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1. Please explain which applies, the Statute (49 U.S.C. 5323(j)) or the Regulation (49 C.F.R. 661)?
Both apply, and are consistent with one another. Legislation is enacted by Congress and signed into law by the President. A regulation implements legislation, and generally provides more detailed information. Regulations are written and enforced by administrative agencies such as FTA. A regulatory history of the rulemaking process for Buy America is available on this web site.
2. How do the Federal Register rulemaking documents posted on this site apply?
The documents from the Federal Register posted here have been provided for guidance purposes. Agencies publish notices, changes, and proposed changes to their rules in the Federal Register. Documents in the Federal Register often contain a discussion of the guidance or changes being offered. The Federal Register documents posted here are for guidance purposes and offered because they address issues not expressly discussed in the regulation. Generally, this material is located in the preamble, which is the text found in the beginning of a regulatory document under the heading "Supplementary Information."
You should be aware that over the years the Buy America regulations have changed. The documents linked here are provided for the interpretive language in their preambles and should always be read in light of the most current regulations. An example is the domestic content requirement for rolling stock, which was not raised to its current 60% until 1992; there are useful discussions pertaining to the rolling stock requirements from Federal Register documents published before 1992 and they should not be ignored simply because the rule has changed. However, the reader must be aware of the most current requirements.
3. Does NAFTA apply?
No. The Buy America regulations are exempt from the North American Free Trade Agreement (NAFTA). Chapter 10 of NAFTA deals with government procurements, and specifically exempts from its application:
non-contractual agreements or any form of government assistance, including cooperative agreements, grants, loans, equity infusions, guarantees, fiscal incentives, and government provision of goods and services to persons or state, provincial and regional governments.
(Emphasis added) NAFTA, Part four, Chapter ten, Section A, Article 1001, Part 5(a). Additionally, the Statement of Administrative Action that accompanied the NAFTA Implementation Act also expressly stated that the rules of Chapter 10 of NAFTA do not apply to certain kinds of purchases by the U.S. government, among them procurements funded by federal grants, such as those made by FTA. H.R. Doc. No. 103-159, Vol. 1, 103rd Cong., 1st Sess. 584-585 (1993).
Therefore, manufacture in either Mexico or Canada is NOT considered domestic manufacture under FTA's regulations.
4. If there are no federal funds involved in the project, do federal Buy America regulations apply?
No.
5. What is the small purchase waiver?
Purchases under $100,000 (including options) are not subject to the Buy America requirements, as provided in paragraph (e) of Appendix A to 49 C.F.R. 661.7; therefore, no Buy America certificate is necessary. In such cases, the grantee need not enclose a certification in the bid package nor must the potential manufacturer submit one in order for the bid to be responsive. This waiver does not apply to small contracts between prime contractors and subcontractors. Only FTA recipients can invoke this waiver. Finally, grantees are not permitted to break up procurements in order to stay under this threshold amount.
For those procurements that may result in bids right around $100,000, grantees should put the Buy America certifications in the solicitation, with a note at the top which says that if the bid is $100,000 or above, the bidder must certify per the Buy America requirements, but if the bid is under $100,000 no certification is necessary. However, a bidder may also certify compliance, as discussed in question 11, if the bid is less than $100,000.
6. What happens if the Buy America certification requirements aren't followed?
Procurement officers need to be aware of the Buy America requirements and review the certificates of compliance and non-compliance prior to awarding contracts over $100,000. This review will prevent situations where FTA is forced to withdraw its participation in the project because the contract was awarded in error.
Grantees must review all Buy America certifications before contract award and request a waiver, if one is necessary, before award in order to ensure FTA participation in the contract. Whether the situation is a sealed bid or a request for proposal, the award must go to a party who certified compliance unless the grantee requests and receives a waiver from FTA. FTA will not be in a position to grant a waiver unless one of the following conditions is satisfied:
A. It is established that the low domestic bid/proposal for the end product is 25 percent more than the low foreign bid/offer;
B. It is established that the item or items being procured are not available in the U.S.
C. It is established that there is a public interest in waiving the national policy embodied in the Buy America provisions.
In the case of an Invitation for Bids, if a bidder certifies both compliance and non-compliance for the same product, certifies compliance with the wrong provision, or fails to certify at all, that bid is ambiguous and should be deemed non-responsive. In competitive negotiated procurements (i.e., requests for proposals), certifications submitted as part of an initial proposal may be superseded by subsequent certifications submitted with revised proposals, and the certification submitted with the offeror’s final revised proposal (or best and final offer) will control. However, where the grantee awards on the basis of initial proposals without discussion, the certification submitted with the initial proposal will control. If a bidder or offeror wrongly certifies non-compliance, please see: [here].
7. To who do the individual waivers posted on this web site apply?
They only apply to the party and procurement referenced in the waiver. Even if you have a similar situation or fact pattern you must request your own waiver.
8. How do I request a waiver, seek guidance, or petition for an investigation?
Non-availability waivers and price-differential waivers can be requested by writing your FTA Regional Administrator. Public interest waiver requests, component waiver requests, requests for advisory opinions, and petitions to investigate, should be submitted to FTA Headquarters, at the address below, and copied to the appropriate Regional Administrator.
Jayme L. Blakesley
Attorney-Advisor
Federal Transit Administration
U.S. Department of Transportation
1200 New Jersey Avenue, S.E.
Washington, D.C. 20590
(202) 366-4011
9. I have a question not answered here, who do I contact?
You may either contact your regional office or headquarters using the contact information on the first page of the Buy America site. We will be adding to this list questions, if you have suggestions or comments, please feel free to contact us.
10. How does Buy America apply to Design Build contracts?
When purchasing a system, it is industry practice to have the contract broken down by sub-systems with each sub-system identified in the contract treated as an end product subject to the Buy America requirement. FTA has defined end product as "any item or items * * * to be acquired by a grantee, as specified in the overall project contract." For example, the guideway surfaces and equipment; the vehicles; the traction power system; the command and control system; the communications system; and the maintenance facility and equipment are all sub-systems and should have separate certifications. If the contractor is not sure if it will be able to comply, then it should certify non-compliance. If all bidders/offerors certify non-compliance, the grantee should request a non-availability waiver from FTA before award. Certification of non-compliance for one sub-system should be considered a certification of non-compliance for the entire contract, and a waiver is required if the contract is to be awarded to that party.
Another option for grantees is that before the solicitation is advertised, they request a public interest waiver of the procedural requirements of Buy America which would allow the bidders/offerors to submit the certification later in the process, after award and after the design portion of the project is complete. If FTA waived the procedural requirements of Buy America, the grantee would put language in the solicitation that directed the bidders/offerors that they would be required to comply with Buy America unless they qualified for a non-availability waiver or a public interest waiver for certain components of the project. After design, the contractor would be required to submit its certification to the grantee, and if necessary, the grantee would request a waiver from FTA at that time.
11. How should I certify if I qualify for a permanent waiver found in the Appendix to 49 CFR 661.7, for example, if the solicitation is for microcomputer equipment?
NOTE: The General Waiver for 15 passenger Chrysler vans and wagons has been eliminated in SAFETEA-LU. If the product you plan to supply qualifies for a permanent waiver listed in the Appendix, you may certify compliance with Buy America. The references contained in the certificates of non-compliance found at 49 CFR 661.6 and 661.12 that say that the bidder or offeror may qualify for an exception to the requirements is for parties who have not yet qualified for an exception, in other words, for parties who have not yet received a waiver. The waivers published in the Appendix have already been issued, and thus, are in effect and serve to waive the requirements and allow a party to certify compliance for those products that, without a waiver, would not comply. If a grantee knows, however, that all bids/offers will be for items waived by the requirements (bids are all going to come in well under $100,000, or the solicitation is for microcomputer equipment only), the grantee should not be putting the certifications in the solicitation. This answer is provided for when the grantee consciously puts the certifications in knowing that the solicitation may result in bids/offers for waived items as well as items not subject to a waiver.
12. Appendix A(a) of 661.7 says that "All waivers published in 48 CFR 25.108 which establish excepted articles, materials, and supplies for the Buy American Act of 1933 (41 U.S.C. 10a-d), as the waivers may be amended from time to time, apply to this part under the provisions of Sec. 661.7 (b) and (c)." I cannot find 48 CFR 25.108 – where is this list?
It can now be found at 48 CFR 25.104.
13. Do the Buy America final assembly requirements apply to prototype vehicles?
Yes. However, the grantee should allow the bidder/offeror to certify separately for the production of the prototype vehicles and the rest of the fleet if the bidder/offeror intends to assemble the prototypes outside the U.S. This will allow the grantee to request a non-availability waiver for the prototype vehicles if one is warranted. Please see letter to New Jersey Transit, September 19, 2001.
14. Does Buy America apply to concrete?
It used to, but in 1984, the President signed a law which included a section removing cement from the list of items covered. Pub. L. 98-229 (1984). The following year, FTA implemented that change in the Buy America regulation. The final rule stated, in part, "Congress clearly indicated that the domestic preference requirements of [Buy America] should not be applied to the procurement of cement and cement products in [FTA] grantee third party contracts utilizing federal funds." 50 Fed. Reg. 2298 (Jan. 16, 1985). Concrete is a "cement product," and as such, is exempt from the requirements per the amendment.
15. Is there a difference between Buy America and Buy American?
Yes. Buy America (49 U.S.C. 5323(j) and 49 CFR Part 661) is applicable to FTA grant funds and is the subject of this web page. Buy American (41 U.S.C. 10a - 10d and 48 CFR Part 25) is an entirely different statute, applicable to purchases by federal agencies and departments. For more information on Buy American, contact:
Cecelia L. Davis
Procurement Analyst
General Services Administration
Office of Acquisition Policy
(202) 219-0202
Amy Williams
Department of Defense
(703) 602-0328
16. Is the Dear Colleague letter on Pre-Award and Post Delivery Audits from March 18, 1997, the controlling document on FTA's final assembly requirements?
Yes. However, there were two subsequent letters on this subject, the August 5, 1997 letter changed the list of domestic activities required for final assembly compliance and the September 25, 1997 letter rescinded the August letter, which restored the March letter. Also note that section 3035 of the Transportation Equity Act for the 21st Century (TEA-21), contains a provision that all buses manufactured after September 1, 1999, purchased with FTA grant funds, shall conform with FTA's Guidance on Buy America Requirements, dated March 18, 1997.
17. Is the sliding threshold a component or a subcomponent of a rail car?
Typical components of rail cars and buses are listed in the Appendix to 49 CFR 661.11. According to the regulation, a railcar door system contains multiple components including the door panels, door actuators, and door controls. This list is not conclusive and illustrates the nature and type of items that Congress intended to be considered components.
A component is defined as an article, material, or supply (manufactured or unmanufactured) that is directly incorporated into the end product, while a subcomponent is one step removed from a component in the manufacturing process and is incorporated directly into a component (49 C.F.R. 661.11). The sliding threshold is a movable piece mounted, in part, on the passenger access door panel. In order to facilitate the purpose of both high and low platform loading, the threshold must be functionally independent part of the door and the vehicle. Also, in order to serve its function, it should have controls separate from the door controls in order to allow both high and low platform boarding. Its connection to the panel by itself does not make it a subcomponent or one step removed from the component door panel. It is a separate entity, attached to -- not incorporated into -- the panel. The door panel, actuator, and controls are listed as components, other similarly functioning parts, such as the sliding threshold, must be viewed as components as well.
18. Do the Buy America requirements apply to service contracts?
FTA posted a request for comments on this website, seeking comments on whether or not the Buy America requirements should apply to equipment owned or leased by private service providers under an FTA funded contract with an FTA grantee. In response to the request for comments, FTA received 16 comments, nine commenters supported FTA's current interpretation-the requirements apply to equipment purchased or leased by the contractor to fulfill a service contract, but not to previously owned or leased equipment. Ten commenters wanted FTA to apply the small purchase waiver to capital purchases by a service contactor and one commenter argued against that interpretation. Two commenters argued that the requirements should apply to all goods used by a contractor. Three comments were either not clear or beyond the scope of the request for comments.
Consistent with the majority of the comments and FTA's position on this question historically, FTA will continue to apply the Buy America requirements to equipment acquired for, or in anticipation of, an FTA funded contract. The requirements will not apply to equipment owned or leased by the contractor, if it is purchased or leased before the invitation for bids (IFB) or request for proposals (RFP) is issued.
Grantees should put the Buy America certification forms in all service contract solicitations, and direct bidders or offerors to complete the certification if they will be buying or leasing equipment to fulfill the contract. If there will not be such purchase or lease, the bidder or offeror should be directed not to certify and instead document that they will not be purchasing or leasing equipment. If the contract is for rolling stock services, the rolling stock certification found at 49 C.F.R. 661.12 should be used and if it is for non-rolling stock services the manufactured products certification found at 49 C.F.R. 661.6 should be used. If the contract is both types of service, both certifications should be used.
The Buy America small purchase waiver (49 C.F.R. 661.7, App. A(e)) refers to the common grant rule's small purchase procurement procedures and incorporates the federal government's simplified acquisition threshold of $100,000. FTA has always applied this amount to the grantee contract, and not the subcontract. Absent a rulemaking on this issue, FTA will not change that position at this time.
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