Santa Clara Valley Transportation Authority
Pamela J. Silberstein, Esq.
Senior Assistant Counsel
Santa Clara Valley Transportation Authority
3331 North First Street
San Jose, California 95134-1906
Dear Ms. Silberstein:
This letter responds to your correspondence of October 1, 2001, and to telephone conversations you have had with my staff on this matter. You ask how Buy America applies to a cable trough, which is part of a $46 million contract for the construction of a section of the Tasman Corridor East light rail project. The cable trough is a $1,065,000 line item in the contract and is composed of 7100 linear feet of interlocking precast concrete units or sections. The contractor has characterized the cable trough as a cable tray. The completed cable trough will house and protect fiber optic communications cable and cable for the light rail signaling system. There are three questions that must be answered to resolve this issue:
- Is the cable trough an end product?
- Which part of the Buy America regulation applies to the purchase of the cable trough, the general requirements or the rolling stock section?
- If it is not an end product, is the cable trough a component or subcomponent?
1. Is the cable trough an end product?
FTA has consistently applied the following reasoning to the end product question: "[a]n end product is ‘any item’ . . . that is to be acquired by a grantee, as specified in the overall project contract. The key determinant is the grantee’s specification. For example, if a grantee is procuring a new rail car, the car is the end product and the propulsion motor would be a component of the end product. If that same grantee is procuring a replacement propulsion motor for an existing rail car, that propulsion motor would be the end product." 56 Fed. Reg. 928 (Jan. 9, 1991).
Here, you have provided that this cable trough system was not an end product of the procurement, a position supported by the contract itself. Accordingly, the construction of a section of the Tasman Corridor East light rail, and not the cable trough, is the subject of the procurement and thus, the end product.1
2. Which part of the Buy America regulation applies to the purchase of the cable trough, the general requirements or the rolling stock section?
The regulation and statute provide that the general requirements apply to all procurements except those for rolling stock, which includes train control, communication, and traction power equipment. See, 49 U.S.C. 5323(j)(2)(C), 49 C.F.R. 661.5 and 661.11(a). The contractor suggests that because the cable trough functions as a cable tray, and cable trays are on both the train control and traction power lists found at 49 C.F.R. 661.11(t) and (v), the cable trough should treated as rolling stock.
It is FTA’s position that train control, communication, and traction power equipment are only governed by the rolling stock section of the regulation when purchased as end products. As noted above, the cable trough is not an end product in this case, and thus, the general requirements apply to this entire procurement.2
3. If it is not an end product, is the cable trough a component or subcomponent?
The cable trough is a component of a manufactured product and must be manufactured in the U.S. The interlocking concrete sections are the cable trough, and as such, must be manufactured in the U.S. Installation at the job site does not qualify as manufacture of the component. See, 49 C.F.R. 661.3.
If you have any questions, please contact Meghan G. Ludtke at (202) 366-1936.
1 When discussing construction contracts specifically, FTA determined that the "procurement of construction is treated as procurement of a manufactured product in that the deliverable of the construction contract is considered as the end product and the construction materials used therein are considered components of the end product." 46 Fed. Reg. 5809 (Jan. 19, 1981). Further, when asked to clarify the definition of "end product," FTA concluded that, "the deliverable item specified in the contract is the end product. For example, in a contract for 10 buses that must contain 500 h.p. engines, the 10 buses are the end-products." Id.
2 This situation is similar to the application of the regulation taken with respect to vehicle replacement parts, when a grantee purchases a vehicle, the rolling stock standard applies, when that same grantee separately purchases replacement parts for that vehicle, the general requirements apply.
Very truly yours,
Gregory B. McBride
Deputy Chief Counsel