Dear Mr. Coryell:
This letter responds to your correspondence of April 22, 2003, in which North American Bus Industries, Inc. (NABI) requests a non-availability waiver of the Buy America requirements for the procurement of the Hubner Manufacturing Corporation (Hubner) articulated joint system for use in NABIís low floor and standard floor articulated buses. The system is comprised of a mechanical articulating joint incorporating an electronically controlled, hydraulic damping subsystem.
The Federal Transit Administrationís (FTA) 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 U.S. You request a waiver under 49 U.S.C. 5323(j)(2)(B), which states the Buy America requirements shall not apply if the item or items are not produced in the U.S. in sufficient and reasonably available quantities or are not of a satisfactory quality. The implementing regulation provides that non-availability waivers may be granted for a component of rolling stock. 49 C.F.R. 661.7(f).
FTA posted a request for comments and received one comment against the waiver. Gillig Corporation argues that the Buy America rules for rolling stock already allow a waiver of up to forty percent foreign content, and when a component is unavailable from a domestic source, the vehicle maker should use part of its allotted foreign content. However, as noted above, the regulation currently allows component waivers for rolling stock when the product is not available from a domestic source. FTA received no comments indicating that these articulating joint systems are available from a U.S. source. We received two comments in favor of the waiver, one from Hubner, the subject joint manufacturer, and the other from CAPtech, Inc., which argues that allowing foreign manufacturers into the market place will result in better U.S. products.
FTA issued a similar waiver to New Flyer of America on April 24, 2001, which was valid until April 24, 2003. Based in part on the waiver issued to New Flyer in 2001, NABI requested a similar waiver on August 9, 2002. In granting NABIís waiver, we wrote "we will grant this waiver to NABI for all solicitations responded to until April 24, 2003, which is when New Flyerís waiver expires. We will then evaluate the situation with respect to all vehicle and articulating joint manufacturers." New Flyer and NABI have both requested a renewal of this waiver and on April 24, 2003, FTA issued another waiver to New Flyer.
You state that the circumstances necessitating the current waiver remain unchanged and in the near term, NABI must still use the Hubner joint, which is still not available from a domestic source. FTA has been advised by Hubner Manufacturing that it plans to relocate the entire articulation systems manufacturing process from Germany to South Carolina by the end of 2003. Based on a review of the industry and the information provided by New Flyer, NABI, and Hubner, I have determined that the grounds for a non-availability waiver still exist. Therefore, pursuant to the provisions of
49 U.S.C. §5323(j)(2)(B), and consistent with the waiver issued to New Flyer on April 24, 2003, a waiver is granted for the procurement of Hubnerís articulated joint system for NABIís low floor and standard buses until June 30, 2004. This waiver will allow time for Hubnerís relocation to the U.S. In order to insure that the public is aware of this waiver, particularly potential manufacturers, this waiver will be published in the Federal Register.
If you have any questions, please contact Meghan G. Ludtke at (202) 366-1936.
Very truly yours,
Gregory B. McBride
Deputy Chief Counsel