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[Federal Register Volume 89, Number 230 (Friday, November 29, 2024)]
[Notices]
[Pages 94868-94871]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-28068]

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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

Docket No. FRA-2024-0104]

Notice of Final 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.

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SUMMARY: The Federal Railroad Administration (FRA) is issuing 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

[[Page 94869]]

States. FRA is not waiving the applicable BABA requirements for 
construction materials used in the Project. The final 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 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: This waiver is effective December 4, 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 concluded are not 
produced in the United States. The DSWP also provides the Authority's 
justification for seeking a waiver based on nonavailability of the 
requested products. The Authority describes its coordination with 
potential suppliers and consideration of alternate products. In 
addition to the Authority's market research and coordination, the 
Authority also refers to market research conducted by Brightline West 
for the Brightline West High-Speed Train Project, as the Authority 
anticipates using the same or substantially similar products for the 
Project. 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 to provide service between San Francisco and 
Los Angeles and to 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 and making certain statutory findings, 
consistent with 49 U.S.C. 22905(a)(2). FRA plays no role in the 
business decisions the Authority makes with respect to procurement of 
the best products for its project.
    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. Neither OEM indicated that they would be able to supply a fully 
Buy America-compliant trainset in their responses as 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.
    On September 20, 2024, FRA published for a 30-day public comment 
period a proposed waiver for the Project based on the domestic 
nonavailability of certain components. FRA received 11 unique comments, 
which are discussed below. This notice summarizes FRA's Buy America 
requirements, the Authority's request for a waiver, and FRA's findings 
and final 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,

[[Page 94870]]

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.

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 only after making the requisite findings 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).

IV. Summary of the Proposed Waiver

    On September 20, 2024, FRA issued the Notice of Proposed 
Nonavailability Waiver of Buy America Requirements for Certain High-
Speed Rail Products for the California Inaugural High-Speed Rail 
Service Project, at 89 FR 77224. Based on the information provided by 
the Authority, FRA concluded that the following products were not 
available in the United States:
     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, track grade, and maintenance zones) 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; and
     Fire Alarm Systems.
    At the time of the proposed waiver, the Authority had not selected 
an OEM for the trainsets and had not completed its procurement process 
for the Project, but neither OEM indicated that they would be able to 
supply a fully Buy America-compliant trainset, as both OEMs would 
require aluminum car shells that are not produced in the U.S. 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. In a letter dated October 24, 2024, the Authority 
requested FRA finalize the waiver as proposed. The Authority noted that 
it will continue its procurement process and review and evaluate 
proposals based on the needs of the Project. 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. Discussion of Public Comments

    Comments on the waiver were due October 7, 2024. FRA received 11 
comments that generally supported the proposed waiver, and no comments 
that generally opposed the proposed waiver. Commenters did not raise 
significant concerns or provide new information relevant to FRA's 
proposed waiver. As such, FRA is not modifying the proposed waiver in 
response to comments.

VI. NIST-MEP Supplier Scouting Results

    Consistent with section 70916 of BABA, FRA will request that 
recipients consult with the National Institute of Standards and 
Technology's Manufacturing Extension Partnership (NIST-MEP) through the 
NIST-MEP's supplier scouting program, prior to issuing a final waiver. 
The NIST-MEP supplier scouting opportunity allows agencies, 
manufacturers, and project sponsors to identify potential manufacturers 
from across the nation to assist in market research on domestic 
availability. As the products included in this final waiver are the 
same as the products described in the Final Nonavailability Waiver for 
the Brightline West Project, FRA is relying on the results of NIST-
MEP's supplier scouting effort for the Brightline West Project. As of 
January 26, 2024, the NIST-MEP was not able to identify a domestic 
manufacturer for the products listed within the Brightline West waiver 
through the supplier scouting program.\6\ This further supports FRA's 
conclusion that the products listed in the proposed waiver are not 
produced in the United States.
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    \6\ 89 FR 45934 (May 24, 2024).
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VII. Final Waiver

    Based on its review of the waiver request and DSWP, and in 
consideration of comments received on the proposed waiver, FRA is 
waiving its Buy America requirements for the following products:
     Car Shells (shell structure, frame, vehicle paintwork) for 
six trainsets;
     Eurobalises and Euroloops;
     Counting Heads and Axle Counter Sensors;
     Truck Press (test stand);

[[Page 94871]]

     Turnout Systems including Derailers; and
     Fire Alarm Systems.
    The 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 waiver does not apply to any construction materials 
used in the Project. The 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 
waiver will expire upon the end of the period of performance and 
closeout of the grant agreement for the Project.

    Issued in Washington DC.
Allison Ishihara Fultz,
Chief Counsel.
[FR Doc. 2024-28068 Filed 11-27-24; 8:45 am]
BILLING CODE 4910-06-P
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