[Federal Register Volume 83, Number 73 (Monday, April 16, 2018)]
[Notices]
[Pages 16421-16422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-07901]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration


Buy America Waiver Notification

AGENCY: Federal Highway Administration (FHWA), Department of 
Transportation (DOT).

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This notice provides information regarding FHWA's issuance of 
a Buy America waiver for the obligation of Federal-aid funds for 151 
State projects involving the acquisition of vehicles and equipment on 
the condition that they be assembled in the U.S.

DATES: The waiver is issued as of April 17, 2018.

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. Jomar Maldonado, FHWA Office of 
the Chief Counsel, 202-366-1373, or via email at 
[email protected]. Office hours for the FHWA are from 8:00 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 Publishing Office's database at http://www.access.gpo.gov/nara.

Background

    This notice provides information regarding FHWA's decision to issue 
a Buy America waiver for the obligation of Federal-aid funds for 151 
State projects involving the acquisition of vehicles (including sedans, 
vans, pickups, trucks, buses, and street sweepers) and equipment (such 
as trail grooming equipment) on the condition that they be assembled in 
the United States. The waiver would apply to approximately 955 vehicle 
and equipment acquisitions. The requests for vehicle-related waivers 
received between April 2016 and December 2016 are incorporated by 
reference into this notice. These requests are available on FHWA's Buy 
America website at the following locations:
     April to June, 2016: https://www.fhwa.dot.gov/construction/contracts/cmaq161207.cfm;
     July to September, 2016: https://www.fhwa.dot.gov/construction/contracts/cmaq170321.cfm; and
     October to December, 2016: https://www.fhwa.dot.gov/construction/contracts/cmaq170725.cfm.
These projects are being undertaken to implement air quality 
improvement, safety, and mobility goals under FHWA's Congestion 
Mitigation and Air Quality Improvement Program and the Recreational 
Trails Program.
    Title 23, Code of Federal Regulations (CFR), Sec.  635.410 requires 
that steel or iron materials (including protective coatings) that will 
be permanently incorporated in a Federal-aid project must be 
domestically manufactured. For FHWA, this means that all the processes 
that modified the chemical content, physical shape or size, or final 
finish of the material (from initial melting and mixing, continuing 
through the bending and coating) occurred in the United States. The 
statute and regulations create a process for granting waivers from the 
Buy America requirements when its application would be inconsistent 
with the public interest or when satisfactory quality domestic steel 
and iron products are not sufficiently available. In 1983, FHWA 
determined

[[Page 16422]]

that it was both in the public interest and consistent with the 
legislative intent to waive Buy America for manufactured products other 
than steel manufactured products. The FHWA's national waiver for 
manufactured products does not apply to the requests in this notice 
because these involve predominately steel and iron manufactured 
products. The FHWA's Buy America requirements do not have special 
provisions for applying Buy America to ``rolling stock'' such as 
vehicles or equipment (see 49 U.S.C. 5323(j)(2)(C), 49 CFR 661.11, and 
49 U.S.C. 24405(a)(2)(C) for examples of Buy America rolling stock 
provisions for other DOT agencies).
    On April 18, 2017, the President issued Executive Order (E.O.) 
13788--Buy American and Hire American. Section 2(a) of the E.O. 13788 
establishes as a policy of the executive branch to ``maximize, 
consistent with law. . .the use of goods, products, and materials 
produced in the United States.'' Section 3(b)(i) requires every agency 
to ``assess the. . .implementation of, and compliance with Buy American 
Laws'' within their jurisdictions. Section 3(b)(ii) requires agencies 
to assess the use of waivers within their agencies by type and impact 
on domestic jobs and manufacturing. Section 3(b)(iii) requires agencies 
to develop and propose policies to ensure that, to the extent permitted 
by law, Federal financial assistance awards maximize the use of 
materials produced in the United States.
    In response to these E.O. 13788 requirements, the FHWA is 
evaluating how to revise its Buy America policies and procedures, 
including the process and manner in which it decides whether to grant 
waivers for vehicles and equipment. This evaluation may result in 
delays in decisions on whether to grant Buy America waivers in the 
future.
    Although FHWA has not found manufacturers that produce vehicles and 
equipment in such a way that all their steel and iron elements are 
manufactured domestically, the Agency is evaluating the process and 
manner in which it considers these waivers to ensure that it is 
consistent with the intent and purpose of E.O. 13788. The FHWA is aware 
that in today's global industry, vehicles are assembled with iron and 
steel components manufactured all over the world. The Agency also 
understands the difficulty of identifying vehicles that have 100% 
components made in the U.S. For example, the Chevrolet Volt, which was 
identified by many commenters in a November 21, 2011, Federal Register 
Notice (76 FR 72027) as a car that is made in the United States, is 
comprised of only 45 percent of United States and Canadian content 
according to the National Highway Traffic Safety Administration's part 
583 American Automobile Labeling Act Report web page.\1\ There is no 
indication of how much of this 45 percent content is U.S. manufactured 
(from initial melting and mixing) iron and steel content.
---------------------------------------------------------------------------

    \1\ http://www.nhtsa.gov/Laws+&+Regulations/Part+583+American+Automobile+Labeling+Act+(AALA)+Reports.
---------------------------------------------------------------------------

    However, the policy behind E.O. 13788 is to help stimulate economic 
growth, create good jobs at decent wages, strengthen our middle class, 
and support the American manufacturing and defense industrial bases. 
Sec. 2(a), E.O. 13788. This means that FHWA Buy America policies should 
be interpreted and applied in a manner that fosters innovative 
approaches that would increase the manufacture of compliant domestic 
steel and iron products and consistent with 23 U.S.C. 313. Unlike other 
waiver requests, the requests for vehicle and equipment waivers have 
been for recurrent products. The products waived in the past have been 
of similar type and kind, yet there have been no changes in the 
manufacturing process to produce Buy America compliant products or 
products maximizing Buy America compliant content. The FHWA's practice 
of approving waiver requests for these recurrent project types could be 
setting the expectation that FHWA will always grant waivers for these 
projects, discouraging innovative approaches and job creation in the 
domestic steel and iron industry for this sector.
    The FHWA is re-evaluating the process and manner in which it 
decides whether to grant waivers for vehicles and vehicle-related 
equipment. This change will not affect the approval of a waiver for 
vehicles and equipment received during April to December, 2016 
timeframe. The projects in these lists were submitted prior to the 
issuance of the E.O. and have been published for informal comment 
consistent with the Consolidated Appropriations Act of 2017 (Pub. L. 
115-31) (see publications for December 7, 2016,\2\ March 21, 2017,\3\ 
and July 25, 2017 \4\). The FHWA received no comments in response to 
these publications. Because FHWA has not found domestic manufacturers 
that can produce the vehicles and equipment identified in this notice 
in such a way that all their steel and iron materials are manufactured 
domestically, FHWA finds that a waiver of FHWA's Buy America 
requirements is appropriate under the non-availability criteria (23 
U.S.C. 313(b)(2) and 23 CFR 635.410(c)(2)(ii)). However, FHWA believes 
that it is consistent with the Buy America requirements to impose the 
condition that the vehicles and the vehicle components be assembled in 
the United States. Requiring final assembly to be performed in the 
United States is consistent with past guidance to FHWA Division Offices 
on manufactured products (see Memorandum on Buy America Policy 
Response, Dec. 22, 1997).\5\ Moreover, in today's economic environment, 
the Buy America requirement is especially significant in that it will 
ensure that Federal-aid funds are used to support and create domestic 
jobs. Thus, so long as the final assembly of the 151 State projects 
occurs in the United States, applicants to this waiver request may 
proceed to purchase these vehicles and equipment.
---------------------------------------------------------------------------

    \2\ https://www.fhwa.dot.gov/construction/contracts/waivers.cfm?id=139.
    \3\ https://www.fhwa.dot.gov/construction/contracts/waivers.cfm?id=147.
    \4\ https://www.fhwa.dot.gov/construction/contracts/waivers.cfm?id=153.
    \5\ http://www.fhwa.dot.gov/programadmin/contracts/122297.cfm.
---------------------------------------------------------------------------

    In accordance with the provisions of section 117 of the ``Safe, 
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy 
for Users, Technical Corrections Act of 2008'' (Pub. L. 110-244), FHWA 
is providing this notice of its finding that a non-availability waiver 
of Buy America requirements is appropriate on the condition that the 
vehicles and equipment identified in the notice are assembled 
domestically. The FHWA invites public comment on this finding for an 
additional 15 days following the issued date of the finding. Comments 
may be submitted to FHWA's website via the link provided to the waiver 
page noted above.

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

    Issued on: April 11, 2018.
Brandye L. Hendrickson,
Acting Administrator, Federal Highway Administration.
[FR Doc. 2018-07901 Filed 4-11-18; 4:15 pm]
 BILLING CODE 4910-22-P