Mr. John C. Segerdell
Director of Engineering Services
Sacramento Regional Transit District
P.O. Box 2110
Sacramento, California 95812-2110
Dear Mr. Segerdell:
This letter is in response to your request for waiver of the final assembly requirements of 49 C.F.R. 661.11(a) as they apply to the procurement by Sacramento Regional Transit District ("RT") of one prototype Light Rail Vehicle ("LRV") to be assembled by CAF of Spain. You explain that the remaining LRVs and option LRVs, if exercised, will be assembled in the United States.
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).
According to the information in your letter, RT requests that final assembly requirements be waived for a prototype LRV because assembly in the same location as the design and manufacturing engineering will insure quality and reliability. Further, skilled personnel familiar with the product will be utilized, therefore allowing a systematic and expeditious transition of this LRV technology to the United States. Changes that are determined necessary at this early stage will then be incorporated into the remaining LRVs during final assembly in the United States.
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 a prototype vehicle in appropriate circumstances. First article testing and inspection before full domestic manufacture and delivery of an order justifies conditions necessary for a "public interest" waiver. Pursuant to the provisions of 49 U.S.C. 5323(j)(2)(A), a waiver is hereby granted for one prototype LRV.
If you have any questions, please feel free to contact Meghan G. Ludtke, at (202) 366-4011.
Very truly yours,
Patrick W. Reilly
cc: Renee M. Marler
Public interest waiver of the final assembly requirements for one CAF prototype vehicle. See above.
August 12, 1999