Giesecke & Devrient
July 21, 2000
Mr. Klaus J. Krauth
Chief Financial Officer
Giesecke & Devrient America, Inc.
45925 Horseshoe Drive
Dulles, Virginia 20166
Re: Application for Waiver of Buy America for Automated Fare Collection System Component
Dear Mr. Krauth:
This letter responds to your correspondence of June 1, 2000, in which you request a Buy America component waiver based upon non-availability for certain banknote identification modules (BIM) manufactured for use in ticket vending machines. The BIM at issue here features unique security functions and the ability to be upgraded for currency changes.
Based upon the fact that there were no known domestic sources, the Federal Transit Administration (FTA) has granted Buy America waivers to one of your competitors, Mars Electronics, for its bill handling unit (BHU), an item with similar functionality to the BIM. Upon hearing from both Mars and G&D on the subject of a component waiver, FTA contacted Cubic Transportation Systems, Inc., a manufacturer of ticket vending machines using both BIM’s and BHU’s and requested that it submit its assessment of the state of this market.
Cubic contended, by letter dated April 19, 2000, that based upon an extensive survey of the market, which is continuously updated by technical staff, there is no known U.S. manufacturer of a BIM/BHU that perform the functions listed herein. To date, Cubic has qualified only two sources for the BIM/BHU used in its ticket vending machines; those sources are G&D and Mars Electronics. This letter incorporates, by reference, the information contained in the above-referenced correspondence.
FTA’s requirements concerning domestic preference for federally funded transit projects are set forth in 49 U.S.C. §5323(j). However, Section 5323(j)(2)(B) states that those requirements shall not apply if the item or items being procured are not produced in the U.S. in sufficient and reasonably available quantities and of a satisfactory quality. The implementing regulation also provides that a waiver may be requested "for a specific item or material that is used in the production of a manufactured product." 49 C.F.R. 661.7(g). The regulations allow a bidder or supplier to request a waiver only if it is being sought under this section. See 49 C.F.R. 661.7(g) and 49 C.F.R. 661.9(d). This waiver would allow G&D to treat the BIM as domestic.
Based on the above-referenced information, I have determined that the grounds for a "non-availability" waiver exist. Therefore, pursuant to the provisions of 49 U.S.C. §5323(j)(2)(B), the waiver is hereby granted for manufacture of the BIM model number 2020 for the period of two years, or until such time as a domestic source for this type of component becomes available, whichever occurs first. In order to insure that the public is aware of this waiver, particularly potential manufacturers, it will be published in the Federal Register.
If you have any questions, please contact Meghan G. Ludtke at (202) 366-4011.
Very truly yours,
Gregory B. McBride
Deputy Chief Counsel