[Federal Register Volume 85, Number 127 (Wednesday, July 1, 2020)]
[Notices]
[Pages 39661-39664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14155]


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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

[Docket No. FRA-2012-0033]


Notice of Intent To Grant a Buy America Exemption to Amtrak To 
Purchase Certain Non-Domestic Track Maintenance Equipment

AGENCY: Federal Railroad Administration (FRA), United States Department 
of Transportation (DOT).

ACTION: Notice of intent to grant Amtrak Buy America exemption.

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SUMMARY: FRA is issuing this notice to provide information to the 
public regarding its finding that it is appropriate to grant the 
National Railroad Passenger Corporation (Amtrak) an exemption from 
Amtrak's Buy America requirement for procurement of the following non-
domestic track maintenance equipment as part of its state-of-good-
repair (SOGR) program: One tunnel crane; one track laying machine; and 
eight two-man rail car movers.

DATES: Written comments on FRA's determination to grant a Buy America 
exemption to Amtrak should be provided to FRA on or before July 8, 
2020.

ADDRESSES: Please submit your comments to the U.S. Government 
electronic docket site at http://www.regulations.gov, in docket number: 
FRA-2012-0033.
    Note: 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 published in the Federal Register on 
April 11, 2000 (65 FR 19477).

FOR FURTHER INFORMATION CONTACT: Mr. John Johnson, Attorney-Advisor, 
FRA Office of the Chief Counsel, 1200 New Jersey Avenue SE, Washington, 
DC 20590, (202) 493-0078, [email protected].

SUPPLEMENTARY INFORMATION: The purpose of this notice is to provide 
information to the public regarding FRA's finding that it is 
appropriate to grant Amtrak an exemption from Amtrak's Buy America 
requirement, pursuant to 49 U.S.C. 24305(f)(4)(A)(iii), to purchase the 
following non-domestic equipment as part of its SOGR program: Railbound 
Tunnel Crane; Track Laying Machine; and eight Two-Man Rail Car Movers 
with Heavy Duty Crane, Railgear, and Rail Car Couplers.

[[Page 39662]]

Background

    Amtrak is the Nation's Federally chartered intercity passenger rail 
operator and rail infrastructure provider. Among its infrastructure 
assets, Amtrak owns 1,169 track miles of infrastructure on the 
Northeast Corridor (NEC), which connects Washington, DC; Philadelphia, 
Pennsylvania; New York, New York; and up to the Massachusetts/Rhode 
Island border. Amtrak provides the infrastructure for approximately 
820,000 trips daily. Amtrak is designing a program to achieve a SOGR 
across its infrastructure assets, meaning that its assets perform 
safely, as designed, within their estimated service lives. Amtrak 
Engineering has assessed the SOGR backlog at $33.3 billion for 
infrastructure nationally.
    Amtrak's infrastructure is divided into four categories: Track; 
Bridges and Buildings; Electric Traction; and Communications and 
Signals. The three components of track are rail, ties, and ballast. 
These components are integrated and if any are not in a SOGR, track 
geometry suffers, trains no longer travel at the desired speed, trip 
time is extended, and ride quality suffers. Each of these consequences 
negatively impacts revenue, ridership, and customer experience. Amtrak 
has set an aggressive 10-year schedule to eliminate the SOGR backlog. 
The equipment that is the subject of Amtrak's exemption request (one 
(1) Railbound Tunnel Crane, one (1) Track Laying Machine, and eight (8) 
Two-Man Rail Car Movers with Heavy Duty Crane, Railgear, and Rail Car 
Couplers), will be used to repair and maintain Amtrak's Track 
Infrastructure Assets.
    On October 9, 2019, Amtrak requested an exemption \1\ from the 
National Railroad Passenger Corporation (Amtrak) domestic buying 
preference requirement (49 U.S.C. 24305(f)) to purchase certain track 
maintenance equipment for its state-of-good-repair (SOGR) program. 
Amtrak seeks to purchase: One tunnel crane, one track laying machine, 
and eight two-man rail car movers with heavy duty crane, railgear, and 
rail car couplers (Car Movers). In its request, Amtrak states that 
products meeting its specifications are not available from a U.S. 
source. On March 31, 2020, FRA provided public notice of Amtrak's 
exemption request and a 20-day opportunity for comment. FRA also 
emailed the notice to over 6,000 recipients that requested Buy America 
notices through ``GovDelivery.'' For the reasons stated below, FRA 
grants a non-availability exemption to Amtrak.
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    \1\ Amtrak's exemption request is available at: https://railroads.dot.gov/legislation-regulations/buy-america/amtrak-buy-america-maintenance-equipment-exemption-request.
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Buy America Requirement

    With certain exceptions, Amtrak's Buy America statute requires 
Amtrak to buy only ``(A) unmanufactured articles, material, and 
supplies mined or produced in the United States; or (B) manufactured 
articles, material, and supplies manufactured in the United States 
substantially from articles, material, and supplies mined, produced, or 
manufactured in the United States.'' 49 U.S.C. 24305(f)(2). Amtrak's 
requirements apply without regard to the source of funds; if it does 
not receive an exemption, it may not acquire goods that are not 
consistent with Section 24305(f)(2), even if it does not propose to use 
Federal funds. However, FRA may exempt Amtrak from this requirement 
when one of the exemptions of 49 U.S.C. 24305(f)(4)(A) or (B) have been 
met. Section 24305(f)(4)(A)(iii) permits an exemption when, ``the 
articles, material, or supplies, or the articles, material, or supplies 
from which they are manufactured, are not mined, produced, or 
manufactured in the United States in sufficient and reasonably 
available commercial quantities and are not of a satisfactory 
quality.'' This is typically referred to as a ``non-availability 
exemption.''
    In addition to the Buy America statute, FRA's action is subject to 
Executive Order 13788, Buy American and Hire American (April 18, 2017). 
Consistent with Executive Order 13788, FRA evaluated Amtrak's request 
to determine whether it had sought maximize the use of goods, products, 
and materials produced in the United States.

Findings

    In its letter to FRA, dated October 9, 2019, Amtrak described in 
detail the need for equipment that met the technical specifications for 
its SOGR program, the steps taken to identify domestically-sourced 
equipment, and the harm that would result in the absence of an 
exemption. FRA evaluated the information Amtrak provided and made the 
following findings.

A. Railbound Tunnel Crane

    New York Penn Station (PSNY) handles over 1,300 train moves 
carrying 350,000 people on Amtrak, New Jersey Transit (NJ Transit), and 
Long Island Railroad (LIRR) trains every day. The track structure 
consists of 87 turnouts, including 34 slip switches, each equivalent to 
four conventional turnouts, totaling 219 turnouts. It is Amtrak's 
busiest station on the Northeast Corridor with 21 tracks fed by seven 
tunnels serving Amtrak, NJ Transit, and LIRR.
    Currently, Amtrak is replacing turnouts in PSNY with a 1994-built 
crane which is well-tested under the extreme production requirements of 
PSNY. However, after 25 years, its reliability has decreased 
significantly, and it lacks the remaining components of the system upon 
which Amtrak is relying to replace one turnout per 55-hour track 
possession window.
    In May 2019, Amtrak issued a Request for Proposal (RFP) for one 
Railbound Tunnel Crane. In accordance with Amtrak's procurement 
process, the RFP was posted to the Procurement Portal on Amtrak's 
website. In addition, Amtrak solicited four companies that participated 
in a request for information process for similar equipment in the past 
to participate in the acquisition event; proposals were received from 
three offerors. Amtrak evaluated the proposals on compliance with the 
technical specifications, previous relevant and successful experience 
in providing similar supplies, pricing, and delivery. The Railbound 
Tunnel Crane consists of interrelated units that function as one 
complete system. Amtrak's Technical Evaluation Committee evaluated the 
three proposals in accordance with the terms of the RFP and concluded 
that only one offeror met the requirements of the specification. The 
sole successful offeror's tunnel crane does not meet the Amtrak Buy 
America requirements.
    Amtrak maintains that not having the Railbound Tunnel Crane would 
have an adverse effect on the Penn Station turnout replacement plan. 
Over the past 2 years, Amtrak has only been able to replace 20 of the 
219 turnouts, requiring forty-two 55-hour track outages, which impacted 
service to Amtrak, NJ Transit, and LIRR. According to Amtrak, the 
current crane system takes two 55-hour track outages to replace a 
turnout; whereas, the proposed crane system would permit the 
replacement of a turnout during one 55-hour track outage. According to 
Amtrak, the inability to replace more than 10 turnouts per year will 
increase the SOGR backlog, and prevent PSNY from ever achieving a SOGR.
    FRA's engineering team accepts Amtrak's assertions that none of the 
Buy America-compliant bidders offered products meeting Amtrak's 
specification, and that not having the tunnel crane would have an 
adverse effect on Penn Station's SOGR program.

[[Page 39663]]

B. Track Laying Machine

    The new Track Laying Machine is required to address the NEC's 
concrete tie condition. The NEC has three million concrete ties which 
are projected to have a 40 to 50-year life; one million Santa Fe San 
Vel concrete ties were installed between 1978 and 1982 and are now on 
the verge of needing replacement.
    Furthermore, during the 1990s, Amtrak installed 1.4 million Rocla 
concrete ties that began failing at an accelerated rate in 2004, 
requiring replacement well before the end of the projected useful life. 
Neither the San Vel replacement nor the Rocla replacement can be 
achieved with Amtrak's current equipment.
    In August 2018, Amtrak issued an RFP for one Track Laying Machine. 
In accordance with Amtrak's procurement process, the RFP was posted to 
the Procurement Portal on Amtrak's website. In addition, Amtrak 
solicited bids from three companies that were known to Amtrak and had 
previously supplied similar equipment to Amtrak.
    Amtrak received proposals from two offerors, including the proposed 
awardee. The proposals were evaluated on compliance to the technical 
specifications, previous relevant and successful experience in 
providing similar supplies, pricing, and delivery. After an initial 
technical review of the unsuccessful offeror's proposal, Amtrak 
determined that it did not meet Amtrak's technical specification. 
Amtrak initiated discussions with the offeror to delineate deficiencies 
in the proposal and requested that the offeror submit a revised 
proposal that met the specification requirements.
    Amtrak's Technical Evaluation Committee thoroughly evaluated the 
offeror's revised proposal and the proposed awardee's original proposal 
and determined that only the proposed awardee met the technical 
specification requirement. The sole successful offeror's Track Laying 
Machine does not meet the Amtrak Buy America requirements. The nine 
passenger railroads that rely on NEC infrastructure to provide rail 
service to the public all have a vested interest in ensuring the 
infrastructure can meet current and future service needs. If FRA denies 
Amtrak's request for an exemption, then Amtrak cannot acquire the Track 
Laying Machine. According to Amtrak, the new Track Laying machine will 
cut Amtrak's footprint of track outage in half. Further, Amtrak cannot 
achieve the annual steady state program for either the San Vel or Rocla 
replacement cycle with its current equipment. As a result, Amtrak 
maintains that not having the Track Laying Machine will have adverse 
effects on Amtrak's ability to reduce the SOGR backlog, and ultimately, 
negatively impact service and the ability to grow ridership.
    FRA's engineering team accepts Amtrak's assertions that none of the 
Buy America-compliant bidders offered products meeting Amtrak's 
specification, and that not having the Track Laying Machine would have 
an adverse effect on Amtrak's ability to meet its SOGR goals.

C. Two-Man Rail Car Mover With Heavy Duty Crane, Railgear, and Rail Car 
Couplers

    Amtrak's market research concluded that one company was the sole 
manufacturer of the Car Movers, which are utilized extensively by 
freight railroads. To create competition, Amtrak prepared a bidders 
list that included the known manufacturer and twelve other truck 
manufacturers to ascertain if any of these manufacturers had entered 
the market for Car Movers.
    In March 2018, Amtrak issued an RFP for twelve different styles of 
trucks that are required to maintain a SOGR, which included the Car 
Movers. To ensure that there would be competition, Amtrak solicited 
thirteen providers of a variety of trucks, which included the provider 
of the Car Movers, that were known to Amtrak and had previously 
supplied similar equipment to Amtrak to participate in the acquisition 
event.
    Of the proposals Amtrak received, only two offerors provided a 
proposal for the Car Movers. After a thorough technical review of the 
proposals, the Technical Evaluation Committee determined that only the 
known manufacturer's offering met the technical specification 
requirement of a truck having 50,000 lbs of tractive effort capability. 
The sole successful offeror's Car Movers do not meet the Amtrak Buy 
America requirements. If FRA denies Amtrak's request for an exemption, 
then Amtrak cannot acquire the Car Movers. Amtrak maintains that not 
having the Car Movers will prevent Amtrak from achieving a SOGR.
    FRA's engineering team accepts Amtrak's assertions that none of the 
Buy America-compliant bidders offered products meeting Amtrak's 
specification, and that not having the Car Movers would have an adverse 
effect on Amtrak's ability to meet its SOGR goals.

D. Summary of Information That Amtrak Provided to FRA on Efforts To 
Identify Compliant Products and Maximize Domestic Content

    As described above, although Amtrak did not identify compliant 
products, it provided information to FRA supporting its exemption 
request, including:
     Information describing the domestic content 
characteristics of the manufactured products needed, including the 
sources and assembly locations of the products offered by all bidders;
     Information supporting the technical necessity of these 
specific products for Amtrak's SOGR program, including details 
supporting Amtrak's determination that unsuccessful bidders' products 
did not satisfy technical specifications; and
     Information describing the effects of denying the request, 
including the relationship between these products, the SOGR backlog, 
and Amtrak's plan to eliminate that backlog.
    On the basis of this information, FRA concludes that Amtrak's 
procurement was consistent with the policy in Executive Order 13788 to 
maximize ``the use of goods, products, and materials produced in the 
United States.'' FRA further concludes that denying the requested 
exemption would not increase the use of goods, products, and materials 
produced in the United States.

Determination Under 49 U.S.C. 24305

    FRA has determined an exemption is appropriate under 49 U.S.C. 
24305(f)(4)(A)(iii) for the track maintenance equipment because 
domestically produced equipment is not currently ``manufactured in the 
United States in sufficient and reasonably available commercial 
quantities and are not of a satisfactory quality.'' FRA bases this 
determination on the following:
     Amtrak competitively bid its requirements and found that 
there are no domestic solutions meeting Amtrak's specifications;
     FRA's engineering team concurs with Amtrak's 
specifications, due to the unique operating environment on the NEC. FRA 
also concurs with Amtrak's selection rationale and the effect on 
Amtrak's SOGR if it cannot purchase this equipment; and
     On March 31, 2020, FRA provided public notice of Amtrak's 
exemption request and a 20-day opportunity for comment. FRA also 
emailed the notice to over 6,000 recipients that requested Buy America 
notices through ``GovDelivery.'' FRA received 2 comments. However, the 
commenters

[[Page 39664]]

did not provide any information about domestic sources for Amtrak's 
specifications.
    This exemption applies only to Amtrak's acquisition of the 
equipment described. FRA is providing notice of this finding and an 
opportunity for public comment, after which, this exemption will take 
effect. Questions about this Notice can be directed to, John Johnson, 
Attorney-Advisor, at [email protected] or (202) 493-0078.

    Issued in Washington, DC.
Quintin Kendall,
Deputy Administrator.
[FR Doc. 2020-14155 Filed 6-30-20; 8:45 am]
BILLING CODE 4910-06-P