Allison Transmission, Inc.

Edward J. Gill, Jr., Esq.

Thompson Coburn

1909 K Street, N.W. Suite 600

Washington, D.C.  20006-1167

 

April 3, 2009

Re:  Request for Buy America Waiver – Allison Transmission, Inc.

Dear Mr. Gill:

I write in response to your letters dated November 14, 2008, and March 12, 2009, in which you ask the Federal Transit Administration (FTA) to waive its Buy America requirements for an Energy Storage Unit (ESU) that is one of five subsystems of a hybrid-electric propulsion system manufactured by your client, Allison Transmission, Inc. (Allison).  The basis for your request is that the Energy Storage Unit is not available from a domestic source.  After careful consideration of the facts outlined in your letters, I have decided to waive FTA’s Buy America requirements for the Energy Storage Unit.  This waiver will remain in effect for two years or until such time as a domestic supplier becomes available, whichever occurs first.

Allison has asked FTA to waive its Buy America requirements of 49 U.S.C. 5323 (j), as implemented at 49 CFR part 661, for a minimum of two years.  A waiver would allow Allison to count as domestic an ESU that, according to Allison, is not available from a domestic source. 

The ESU is one of five subsystems of Allison’s hybrid electric propulsion system (Ep System).  The ESU stores and supplies electrical energy for the Ep System during normal motor-generator operation and during regenerative breaking. 

Allison purchases the assembled ESU subsystem from a third-party supplier.  According to Allison, there are no counterparts to Allison’s current ESU offshore supplier who are qualified or ready to produce in the United States a product that meets the design requirements of Allison’s current ESU.  To verify this fact, Allison sent a Request for Qualifications (RFQ) to sixteen potential suppliers, nine of which have facilities in the United States or have indicated the possibility of opening a facility in the United States.  Responses to Allison’s RFQ indicate that there will be no domestic supplier of ESUs within the next four to six years.

With limited exceptions, FTA may not obligate funds for a project unless all iron, steel, and manufactured products used in the project are produced in the United States.[1]  However, pursuant to 49 U.S.C. 5323(j)(2)(B), FTA may waive its Buy America requirements if the goods for which a waiver is requested are not produced in the United States in sufficient and reasonably available amount or are not of a satisfactory quality.

Based on the information above, I have found that ESUs are not available from a domestic source in sufficient and reasonably available quantity or of a satisfactory quality.  Therefore, pursuant to the provisions of 49 CFR 661.7(c), I hereby grant Allison a non-availability waiver for assembled ESU subsystems.  Consistent with FTA practice, this waiver is valid for a period of two years, or until such time as a domestic source for this type of manufactured product becomes available.

According to your letters, Allison has started the process of identifying a domestic producer of ESUs.  It is FTA’s expectation that Allison will continue this process with the goal of having a domestic manufacturer on line in two years.

Feel free to contact Jayme L. Blakesley at (202) 366-0304 or jayme.blakesley@dot.gov with any questions.

Sincerely,

Scott A. Biehl

Acting Chief Counsel


[1] 49 CFR 661.5(a).

FTA waived its Buy America requirements for an Energy Storage Unit that is one of five subsystems of a hybrid-electric propulsion system manufactured by Allison Transmission, Inc.  The Energy Storage Unit is not available from a domestic source.  This waiver will remain in effect for two years or until such time as a domestic supplier becomes available, whichever occurs first.

April 3, 2009