North American Bus Industries; Notice of Granted Buy America Waivers

Printer Friendly Number 67 FR 17104

[PDF Format]

[Federal Register:  April 9, 2002  (Volume 67, Number 68)]
[Page 17104-17105]
From the Federal Register Online via GPO Access []
Federal Transit Administration
North American Bus Industries; Notice of Granted Buy America 
AGENCY: Federal Transit Administration (FTA), DOT.
ACTION: Notice of granted Buy America waivers.
SUMMARY: FTA granted North American Bus Industries (NABI) two Buy 
America waivers on March 19, 2002. The first waiver allows NABI to 
assemble its CompoBus outside the United States and the second allows 
it to count the composite chassis/frame as domestic for purposes of 
calculating the domestic component content of the vehicle. The final 
assembly waiver is predicated on public interest and the component 
waiver on the non-availability of the item domestically. Both of these 
waivers will apply to procurements for which solicitations are issued 
within two years of the date of the letter, March 19, 2002, and to two 
contracts signed prior to the date of the letter, as noted below. This 
notice shall insure that the public is aware of these waivers.
Counsel, Room 9316, (202) 366-1936 (telephone) or (202) 366-3809 (fax).
SUPPLEMENTARY INFORMATION: The above-referenced waivers follow:
March 19, 2002.
Mr. Andy Racz, President and CEO, North American Bus Industries, 
Inc., H-1165 Budapest, XVI UJSZASZ u., 45 Hungary.
Dear Mr. Racz:
    This responds to your letter dated December 14, 2001, in which 
you request two Buy America waivers from the Federal Transit 
Administration (FTA) for North American Bus Industries' (NABI) 
CompoBus. The CompoBus is a light-weight, composite-structured 
vehicle with an integrated frame and chassis developed in line with 
FTA's Advanced Technology Bus program. You request (1) a public 
interest waiver of the final assembly requirements for a period of 
seven years and (2) a component waiver for the integrated body/
chassis of the CompoBus, based on public interest or non-
availability. For the reasons discussed below, we have determined 
that the grounds for such waivers exist for a two-year period.
Applicable Law
    FTA's requirements concerning domestic preference for federally 
funded transit projects are set forth in 49 U.S.C. 5323(j). Section 
5323(j)(2)(C) addresses the general requirements for the procurement 
of rolling stock. This section provides that all rolling stock 
procured with FTA funds must have a domestic content of at least 60 
percent and must undergo final assembly in the U.S.
    Under 49 U.S.C. 5323(j)(2)(A) and the implementing regulations, 
these requirements may be waived if their application ``would be 
inconsistent with the public interest.'' 49 C.F.R. 661.7(b). The 
regulation also notes that ``[i]n determining whether the conditions 
exist to grant this public interest waiver, the [FTA] will consider 
all appropriate factors on a case-by-case basis . . . .'' Id. And 49 
U.S.C. 5323(j)(2)(B) states that the Buy America requirements shall 
not apply if the item or items being procured are not produced in 
the U.S. in sufficient and reasonably available quantities or are 
not of a satisfactory quality. The implementing regulation also 
provides that public interest and non-availability waivers may be 
granted for a component of rolling stock, and in such cases, the 
component would be treated as domestic when calculating the overall 
component content of the vehicle. 49 C.F.R. 661.7(f)
Final Assembly Waiver Request
    Your request for a final assembly waiver is for CompoBus models 
40C-LFW and 45C-LFW. You detail a number of advantages offered by 
the CompoBus, including its lightweight frame/chassis, the fact that 
it has completed Altoona testing, the lack of rusting, the 
environmental advantages, and
[[Page 17105]]
its crash worthiness. NABI has two primary manufacturing facilities, 
one in Hungary, the other in Anniston, Alabama.
    FTA has determined that in this case, a final assembly waiver 
for a two-year period is in the public interest. FTA acknowledges 
the technical difficulties and increased costs associated with new 
technology and the consequent benefits of a single manufacturing 
facility. FTA supports the continued development of new vehicle 
technology that will result in more choices for FTA grantees and 
better buses for the riding public. This waiver will accomplish that 
goal. These advances are important enough to allow NABI time to 
further develop the technology. FTA declines to provide a seven-year 
waiver because we want to encourage continued changes in the 
marketplace and must be in a position to review this decision in two 
years and consider any such changes. However, FTA is also aware of 
the time lapses between entering into a contract and building a bus; 
therefore, this waiver applies to CompoBus models 40C-LFW and 45C-
LFW for all procurements for which solicitations are issued within 
two years of the date of this letter.
Component Wavier Request
    You also request a non-availability waiver for the CompoBus' 
integrated frame/chassis structures for use in model numbers 40C-LFW 
and 45C-LFW. Based on the information you have provided, I have 
determined that the grounds for a non-availability waiver exist, as 
it does not appear that there is another source for this product. 
Therefore, pursuant to the provisions of 49 U.S.C. 
Sec. 5323(j)(2)(B), a non-availability waiver is granted for the 
CompoBus models 40C-LFW and 45C-LFW integrated frame/chassis 
structure for all procurements for which solicitations are issued 
within two years of the date of this letter.
    NABI has offered sufficient justification for a public interest 
waiver for the final assembly of the CompoBus for a period of two 
years. The grounds necessary for a non-availability component waiver 
also exist for the integrated frame/chassis structure, and FTA 
hereby grants such a waiver for a period of two years. To ensure 
that the public is aware of these waivers, this letter will be 
published in the Federal Register.
    The public interest waiver is predicated on the fact that it is 
in the public's interest to waive the Buy America final assembly 
requirements in this case; however, FTA is not of the opinion that 
that public interest overrides the government's interest in full and 
open competition. It is for this reason that FTA has reviewed the 
three procurements that resulted in an award to NABI for the 
CompoBus. FTA has reviewed the underlying competition for each 
contract and found that in two cases, the waiver will have no impact 
on the full and open competition required in federally funded 
procurements. Therefore, this waiver will apply to those contracts 
between NABI and the City of Phoenix and between NABI and the Los 
Angeles County Metropolitan Transportation Authority (LACMTA) for 30 
CompoBuses.\1\ Another LACMTA procurement is affected by this 
waiver, a contract for 370 buses, the last 20 of which will be 
composite buses.\2\ Because that award would have had a different 
result if NABI had certified non-compliance and requested a waiver 
prior to award, it is FTA's position that NABI is bound by its 
original certification of compliance and, therefore, must assemble 
those vehicles in the U.S.
    \1\ The contract with the City of Phoenix was awarded to NABI, 
the only bidder, which certified compliance with Buy America. Had 
NABI certified non-compliance, it would have been eligible for award 
as the only bidder, and Phoenix would have qualified for a non-
availability waiver under 49 C.F.R. 661.7(c)(1). The contract with 
LACMTA for 30 CompoBuses was awarded after a negotiated procurement 
with two responsive and responsible proposers in competitive range. 
Both proposers certified compliance with Buy America; however, the 
other bid was more than twenty-five percent over NABI's bid. Thus, 
had NABI certified non-compliance, it would have been eligible for 
award because there was more than a twenty-five percent price 
difference between the two offers, and LACMTA would have qualified 
for a waiver under 49 C.F.R. 661.7(c)(1).
    \2\ This was a sealed bid with two responsive and responsible 
bidders, both of which certified compliance. There was not more than 
a twenty-five percent difference in the bids; therefore, had NABI 
certified non-compliance, it would not have qualified for the award.
    If you have any questions, please contact Meghan G. Ludtke at 
    Very truly yours,
Gregory B. McBride,
Deputy Chief Counsel.
    Issued on: April 4, 2002.
Jennifer L. Dorn,
FTA Administrator.
[FR Doc. 02-8551 Filed 4-8-02; 8:45 am]