71246 Federal Register / Vol. 70, No. 227 / Monday, November 28, 2005 / Proposed Rules 

individuals’ access to or amendment of 

records. When such access or 

amendment would cause the identity of 

a confidential source to be revealed, it 

would impair the future ability of the 

Department to compile investigatory 

material for the purpose of determining 

suitability, eligibility, or qualifications 

for Federal civilian employment, 

Federal contracts, or access to classified 

information. In addition, the system 

should be exempt from 5 U.S.C. 

552a(e)(1) which requires that an agency 

maintain in its records only such 

information about an individual as is 

relevant and necessary to accomplish a 

purpose of the agency required to be 

accomplished by statute or executive 

order. The Department believes that to 

fulfill the requirements of 5 U.S.C. 

552a(e)(1) would unduly restrict the 

agency in its information gathering 

inasmuch as it is often not until well 

after the investigation that it is possible 

to determine the relevance and 

necessity of particular information. 

In a notice, to be published separately 

in the Federal Register, the Department 

proposes to revise Treasury/IRS 34.022. 

The purpose of the notice is to make 

certain alterations to the notice 

including changing the title from 

‘‘Treasury/IRS 34.022—National 

Background Investigations Center 

Management Information System’’ to 

‘‘Treasury/IRS 34.022—Automated 

Background Investigations System 

(ABIS).’’

As required by Executive Order 

12866, it has been determined that this 

proposed rule is not a significant 

regulatory action, and therefore, does 

not require a regulatory impact analysis. 

The regulation will not have a 

substantial direct effect on the States, on 

the relationship between the Federal 

Government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. Therefore, it is 

determined that this Proposed rule does 

not have federalism implications under 

Executive Order 13132. 

Pursuant to the requirements of the 

Regulatory Flexibility Act, 5 U.S.C. 601–

612, it is hereby certified that these 

regulations will not significantly affect a 

substantial number of small entities. 

The proposed rule imposes no duties or 

obligations on small entities. 

In accordance with the provisions of 

the Paperwork Reduction Act of 1995, 

the Department of the Treasury has 

determined that this proposed rule 

would not impose new record keeping, 

application, reporting, or other types of 

information collection requirements. 

List of Subjects in 31 CFR Part 1 

Privacy. 

Part 1 subpart C of Title 31 of the 

Code of Federal Regulations is proposed 

to be amended as follows: 

PART 1—[AMENDED] 

1. The authority citation for part 1 

continues to read as follows: 

Authority: 5 U.S.C. 301, 31 U.S.C. 321, 

subpart A also issued under 5 U.S.C. 552, as 

amended. Subpart C also issued under 5 

U.S.C. 552a. 

2. Section 1.36 of subpart C is 

amended as follows: 

a. Paragraph (c)(1)(viii) is amended by 

removing ‘‘IRS 34.022—National 

Background Investigations Center 

Management Information System’’ from 

the table. 

b. Paragraph (m)(1)(viii) is amended 

by adding the following text to the table 

in numerical order: 

§ 1.36 Systems exempt in whole or in part 

from provisions of 5 U.S.C. 522a and this 

part. 

* * * * * 

(m) * * * 

(1) * * * 

(viii) * * * 

Number Name of system 

* * * * * 

IRS 34.022 .... Automated Background Investigations System (ABIS) 

* * * * * 

* * * * * 

Dated: October 3, 2005. 

Sandra L. Pack, 

Assistant Secretary for Management and 

Chief Financial Officer. 

[FR Doc. E5–6577 Filed 11–25–05; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Transit Administration 

49 CFR Part 661 

[Docket No. FTA–2005–23082] 

RIN 2132–AA80 

Buy America Requirements; 

Amendments to Definitions and Waiver 

Procedures 

AGENCY: Federal Transit Administration, 

DOT. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Safe, Accountable, 

Flexible, Efficient Transportation Equity 

Act: A Legacy for Users (SAFETEA–LU) 

requires the Federal Transit 

Administration (FTA) to make certain 

changes to our Buy America 

requirements. Accordingly, this Notice 

of Proposed Rulemaking (NPRM) would 

clarify the Buy America requirements 

with respect to microprocessor waivers, 

remove two general waiver categories, 

allow for post-award waivers, require 

greater detail for public interest waivers, 

and specify that final decisions by FTA 

are subject to judicial review. In 

addition, this NPRM would clarify the 

definitions of end product, negotiated 

agreement, and contractor, and provide 

a list representative of those items. The 

NPRM also proposes addressing the 

procurement of systems under the 

definition of end product, negotiated 

agreement, and contractor to ensure that 

major system procurements are not used 

to circumvent the Buy America 

requirements. Finally, the NPRM would 

make a minor clarification to pre-award 

and post-delivery review of rolling stock 

purchases. 

DATES: Comments requested by January 

27, 2006. Late filed comments will be 

considered to the extent practicable. 

ADDRESSES: You may submit comments 

[identified by DOT DMS Docket Number 

FTA–2005–23082] by any of the 

following methods: 

Federal Rulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

online instructions for submitting 

comments. 

Web site: http://dms.dot.gov. Follow 

the instructions for submitting 

comments on the DOT electronic docket 

site. 

Fax: 202–493–2251. 

Mail: Docket Management Facility; 

U.S. Department of Transportation, 400 

Seventh Street, SW., Nassif Building, 

PL–401, Washington, DC 20590–0001. 

Hand Delivery: Room PL–401 on the 

plaza level of the Nassif Building, 400 

Seventh Street, SW., Washington, DC, 

between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal holidays. 

Instructions: You must include the 

agency name (Federal Transit 

Administration and Docket number 

(FTA–2005–23082) or the Regulatory 

Identification Number (RIN) for this 

rulemaking at the beginning of your 

comments. You should submit two 

copies of your comments if you submit 

them by mail. If you wish to receive 

confirmation that FTA received your 

comments, you must include a selfaddressed stamped postcard. Note that 

all comments received will be posted, 

without change, to http://dms.dot.gov 

including any personal information 

provided and will be available to 

Federal Register / Vol. 70, No. 227 / Monday, November 28, 2005 / Proposed Rules 71247 

internet users. Please see the Privacy 

Act section of this document. 

Docket: For access to the docket to 

read background documents and 

comments received, go to http:// 

dms.dot.gov at any time or to Room PL–

401 on the plaza level of the Nassif 

Building, 400 Seventh Street, SW., 

Washington, DC between 9 a.m. and 5 

p.m., Monday through Friday, except 

Federal holidays. 

FOR FURTHER INFORMATION CONTACT: 

Joseph Pixley, Chief Counsel’s Office, 

Federal Transit Administration, 400 

Seventh Street SW., Room 9316, 

Washington, DC 20590, (202) 366–4011 

or Joseph.Pixley@fta.dot.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In section 401 of the Surface 

Transportation Assistance Act of 1978 

(STAA) (Pub. L. 95–594, 92 Stat. 2689), 

Congress first enacted the Buy America 

legislation applicable to the expenditure 

of Federal funds by recipients under 

FTA grant programs. This legislation 

established a domestic preference for 

‘‘articles, materials, supplies mined, 

produced, or manufactured’’ in the 

United States and costing more than 

$500,000. In January 1983, Congress 

repealed section 401 and substituted 

section 165 of the Surface 

Transportation Assistance Act of 1982 

(Pub. L. 97–424, 96 Stat. 2097), which 

eliminated the $500,000 threshold and 

created four waiver exceptions. Section 

165 is codified at 49 U.S.C. 5323(j). 

Congress further amended 49 U.S.C. 

§ 5323 (j) in a series of enactments 

between 1984 and 2003. See generally 

section 227 of the Surface 

Transportation Assistance and Uniform 

Relocation Act of 1987 (STURAA) (Pub. 

L. 100–17, 101 Stat. 165); section 1048 

of the Intermodal Surface 

Transportation Efficiency Act (ISTEA) 

(Pub. L. 102–240); Section 3020(b) of the 

Transportation Equity Act for the 

Twenty-First Century (TEA–21) (Pub. L. 

105–178). 

Pursuant to 49 U.S.C. 5323 (j), FTA 

promulgated regulations to implement 

and administer the Buy America 

requirements at 49 CFR 661. 

SAFETEA–LU amends Section 5323(j) 

by redesignating paragraphs (3) through 

(7) as paragraphs (4) through (8) and by 

inserting after paragraph (2) and (8), 

respectively. Section 5323(j)(6) (as so 

redesignated) is also amended by 

striking ‘‘Intermodal Surface 

Transportation Efficiency Act of 1991 

(Public Law 102–240, 105 Stat. 1914)’’

and inserting ‘‘Federal Public 

Transportation Act of 2005’’. 

Furthermore, SAFETEA–LU repeals 

the general waiver found in Appendix A 

of 49 C.F.R 661.7 subsections (b) and (c) 

for 15 passenger vans and wagons 

produced by Chrysler Corporation. 

In addition, SAFETEA–LU requires 

that the Secretary issue a rule that 

clarifies the microprocessor waiver, 

defines end product, negotiated 

procurement, and contractor, allows for 

a post-award waiver, and includes a 

certification under a negotiated 

procurement process. Each of these 

legislative changes and requirements 

will be discussed in further detail, 

below. 

II. Written Justification for Public 

Interest Waiver 

FTA’s Buy America regulations 

provide for public interest waivers if the 

Administrator finds that the application 

of the Buy America requirements would 

be inconsistent with the public interest. 

The new provision in section 

5323(j)(3) requires that the Secretary 

issue a detailed written justification, 

explaining why the waiver is in the 

public interest, and requiring that such 

justifications be published in the 

Federal Register for notice and 

comment by the public for a reasonable 

period of time. FTA considers this 

requirement to be self-explanatory. To 

implement the change in 5323(j)(3), 

therefore, FTA proposes to add the 

following language: ‘‘When granting a 

public interest waiver, the 

Administrator shall issue a detailed 

written statement justifying why the 

waiver is in the public interest. The 

Administrator shall publish this 

justification in the Federal Register, 

providing the public with a reasonable 

period of time for notice and comment.’’

Note that this proposed language in 

the regulation requires written 

justification and publication in the 

Federal Register only in cases where the 

Administrator approves a waiver 

request, rather than denies such a 

request. FTA makes this distinction for 

two reasons. First, the statutory 

language indicates that only waiver 

approvals are required to be published 

in the Federal Register. See Section 

5323(j)(3) (‘‘shall issue a detailed 

written justification as to why the 

waiver is in the public interest’’). 

Second, for some time FTA has placed 

all requests for public interest waivers 

on the Buy America section of its web 

site, http://www.fta.dot.gov/legal/ 

buy_america/14328_ENG_HTML.htm, 

and has requested comment from the 

public. In addition, FTA notifies the 

American Public Transportation 

Association (APTA) when a waiver 

request is posted and APTA sends out 

a notice to all of its members, which 

include transit authorities and transit 

industry members. This process 

functions well. The relevant industries 

and grantees actively respond and 

provide valuable information to FTA. 

Following receipt of such comments, 

the FTA Office of Chief Counsel, 

through authority delegated by the 

Administrator, then issues ‘‘detailed 

written statements’’ either approving or 

disapproving public interest waiver 

requests. FTA proposes maintaining this 

in-house ‘‘notice and comment’’ process 

in cases where public interest waiver 

requests are denied. FTA requests 

public comment on whether we should 

continue with this process or whether 

there are other, more effective means, 

for accomplishing this task. 

III. Administrative Review 

FTA’s Buy America regulations 

provide for ‘‘Rights of Third Parties’’ to 

petition FTA for review of a decision 

and to pursue any other additional right 

at law or equity. 

The new Section 5323(j)(9) states that 

‘‘a party adversely affected by an agency 

action under this subsection shall have 

the right to seek review under section 

702 of title 5 [the Administrative 

Procedure Act (APA)].’’ FTA considers 

this provision to be self-explanatory. 

Moreover, FTA has always believed that 

its final agency actions are subject to 

judicial review under the APA. To 

clarify this, however, FTA proposes 

striking the word ‘‘Third’’ from the title 

heading ‘‘Rights of Third Parties’’ in 

section 661.20, to reflect that all parties 

have the right to judicial review under 

the APA. A new subsection (a) will be 

added as follows: ‘‘(a) A party adversely 

affected by an FTA action under this 

subsection shall have the right to seek 

review under the Administrative 

Procedure Act (APA), 5 U.S.C. 702 et 

seq.’’

In addition, the existing provision in 

section 661.20, pertaining to the rights 

of third parties, will be designated as 

paragraph (b), with the following 

highlighted clause added at the 

beginning, to read: ‘‘(b) Except as 

provided in section 661.20(a), the sole 

right of any third party under the Buy 

America provision is to petition FTA 

under the provisions of Sec. 661.15 of 

this part. No third party has any 

additional right, at law or equity, for any 

remedy including, but not limited to, 

injunctions, damages, or cancellation of 

the Federal grant or contracts of the 

grantee.’’

FTA seeks comment on whether this 

proposed change is sufficient to clarify 

a party’s appeal rights under the Buy 

America regulations. 

71248 Federal Register / Vol. 70, No. 227 / Monday, November 28, 2005 / Proposed Rules 

IV. Repeal of General Waiver for 

Chrysler Vans 

Appendix A to section 661.7 provides 

for general waivers for 15 passenger 

Chrysler vans and wagons. SAFETEA–

LU repeals these two general waivers for 

Chrysler vehicles in Appendix A. 

Accordingly, subsections (b) and (c) of 

Appendix A, 49 CFR 661.7, will be 

stricken and subsection (d), the general 

waiver pertaining to microcomputers, 

will be re-designated as subsection (b). 

V. Microprocessor Waiver 

FTA’s existing regulations provide for 

a general waiver of microcomputer 

equipment. SAFETEA–LU requires that 

the Secretary issue a rule to ‘‘clarify’’

the microcomputer/microprocessor 

waiver as follows: 

(A) Microprocessor waiver.—To clarify that 

any waiver from the Buy America 

requirements issued under section 5323(j)(2) 

of such title [49 U.S.C.A. 5323(j)(2)] for a 

microprocessor, computer, or microcomputer 

applies only to a device used solely for the 

purpose of processing or storing data and 

does not extend to a product containing a 

microprocessor, computer, or 

microcomputer. 

This ‘‘clarification’’ in SAFETEA–LU 

actually reflects current FTA practice 

with respect to implementing the 

general waiver for microcomputer, 

microprocessor, and related equipment. 

For example, FTA has previously 

defined a ‘‘microcomputer’’ as 

A computer system whose processing unit 

is a microprocessor. A basic microcomputer 

includes a microprocessor, storage, and 

input/output facility, which may or may not 

be on one chip. The same source defines 

computer system as: A functional unit 

consisting of one or more computers and 

associated software, that uses common 

storage for all or part of a program and also 

for all or part of the data necessary for the 

execution of the program executes userwritten or user-designated programs; 

performs user-designated data manipulation, 

including arithmetic operations and logic 

operations; and that can execute programs 

that modify themselves during their 

executions. A computer system may be a 

stand-alone unit or may consist of several 

interconnected units. Synonymous with ADP 

system, computing system. 

50 FR 18760 (May 2, 1985). 

Applying this definition, FTA 

determined that a manufacturer may use 

foreign microcomputer equipment 

without violating the Buy America 

requirements. For example, FTA 

determined that a Mobile Data 

Communication System was covered by 

the microcomputer waiver, and found 

that ‘‘[a]ll this equipment and associated 

software is linked together to a 

computer system at your headquarters 

with additional interfaces to other 

CDTA computer systems.’’ Capital 

District Transportation Authority letter, 

August 30, 2001. Following that 

decision, FTA withdrew an outstanding 

advance notice of proposed rulemaking 

on the microcomputer waiver, and 

stated as follows: 

It should be noted that FTA does not apply 

the waiver to an entire product because it 

contains a microcomputer. The parameters of 

the waiver as it currently exists are that if the 

end product is itself a microcomputer or 

software as defined above, Buy America is 

waived. If, however, the end product 

contains a microcomputer (e.g., a fare card 

system), that microcomputer is exempt from 

the requirements of Buy America, but the rest 

of the end product must be in compliance. 

68 FR 9810 (Feb. 28, 2003). 

FTA applied this reasoning to 

subsequent Buy America decisions, 

finding for example, that some 

components of a fare collection system 

were subject to the waiver, but others 

were not. Specifically, FTA found that 

‘‘[t]he bill and coin validator, and the 

printer, are not, themselves, 

microcomputers, although they may 

each contain embedded 

microprocessors.’’ CoinCard letter, May 

23, 2003. See also, MTA letter, 

September 23, 2003, and Vansco 

Electronics letter, September 15, 2003. 

All of these letters are available on 

FTA’s Web site at http://fta.dot.gov. In 

FTA’s most recent Buy America 

decision addressing the microcomputer 

waiver in a procurement for Monitoring 

and Diagnostic equipment, FTA stated: 

Some of the Monitoring and Diagnostic 

system is microcomputer equipment subject 

to the waiver; however, some of it is not. As 

discussed in the definition, a microcomputer 

is a computer based on a microprocessor. A 

microprocessor is a computer whose central 

processing unit is contained on one or a 

small number of integrated circuits. 

Microcomputers may be stand-alone units or 

they may be embedded in other equipment. 

They must have, or be, controllers or 

communication processors and be capable of 

processing, storage, programming, and have 

input/output facilities. Microcomputers may 

be grouped within larger systems or 

equipment, consisting of several 

interconnected units each functioning as 

either stand-alone units or embedded 

equipment, or a mix of both. Related 

hardware and equipment that may be 

controlled by a microprocessor is not covered 

by the microcomputer waiver. 

Questor Tangent Letter, August 2, 2004. 

To reflect FTA’s current 

understanding of this general waiver 

and to implement the specific 

requirements of SAFETEA–LU, is 

clarified to read as follows: ‘‘(b) Under 

the provisions of Sec. 661.7 (b) and (c) 

of this part, a general public interest 

waiver from the Buy America 

requirements applies to 

microprocessors, computers, 

microcomputers, or software, or other 

such devices, which are used solely for 

the purpose of processing or storing 

data. This general waiver does not 

extend to a product or device which 

merely contains a microprocessor or 

microcomputer, or is controlled by a 

microprocessor, and is not used solely 

for the purpose of processing or storing 

data.’’ FTA seeks comment on whether 

this change adequately clarifies the 

microprocessor waiver. 

VI. Proposed Revisions to Buy America 

Definitions 

A. Negotiated Procurement 

SAFETEA–LU requires that the 

Secretary issue a rule to define the term 

‘‘negotiated procurement.’’ In public 

contracting two basic methods of 

procurement are used: sealed bidding 

and negotiated procurement. Generally, 

sealed bidding is a formal process 

marked by five phases: (1) Preparation 

of the Invitation for Bids (IFB) by the 

contracting agency; (2) Publicizing the 

IFB; (3) Submission of bids by interested 

contractors; (4) Evaluation of bids by the 

contracting agency; and (5) Contract 

award. In sealed bidding, contract 

specifications are clear, complete and 

definite. There are no ‘‘discussions’’ or 

‘‘negotiations’’ between the parties, 

other than what is contained in the IFB 

and submitted bids. There are strict 

requirements that bids comply in all 

material respects with the invitation for 

bids, to include the method and time of 

bid submission. A contracting agency 

may only accept a responsive bid from 

a responsible bidder. A bid is 

considered ‘‘responsive’’ if it 

unequivocally offers to provide the 

requested supplies or services at a firm, 

fixed price, in accordance with the 

terms of the IFB. Finally, contracting 

agencies evaluate bids on price and nonprice-related factors, but with award 

generally made on the basis of lowest 

price offered. 

By contrast, negotiated procurements 

are marked by greater flexibility and 

variety than sealed bid solicitations. 

Generally, in negotiated contracting the 

contracting agency issues a Request for 

Proposal (RFP). RFPs include a 

description of the work to be performed, 

a section describing the information that 

offerors need to provide in their 

proposals, and a section describing how 

the agency will evaluate proposals. 

Interested contractors, called offerors, 

submit offers or proposals in response to 

the RFP. Unlike in sealed bidding, 

negotiated procurements may include 

‘‘discussions’’ or ‘‘negotiations’’

Federal Register / Vol. 70, No. 227 / Monday, November 28, 2005 / Proposed Rules 71249 

between agency and offerors, if the 

agency so chooses. Also, unlike in 

sealed bidding, which is marked by a 

one-time, all or nothing submission of 

bids, negotiated procurements may 

include multiple offers by each 

contractor, with the ‘‘best and final’’

offer or ‘‘final revised’’ offer controlling, 

unless award is to be made on receipt 

of initial proposals. In addition, 

negotiated procurements may be either 

competitive or non-competitive, as in 

the case of sole-source procurements. In 

negotiated procurements, contracting 

officers generally have discretion to 

weigh non-price factors to a greater 

extent than in sealed bidding. In socalled ‘‘best value’’ contracting, price 

may even be the low ranking factor. 

Because negotiated procurements are 

marked by so much variety and provide 

contracting officials with great 

discretion to implement different 

procurement mechanisms (e.g. award 

with discussions versus award without 

discussions), the term ‘‘negotiated 

procurement’’ is difficult to define. See 

e.g., Gallagher, the Law of Federal 

Negotiated Contract Formation at p. 39 

(CGA Publications, Inc., 1981) 

(‘‘Providing a nutshell description of 

‘‘negotiation’’ is much more difficult 

[than sealed bidding]).’’ For this reason, 

contract law scholars have defined 

negotiated procurement by what it is 

not. For example, Professors Nash and 

Cibinic describe a negotiated contract as 

one that is awarded without the use of 

a sealed bid. See Formation of 

Government Contracts, Second Edition, 

George Washington University, 1986. 

The drafters of the Federal Acquisition 

Regulation (FAR), which governs direct 

Federal procurement, have adopted a 

similar definition. FAR Part 15—

Contracting By Negotiation, defines 

negotiated procurement as follows: ‘‘A 

contract awarded using other than 

sealed bidding procedures is a 

negotiated contract.’’ 48 CFR 15.000. 

There is no FTA requirement that 

grantees use a specific procurement 

method such as sealed bidding or 

negotiated procurement, or a particular 

methodology of negotiations, for any 

particular procurement. Indeed, the Buy 

America regulations in 49 CFR Part 661 

refer to both ‘‘bids’’ and ‘‘bidders’’ and 

‘‘offers’’ and ‘‘offerors,’’ reflecting the 

two basic methods of procurement 

available to grantees. 

Recognizing that procurement 

practices are established locally, and to 

define ‘‘negotiated procurement’’ in 

such a way as not to overtly contradict 

or limit local practices of grantees, FTA 

proposes adopting the ‘‘flexible’’

definition of negotiated contracts in 

FAR Part 15. The proposed definition to 

be added would be as follows: 

‘‘Negotiated Procurement means a 

contract awarded using other than 

sealed bidding procedures.’’

FTA seeks comment on whether this 

definition sufficiently captures the 

concept of negotiated procurement and 

whether there are other definitions 

available that more accurately capture 

this concept. 

B. Contractor 

SAFETEA–LU requires that the 

Secretary issue a rule to define the term 

‘‘contractor.’’ To implement this 

requirement, FTA proposes two 

alternative definitions adopted from 

direct Federal procurement. The first 

proposed definition to be added would 

state as follows: ‘‘Contractor means any 

individual or other legal entity that 

directly or indirectly (e.g., through an 

affiliate), submits bids or offers for or is 

awarded, or reasonably may be expected 

to submit bids or offers for or be 

awarded, a federally funded third party 

contract or subcontract under a federally 

funded third party contract; or, 

conducts business, or reasonably may be 

expected to conduct business, with an 

FTA grantee, as an agent or 

representative of another contractor.’’

This proposed definition comes from 

the definition of ‘‘contractor’’ in FAR 

9.403 (suspension & debarment section). 

The term contractor could also be 

defined as follows: ‘‘Contractor means 

any party to a third party government 

contract other than the government.’’

This definition is based on the 

definition of ‘‘contractor’’ in the 

Contract Disputes Act (CDA), 41 U.S.C. 

601(4). 

FTA seeks comment on the relative 

merits and demerits of selecting one of 

the above definitions over the other. 

FTA would also like to receive 

information on whether there are other 

definitions available for this situation 

that would better serve our purpose. If 

a commenter proposes an alternative 

definition, please include as much 

supporting information as possible for 

the alternative definition. 

C. End Product 

SAFETEA–LU requires that the 

Secretary issue a rule to define the term 

‘‘end product,’’ and to develop a list of 

representative items that are subject to 

the Buy America requirements. To 

implement this requirement, FTA 

proposes two alternative definitions of 

‘‘end product.’’ The first is based on the 

definition of end product currently used 

by FTA. To examine this current 

definition, FTA will first review its 

history in Buy America practice. 

FTA’s first regulatory implementation 

of the Surface Transportation Assistance 

Act of 1978 (STAA) (Pub. L. 95–594, 92 

Stat. 2689) made clear that ‘‘[t]he 

legislative history of the Buy America 

provision indicates that Congress 

intended it to be interpreted in the light 

of the Buy American Act of 1933, 41 

U.S.C. 10a–10d, to the extent the Act is 

applicable.’’ The Buy American Act 

(BAA), in fact, is an entirely different 

statute from Buy America, applicable to 

direct purchases by federal agencies and 

departments. As implemented in FAR 

Part 25, the BAA establishes a 

preference for ‘‘domestic end products,’’

which are defined as follows: 

An unmanufactured end product which 

has been mined or produced in the United 

States, or an end product manufactured in 

the United States if the cost of its 

components mined, produced and/or 

manufactured in the United States exceeds 

50 percent of the cost of all its components. 

The STAA of 1978 and its 

implementing regulation retained this 

‘‘preference’’ for ‘‘domestic end 

products’’ from the BAA, but tailored 

the requirements to FTA’s grant making 

process. FTA’s first Buy America 

regulation issued in December 1978 

defined ‘‘end product’’ as follows: ‘‘(e) 

‘End product’ means an article, material 

or supply, whether manufactured or 

unmanufactured, that is to be acquired 

by the grantee, with financial assistance 

derived from UMTA, and that is to be 

delivered to the grantee, as specified by 

the third party contract. (f) ‘Foreign end 

product’ means an end product other 

than a domestic end product.’’ Like the 

FAR Part 25 provisions implementing 

the BAA, the original Buy America 

regulation also included a ‘‘50 percent’’

requirement for domestic components. 

(See section 660.22 Determination of 

Origins stating: ‘‘(a) In order for a 

manufactured end product to be 

considered a domestic end product—(1) 

the cost of the domestic components 

must exceed 50 percent of the cost of all 

its components; and (2) the final 

assembly of the components to form the 

end product must take place in the 

United States.’’) 

Subsequently, Congress eliminated 

the ‘‘preference’’ for domestic products 

in Buy America and the ‘‘50 percent’’

domestic component requirement, 

making compliance with Buy America 

an absolute ‘‘requirement’’ (unless a 

waiver applies) and increasing the 

domestic content threshold to 100 

percent in the case of steel and iron 

products and manufactured products, 

and 60 percent in the case of rolling 

stock. Over the years, FTA modified its 

Buy America regulations to reflect these 

71250 Federal Register / Vol. 70, No. 227 / Monday, November 28, 2005 / Proposed Rules 

changes. Nevertheless, from December 

1978 to this day, FTA has retained some 

variation of ‘‘end product’’ as originally 

defined in the first Buy America 

regulation: ‘‘ ‘End product’ means an 

article, material or supply * * * that is 

to be delivered to the grantee, as 

specified by the third party contract.’’

Section 660.13. This definition comes 

from case law interpreting the Buy 

American Act. For example, in Brown 

Boveri Corp., the then U.S. General 

Accounting Office [now the U.S. 

Government Accountability Office] 

(GAO) defined ‘‘end product’’ as 

follows: ‘‘As to a given contract the end 

product is the item to be delivered to 

the Government as specified in the 

contract.’’ B–187252, 56 Comp. Gen. 

596, May 10, 1977 (emphasis in 

original). 

Consistent with this precedent, FTA 

currently defines ‘‘end product,’’ in 

part, as ‘‘any item subject to 49 U.S.C. 

5323(j) that is to be acquired by a 

grantee, as specified in the overall 

project contract.’’ (Emphasis added). 49 

CFR 661.11(s). In the current version of 

the Buy America regulations, this 

definition of ‘‘end product’’ migrated 

from the definition section at 661.3 to 

the rolling stock section at 661.11, 

creating some confusion that the term 

‘‘end product’’ is only relevant to rolling 

stock procurements. Nevertheless, the 

term ‘‘end product’’ remains in the 

definition of ‘‘component’’ in section 

661.3, indicating the general 

applicability of the term in Buy America 

analysis. See 49 CFR 661.3: 

‘‘Component means any article, 

material, or supply * * * that is 

directly incorporated into the end 

product at the final assembly location.’’

Moreover, although section 661.11 

applies specifically to rolling stock 

procurements, FTA has consistently 

applied the definition at section 

661.11(s) and similar definitions of ‘‘end 

product’’ to steel and iron and 

manufactured products as well. In a 

letter to the Santa Clara Valley 

Transportation Authority dated October 

18, 2001, for example, FTA addressed 

whether a ‘‘cable trough’’ was an end 

product in a procurement for a section 

of the Tasman Corridor East light rail 

construction project. The letter stated, 

in part, as follows: 

FTA has consistently applied the following 

reasoning to the end product question: ‘‘[A]n 

end product is ‘any item’ * * * that is to be 

acquired by a grantee, as specified in the 

overall project contract. The key determinant 

is the grantee’s specification. For example, if 

a grantee is procuring a new rail car, the car 

is the end product and the propulsion motor 

would be a component of the end product. 

If that same grantee is procuring a 

replacement propulsion motor for an existing 

rail car, that propulsion motor would be the 

end product.’’ 56 FR 928 (Jan. 9, 1991). 

(Emphasis added.) 

Similarly, in 1981 FTA determined that 

‘‘the procurement of construction is treated 

as procurement of a manufactured product in 

that the deliverable of the construction 

contract is considered as the end product and 

the construction materials used therein are 

considered components of the end product.’’

46 FR 5808 (Jan. 19, 1981). Further, when 

asked to clarify the definition of ‘‘end 

product,’’ FTA concluded that, ‘‘the 

deliverable item specified in the contract is 

the end product. For example, in a contract 

for 10 buses that must contain 500 h.p. 

engines, the 10 buses are the end-products.’’

Id. (Emphasis added.) 

Under FTA’s long standing ‘‘end 

product’’ analysis, where the end 

product of a procurement is the 

deliverable item specified by the grantee 

in the third party contract, not only the 

‘‘end product,’’ but also the 

components, subcomponents, and even 

the applicable Buy America standard 

are subject to ‘‘shift,’’ for lack of a better 

term, depending on the article being 

procured. In the earlier example, cited 

above, if a grantee is procuring a new 

rail car, the car is the end product and 

the propulsion motor would be a 

component of the end product. For this 

hypothetical rail car end product, the 

rolling stock standard (e.g. 60 percent 

domestic components by cost) at 661.11 

would apply. However, if that same 

grantee is procuring a replacement 

propulsion motor for an existing rail car, 

that propulsion motor would be the end 

product (with different resulting 

components), and the manufactured 

products standard (100 percent U.S. 

content) would apply. 

Again, this so-called ‘‘shifting’’ end 

product analysis is long-standing at 

FTA, beginning with the original 

implementation of Buy America in 

1978. Moreover, this methodology is 

based on decisions interpreting the Buy 

American Act. In the case of Brown v. 

Boveri, cited previously, GAO 

recognized a similar ‘‘shifting’’ analysis 

of end product under the BAA: 

We have held that there is no 

inconsistency between a given article’s 

classification as an end product under a 

particular procurement and its subsequent 

classification as a component under another 

contract under which that article will be 

incorporated into a different end product. 

56 Comp. Gen. 596 (1977). In a decision 

letter from April 2000, FTA explained 

the advantages of this ‘‘shifting’’ end 

product methodology as avoiding 

having to classify literally thousands of 

parts, due to the enormous 

administrative burden: 

Depending on the particular procurement 

at issue, literally thousands of individual 

manufactured items, themselves made up of 

many thousand more manufactured subitems, may go into the ultimate product being 

procured by an FTA grant recipient. Indeed, 

the question is one of perspective: any given 

item, from a screw to a maintenance garage, 

may be viewed as an end product, a 

component, a subcomponent, or less. 

Accordingly, FTA’s rule looks at the end 

product being acquired in a given case. Here, 

the procurement contract was for the garage; 

accordingly, the vehicle lift to be installed in 

the garage was a component. Further, the end 

product must be the result of a 

manufacturing process. In this case, the hoist 

will ultimately be a fixture of the garage, and 

installation of the hoist is part of the 

manufacturing process. The construction of 

the garage as a whole, is the subject of the 

procurement and the end product. 

June 8, 2000 decision letter to 

Macton-Joyce and Whiting Corporation. 

Based on this long standing ‘‘end 

product’’ methodology and precedent, 

FTA proposes moving its existing 

definition of end product at 661.11(s) to 

the definition section of Part 661.3, for 

universal applicability. In keeping with 

the Congress’s mandate to include a 

‘‘representative list’’ of end product 

items, FTA proposes the following 

general definition: ‘‘End product means 

any item subject to 49 U.S.C. 5323(j) 

that is to be acquired by a grantee, as 

specified in the overall project contact. 

A list of representative end product 

items is included at Appendix A.’’ FTA 

seeks public comment on this proposal. 

FTA proposes an alternative 

definition of ‘‘end product’’ as follows: 

End product means any article, material, 

supply, or system, whether manufactured or 

unmanufactured, that is acquired for public 

use under a federally funded third party 

contract. A list of representative end 

products is included at Appendix A. 

FTA bases this alternative definition 

on the definition of end product under 

the Buy American Act in FAR Part 25. 

What FTA proposes under this second, 

alternative version is to abandon its long 

standing ‘‘shifting’’ end product 

methodology described earlier, in favor 

of one where the end products do not 

‘‘shift.’’ In other words, where a bus, rail 

car, or other major procurement items 

are always designated as end products—

and their components are always 

designated as components, even if 

purchased as replacement parts. In the 

earlier example, cited above, if a grantee 

is procuring a new rail car, the car is the 

end product and the propulsion motor 

would be a component of the end 

product. Again, for this hypothetical rail 

car end product, the rolling stock 

standard (e.g. 60 percent domestic 

components by cost) at 661.11 would 

Federal Register / Vol. 70, No. 227 / Monday, November 28, 2005 / Proposed Rules 71251 

apply. However, under the new end 

product definition and methodology, if 

that same grantee is procuring a 

replacement propulsion motor for an 

existing rail car, which propulsion 

motor would still be a component of the 

rail car end product, and the rolling 

stock standard applicable to the rail car 

would apply to its component. Such a 

new methodology would necessarily 

place greater reliance on the 

accompanying list of end product items. 

In addition, procurements under this 

new Buy America methodology may 

result in multiple end products or 

components. In such instances, each 

distinct end product or component 

procured with federal funds must 

separately and independently comply 

with applicable Buy America standards. 

FTA seeks comment on which 

approach should be adopted and why 

one approach is favored over the other. 

D. End Product as System 

In defining terms like ‘‘end product,’’

SAFETEA–LU requires that the 

Secretary issue a final rule addressing 

‘‘the procurement of systems * * * to 

ensure that major system procurements 

are not used to circumvent the Buy 

America requirements.’’ FTA has long 

considered ‘‘systems’’ as definable end 

products. For example, in decisions 

dating from 1994, 1995, and 2002, FTA 

has taken the position that automated 

fare collection systems (AFC) systems 

constitute end products. Indeed, section 

661.11(s) states, in part, that ‘‘[i]f a 

system is being procured as the end 

product by the grantee, the installation 

of the system qualifies as final 

assembly.’’ (Emphasis added). In 1991, 

FTA also issued a Federal Register 

notice describing the procurement of an 

entire system under a design-build, or 

turn-key procurement: 

One commenter questioned how UMTA 

applies the Buy America requirements when 

a grantee procures an entire system (a turnkey project). In purchasing systems, it is 

industry practice to have a contract broken 

down by sub-systems. As just mentioned, 

UMTA has defined end product as ‘‘any item 

or items * * * to be acquired by a grantee, 

as specified in the overall project contract.’’

(Emphasis supplied.) (See § 661.11(u).) 

Accordingly, each sub-system identified in 

the contract is an end product and subject to 

the Buy America requirement. 

For example, UMTA has determined in the 

past that an entire people mover system has 

six sub-systems to be supplied by the 

contractor (under the terms of a particular 

contract) and that each sub-system is an 

individual end product. The six sub-systems 

are: the guideway surfaces and equipment; 

the vehicles; the traction power system; the 

command and control system; the 

communications system; and the 

maintenance facility and equipment. This 

means that six separate products must meet 

the Buy America requirements. 

56 FR 926. 

Furthermore, decisions interpreting 

the Buy American Act have also 

recognized ‘‘systems’’ as end products. 

In Brown Boveri Corp., the ‘‘end 

product’’ to be delivered was a sodium 

pump-drive system in a nuclear power 

plant. 56 Comp. Gen. 596 (1997). 

Similarly, in Matter of: Dictaphone 

Corp., B–191,383, May 8, 1978, 78–1 

CPD 343, GAO held that where an 

agency purchased a ‘‘Central Dictation 

System’’ the various elements of the 

system, such as transcribers and 

recorders, were not independent end 

products, but rather components of a 

system. Furthermore, in the case of Bell 

Helicopter Textron, Inc. v. Adams, the 

U.S. District Court for the District of 

Columbia held that complete 

helicopters were not individual end 

products but components of a system 

(‘‘Short Range Recovery (SRR) 

Helicopter System . . . define[d] the 

contract end product of this 

procurement’’). 493 F. Supp. 824, 833 

(D.C. D.C. 1980). There is thus a long 

standing precedent both within the 

agency and without indicating that 

procurement of ‘‘systems’’ constitute 

end product items. Beginning in the 

mid-1990’s and today, especially, transit 

projects are increasingly automated and 

have integrated ‘‘systems’’ of various 

types within their core functionality. 

For these reasons, FTA proposes to 

retain this application of ‘‘systems’’ in 

the end product definition adopted in 

this rule. Nevertheless, to better 

implement Congress’s mandate in 

SAFETEA–LU to ‘‘address the 

procurement of systems under the 

definition [of end product] to ensure 

that major system procurements are not 

used to circumvent the Buy America 

requirements,’’ FTA proposes defining 

the term ‘‘system.’’

In Bell Helicopter Textron, Inc. v. 

Adams, cited previously, the U.S. 

District Court acknowledged that 

‘‘presently [in 1980] there are no 

uniform guidelines interpreting such 

critical terms as * * * ‘system.’ ’’ 493 F. 

Supp. 824, 831 (D.D.C. 1980). However, 

within law applicable to the Customs 

Service, analogous principles support 

characterizing individual machines or 

pieces of equipment integrated together 

to provide a single defined function as 

a single system. For example, the 

Customs Service in a case in New York 

concluded that a ‘‘Flexipark Parking 

System’’ consisting of entry machines, 

exit machines, automated cashier 

stations, and ‘‘pay on foot’’ automated 

paying machines represented a single 

system under a single tariff heading, and 

not separately classified components. 

NY H88649, 2002 U.S. Customs NY 

Lexis 2030 (March 8, 2002). Treas. Dec., 

2002 U.S. CUSTOM NY LEXIS 2030; NY 

H88649 (Mar. 8, 2002). 

Moreover, the Harmonized System of 

tariff classification used by the United 

States specifically recognizes that fare 

machines, cash registers and similar 

calculating devices may be combined 

with other units to comprise a single 

system. See Harmonized Tariff Schedule 

of the United States (HTSUS), 19 U.S.C. 

1202, heading 8470. The explanatory 

notes that govern Chapter 84 expressly 

require that machines which work in 

combination to perform a specific 

function are to be classified as a single 

system under a single tariff heading. 

These notes provide: 

Where a machine (including a combination 

of machines) consists of individual 

components (whether separate or 

interconnected by piping, by transmission 

devices, by electrical cables or by other 

devices) intended to contribute together to a 

clearly defined function covered by one of 

the headings in Chapter 84 * * *, then the 

whole falls to be classified in the heading 

appropriate to that function. 

HTSUS, Section XVI, Note 4. Based 

on this ‘‘functional test’’ for 

interconnected systems from customs 

law, FTA proposes a definition of 

‘‘system,’’ as follows: 

System means a machine, product, or 

device, or a combination of such equipment, 

consisting of individual components, 

whether separate or interconnected by 

piping, transmission devices, electrical 

cables or circuitry, or by other devices, which 

are intended to contribute together to a 

clearly defined function. 

Under this proposed new definition 

the system would be the end product 

and the individual machines, products, 

or devices that constitute the system 

would be components. Certainly some 

equipment designated as part of a 

‘‘system’’ in a third party contract may, 

in fact, prove to be ancillary to the core 

functionality of the system, and would 

be a separate end product. Using the 

proposed ‘‘functional’’ definition of 

system, above, therefore, FTA will 

carefully review system procurements to 

determine whether a system exists and 

if so, which items of equipment 

constitute the system. 

End product systems may be 

proprietary, where connections and 

interfaces between devices are marked 

by proprietary rights or license. Or, 

depending on the requirements of the 

grantee, system procurements may 

require open architecture that permits 

interface between non-proprietary 

devices. FTA seeks comment as to 

71252 Federal Register / Vol. 70, No. 227 / Monday, November 28, 2005 / Proposed Rules 

whether the Buy America requirements 

should apply equally for these two types 

of system end products, or whether 

different Buy America standards should 

apply to proprietary versus open 

architecture systems. FTA seeks 

comment on its proposed approach for 

defining system. 

In keeping with the Congress’s 

mandate to include a ‘‘representative 

list’’ of end product items, FTA 

proposes the following list: 

The following is a list of items, as specified 

by grantees in third party contracts, that are 

representative end products that are subject 

to the requirements of Buy America. This list 

is not all-inclusive. 

(1) Rolling stock end products: All 

individual items identified as rolling stock in 

Section 661.3 (buses, vans, cars, railcars, 

locomotives, trolley cars, ferry boats, as well 

as vehicles used for support services); train 

control equipment or systems; 

communication equipment or systems; 

traction power equipment or systems. 

(2) Steel and iron end products: Products 

and infrastructure projects made primarily of 

steel or iron or involving track work, 

including bridges; steel or iron structures; 

running rail and contact rail; turnouts. 

(3) Manufactured end products: Fare 

collection equipment [non-system 

equipment] or systems; computers and 

computer systems; information, security, and 

data processing equipment or systems; lifts, 

hoists, and elevators; infrastructure projects 

not made primarily of steel or iron, including 

structures (terminals, depots, garages, and 

bus shelters), ties and ballast; contact rail not 

made primarily of steel or iron. 

This proposed list is not meant to be 

all-inclusive, but rather describes 

general categories of end product items. 

Some of these items are easy to identify 

as discreet end products, such as buses. 

Other products are not so easily 

categorized. For example, the proposed 

list identifies the following types of 

equipment as either discreet end 

products or as system end products: 

Train control equipment or systems; 

communication equipment or systems; 

traction power equipment or systems; 

information, security, and data 

processing equipment or systems. This 

approach is meant to be flexible, to 

account for a range of procurement 

requirements. To illustrate this, if a 

grantee procures hand-held radios, 

which are one of the items enumerated 

in 49 CFR 661.11(u)(3), the radios 

would be discreet end products, under 

the category of ‘‘communication 

equipment.’’ However, if the grantee 

procures a hypothetical, wayside 

‘‘surveillance system,’’ which includes 

interconnected video cameras, 

microcomputers, alarms, and remote 

relay capability, then the ‘‘surveillance 

system’’ would be the end product, and 

the individual items that make up the 

system would constitute components. 

At this stage, it is not practical to predefine what type of equipment would go 

into such systems, as transit operators 

may seek to mix and match different 

types of system equipment to obtain 

different functionalities. Therefore, a 

grantee’s specifications in the third 

party contract will continue to remain 

important in determining what 

constitutes discreet end product 

‘‘equipment’’ or system end products. 

FTA considers any proposed list of 

representative end products to be very 

important in future Buy America 

determinations. FTA seeks comment on 

this proposed list. 

E. Final Assembly 

FTA proposes amending the 

definition of ‘‘final assembly’’ in Part 

661 to incorporate agency guidance. 

Under FTA’s Buy America requirements 

for rolling stock, 49 U.S.C. 5323(j)(2)(C) 

and 49 C.F.R. 661.11, 60 percent of all 

components, by cost, must be of U.S. 

origin, and final assembly must take 

place in the U.S. ‘‘Final assembly’’ is 

defined as follows: ‘‘Final Assembly is 

the creation of the end product from 

individual elements brought together for 

that purpose through application of 

manufacturing processes. If a system is 

being procured as the end product by 

the grantee, the installation of the 

system qualifies as final assembly.’’ This 

definition of ‘‘final assembly’’ in the 

regulation proved to be insufficiently 

detailed in practice. Grantees and 

contractors frequently sought FTA 

guidance on what constituted ‘‘final 

assembly’’ in rolling stock 

procurements. For this reason, FTA 

created a Dear Colleague letter of March 

18, 1997, which described the minimum 

requirements for final assembly of rail 

car vehicles and buses. Section 3035 of 

the Transportation Equity Act for the 

21st Century incorporated these 

requirements into law. The March 18, 

1997 letter states, in part, the following: 

In the case of the manufacture of a new rail 

car, final assembly would typically include, 

as a minimum, the following operations: 

Installation and interconnection of 

propulsion control equipment, propulsion 

cooling equipment, brake equipment, energy 

sources for auxiliaries and controls, heating 

and air conditioning, communications 

equipment, motors, wheels and axles, 

suspensions and frames; the inspection and 

verification of all installation and 

interconnection work; and the in-plant 

testing of the stationary product to verify all 

functions. In the case of a new bus, final 

assembly would typically include, at a 

minimum, the installation and 

interconnection of the engine, transmission, 

axles, including the cooling and braking 

systems; the installation and interconnection 

of the heating and air conditioning 

equipment; the installation of pneumatic and 

electrical systems, door systems, passenger 

seats, passenger grab rails, destination signs, 

wheelchair lifts; and road testing, final 

inspection, repairs and preparation of the 

vehicles for delivery. 

The letter also provides that ‘‘[i]f a 

manufacturer’s final assembly processes 

do not include all the activities that are 

typically considered the minimum 

requirements, it can request an FTA 

determination of compliance.’’ Id. 

Subsequent to the publication of the 

March 19, 1997 Dear Colleague letter, 

FTA still frequently received requests 

for guidance from grantees and 

contractors on ‘‘final assembly.’’ These 

requestors either were not aware of the 

Dear Colleague letter, or had questions 

about fabrication processes which did 

not fit within the parameters of the 1997 

letter. For these reasons, FTA proposes 

amending the definition of ‘‘final 

assembly’’ in section 661.11, to 

incorporate the ‘‘minimum 

requirements’’ of final assembly in the 

March 18, 1997 letter, and to further 

clarify those requirements. FTA 

proposes to do this by creating an 

additional appendix that would state 

the following: 

Rail Cars: In the case of the manufacture 

of a new, remanufactured, or overhauled rail 

car, final assembly would typically include, 

as a minimum, the following operations: 

Installation and interconnection of car bodies 

or shells, propulsion control equipment, 

propulsion cooling equipment, brake 

equipment, energy sources for auxiliaries and 

controls, heating and air conditioning, 

communications equipment, pneumatic and 

electrical systems, door systems, passenger 

seats, passenger interiors, destination signs, 

wheelchair lifts, motors, wheels, axles, and 

gear units, suspensions, frames, and chassis; 

the inspection and verification of all 

installation and interconnection work; and 

the in-plant testing of the stationary product 

to verify all functions. 

Buses: In the case of a new, 

remanufactured, or overhauled bus, final 

assembly would typically include, at a 

minimum, the installation and 

interconnection of car bodies or shells, the 

engine and transmission (drive train), axles, 

chassis, and wheels, including the cooling 

and braking systems; the installation and 

interconnection of the heating and air 

conditioning equipment; the installation of 

pneumatic and electrical systems, door 

systems, passenger seats, passenger grab rails, 

destination signs, wheelchair lifts; and road 

testing, final inspection, repairs and 

preparation of the vehicles for delivery. 

FTA seeks public comment on 

whether this appendix sufficiently 

clarifies what FTA considers ‘‘final 

assembly.’’

Federal Register / Vol. 70, No. 227 / Monday, November 28, 2005 / Proposed Rules 71253 

VII. Post-Award Non-Availability 

Waiver 

Under FTA’s current Buy America 

regulations, grantees are required to 

ensure that contractors certify in their 

bids, as a condition of responsiveness, 

that they will comply with Buy 

America. 49 CFR 661.13(b). The 

regulations specifically provide that a 

bidder or offeror that certifies 

compliance with Buy America is 

‘‘bound by its original certification’’ and 

‘‘is not eligible for a waiver of those 

requirements.’’ 49 CFR 661.13(c). These 

regulatory provisions, in effect, 

eliminated so-called ‘‘post-award’’

waivers—waivers issued after contract 

award. 

SAFETEA–LU requires that the 

Secretary issue a rule to ‘‘permit a 

grantee to request a non-availability 

waiver * * * after contract award in 

any case in which the contractor has 

made a certification of compliance with 

the requirements in good faith.’’ This 

requirement will allow FTA the 

flexibility to consider non-availability 

waivers in those rare instances where 

materials or supplies become 

unavailable, through no fault of the 

contractor or grantee, after contract 

award, to the extent that complying 

with the terms of the third party 

contract becomes commercially 

impossible or impracticable (due to 

price). 

Such a post-award waiver could be 

subject to abuse, however. To guard 

against this, and to limit approval of 

post-award waivers to legitimate 

situations, FTA will require evidence of 

bidders’ and offerors’ good faith in 

originally certifying compliance. Such 

evidence may include price quotes 

indicating the availability of domestic 

material at the time the contractor 

certified compliance. Bidders or offerors 

who negligently certify compliance, for 

example, by not adequately researching 

the availability of domestic material or 

by mistakenly concluding that domestic 

supplies are available, prior to 

certifying, would be denied a postaward waiver. FTA will also require 

grantees to produce evidence of changed 

market conditions, demonstrating the 

non-availability of materials or supplies 

after contract award, and the 

impossibility or impracticability of 

completing the third party contract. 

FTA will also consider the status of 

other bidders or offerors who 

participated in the procurement and the 

effect of any waiver on them. For 

example, a post award waiver will not 

be granted where other bidders or 

offerors who certified compliance are 

able to supply domestic products or 

material. 

To implement the requirement for 

post-award waivers in SAFETEA–LU, 

FTA proposes to add the following 

clause to non-availability waivers: ‘‘In 

those situations where materials become 

unavailable after contract award due to 

unforeseen circumstances beyond the 

control of the contractor or grantee, the 

Administrator may grant a nonavailability waiver under section 661.7c, 

in any case in which a contractor has 

originally certified compliance with the 

Buy America requirements in good 

faith, but can no longer comply with its 

certification and contractual obligations 

due to commercial impossibility or 

impracticability. In making such a 

waiver request, the grantee will submit 

evidence of the contractor’s good faith 

and evidence justifying the post-award 

waiver, such as information about the 

origin of the product or materials, 

invoices, and other relevant solicitation 

documents to the FTA Chief Counsel, as 

requested. In determining whether the 

conditions exist to grant this post-award 

non-availability waiver, the 

Administrator will consider all 

appropriate factors, including the status 

of other bidders or offerors in the 

procurement and the effect of any 

waiver on them, on a case-by-case 

basis.’’ To reflect this change, and to 

clarify the distinctions in Buy America 

certification between sealed bidding and 

negotiated procurements, FTA proposes 

to add paragraph (c) that would state: 

‘‘A bidder or offeror certifies that it will 

comply with the applicable requirement 

and such bidder or offeror is bound by 

its original certification (in the case of 

a sealed bidding procurement) or its 

certification submitted with its final 

offer (in the case of a negotiated 

procurement) and is not permitted to 

change its certification after bid opening 

or submission of a final offer, except for 

inadvertent or clerical error, as 

described in section 661.13(b)(1). Where 

a bidder or offeror certifies that it will 

comply with the applicable Buy 

America requirements, the bidder, 

offeror, or grantee is not eligible for a 

waiver of those requirements, except as 

provided in section 661.7(c)(3) in the 

case of a post-award non-availability 

waiver.’’ FTA seeks comment on these 

proposed changes. 

VIII. Certification Under Negotiated 

Procurement 

As stated previously, under FTA’s 

current Buy America regulations, 

grantees are required to ensure that 

contractors certify in their bids, as a 

condition of responsiveness, that they 

will comply with Buy America. 49 CFR 

661.13(b). Moreover, contractors are not 

permitted to change their certifications 

‘‘after bid opening.’’ 49 CFR 661.13(c). 

However, FTA allows bidders or 

offerors to correct an incomplete Buy 

America certificate or an incorrect 

certificate of noncompliance made 

through inadvertent or clerical error. 

Reflecting the practice in public 

contracting that offerors may submit 

multiple offers in negotiated 

procurement processes, unlike in sealed 

bidding, FTA has issued the following 

guidance on its public Buy America 

Web site: 

In competitive negotiated procurements 

(i.e., requests for proposals), certifications 

submitted as part of an initial proposal may 

be superseded by subsequent certifications 

submitted with revised proposals, and the 

certification submitted with the offeror’s final 

revised proposal (or best and final offer) will 

control. However, where the grantee awards 

on the basis of initial proposals without 

discussion, the certification submitted with 

the initial proposal will control. 

See ‘‘Buy America: Frequently Asked 

Questions’’ # 6 http://www.fta.dot.gov/ 

legal/buy_america/ 

14422_17793_ENG_HTML.htm 

Consistent with FTA’s current 

guidance, SAFETEA–LU requires that 

the Secretary issue a rule reflecting that, 

‘‘in any case in which a negotiated 

procurement is used, compliance with 

the Buy America requirements shall be 

determined on the basis of the 

certification submitted with the final 

offer.’’ To implement this requirement, 

FTA proposes adding the following 

provision: ‘‘(2) In the case of a 

negotiated procurement, a certification 

submitted as part of an initial proposal 

may be superseded by a subsequent 

certification(s) submitted with a revised 

proposal or offer. Compliance with the 

Buy America requirements shall be 

determined on the basis of the 

certification submitted with the final 

offer or final revised proposal. However, 

where a grantee awards on the basis of 

initial proposals without discussion, the 

certification submitted with the initial 

proposal shall control.’’ FTA seeks 

comment on this proposal. 

IX. Pre-Award and Post-Delivery 

Review of Rolling Stock Purchases 

Under FTA’s regulations at 49 CFR 

663.37, generally, for purchases of more 

than 10 buses or rail vehicles, grantees 

must certify that an onsite inspector was 

present throughout the manufacturing 

process and that the grantee has 

received an inspector’s report that 

accurately records all vehicle 

construction activities and explains how 

construction and operation of the 

vehicle meets specifications. However, 

71254 Federal Register / Vol. 70, No. 227 / Monday, November 28, 2005 / Proposed Rules 

for orders of 10 or fewer buses, there is 

no requirement for a resident factor 

inspector, pursuant to 49 CFR 663.37(c). 

Under this provision, a grantee is only 

required to certify that it has visually 

inspected and road tested the vehicles 

and has determined that the vehicles 

meet contract specifications. 

SAFETEA–LU amends section 

5323(m) by mandating, in effect, that for 

rolling stock procurements of 20 

vehicles or less serving rural (other than 

urbanized) areas, or urbanized areas of 

200,000 people or less, then the same 

post-delivery certification requirements 

which apply to procurements of ‘‘10 or 

fewer buses,’’ i.e. no resident factory 

inspector, shall likewise apply. FTA 

considers this requirement to be selfexplanatory. To implement the change 

in section 5323(m), therefore, FTA 

proposes the following amendment: 

‘‘For procurements of (1) Ten or fewer 

buses; or (2) procurements of 20 

vehicles or fewer serving rural (other 

than urbanized) areas, or urbanized 

areas of 200,000 people or fewer; or (3) 

any number of primary manufacturer 

standard production and unmodified 

vans, after visually inspecting and road 

testing the vehicles, the vehicles meet 

the contract specifications.’’ FTA seeks 

comment on this proposed change. 

X. Miscellaneous 

In addition to the requirements 

mandated in SAFETEA–LU, FTA 

proposes several changes to the Buy 

America regulations. The first of these 

involve minor corrections and 

clarifications. The second involve 

substantive changes. 

A. Corrections and Clarifications 

In Section 661.3 ‘‘Definitions’’ for the 

term ‘‘act,’’ FTA proposes deleting the 

clause ‘‘section 337 of the Surface 

Transportation and Uniform Relocation 

Assistance of 1987 (Pub. L. 100–17),’’

which follows ‘‘as amended by,’’ and 

replacing this with the clause ‘‘the Safe 

Accountable, Flexible, Efficient 

Transportation Act: A Legacy for Users 

(Pub. L. 109–59). Similarly, under 

Section 661.3, FTA proposes deleting 

the phrase ‘‘STURRA means the Surface 

Transportation and Uniform Relocation 

Assistance Act of 1987 (Pub. L. No. 100–

17) and replacing this with ‘‘SAFETEA–

LU means the Safe Accountable, 

Flexible, Efficient Transportation Act: A 

Legacy for Users (Pub. L. 109–59).’’

In Section 661.6 ‘‘Certification 

requirement for procurement of steel or 

manufactured products,’’ FTA proposes 

adding the word ‘‘iron,’’ after the word 

‘‘steel’’ to reflect that iron, as well as 

steel and manufactured products, are 

subject to the certification requirement. 

Moreover, the word ‘‘offeror’’ is a 

term of art for contractors who 

participate in negotiated procurements. 

The words ‘‘or offeror’’ are added after 

‘‘bidder,’’ wherever it appears in Part 

661, to reflect that grantees may elect to 

use negotiated methods of procurement 

on FTA funded projects. The term ‘‘or 

offeror,’’ is added, therefore, as follows: 

(1) In the example ‘‘Certificate of 

Compliance With Section 165(a) and the 

‘‘Certificate for Non-Compliance With 

Section 165(a) in section 661.6; (2) in 

section 661.9(b) and (d); (3) in the 

example ‘‘Certificate of Compliance 

With Section 165(b)(3) and the 

‘‘Certificate for Non-Compliance With 

Section 165(b)(3) in Section 661.12; (4) 

in section 661.13(b)(1), and in 

subparagraph (b)(1) a(i) (as 

redesignated); (4) in section 661.15(a), 

(b), (d), and (g); in section 661.17—in 

addition, the clause ‘‘or the price of its 

final offer’’ is added after ‘‘original bid 

price’’ in the second sentence; (5) in 

section 661.19. 

Similarly, the words ‘‘or offer’’ are 

added after ‘‘bid’’ in Part 661, as 

follows: (1) in section 661.7(c)(1) and 

(d). In section 661.13(b), the clause ‘‘or 

request for proposal (RFP)’’ is added 

after the word ‘‘bid’’ in the first 

sentence. The words ‘‘or offer’’ are 

added after the word ‘‘bid’’ in the 

second sentence. In section 661.13(b)(1), 

the words ‘‘of submission of a final 

offer,’’ are added after the words ‘‘bid 

opening’’ in the first sentence. These 

proposed changes are made to reflect 

that grantees may elect to use negotiated 

methods of procurement on FTA funded 

projects. FTA seeks comment on these 

proposed changes. 

B. Substantive Change Proposals 

Communication Equipment 

49 U.S.C. 5323(j)(2)(C) states that 

rolling stock includes ‘‘train control, 

communication, and traction power 

equipment.’’ (Emphasis added). 

Pursuant to this requirement, FTA 

drafted representative examples of train 

control, communication, and traction 

power equipment in the rolling stock 

section of the Buy America regulations 

as follows: 

Train control equipment includes, but is 

not limited to, the following equipment: 

(1) Mimic board in central control 

(2) Dispatcher’s console 

(3) Local control panels 

(4) Station (way side) block control relay 

cabinets 

(5) Terminal dispatcher machines 

(6) Cable/cable trays 

(7) Switch machines 

(8) Way side signals 

(9) Impedance bonds 

(10) Relay rack bungalows 

(11) Central computer control 

(12) Brake equipment 

(13) Brake systems 

Communication equipment includes, but is 

not limited to, the following equipment: 

(1) Radios 

(2) Space station transmitter and receivers 

(3) Vehicular and hand-held radios 

(4) PABX telephone switching equipment 

(5) PABX telephone instruments 

(6) Public address amplifiers 

(7) Public address speakers 

(8) Cable transmission system cable 

(9) Cable transmission system multiplex 

equipment 

(10) Communication console at central 

control 

(11) Uninterruptible power supply inverters/ 

rectifiers 

(12) Uninterruptible power supply batteries 

(13) Data transmission system central 

processors 

(14) Data transmission system remote 

terminals 

(15) Line printers for data transmission 

system 

(16) Communication system monitor test 

panel 

(17) Security console at central control 

Traction power equipment includes, but is 

not limited to the following: 

(1) Primary AC switch gear 

(2) Primary AC transformer rectifiers 

(3) DC switch gear 

(4) Traction power console and CRT display 

system at central control 

(5) Bus ducts with buses (AC and DC) 

(6) Batteries 

(7) Traction power rectifier assemblies 

(8) Distribution panels (AC and DC) 

(9) Facility step-down transformers 

(10) Motor control centers (facility use only) 

(11) Battery chargers 

(12) Supervisory control panel 

(13) Annunciator panels 

(14) Low voltage facility distribution switch 

board 

(15) DC connect switches 

(16) Negative bus boxes 

(17) Power rail insulators 

(18) Power cables (AC and DC) 

(19) Cable trays 

(20) Instrumentation for traction power 

equipment 

(21) Connectors, tensioners, and insulators 

for overhead power wire systems 

(22) Negative drainage boards 

(23) Inverters 

(24) Traction motors 

(25) Propulsion gear boxes 

(26) Third rail pick-up equipment 

(27) Pantographs 

In years past, FTA offered guidance 

on a proposed federally funded contract 

for a public address/customer 

information screen (PA/CIS) to be 

awarded to the New York City Transit 

Authority (NYCT), which generated 

some controversy. In that case, FTA 

opined: 

The Buy America provisions for rolling 

stock (which includes buses, rail cars, and 

ferries) require that at least 60 percent of the 

cost of all components and subcomponents 

Federal Register / Vol. 70, No. 227 / Monday, November 28, 2005 / Proposed Rules 71255 

be of domestic origin and that final assembly 

of vehicles occur in the United States. The 

statutory provisions of Buy America 

expressly define rolling stock to include 

‘‘communication equipment.’’ FTA 

regulations further provide a nonexhaustive 

listing of certain communication equipment 

considered to be rolling stock components, 

including public address amplifiers and 

speakers. 

It is our understanding that the PA/CIS 

equipment will be placed in fixed transit 

stations, rather than on vehicles. However, 

pursuant to statute and regulation, 

communications equipment need not be on 

a vehicle, and is procured under the ‘‘rolling 

stock’’ rule not the ‘‘manufactured products’’

rule. 

FTA’s decision on the PA/CIS 

equipment procurement is consistent 

with longstanding agency precedent, 

including a Federal Register Notice 

from September 1983 which indicated 

that the particular equipment listed in 

section 661.11 ‘‘include[s] both onboard and wayside equipment.’’ 48 FR 

41562. Nevertheless, FTA seeks public 

comment on whether the agency should 

continue to interpret the items listed in 

661.11 as including wayside equipment. 

FTA also seeks public comment as to 

whether any items of equipment listed 

in section 661.11(t) (u) and (v), should 

be deleted, and whether any new items 

should be added to these lists, to reflect 

new technology. 

In addition, FTA seeks public 

comment as to what constitutes 

‘‘communication equipment’’ within the 

meaning of 5323(j)(2)(c) and section 

661.11, and whether these terms should 

be defined in the regulation. FTA’s 

concern on this matter arises as the 

technology utilized in the transit 

industry becomes more complex and 

sophisticated, and as categorical 

distinctions between product functions 

become increasingly blurred. To 

illustrate this point, it undoubtedly 

raises little or no dispute that an onboard radio or public address system 

constitutes ‘‘communication 

equipment.’’

However, FTA has also been called on 

to review for Buy America compliance 

such procurements as: a ‘‘Mobile Data 

Communication System,’’ ‘‘Monitoring 

and Diagnostic equipment,’’ a ‘‘Service 

Management and Customer Information 

System,’’ ‘‘on-board and wayside LED 

signage systems,’’ ‘‘Automated 

Passenger Information System,’’ etc. 

Such equipment often includes 

sophisticated networked 

microcomputers, processors, data 

screens, and other devices which 

‘‘communicate’’ information to 

customers or transit personnel (such as 

for fares or schedules) in a broad 

sense—but also serves other functions 

such as counting passengers, tabulating 

revenues, and then ‘‘communicating’’

such information automatically by 

remote transmission to stakeholders for 

later processing and storage. 

A review of this prior FTA guidance 

reveals instances where equipment 

which has as its primary function 

communication ‘‘with or between 

people,’’ such as for radios, constituted 

‘‘communication equipment’’ under the 

rolling stock standard. Other cases 

demonstrate that where ‘‘machine to 

machine’’ interface constituted the 

primary function of the equipment, the 

manufactured product standard at 

section 661.7 applied. In determining 

what constitutes communication 

equipment, FTA believes that this 

distinction in the primary purpose of 

the equipment (e.g. ‘‘with or between 

people’’ versus ‘‘machine to machine’’

interface) should be maintained, with 

the former constituting communication 

equipment under the rolling stock 

standard. Nevertheless, to foster clarity 

in this area, FTA invites public 

comment and opinion on what 

constitutes ‘‘communication 

equipment.’’

XI. Regulatory Analyses and Notices 

A. Statutory/Legal Authority for This 

Rulemaking 

This NPRM is authorized under the 

Safe, Accountable, Flexible, Efficient 

Transportation Equity Act: A Legacy for 

Users (Pub. L. 109–59) amended Section 

5323(j) and (m) of Title 49, United 

States Code and requires FTA to revise 

its regulations with respect to Buy 

America requirements. 

B. Executive Order 12866 and DOT 

Regulatory Policies and Procedures 

This NPRM is a nonsignificant 

regulatory action under section 3(f) of 

Executive Order 12866 and, therefore, 

was not reviewed by the Office of 

Management and Budget. This NPRM is 

also nonsignificant under the Regulatory 

Policies and Procedures of the 

Department of Transportation (44 FR 

11034). This NPRM imposes no new 

compliance costs on the regulated 

industry; it merely clarifies terms 

existing in the Buy America regulations 

and adds terms consistent with 

SAFETEA–LU. 

C. Executive Order 13132 

This NPRM has been analyzed in 

accordance with the principles and 

criteria contained in Executive Order 

13132 (‘‘Federalism’’). This NPRM does 

not include any regulation that has 

substantial direct effects on the States, 

the relationship between the national 

government and the States, or the 

distribution of power and 

responsibilities among the various 

levels of government. Therefore, the 

consultation and funding requirements 

of Executive Order 13132 do not apply. 

D. Executive Order 13175 

This NPRM has been analyzed in 

accordance with the principles and 

criteria contained in Executive Order 

13175 (‘‘Consultation and Coordination 

with Indian Tribal Governments’’). 

Because this NPRM does not have tribal 

implications and does not impose direct 

compliance costs, the funding and 

consultation requirements of Executive 

Order 13175 do not apply. 

E. Regulatory Flexibility Act and 

Executive Order 13272 

The Regulatory Flexibility Act (5 

U.S.C. 601–611) requires each agency to 

analyze regulations and proposals to 

assess their impact on small businesses 

and other small entities to determine 

whether the rule or proposal will have 

a significant economic impact on a 

substantial number of small entities. 

This NPRM imposes no new costs. 

Therefore, FTA certifies that this 

proposal does not require further 

analysis under the Regulatory 

Flexibility Act. FTA requests public 

comment on whether the proposals 

contained in this NPRM have a 

significant economic impact on a 

substantial number of small entities. 

F. Unfunded Mandates Reform Act of 

1995 

This NPRM does not propose 

unfunded mandates under the 

Unfunded Mandates Reform Act of 

1995. If the proposals are adopted into 

a final rule, it will not result in costs of 

$100 million or more (adjusted annually 

for inflation), in the aggregate, to any of 

the following: State, local, or Native 

American tribal governments, or the 

private sector. 

G. Paperwork Reduction Act 

This NPRM proposes no new 

information collection requirements. 

H. Regulation Identifier Number (RIN) 

A regulation identifier number (RIN) 

is assigned to each regulatory action 

listed in the Unified Agenda of Federal 

Regulations. The Regulatory Information 

Service Center publishes the Unified 

Agenda in April and October of each 

year. The RIN number contained in the 

heading of this document may be used 

to cross-reference this action with the 

Unified Agenda. 

71256 Federal Register / Vol. 70, No. 227 / Monday, November 28, 2005 / Proposed Rules 

I. Environmental Assessment 

The National Environmental Policy 

Act of 1969 (NEPA), as amended (42 

U.S.C. 4321–4347), requires Federal 

agencies to consider the consequences 

of major federal actions and prepare a 

detailed statement on actions 

significantly affecting the quality of the 

human environment. There are no 

significant environmental impacts 

associated with this NPRM. 

J. Privacy Act 

Anyone is able to search the 

electronic form for all comments 

received into any of our dockets by the 

name of the individual submitting the 

comments (or signing the comment, if 

submitted on behalf of an association, 

business, labor union, etc.). You may 

review DOT’s complete Privacy Act 

Statement in the Federal Register 

published on April 11, 2000 (Volume 

65, Number 70; Pages 19477–78) or you 

may visit http://dms.dot.gov. 

List of Subjects in 49 CFR Part 661 

Grant programs—transportation, Mass 

transportation, Reporting and 

recordkeeping requirements. 

Amendment of 49 CFR Part 661 

Accordingly, for the reasons described 

in the preamble, part 661 of Title 49 of 

the Code of Federal Regulations is 

proposed to be amended as follows: 

PART 661—[AMENDED] 

1. The authority citation for part 661 

is revised to read as follows: 

Authority: 49 U.S.C. 5323(j) (formerly sec. 

165, Pub. L. 97–424; as amended by sec. 337, 

Pub. L. 100–17, sec. 1048, Pub. L. 102–240, 

sec. 3020(b), Pub. L. 105–178, and sec. 

3023(i) and (k), P.L. 109–59); 49 CFR 1.51. 

2. Revise § 661.3 to read as follows: 

§ 661.3 Definitions. 

As used in this part: 

Act means the Surface Transportation 

Assistance Act of 1982 (Pub. L. 97–424), 

as amended by the Safe, Accountable, 

Flexible, Efficient Transportation Act: A 

Legacy for Users (Pub. L. 109–59). 

Administrator means the 

Administrator of FTA, or designee. 

Component means any article, 

material, or supply, whether 

manufactured or unmanufactured, that 

is directly incorporated into the end 

product at the final assembly location. 

Contractor means: 

(1) Any individual or other legal 

entity that directly or indirectly (e.g., 

through an affiliate), submits bids or 

offers for or is awarded, or reasonably 

may be expected to submit bids or offers 

for or be awarded, a federally funded 

third party contract or subcontract 

under a federally funded third party 

contract; or, conducts business, or 

reasonably may be expected to conduct 

business, with an FTA grantee, as an 

agent or representative of another 

contractor; or 

(2) Any party to a third party 

government contract other than the 

government. 

End Product means: 

(1) Any item subject to 49 U.S.C. 

5323(j) that is to be acquired by a 

grantee, as specified in the overall 

project contract; or 

(2) Any article, material, supply, or 

system, whether manufactured or 

unmanufactured, that is acquired for 

public use under a federally funded 

third party contract. A list of 

representative end products is included 

at Appendix A to this section. 

FTA means the Federal Transit 

Administration. 

Grantee means any entity that is a 

recipient of FTA funds. 

Manufactured product means an item 

produced as a result of manufacturing 

process. 

Manufacturing process means the 

application of processes to alter the 

form or function of materials or of 

elements of the product in a manner 

adding value and transforming those 

materials or elements so that they 

represent a new end product 

functionally different from that which 

would result from mere assembly of the 

elements or materials. 

Negotiated Procurement means a 

contract awarded using other than 

sealed bidding procedures 

Rolling stock means transit vehicles 

such as buses, vans, cars, railcars, 

locomotives, trolley cars and buses, and 

ferry boats, as well as vehicles used for 

support services. 

SAFETEA–LU means the Safe, 

Accountable, Flexible, Efficient 

Transportation Act: A Legacy for Users 

(Pub. L. 109–59). 

Subcomponent means any article, 

material, or supply, whether 

manufactured or unmanufactured, that 

is one step removed from a component 

in the fabrication process and that is 

incorporated directly into a component. 

United States means the several 

States, the Commonwealth of Puerto 

Rico, the District of Columbia, Guam, 

American Samoa, the Virgin Islands, 

and the Commonwealth of the Northern 

Mariana Islands. 

Appendix A to § 661.3—Representative End 

Products 

The following is a list of items, as specified 

by grantees in third party contracts, which 

are representative end products that are 

subject to the requirements of Buy America. 

This list is not exclusive. 

(1) Rolling stock end products: All 

individual items identified as rolling stock in 

§ 661.3 (buses, vans, cars, railcars, 

locomotives, trolley cars, ferry boats, as well 

as vehicles used for support services); train 

control equipment or systems; 

communication equipment or systems; 

traction power equipment or systems. 

(2) Steel and iron end products: Products 

and infrastructure projects made primarily of 

steel or iron or involving track work, 

including bridges; steel or iron structures; 

running rail and contact rail; turnouts. 

(3) Manufactured end products: Fare 

collection equipment [non-system 

equipment] or systems; computers and 

computer systems; information, security, and 

data processing equipment or systems; lifts, 

hoists, and elevators; infrastructure projects 

not made primarily of steel or iron, including 

structures (terminals, depots, garages, and 

bus shelters), ties and ballast; contact rail not 

made primarily of steel or iron. 

3. Revise § 661.6 to read as follows: 

§ 661.6 Certification requirements for 

procurement of steel or manufactured 

products. 

If steel, iron, or manufactured 

products (as defined in §§ 661.3 and 

661.5 of this part) are being procured, 

the appropriate certificate as set forth 

below shall be completed and submitted 

by each bidder or offeror in accordance 

with the requirement contained in 

§ 661.13(b) of this part. 

Certificate of Compliance With Section 

165(a) 

The bidder or offeror hereby certifies that 

it will comply with the requirements of 

section 165(a) of the Surface Transportation 

Assistance Act of 1982, as amended, and the 

applicable regulations in 49 CFR part 661. 

Date llllllllllllllllll

Signature llllllllllllllll

Company Name lllllllllllll

Title llllllllllllllllll

Certificate for Non-Compliance With Section 

165(a) 

The bidder or offeror hereby certifies that 

it cannot comply with the requirements of 

section 165(a) of the Surface Transportation 

Assistance Act of 1982, as amended, but it 

may qualify for an exception to the 

requirement pursuant to section 165 (b)(2) or 

(b)(4) of the Surface Transportation 

Assistance Act of 1982 and regulations in 49 

CFR 661.7. 

Date llllllllllllllllll

Signature llllllllllllllll

Company Name lllllllllllll

Title llllllllllllllllll

4. In § 661.7: 

a. Revise paragraphs (b), (c)(1), and (d) 

and add new paragraph (c)(3) to read as 

set forth below; and 

b. Amend appendix A to § 661.7 by 

removing paragraphs (b) and (c) and 

adding new paragraph (b) to read as set 

forth below. 

Federal Register / Vol. 70, No. 227 / Monday, November 28, 2005 / Proposed Rules 71257 

§ 661.7 Waivers. 

* * * * * 

(b) Under the provision of section 

165(b)(1) of the Act, the Administrator 

may waive the general requirements of 

section 165(a) if the Administrator finds 

that their application would be 

inconsistent with the public interest. In 

determining whether the conditions 

exist to grant this public interest waiver, 

the Administrator will consider all 

appropriate factors on a case-by-case 

basis, unless a general exception is 

specifically set out in this part. When 

granting a public interest waiver, the 

Administrator, as delegated, shall issue 

a detailed written statement justifying 

why the waiver is in the public interest. 

The Administrator shall publish this 

justification in the Federal Register, 

providing the public with a reasonable 

period of time for notice and comment. 

(c) * * * 

(1) It will be presumed that the 

conditions exist to grant this nonavailability waiver if no responsive and 

responsible bid or offer is received 

offering an item produced in the United 

States. 

* * * * * 

(3) In those situations where materials 

become unavailable after contract award 

due to unforeseen circumstances 

beyond the control of the contractor or 

the grantee, the Administrator may grant 

a non-availability waiver under this 

paragraph (c), in any case in which a 

contractor has originally certified 

compliance with the Buy America 

requirements in good faith, but can no 

longer comply with its certification and 

contractual obligations due to 

commercial impossibility or 

impracticability. In making such a 

waiver request, the grantee will submit 

evidence of the contractor’s good faith 

and evidence justifying the post-award 

waiver, such as information about the 

origin of the product or materials, 

invoices, or other relevant solicitation 

documents to the FTA Chief Counsel, as 

requested. In determining whether the 

conditions exist to grant this post-award 

non-availability waiver, the 

Administrator will consider all 

appropriate factors, including the status 

of other bidders or offerors in the 

procurement and the effect of any 

waiver on them, on a case-by-case basis. 

(d) Under the provision of section 

165(b)(4) of the Act, the Administrator 

may waive the general requirements of 

section 165(a) if the Administrator finds 

that the inclusion of a domestic item or 

domestic material will increase the cost 

of the contract between the grantee and 

its supplier of that item or material by 

more than 25 percent. The 

Administrator will grant this pricedifferential waiver if the amount of the 

lowest responsive and responsible bid 

or offer offering the item or material that 

is not produced in the United States 

multiplied by 1.25 is less than the 

amount of the lowest responsive and 

responsible bid or offer offering the item 

or material produced in the United 

States. 

* * * * * 

Appendix A to § 661.7—General Waivers 

* * * * * 

(b) Under the provisions of § 661.7 (b) and 

(c) of this part, a general public interest 

waiver from the Buy America requirements 

applies to microprocessors, computers, 

microcomputers, or software, or other such 

devices, which are used solely for the 

purpose of processing or storing data. This 

general waiver does not extend to a product 

or device which merely contains a 

microprocessor or microcomputer and is not 

used solely for the purpose of processing or 

storing data. 

* * * * * 

5. In § 661.9, revise paragraphs (b) and 

(d) to read as follows: 

§ 661.9 Application for waivers. 

* * * * * 

(b) A bidder or offeror who seeks to 

establish grounds for an exception must 

seek the exception, in a timely manner, 

through the grantee. 

* * * * * 

(d) FTA will consider a request for a 

waiver from a potential bidder, offeror, 

or supplier only if the waiver is being 

sought under § 661.7 (f) or (g) of this 

part. 

* * * * * 

6. In § 661.11, remove and reserve 

paragraph (s) and add a new Appendix 

D to read as follows: 

§ 661.11 Rolling stock procedures. 

* * * * * 

Appendix D to § 661.11—Minimum 

Requirements for Final Assembly 

(a) Rail Cars: In the case of the 

manufacture of a new, remanufactured, or 

overhauled rail car, final assembly would 

typically include, as a minimum, the 

following operations: Installation and 

interconnection of car bodies or shells, 

propulsion control equipment, propulsion 

cooling equipment, brake equipment, energy 

sources for auxiliaries and controls, heating 

and air conditioning, communications 

equipment, pneumatic and electrical 

systems, door systems, passenger seats, 

passenger interiors, destination signs, 

wheelchair lifts, motors, wheels, axles, and 

gear units, suspensions, frames, and chassis; 

the inspection and verification of all 

installation and interconnection work; and 

the in-plant testing of the stationary product 

to verify all functions. 

(b) Buses: In the case of a new, 

remanufactured, or overhauled bus, final 

assembly would typically include, at a 

minimum, the installation and 

interconnection of car bodies or shells, the 

engine and transmission (drive train), axles, 

chassis, and wheels, including the cooling 

and braking systems; the installation and 

interconnection of the heating and air 

conditioning equipment; the installation of 

pneumatic and electrical systems, door 

systems, passenger seats, passenger grab rails, 

destination signs, wheelchair lifts; and road 

testing, final inspection, repairs and 

preparation of the vehicles for delivery. 

7. Revise § 661.12 to read as follows: 

§ 661.12 Certification requirement for 

procurement of buses, other rolling stock 

and associated equipment. 

If buses or other rolling stock 

(including train control, 

communication, and traction power 

equipment) are being procured, the 

appropriate certificate as set forth below 

shall be completed and submitted by 

each bidder in accordance with the 

requirement contained in Sec. 661.13(b) 

of this part. 

Certificate of Compliance With Section 

165(b)(3) 

The bidder or offeror hereby certifies that 

it will comply with the requirements of 

section 165(b)(3), of the Surface 

Transportation Assistance Act of 1982, as 

amended, and the regulations of 49 CFR 

661.11. 

Date llllllllllllllllll

Signature llllllllllllllll

Company Name lllllllllllll

Title llllllllllllllllll

Certificate for Non-Compliance with Section 

165(b)(3) 

The bidder or offeror hereby certifies that 

it cannot comply with the requirements of 

section 165(b)(3) of the Surface 

Transportation Assistance Act of 1982, as 

amended, but may qualify for an exception 

to the requirement consistent with section 

165(b)(2) or (b)(4) of the Surface 

Transportation Assistance Act, as amended, 

and regulations in 49 CFR 661.7. 

Date llllllllllllllllll

Signature llllllllllllllll

Company Name lllllllllllll

Title llllllllllllllllll

7. In § 661.13, revise paragraphs (b) 

introductory text, (b)(1), (b)(2), and (c), add 

new paragraph (b)(1)(i), and add and reserve 

paragraph (b)(1)(ii) to read as follows: 

§ 661.13 Grantee responsibility. 

* * * * * 

(b) The grantee shall include in its bid 

or request for proposal (RFP) 

specification for procurement within the 

scope of this part an appropriate notice 

of the Buy America provision. Such 

specifications shall require, as a 

condition of responsiveness, that the 

bidder or offeror submit with the bid or 

71258 Federal Register / Vol. 70, No. 227 / Monday, November 28, 2005 / Proposed Rules 

offer a completed Buy America 

certificate in accordance with §§ 661.6 

or 661.12 of this part, as appropriate. 

(1) A bidder or offeror who has 

submitted an incomplete Buy America 

certificate or an incorrect certificate of 

noncompliance through inadvertent or 

clerical error (but not including failure 

to sign the certificate, submission of 

certificates of both compliance and noncompliance, or failure to submit any 

certification), may submit to the FTA 

Chief Counsel within ten (10) days of 

bid opening of submission of a final 

offer, a written explanation of the 

circumstances surrounding the 

submission of the incomplete or 

incorrect certification in accordance 

with 28 U.S.C. 1746, sworn under 

penalty of perjury, stating that the 

submission resulted from inadvertent or 

clerical error. The bidder or offeror will 

also submit evidence of intent, such as 

information about the origin of the 

product, invoices, or other working 

documents. The bidder or offeror will 

simultaneously send a copy of this 

information to the FTA grantee. 

(i) The FTA Chief Counsel may 

request additional information from the 

bidder or offeror, if necessary. The 

grantee may not make a contract award 

until the FTA Chief Counsel issues his/ 

her determination, except as provided 

in § 661.15(m). 

(ii) [Reserved] 

(2) In the case of a negotiated 

procurement, a certification submitted 

as part of an initial proposal may be 

superseded by a subsequent 

certification(s) submitted with a revised 

proposal or offer. Compliance with the 

Buy America requirements shall be 

determined on the basis of the 

certification submitted with the final 

offer or final revised proposal. However, 

where a grantee awards on the basis of 

initial proposals without discussion, the 

certification submitted with the initial 

proposal will control. 

(c) Whether or not a bidder or offeror 

certifies that it will comply with the 

applicable requirement, such bidder or 

offeror is bound by its original 

certification (in the case of a sealed 

bidding procurement) or its certification 

submitted with its final offer (in the case 

of a negotiated procurement) and is not 

permitted to change its certification 

after bid opening or submission of a 

final offer. Where a bidder or offeror 

certifies that it will comply with the 

applicable Buy America requirements, 

the bidder, offeror, or grantee is not 

eligible for a waiver of those 

requirements, except as provided in 

section 661.7(c)(3) in the case of a postaward non-availability waiver. 

8. In § 661.15, revise paragraphs (a), 

(b), (d), and (g) to read as follows: 

§ 661.15 Investigation procedures. 

(a) It is presumed that a bidder or 

offeror who has submitted the required 

Buy America certificate is complying 

with the Buy America provision. A false 

certification is a criminal act in 

violation of 18 U.S.C. 1001. 

(b) Any party may petition FTA to 

investigate the compliance of a 

successful bidder or offeror with the 

bidder’s or offeror’s certification. That 

party (‘‘the petitioner’’) must include in 

the petition a statement of the grounds 

of the petition and any supporting 

documentation. If FTA determines that 

the information presented in the 

petition indicates that the presumption 

in paragraph (a) of this section has been 

overcome, FTA will initiate an 

investigation. 

* * * * * 

(d) When FTA determines under 

paragraph (b) or (c) of this section to 

conduct an investigation, it requests that 

the grantee require the successful bidder 

or offeror to document its compliance 

with its Buy America certificate. The 

successful bidder or offeror has the 

burden of proof to establish that it is in 

compliance. Documentation of 

compliance is based on the specific 

circumstances of each investigation, and 

FTA will specify the documentation 

required in each case. 

* * * * * 

(g) The grantee’s reply (or that of the 

bidder or offeror) will be transmitted to 

the petitioner. The petitioner may 

submit comments on the reply to FTA 

within 10 working days after receipt of 

the reply. The grantee and the low 

bidder or offeror will be furnished with 

a copy of the petitioner’s comments, and 

their comments must be received by 

FTA within 5 working days after receipt 

of the petitioner’s comments. 

* * * * * 

9. Revise § 661.17 to read as follows: 

§ 661.17 Failure to comply with 

certification. 

If a successful bidder or offeror fails 

to demonstrate that it is in compliance 

with its certification, it will be required 

to take the necessary steps in order to 

achieve compliance. If a bidder or 

offeror takes these necessary steps, it 

will not be allowed to change its 

original bid price or the price of its final 

offer. If a bidder or offeror does not take 

the necessary steps, it will not be 

awarded the contract if the contract has 

not yet been awarded, and it is in breach 

of contract if a contract has been 

awarded. 

10. Revise § 661.19 to read as follows: 

§ 661.19 Sanctions. 

A willful refusal to comply with a 

certification by a successful bidder or 

offeror may lead to the initiation of 

debarment or suspension proceedings 

under part 29 of this title. 

11. Revise § 661.20 to read as follows: 

§ 661.20 Rights of parties. 

(a) A party adversely affected by an 

FTA action under this subsection shall 

have the right to seek review under the 

Administrative Procedure Act (APA), 5 

U.S.C. section 702 et seq. 

(b) Except as provided in paragraph 

(a) of this section, the sole right of any 

third party under the Buy America 

provision is to petition FTA under the 

provisions of § 661.15 of this part. No 

third party has any additional right, at 

law or equity, for any remedy including, 

but not limited to, injunctions, damages, 

or cancellation of the Federal grant or 

contracts of the grantee. 

Issued in Washington, DC this 18th day of 

November, 2005. 

David B. Horner, 

Acting Deputy Administrator. 

[FR Doc. 05–23323 Filed 11–22–05; 11:43 

am] 

BILLING CODE 4910–57–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 660 

[I.D. 111505C] 

Fisheries off West Coast States and in 

the Western Pacific; Bottomfish 

Fisheries; Overfishing Determination 

on Bottomfish Multi-Species Stock 

Complex; Hawaiian Archipelago 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Notice of intent to prepare a 

supplemental environmental impact 

statement; notice of scoping meetings; 

request for comment. 

SUMMARY: Pursuant to the National 

Environmental Policy Act (NEPA) and 

regulations published by the Council on 

Environmental Quality (40 CFR part 

1505), NMFS, in coordination with the 

Western Pacific Fishery Management 

Council (Council), is preparing a 

Supplemental Environmental Impact 

Statement (SEIS). The SEIS will 

supplement the Final Environmental 

Impact Statement (FEIS) Bottomfish and 

Seamount Groundfish Fishery of the