Dear Mr. Lynch:
This letter is in response to your October 18, 1999, request for waiver of the "Buy America" provision as it applies to procurement by the Southeastern Pennsylvania Transportation Authority (SEPTA) of bearings for the N5 Drive Unit SKF No. NJ214ECML/C4 and N5 Drive Unit SKF No. NJ1036ML/C4, for use on SEPTA’s high speed line cars.
The Federal Transit Administration’s (FTA) general requirements concerning domestic preference for the procurement of manufactured products are set forth in 49 U.S.C. §5323(j). Under 49 U.S.C. §5323(j)(2)(B), those requirements shall not apply if the item or items being procured are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality. The implementing regulation provides that, "[i]t will be presumed that the conditions exist to grant this non-availability waiver if no responsive and responsible bid is received offering an item produced in the United States." 49 C.F.R. §661.7(c)(1).
SEPTA engaged in a public solicitation for these bearings. As part of the SKF drive unit assembly for SEPTA’s high speed line fleet, these bearings are considered subassemblies. Notice was given in accordance with FTA requirements and invitations to bid were extended to 28 prospective bidders and six bids were submitted. Three of those bids were rejected as non-responsive, and the three remaining bids certified non-compliance with Buy America.
The failure of the bearings in the N5 drive unit was premature and therefore, unexpected. Due to the internal precision required in these bearings and the fact that they are in a safety critical area, all new sources require testing. These bearings are currently the only type pre-approved by your engineering department for use in this vehicle because, due to the immediate nature of this problem, the engineering department has not had time to conduct alternative testing. At this time there is no approved "equal" to SKF, the original equipment manufacturer for these bearings.
You have provided documentation illustrating that the bid solicitation specified that the bearings required were for use in an SKF drive unit, consequently, all bids received were from distributors of this product. You note that while there were no bids quoting an equal, SEPTA’s policy in such cases is to consider such offers formal requests for "approved source" status and put them through the prequalification testing process.
Based on the information you have provided, it appears that appropriate competitive principles have been complied with in this case. I have determined that the grounds for a "non-availability" waiver do exist. Therefore, pursuant to the provisions of 49 U.S.C. §5323(j)(2)(B), a waiver is hereby granted for the above-referenced procurement.
If you have any questions, please do not hesitate to contact Meghan G. Ludtke at (202) 366-4011.
Very truly yours,
Patrick W. Reilly
cc: Nancy Greene