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Notice of Proposed Temporary Waiver of Buy America Requirements for the Strengthening Mobility and Revolutionizing Transportation (SMART) Grants Program Publication: Federal Register Signing Official: Polly E. Trottenberg Department: U.S. Department of Transportation Date: 7 October 2022 
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[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 darren.timothy@dot.gov 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
michael.a.smith@dot.gov.
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]
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