Dear Mr. Richeson:
This letter responds to your request for a public interest waiver of the final assembly requirements of 49 CFR 661.11(a) as they apply to the purchase of 59 Dodge Caravans by the Missouri Department of Transportation (MoDOT). By reference, this letter incorporates all correspondence and discussion in this matter, including but not limited to your letters of August 6, 1999, September 30, 1999, and October 22, 1999, as well as our letter dated September 20, 1999.
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 sixty-percent and must undergo final assembly in the United States. You request a waiver under 49 CFR 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 section 5323(j)(2)(A) 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).
As is more fully discussed in prior correspondence, MoDOT purchased these vehicles as part of a blanket state contract and the dealer certified compliance with Buy America. You further note that the non-compliance was not discovered until after the vehicles were placed in revenue service. Your letter also indicates that you have pursued and exhausted all possible avenues to correct these deficiencies. Your letter states that MoDOT has attempted to give the vehicles to another agency, with the intent of ordering compliant minivans in their place. However, the presence of certain previously installed ancillary equipment has apparently diminished the possibility of either returning the vehicles to the dealer or exchanging them with another agency. You further indicate that this equipment can not be removed and reinstalled on other vehicles without body damage to the first vehicle and additional labor costs on the second. In addition, the vehicles in question were purchased to replace equipment that had reached its maximum useful life, and the old equipment is no longer available.
Should the vehicles be returned to the dealer, the recipient organizations will be left with no vehicles until the spring of 2000. Finally, you state that the affected sub-recipients consist of organizations transporting employees to sheltered workshops, and senior citizens to senior citizen centers and medical facilities who have very few transportation options. Should this waiver be denied and the Federal money be withheld, you state that the active public transportation fleet as well as the riding public in rural Missouri will be severely affected.
It appears that despite FTA's concerns regarding MoDOT's actions herein, unless you are granted a waiver, the resulting burden would rest upon the public's shoulders. FTA does not intend for its policies to negatively affect the riding public; therefore, pursuant to the provisions of 49 U.S.C. 5323(j)(2)(A), a public interest waiver is hereby granted for these 59 Dodge Caravans.
In order to prevent any future occurrence of this type, FTA expects MoDOT to comply with our procurement and Buy America regulations. I have highlighted five core issues MoDOT must address to ensure compliance.
Finally, in order to ensure and monitor your Buy America compliance, please send us the following information prior to vehicle solicitations for the next two years. Please copy the regional office on all such submissions.
If you have any questions, please feel free to contact Meghan G. Ludtke, (202) 366-4011, or Cindy Terwilliger (816) 523-0204, in the regional office.
Very truly yours,
Patrick W. Reilly
cc: Mokhtee Ahmad