Document ID: FRA-2023-0099-0001
Agency: fra
Document Type: Notice
Title: Proposed Nonavailability Waiver of Buy America Requirements: Nevada Department of Transportation to Purchase Certain High-Speed Rail Components
Posted Date: 2023-12-26T05:00Z

[Federal Register Volume 88, Number 246 (Tuesday, December 26, 2023)]
[Notices]
[Pages 89015-89017]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-28424]

[[Page 89015]]

-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

[Docket No. FRA-2023-0099]

Notice of Proposed Nonavailability Waiver of Buy America 
Requirements for the Nevada Department of Transportation To Purchase 
Certain High-Speed Rail Components

AGENCY: Federal Railroad Administration (FRA), Department of 
Transportation (DOT).

ACTION: Notice; request for comment.

-----------------------------------------------------------------------

SUMMARY: The Federal Railroad Administration (FRA) is seeking comments 
on whether to grant a waiver of its Buy America requirements to the 
Nevada Department of Transportation (NVDOT) for certain components that 
are not produced in the United States for use in a high-speed passenger 
train project between Las Vegas, NV and Rancho Cucamonga, CA (Project). 
FRA selected the Project for funding under the Federal-State 
Partnership for Intercity Passenger Rail Program (FSP Program), and 
therefore, FRA's Buy America requirements apply to the Project. FRA's 
Buy America requirements include both FRA's statutory requirements, 
which require 100 percent of the manufactured products and steel and 
iron used in an FRA-funded project to be produced in the United States, 
and the Build America, Buy America Act (BABA), which requires that all 
construction materials used in the FRA-funded project be produced in 
the United States. FRA is not proposing to waive the applicable BABA 
requirements for construction materials used in the Project, and 
therefore this proposed waiver would not apply to the construction 
materials used in the Project. The proposed waiver would apply to the 
trainset, signal systems, high-speed rail turnout and fire alarm 
systems based on the domestic nonavailability of such components, as 
identified by NVDOT's railroad operating partner Brightline West and 
the two potential suppliers (Alstom and Siemens) of the rolling stock 
and signaling systems for the project. NVDOT and Brightline estimate 
that over 95 percent of the total direct dollar expenditures for the 
Project would be spent on domestically sourced products and labor, 
including 100 percent of the civil infrastructure costs.

DATES: Comments must be received by January 25, 2024.

ADDRESSES: Please submit all comments electronically to the Federal 
eRulemaking Portal. Go to https://www.regulations.gov and follow the 
instructions for submitting comments.
    Instructions: All submissions must refer to the Federal Railroad 
Administration and the docket number in this notice (FRA-2023-0099). 
Note that all submissions received, including any personal information 
provided, will be posted without change and will be available to the 
public on https://www.regulations.gov. You may review DOT's complete 
Privacy Act Statement in the Federal Register published April 11, 2000 
(65 FR 19477), or at https://www.transportation.gov/privacy.

FOR FURTHER INFORMATION CONTACT: For questions about this notice, 
please contact Ryan Arbuckle, Chief, Program Coordination and Strategy, 
Office of Railroad Development, FRA, telephone: (202) 617-0212, email: 
[email protected]. For legal questions, please contact Faris 
Mohammed, Attorney-Advisor, Office of the Chief Counsel, FRA, 
telephone: (202) 763-3230, email: [email protected].

SUPPLEMENTARY INFORMATION: 

I. Project History and Background

    On December 7, 2022, FRA published a Notice of Funding Opportunity 
(NOFO) announcing application requirements and procedures to obtain 
grant funding under the FSP Program for projects not located on the 
Northeast Corridor for Fiscal Year 2022. The FSP Program provides a 
Federal funding opportunity to improve passenger rail service, 
including privately operated intercity passenger rail service if an 
eligible applicant is involved. On February 3, 2023, FRA published a 
notice adding funding and extending the application period for the FSP 
Program NOFO. On March 22, 2023, FRA published a notice (March Notice) 
inviting high-speed rail project sponsors to voluntarily submit, in 
advance of being selected to receive FRA funding, their domestic 
sourcing and workforce plans (DSWP) to demonstrate how they will 
maximize the use of domestic goods, products and materials, consistent 
with FRA's Buy America requirements.\1\
---------------------------------------------------------------------------

    \1\ Advancing High-Speed Rail Projects Intended for Operations 
Over 160 Miles Per Hour Through Domestic Sourcing Plans and Buy 
America Compliance, 88 FR 17289 (March 22, 2023).
---------------------------------------------------------------------------

    NVDOT submitted an application for FSP Program funding expressing 
its intent to partner with Brightline West, a privately-owned railroad, 
to advance a high-speed passenger rail system between Las Vegas, NV and 
Rancho Cucamonga, CA (Project). Brightline West, under the supervision 
and oversight of NVDOT, would construct the Project, which would 
consist of a fully-grade separated high-speed train system largely 
within the I-15 right-of-way with stations in Rancho Cucamonga, 
Hesperia, and Victor Valley, CA, and Las Vegas, NV. Brightline West 
would then operate and maintain the system.
    Consistent with FRA's March Notice, NVDOT and Brightline West 
submitted a DSWP,\2\ which included a request for a waiver of FRA's Buy 
America requirements \3\ for certain components of the high-speed rail 
system that the applicant indicated are not produced in the United 
States. FRA reviewed the DSWP, including the market research conducted 
by Brightline West and their consideration of qualifying alternate 
items, products, or materials. FRA selected the Project to receive 
$3,000,000,000 in funding under the FSP Program.
---------------------------------------------------------------------------

    \2\ The DSWP contains proprietary information that FRA has 
determined is confidential business information. As such, FRA is not 
making the DSWP available to the public at this time; however, 
pertinent non-proprietary information provided in the DSWP is 
discussed in this notice.
    \3\ For FRA's Buy America requirements, see section II.
---------------------------------------------------------------------------

    This notice summarizes FRA's Buy America requirements, NVDOT and 
Brightline West's request for a waiver, and FRA's proposed waiver 
decision.

II. FRA's Buy America Requirements and Policy

    Projects that receive funding under the FSP Program are subject to 
FRA's Buy America requirements. FRA's Buy America requirements include 
both: (i) FRA's statutory requirements for steel, iron, and 
manufactured goods at 49 U.S.C. 22905(a); and (ii) requirements under 
the Build America, Buy America Act (BABA) and guidance at 2 CFR 184.6 
for construction materials. This means that FRA can fund a project only 
if the steel, iron, and manufactured goods used in the project are 
produced in the United States. 49 U.S.C. 22905(a). In addition, FRA-
funded projects must also comply with the relevant provisions of BABA, 
including the requirement that all construction materials used in the 
project must also be produced in the United States. Public Law 117-58, 
70914(a); 2 CFR 184.6.
    FRA strictly enforces compliance with its Buy America requirements 
to ensure that FRA-funded projects maximize the use of materials 
produced in the United States. FRA expects grantees to work with 
suppliers to conduct thorough market research and adequately consider, 
where appropriate, qualifying alternate items, products, or materials.

[[Page 89016]]

Compliance with FRA's Buy America requirement supports domestic 
industry and well-paying jobs.

III. FRA's Authority To Waive Buy America Requirements

    There are limited circumstances in which FRA can waive its Buy 
America requirements under section 22905(a) and BABA. FRA will grant a 
waiver request that is consistent with the statutory criteria for a 
waiver and where a project sponsor has adequately justified the need 
for a waiver.
    FRA may waive its Buy America requirements if FRA determines that: 
applying the Buy America requirements would be inconsistent with the 
public interest; the steel, iron, and goods produced in the United 
States are not produced in a sufficient and reasonably available amount 
or are not of a satisfactory quality; rolling stock or power train 
equipment cannot be bought and delivered in the United States within a 
reasonable time; or including domestic material will increase the cost 
of the overall project by more than 25 percent. 49 U.S.C. 22905(a)(2); 
see also Public Law 117-58, 70914(b)(prescribing similar statutory 
conditions for waivers); and 2 CFR 184.7 (doing the same).
    If FRA determines a waiver is appropriate, FRA will provide notice 
and seek comment from the public in accordance with the requirements of 
both section 22905(a) and BABA, if applicable. In addition, FRA will 
consult with the National Institute of Standards and Technology's 
Manufacturing Extension Partnership before granting a waiver, 
consistent with section 70916 of BABA. Unless otherwise specified, 
waiver decisions are non-precedential and are only applicable to the 
entities and components for the specific project identified in the 
final decision.

IV. Summary of the Request for Waiver

    In response to FRA's March Notice, NVDOT and Brightline West 
submitted a DSWP outlining the efforts Brightline West would take to 
ensure maximum use of available domestic materials in the project if 
NVDOT's application is selected for funding under the FSP Program. In 
the DSWP, NVDOT and Brightline West explain that certain components 
intended to be used on the project are not produced in the United 
States and thus request a waiver of FRA's Buy America requirements 
under section 22905(a) for these components. No construction materials 
covered under BABA are included in the waiver request.

V. Summary of Components Requiring Waiver

    Brightline West sought to identify a domestic supplier for the 
rolling stock and signal system components of the Project. Brightline 
West received two responses to its Request for Interest, from Siemens 
and Alstom, who represented they could provide high-speed rail 
components that meet Brightline West's specifications and applicable 
FRA safety requirements. However, both suppliers certified that certain 
non-domestic components would be required to meet the specifications, 
as those types of high-speed rail equipment are not produced in the 
United States. Brightline West consulted with each potential supplier 
so that their lists of non-domestic components would include only those 
components for which there is no available domestic option.
    Brightline West received responses from both Siemens and Alstom for 
the signal systems and both responses indicated a need for a waiver for 
certain components. Brightline West selected Siemens as the preferred 
vendor for the signal systems for the Project, and therefore the 
proposed waiver only describes the non-domestic components in Siemens' 
proposal.
    For rolling stock, both Alstom and Siemens indicated that certain 
components that perform safety critical functions for the operation of 
the high-speed rail system would not be compliant with FRA's Buy 
America requirements. At the time of this proposed waiver, Brightline 
West has not selected its preferred vendor for rolling stock. The non-
domestic components identified by Brightline West that would require a 
waiver from FRA's Buy America requirements are described in this 
section.\4\
---------------------------------------------------------------------------

    \4\ The non-domestic component lists may vary among suppliers 
depending on the specific manufacturing processes used and system 
design. In highly specialized systems, such has high-speed rail 
trainsets, components cannot be easily substituted without potential 
impacts to performance and safety.
---------------------------------------------------------------------------

a. Siemens Proposal--Non-Domestic Rolling Stock Components

    Siemens is proposing to introduce the next generation Velaro NOVO 
Electric-Multiple-Unit (EMU) for the Project. As this would be the 
first introduction of this technology into the United States, Siemens 
would plan for the first two trainsets to be manufactured and assembled 
in its German headquarters with American workers present to witness and 
learn in advance of commencing the manufacturing and assembly of the 
remaining eight trainsets at a new factory, which would be constructed 
in Nevada. Under the Siemens proposal, the following components would 
not be produced in the United States:

 First Two Complete Trainsets
 Car Shells for All 10 Trainsets (shell structure, frame, 
vehicle paintwork)

b. Alstom Proposal--Non-Domestic Rolling Stock Components

    Alstom is proposing to adapt the Avelia technology planned for 
deployment on the NEC for use in the Project by increasing power 
capacity and traction to achieve the speed and performance capability 
required by Brightline West, and consistent with that achieved with its 
TGV trains in Europe. Manufacturing would take place at its existing 
facility in Hornell, New York, where all 10 trainsets would be built. 
For this procurement, the following components would not be produced in 
the United States:

 Car Shells (shell structure, frame, vehicle paintwork)
 Brake Control Units

c. Non-Domestic Infrastructure Components

    Brightline West notes that the Project would also require the use 
of specialty high-speed rail turnouts to allow trains to smoothly 
diverge to a passing siding, which plays a key role in safety and 
stability of train operations. In addition, the Project would require 
fire alarm panels and devices for use in stations, garages, and 
maintenance facilities. Brightline West has researched known suppliers 
and was not able to identify a domestic manufacturer for the following 
components:

 Eurobalises and Euroloops \5\
---------------------------------------------------------------------------

    \5\ Eurobalise and euroloops are components installed between 
the rails of a railway that are part of the European train control 
system used by Siemens. These components store infrastructure data 
(e.g., position reference, speed limits, line gradient, works on the 
line, etc) and can send this information to the train.
---------------------------------------------------------------------------

 Counting Heads and Axle Counter Sensors
 Truck Press (test stand)
 Turnout Systems including Derailers
 Fire Alarm Systems

VI. Applicant's Request for Waiver

    In their request for a waiver, NVDOT and Brightline West indicated 
that they believe a waiver is justified because no manufacturers exist 
in the United States that can produce the components described above, 
and that the use of these non-domestic components is necessary to 
ensure the safety and reliability of the high-speed rail system.

[[Page 89017]]

    NVDOT's and Brightline West's DSWP further explains that over 95 
percent of the total direct dollar expenditures for the Project would 
be spent on domestically sourced products and labor, including 100 
percent of the civil infrastructure costs. In addition, the Project is 
expected to support approximately 35,000 domestic jobs across the 
construction period and includes a project labor agreement (PLA). The 
operator has reached an agreement with rail labor which may result in 
ongoing operations and maintenance work being performed by union 
labor.\6\ The DSWP further explains efforts Brightline West would take 
to facilitate, where feasible, a ramp up in domestic production 
capabilities for the materials that are not currently produced in the 
United States on future high-speed rail projects in the United States.
---------------------------------------------------------------------------

    \6\ In March 2023, thirteen rail unions representing more than 
160,000 workers signed a Memorandum of Understanding with Brightline 
West, establishing a commitment for the use of highly skilled union 
labor required to operate and maintain the System.
---------------------------------------------------------------------------

    In the absence of a waiver, NVDOT and Brightline West argue that 
the Project could not be delivered within the planned schedule and 
budget because there is no domestic supplier for the components listed 
above. To ensure safety of the system, Brightline West expects to 
conform with FRA's Passenger Equipment Safety Standards governing Tier 
III equipment,\7\ which allows for service-proven high-speed rail 
technologies from around the world (in this case Europe) to be 
introduced to the United States with minimal modification.
---------------------------------------------------------------------------

    \7\ See 49 CFR part 238.
---------------------------------------------------------------------------

    For example, the high-speed rolling stock aluminum car shells are 
critical to the achievement of high speeds, due to aluminum's strength 
and light weight, and it has taken decades of development in technology 
by highly specialized experts that can shape, mold, and weld these car 
shells to the required safety and quality standards, including 
crashworthiness. There is currently no available aluminum car shell 
manufacturer in the United States, and it would take years to establish 
a domestic, quality-controlled manufacturing capability. The relatively 
small size of the Project's order (ten trainsets) is also not 
considered by the applicant to be sufficient to justify the significant 
capital investments required to initiate development of domestic 
production capacity for those products.
    In its request for a waiver, NVDOT and Brightline West explain how 
they conducted due diligence and performed thorough market research to 
adequately consider qualifying alternate items, products, or materials. 
Brightline West engaged with both Alstom and Siemens to determine the 
systems that could be manufactured domestically. These efforts included 
considering options for the establishment of either temporary or 
permanent manufacturing facilities, alternative manufacturing 
processes, and system design. In addition, Brightline West conducted 
market research to identify a domestic supplier for high-speed turnout 
and fire alarm components. However, Brightline West was unable to 
identify a domestic supplier for the rolling stock, signal systems, 
turnout, and fire alarm components.

VII. Proposed Waiver

    Based on its review of the waiver request and DSWP, FRA proposes to 
waive its Buy America requirements for the following components for the 
Project:
     The infrastructure components listed above in Section 
V(c); and the rolling stock components listed in either:
    [cir] Section V(a), if Siemens is selected as the preferred 
supplier; or
    [cir] Section V(b), if Alstom is selected as the preferred 
supplier.
    The proposed waiver would apply only to components listed above for 
use in the Project, as described in the grant agreement between FRA and 
NVDOT. FRA is not proposing to waive any requirements under BABA, as 
the proposed waiver does not apply to any construction materials used 
in the Project. The proposed waiver would not apply to other FRA 
grantees or to other grants that might be made to NVDOT or Brightline 
West for other projects (including any future phases related to the 
Project).

VIII. Request for Comment

    FRA will consider comments received during the comment period, 
consistent with BABA and 2 CFR 184.7. FRA may consider comments 
received after this period to the extent practicable. Consistent with 
49 U.S.C. 22905(a)(4), if FRA determines it is necessary to waive its 
Buy America requirements, FRA will publish its decision in the Federal 
Register and provide an opportunity for public comment on such finding 
for a reasonable period of time not to exceed 15 days. After such 
period, FRA's decision will be effective.

    Issued in Washington, DC.
Amitabha Bose,
Administrator.
[FR Doc. 2023-28424 Filed 12-22-23; 8:45 am]
BILLING CODE 4910-06-P