May 19, 2009
Steven A. Diaz, Esq.
2300 M Street, NW
Washington, DC 20037
Re: Request for Buy America Investigation
Dear Mr. Diaz:
I write in response to your recent letters on behalf of your client, TwinVision of North America (TV), questioning whether Hanover Displays, Inc. (Hanover) is in compliance with the Buy America requirements of 49 U.S.C. § 5323(j) and 49 C.F.R. Part 661, and asking FTA to investigate Hanover pursuant to 49 C.F.R. 661.15. Thank you for bringing this matter to our attention. I am declining your request, however, for the reasons outlined below.
You allege that Hanover violated the Buy America requirements when it provided foreign-manufactured equipment to the City of Los Angeles Department of Transportation through a subcontract with a bus manufacturer. Based on the observations of several individuals, you claim that the addresses listed on Hanover’s website do not appear to be manufacturing facilities and that the items shipped from Hanover to the vehicle manufacturer do not include the manufacturing plates or labels that Hanover customarily affixes to such equipment to indicate the manufacturer, the place and date of manufacture, and the serial number. You interpret these alleged facts as evidence that Hanover did not manufacture its equipment in the United States, thus, that Hanover violated FTA’s Buy America requirements.
As you know, with limited exceptions, Buy America requires that all steel, iron, and manufactured goods used in FTA-funded projects be produced in the United States. Rolling stock procurements are subject to a less stringent standard: the cost of components and subcomponents produced in the United States must be more than 60 percent of the cost of all components of the rolling stock, and final assembly of the rolling stock must occur in the United States.
When responding to an FTA-funded procurement for steel, iron or manufactured products, each bidder or offeror must submit either a Certificate of Compliance or a Certificate of Non-Compliance with FTA’s Buy America requirements. A Certificate of Compliance is a certification that the bidder or offeror will comply with the requirements of 49 U.S.C. 5323(j)(1) and the applicable regulations in 49 CFR part 661. Pursuant to the regulations, any party may petition FTA to investigate the compliance of a successful bidder or offeror with the bidder’s or offeror’s certification. FTA presumes that a bidder or offeror who has submitted the required Buy America certificate is complying with the Buy America provision.
In this instance, while TV’s allegations raise concerns about whether items supplied by Hanover were manufactured in the United States, I find TV has omitted any evidence on two key questions: (1) whether Hanover signed a Certificate of Compliance, and (2) whether the items manufactured by Hanover were counted as foreign or domestic for purposes of calculating the cost of components and subcomponents produced in the United States. Indeed, it would have been permissible for the bus manufacturer to include the items supplied by Hanover as part of the foreign-produced goods in its buses as long as the foreign components and subcomponents did not total more than 40 percent of the cost of all components of the rolling stock. Thus, Hanover was bound to comply with the Buy America requirements only if the items it supplied were counted as domestic and it had signed a Certificate of Compliance.
For these reasons, I do not find sufficient information to justify the initiation of an investigation into Hanover’s compliance with the Buy America requirements at this juncture. I appreciate that your client is a competitor of Hanover, and has an obvious interest in ensuring that all its competitors comply with the Buy America requirements, but in the absence of any specific information about whether Hanover certified compliance and whether its products were counted as domestic for purposes of Buy America, I have no reason to pursue this matter.
Should you have any questions, please contact Jayme Blakesley at (202) 366-0304 or email@example.com.
Scott A. Biehl
Acting Chief Counsel