Dear Mr. Winton:
This is in response to your letter of July 28, 2001, in which you request a Buy America component waiver. You base this request on the domestic non-availability of the auxiliary diesel-fired heater used in bus heating systems. For the reasons below, I have determined that a waiver would not be appropriate in these circumstances.
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) 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).
The rolling stock requirements allow vehicle manufacturers to use up to 40 percent foreign component content. Where FTA has granted waivers to foreign manufacturers based on non-availability for a component of rolling stock, FTA has determined that there were no domestic sources for the item, that the component represented a significant cost, and that only one foreign source was available. It is also important to note that these waivers were granted to the vehicle manufacturer, not the manufacturer of the component.
In this case, there is no showing that the cost of this component would comprise a significant portion of the allowed 40 percent foreign component content. The regulations do not prohibit Teleflex, or the two other foreign manufacturers of this product you mention, from entering the U.S. market. Accordingly, I have determined that the grounds for a non-availability waiver do not exist.
If you have any questions, please contact Meghan G. Ludtke at (202) 366-1936.
Very truly yours,
Gregory B. McBride
Deputy Chief Counsel