Mr. Patrick Lock
Transit OEM Account Manager
Webasto Theromsystems Inc.
3333 John Conley Dr.
Lapeer, Michigan 48446
Mr. Scott Winton
Sales & Marketing Manager
Teleflex Thermal Technology
3831 No. 6 Road
Canada V6V 1P6
Mr. John Dennehy
Vice President of Marketing and Communications
Espar Products, Inc.
6435 Kestrel Road
Dear Messrs. Lock, Winton, and Dennehy:
This is in response to Mr. Lock’s letters of March 5, 2002, and April 1, 2002, in which he requested a Buy America component waiver. The request is based on the domestic non-availability of auxiliary heaters used in bus heating systems. For the reasons below, I have determined that a waiver is appropriate here.
We received a similar request from Teleflex on July 28, 2001, which was ultimately denied. The reason for that denial was discussed in our September 28, 2001, letter. We considered the fact that the auxiliary heaters comprised a small percentage of the overall material content of the vehicle and FTA’s unwillingness to create a competitive advantage where there might be more then one foreign manufacturer. In that case, no further information was provided concerning the market or other manufacturers, and therefore, we were not presented with enough information on which to base a waiver.
However, the request by Webasto contained the information needed to grant this waiver; specifically, we were given information about all known auxiliary heater manufacturers. We then verified this information with many vehicle manufacturers and were told that the three companies listed here were, in fact, the only known manufacturers of such auxiliary heaters and that all three companies supply foreign products. We are now confident that that no domestic manufacturer of this product currently exists.
The Federal Transit Administration’s (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) contains the general requirements for the procurement of rolling stock. This section provides that when rolling stock is procured with FTA funds, the cost of the components and subcomponents produced in the United States must be at least 60 percent of the cost of the components of the rolling stock, and the vehicle must undergo final assembly in the U.S. See also, 49 C.F.R. 661.11. Section 5323(j)(2)(B) states that those requirements shall not apply if the item is not produced in sufficient and reasonably available amounts in the U.S. See also, 49 C.F.R. 661.7(c). The implementing regulation allows a bidder or supplier to request a non-availability waiver for a component or subcomponent of rolling stock. 49 C.F.R. 661.7(f) and 661.9(d).
Based on the above-referenced information, I have determined that the grounds for a "non-availability" waiver do exist for Webasto, Teleflex, and Espar. Therefore, pursuant to the provisions of 49 U.S.C. §5323(j)(2)(B), the waiver is hereby granted for all contracts for auxiliary heaters entered into within two years of the date of this letter, or until such time as a domestic source for this type of product becomes available, whichever occurs first. In order to ensure that the public is aware of this waiver, particularly potential manufacturers, it 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
Non-availability component waiver granted to Webasto Thermosystems, Inc., Teleflex Thermal Technology, and Espar Products for the manufacture of auxiliary heater to be used in bus heating systems and will allow vehicle manufacturers to count the auxiliary heater as domestic when calculating domestic content.
May 15, 2002