[Federal Register Volume 87, Number 194 (Friday, October 7, 2022)]
[Notices]
[Pages 61143-61144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-21848]



[[Page 61143]]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

[Docket No.: OST-2022-0106]


Notice of Proposed Temporary Waiver of Buy America Requirements 
for the Strengthening Mobility and Revolutionizing Transportation 
(SMART) Grants Program

ACTION: Notice; request for comments.

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SUMMARY: In order to deliver projects and meaningful results while 
ensuring robust adoption of Buy America standards, DOT is proposing to 
establish a temporary public interest waiver for projects funded under 
the new Strengthening Mobility and Revolutionizing Transportation 
(SMART) Grants Program. The waiver only applies to awards made within 
the first year (FY 2022) of funding for the new program, for which 
there may be limited cases where the Buy America requirements would 
apply for planning and prototyping activities. Given that this program 
is in its first year and DOT has not yet received applications, the 
waiver is intended to ensure that applicants consider the broadest 
possible range of technologies and solutions in their proposals for 
funding in FY 2022. Recipients of FY 2022 funds for Stage 1 activities 
are to collect data that will help inform the application of Buy 
America requirements to the funding of implementation activities under 
the program and identify any current gaps in the domestic availability 
of products that could potentially be filled by American suppliers.

DATES: Comments must be received by October 21, 2022.

ADDRESSES: Please submit your comments to the U.S. Government 
electronic docket site at http://www.regulations.gov/, Docket: OST-
2022-0106.
    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: For questions about this notice, 
please contact Darren Timothy, DOT Office of the Assistant Secretary 
for Transportation Policy, at [email protected] or at 202-366-
4051. For legal questions, please contact Michael A. Smith, DOT Office 
of the General Counsel, 202-366-2917, or via email at 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    On November 15, 2021, President Biden signed the Bipartisan 
Infrastructure Law (BIL), enacted as the Infrastructure Investment and 
Jobs Act, Public Law 117-58. Section 25005 of the BIL authorized the 
Department of Transportation (DOT) to establish the SMART Grants 
Program, and Div. J of the BIL appropriated $500 million for that 
purpose for fiscal year 2022 through 2026, of which $100 million is 
available for fiscal year 2022. The purpose of the SMART Grants Program 
is to conduct demonstration projects focused on advanced smart city or 
community technologies and systems in a variety of communities to 
improve transportation efficiency and safety. Eligible project 
activities under the program include Coordinated Automation; Connected 
Vehicles; Intelligent, Sensor-based Infrastructure; Systems 
Integration; Commerce Delivery and Logistics; Leveraging Use of 
Innovative Aviation Technology; Smart Grid; and Smart Technology 
Traffic Signals.
    The SMART Grants Program anticipates providing two types of 
funding. The first is Stage 1 Planning and Prototyping Grants (Stage 1 
grants) which will support recipients' efforts in refining and 
prototyping their proposed projects. At the conclusion of Stage 1, 
recipients should have the information to either create a fully 
realized implementation plan with robust performance metrics or to make 
an informed decision not to proceed with the concept.
    Eligible entities will be required to receive Stage 1 grants in 
order to be considered for selection for the second type of funding: 
Stage 2 Implementation Grants (Stage 2 grants). Stage 2 implementation 
projects should result in a scaled-up demonstration of the concept, 
integrating it with the existing transportation system and refining the 
concept such that it could be replicated by others. In FY 2022, DOT is 
only soliciting applications for Stage 1 grants. DOT anticipates that 
it will solicit applications for both Stage 1 and Stage 2 grants in FY 
2023.
    In January 2021, President Biden issued Executive Order (E.O.) 
14005, titled ``Ensuring the Future is Made in All of America by All of 
America's Workers,'' launching a whole-of- government initiative to 
strengthen Made in America standards. The E.O. states that the United 
States Government ``should, consistent with applicable law, use terms 
and conditions of Federal financial assistance awards and Federal 
procurements to maximize the use of goods, products, and materials 
produced in, and services offered in, the United States.'' DOT is 
committed to ensuring strong and effective Buy America implementation 
consistent with E.O. 14005, and has a long track record of successfully 
applying Made in America standards to support American workers and 
businesses through its more than $70 billion in grant programs, and 
$700 million in direct purchases in FY2020.
    The BIL also includes the Build America, Buy America Act (``the 
Act''). Public Law 117-58, div. G 70901-52, which greatly strengthens 
Made in America standards by expanding the coverage and application of 
Buy America preferences in Federal financial assistance programs for 
infrastructure. The Act requires that the head of each covered Federal 
agency shall ensure that ``none of the funds made available for a 
Federal financial assistance program for infrastructure . . . may be 
obligated for a project unless all of the iron, steel, manufactured 
products, and construction materials used in the project are produced 
in the United States.'' BIL Sec.  70914(a).
    On April 18, 2022, OMB issued memorandum M-22-11, ``Initial 
Implementation Guidance on Application of Buy America Preference in 
Federal Financial Assistance Programs for Infrastructure'' 
(``Implementation Guidance''). The Implementation Guidance states that, 
for purposes of applying the Act's domestic preference requirements, 
``the term `infrastructure' includes, at a minimum, the structures, 
facilities, and equipment for, in the United States, roads, highways, 
and bridges; public transportation'' and other public infrastructure. 
The Implementation Guidance also states that ``Federal agencies should 
interpret the term `infrastructure' broadly and consider the definition 
provided above as illustrative and not exhaustive. When determining if 
a particular construction project of a type not listed in the 
definition above constitutes ``infrastructure,'' agencies should 
consider whether the project will serve a public function.'' 
Implementation Guidance at p. 4.
    Section 70914(b) of the Act allows the head of a Federal agency to 
waive the application of a Buy America preference under an 
infrastructure program under certain limited circumstances, including 
on the basis of public interest; nonavailability of domestically 
produced materials or products; or unreasonable cost. The 
Implementation Guidance notes that a ``waiver in the

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public interest may be appropriate where an agency determines that 
other important policy goals cannot be achieved consistent with the Buy 
America requirements established by the Act.'' Implementation Guidance 
at p. 10. The guidance also recognizes several instances in which 
Federal agencies may consider issuing a public interest waiver.

Proposed Waiver and Request for Comments

    With the goal of advancing crucial infrastructure projects in a 
timely manner while implementing the new Buy America requirements, DOT 
is considering using its authority under Section 70914(b)(1) of the Act 
to provide a temporary waiver of the Buy America requirement for 
projects funded under the SMART grants program, on the basis that 
applying the domestic content preference for these materials would be 
inconsistent with the public interest. The temporary waiver would apply 
only to projects' Stage 1 planning and prototyping activities awarded 
pursuant to the FY 2022 Notice of Funding Opportunity for the program. 
The Department requests comment on whether such a waiver would be 
warranted. The proposed waiver would not apply to any Stage 1 or Stage 
2 activities funded by the SMART Grants program in subsequent fiscal 
years.
    As noted above, in FY 2022, SMART Grants funding will only be 
awarded for Stage 1 Planning and Prototyping grants. While those 
activities will largely involve project pre-development activities that 
would not be subject to Buy America requirements, they may also include 
the permanent installation of transportation-related technologies and 
equipment on public roads or public transportation systems, in which 
case they would be considered infrastructure that is subject to the 
domestic preference requirements of the Act.
    The purpose of this waiver is to ensure that applicants for Stage 1 
funding in FY 2022 consider the broadest possible range of technologies 
and solutions in their proposals. During and following Stage 1, 
recipients will report on their projects and results, which will be 
shared with the broader transportation sector to document lessons 
learned and identify any barriers or technical limitations on further 
development and deployment of those solutions, as well as those 
technologies that might show promise. Those purposes are best served by 
ensuring that a variety of technological applications can be explored 
in this first stage. The waiver will also ensure that recipients of FY 
2022 funding are able to obligate those funds in a timely manner and 
commence the critical activities envisioned by Congress in its creation 
of this Federal assistance program.
    The data collected by recipients of FY 2022 Stage 1 grant funding 
will also assist DOT in better understanding the nature of the types of 
structures and equipment that may be deployed in Stage 2 
Implementation, which will assist the Department in determining how the 
Act's domestic preference requirements for infrastructure should be 
applied. Recipients will also collect and report data on the 
manufacturing sources of that equipment, which will help DOT and the 
industry identify both potential domestic suppliers for these 
technologies and any gaps in availability from U.S.-based sources that 
would provide a market opportunity for any suppliers able to meet the 
domestic preference requirements of the Act for iron and steel, 
manufactured products, and/or construction materials.
    If this general applicability waiver is not issued, recipients of 
FY 2022 SMART Grants funding would be expected to comply with the Act 
in implementing their Stage 1 planning and prototyping projects. This 
could lead some potential applicants to limit the range of potential 
eligible projects that they might consider seeking funding for in FY 
2022 due to an inability to determine a priori whether products 
procured under those projects might be subject to and compliant with 
the Buy America requirements of the Act, which would thus reduce the 
program's potential to foster innovative concepts in its inaugural 
year. In contrast, under the proposed waiver, applicants will be able 
to propose more diverse innovative concepts.
    The OMB Implementation Guidance also provides that, before granting 
a waiver in the public interest, to the extent permitted by law, 
agencies shall assess whether a significant portion of any cost 
advantage of a foreign-sourced product is ``the result of the use of 
dumped steel, iron, or manufactured products or the use of injuriously 
subsidized steel, iron, or manufactured products.'' Implementation 
Guidance at p. 12. E.O. 14005 at Section 5 includes a similar 
requirement for ``steel, iron, or manufactured goods.'' However, 
because the public interest waiver that DOT is proposing in this notice 
is not based on consideration of the cost advantage of any foreign-
sourced steel, iron, or manufactured product content, there is not a 
specific cost advantage for DOT to consider.
    DOT will consider all comments received in the 15-day comment 
period during its consideration of the proposed waiver, as required by 
section 70914(c)(2) of the Act. Comments received after this period, 
but before any notice of a decision whether to grant a waiver is 
published in the Federal Register, will be considered to the extent 
practicable.

    Issued in Washington, DC.
Polly E. Trottenberg,
Deputy Secretary.
[FR Doc. 2022-21848 Filed 10-6-22; 8:45 am]
BILLING CODE 4910-9X-P