Ms.Nancy E. Whelan
Deputy General Manager
Department of Public Transportation
401 Van Ness Avenue, Suite 334
San Francisco, California 94102
Dear Ms. Whelan:
This letter is in response to your recent correspondence, including the letters of March 10, 1999, September 13, 1999, and October 26, 1999, requesting waiver of the final assembly requirements of 49 C.F.R. 661.11(a) as they apply to the installation of axles by Electric Transit, Inc. (ETI) into three prototype electric trolley coaches.
Specifically, you request a waiver for one prototype articulated trolley coach and two prototype standard trolley coaches. 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 all rolling stock procured with Federal Transit Administration (FTA) funds must have a domestic content of at least 60 percent and must undergo final assembly in the United States. You request a waiver under 49 U.S.C. 5323(j)(2)(A). This section provides that the general Buy America requirements may be waived if "their application would be inconsistent with the public interest." The regulations implementing this section provide 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 . . . ." 49 C.F.R. 661.7(b).
FTA implements the Buy America requirements in a manner that takes into account the realities of the industry and the practical necessities of foreign assembly of one prototype vehicle under appropriate circumstances. The reasons listed in your request supplied sufficient justification for such a waiver for one of the prototypes of each vehicle type. However, you have not provided sufficient justification that would necessitate granting a waiver for the second standard trolley coach. Specifically, you have failed to articulate the publicís interest in this matter as is required by the governing statute. You also fail to discuss how the technical issues will affect the delivery schedule.
Pursuant to the provisions of 49 U.S.C. 5323(j)(2)(A), a waiver is hereby granted for one prototype standard trolley coach and one prototype articulated trolley coach and denied for a second prototype standard trolley coach. FTA funds should not be used in the purchase of that vehicle.
If you have any questions, please feel free to contact Meghan G. Ludtke, at (202) 366-4011.
Very truly yours,
Gregory B. McBride
Deputy Chief Counsel
cc: Renee M. Marler