Examples of Compliance with the Pre-Award and Post-Delivery Review Requirements

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This section provides examples of Buy America certification calculations, and purchaser's requirements certification information.

Buy America Certification

Exhibit 4-1 presents a sample table to be prepared by a manufacturer for the Buy America certification process.

Component Subcomponent Manufacturer Origin Percentage of Component Cost Percentage of Vehicle Cost
1. XXXXX1

 

xxxxx

A Co.

U.S.A.

13%

 

 

xxxxx B Co. U.S.A 4

 

 

xxxxx C Co U.S.A. 20

 

 

xxxxx D Co. U.S.A. 5

 

 

xxxxx E Co. U.S.A. 21

 

 

Total F Co. U.S.A. 63% 23%
2. Friction Brakes (Foundation Brake Equipment)

 

Air System G Co. U.S.A 53%

 

 

xxxxx H Co. U.S.A. 8

 

 

Total (friction brakes) I Co. U.S.A. 61% 8
3. Coupler

 

Mechanical Equipment J Co. U.S.A. 30%

 

 

Electrical Equipment K Co. U.S.A. 32

 

 

Total (coupler) L Co. U.S.A. 62% 7
4. Passenger Seats M Co. U.S.A.

 

2
5. Flooring N Co. U.S.A.

 

2
6. Air-Conditioning/Heating Unit O Co. U.S.A.

 

5
7. Pantograph P Co. U.S.A.

 

2
8. Wheelchair Lift Q Co. U.S.A.

 

2
9. Windows R Co. U.S.A.

 

1
10. Lighting System S Co. U.S.A.

 

2
11. Auxiliary Power Equipment Rack T Co. U.S.A.

 

1
12. Destination Signs U Co. U.S.A.

 

1
13. Assembly Materials V Co.

 

 

4
Total (vehicle)

 

 

 

60%

Exhibit 4-1. Sample Manufacturer’s Buy America Calculation

If a component is manufactured in the United States with less than 60 percent domestic subcomponents, then only its domestic cost (i.e., the cost of its domestic subcomponents plus the cost of manufacturing the component) may be used in the domestic content calculation of the vehicle.

Domestic subcomponents exported for inclusion in a foreign-manufactured component may also be included in the Buy America calculation, if the domestic subcomponents received a tariff exemption for importation back into the United States. However, only the cost of the domestic subcomponents, which is the cost at the time of export, may be used in the domestic content calculation of the vehicle.

The presentation of the costs for both of the above cases is different from that shown in Exhibit 4-1. Exhibit 4-2 presents the Buy America presentation for the cost of friction brakes with at least 60 percent domestic subcomponents as was shown in Exhibit 4-1.

 

Component Subcomponent Manufacturer Origin Percentage of Component Cost Percentage of Vehicle Cost
2. Friction Brakes (Foundation Brake Equipment)

 

Air System G Co. U.S.A 53%

 

 

xxxxx H Co. U.S.A. 8

 

 

Total (friction brakes) I Co. U.S.A. 61% 8%

Exhibit 4-2. Sample Content Calculation for a U.S.-Manufactured Component With at Least
60 Percent Domestic Subcomponents

The 8 percent "Total (friction brakes)" figure in Exhibit 4-2 indicates that the cost equals 8 percent of the cost of all components used in the vehicle. In this case, the cost includes direct labor costs, direct materials costs, freight-in costs, sales costs, general and administrative costs, and an allowance for profit attributable to manufacturing the brakes.

For example, if the total cost of all components is $1,000,000, then, according to Exhibit 4-2, the cost of the friction brakes is $80,000. Of that $80,000, if $60,000 were the total cost of all subcomponents, then $20,000 would be the cost of manufacturing. The cost of the air system and resistor is $31,800 and $4,800, respectively.

Exhibit 4-3 presents a Buy America calculation for friction brakes manufactured in the United States with less than 60 percent domestic subcomponents.

Component Subcomponent Manufacturer Origin Percentage of Component Cost Percentage of Vehicle Cost
2. Friction Brakes (Foundation Brake Equipment)

 

Air System G Co. U.S.A 53%

 

 

Total (friction brakes) I Co. U.S.A 53% 5.2%

Exhibit 4-3. Sample Content Calculation for a U.S.-Manufactured Component With Less Than
60 Percent Domestic Subcomponents

In Exhibit 4-3, the 5.2 percent "Total (friction brakes)" figure means that the cost of the domestic subcomponents (or 53 percent of the brake subcomponent cost) plus the cost of manufacturing the brakes equals 5.2 percent of the cost of all components used in the vehicle. In this case, the cost of the brakes includes direct labor costs, domestic direct materials costs (or the domestic subcomponent costs), freight-in costs, an allowance for profit, and the sales, general and administrative costs attributable to manufacturing the brakes.

Using the earlier example, the 53 percent implies that the domestic subcomponents cost $31,800. Since the $20,000 manufacturing cost is allowed, the total is $51,800, or approximately 5.2 percent of $1,000,000.

Exhibit 4-4 provides an example of friction brakes from a foreign source with domestic subcomponents that received tariff exemptions.

Component Subcomponent Manufacturer Origin Percentage of Component Cost Percentage of Vehicle Cost
2. Friction Brakes (Foundation Brake Equipment)

 

Air System G Co. U.S.A 53%

 

 

Total (friction brakes) I Co. Foreign Country 53% 3.2%

Exhibit 4-4. Sample Content Calculation for a Foreign-Manufactured Component With Domestic Subcomponents

In Exhibit 4-4, the 3.2 percent "Total (friction brakes)" figure means that the cost of the domestic subcomponents (domestic direct materials cost) used in the brakes is 3.2 percent of the cost of all components used in the vehicle.

Continuing with the previous example, the 3.2 percent indicates that the domestic components contribute $32,000 toward the cost of the vehicle. Recall that the total cost of the subcomponents equals $60,000. Note, however, that the $20,000 manufacturing cost is not allowed for foreign components as is allowed in both previous examples.

A component’s manufacturing cost is never used when calculating the domestic content of that component; its domestic content is based on subcomponent cost only. However, the component’s manufacturing cost should be used in the domestic content calculation of the vehicle, if the component was manufactured in the United States. Notice in the examples that the $20,000 manufacturing cost never contributes toward the domestic content of the component, but it does contribute toward the domestic content of the vehicle in Exhibits 4-2 and 4-3.

Purchaser’s Requirements Certification

The recipient should keep the following information in the certification file to support the purchaser’s requirements certification review:

  • A comparison of solicitation and bid specifications
  • An analysis of manufacturing capability
  • Copies of the visual inspection sheets
  • Copies of the performance test sheets
  • A copy of the resident inspector's report describing manufacturing activities
  • Records of quality control measurements.

Comparison of Solicitation and Bid Specifications

The recipient should keep on file copies of the solicitation specifications, the manufacturer’s specifications, and the recipient’s agreement to any deviations from the solicitation technical specifications as proposed by the manufacturer.

Analysis of Manufacturing Capability

The recipient should keep on file an analysis of a prospective manufacturer’s information used to verify that the manufacturer is capable of building the rail vehicles to the specifications. This analysis may include statements, letters, and other information from the manufacturer describing the product, manufacturing and final assembly operations, and quality assurance program.

Visual Inspection Sheets

The visual inspection sheets should include a line for each item in the specification that can be verified and signed off. Appendix D contains a sample visual inspection sheet.

Performance Test Sheets

Performance test sheets should include all information cited in the contract that fairly represents the handling and operation of the vehicles. It might include items such as top speed, noise, braking, jerk limiting, accessibility, maintainability, and operation of all accessories. Appendix D contains a sample performance test sheet.

Manufacturing Activities

The resident inspector’s report must include a description of final assembly and manufacturing operations, including a description of machine and hand operations—such as welding, painting, and drilling.

Records of Quality Control Measurements

Typical records of quality control should include information of actual and specified dimensions, clearances, and machining and assembly tolerances. In addition, the operational characteristics of all accessories should be included with this information.


1 The web version of this chart has been changed because of a conflict with the rule regarding the designation of a component versus a subcomponent. Please see the Federal Register Notice addressing this issue.

2 The web version of this chart has been changed because of a conflict with the rule regarding the designation of a component versus a subcomponent. Please see the Federal Register Notice addressing this issue.