Buy American Requirements; Permanent Waiver


Printer Friendly Number 51 FR 36126
10-08-86

DEPARTMENT OF TRANSPORTATION
Urban Mass Transportation Administration
AGENCY: Urban Mass Transportation Administration, DOT.
ACTION: Notice of permanent waiver of Buy America Requirements for microcomputers.
51 FR 36126
October 8, 1986

Buy American Requirements; Permanent Waiver

SUMMARY: This notice makes a waiver for microcomputers from the Buy America requirements of the Surface Transportation Assistance Act of 1982 (STAA) (Pub. L. 97-424) permanent. Previously, the Urban Mass Transportation Administration (UMTA) granted the waiver on a temporary basis, and sought comments as to whether a permanent waiver should be granted.

DATE: The permanent waiver is in effect upon publication of this notice. The temporary waiver, granted by UMTA on May 2, 1985, continues until that time.

FOR FUTHER INFORMATION CONTACT: Edward J. Gill, Jr., Office of the Chief Counsel, Room 9228, 400 Seventh Street, SW., Washington, DC 20590, (202) 366-4063.

TEXT: SUPPLEMENTARY INFORMATION: On January 9, 1985, in response to a request from the American Association of State Highway and Transportation Officials (AASHTO) indicating that several UMTA grantees were experiencing difficulty in purchasing domestically produced microcomputer equipment appropriate to their needs, UMTA solicited comments from interested parties. (50 FR 1156). Section 165(b)(2) of the STAA provides that a waiver may be granted if materials and products being procured are not produced in the United States in sufficient and reasonable quantities and of satisfactory quality. Under UMTA regulations, the item being procured is presumed to be unavailable if no responsive bid is received which will provide a domestically produced product.

Based upon its review and analysis of the 22 comments received, UMTA granted the requested waiver for a one year period. (50 FR 18760, May 2, 1985). When the period expired, UMTA extended the waiver termporarily, again soliciting comments to see if the domestic market for microcomputers had changed. (51 FR 19653, May 30, 1986). In response to this latest solicitation, UMTA received three comments from transit agencies and one from a foreign supplier. All four commenters cited several reasons why they were in favor of making the waiver permanent. First, although new technology had increased the availability of hardware and software components, many product component (microchips) are still made and assembled abroad. Furthermore, it is difficult to estimate when, if ever, microcomputer component manufacturing will be relocated to the United States, since the computer industry is becoming increasingly multinational in nature.

Based on this knowledge gained from commenters who have practical experience in the field and other sources, UMTA has decided to make the waiver for microcomputers permanent.

UMTA, of course, reserves the right to reassess the need for a permanent waiver if, for instance, international market conditions change.

As an example, there was a recent agreement between the United States and Japan on several semiconductor trade disputes. On July 31, 1986, Japan and the United States entered into a five year agreement to, among other things, help prevent the dumping of semiconductors by Japanese manufacturers to below-cost prices in the U.S. and other countries. Additionally, the Japanese Government is to establish an organization to aid foreign semiconductor producers (such as those in the United States) to increase sales in the Japanese market. While this agreement should go far in enhancing fair trade in the semiconductor (and thus microchip) industry, UMTA realizes that domestic availabilty of microchips will not be immediately increased; therefore, a need for a waiver from the Buy America requirements still exists.

Issued on: October 3, 1986.

Ralph L. Stanley,

Administrator.

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