Buy America

Please Note: The bulk of this question and answer text is currently under review and will be published as soon as available.

Q. An item specified in our RFP (by brand name) is manufactured in Singapore and is included in the USA/WTO Free Trade Agreement. Is this item permissible to be used in the construction project? Are the Buy America requirements waived by the Free Trade Agreement? If the item is not permitted to be used, is the contractor obligated to come up with and propose an "or equal" product that is of US manufacture?

A. Your question raises two issues:  first, whether an RFP that identifies a product by brand name constitutes a fair and open competitive procurement; and second, whether a product manufactured in a foreign Country covered under a WTO Free Trade Agreement complies with FTA's Buy America requirements.

 With regard to the first question, FTA Circular 4220.1F, Chapter VI, 2.a. (3) and 2.a. (4)(f), states that the use of brand names without listing salient characteristics and allowing "an equal" product to be offered is a practice that is restrictive of competition and therefore a violation of the "full and open competition" requirement. This means you would have to justify the action (use of a single brand name) as a "sole source" or noncompetitive procurement before issuing your solicitation. The FTA Circular is available online: http://www.fta.dot.gov/laws/circulars/leg_reg_8641.html

 With regard to the second question, while products manufactured in a WTO-covered country may be eligible for direct Federal procurements under the Buy American Act, section 661.5 of FTA's Buy America regulation (49 CFR Part 661) requires manufactured products to be manufactured in the United States, unless the product qualifies for a waiver - see Section 661.7:
        http://www.access.gpo.gov/nara/cfr/waisidx_09/49cfr661_09.html. (Posted: October, 2010)

 

Q. Would the purchase of escalator step tread boards be subject to the Buy America requirement, if as part of escalator/elevator maintenance and repair services contract, some of the escalator step tread boards may need to be replaced as a result of wear and tear or vandalism/abuse?
 
A. 
As a (sub)component of the escalator module, LA Metro may procure the step treads from the original equipment maker without violating FTA's Buy America requirements – see http://edocket.access.gpo.gov/2007/pdf/E7-18355.pdf, specifically, the non-shift explanation.  (Posted: November, 2010)



Q. 
I have a $350,000 FTA construction project requiring the installation of upgraded security equipment into an existing system. The bidder has signed their Buy America form as non-compliant with 49 U.S.C. - specified security equipment is not American-made.  Because the cost of the security equipment is a small portion of the labor cost for final installation and restoration of the lot, did they complete this form correctly?  Or is the security equipment considered a subcomponent (with over 60% of the final installation and restoration being completed in the United States)?

 A. Because the subject of the procurement is security equipment, a capital expense, the item would be considered a manufactured end product and section 66.15 of the Buy America regulation applies.  And because the contract exceeds $100,000, the purchase would not qualify for the small purchase waiver.

If the source of the funds is 49 USC Chapter 53, the grantee may seek a non-availability waiver from FTA's regional office if no suitable US-made product was identified.  If, however, the source of the funding is ARRA money, the traditional FTA waiver policy would not apply and the grantee should be advised to procure a product manufactured in the United States, even if it means transferring the funds to another capital expense. (Posted: November, 2010)



Q. 
The pump that we intend to specify in our bid is 85 % made in USA; however, the nuts, bolts, and gaskets may not be made in USA.  What would be the tipping point percentage to assign a “made in USA” claim?  Is a small assembly designated as “Made in USA” if the parts are imported and assembled in USA?  For example a different pump manufacture buys the pump case, impeller, and bolts and then assembles and tests the pump in USA shops.

A. For manufactured products, FTA requires that 100% of the components are produced in the United States, and that all manufacturing processes take place in the U.S.  85% U.S. content is insufficient.  Similarly, assembly does not satisfy the requirement that all manufacturing processes take place in the U.S.  Final assembly is not the same as manufacturing.  (Posted: February 18, 2011)



Q. 
In order to comply with both the rules and the intent of Buy America, ZTR Control Systems would like to have a batch (i.e. 100 systems) of our locomotive Automatic
Engine Shutdown and Start systems assembled and tested in Michigan.  We would then like to have these systems inventoried in our facility in London, Ontario for distribution to a transit organization that is required to comply with Buy America provisions.  Is this possible under Buy America rules?  We would have traceable documentation in place to prove that any system sold has been manufactured under Buy America rules.

A. If a product is manufactured in the United States and then exported outside of the United States, it retains its domestic identity only if it receives tariff exemptions as provided in Customs Service regulations set forth in 19 C.F.R. § 10.11-10.24.
See FTA regulations at 49 C.F.R. 661.11(i) for more information.  Also, I note that in your question you use the term "assembled" to describe the activities taking place in the United States.  For manufactured products, the Buy America requirement is that manufacturing processes take place in the United States.  Mere assembly is not the same as manufacturing. (Posted: February 18, 2011)

 

Q. In addition to the service mentioned below, my company, ZTR Control Systems has a product that automatically shuts down and restarts diesel electric locomotives when not in use.  The primary objective is to reduce emissions and fuel consumption.  It does not control the propulsion system of a locomotive but does interface with contactors and relays and other locomotive equipment to perform its task.  The entity this product is sold to can either be direct to the transit authority or to a rebuilder that would install on behalf of the transit authority. My primary question is:  Would our device be classified as a rolling stock component or sub-component?

A. If the product does not function as the subset or a subsystem of a higher-level component, then the product itself is likely to be considered a component.
(Posted: February 18, 2011)




Q. 
We wish to provide a service where a transit company's overhead line and rail are measured and analyzed.  The equipment that does this is manufactured in Germany.  The equipment will be installed on the customer's existing rolling stock and measurements will be taken during normal revenue service.  The equipment is then removed leaving no traces behind.  The deliverable to the customer is the raw data taken from the measurements, software to analyze the data and a report with our own findings and recommendations.  In some cases, the service will be greater than $100,000.  How does Buy America apply to this scenario?

A. If the customer is contracting for service/data, and not for a manufactured product, the Buy America regulations at 49 CFR Part 661 would not apply, particularly where the transit agency will not be taking delivery of or coming into possession of any hardware or equipment.  We should also note that Appendix A to section 661.7 allows for the procurement of foreign software under a standing Buy America waiver. (Posted: February 18, 2011)


Q. Are hydraulic and traction elevators subject to Buy America Act if they are to be part of transit system (MTA - NYC)?

A. Yes, all steel, iron and manufactured products, including elevators, are subject to Buy America.  (Posted: February 18, 2011)


Q. 
Recently, the designs of many transit train-sets have evolved and not all vehicles in a specific purchase contract have the same equipment.  Because some vehicles have minimal equipment (no propulsion equipment, etc.), it might be very difficult for those specific cars in the procurement to individually meet the 60% domestic content requirement.  However, the total project domestic content (total domestic content amount/total number of cars) would exceed the 60% requirement.  Is it acceptable to calculate domestic content in this manner based on total material value, total domestic content value, and total number of cars in the order?

A. The process you propose would not meet FTA's Buy America requirements. For rolling stock procurements, each vehicle must contain at least 60% U.S. content, and final assembly must take place in the U.S. (Posted: June, 2011)


Q. We are purchasing two Gillig buses made in California. We are putting out an RFP to hire a Bus Inspector to monitor the assembly of the buses. Would the Bus Testing and Pre-Award & Post Audit clauses apply to this RFP since it has to do with buses? My guess is no but would appreciate your input.

A. The pre-award and post-delivery Buy America audits pertain to the bus contract only, and FTA requires that your agency conduct these audits. The audits do not pertain to the inspection services you refer to.  (Posted: January, 2012)


Q.
Does Buy America apply to surveillance cameras and DVRs? If
yes, what is the procedure if any or all bidders sign they will not
comply with BA?

We have a RFP, "Surveillance System Upgrade for Transit
Buses", on the street. This is to upgrade cameras and DVRs on existing
buses and add same on existing buses that do not have any equipment.
The Buy America form is included in the bid package but it is marked
"THIS FORM MUST BE COMPLETED, SIGNED AND RETURNED WITH YOUR BID RESPONSE, IF APPLICABLE,” because it is not clear if this purchase
falls under Buy America. We want to ensure a clean solicitation so I
can issue an addendum to delete the "...if applicable" language if this
is covered under Buy America, but I need a response immediately to do
so.

A. If the project uses FTA funds, then Buy America is required. (Posted: January, 2012)


Q. Is there a Buy America Waiver for diesel fuel? I searched the website and was not able to find anything for fuel.

A. No. There is not a waiver for fuel. Fuel is not subject to Buy America. (Posted: June, 2012)


Q. The City of Tucson has an RFP that is a FHWA-funded (not FTA-funded) non-construction project for our Transportation Department. This is a procurement for communication equipment for our Streetcar project. The vendors have returned their proposals and we have opened them. The price of the equipment has been confidential. Our primary concerns are the FTA compliance and audit if in fact we should use this contract in the future to procure FTA funded equipment. If we go back to our top ranked vendors and ask for the Buy America Certificate, is that allowable? We would also note that the proposals we now have are in fact Buy America compliant and the obtaining of the BA certifications would be a formality in the sense that the vendors are already in compliance with BA.

A. As a general rule FTA will not allow grantees to obtain BA certifications after bids are opened. This is so a low price bidder cannot be given the opportunity to walk away from its bid by not submitting the BA certification. In this case there are several circumstances that would allow you to obtain the certifications now (after receipt of proposals). First, the proposals and their prices are not public. Thus there is no incentive or opportunity for any of the vendors to walk away from their proposals because of your BA compliance certification. Second, the equipment already complies with BA and thus no “new” requirement is being imposed on the vendors at this time. In this regard we would say that if a vendor does protest the requirement of BA compliance, that you would have to cancel the procurement and re-solicit proposals with BA certifications in the RFP. (Posted: February, 2013)


Q.
Would bicycle frames be considered subcomponents of a bike share system for purposes of Buy America?

A. An entire bike share system could not be an end product, and FTA would apply the end product requirement to its separable elements, with the bicycles treated as a manufactured end product. As such, the frames would likely be considered a component of the bicycle. (Posted: August, 2013)


Q.
Must a Buy America clause be included in a services contract if the contractor is expected to purchase equipment for use on the contract?

A. The Buy America clause must be included in a “services” contract if the contractor is expected to purchase equipment under the contract. (Posted: August, 2013)


Q.
O'Reilly Auto Parts provides replacement parts for vehicles of all types and we are currently working with the Central Oklahoma Transportation & Parking Authority to provide these products. The "Buy America" requirements are creating some concerns since we are not supplying a single part for a government project but commodities. Do Buy America requirements apply to all products we sell to a federally funded agency (brake pads, shocks, batteries)?

A. FTA’s Buy America regulation (49 CFR Part 661) requires that rolling stock (vehicles) undergo final assembly in the United States, and that 60% of the vehicle’s components be manufactured in the United States, and a 60% domestic subcomponent requirement applies to those America-made components. When replacement part are acquired, however, components must be manufactured in the United States, but replacement sub-components may come from any source, foreign or domestic. For a list of representative components, see Appendix B of section 661.11 of the regulation: http://www.gpo.gov/fdsys/pkg/CFR-2011-title49-vol7/pdf/CFR-2011-title49-vol7-sec661-11.pdf. (Posted: August, 2013)

 

Q. Is there an existing public interest waiver to purchase nuts, bolts, and/or screws?

A. Only the Federal Highway Administration has an existing nuts-and-bolts waiver (see the "Costs of Foreign Steel" provision here: http://www.fhwa.dot.gov/programadmin/contracts/070689.cfm. FTA, however, has no similar provision. If, however, nuts, bolts, and screws are only items the grantee is directly procuring, the contract is not likely to exceed $100,000, and therefore would be covered under the small purchase waiver at 49 CFR 661.7, Appendix A, paragraph (c): see, http://www.gpo.gov/fdsys/pkg/CFR-2010-title49-vol7/pdf/CFR-2010-title49-vol7-sec661-7.pdf. If, on the other hand, the nuts, bolts, and screws have been incorporated into the manufacturing of component, it is the manufactured component that would have to be manufactured in the United States and the nuts, bolts, or screws could come from any source, foreign or domestic.

But if the nuts, bolts, or screws comprise the structural elements of a building or facility (e.g., anchor bolts), they could be categorized as structural steel or iron (see FHWA's guidance memo at: http://www.fhwa.dot.gov/construction/contracts/121221.cfm) and therefore subject to FTA's Buy America requirements for steel and iron products in 49 CFR 661.5(b) and (c): http://www.gpo.gov/fdsys/pkg/CFR-2010-title49-vol7/pdf/CFR-2010-title49-vol7-sec661-5.pdf (Posted: October, 2013)