[Federal Register Volume 80, Number 32 (Wednesday, February 18, 2015)]
[Notices]
[Pages 8753-8754]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-03242]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket No. FTA-2014-0025]


Notice of Buy America Waiver for Track Turnout Components

AGENCY: Federal Transit Administration, DOT.

ACTION: Notice of Buy America Waiver.

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SUMMARY: In response to a request from the Long Island Rail Road 
Company (LIRR), a subsidiary of the New York Metropolitan 
Transportation Authority (MTA), for a Buy America waiver for track 
turnout components, the Federal Transit Administration (FTA) hereby 
waives its Buy America requirements for LIRR's procurement of the 
following track turnout components: Schwihag roller assemblies, 
Schwihag plates, ZU1-60 steel switch point rail sections, and movable 
point frogs. This waiver is limited to LIRR's procurement of these 
track turnout components for the nine (9) turnouts that LIRR needs for 
VHL03 LIRR Stage 3 of the East Side Access Project and the one (1) 
turnout that LIRR needs for VHL04 LIRR Stage 4 of the East Side Access 
Project. The turnouts themselves, however, are subject to FTA's Buy 
America requirements and, accordingly, the turnouts must be 
manufactured in the United States.
    This Buy America waiver does not apply to the track turnout 
components for Phase I of LIRR's Jamaica Capacity Improvements Project, 
and FTA will address that waiver request separately. Moreover, this Buy 
America waiver does not apply to the track turnout components for the 
Northeast Corridor Congestion Relief Project at Harold Interlocking, 
which is being addressed in a separate waiver decision published by the 
Federal Railroad Administration (FRA), as FRA funds are being used for 
that project.

DATES: This waiver is effective immediately.

FOR FURTHER INFORMATION CONTACT: Richard L. Wong, FTA Attorney-Advisor, 
at (202) 366-4011 or [email protected].

SUPPLEMENTARY INFORMATION: The purpose of this notice is to announce 
that FTA is granting a non-availability waiver for LIRR's procurement 
of track turnout components--i.e., Schwihag roller assemblies, Schwihag 
plates, ZU1-60 steel switch point rail sections, and movable point 
frogs (MPFs)--that are needed for VHL03 LIRR Stage 3 and VHL04 LIRR 
Stage 4 of the East Side Access (ESA) Project.
    With certain exceptions, FTA's Buy America requirements prevent FTA 
from obligating an amount that may be appropriated to carry out its 
program for a project unless ``the steel, iron, and manufactured goods 
used in the project are produced in the United States.'' 49 U.S.C. 
5323(j)(1). A manufactured product is considered produced in the United 
States if: (1) All of the manufacturing processes for the product must 
take place in the United States; and (2) All of the components of the 
product must be of U.S. origin. 49 CFR 661.5(d). A component is 
considered of U.S. origin if it is manufactured in the United States, 
regardless of the origin of its subcomponents. 49 CFR 661.5(d)(2). If, 
however, FTA determines that ``the steel, iron, and goods produced in 
the United States are not produced in a sufficient and reasonably 
available amount or are not of a satisfactory quality,'' then FTA may 
issue a waiver (non-availability waiver). 49 U.S.C. 5323(j)(2)(B); 49 
CFR 661.7(c).
    On July 31, 2014, LIRR requested a non-availability Buy America 
waiver for the procurement of four specific track turnout components--
i.e., Schwihag roller assemblies, Schwihag plates, ZU1-60 steel switch 
point rail sections, and MPFs--that are needed for the ESA Project. MTA 
entered into an FTA Full Funding Grant Agreement in 2006 to build the 
ESA Project. As described by LIRR, the ESA Project will extend LIRR 
commuter rail service from Queens to the east side of Midtown Manhattan 
and will construct a new LIRR Terminal at Grand Central Terminal.
    On February 4, 2015, LIRR submitted a letter to FTA indicating that 
it has become aware of alternate turnout designs that may be compatible 
with LIRR's infrastructure, with some modifications, for the ESA 
Project and that may be available from a domestic source in the future. 
Accordingly, in its February 4, 2015 letter, LIRR narrowed its waiver 
request to apply only to VHL03 LIRR Stage 3 and VHL04 LIRR Stage 4 of 
the ESA Project. Specifically, LIRR explained that it critically needs 
the Buy America waiver for nine (9) turnouts that are necessary for 
VHL03 LIRR Stage 3 of the ESA Project in order for LIRR to meet its 
2016 installation schedule and to thereby avoid delays to the overall 
ESA project schedule. Additionally, LIRR specified that it needs the 
track turnout components waiver so that it may procure one (1) unique 
turnout--No. 32.75--for VHL04 LIRR Stage 4 of the ESA Project.
    LIRR has stated that the foreign-sourced MPFs are essential 
components of track turnouts for the following operational reasons: (1) 
turnouts with MPFs are necessary to withstand the frequent and heavy 
use by passenger and freight trains traveling along LIRR's right of 
way; (2) turnouts with MPFs allow trains to travel through the turnouts 
at higher speeds, ultimately providing more throughput during rush 
hour; (3) turnouts with MPFs reduce impact loading to the turnouts; and 
(4) turnouts with MPFs provide for less wear and tear, thereby 
requiring less overall maintenance, extending the useful lives of the 
turnouts, and resulting in fewer outages and negative impacts on LIRR's 
operations.
    Based on previous solicitations, market research, and manufacturer 
outreach, as set forth below, LIRR

[[Page 8754]]

concluded that it was unable to identify a domestic source for track 
turnout components--i.e., Schwihag roller assemblies, Schwihag plates, 
ZU1-60 steel switch point rail sections, and MPFs--that LIRR needs for 
VHL03 LIRR Stage 3 and VHL04 LIRR Stage 4 of the ESA Project.
    In February 2014, LIRR issued a competitive solicitation seeking 
vendors to provide five (5) turnouts for VHL03 LIRR Stage 3 of the ESA 
Project. LIRR received only one response, and it was from VAE Nortrak 
North America Inc. (Nortrak), which certified that it was not compliant 
with the Buy America requirements. Based on LIRR's prior experience in 
procuring the same or similar turnouts, LIRR has found that Nortrak and 
Progress Rail Services Corporation (Progress) are the only two vendors 
that are technically capable of manufacturing turnouts with the roller 
assemblies, plates, ZU1-60 steel switch point rail sections, and MPFs 
that LIRR requires for the ESA Project. According to LIRR, Nortrak and 
Progress manufacture the turnouts domestically, but the turnout 
components that are the subject of this waiver are presently 
manufactured only non-domestically.\1\ Progress did not submit a bid in 
response to the February 2014 solicitation related to VHL03 LIRR Stage 
3 of the ESA Project.
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    \1\ The roller assemblies and plates are manufactured in 
Switzerland; the ZU1-60 steel switch point rail sections are 
manufactured in Austria; and the MPFs are manufactured in Germany.
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    Furthermore, in support of its requests, LIRR also conducted market 
research and manufacturer outreach. In conducting this research, LIRR 
utilized the National Railroad Passenger Corporation's (Amtrak) 
previous market research regarding potential domestic manufacturers of 
the four component types that are the subject of this notice. Amtrak 
conducted its market research at the request of FRA, and the research 
included outreach to manufacturers that were previously identified by 
the U.S. Department of Commerce's National Institute of Standards and 
Technology (NIST) in a December 2012 Supplier Scouting Report.
    Additionally, LIRR conducted its own independent outreach and 
contacted seven potential manufacturers: Unitrac Railroad Materials, 
Inc., Arcelor Mittal, J. Manufacturing Inc., Steel Dynamics, Inc., 
Metal Tech, Compucision, LLC, and IAT International Inc.\2\ Three of 
the seven potential manufacturers failed to respond to repeated 
requests for information. Four manufacturers responded, but LIRR 
concluded that the four manufacturers were not potential domestic 
sources for the components because the manufacturers each stated that 
either it did not currently manufacture the components or it did not 
appear economically feasible for the manufacturer to manufacture the 
components in the quantities needed by LIRR. One of the four responsive 
manufacturers, Compucision, LLC, expressed interested, but it had never 
manufactured the components previously and had little knowledge of the 
technical requirements. Based on these efforts, LIRR determined that 
there are no U.S. manufacturers that are willing and capable of 
producing the turnout components that are presently required for VHL03 
LIRR Stage 3 and VHL04 LIRR Stage 4 the ESA Project.
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    \2\ FTA defers to LIRR's spelling and punctuation of the 
manufacturers' names as presented in LIRR's July 31, 2014, letter.
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    On December 19, 2014, FTA published a Federal Register notice 
requesting comment on LIRR's waiver request, pursuant to 49 CFR 661.7. 
79 FR 75857 (Dec. 19, 2014). No comments were received to the docket.
    Based upon LIRR's good faith efforts to identify potential domestic 
manufacturers for these track turnout components, LIRR's informed 
conclusion that there are presently no U.S. manufacturers that are 
willing and capable of producing the turnout components needed for 
VHL03 LIRR Stage 3 and VHL04 LIRR Stage 4 of the ESA Project, and the 
lack of responses to FTA's Federal Register Notice, FTA is issuing a 
non-availability waiver, pursuant to 49 CFR 661.7(c), for LIRR's 
procurement of the track turnout components--i.e., Schwihag roller 
assemblies, Schwihag plates, ZU1-60 steel switch point rail sections, 
and MPFs--but in connection with only the nine (9) turnouts needed for 
VHL03 LIRR Stage 3 and the one (1) turnout needed for VHL04 LIRR Stage 
4 of the East Side Access Project, as set forth above. Subsequent 
waiver requests for track turnout components will be subject to notice-
and-comment publication requirements. This waiver does not apply to the 
turnouts themselves, and, accordingly, the turnouts must be 
manufactured in the United States pursuant to FTA's Buy America 
requirements. See 49 CFR part 661.
    Furthermore, this Buy America waiver does not apply to the track 
turnout components for Phase I of LIRR's Jamaica Capacity Improvements 
Project, which will be addressed in a separate waiver decision by FTA. 
With respect to LIRR's Buy America waiver request from March 26, 2013 
(and supplemented on September 19, 2014) for track turnout components 
of one (1) #20 tangential geometry turnout for LIRR's State of Good 
Repair (SGR) Program, LIRR withdrew that waiver request on February 9, 
2015 due to a potential domestically produced alternative turnout for 
its SGR program.
    Furthermore, this Buy America waiver does not apply to the track 
turnout components for the Northeast Corridor Congestion Relief Project 
at Harold Interlocking, which is being addressed in a separate waiver 
decision published by FRA, as FRA funds are being used for that 
project.

Dana Nifosi,
Acting Chief Counsel.
[FR Doc. 2015-03242 Filed 2-17-15; 8:45 am]
BILLING CODE 4910-57-P