Re: Fast Vessel Ferry Buy America Waiver
Dear Mr. Doll:
This is in response to your June 28, 2001, letter requesting a waiver of the Buy America provision as it applies to the anticipated procurement by the Alaska Marine Highway System of certain components, which would likely exceed the allowable 40 percent foreign component content, in the Fast Vessel Ferry (FVF) Vessel No. 2 procurement using Federal Transit Administration (FTA) funds. Specifically, this waiver request applies to the following: marine diesel engines; waterjets; and reduction gears. For reasons detailed below, FTA hereby grants this waiver.
Section 5323(j)(2)(C) of the Federal transit laws (49 U.S.C. 5301, et seq.) sets forth 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 must undergo final assembly in the U.S. Under 49 U.S.C. 5323(j)(2)(A) and the implementing regulations, these requirements may be waived if their application "would be inconsistent with the public interest." 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, the [FTA] will consider all appropriate factors on a case-by-case basis . . . ." Id.
According to the information in your letter, Vessel No. 2 is part of a single-contract, multi-vessel procurement jointly funded by the Federal Highway Administration (FHWA) and FTA. FHWA has its own Buy America regulations, found at 23 CFR 635.410. Those regulations differ from FTA’s in many ways, but are also applicable here. As noted in correspondence provided to FTA, FHWA granted Buy America waivers for the three subject components. The marine diesel engines are subject to an FHWA nationwide non-availability waiver. 59 Fed. Reg. 6080 (1994). Alaska DOT received a non-availability waiver from FHWA for the waterjets, as there is no domestic manufacturer of this component. And finally, Alaska DOT requested and received a public interest waiver for the reduction gears from FHWA.
FTA has determined that it is in the public interest to concur with FHWA on the waivers previously granted. Therefore, pursuant to the provisions of 49 U.S.C. 4323(j)(2)(A) and (B), waivers are hereby granted for the procurement of the above-referenced components. These waivers shall apply solely to the procurement of Vessel No. 2 and do not vitiate the requirement that final assembly of the vessel take place in the United States.
If you have any questions, please contact Ted Uyeno at (206) 220-7958 or Meghan Ludtke at (202) 366-0957.
Very truly yours,
Gregory B. McBride
Deputy Chief Counsel
cc: Helen M. Knoll, Regional Administrator