements reflecting the
size and resources available to the grantee and the number of vehicles in the
procurement. A grantee with a large order of many vehicles costing several
million dollars would be expected to perform an actual audit of the vehicle
manufacturer. Component costs would be determined from the manufacturer’s
bill of materials and domestic component percentages would be independently
verified. Buy America auditors usually require a separate Buy America
certification from each component manufacturer identified as domestic. Often an
accountant or consultant is retained to complete this audit, although it is
equally acceptable for the grantee to use its own personnel if they are
qualified.
Conversely, a smaller grantee purchasing one or two vehicles can satisfy these
requirements by reviewing the material supplied by the manufacturer, attesting
that the percentages seem reasonable, and noting that that the component
manufacturers identified as domestic are recognized as American manufacturers.
Reason for the Question
49 CFR
661.11, Appendices B and C
49 CFR
663.9, 663.25
Dear
Colleague letter of March 30, 2001.
Sources of Information
The grantee’s representative should be interviewed to determine the
process used to verify the manufacturer’s assertion of the domestic
content of the vehicles. The manufacturer’s listings of components, audit
reports, and work papers substantiate the process used.
Determination
If the grantee has conducted an independent review of the manufacturer’s
documents and verified that the manufacturer intends to comply with the Buy
America requirements, the grantee is not deficient. If the extent of the review
appears insufficient, given the grantee’s resources, the number of the
vehicles in the order or the value of the contract, the grantee is deficient.
If the manufacturer has not provided a listing of the components, percentages,
and component origins, or if the grantee has done nothing beyond accepting and
retaining the manufacturer’s documents, the grantee is deficient.
Suggested Corrective Action
The grantee must take whatever actions are necessary to obtain appropriate
certifications. The grantee might be directed to conduct an after-the-fact
pre-award audit to prove that the vehicles comply with the domestic content
requirements. For vehicle purchases that have been completed, the grantee must
provide FTA with a written explanation for not complying with the regulations.
The grantee also needs to revise its procedures and assure adherence to these
requirements in future procurements.
Back to Questions
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If required, did the grantee use in-plant inspectors during the
manufacturing process?
Explanation
Grantees are required to have an in-plant inspector throughout the manufacturing
process if it meets the following criteria:
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Grantees purchasing any number of rail vehicles;
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Grantees in urbanized areas with populations of more than 200,000 that purchase
more than 10 buses; and
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Grantees in urbanized areas with populations of 200,000 or less that purchase
more than 20 buses.
Bus purchases that do not meet the aforementioned criteria, or purchases of any
number of standard production and unmodified vans, requires only a visual
inspection and road test upon delivery. The grantee still must complete the
proper post-delivery purchaser’s requirements certifications showing that
the vehicles meet contract specifications.
Reason for the Question
49 CFR 633.37
(a) and (c)
Federal Register Vol. 71, No. 54, pp. 14112-14118
Sources of Information
The post-award purchaser’s requirement certification must include a
certification that an on-site inspector was present throughout the
manufacturing period. It also must state that the grantee received a report
that accurately recorded the construction process and described that the
vehicle met the grantee’s specifications.
Determination
If the size of the grantee’s purchase required an in-plant inspector and
the grantee did use an in-plant inspector who provided reports throughout the
manufacturing process, the grantee is not deficient. If the grantee did not use
in-plant inspectors, but was required to do so, the grantee is deficient.
Suggested Corrective Action
If an in-plant inspector was lacking, the grantee must provide the FTA with a
complete explanation for not complying with the regulations, change its
procedures, and assure that future procurements will be done properly.
Back to Questions
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Does the grantee have a description of the manufacturing
activities taking place during the final assembly of the vehicles and, for
vehicles that were partially manufactured outside the United States, did the
final assembly meet FTA requirements?
Explanation
Rolling stock that is manufactured partially outside the United States must have
the final assembly take place within the United States.
The Buy America Requirements Final Rule, 49 CFR Part 661, defines final assembly
as “the creation of the end product from different elements brought
together for that purpose and through the application of manufacturing
processes.”
In the manufacture of a bus, final assembly would include, at the minimum:
installation and interconnection of the engine, transmission, axles, including
the cooling systems; installation and interconnection of the heating and air
conditioning systems; installation of the pneumatic and electrical systems,
doors systems, passenger seats, passenger grab rails, destination signs,
wheelchair lifts; and road testing, final inspection, repair, and preparation
of vehicles for delivery.
In the case of the manufacture of a new rail car, final assembly would typically
include, as a minimum, the following operations: installation and
interconnection of propulsion control equipment, propulsion cooling equipment,
brake equipment, energy sources for auxiliaries and controls, heating and air
conditioning, communications equipment, motors, wheels and axles, suspensions
and frames; the inspection and verification of all installation and
interconnection work; and the in-plant testing of the stationary product to
verify all functions.
These requirements are addressed in the FTA Dear Colleague letter dated March
18, 1997. Dear Colleague letters are available on FTA’s web site at
www.fta.dot.gov. Buy America information can be found at
www.fta.dot.gov/library/legal/buyamer/
Reason for the Question
49 CFR
661.11 (a) and (t)
FTA Dear Colleague Letter,
March 18, 1997
Sources of Information
The manufacturer is required to provide the grantee with the location of the
final assembly for the vehicles and a listing of the manufacturing tasks that
took place during final assembly. If in-plant inspectors were required, the
inspector reports will confirm that the activities identified as final assembly
by the manufacturer did take place.
Determination
If the location of the final assembly was in the United States and the
manufacturers final assembly activities met the minimum requirements described
above, the grantee is not deficient. If not, the grantee is deficient.
Suggested Corrective Action
If the vehicles were constructed partially outside the United States, and final
assembly did not meet the FTA’s standards, the grantee must provide the
FTA with a complete explanation for not complying with the regulations. The
grantee also must assure that future vehicle procurements will be conducted in
accordance with the requirements.
Back to Questions
