Mr. Kevin Berry
Vansco Electronics Ltd.
1305 Clarence Avenue
Dear Mr. Berry:
This responds to your July 31, 2003, letter requesting that the Federal Transit Administration (FTA) determine whether the automated passenger information systems manufactured by Mitron and sold by Vansco can be deemed microcomputer equipment subject to the Buy America waiver for microcomputer equipment. The automated information system is used to provide route and other information to bus passengers.
The Buy America requirements may be waived 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. There is a permanent waiver for microcomputer equipment and software. 49 C.F.R. 661.7, App. A(d). FTA has defined a microcomputer as
A computer system whose processing unit is a microprocessor. A basic microcomputer includes a microprocessor, storage, and input/output facility, which may or may not be on one chip. The same source defines computer system as: A functional unit consisting of one or more computers and associated software, that uses common storage for all or part of a program and also for all or part of the data necessary for the execution of the program; executes user-written or user-designated programs performs user-designated data manipulation, including arithmetic operations and logic operations; and that can execute programs that modify themselves during their executions. A computer system may be a stand-alone unit or may consist of several interconnected units. Synonymous with ADP system, computing system.
50 Fed. Reg. 18760 (May 2, 1985). When the waiver is properly applied, a manufacturer may use foreign microcomputer equipment without violating the Buy America requirements. For example, FTA determined that a Mobile Data Communication System was covered by the microcomputer waiver, and found that “[a]ll this equipment and associated software is linked together to a computer system at your headquarters with additional interfaces to other CDTA computer systems.” Capital District Transportation Authority letter, August 30, 2001.
FTA subsequently withdrew a rulemaking on the microcomputer waiver:
It should be noted that FTA does not apply the waiver to an entire product because it contains a microcomputer. The parameters of the waiver as it currently exists are that if the end product is itself a microcomputer or software as defined above, Buy America is waived. If, however, the end product contains a microcomputer (e.g., a farecard system), that microcomputer is exempt from the requirements of Buy America, but the rest of the end product must be in compliance.
68 Fed. Reg. 9810 (Feb. 28, 2003). FTA applied that reasoning in another decision, finding that some components of a fare collection system were subject to the waiver, but others were not. Specifically, we found that “[t]he bill and coin validator, and the printer, are not, themselves, microcomputers, although they may each contain embedded microprocessors.” CoinCard letter, May 23, 2003.
As discussed in the original definition, a microcomputer is a computer based on a microprocessor. A microprocessor is a computer whose central processing unit is contained on one or a small number of integrated circuits. Microcomputers may be stand-alone units or they may be embedded in other equipment. They must have, or be, controllers or communication processors and be capable of processing, storage, programming, and input/output facilities. Microcomputers may be grouped within larger systems or equipment, consisting of several interconnected units each functioning as either stand-alone units, embedded into the equipment or system, or a mix of both. Related hardware and equipment that may be controlled by a microprocessor is not covered by the waiver.
The Vansco/Mitron product consists of three modules, the Panelmix 2 software programs, the 95BD145 Display Module, and the 95MMC16 Driver Panel module, each is reviewed below:
Panelmix 2 Software Programs: The Panelmix 2 is Windows-based software that affects programming, reprogramming, and repair. Software is specifically discussed in the waiver and therefore eligible for the waiver.
95BD145 Display Module: The Display Module displays the information for the rider. It consists of a control unit, its connection board, and an LED display controller. It also has related hardware and equipment such as power inverters, LED signs, backlights, cabling, and connectors. The control unit, its connection board, and the LED display controller are eligible for the microcomputer waiver because they have controllers or communication processors, and are capable of processing, storage, programming, and input/output functions. The hardware and other equipment identified do not possess those characteristics, and therefore, are not eligible for the exemption for microcomputers.
95MMC16 Driver Panel Module: The Driver Panel allows the driver to enter information that will be seen on the Display Module by passengers. This unit consists of a control unit, its connection board, and an LED display controller. It also has related hardware and equipment such as a multi-media card reader, LED signs, cabling, and connectors. The control unit, its connection board, and an LED display controller are eligible for the microcomputer waiver because they have controllers or communication processors and are capable of processing, storage, programming, and input/output functions. The hardware and other equipment identified do not possess those characteristics, and therefore, are not eligible for the exemption for microcomputers.
Thank you for bringing these issues to our attention. Please let me know if I can be of further help.
Very truly yours,
Gregory B. McBride
Deputy Chief Counsel