Nancy H. Lowenthal, Esq.
Office of the General Counsel
San Francisco Bay Area Rapid Transit District
300 Lakeside Drive
P.O. Box 12688
Oakland, CA 94604-2688
Dear Ms. Lowenthal:
I write in response to your letter dated December 18, which included a memorandum of law, regarding the procurement of an Automated Guideway Transit System for the San Francisco Bay Area Rapid Transit District's (BART) Oakland Airport Connector Project ("Connector Project"). You have asked the Federal Transit Administration (FTA) to quickly confirm your conclusions in the memorandum by January 4th I have issued this response to your interpretation in advance of your requested deadline so that BART may have the maximum amount of time possible to award a contract for the Connector Project that is in full compliance with this letter and the Buy America requirements. For the reasons outlined below, however, I cannot support BART's interpretation of the Buy America requirements in 49 U.S.C. 53230), as implemented at 49 C.F.R. Part 661. I do not believe that cable components attached to the wayside, including the engine or traction motor, ropes, and cable mechanisms, can be considered rolling stock components.
Before I reach the merits of your argument, I want you to know that I find this issue to be a case of first impression as FTA has never provided an official interpretation of the application of the Buy America regulations to a cable-propelled system. In fact, nothing in the regulation seems to contemplate cable-propelled systems and no Federal transit funding has previously gone into a cable-propelled system.
That being said, you informed FTA that BART wishes to procure a 3.2 mile Automated Guideway Transit System (AGT) that will connect the BART Coliseum Station to the Oakland International Airport. The AGT would be fully automated and will operate on an exclusive right-of-way. In a separate conference call on December 14, you indicated that the propulsion system would consist of four separate cable loops from which the railcars will attach and detach. Further, the Connector Project would consist of the design, construction, and installation of the AGT fixed facilities (including guideway structure) and the supply and installation of the complete AGT operating system (including AGT vehicles, automatic train control, communications, station equipment, central control and specialized maintenance fixtures and equipment). BART seeks Federal financial assistance for the Connector Project from FTA's New Starts Program and the American Recovery and Reinvestment Act of 2009.
Since the vehicles in the Connector Project are not self-propelled, BART staff has proposed the novel approach of including the wayside propulsion and braking equipment with the car shells to constitute a fully-functioning unit of rolling stock, in the same way that onboard propulsion elements and a car shell would constitute a fully-functioning unit of rolling stock. Further, in your letter you state BART's position as: "[T]he 'vehicle' portion of a cable-propelled vehicle includes those items specified in Appendix C, whether mounted on the vehicle, the guideway or the wayside. Such elements integrally related to the drive, propulsion and braking function of the vehicle should be considered as a vehicle subsystem component end product."
Section 53230) of Title 49 of the United States Code sets forth the Buy America requirements. Specifically, paragraph 53230)(2)(C) states that the rules applicable to rolling stock include ''train control, communication, and traction power equipment."
FTA's implementing regulation at 49 C.F.R Section 661.11 identifies two primary requirements for rolling stock and related equipment: (1) at least 60 percent of the rolling stock components (by cost) must be produced in the United States (with at least 60 percent of the respective subcomponents also being produced in the United States); and (2) final assembly of the rolling stock must occur in the United States.
FTA's Buy America regulation categorizes components as rolling stock or as wayside equipment based on the physical location of the components. See Appendix B to 49 C.F.R. Section 661.11 and 49 C.F.R Section 661.11(t) and (v). As the regulation indicates, some components appear on both lists of rolling stock and wayside equipment, depending on the physical placement of the equipment.
Given the above, I do not agree with BART's position that the cable elements of the wayside propulsion and braking system should be included as part of the rolling stock for the purpose of Buy America pre-award and post-delivery audits, particularly where the propulsion elements are not permanently affixed or attached to the vehicle. Rather, the cable elements serve as the functional equivalent of a train control equipment or traction power equipment, providing propulsion and braking to an otherwise passive passenger compartment.
I am advising BART to review the elements of the cable guideway system to determine the appropriate categorization of the equipment under 49 C.F.R Section 661.1 1 (i) or (v). At the same time, BART should review the remaining rolling stock components to determine whether, absent the cable components, the rolling stock will comply with the Buy America regulation's 60 percent domestic content threshold.
Feel free to contact me directly should you have any further questions.
Dorval R. Carter, Jr.
December 22, 2009