4

waiver is granted only because of the specific facts of these projects; any future requests for a
waiver regarding this product will not be granted without a specific showing that domestic
products for that particular project also are not reasonably available at that time. Additionally,
unless otherwise approved by FRA in writing, this waiver is time limited to two years after the
effective date of this waiver or until Vossloh begins manufacturing the components in the United
States, whichever occurs first.

Sincerely,

Cue edo
Joseph C. Szabo
Administrator

cc:

William D. Bronte, Chief, Division of Rail, California Department of Transportation
William E. Glavin, P.E., Director, Rail Division, Texas Department of Transportation
George Weber, Deputy Director, Bureau of Railroads, Illinois Department of Transportation


Q

U.S. Department Administrator 1200 New Jersey Avenue, SE
of Transportation Washington, DC 20590

Federal Railroad
Administration
Mr. David Smelser
Washington State Department of Transportation JUN 19 2012
310 Maple Park Ave SE
Olympia, WA 98504-7300

Dear Mr. Smelser:

This letter is in response to your March 19, 2012, request that the Washington State Department
of Transportation (WSDOT) be granted a waiver from the Federal Railroad Administration’s
(FRA) Buy America provision, at 49 U.S.C. § 24405(a). Your waiver request contained a
justification letter from the BNSF Railway Company (BNSF) which owns the infrastructure
WSDOT intends to improve as part of the Pacific Northwest Rail Corridor program funded

by an FRA grant. Such a waiver would permit WSDOT to purchase and have installed
American-made Vossloh 101-VL concrete rail ties which contain two components that are not
manufactured in the United States.

The FRA also received the BNSF justification letter from the California Department of
Transportation (Caltrans), the Texas Department of Transportation (TxDOT), the Illinois
Department of Transportation (IDOT) (with WSDOT, collectively “grantees”) all of whom
received grant funding under FRA’s High-Speed Intercity Passenger Rail (HSIPR) Program.
The BNSF justification letter covers the following projects: the Pacific Northwest Rail Corridor
Program, the Amtrak Quad Cities to Chicago Service Initiation Project, the Tower 55 At-Grade
Improvement Project Section, and the Los Angeles to Fullerton Triple Track — Segment 7
Project.

Section 24405(a) authorizes the Secretary of Transportation to obligate certain grant funds only
if the steel, iron, and manufactured goods used in the project are produced in the United States.
The Secretary (delegated to the FRA Administrator) may waive the Buy America requirement
only if he or she finds that: (A) applying it would be inconsistent with the public interest; (B) the
steel, iron, and goods manufactured in the United 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; (D) or
including domestic material will increase the cost of the overall project by more than 25 percent.
49 U.S.C. § 24405(a)(2)(A)-(D). In its justification letter BNSF asserts that two components of
the Vossloh 101-L concrete ties—a dowel insert and SKL-30 tension clamps—are not produced
in the United States in sufficient and reasonably available amounts and are not of a satisfactory

* This decision on WSDOT’s Buy America waiver request will also apply to the HSIPR projects advanced by IDOT,
TXDOT, and Caltrans on BNSF infrastructure using the Vossloh 101-VL concrete rail tie.


quality and that therefore a waiver is warranted under 49 U.S.C. § 24405(a)(2)(B). For the
following reasons, I am granting WSDOT’s request. According to the justification letter, since it
began installing concrete ties in the 1970’s, BNSF has worked closely with manufacturers to
evaluate and test various concrete tie products and technologies. As described in its justification
letter, as concrete tie technology advanced and became a more viable alternative to wooden ties,
BNSF intensified its efforts to test all available products in an effort to establish a standard for
use across its system. As a result, BNSF selected the Vossloh 101-LV tie as the standard
concrete tie for use on BNSF’s network in 2008. The Vossloh 101-LV concrete tie was selected
as BNSF’s standard for the following reasons:

e Vossloh concrete ties meet or exceed the technical standards of the American Railway
Engineering and Maintenance-of-Way Association (“AREMA”);

e BNSF’s performance testing of the Vossloh concrete tie system demonstrated excellent
results across all measured criteria, including longitudinal restraint, maintenance of gage,
freedom of motion, thermal expansion and failure rates;

¢ Vossloh concrete ties feature several unique design elements, such as the lack of a
shoulder and a field side angle guide plate that matches the width of the tie, which result
in reduced wear, reduced maintenance costs and longer product life; and

e Installation and maintenance of Vossloh concrete ties can be largely automated compared
to other concrete tie systems, which improves safety and efficiency while reducing
overall maintenance time and cost.

As stated in its justification letter, BNSF has searched for domestically manufactured dowel
inserts and SKL-30 clamps that are compatible with the American-made Vossloh 101-LV
concrete tie system. In addition, while there are alternative concrete tie systems available in the
market, they do not meet BNSF’s specific operational and maintenance needs.

Through its justification letter and during conversations with FRA staff, BNSF maintains that the
selection of the Vossloh concrete tie system as the standardized concrete tie system used on
BNSF infrastructure was based on the criteria above and occurred in 2008 prior to the obligation
of FRA grant funding. Additionally, BNSF suggests that installing different products would
pose potentially insurmountable technical complications. For example, alternative rail ties if
used in the FRA-funded projects would not be consistent with BNSF’s existing concrete tie
system or corresponding maintenance and installation equipment and procedures employed by
BNSF. Requiring BNSF to procure and install such alternative concrete ties would require
BSMF to purchase specialized installation and maintenance equipment at a substantial cost, as
BNSF’s current equipment is designed for the installation and maintenance of the Vossloh tie
and would not be compatible with alternative rail ties. As such, while there are other concrete tie
systems available, such systems are not compatible with BNSF’s existing infrastructure and for
that reason are not of satisfactory quality for installation in the FRA-funded projects.

Furthermore, the selection of the Vossloh 101-LV concrete tie system was made on technical,
safety, and economic considerations rooted in BNSF’s long experience installing and
maintaining rail tie systems for use by both freight and intercity passenger trains. The FRA


therefore finds that BNSF has made an adequate showing that the manufactured products
meeting BNSF’s appropriate specifications are not produced in a sufficient and reasonably
available amount.

The FRA also solicited public comments on the waiver request for a period of 15 days. The
waiver request was made available for public review on FRA’s website and through a notice
published in the Federal Register. The Federal Register notice requested the public’s views on
the waiver request and for any information regarding the availability of suitable domestically
manufactured products. FRA did not receive any comments on the waiver request or any
information regarding the availability of suitable domestically manufactured products.

The WSDOT and BNSF began discussions with FRA concerning the Vossloh concrete tie in late
2011. Since then, WSDOT and BNSF have consulted with FRA’s legal and technical staff in
determining how FRA’s Buy America requirements apply to the Vossloh concrete tie and to
other FRA investments on BNSF infrastructure. As part of this consultation, BNSF participated
in calls with the U.S. Department of Commerce, National Institute of Standards and Technology,
Hollins Manufacturing Extension Program (NIST-MEP), an agency that helps encourage the
development of a domestic supply base to support intermodal transportation in the United States,
including rail infrastructure. These conversations led to BNSF’s commitment to help facilitate
conversations between NIST-MEP and Vossloh.

The FRA understands that BNSF is one of the largest users of concrete ties in North America
with over 11 million concrete ties currently in track. Consequently, FRA acknowledges that
BNSF has a substantial interest in ensuring that the concrete ties installed on its system meet
BNSF’s specific needs in terms of performance, durability and cost efficiency. However, as
demonstrated in the waiver request, BNSF also recognizes that as a “large supplier of rail
infrastructure and construction materials it is uniquely situated to encourage American
manufacturing of those products.” The FRA appreciates that BNSF has committed to working
with Vossloh to explore the feasibility of having the foreign components made in the United
States and to continue an ongoing dialog with FRA and NIST-MEP. Further, FRA is encouraged
to hear that Vossloh has separately begun the process to identify potential suitable locations on
which to construct a manufacturing facility for the dowels and SKL-30 tension clamps.

For the foregoing reasons, FRA is granting WSDOT’s Buy America waiver request.” The
waiver is conditioned on BNSF’s good faith efforts to facilitate conversations between NIST-
MEP, FRA and Vossloh in order to explore the feasibility of having the dowel and SKL-30
tension clamps made in the United States. Pursuant to 49 U.S.C. § 24405(a)(4), FRA will
publish a detailed written justification in the Federal Register and provide notice of such finding
and an opportunity for public comment after which this waiver will become effective. This

? This waiver applies to the SKL-30 tension clamp and the dowel insert manufactured in Germany and does not
apply to-any other component of the Vossloh 101-LV concrete rail tie that might be available from both foreign and
domestic sources.