[Federal Register Volume 81, Number 95 (Tuesday, May 17, 2016)]
[Notices]
[Pages 30602-30604]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11571]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket No. FTA-2016-0025]


Notice of Proposed Buy America Waiver for Minivans

AGENCY: Federal Transit Administration, DOT.

ACTION: Notice of proposed Buy America waiver and request for comment.

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SUMMARY: The Federal Transit Administration (FTA) received a formal 
request from the Pace Suburban Bus Division of the Regional 
Transportation Authority (Pace) for a Buy America non-availability 
waiver to purchase 188 Dodge Caravan minivans for its vanpool program. 
Minivans are considered rolling stock and are subject to the Buy 
America waiver set forth in 49 U.S.C. 5323(j)(2)(C), which requires 
that minivans (i) contain more than 60 percent domestic content, and 
(ii) final assembly of the vehicles occurs in the United States. 
Although initially Pace sought only a waiver of the requirement that 
final assembly take place in the United States, Pace now seeks a waiver 
of both requirements. Because FTA is aware of at least four 
manufacturers that can meet the final assembly requirement, however, 
FTA is proposing a waiver of only the domestic content requirement for 
non-ADA-accessible minivans. This waiver would apply to all 
procurements of non-ADA-accessible minivans by any FTA grantee and 
would be limited to contracts entered into before September 30, 2019 or 
until a fully compliant domestic source becomes available, whichever is 
earlier. In accordance with 49 U.S.C. 5323(j)(3)(A), FTA is providing 
notice of this proposed waiver and seeks public and industry comment on 
whether FTA should grant the waiver.

DATES: Comments must be received by May 31, 2016. Late-filed comments 
will be considered to the extent practicable.

[[Page 30603]]


ADDRESSES: Please submit your comments by one of the following means, 
identifying your submissions by docket number FTA-2016-0025:
    1. Web site: http://www.regulations.gov. Follow the instructions 
for submitting comments on the U.S. Government electronic docket site.
    2. Fax: (202) 493-2251.
    3. Mail: U.S. Department of Transportation, 1200 New Jersey Avenue 
SE., Docket Operations, M-30, West Building, Ground Floor, Room W12-
140, Washington, DC 20590-0001.
    4. Hand Delivery: U.S. Department of Transportation, 1200 New 
Jersey Avenue SE., Docket Operations, M-30, West Building, Ground 
Floor, Room W12-140, Washington, DC 20590-0001 between 9 a.m. and 5 
p.m., Monday through Friday, except Federal holidays.
    Instructions: All submissions must make reference to the ``Federal 
Transit Administration'' and include docket number FTA-2016-0025. Due 
to the security procedures in effect since October 2011, mail received 
through the U.S. Postal Service may be subject to delays. Parties 
making submissions responsive to this notice should consider using an 
express mail firm to ensure the prompt filing of any submissions not 
filed electronically or by hand. Note that all submissions received, 
including any personal information therein, will be posted without 
change or alteration to http://www.regulations.gov. For more 
information, you may review DOT's complete Privacy Act Statement in the 
Federal Register published April 11, 2000 (65 FR 19477), or you may 
visit http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Laura Ames, FTA Attorney-Advisor, at 
(202) 366-2743 or [email protected].

SUPPLEMENTARY INFORMATION: By way of background, Pace operates a 
vanpool program in the Chicago suburban area with more than 785 
vehicles in service. A vanpool vehicle is defined, in pertinent part, 
as a vehicle with a seating capacity of at least six adults (not 
including the driver). See 49 U.S.C. 5323(i)(2)(C)(ii).
    In October 2014, Pace issued an invitation for bid (IFB) for a 
five-year contract for the purchase of seven-person minivans. The 
successful bidder, Napoleon Fleet, Inc., proposed providing Chrysler 
Dodge Caravan minivans, but certified that the vehicles were not 
compliant with the Buy America requirement that the vehicles be 
assembled in the United States. Chrysler manufactures its minivans in 
Windsor, Ontario, Canada. On April 15, 2015, Pace requested a Buy 
America non-availability waiver for the procurement of 188 Dodge 
Caravan minivans based on the final assembly requirement only. Pace 
believed that the vehicles it proposed to purchase met the domestic 
content requirement.
    In August 2015 and November 2015, Pace conducted pre-award Buy 
America audits of the Dodge Caravan minivans and discovered that 
Chrysler did not meet the current domestic content requirement of more 
than 60%. Pace notified FTA that the audit showed a 57.4% domestic 
content for 2015 minivans and only 52% domestic content for 2016 
minivans. Pace, therefore, is requesting a waiver on the grounds that a 
seven-person minivan that complies with Buy America's domestic content 
and final assembly requirements is not available.
    In addition to the request from Pace, FTA has received inquiries 
from other grantees and manufacturers about the asserted non-
availability of minivans for their vanpool fleet that meet both 
requirements of Buy America. Therefore, FTA proposes to grant a general 
Buy America waiver from the domestic content requirement for non-ADA-
accessible minivans procured pursuant to contracts entered into before 
September 30, 2019, or until a fully-compliant domestic source becomes 
available, whichever is earlier.
    With certain exceptions, FTA's Buy America statute prevents 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. 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). 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).
    The requirement that manufactured goods be produced in the United 
State may be waived for rolling stock if (i) the cost of components and 
subcomponents produced in the United States for fiscal years 2016 and 
2017 is more than 60 percent of the cost of all components of the 
rolling stock; and (ii) final assembly of the rolling stock occurs in 
the United States.\1\ 49 U.S.C. 5323(j)(2)(C).
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    \1\ Under recent amendments to 49 U.S.C. 5323(j)(2)(C), if the 
minivans are delivered in FY2018 or FY2019, the domestic content 
will increase to more than 65 percent and if delivered in FY2020 or 
beyond, the domestic content will increase to more than 70 percent.
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    FTA funds the procurement of between 2,500 and 3,000 minivans 
annually, including both ADA-accessible vans and non-ADA-accessible 
vans. The challenges associated with buying minivans that comply with 
FTA's Buy America statute and regulations have been well documented 
over the past six years. In 2010, El Dorado National, Kansas and 
Chrysler Group LLC petitioned FTA for a waiver of the Buy America final 
assembly requirement. In response to the request FTA published a notice 
in the Federal Register, seeking comment from all interested parties. 
Numerous parties responded to the notice expressing support for the 
waiver. One manufacturer, Honda, indicated that its minivans were in 
compliance with the Buy America regulations but would not provide the 
additional information needed to support its claims. Ultimately, on 
June 21, 2010, FTA issued a blanket waiver of the Buy America final 
assembly requirements for minivans and minivan chassis. See 75 FR 
35123, (June 21, 2010).
    On November 27, 2012, FTA rescinded the non-availability waiver for 
minivans, finding that the manufacturer of the MV-1 was a domestic 
manufacturer of eligible paratransit vehicles and could meet both the 
domestic content and the final assembly requirements for rolling stock 
under Buy America. See 75 FR 71676, (November 24, 2010). Although FTA 
acknowledged that the MV-1 minivan is a wheelchair-lift equipped 
minivan and does not provide the seating capacity needed for vanpool 
programs, FTA did not continue the blanket waiver for these vehicles, 
noting that it ``prefers to consider waiver requests for limited 
circumstances and on procurement-by-procurement basis . . . .'' Id.
    On November 27, 2013, FTA issued a one-time, limited Buy America 
waiver of the final assembly requirement to the North Front Range 
Metropolitan Planning Organization (NFRMPO), for the purchase of 25 
seven-passenger minivans, based upon non-availability. See 78 FR 71025, 
(November 27, 2013). FTA rejected comments suggesting that it reinstate 
the 2012 blanket waiver for seven-person minivans, and instead issued a 
waiver for final assembly for

[[Page 30604]]

NFRMPO's purchase of up to 25 minivans.
    The market for non-ADA accessible minivans has changed since 2013. 
In 2013, the Chrysler minivan met the domestic content requirements but 
was not assembled in the United States. FTA issued a non-availability 
waiver for final assembly because more than 60 percent of the minivan's 
components were produced in the United States. Today, Chrysler does not 
meet either Buy America requirements. However, there are at least four 
manufacturers--GMC, Ford, Honda and Toyota--that make non-ADA-
accessible minivans that are assembled in the U.S.\2\
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    \2\ This information is from the 2016 report submitted by car 
manufacturers to the National Highway Transportation Safety 
Administration (NHTSA) under the American Automobile Labeling Act. A 
copy of the report is posted on NHTSA's Web site at http://www.nhtsa.gov.
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    Because there are at least four minivans manufacturers who assemble 
their vehicles in the United States, FTA will not grant Pace a non-
availability waiver for both final assembly and domestic content. 
Instead, in order to maintain U.S. jobs and obtain the benefits of the 
Buy America statute, FTA proposes to grant a general waiver of only the 
domestic content requirement for non-ADA-accessible minivans. This 
waiver would apply to all procurements of non-ADA-accessible minivans 
and is limited to contracts entered into before September 30, 2019 or 
until a fully-compliant domestic source becomes available, whichever is 
earlier. Because the non-ADA-accessible minivans are production line 
vehicles sold to the general public (i.e., they are not designed and 
manufactured specifically to be purchased using Federal funds), and 
those sales substantially outnumber purchases with Federal funds, 
manufacturers have been reluctant to subject their vehicles to the pre-
award and post-delivery audit requirements in 49 CFR part 663 to verify 
their domestic content. FTA seeks comments on whether manufacturers 
would consider submitting to a pre-award and post-delivery audit 
process that was conducted by FTA on each new model year, as opposed to 
requiring audits for each individual procurement.
    This waiver would not apply to ADA-accessible minivans because such 
vehicles are available that meet the Buy America requirements.
    FTA is publishing this Notice to seek public and industry comment 
from all interested parties in accordance with 49 U.S.C. 5323(j)(3)(A). 
Such information and comments will help FTA understand completely the 
facts surrounding the request, including the merits of the request. A 
full copy of the request has been placed in docket number FTA-2016-
0025.

Ellen Partridge,
Chief Counsel.
[FR Doc. 2016-11571 Filed 5-16-16; 8:45 am]
 BILLING CODE 4910-57-P