400 Seventh St., S.W.
This letter amends our March 18, 1997, guidance (copy enclosed) on Pre-Award and Post-Delivery Reviews of the Buy America final assembly requirements for bus procurements. The Federal Transit Administration (FTA) recently conducted a review of final assembly procedures used by heavy-duty transit bus manufacturers. This review showed that most manufacturers using a two-stage process in which buses are built partially abroad and partially in the U.S. install doors, windows, axles and/or wheels, including brake subcomponents, on bus shells abroad in order to facilitate shipment into the U.S. The installation of these components prior to shipment to the U.S. helps to maintain the structural integrity of the shells during transport and final assembly, and to ensure that shell interiors are not damaged during unfavorable weather conditions. Moreover, certain manufacturers install wheelchair ramps, which are relatively low-cost items, during construction of the bus floor. Our study further showed that the number of labor hours required to install any of these components is not significant. Consequently, and consistent with apparent industry practice, FTA will no longer require that these components be installed in the United States. All other components listed in our guidance should be installed in the United States as part of the Buy America final assembly process.
I still want to emphasize that the grantee needs to perform an adequate Pre-Award and Post-Delivery Review to avoid Buy America violations. The Pre-Award and Post-Delivery Reviews are designed to ensure that any vehicle purchased with Federal Transit Administration funds has at least a 60 percent domestic content and undergoes final assembly in the United States. The grantee must review the manufacturer's information on equipment domestic content and the final assembly process to determine if the manufacturer has met the Buy America requirements. If the information is insufficient, the grantee must take whatever steps are necessary to satisfy itself that the manufacturer is complying with the Buy America requirements.
In order to assist you in conducting reviews in accordance with the Pre-Award and Post-Delivery Review Regulation, 49 CFR Part 663, I have outlined in the enclosure procedures with revised final assembly requirements that a grantee must use to ensure that any vehicles it purchases comply with Buy America. If you have any questions regarding Buy America compliance, please contact your FTA Regional Office.
Gordon J. Linton
This guidance only addresses the Buy America requirements of the Pre-Award and Post-Delivery Reviews. The Purchaser's Requirements and the Federal Motor Vehicle Safety Standards requirements must still be met.
I. Pre-Award Review (before contract award)
Review data and information on Buy America compliance submitted by the manufacturer, including;
- Proposed domestic content of vehicle components to determine that the 60 percent
United States content requirement is met;
- Proposed final assembly location;
- Manufacturing activities that will take place during final assembly.
The manufacturer should provide enough detail about these activities to allow for the determination that these activities would constitute adequate final assembly under Buy America requirements. If the manufacturer does not provide sufficient information, the grantee must seek additional information. If the grantee determines that the activities are not adequate, the manufacturer must be asked to submit a revised manufacturing plan. A contract may not be awarded until the grantee is assured that the Buy America requirements will be met.
Final assembly is defined in 49 CFR Part 661 Buy America Requirements; Final Rule as "the creation of the end product from different elements brought together for that purpose through the application of manufacturing processes." In the case of the manufacture of a new rail car, final assembly would typically include, as a minimum, the following operations: installation and interconnection of propulsion control equipment, propulsion cooling equipment, brake equipment, energy sources for auxiliaries and controls, heating and air conditioning, communications equipment, motors, wheels and axles, suspensions and frames; the inspection and verification of all installation and interconnection work; and the in-plant testing of the stationary product to verify all functions.
In the case of a new bus, final assembly would typically include, at a minimum, the installation and interconnection of the engine, transmission and cooling systems; the installation and interconnection of the heating and air conditioning equipment; the installation of pneumatic and electrical systems, passenger seats, passenger grab rails, destination signs, wheelchair lifts; and road testing, final inspection, repairs and preparation of the vehicles for delivery.
If a manufacturer's final assembly processes do not include all the activities that are typically considered the minimum requirements, it can request an Federal Transit Administration (FTA) determination of compliance. FTA will review these requests on a case-by-case basis to determine compliance with Buy America.
The information reviewed supports a Pre-Award Buy America Certification that the proposed procurement meets the domestic content, the final assembly location and final assembly activities requirements.
II. Post-Delivery Review Requirements (during and after manufacturing)
The grantee is required to:
-Review actual component content to ensure that the vehicle meets the 60 percent Buy America
domestic content requirement.
-Check that the final assembly location is in the United States and the manufacturer's final
assembly activities meet the requirements outlined in paragraph I above.
-Have an on-site inspector for rail car procurements and bus procurements of greater than 10
The inspector must verify that the actual manufacturing processes are consistent with the information provided by the manufacturer or with the grantee's own assessments. The post-delivery reviews verifies a grantee's Post-Delivery Buy America Certification that the domestic content, final assembly location and final assembly activities requirements are met. Any questions or uncertainties concerning these activities should be referred immediately to FTA.