Buy America Waiver Notification, 72027-72028 [2011-29976]

Agencies

• Federal Highway Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 76, Number 224 (Monday, November 21, 2011)]
[Notices]
[Pages 72027-72028]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29976]



[[Page 72027]]

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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration


Buy America Waiver Notification

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice.

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SUMMARY: This notice provides information regarding the FHWA's finding 
that a partial Buy America waiver is appropriate for the purchase of 79 
electric sedans and 11 electric vans in Alameda County, California. The 
partial waiver will permit the purchase of these vehicles so long as 
the final assembly occurs in the United States.

DATES: The effective date of the waiver is November 22, 2011.

FOR FURTHER INFORMATION CONTACT: For questions about this notice, 
please contact Mr. Gerald Yakowenko, FHWA Office of Program 
Administration, (202) 366-1562, or via email at 
gerald.yakowenko@dot.gov. For legal questions, please contact Mr. 
Michael Harkins, FHWA Office of the Chief Counsel, (202) 366-4928, or 
via email at michael.harkins@dot.gov. Office hours for the FHWA are 
from 8 a.m. to 4:30 p.m., e.t., Monday through Friday, except Federal 
holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

    An electronic copy of this document may be downloaded from the 
Federal Register's home page at: https://www.archives.gov and the 
Government Printing Office's database at: https://www.access.gpo.gov/nara.

Background

    The FHWA's Buy America policy in 23 CFR 635.410 requires a domestic 
manufacturing process for any steel or iron products (including 
protective coatings) that are permanently incorporated into a Federal-
aid highway construction project. The regulation also provides for a 
waiver of the Buy America requirements when the application would be 
inconsistent with the public interest or when the relevant domestic 
steel and iron products are not produced in the United States in 
sufficient and reasonable available quantities and of a satisfactory 
quality. This notice provides information regarding the FHWA's finding 
that a partial Buy America waiver is appropriate for the purchase of 79 
electric sedans and 11 electric vans in Alameda County, California.
    In accordance with Division A, section 123 of the ``Consolidated 
Appropriations Act, 2010'' (Pub. L. 111-117), the FHWA published a 
notice of intent to issue a waiver on its Web site for 79 electric 
sedans (Nissan Leafs) and 11 electric vans (Ford Transit Connects) 
(https://www.fhwa.dot.gov/construction/contracts/waivers.cfm?id=57) on 
May 12th. The FHWA received 33 comments in response to the publication. 
Of these comments, 7 commenters objected to the proposed waiver on the 
grounds that Federal funds should be used to simply buy American 
products; 19 comments objected to Alameda County's intent to buy the 
Nissan Leaf, which is made in Japan, when there are electric vehicles, 
such as the Chevy Volt, that are made in America; 4 comments were from 
Alameda County responding to the concerns expressed in the comments; 1 
comment supported the waiver because the Leaf is a better electric 
vehicle than the Volt; 1 comment supported the waiver because Nissan 
intends to manufacture the Leaf in Tennessee in the future; one comment 
supports the purchase of all electric vehicles; and one comment did not 
contain any message.
    In general, Alameda County explained that there are no vehicles on 
the market that currently meet the FHWA's Buy America standard, which 
is 100 percent domestic steel and iron content. Alameda County further 
explained that the Chevy Volt does not meet their requirements because 
the Volt has only a 40-mile range when fully charged and then reverts 
to gasoline. Alameda County also explained that it needs to purchase 
all electric vehicles in order to achieve the best overall reduction in 
greenhouse gas emissions and particulate matter associated with those 
emissions since the San Francisco Bay Area is currently a nonattainment 
area for particulate matter.
    The FHWA has considered Alameda County's assertion that its needs 
for this project require an all electric vehicle and that no vehicle on 
the market currently satisfies a 100 percent domestic iron and steel 
content requirement. The FHWA has also considered the comments stating 
that Federal funds should be used to purchase a vehicle that is made in 
the United States. In considering these comments, the FHWA has 
reevaluated the applicability of the Buy America requirement as it may 
apply to the purchase of vehicles. The FHWA's Buy America requirement 
was initially established in 1983 when the purchase of vehicles was not 
eligible for assistance under the Federal-aid Highway Program. As such, 
the FHWA's Buy America requirements were tailored to the types of 
products that are typically used in highway construction, which 
generally meet a 100 percent domestic steel and iron content 
requirement.
    Vehicles, however, are not the types of products that were 
initially envisioned as being purchased with Federal-aid highway funds 
when Buy America was first enacted. In today's global industry, 
vehicles are assembled with components that are made all over the 
world. The FHWA is not aware of any vehicle on the market that can 
claim to incorporate 100 percent domestic content. For instance, the 
Chevy Volt, which was identified by many commenters as being a car that 
is made in the United States, comprises only 40 percent United States 
and Canada content according to the window sticker (https://www.cheersandgears.com/uploads/1298005091/med_gallery_51_113_449569.png). There is no indication of how much of this 40 percent 
United States/Canadian content is United States-made content. Thus, the 
FHWA does not believe that application of a domestic content standard 
should be applied to the purchase of vehicles.
    However, the FHWA believes that the vehicles should be assembled in 
the United States. Whenever a person discusses the manufacture of 
vehicles, the discussion typically refers to where the final assembly 
takes place. For instance, in the comments urging that the waiver be 
denied because the Chevy Volt is made in the United States, the FHWA 
interprets these comments as referring to the assembly of the vehicle 
in Detroit since the Volt window sticker says that the United States/
Canada parts content of the vehicle is only 40 percent. While the 
manufacture of steel and iron products that are typically used in 
highway construction (such as pipe, rebar, struts, and beams) generally 
refers to the various processes that go into actually making the entire 
product, the manufacture of vehicles typically refers to where the 
vehicle is assembled. Thus, given the inherent differences in the type 
of products that are typically used in highway construction and 
vehicles, we feel that simply waiving the Buy America requirement, 
which is based on the domestic content of the product, without any 
regard to where the vehicle is assembled would diminish the purpose of 
the Buy America requirement. Moreover, in today's economic environment 
with the National unemployment rate over 9 percent, the Buy America 
requirement is especially significant in that it will ensure that 
Federal Highway Trust Fund (HTF) dollars are used to support and create 
jobs in the United States.

[[Page 72028]]

    Therefore, while the FHWA has not located a vehicle that meets a 
100 percent domestic iron and steel content requirement, the FHWA does 
not find that a complete waiver based on nonavailability pursuant to 23 
U.S.C. 313(b)(2) is appropriate. However, the FHWA also recognizes that 
at least a partial waiver is necessary in order to permit Alameda 
County to proceed with its project. In order to enable Alameda County 
to proceed with this project, the FHWA believes that a partial waiver 
that allows the County to purchase vehicles so long as the final 
assembly of the vehicle as the end product occurs in the United States 
is appropriate. This approach is similar to the standard in the 
provisions implementing the Buy American Act in the Federal Acquisition 
Regulations where ``commercially available off-the-shelf'' (COTS) items 
may be used if such items are manufactured in the United States. The 
general Buy American Act standard requiring the product to exceed 50 
percent domestic content is waived for COTS items. This approach will 
also give effect to the FHWA's Buy America requirement by ensuring that 
HTF dollars are used to support American jobs in a reasonable and 
meaningful way.
    In conclusion, and in light of the above, pursuant to 23 U.S.C. 
313(b)(1), the FHWA finds that it is in the public interest to grant a 
partial waiver from the Buy America requirement at 23 U.S.C. 313(a) to 
purchase 79 electric sedans and 11 electric vans. Under this partial 
waiver, the general 100 percent domestic content requirement that 
applies to Federal-aid highway projects shall not apply to the purchase 
of such vehicles. However, the final assembly of any vehicles purchased 
with HTF funds must occur in the United States.
    In accordance with the provisions of section 117 of the Safe, 
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy of 
Users Technical Corrections Act of 2008 (Pub. L. 110-244, 122 Stat. 
1572), the FHWA is providing this notice of its finding that a partial 
waiver of Buy America requirements is appropriate. The FHWA invites 
public comment on this finding for an additional 15 days following the 
effective date of the finding. Comments may be submitted to the FHWA's 
Web site via the link provided to the automated batter switching 
mechanism waiver page noted above.

    Authority: 23 U.S.C. 313; Pub. L. 110-161, 23 CFR 635.410.

    Issued on: November 10, 2011.
Victor M. Mendez,
Administrator.
[FR Doc. 2011-29976 Filed 11-18-11; 8:45 am]
BILLING CODE 4910-22-P