Legislative Alert: Minivan Buy America Waiver
In May 2016, the FTA issued a partial Buy America waiver for the procurement of minivans used in vanpool programs. Specifically, the notice waived steel content requirements. FTA did, however, require final assembly in the United States. The waiver is limited to contracts entered before September 30, 2019 or until a fully compliant domestic source becomes available.
That waiver is set to expire at the end of the fiscal year and to-date, a fully compliant vehicle is not available.
If the current waiver is not extended, vanpool programs that utilize mini-vans will no longer be able to use FTA funds to procure mini-vans for any contract signed after September 30, 2019.
In 2012, a similar lapse occurred and had a dramatic impact on the vanpool market.
The Coalition for Smarter Transportation is asking its members and other agencies to do two things:
- Contact your Members of Congress and ask them to reach out to FTA and urge that the Buy America waiver for mini-vans be extended given that a compliant vehicle is not available
- Reach out to FTA directly and urge them to take action before the current waiver expires.
We have developed two tools for your consideration
- A draft email to be sent to your Congressional delegation
- A draft letter for your consideration to be sent to FTA
Background on Federal Transit Administration Buy America Policy
When Federal transit funds are utilized to procure capital or contract for capital, law requires “the steel, iron, and manufactured goods used in the project to be produced in the United States. Final assembly for rolling stock also must occur in the U.S.”
The FAST Act made several changes to Buy America requirements. Specifically, it calls for an increased percentage of domestic steel in rolling stock purchases. The law phases in the increased domestic content percentage requirement for rolling stock, as follows:
- FY16 & FY17: more than 60% domestic content
- FY18 & FY19: more than 65% domestic content
- FY20 & beyond: more than 70% domestic content
Under limited circumstances, FTA may waive Buy America requirements if the agency finds that:
- application of Buy America is inconsistent with the public interest;
- the steel, iron, and goods produced in the U.S. are not produced in a sufficient and reasonably available amount or are not of a satisfactory quality; or
- including domestic material will increase the cost of the overall project by more than 25 percent for rolling stock.
The Federal Transit Administration and Federal Highway Administration have different Buy America policies, and thus they each administer the policies differently. Projects funded with FHWA CMAQ dollars (that have not been transferred to FTA administration) are not impacted by the policy above. Contract sponsors using CMAQ funds SHOULD be requesting authority from FHWA to purchase/lease vanpool vehicles.
Background on Mini-Van Waiver Request
On November 27, 2012, the FTA rescinded a Buy America waiver for minivans after confirming that the Vehicle Production Group was starting production of a substantially similar vehicle, the MV-1, in the United States. At that time, the FTA received approximately 836 public comments in response to its notice, a significant number of comments claimed the MV-1 is solely a paratransit vehicle and does not qualify for FTA funding for vanpool services nor was the vehicle designed to accommodate daily commuters. In its final rule, FTA recognized the point that was made by commenters. However, FTA elected not to revise that ruling, opting instead to give FTA regional administrators the ability to provide a waiver for vanpool projects on a project by project basis. Only one program, Fort Collins CO, program applied for such waiver and it took over a year to complete.
After significant pressure by industry stakeholders, the FTA created a broader waiver in May 2016. Responding to a waiver request by PACE (suburban Chicago), the Federal Transit Administration proposed a partial Buy America waiver for the procurement of minivans used in vanpool programs. Specifically, the notices waived steel content requirements. FTA did, however, require final assembly in the United States. The waiver is limited to contracts entered before September 30, 2019 or until a fully compliant domestic source becomes available.