Golden Gate Bridge, Highway and Transportation District

David Cruise
Communications Systems Project Manager
Golden Gate Bridge, Highway and Transportation District
P.O. Box 9000, Presidio Station
San Francisco, CA 94129

Dear Mr. Cruise:

I write in response to your September 2008 letter asking the Federal Transit Administration (FTA) to interpret its Buy America requirements as they relate to the Golden Gate Bridge, Highway & Transportation District’s (Golden Gate) procurement of an Advanced Communications and Information System (ACIS). In particular, Golden Gate has asked whether its ACIS may be considered a “rolling stock end product” as described at Appendix A to 49 CFR 661.3 and consistent with the interpretation set forth in FTA’s letter of June 2, 2004, to AESF Communications.

Background

According to your letter, on April 15, 2008, Golden Gate issued a Request for Proposals (RFP) for the procurement of an Advanced Communications and Information System (ACIS). The ACIS consists of a number of inter-related components: (1) a communication system for all of Golden Gate’s buses and ferries, including radios, wiring, wifi connections, interface equipment, as well as the network and server hardware necessary for the communications system; (2) an on-board announcement system that in part relies on the communications equipment described above (1); (3) portable radios for Golden Gate personnel, as well as for all of Golden Gate’s non-revenue vehicles; and (4) a Passenger Information System installed at various Golden Gate facilities, and connected to the network described above (1). These elements (1) through (4) work together in an integrated fashion with a single warranty provided by the vendor.

Legal Standard

With limited exceptions, FTA may not obligate funds for a project unless all iron, steel and manufactured products used in the project are produced in the United States. For a manufactured product to be considered produced in the United States, all of the manufacturing processes for the product must take place in the United States and all of the components of the product must be of U.S. origin.

The provisions of 49 CFR 661.5 do not apply to the procurement of buses and other rolling stock (including train control, communication, and traction power equipment), however, if the cost of components produced in the United States is more than 60 percent of the cost of all components and final assembly takes place in the United States.[1]

The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) directed the FTA to define the term “end product,” and in defining the term, FTA was to “address the procurement of systems under the definition to ensure that major system procurements are not used to circumvent the Buy America requirements.” Based on comments received and on SAFETEA-LU’s statutory language and legislative history, FTA added the term “system” to its definition of “end product”:

End product means any vehicle, structure, product, article, material, supply, or system, which directly incorporates constituent components at the final assembly location, that is acquired for public use under a federally-funded third-party contract, and which is ready to provide its intended end function or use without any further manufacturing or assembly changes.[2]

In addition, SAFETEA-LU directed FTA to develop a list of representative end products that are subject to Buy America requirements. Based on comments received and on SAFETEA-LU’s statutory language and legislative history, FTA’s list of representative rolling stock end products includes “train control, communication, and traction power equipment that meets the definition of end product at 49 CFR 661.3 (e.g., a communication or traction power system).”[3]

Discussion

With its request for a letter of interpretation, Golden Gate set forth three alternative approaches for considering whether proposals comply with FTA’s Buy America requirements:

  1. The ACIS should be considered Rolling Stock because it is communications equipment;
  2. The ACIS is not subject to the Rolling Stock Rule, but the proposed System is nevertheless Buy America compliant; and
  3. The ACIS is eligible for a Non-Availability waiver.

It is FTA’s opinion that the ACIS being procured by Golden Gate would be considered a system under the manufactured product standard of 49 CFR 661.5; the radios, wiring, wifi connections, interface equipment, and network and server hardware are intended to contribute together to a clearly defined function and will perform on an integrated basis; and the warranty will apply to the integrated system. However, because the ACIS will be used for buses and ferries, Golden Gate should apply the rolling stock standard of 49 CFR 661.11. The ACIS represents the type of rolling stock end product described as a communication system by FTA at Appendix A to 49 CFR 661.3.

Golden Gate will not need a waiver to purchase the ACIS so long as it is manufactured and assembled according to the rolling stock requirements of 49 CFR 661.11. The cost of components produced in the United States must be more than 60 percent of the cost of all components and final assembly takes place in the United States.

Please contact Jayme L. Blakesley at (202)366-0304 or jayme.blakesley@dot.gov with any questions.

Sincerely,

Severn E.S. Miller
Chief Counsel
Federal Transit Administration


[1] 49 CFR 661.11(a).

[2] 49 CFR 661.3.

[3] Appendix A to 49 CFR 661.3.

Interpretation of FTA's Buy America requirements as they relate to the procurement of an Advanced Communications and Information System (ACIS).  When used for rolling stock, an ACIS is a rolling stock end product described as a communications system at Appendix A to 49 CFR 661.3.

November 7, 2008