Notice of Proposed Buy America Waiver for Minivans |
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Topics: Dodge Caravan
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Ellen Partridge
Federal Transit Administration
17 May 2016
[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 Laura.Ames@dot.gov.
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
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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