Buy America Waiver Notification, 19410-19411 [2012-7731]

Agencies

• Federal Highway Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 77, Number 62 (Friday, March 30, 2012)]
[Notices]
[Pages 19410-19411]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-7731]


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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 obligation of 
Federal-aid Congestion Mitigation and Air Quality (CMAQ) improvement 
program funds for the purchase of eight 2012 Ford Escape hybrid four-
wheel drive vehicles by Merced County, CA.

DATES: The effective date of the waiver is March 31, 2012.

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.gpo.gov.

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 in a Federal-aid 
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 satisfactory quality domestic steel 
and iron products are not sufficiently available. This notice provides 
information regarding the FHWA's finding that a partial Buy America 
waiver is appropriate for the obligation of Federal-aid CMAQ program 
funds for the purchase of eight 2012 Ford Escape hybrid four-wheel 
drive vehicles by Merced County, CA.
    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 the eight 2012 
Ford Escape hybrid vehicles. (https://www.fhwa.dot.gov/construction/contracts/waivers.cfm?id=65) on January 11th. The FHWA received eight 
comments in response to the publication. Two commenters objected to the 
proposed waiver but did not provide evidence of a domestic source that 
meets the appropriate requirements. One commenter questioned whether 
the Federal Acquisition Regulations (FAR) used by other Federal 
agencies for direct Federal procurement would allow for a

[[Page 19411]]

waiver. In response to this commenter, it is noted that the FAR is not 
applicable to authorizations under the Federal-aid highway program and 
FHWA must comply with the applicable Buy America provisions in 23 
U.S.C. 313 and FHWA's implementing regulations in 23 CFR 635.410. Five 
of the commenters expressed partial or full support for the proposed 
waiver based on the belief that there are no domestic manufacturers 
that are able to provide a vehicle with 100 percent domestic steel and 
iron content. Several commenters questioned the need for this specific 
type of vehicle; however, Merced County's representative explained that 
this vehicle is necessary to meet their needs in accessing road and 
bridge construction sites during inclement weather while meeting the 
vehicle emission requirements of the CMAQ program.
    During the 15-day comment period, the FHWA conducted additional 
review but was unable to locate a domestic manufacturer that could meet 
a 100 percent domestic steel and iron content requirement. Based on all 
the information available to the agency, the FHWA concludes that there 
are no domestic manufacturers that could meet a 100 percent domestic 
steel and iron content for the 2012 Ford Escape hybrid four-wheel drive 
vehicle.
    The FHWA has considered Merced County's assertion that its needs 
for this project require a hybrid four-wheel drive 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 the vehicles. The FHWA's 
Buy America requirement was initially established in 1983 when the 
acquisition 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 steel and iron content. For 
instance, the Chevy Volt, which was identified by many commenters in a 
November 21, 2011, Federal Register Notice 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, 
under a previous proposed waiver notification and comment process, 
several commenters urged 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 8 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.
    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 non-availability 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 Merced 
County to proceed with its 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 partial waiver given to 
Alameda County, CA, for the purchase of 79 electric sedans and electric 
vans in the November 21, 2011, Federal Register.
    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 general 100 percent domestic content 
requirement that applies to Federal-aid highway projects under Buy 
America. Under this partial waiver, however, the final assembly of any 
vehicles purchased with HTF funds must occur in the United States. 
Thus, so long as the final assembly of the 2012 Ford Escape hybrid 
four-wheel drive vehicles occurs in the United States, Merced County 
may proceed to purchase these vehicles consistent with the Buy America 
requirement.
    In accordance with the provisions of section 117 of the SAFETEA-LU 
Technical Corrections Act of 2008 (Pub. L. 110-244, 122 Stat. 1572), 
the FHWA is providing this notice as its finding that a 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 Merced County waiver page noted above.

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

     Issued on: March 21, 2012.
Victor M. Mendez,
Federal Highway Administrator.
[FR Doc. 2012-7731 Filed 3-29-12; 8:45 am]
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