February 03, 2006
John M. Adams, Esq.
235 West Florence Avenue
Inglewood, California 90301
Dear Mr. Adams:
This letter responds to your correspondence of November 14 and 28, and December 23, 2005, in which you request on behalf of N/S Corporation that the Federal Transit Administration (FTA) investigate the Buy America compliance of the winning bidder in the Valley Metro Rail Transit Authority (Valley Metro) procurement of rail car washing system. For the reasons detailed below, I will not be initiating an investigation.
Applicable Law and Policy
FTA’s Buy America investigative procedures, 49 C.F.R. 661.15, establish a presumption that a bidder that has submitted a Buy America certificate is in compliance with that regulation. The regulations allow a third party to protest the bidder’s certification, but require that the protest include both a statement of the grounds on which it rests and any supporting documentation. FTA will then determine if the presumption of compliance has been overcome and if so, an investigation will be initiated.
A manufactured product is considered domestic if all of the manufacturing processes for the product take place in the United States (U.S.) and all of the components of the product are of U.S. origin. 49 C.F.R. 661.5(d)(1). A component "is considered of U.S. origin if it is manufactured in the United States, regardless of the origin of its subcomponents. "49 C.F.R. 661.5(d)(2). A component is "any article, material, or supply, whether manufactured or unmanufactured, that is directly incorporated into the end product at the final assembly location." 49 C.F.R. 661.3.
You allege that in its procurement for a rail car washing system, Valley Metro selected Neu, Inc. (Neu), a French company without a manufacturing capability in the U.S. Furthermore, you assert that Neu operates out of a small office in a residential neighborhood in Paoli, Pennsylvania, and have provided a photograph of that residence. Nevertheless, Valley Metro has provided express assurances to FTA that Neu’s supplier for this vehicle washing equipment will manufacture components in the U.S., from both domestic and foreign subcomponents. Under FTA’s Buy America requirements for manufactured products, sub-components may be sourced “regardless of their origin.”
49 C.F.R. 661.5(d)(2). The finished components will then be shipped to Valley Metro’s site for final assembly of the washing system. This plan complies with the requirements of Buy America.
After reviewing the information you presented, along with information from Valley Metro, I have concluded the presumption stated in 49 C.F.R. 661.15(a) has not been overcome with respect to this procurement. Accordingly, FTA will not initiate an investigation at this time.
If you have any questions, please contact Joe Pixley at (202) 366-1936.
David B. Horner