[Federal Register Volume 89, Number 183 (Friday, September 20, 2024)]
[Notices]
[Pages 77224-77227]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-21574]


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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

[Docket No. FRA-2024-0104]


Notice of Proposed Nonavailability Waiver of Buy America 
Requirements for Certain High-Speed Rail Products for the California 
Inaugural High-Speed Rail Service Project

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

ACTION: Notice; request for comment.

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SUMMARY: The Federal Railroad Administration (FRA) is seeking comments 
on whether to grant a waiver of its Buy America requirements to the 
California High-Speed Rail Authority (the Authority) to use certain 
products that are not produced in the United States for use in the 
California Inaugural High-Speed Rail Service Project between Merced, 
California and Bakersfield, California (Project). FRA is funding the 
Project under the Federal-State Partnership for Intercity Passenger 
Rail Program (FSP Program); therefore, FRA's Buy America requirements 
apply to the Project. FRA's Buy America requirements include both FRA's 
statutory requirements, which require 100 percent of the manufactured 
products and steel and iron used in an FRA-funded project to be 
produced in the United States, and the Build America, Buy America Act 
(BABA), which requires that all construction materials used in the FRA-
funded project be produced in the United States. FRA is not proposing 
to waive the applicable BABA requirements for construction materials 
used in the Project. The proposed waiver would apply to the aluminum 
car shells, signal systems, high-speed rail turnouts and fire alarm 
systems based on the domestic nonavailability of such

[[Page 77225]]

products, as identified by the Authority. The Authority estimates that 
over 98 percent of the total direct dollar expenditures for the Project 
would be spent on domestically sourced products and labor, including 
100 percent of the civil infrastructure costs.

DATES: Comments must be received by October 7, 2024.

ADDRESSES: Please submit all comments electronically to the Federal 
eRulemaking Portal. Go to https://www.regulations.gov and follow the 
instructions for submitting comments.
    Instructions: All submissions must refer to the Federal Railroad 
Administration and the docket number in this notice (FRA-2024-0104). 
Note that all submissions received, including any personal information 
provided, will be posted without change and will be available to the 
public on https://www.regulations.gov. You may review DOT's complete 
Privacy Act Statement in the Federal Register published April 11, 2000 
(65 FR 19477), or at https://www.transportation.gov/privacy.

FOR FURTHER INFORMATION CONTACT: For questions about this notice, 
please contact Shreyas Bhatnagar, Regional Supervisor, Office of 
Regional Outreach & Project Delivery, Office of Railroad Development, 
FRA, telephone: (202) 495-8630, email: [email protected] or 
Ryan Arbuckle, Chief, Program Coordination and Strategy, Office of 
Railroad Development, FRA, telephone: (202) 617-0212, email: 
[email protected]. For legal questions, please contact Faris 
Mohammed, Attorney-Adviser, Office of the Chief Counsel, FRA, 
telephone: (202) 763-3230, email: [email protected].

SUPPLEMENTARY INFORMATION:

I. Project History and Background

    On December 7, 2022, FRA published a Notice of Funding Opportunity 
(NOFO) announcing application requirements and procedures to obtain 
grant funding under the FSP Program for projects not located on the 
Northeast Corridor for Fiscal Year 2022. The FSP Program provides a 
Federal funding opportunity to improve passenger rail service. On 
February 3, 2023, FRA published a notice adding funding and extending 
the application period for the FSP Program NOFO. On March 22, 2023, FRA 
published a notice (March Notice) inviting high-speed rail project 
sponsors to voluntarily submit, in advance of being selected to receive 
FRA funding, a domestic sourcing and workforce plan (DSWP) to 
demonstrate how the sponsor will maximize the use of domestic goods, 
products and materials, consistent with FRA's Buy America 
requirements.\1\
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    \1\ Advancing High-Speed Rail Projects Intended for Operations 
Over 160 Miles Per Hour Through Domestic Sourcing Plans and Buy 
America Compliance, 88 FR 17289 (March 22, 2023).
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    The Authority applied for FSP Program funding expressing its intent 
to advance the California High-Speed Rail System through completion of 
the Inaugural High-Speed Rail Service Project between the cities of 
Merced and Bakersfield in the Central Valley of California.\2\ 
Consistent with FRA's March Notice, the Authority submitted a DSWP,\3\ 
which included an initial request for a waiver of FRA's Buy America 
requirements for certain products that the Authority indicated are not 
produced in the United States. In December 2023, FRA selected the 
Project to receive $3,073,600,000 in funding under the FSP Program. In 
a letter dated September 13, 2024, the Authority requested a waiver 
from FRA's Buy America requirements consistent with the Authority's 
DSWP.
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    \2\ The California High-Speed Rail System is a multi-phase 
effort that is planned between to provide service between San 
Francisco to Los Angeles and provide a competitive transportation 
mode with estimated speeds capable of 186 (or greater) miles per 
hour.
    \3\ The DSWP contains proprietary information that FRA has 
determined is confidential business information. As such, FRA is not 
making the DSWP available to the public at this time; however, 
pertinent non-proprietary information provided in the DSWP is 
discussed in this notice.
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    The Authority is responsible for developing product specifications 
and procuring materials for use in the Project and expects to use FSP 
Program funds for costs associated with those procurements. The 
Authority's procurement process is separate from FRA's review of the 
Authority's request for a waiver of Buy America requirements, and FRA 
is not involved in the development of product specifications or the 
Authority's procurement process. FRA's role is limited to reviewing the 
Authority's request for a waiver, consistent with 49 U.S.C. 
22905(a)(2).
    In August 2023, the Authority issued a Request for Qualifications 
(RFQ) to procure six trainsets for the Project that could meet FRA's 
Passenger Equipment Safety Standards governing Tier III equipment (Tier 
III Rule), which establishes safety standards for high-speed rail 
equipment and operations that travel at speeds above 125 mph.\4\ Two 
Original Equipment Manufacturers (OEMs) responded to the Authority's 
RFQ; however, neither OEM indicated that they would be able to supply a 
fully Buy America-compliant trainset in their responses. Both OEMs 
indicated they would need a waiver from FRA's Buy America requirements 
for the aluminum car shells (shell, structure, and vehicle paintwork), 
as the car shells are not produced in the United States. In April 2024, 
the Authority issued a Request for Proposals for the six trainsets. In 
addition to trainsets, the Authority identified additional products 
that are not produced domestically, which would also require a waiver. 
The Authority expects to complete its procurement process for the 
trainsets and other contracts later this year.
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    \4\ See 49 CFR part 238.
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    Based on information gathered through the procurement process and 
through market research, the Authority revised its initial DSWP, which 
further explains how the Authority will meet FRA's Buy America 
requirements and identifies any necessary waivers for noncompliant 
products. FRA reviewed the DSWP, including the market research 
conducted by the Authority.
    This notice summarizes FRA's Buy America requirements, the 
Authority's request for a waiver, and FRA's findings and proposed 
waiver.

II. FRA's Buy America Requirements and Policy

    Projects that receive funding under FRA's FSP Program are subject 
to FRA's Buy America requirements. FRA's Buy America requirements 
include both: (i) FRA's statutory requirements for steel, iron, and 
manufactured goods at 49 U.S.C. 22905(a); and (ii) requirements under 
the Build America, Buy America Act (BABA) and related guidance at 2 CFR 
184.6 for construction materials. This means that FRA can fund a 
project only if the steel, iron, and manufactured goods used in the 
project are produced in the United States. 49 U.S.C. 22905(a). In 
addition, FRA-funded projects must also comply with the relevant 
provisions of BABA, including the requirement that all construction 
materials used in the project must also be produced in the United 
States. Public Law 117-58, 70914(a); 2 CFR 184.6.
    FRA strictly enforces compliance with its Buy America requirements 
to ensure that FRA-funded projects maximize the use of materials 
produced in the United States. FRA expects recipients to work with 
suppliers to conduct thorough market research and adequately consider, 
where appropriate, qualifying alternate items, products, or materials 
that can also meet the recipient's technical specifications. Compliance 
with FRA's Buy America requirements supports domestic industry and 
well-paying jobs.

[[Page 77226]]

III. FRA's Authority To Waive Buy America Requirements

    There are limited circumstances in which FRA can waive its Buy 
America requirements under 49 U.S.C. 22905(a) and BABA. FRA will grant 
a waiver request that is consistent with the statutory criteria for a 
waiver and where a project sponsor has adequately justified the need 
for a waiver.
    FRA may waive its Buy America requirements if FRA determines that: 
applying the Buy America requirements would be inconsistent with the 
public interest; 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; rolling stock or power train 
equipment cannot be bought and delivered in the United States within a 
reasonable time; or including domestic material will increase the cost 
of the overall project by more than 25 percent. 49 U.S.C. 22905(a)(2); 
see also Public Law 117-58, 70914(b) (prescribing similar statutory 
conditions for waivers); and 2 CFR 184.7 (doing the same).
    Specifically, when determining whether 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 
pursuant to 49 U.S.C. 22905(a)(2)(B), FRA considers whether the 
recipient has used appropriate due diligence, such as market research 
or by soliciting proposals through an open procurement process, to 
identify domestic products or domestically available alternative 
products that meet the recipient's specifications. A comparable product 
that performs a similar function is not necessarily a domestic 
alternative; the product must also meet the recipient's specific 
requirements. FRA's statutory requirements do not require recipients to 
change product specifications in order to utilize domestic products 
that do not meet the recipient's original specifications. If there are 
no domestically produced products that also meet the recipient's 
specifications, and the recipient has exercised appropriate diligence, 
FRA may waive its Buy America requirements based on nonavailability, 
consistent with 49 U.S.C. 22905(a)(2)(B).
    If FRA determines a waiver is appropriate, FRA will provide notice 
and seek comment from the public in accordance with the requirements of 
both section 22905(a) and BABA, if applicable. In addition, FRA will 
consult with the National Institute of Standards and Technology's 
Manufacturing Extension Partnership (NIST MEP) before granting a 
waiver, consistent with section 70916 of BABA. Unless otherwise 
specified, waiver decisions are non-precedential and are only 
applicable to the entities and products for the specific project 
identified in the final waiver.

IV. The Authority's Request for Waiver

    In response to FRA's March Notice, the Authority submitted a DSWP 
outlining the efforts that would be used to ensure maximum use of 
available domestic materials in the Project if the Authority's 
application was selected for funding under the FSP Program. In the 
DSWP, the Authority explained that the Project would require the use of 
products that are not produced in the United States, which would 
require a waiver of FRA's Buy America requirements. The Authority did 
not identify any construction materials covered under BABA that would 
require a waiver. The Authority explained that the use of these non-
compliant products is necessary to ensure the safety and reliability of 
the high-speed rail system. Specifically, the Authority requested a 
waiver for the following:

 Car Shells (shell structure, frame, vehicle paintwork) for six 
trainsets
 Eurobalises and Euroloops \5\
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    \5\ Eurobalise and euroloops are products installed between the 
rails of a railway that are part of the European train control 
system. These products store infrastructure data (e.g., position 
reference, speed limits, line gradient, works on the line) and can 
send this information to the train.
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 Counting Heads and Axle Counter Sensors
 Truck Press (test stand)
 Turnout Systems including Derailers
 Fire Alarm Systems
    FRA recently conducted a similar analysis for these high-speed rail 
products in its final nonavailability waiver for the Brightline West 
High-Speed Passenger Train Project (Brightline West Waiver) based on a 
request from the Nevada Department of Transportation (NDOT) and 
Brightline West, the private project sponsor. \6\ Brightline West 
conducted market research for these same products and coordinated with 
potential suppliers and the NIST MEP to locate domestic suppliers. In 
the final waiver, FRA concluded that the high-speed rail products, 
which are the same items for which the Authority seeks a waiver, are 
not produced in the United States based on Brightline West's market 
research and coordination with potential suppliers. In developing its 
waiver request, the Authority noted that it closely coordinated with 
Brightline West to identify products that are not currently produced in 
the United States.
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    \6\ Notice of Nonavailability Waiver of Buy America Requirements 
for the Nevada Department of Transportation to Purchase Certain 
High-Speed Rail Products, 89 FR 45934 (May 24, 2024).
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    The Authority requested a waiver for aluminum car shells for the 
six trainsets that will be purchased for and used in the Project. The 
request is based on responses from two OEMs that indicated they could 
not provide a fully compliant trainset without a waiver for the car 
shells, which are not produced in the United States. The Authority 
notes that the car shells are a necessary feature for the safe and 
efficient operation of the high-speed rail trainset. Specifically, the 
Authority explains the car shells are required to achieve high speeds, 
due to aluminum's strength and light weight, and it has taken decades 
of development in technology by highly specialized experts that can 
shape, mold, and weld these car shells to the required safety and 
quality standards, including crashworthiness.
    FRA previously considered the domestic availability of aluminum car 
shells in the Brightline West Waiver, sought public comment on this 
finding and utilized the NIST MEP's supplier scouting program to 
identify potential domestic suppliers. FRA concluded the car shells are 
not produced in the United States. Here, the Authority proposes to use 
the same, or substantially similar, car shells to those described in 
the Brightline West Waiver.
    Similar to the Brightline West High-Speed Passenger Train Project, 
the Authority proposes to use the European Rail Traffic Management 
System (ERTMS) for the Project. The Authority proposes to use ERTMS to 
ensure safety of the high-speed rail system and expects to conform to 
FRA's Tier III Rule, which allows for service-proven high-speed rail 
technologies from around the world (in this case, Europe) to be 
introduced to the United States with minimal modification.\7\
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    \7\ ERTMS has not yet been tested, certified, and approved for 
operation in the United States. Design documentation, testing, and 
submission of a PTC Safety Plan and associated HSR-125 document will 
be required to obtain PTC certification and approval to operate. The 
operational experience of ERTMS across the European high-speed rail 
network will provide operational safety and reliability data to 
support the PTC Safety Plan and HSR-125 document.
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    Although the Authority's procurement process for the signal system 
is still ongoing, the Authority requested a waiver for eurobalises and 
euroloops that can be used in the ERTMS for the Project, as these 
products will be required for the ERTMS regardless of the selected 
supplier. FRA previously considered the

[[Page 77227]]

availability of eurobalises and euroloops in the Brightline West Waiver 
and concluded these products are not produced in the United States.
    In addition, and similar to the Brightline West Waiver, the Project 
will also require the use of specialty high-speed rail turnouts to 
allow trains to smoothly diverge to a passing siding, which plays a key 
role in safety and stability of train operations. The Project will also 
require fire alarm panels and devices for use in stations, garages, and 
maintenance facilities. The Authority has researched known suppliers 
but did not identify a domestic manufacturer for these products, which 
FRA also previously concluded are not produced in the United States.\8\
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    \8\ 89 FR 45934.
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    The Authority explains in the DSWP that over 98 percent of the 
total direct dollar expenditures for the Project will be spent on 
domestically sourced products and labor, including 100 percent of the 
civil infrastructure costs. In addition, the Project has created 
approximately 13,000 domestic jobs across the construction period and 
includes a community benefits agreement designed to assist small 
businesses and job seekers in finding or obtaining construction 
contracts.\9\ The Authority has also reached an agreement with rail 
labor, which may result in ongoing operations and maintenance work 
being performed by union labor.\10\ The DSWP further explains efforts 
the Authority will take to facilitate, where feasible, a ramp up in 
domestic production capabilities.
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    \9\ For more information on the Community Benefits Agreement, 
see: https://hsr.ca.gov/business-opportunities/general-info/community-benefits-agreement/.
    \10\ In November 2023, 13 rail unions representing more than 
160,000 workers signed a Memorandum of Understanding with California 
High-Speed Rail Authority, establishing a commitment for the use of 
highly skilled union labor required to operate and maintain the 
system.
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    At the time of this proposed waiver, the Authority has not selected 
an OEM for the trainsets and has not completed its procurement process 
for the Project. As noted above, the Authority's procurement process is 
separate from FRA's consideration of nonavailability under 49 U.S.C. 
22905(a)(2)(B). FRA expects the Authority to make its procurement 
decision based on the needs for the Project and to select products that 
meet the Authority's specifications. If, based on the final 
procurement, there are changes to the items described in the final 
waiver, the Authority may need to request additional waivers from FRA.

V. Findings and Proposed Waiver

    FRA has preliminarily determined that these products are not 
produced in the United States in a sufficient and reasonably available 
amount or are not of a satisfactory quality, consistent with 49 U.S.C. 
22905(a)(2)(B). FRA finds that the Authority has conducted appropriate 
due diligence through market research to identify potential suppliers 
for the Project. The Authority's research included discussions with 
potential suppliers and coordination with Brightline West. FRA 
previously considered the products described in the Authority's request 
with respect to the Brightline West High-Speed Passenger Train Project 
and determined the products were not produced in the United States, 
which included consultation with NIST-MEP through its supplier scouting 
program.\11\ Given the short amount of time between FRA's previous 
findings and the Authority's request, FRA is relying on its findings in 
the Brightline West Waiver to support its determination with respect to 
the Authority's request. Based on its review of the waiver request, the 
Authority's DSWP, and FRA's previous findings in the Brightline West 
Waiver, FRA proposes to waive its Buy America requirements for the 
products listed above in Section IV.
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    \11\ 89 FR 45934.
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    The proposed waiver would apply only to products listed in Section 
IV for use in the Project. FRA is not proposing to waive any 
requirements under BABA, as the proposed waiver does not apply to any 
construction materials used in the Project. The proposed waiver would 
not apply to other FRA recipients or to other grants that might be made 
to the Authority for other projects (including any future phases 
related to the Project). This proposed waiver will expire upon the end 
of the period of performance and closeout of the grant agreement for 
the Project.

VI. Request for Comment

    FRA will consider comments received during the comment period, 
consistent with BABA and 2 CFR 184.7. FRA may consider comments 
received after this period to the extent practicable. Consistent with 
49 U.S.C. 22905(a)(4), if FRA determines it is necessary to waive its 
Buy America requirements, FRA will publish its decision in the Federal 
Register and provide an opportunity for public comment on such finding 
for a reasonable period of time not to exceed 15 days. After such 
period, FRA's decision will be effective.
    Issued in Washington DC

Amitabha Bose,
Administrator.
[FR Doc. 2024-21574 Filed 9-19-24; 8:45 am]
BILLING CODE 4910-06-P