Dear Mr. Hubner:
This letter replies to your correspondence dated February 1, 2000, requesting clarification of our Buy America provisions as they apply to your product. According to the information in your letter, Hubner manufactures bellows for use in articulated buses. You ask that we "qualify" your product as being 100 percent U.S. It should first be noted that it is up to the grantee to do the calculations that verify compliance of a vehicle. The Federal Transit Administration (FTA) does not grant blanket certifications.
That being said, I can tell you that the analysis applied depends on the type of procurement at issue. If you sell your product to the bus manufacturer, then the manufacturer and grantee would likely count the bellow as a component of the end product. "For a component to be of domestic origin, more then 60 percent of the subcomponents of the components, by cost, must be of domestic origin, and the manufacture of the component must take place in the U.S." 49 CFR 661.11(g). See also 49 CFR 661.11(m), (n), and (p) for guidance on calculating cost. To determine if your component qualifies as a U.S. component, you must calculate the cost of the subcomponents; if less then 40 percent of those subcomponents are foreign, the bellows would qualify as domestic.
If, however, the procurement is for a replacement part for a bus and it is purchased by the grantee directly from Hubner, then a different standard would apply. In that case, because the procurement is not for rolling stock but for the bellows itself, the general requirements found at 49 CFR 661.5 apply. In that case, all manufacturing processes for the bellows must take place in the U.S., and all the components of the bellows must be of U.S. origin, which means that all of the components must be manufactured here, regardless of the origin of its subcomponents.
You should also be aware that the waivers listed at 49 CFR 661.7 are available, but must be requested by the grantee in most cases, except as is found in section 661.7(f) or (g). I have enclosed a copy of the Buy America regulation for your use.
Very truly yours,
Gregory B. McBride
Deputy Chief Counsel