Notice of Granted Buy America Waivers


Printer Friendly Number 68 FR 35249
06-12-03

[PDF Format]

[Federal Register:June 12, 2003 (Volume 68, Number 113)]
[Notices]               
[Page 35249-35250]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12jn03-78]                         
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DEPARTMENT OF TRANSPORTATION
Federal Transit Administration
 
Notice of Granted Buy America Waivers
AGENCY: Federal Transit Administration (FTA), DOT.
ACTION: Notice of granted Buy America waiver.
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SUMMARY: The following waivers allow New Flyer of America and the North 
American Bus Industries (NABI) to count a foreign-manufactured 
articulating joint system used in low and standard floor bus as a 
domestic component for purposes of calculating the aggregate domestic 
content of the vehicle and was predicated on the non-availability of 
the item in the domestic market. The New Flyer waiver was granted on 
April 24, 2003, and the NABI waiver on May 9, 2003. For reasons 
discussed in the text of the waivers, both expire on July 1, 2004. This 
notice shall insure that the public is aware of the waivers. FTA 
requests that the public notify it of any relevant changes in the 
domestic articulating joint market.
FOR FURTHER INFORMATION CONTACT: Meghan G. Ludtke, FTA Office of Chief 
Counsel, Room 9316, (202) 366-1936 (telephone) or (202) 366-3809 (fax).
SUPPLEMENTARY INFORMATION: See waivers below.
    Issued: June 9, 2003.
Jennifer L. Dorn,
Administrator.
April 24, 2003.
Mr. Paul Smith,
Vice President, Sales and Marketing, New Flyer of America, 711 
Kerneghan Avenue, Winnipeg, Manitoba, Canada R2C 3T4.
    Mr. Smith: This letter responds to your correspondence of March 
24, 2003, in which New Flyer of America (New Flyer) requests a non-
availability waiver of the Buy America requirements for the 
procurement of the Hubner Manufacturing Corporation (Hubner) 
articulated joint system for New Flyer's low floor buses.
    The Federal Transit Administration's (FTA) 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. You request a waiver under 49 U.S.C. 
5323(j)(2)(B), which states the Buy America requirements shall not 
apply if the item or items are not produced in the U.S. in 
sufficient and reasonably available quantities or are not of a 
satisfactory quality. The implementing regulation provides that non-
availability waivers may be granted for a component of rolling 
stock. 49 CFR 661.7(f).
    FTA post a summary of this waiver request on its website and 
requested comment. We received four comments, one against and three 
in favor of granting the waiver.\1\ The comment against the waiver 
argues that the Buy America rules for rolling stock already allow a 
waiver of up to forty percent foreign content, and when a component 
is unavailable from a domestic source, the vehicle maker should use 
part of its allotted foreign content. However, as noted above, the 
regulation currently allows component waivers for rolling stock when 
the product is not available from a domestic source. FTA received no 
comments indicating that these articulating joint systems are 
available from a U.S. source.
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    \1\ The comment against the waiver was from Gillig Corporation. 
The comments in favor of the waiver were from CAPtech, Inc., North 
American Bus Industries, and Hubner Manufacturing.
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    Based on a thorough review of the industry, FTA previously 
granted a two-year non-availability waiver to Newflyer for this 
articulated joint system on April 24, 2001. You state that the 
circumstances necessitating the current waiver remain unchanged and 
in the near term, New Flyer must still use the Hubner joint, which 
is still not available from a domestic source.
    In response to the original waiver, FTA received a comment from 
a U.S. bellows
[[Page 35250]]
manufacturer, A&A Manufacturing, expressing concern that because the 
articulated joint system is made of separate subcomponents that 
could be supplied separately by different manufacturers, the waiver 
effectively prevented A&A from selling its product, the bellows, to 
New Flyer's response stated that in the low floor bus, the 
articulated joints are purchased as an entire unit and any changes 
or integration of a subcomponent, such as new bellows, would require 
sufficient time to design, integrate and test.
    On January 17, 2001, FTA directed Newflyer to work with domestic 
suppliers for these parts to develop alternative sources. We noted 
that this good faith effort to qualify new domestic suppliers would 
be considered should New Flyer request a renewal of the waiver. 
Newflyer now informs FTA that it plans to install an articulated 
joint, utilizing A&A's bellows and manufactured by a domestic 
manufacturer, in August 2003. The requisite testing should be 
completed by April 2004. FTA has also been advised by Hubner 
Manufacturing, that it plans to relocate the entire articulation 
systems manufacturing process from Germany to South Carolina by the 
end of 2003.
    Based on the information you have provided, I have determined 
that the grounds for a non-availability waiver still exist. 
Therefore, pursuant to the provisions of 49 U.S.C. 5323(j)(2)(B), a 
waiver is granted for the procurement of Hubner's articulated joint 
system for New Flyer low floor buses until June 30, 2004, as 
requested. The waiver will allow time for Hubner's relocation to the 
U.S. and completion of necessary testing for the alternate U.S. 
joint system. In order to insure that the public is aware of this 
waiver, particularly potential manufacturers, this waiver will be 
published in the Federal Register.
    If you have any questions, please contact Meghan G. Ludtke at 
(202) 366-1935.
     Very truly yours,
Gregory B. McBride,
Deputy Chief Counsel.
May 9, 2003.
Mr. Bill Coryell,
Vice President, Marketing and Sales, North American Bus Industries, 
Inc., 20350 Ventura Blvd., Suite 205, Woodland Hills, California 
91364.
    Dear Mr. Coryell: This letter responds to your correspondence of 
April 22, 2003, in which North American Bus Industries, Inc. (NABI) 
requests a non-availability waiver of the Buy America requirements 
for the procurement of the Hubner Manufacturing Corporation (Hubner) 
articulated joint system for use in NABI's low floor and standard 
floor articulated buses. The system is comprised of a mechanical 
articulating joint incorporating an electronically controlled, 
hydraulic damping subsystem.
    The Federal Transit Administration's (FTA) 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. You request a waiver under 49 U.S.C. 
5323(j)(2)(B), which states the Buy America requirements shall not 
apply if the item or items are not produced in the U.S. in 
sufficient and reasonably available quantities or are not of a 
satisfactory quality. The implementing regulation provides that non-
availability waivers may be granted for a component of rolling 
stock. 49 CFR 661.7(f).
    FTA posted a request for comments and received one comment 
against the waiver. Gillig Corporation argues that the Buy America 
rules for rolling stock already allow a waiver of up to forty 
percent foreign content, and when a component is unavailable from a 
domestic source, the vehicle maker should use part of its allotted 
foreign content. However, as noted above, the regulation currently 
allows component waivers for rolling stock when the product is not 
available from a domestic source. FTA received no comments 
indicating that these articulating joint systems are available from 
a U.S. source. We received two comments in favor of the waiver, one 
from Hubner, the subject joint manufacturer, and the other from 
CAPtech, Inc., which argues that allowing foreign manufacturers into 
the market place will result in better U.S. products.
    FTA issued a similar waiver to New Flyer of America on April 24, 
2001, which was valid until April 24, 2003. Based in part on the 
waiver issued to New Flyer in 2001, NABI requested a similar waiver 
on August 9, 2002. In grating NABI's waiver, we wrote ``we will 
grant this waiver to NABI for all solicitations responded to until 
April 24, 2003, which is when New Flyer's waiver expires. We will 
then evaluate the situation with respect to all vehicle and 
articulating joint manufacturers.'' New Flyer and NABI have both 
requested a renewal of this waiver and on April 24, 2003, FTA issued 
another waiver to New Flyer.
    You state that the circumstances necessitating the current 
waiver remain unchanged and in the near term, NABI must still use 
the Hubner joint, which is still not available from a domestic 
source. FTA has been advised by Hubner Manufacturing that it plans 
to relocate the entire articulation systems manufacturing process 
from Germany to South Carolina by the end of 2003. Based on a review 
of the industry and the information provided by New Flyer, NABI, and 
Hubner, I have determined that the grounds for a non-availability 
waiver still exist. Therefore, pursuant to the provisions of 49 
U.S.C. 5323(j)(2)(B), and consistent with the waiver issued to New 
Flyer on April 24, 2003, a waiver is granted for the procurement of 
Hubner's articulated joint system for NABI's low floor and standard 
buses until June 30, 2004. This waiver will allow time for Hubner's 
relocation to the U.S. In order to insure that the public is aware 
of this waiver, particularly potential manufacturers, this waiver 
will be published in the Federal Register.
    If you have any questions, please contact Meghan G. Ludtke at 
(202) 366-1936.
     Very Truly yours,
Gregory B. McBride,
Deputy Chief Counsel.
[FR Doc. 03-14888 Filed 6-11-03; 8:45 am]
BILLING CODE 4910-57-M