U.S. Department 

of Transportation 

Federal Railroad 

Administration 

NOV Z 4 2014 

Paul Vilter 

Acting Chief Logistics Officer 

Procurement Department 

Administrator 

National Railroad Passenger Corporation 

30th Street Station, Box 71 

Philadelphia, PA 19104 

1200 New Jersey Avenue, SE 

Washington, DC 20590 

Re: Request for Waiver of Buy America Requirement for Two Prototype Next Generation 

Trainsets 

Dear Mr. Vilter: 

This letter is in response to your request dated February 27, 2014, that the Federal Railroad 

Administration (FRA) grant the National Passenger Railroad Corporation (Amtrak), a waiver 

from FRA's Buy America provision, at 49 U.S.C. § 24405(a)(1), for final assembly oftwo 

prototype high-speed rail (HSR) trainsets. For the reasons contained in this letter, FRA is 

granting Amtrak's request, subject to the following condition: 

• At ''Notice To Proceed", Amtrak must provide support for its assertion and certify to 

FRA that its selected supplier has not established domestic manufacturing facilities 

capable of assembling the prototypes within a reasonable time. 

The larger projects underlying this waiver are Amtrak's and the the California High-Speed Rail 

Authority's (Authority) plans to advance HSR on the Northeast Corridor (NEC) and in 

California, respectively. In the near identical waiver requests1

, Amtrak and the Authority 

assert that the projects require the purchase and use of high-quality, service-proven FRA Tier 

III Next Generation Trainsets, including two prototype HSR trainsets for each project. Amtrak 

states that HSR trainsets are essential to meeting Amtrak's critical short-term need to expand 

the capacity of its current NEC high-speed service and meeting the long-term operational needs 

of Amtrak. The Authority is seeking trainsets that can meet its planned trip-time requirements 

for service from the San Francisco Bay Area to Los Angeles on what will be largely brand new 

infrastructure. Amtrak and the Authority further assert that each project requires the purchase 

and use of two prototype HSR trainsets and that there are no domestic facilities capable of 

producing and testing HSR trainsets operating at greater than 160 miles per hour (mph). 

1 Amtrak's and the Authority's waiver requests are available at https://www.fra.dot.gov/eLib/Details/L04954 and 

https :/ /www. fra. dot. gov I eLib/Details/L04 9 55, respectively. 
2 

FRA's Buy America requirement for rolling stock, including HSR trainsets, requires domestic 

final assembly of the trainsets and that all ofthe components be manufactured in the United 

States. Section 24405(a)(2) also permits the Secretary (delegated to the FRA Administrator) to 

waive the Buy America requirements if the Secretary finds that: (A) applying paragraph (1) 

would be inconsistent with the public interest; (B) the steel, iron, and goods manufactured in 

the Un~ted States are not produced in sufficient and reasonably available amount or are not of a 

satisfactory quality; (C) rolling stock or power train equipment cannot be bought or delivered 

to the United States within a reasonable time; or (D) including domestic material will increase 

the cost of the overall project by more than 25 percent. 

FRA believes a waiver is appropriate under 49 U.S.C. §24405(a)(2)(C) because domestically 

produced HSR trainsets meeting the specific technical, design, and schedule needs of Amtrak 

and the Authority are not currently available in the U.S. There is no assembly or testing 

facility for HSR trainsets operating at speeds greater than160 mph in the U.S. Moreover, 

domestically-produced HSR trainsets cannot be bought or produced in the United States within 

a "reasonable time" given the program schedule associated with Amtrak's and the Authority's 

projects. FRA estimates that it could take HSR trainset manufacturers a minimum of one and a 

half to two years to establish the required facilities to support a domestic HSR trainset 

assembly capability. This includes any HSR trainset manufacturers that currently have 

domestic trainset manufacturing facilities. For example, in addition to acquiring specialized 

machinery and training and hiring the workforce, these manufacturers' plants are customized 

for steel railcars, and HSR trainsets require aluminum, which requires different manufacturing 

techniques. 

Tier III HSR is a significant new technology for the U.S. market, and safety is a significant 

factor. Further, allowing final assembly ofthe prototype HSR trainsets at the manufacturer's 

existing non-domestic facilities is necessary to ensure that expected safety benefits of "serviceproven" systems are secured, to enable training of U.S. workers, and to assure successful 

technology transfer. For example, rather than attempting to establish new manufacturing and 

assembly processes at a domestic facility while simultaneously integrating and testing HSR 

trainset designs, the selected manufacturers can focus on identifying and remedying any 

defects in the designs specific to Amtrak and the Authority and their operations in the United 

States. Further, FRA concludes that integrating U.S. manufacturing, assembly, and labor 

resources into the prototype production, among other suggested actions by Amtrak and the 

Authority, will facilitate the development of domestic HSR production facilities. This same 

"human technology transfer" has been used in other global HSR installations in South Korea, 

China, Taiwan, and Spain. 

FRA finds that this delay to provide "service-proven" systems makes the prototypes not 

available within a "reasonable time." Therefore, a waiver is appropriate. 
3 

On March 14, 2014, FRA published on its website public notice of Amtrak's and the 

Authority's waiver requests. FRA received 13 online comments and one mailed response to 

this notice. None ofthe commenters identified a domestic source for HSR trainsets. Of the 14 

comments, 1 0 commenters indicated they were against granting the waiver; four were for 

granting the waiver. Of the 10 comments "against," four were not responsive to the notice. Of 

the six remaining dissenters, they mainly disagreed with Amtrak's and the Authority's 

argument that HSR trainsets cannot be delivered in a reasonable time because Amtrak and the 

Authority could wait for domestic assembly. While this is theoretically possible, significant 

capacity and technology transfer problems are probable, and FRA believes that the one and a 

half to two year minimum delay could negatively impact the schedules proposed by Amtrak 

and the Authority. In addition, as noted above, assembling the prototypes at the suppliers' nondomestic factories will facilitate the successful technology transfer and training of U.S. 

workers. Finally, because FRA is limiting the waiver to final assembly of up to four 

prototypes with the expectation that the training of domestic resources will occur 

simultaneously, FRA is not delaying or preventing the establishment of the selected supplier's 

domestic assembly facilities. 

Pursuant to 49 U.S.C. § 24405(a)(4), FRA is publishing notice of its decision to grant Amtrak's 

waiver request in the Federal Register and provide notice of such finding and an opportunity 

for public comment after which this waiver will become effective. This waiver applies only to 

the final assembly of up to two prototype HSR trainsets and is subject to the condition 

described at the beginning of this letter. 

Any components must be domestically manufactured or separate waivers for components 

applied for and granted before assembly of the prototypes can commence. FRA expects 

Amtrak and the Authority to require the selected HSR trainset supplier(s) to assemble the 

remaining trainset order(s) in the United States. 

Question about this letter can be directed to, John Johnson, Attorney-Advisor, at 

john.johnson@dot.gov or (202)493-0078. 

Sincerely, 

Administrator