Blue Bird Corporation

Mr. Jeffry D. Bust
President and CEO
Blue Bird Corporation
315 North Camellia Blvd.
Fort Valley, Georgia 31030

Dear Mr. Bust:

This responds to your letter dated September 12, 2003, requesting a waiver of the Buy America requirements for 40 "pilot" Blue Bird Ultra Low Mass Buses (Ultra LMB) that have already been manufactured at Blue Bird's plant in the United Kingdom.

Applicable Law

FTA's requirements concerning domestic preference for federally funded transit projects are set forth in 49 U.S.C. §5323(j). Section 5323(j)(2)(C) addresses the general requirements for the procurement of rolling stock. This section provides that all rolling stock procured with FTA funds must have a domestic content of at least 60 percent and must undergo final assembly in the United States.

These requirements may be waived under 49 U.S.C. 5323(j)(2), which allows waiver for non-availability and public interest. The non-availability waiver provides that the Buy America requirements shall not apply if the item or items being procured are not produced in the United States in sufficient and reasonably available quantities or are not of a satisfactory quality. 49 U.S.C. 5323(j)(2)(B) and 49 C.F.R. 661.7(c). A public interest waiver may be granted if FTA finds that it would be inconsistent with the public interest to apply the Buy America requirements. 49 U.S.C. 5323(j)(2)(A) and 49 C.F.R. 661.7(b). The regulation also notes that "[i]n determining whether the conditions exist to grant this public interest waiver, [FTA] will consider all appropriate factors on a case-by-case basis . . . ." Id.

Arguments Made in Support of a Waiver

Blue Bird states that the vehicle is lightweight and low mass, produces lower emissions, has reduced maintenance costs, and is resistant to corrosion and that there are no other vehicles with these features of comparable quality available from a U.S. source. You also explain that it is in the public interest to grant a waiver for these vehicles because of their unique features -- low floor, rear engine, twenty-eight foot length, and quiet operation -- make them ideal for neighborhood circulators or downtown areas. You also note that Blue Bird intends to transfer manufacturing to the United States next year. You request a waiver for these vehicles so that transit agencies can purchase these 40 vehicles and provide real world data to Blue Bird, which, you submit, would ultimately benefit FTA grantees as future purchasers.

Summary of Comments

FTA posted a request for comments on this matter on our website and received 45 comments, 15 in support of the waiver, 23 against it, and seven conditional comments in support of the waiver if the features discussed are truly not available from a United States source.

Those that argued in support of the waiver were transit industry consultants, manufacturers of transit-related products, and transit authorities. Delta Services Group pointed out that the industry is having financial difficulties and could benefit from the new product. Others said it is in the public interest or argued the merits of free trade generally. [1] Manchester Transit Authority argued that real-world testing is reasonable and Manchester would prefer a lightweight heavy-duty bus in the 30-foot range. Milwaukee County Transit System said that we should grant it for a short time to allow Blue Bird to shift production to the U.S. and a waiver would be helpful to see if this bus would be a good product, and to allow the competition to improve their product line. The County of Lebanon Transit Authority noted that earlier exposure to the United States market would give users more information and benefit everyone. Maricopa County Human Services argued that citizens should be able to take advantage of this technology and that Blue Bird will be moving production to the United States, which will benefit United States workers.

Most of those arguing against the waiver asserted that it was unnecessary because similar vehicles are already made in the United States. [2] Some argued that the domestic bus industry is suffering from downsizing and now is not the time to ship more business overseas. [3] Many commenters argued that despite the Buy America requirements, Blue Bird elected to manufacture these vehicles in England for purchase outside England and they should not be rewarded for ignoring the law. [4] Some noted that the notion that a manufacturer should get a waiver of a domestic preference statute to collect data for its own use does not advance the public interest. Newflyer of America argued that Blue Bird could get this information by providing the vehicles, at no charge, as demonstration vehicles; Surtrak Corporation said that it manufactures HVAC products that could be used in this vehicle; and Allison Transmission noted that any relatively small advantage that may exist with this bus would not outweigh the principles of Buy America.

Decision

As noted in Administrator Dornís letter issued June 10, 2002, FTA vigorously enforces Buy America. After a review of this record, I find that comparable vehicles are available from domestic sources and that it would not be in the public interest to grant this waiver.

I do not find that the grounds for a non-availability waiver have been satisfied. Comparable vehicles offer similar accessibility features, such as ramps, wheelchair tie-down positions, kneeling and low floors, and flexibility in seating and mobility aid arrangements. [5] For the purposes of this determination, the small engine size and the vehicleís light weight are the only features in Blue Birdís claim that are unique. Our review found, however, that the difference is approximately ten percent between this vehicle and others, well within the range of normal variation in the manufactured products grantees procure. Moreover I note that no FTA grantees articulated a need for these 40 vehicles.

I do not find that the grounds for a public interest waiver have been satisfied either. As discussed above, a waiver is unnecessary because comparable vehicles are available from domestic sources. These vehicles were built for a left-hand driver, indicating Blue Birdís intention that they be sold outside of the U.K. At the time they were manufactured, Blue Bird was aware of the Buy America restrictions and yet failed to come to FTA to seek any type of waiver until after the buses were built. It would be contrary to public policy to grant a waiver, after the fact, to reward this type of sales strategy or product development. Finally, Blue Bird does not need a public interest waiver to gather testing data. As part of normal product development, Blue Bird could arrange for these vehicles to be used by grantees to gather data.

Accordingly, this waiver request is denied. If you have any questions, please contact Meghan G. Ludtke at 202-366-1936.

Very truly yours,


Gregory B. McBride
Deputy Chief Counsel


[1] Bell South, J.A. Parker, Trillium USA, Transmetrics, Software Solutions Unlimited, Tompkins Consolidated Area Transit, Central Arkansas Transit Authority.

[2] This argument was advanced by General Coach America, Inc., Thor Industries, Inc., El Dorado, DiamlerChrysler Commerical Buses, Workhorse Custom Chassis, Overland Custom Coach, Inc., Orion Bus Industries, Gillig, North American Bus Industries, and the TTA Group.

[3] This argument was made by General Coach America, Inc., Thor Industries, Inc., Champion Bus, Wilbur Smith Associates, Capital Metropolitan Transportation Authority, and the City of Culver City.

[4] Overland Custom Coach, Inc., Gillig, and URS Corporation.

[5] These other buses include the Daimler/Chrysler SLF 230 or Orion SLF, the Opus low Floor by Optima/Chance Coach, the Gillig Low Floor, and the NABI 30 LFN.

Denial of a public interest and non-availability waiver request for 40 "pilot" Ultra Low Mass Buses. The request was based on the argument that the vehicles are unique and unavailable from a U.S. source and it is in the public interest to make these innovative features available to FTA grantees. December 2, 2003