[Federal Register Volume 76, Number 224 (Monday, November 21, 2011)]
[Notices]
[Pages 72028-72029]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-29968]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration


Buy America Waiver Notification

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice.

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SUMMARY: This notice provides information regarding the FHWA's finding 
that a partial Buy America waiver is appropriate for the purchase of 12 
all-battery electric vehicles, 12 plug-in hybrid vehicles, and 5 
neighborhood electric vehicles in San Francisco County, California. The 
partial waiver will permit the purchase of these vehicles so long as 
the final assembly occurs in the United States.

DATES: The effective date of the waiver is November 22, 2011.

FOR FURTHER INFORMATION CONTACT: For questions about this notice, 
please contact Mr. Gerald Yakowenko, FHWA Office of Program 
Administration, (202) 366-1562, or via email at 
[email protected]. For legal questions, please contact Mr. 
Michael Harkins, FHWA Office of the Chief Counsel, (202) 366-4928, or 
via email at [email protected]. Office hours for the FHWA are 
from 8 a.m. to 4:30 p.m., e.t., Monday through Friday, except Federal 
holidays.

SUPPLEMENTARY INFORMATION: 

Electronic Access

    An electronic copy of this document may be downloaded from the 
Federal Register's home page at: http://www.archives.gov and the 
Government Printing Office's database at: http://www.access.gpo.gov/nara.

Background

    The FHWA's Buy America policy in 23 CFR 635.410 requires a domestic 
manufacturing process for any steel or iron products (including 
protective coatings) that are permanently incorporated into a Federal-
aid highway construction project. The regulation also provides for a 
waiver of the Buy America requirements when the application would be 
inconsistent with the public interest or when the relevant domestic 
steel and iron products are not produced in the United States in 
sufficient and reasonable available quantities and of a satisfactory 
quality. This notice provides information regarding the FHWA's finding 
that a partial Buy America waiver is appropriate for the purchase of 12 
all-battery electric vehicles, 12 plug-in hybrid vehicles, and 5 
neighborhood electric vehicles in San Francisco County, California.
    In accordance with Division A, section 123 of the ``Consolidated 
Appropriations Act, 2010'' (Pub. L. 111-117), the FHWA published a 
notice of intent to issue a waiver on its Web site for 12 all-battery 
electric vehicles, 12 plug-in hybrid vehicles, and 5 neighborhood 
electric vehicles (http://www.fhwa.dot.gov/construction/contracts/waivers.cfm?id=59) on May 31st. The FHWA received 7 comments in 
response to the publication. Of these comments, 3 objected to the 
proposed waiver simply on the grounds that Federal funds should be used 
to simply buy American products; 2 supported the waiver, including 1 
commenter who reasoned that foreign cars incorporate American-made 
components; 1 urged San Francisco County to buy a Tesla, which is made 
in the United States; and 1 comment from San Francisco County responded 
to the comments. In general, San Francisco County explained that there 
are no vehicles on the market that currently meet the FHWA's Buy 
America standard, which is 100 percent domestic steel and iron content. 
As to the Tesla, San Francisco County explained that the current Tesla 
model does not meet the needs for the project.
    The FHWA has considered San Francisco County's needs for this 
project and its assertion that no vehicle on the market currently meets 
its project needs and satisfies a 100 percent domestic iron and steel 
content requirement. In considering San Francisco County's request and 
the comments submitted, the FHWA has reevaluated the applicability of 
the Buy America requirement as it may apply to the purchase of 
vehicles. The FHWA's Buy America requirement was initially established 
in 1983 when the purchase of vehicles was not eligible for assistance 
under the Federal-aid Highway Program. As such, the FHWA's Buy America 
requirements were tailored to the types of products that are typically 
used in highway construction, which generally meet a 100 percent 
domestic steel and iron content requirement.
    Vehicles, however, are not the types of products that were 
initially envisioned as being purchased with Federal-aid highway funds 
when Buy America was first enacted. In today's global industry, 
vehicles are assembled with components that are made all over

[[Page 72029]]

the world. The FHWA is not aware of any vehicle on the market that can 
claim to incorporate 100 percent domestic content. For instance, the 
Chevy Volt, comprises only 40 percent United States and Canada content 
according to the window sticker (http://www.cheersandgears.com/uploads/1298005091/med_gallery_51_113_449569.png). There is no indication 
of how much of this 40 percent United States/Canadian content is United 
States-made content. Thus, the FHWA does not believe that application 
of a domestic content standard should be applied to the purchase of 
vehicles.
    However, the FHWA believes that the vehicles should be assembled in 
the United States. Whenever a person discusses the manufacture of 
vehicles, the discussion typically refers to where the final assembly 
takes place. While the manufacture of steel and iron products that are 
typically used in highway construction (such as pipe, rebar, struts, 
and beams) generally refers to the various processes that go into 
actually making the entire product, the manufacture of vehicles 
typically refers to where the vehicle is assembled. Thus, given the 
inherent differences in the type of products that are typically used in 
highway construction and vehicles, we feel that simply waiving the Buy 
America requirement, which is based on the domestic content of the 
product, without any regard to where the vehicle is assembled would 
diminish the purpose of the Buy America requirement. Moreover, in 
today's economic environment with National unemployment rate over 9 
percent, the Buy America requirement is especially significant in that 
it will ensure that Federal Highway Trust Fund (HTF) dollars are used 
to support and create jobs in the United States.
    Therefore, while the FHWA has not located a vehicle that meets a 
100 percent domestic iron and steel content requirement, the FHWA does 
not find that a complete waiver based on nonavailability pursuant to 23 
U.S.C. 313(b)(2) is appropriate. However, the FHWA also recognizes that 
at least a partial waiver is necessary in order to permit San Francisco 
County to proceed with its project. In order to enable San Francisco 
County to proceed with this project, the FHWA believes that a partial 
waiver that allows the County to purchase vehicles so long as the final 
assembly of the vehicle as the end product occurs in the United States 
is appropriate. This approach is similar to the standard in the 
provisions implementing the Buy American Act in the Federal Acquisition 
Regulations where ``commercially available off-the-shelf'' (COTS) items 
may be used if such items are manufactured in the United States. The 
general Buy American Act standard requiring the product to exceed 50 
percent domestic content is waived for COTS items. This approach will 
also give effect to the FHWA's Buy America requirement by ensuring that 
HTF dollars are used to support American jobs in a reasonable and 
meaningful way.
    In conclusion, and in light of the above, pursuant to 23 U.S.C. 
313(b)(1), the FHWA finds that it is in the public interest to grant a 
partial waiver from the Buy America requirement at 23 U.S.C. 313(a) to 
purchase 12 all-battery electric vehicles, 12 plug-in hybrid vehicles, 
and 5 neighborhood electric vehicles. Under this partial waiver, the 
general 100 percent domestic content requirement that applies to 
Federal-aid highway projects shall not apply to the purchase of such 
vehicles. However, the final assembly of any vehicles purchased with 
HTF funds must occur in the United States.
    In accordance with the provisions of section 117 of the Safe, 
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy of 
Users Technical Corrections Act of 2008 (Pub. L. 110-244, 122 Stat. 
1572), the FHWA is providing this notice of its finding that a partial 
waiver of Buy America requirements is appropriate. The FHWA invites 
public comment on this finding for an additional 15 days following the 
effective date of the finding. Comments may be submitted to the FHWA's 
Web site via the link provided to the automated batter switching 
mechanism waiver page noted above.

    Authority:  23 U.S.C. 313; Pub. L. 110-161, 23 CFR 635.410.

    Issued on: November 10, 2011.
Victor M. Mendez,
Administrator.
[FR Doc. 2011-29968 Filed 11-18-11; 8:45 am]
BILLING CODE 4910-22-P