Ms. Lisa Garvin Copeland
Law Offices of Lisa Garvin Copeland
74-040 Highway 111, Suite 225
Palm Desert, California 92260
Dear Ms. Copeland:
This responds to your letters of February 24 and March 22, 2004, in which you request, on behalf of your client, Sunline Transit Agency (Sunline), that the Federal Transit Administration (FTA) find that Sunline’s plan for final assembly of a hydrogen fuel cell bus complies with the Buy America requirements in federal transit law.
You explain that Sunline and Alameda County Transit Agency (AC Transit) are purchasing four prototype fuel cell buses as part of a research and development project. Sunline is using FTA grant funds for its part of that purchase, which is one bus, while AC Transit is not using FTA funds for purchase of the other three buses. The glider, or shell, for the buses will be manufactured in Belgium by Van Hool and counted as foreign content in the Buy America calculation.
ISE Research Corporation will integrate the fuel cell engine and other components to develop the prototype vehicle in the U.S. However, the manufacture of the glider will include some activities that are on the list of activities that should occur in the U.S. as part of final assembly. Therefore, you request that FTA review the final assembly plan presented and find that it is compliant with Buy America.
Specifically, you request that Van Hool be allowed to incorporate the wiring harnesses and pneumatic systems in the glider during its manufacture in Belgium because these systems must be incorporated into the framework of the glider to ensure functionality. You also request permission to have the doors and wheelchair lifts installed in Belgium to retain the waterproof integrity of the vehicle during shipping. You estimate that a total of 1533 man hours will be spent to manufacture the glider in Belgium, while the final assembly work in the U.S. is estimated at 6274 man hours.
Applicable Law and Policy
Under FTA’s Buy America requirements for rolling stock, 49 U.S.C. 5323(j)(2)(C) and 49 C.F.R. 661.11, 60 percent of all components, by cost, must be of U.S. origin, and final assembly must take place in the U.S. The minimum requirements for final assembly are described in FTA’s Dear Colleague letter of March 18, 1997. See also, §3035, Transportation Equity Act for the 21st Century. The letter states that final assembly should typically include the following:
installation and interconnection of the engine, transmission, axles, including the cooling and braking systems; the installation and interconnection of the heating and air conditioning equipment; the installation of pneumatic and electrical systems, door systems, passenger seats, passenger grab rails, destination signs, wheelchair lifts; and road testing, final inspection, repairs and preparation of the vehicles for delivery.
It also provides that “[i]f a manufacturer's final assembly processes do not include all the activities that are typically considered the minimum requirements, it can request an FTA determination of compliance.” Id.
This is a procurement of one experimental, prototype vehicle that must be properly tested and integrated. The integrity of the glider and the operation of the wiring and pneumatic systems would be compromised if those systems were not part of the assembly process in Belgium. Because your plan provides for installation and interconnection of the engine, transmission, axles, and cooling and braking systems; installation and interconnection of the heating and air conditioning equipment; passenger seats, passenger grab rails, destination signs; and road testing, final inspection, and repairs in the U.S., I find that it is acceptable final assembly as required by the regulations.
If you have any questions, please contact Meghan G. Ludtke at 202.366.1936.
Very truly yours,
Gregory B. McBride
Deputy Chief Counsel