Dear Ms. Spieles:
This responds to your letter of January 16, 2003, in which you request clarification of the Buy America regulations as they apply to steel frogs for the Blue Line. The contract is below $100,000, so the Buy America requirements do not apply as provided by the small purchase waiver. 49 C.F.R. 661.7, App. A(e).
Due to the nature of your question, however, I will answer the substance of your query for future reference. You suggest that the foreign steel frogs procured by the Chicago Transit Authority (CTA) are subcomponents of the "work," and as such, can be of foreign origin. Although subcomponents of manufactured products can be of foreign origin, "[a]ll steel and iron manufacturing processes must take place in the United States. . ." 49 C.F.R. 661.5(b); 49 U.S.C. 5323(j). This requirement applies to "all construction materials made primarily of steel or iron and used in infrastructure projects such as transit or maintenance facilities, rail lines, and bridges. These items include, but are not limited to, structural steel or iron, steel or iron beams and columns, running rail and contact rail." 49 CFR 661.5(c)(emphasis added). It is clear that in building a rail line, the frogs, and the steel of which they are made, must be of U.S. origin as required by 49 C.F.R. 661.5(b) and (c).1 Once the steel and iron requirements are satisfied, section 661.5(d), the manufactured product section, applies to the balance of the construction contract.
Therefore, if CTA were to use the foreign steel frogs in a contract over $100,000, it would be in violation of Buy America. If you have any questions, please contact Meghan Ludtke at (202) 366-1936.
1 However, the frogs may be cast with foreign manganese. Manganese is considered to be a non-available item and as such, can be used without violating the domestic steel requirements. 25 C.F.R. 104, 49 C.F.R. 661.7, App. A(a).
Very truly yours,
Gregory B. McBride
Deputy Chief Counsel
cc: Joel P. Ettinger, Regional Administrator
Peggy Foley, Acting Regional Counsel, Region 5