Charlotte Area Transit System
August 08, 2013
Mr. Bradley J. Thomas
Assistant City Attorney
Charlotte Area Transit System
600 East Fourth Street
Charlotte. NC 28202
Dear Mr. Thomas:
I write to provide guidance on the application of the Federal Transit Administration (FTA) Buy America rules to the utility relocation performed by AT&T pursuant to an agreement with the City of Charlotte (Charlotte). Thank you for taking time to seek guidance and for facilitating many conversations among FTA, Charlotte, and AT&T to work through the details of your request. After a careful and thorough review of your May 24, 2013 letter, I am pleased to inform you that FTA agrees with Charlotte's analysis and classification of the materials to be used by AT&T. The following is a summary of FTA's review and conclusions.
The City of Charlotte intends to use FTA funds for its Blue Line Extension (BLE) project. The BLE project requires the relocation of approximately 4.5 miles of AT&T's communications network, which provides voice, video, and information data service.
AT&T and Charlotte sought guidance from FTA on how to apply its Buy America rules to the AT&T relocation. On April 30, 2013, FTA, Charlotte, and AT&T staff participated in a conference call meeting (meeting) to discuss the application of FTA's Buy America requirements to the AT&T utility relocation as part of the BLE Project. During the meeting, Charlotte agreed to send FTA its proposed application of Buy America rules to the AT&T relocation.
By letter dated May 24, 2013, Charlotte provided its analysis. The following materials will be installed in the field to comprise the AT&T communications network: conduit, poles, copper cable, fiber optic cable, lashing wire, manholes, handholes, cabinets with electronic equipment, batteries, concrete pads, pedestals, plastic terminals, splice cases, connectors, closures, clamps, fittings, hooks, anchors, washers, screws, nuts and bolts.
In its analysis, Charlotte proposed that the communications network be categorized as an endproduct--a system (communications system) that delivers the voice, video, and information/data services to the customers. Accordingly, the poles, cable, conduit, manholes, handholes, pedestals, and cabinets would be components; and the lashing wire, strand, grip strand, plastic terminals, connectors, closures, splice cases, anchors, clamps, fittings, washers, screws, nuts and bolts, concrete pads for the cabinets, and the other contents of the cabinets (including the electronics, shelves, nuts, screws, bolts, and batteries) would be subcomponents of the
Charlotte followed its letter with a June 4, 2013 waiver request for two items that were not available in the United States. Since that time, AT&T has identified a U.S. manufacturer for one of the items. Thus, the waiver is limited to a single item--the Video Ready Access Device (VRAD) cabinet manufactured by Alcatel-Lucent, the Alcatel-Lucent 7330. [FN1] In this letter, you stated that AT&T anticipates that one VRAD cabinet must be procured as part of the utility relocation, the cabinet is not manufactured in the United States, and there are no substitutes available that meet AT&T' s requirements for size, heat reduction and low noise level.
In subsequent telephone conversations, an in-person meeting among AT&T, FTA, and FederalHighway Administration lawyers, and a follow up email dated July 19, 2013, Charlotte and AT&T provided additional information, including that Alcatel-Lucent has a manufacturing facility in Mexico and in Washington State. However, according to AT&T, under the current contract with Alcatel-Lucent, AT&T cannot select the manufacturing facility where the VRAD cabinet is manufactured. [FN2] AT&T expects to require U.S. manufacture in subsequent contracts.
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 at 49 C.F.R. Part 661. [FN3] Buy America requires all steel, iron, and manufactured products to be produced in the United States.
For steel and iron, all manufacturing processes must take place in the United States. [FN4] 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. [FN5] The steel and iron requirements do not apply to steel or iron used as components or subcomponents of other manufactured products. [FN6]
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. [FN7]
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) .... " [FN8] 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 .... " [FN9] In determining whether a system is an end product FTA looks at various factors, including ·'whether products perform on an integrated basis withother products in a system, or are operated independently of associated products in the system'' [FN10] and carefully exan1ines the system as whole to determine whether it is, in fact, composed of more than one end product. [FN11]
The following is a list or representative manufactured end products that are subject to therequirements of Buy America. Note that 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. [FN12]
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."
Based upon the information provided in your letter and the numerous conversations among FTA, AT&T and the City of Charlotte, I agree with your classifications. The items described in your letter are interconnected and contribute to a clearly defined function--a communications network that delivers the voice, video, and information/data services to customers. [FN13] Therefore, the communications network you describe is a system and this communications system is the end product. [FN14]
The component are the articles, materials, and supplies that are directly incorporated into the end product--poles, manhole, handhole, conduit, cable, pedestals, and the VRAD cabinets and Cross Connect cabinets.
The subcomponents include the connectors, clamps, and fittings of the component conduit; the lashing wire, strand, grip strand, terminals, connectors, closures, splice boxes, anchors, clamps, fittings, washers, screws, nuts, and bolts of the component cable; and the electronics, shelves, nuts, screws, bolts, batteries, and concrete pads of both of the types of component cabinets.
The following chart identifies the end product, components, and subcomponents of the communications system like the one described in your letter:
[Chart in Original Letter Omitted].
Based upon the foregoing, I find AT&T' s communications network is an end product system. The components of this system are the poles, manhole, handhole, conduit, cable, pedestals, and VRAD and Cross Connect cabinets. I note, however, that this decision only classifies the various items and does not consider whether the manufacturing processes in the United States are sufficient for purposes of Buy America.
Regarding your June 4, 2013 request for a Buy America waiver for the Alcatel-Lucent 7330 VRAD Cabinet, FTA is required by law to publish a notice in the Federal Register and provide the public with a reasonable period of time for notice and comment prior to issuing a BuyAmerica waiver. [FN15] FTA intends to publish a notice for waiver on this matter shortly.
Feel free to contact Mary J. Lee at firstname.lastname@example.org with questions about this decision.
Dorval R. Carter, Jr.
[FN1] In your June 4, 2013 letter, you also requested a waiver for the cross connect cabinet. However, in a subsequent telephone conversation between FTA, AT&T, and the City of Charlotte, AT&T stated that a Buy America waiver was no longer needed for the cross connect cabinet.
[FN2] In addition, in the July 19, 2013 email, AT&T stated that the ''closures'' and ''splice cases" listed in your May 24, 2013 letter are the same as ''closure fiber splice'' and "closure copper splice" listed in a June 10, 2013 letter from Sam Mayman, Executive Officer of Engineering, Project Transit Delivery, Los Angeles County Metropolitan Transportation Authority (LACMT A), to Ray Tellis, Team Leader, Los Angeles Metropolitan Office, Federal Transit Administration. AT&T also stated that LACMTA included the ''end plate for copper splice,'' which is a part of the splice case, but was not separately listed in your May 24, 2013 letter.
[FN3] 49 U.S.C. § 5323(j); 49 C.F.R. § 661.5(a).
[FN4] 49 C.F.R. § 661.5(b).
[FN5] Id. at § 661.5(c).
[FN7] Id. at § 661.5(d).
[FN8] Id. at § 661.3.
[FN11] See 72 Fed. Reg. 53688, 53693 (Sept. 20, 2007).
[FN12] Appendix A to 49 C.F.R. § 661.3.
[FN13] See 49 C.F.R. § 661.3 (definitions of "end product" and "system''); Appendix A to 49 C.F.R. § 661.3.
[FN14] See, e.g., Letter from Dorval R. Carter, Jr., Chief Counsel, Federal Transit Administration, to Mark E. Huffer, General Manager, Kansas City Area Transportation Authority (June 8, 2011).
[FN15] 49 U.S.C. § 5323(j)(3)(A).