Notice2024-21574
Notice of Proposed Nonavailability Waiver of Buy America Requirements for Certain High-Speed Rail Products for the California Inaugural High-Speed Rail Service Project
Primary source
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Published
September 20, 2024
Issuing agencies
Transportation DepartmentFederal Railroad Administration
Abstract
The Federal Railroad Administration (FRA) is seeking comments on whether to grant a waiver of its Buy America requirements to the California High-Speed Rail Authority (the Authority) to use certain products that are not produced in the United States for use in the California Inaugural High-Speed Rail Service Project between Merced, California and Bakersfield, California (Project). FRA is funding the Project under the Federal-State Partnership for Intercity Passenger Rail Program (FSP Program); 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. The proposed waiver would apply to the aluminum car shells, signal systems, high-speed rail turnouts and fire alarm systems based on the domestic nonavailability of such products, as identified by the Authority. The Authority estimates that over 98 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.
Full Text
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<title>Federal Register, Volume 89 Issue 183 (Friday, September 20, 2024)</title>
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[Federal Register Volume 89, Number 183 (Friday, September 20, 2024)]
[Notices]
[Pages 77224-77227]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-21574]
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DEPARTMENT OF TRANSPORTATION
Federal Railroad Administration
[Docket No. FRA-2024-0104]
Notice of Proposed Nonavailability Waiver of Buy America
Requirements for Certain High-Speed Rail Products for the California
Inaugural High-Speed Rail Service Project
AGENCY: Federal Railroad Administration (FRA), Department of
Transportation (DOT).
ACTION: Notice; request for comment.
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SUMMARY: The Federal Railroad Administration (FRA) is seeking comments
on whether to grant a waiver of its Buy America requirements to the
California High-Speed Rail Authority (the Authority) to use certain
products that are not produced in the United States for use in the
California Inaugural High-Speed Rail Service Project between Merced,
California and Bakersfield, California (Project). FRA is funding the
Project under the Federal-State Partnership for Intercity Passenger
Rail Program (FSP Program); 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. The proposed waiver would apply to the aluminum
car shells, signal systems, high-speed rail turnouts and fire alarm
systems based on the domestic nonavailability of such
[[Page 77225]]
products, as identified by the Authority. The Authority estimates that
over 98 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 October 7, 2024.
ADDRESSES: Please submit all comments electronically to the Federal
eRulemaking Portal. Go to <a href="https://www.regulations.gov">https://www.regulations.gov</a> 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-2024-0104).
Note that all submissions received, including any personal information
provided, will be posted without change and will be available to the
public on <a href="https://www.regulations.gov">https://www.regulations.gov</a>. You may review DOT's complete
Privacy Act Statement in the Federal Register published April 11, 2000
(65 FR 19477), or at <a href="https://www.transportation.gov/privacy">https://www.transportation.gov/privacy</a>.
FOR FURTHER INFORMATION CONTACT: For questions about this notice,
please contact Shreyas Bhatnagar, Regional Supervisor, Office of
Regional Outreach & Project Delivery, Office of Railroad Development,
FRA, telephone: (202) 495-8630, email: <a href="/cdn-cgi/l/email-protection#396a514b5c40584a177b51584d57585e584b795d564d175e564f"><span class="__cf_email__" data-cfemail="f5a69d87908c9486dbb79d94819b94929487b5919a81db929a83">[email protected]</span></a> or
Ryan Arbuckle, Chief, Program Coordination and Strategy, Office of
Railroad Development, FRA, telephone: (202) 617-0212, email:
<a href="/cdn-cgi/l/email-protection#481a31292666093a2a3d2b23242d082c273c662f273e"><span class="__cf_email__" data-cfemail="b9ebc0d8d797f8cbdbccdad2d5dcf9ddd6cd97ded6cf">[email protected]</span></a>. For legal questions, please contact Faris
Mohammed, Attorney-Adviser, Office of the Chief Counsel, FRA,
telephone: (202) 763-3230, email: <a href="/cdn-cgi/l/email-protection#541235263d277a193b3c353939313014303b207a333b22"><span class="__cf_email__" data-cfemail="c284a3b0abb1ec8fadaaa3afafa7a682a6adb6eca5adb4">[email protected]</span></a>.
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. 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, a domestic sourcing and workforce plan (DSWP) to
demonstrate how the sponsor will maximize the use of domestic goods,
products and materials, consistent with FRA's Buy America
requirements.\1\
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\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).
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The Authority applied for FSP Program funding expressing its intent
to advance the California High-Speed Rail System through completion of
the Inaugural High-Speed Rail Service Project between the cities of
Merced and Bakersfield in the Central Valley of California.\2\
Consistent with FRA's March Notice, the Authority submitted a DSWP,\3\
which included an initial request for a waiver of FRA's Buy America
requirements for certain products that the Authority indicated are not
produced in the United States. In December 2023, FRA selected the
Project to receive $3,073,600,000 in funding under the FSP Program. In
a letter dated September 13, 2024, the Authority requested a waiver
from FRA's Buy America requirements consistent with the Authority's
DSWP.
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\2\ The California High-Speed Rail System is a multi-phase
effort that is planned between to provide service between San
Francisco to Los Angeles and provide a competitive transportation
mode with estimated speeds capable of 186 (or greater) miles per
hour.
\3\ 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.
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The Authority is responsible for developing product specifications
and procuring materials for use in the Project and expects to use FSP
Program funds for costs associated with those procurements. The
Authority's procurement process is separate from FRA's review of the
Authority's request for a waiver of Buy America requirements, and FRA
is not involved in the development of product specifications or the
Authority's procurement process. FRA's role is limited to reviewing the
Authority's request for a waiver, consistent with 49 U.S.C.
22905(a)(2).
In August 2023, the Authority issued a Request for Qualifications
(RFQ) to procure six trainsets for the Project that could meet FRA's
Passenger Equipment Safety Standards governing Tier III equipment (Tier
III Rule), which establishes safety standards for high-speed rail
equipment and operations that travel at speeds above 125 mph.\4\ Two
Original Equipment Manufacturers (OEMs) responded to the Authority's
RFQ; however, neither OEM indicated that they would be able to supply a
fully Buy America-compliant trainset in their responses. Both OEMs
indicated they would need a waiver from FRA's Buy America requirements
for the aluminum car shells (shell, structure, and vehicle paintwork),
as the car shells are not produced in the United States. In April 2024,
the Authority issued a Request for Proposals for the six trainsets. In
addition to trainsets, the Authority identified additional products
that are not produced domestically, which would also require a waiver.
The Authority expects to complete its procurement process for the
trainsets and other contracts later this year.
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\4\ See 49 CFR part 238.
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Based on information gathered through the procurement process and
through market research, the Authority revised its initial DSWP, which
further explains how the Authority will meet FRA's Buy America
requirements and identifies any necessary waivers for noncompliant
products. FRA reviewed the DSWP, including the market research
conducted by the Authority.
This notice summarizes FRA's Buy America requirements, the
Authority's request for a waiver, and FRA's findings and proposed
waiver.
II. FRA's Buy America Requirements and Policy
Projects that receive funding under FRA's 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 related 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 recipients to work with
suppliers to conduct thorough market research and adequately consider,
where appropriate, qualifying alternate items, products, or materials
that can also meet the recipient's technical specifications. Compliance
with FRA's Buy America requirements supports domestic industry and
well-paying jobs.
[[Page 77226]]
III. FRA's Authority To Waive Buy America Requirements
There are limited circumstances in which FRA can waive its Buy
America requirements under 49 U.S.C. 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).
Specifically, when determining whether 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
pursuant to 49 U.S.C. 22905(a)(2)(B), FRA considers whether the
recipient has used appropriate due diligence, such as market research
or by soliciting proposals through an open procurement process, to
identify domestic products or domestically available alternative
products that meet the recipient's specifications. A comparable product
that performs a similar function is not necessarily a domestic
alternative; the product must also meet the recipient's specific
requirements. FRA's statutory requirements do not require recipients to
change product specifications in order to utilize domestic products
that do not meet the recipient's original specifications. If there are
no domestically produced products that also meet the recipient's
specifications, and the recipient has exercised appropriate diligence,
FRA may waive its Buy America requirements based on nonavailability,
consistent with 49 U.S.C. 22905(a)(2)(B).
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 (NIST MEP) 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 products for the specific project
identified in the final waiver.
IV. The Authority's Request for Waiver
In response to FRA's March Notice, the Authority submitted a DSWP
outlining the efforts that would be used to ensure maximum use of
available domestic materials in the Project if the Authority's
application was selected for funding under the FSP Program. In the
DSWP, the Authority explained that the Project would require the use of
products that are not produced in the United States, which would
require a waiver of FRA's Buy America requirements. The Authority did
not identify any construction materials covered under BABA that would
require a waiver. The Authority explained that the use of these non-
compliant products is necessary to ensure the safety and reliability of
the high-speed rail system. Specifically, the Authority requested a
waiver for the following:
<bullet> Car Shells (shell structure, frame, vehicle paintwork) for six
trainsets
<bullet> Eurobalises and Euroloops \5\
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\5\ Eurobalise and euroloops are products installed between the
rails of a railway that are part of the European train control
system. These products store infrastructure data (e.g., position
reference, speed limits, line gradient, works on the line) and can
send this information to the train.
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<bullet> Counting Heads and Axle Counter Sensors
<bullet> Truck Press (test stand)
<bullet> Turnout Systems including Derailers
<bullet> Fire Alarm Systems
FRA recently conducted a similar analysis for these high-speed rail
products in its final nonavailability waiver for the Brightline West
High-Speed Passenger Train Project (Brightline West Waiver) based on a
request from the Nevada Department of Transportation (NDOT) and
Brightline West, the private project sponsor. \6\ Brightline West
conducted market research for these same products and coordinated with
potential suppliers and the NIST MEP to locate domestic suppliers. In
the final waiver, FRA concluded that the high-speed rail products,
which are the same items for which the Authority seeks a waiver, are
not produced in the United States based on Brightline West's market
research and coordination with potential suppliers. In developing its
waiver request, the Authority noted that it closely coordinated with
Brightline West to identify products that are not currently produced in
the United States.
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\6\ Notice of Nonavailability Waiver of Buy America Requirements
for the Nevada Department of Transportation to Purchase Certain
High-Speed Rail Products, 89 FR 45934 (May 24, 2024).
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The Authority requested a waiver for aluminum car shells for the
six trainsets that will be purchased for and used in the Project. The
request is based on responses from two OEMs that indicated they could
not provide a fully compliant trainset without a waiver for the car
shells, which are not produced in the United States. The Authority
notes that the car shells are a necessary feature for the safe and
efficient operation of the high-speed rail trainset. Specifically, the
Authority explains the car shells are required to achieve 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.
FRA previously considered the domestic availability of aluminum car
shells in the Brightline West Waiver, sought public comment on this
finding and utilized the NIST MEP's supplier scouting program to
identify potential domestic suppliers. FRA concluded the car shells are
not produced in the United States. Here, the Authority proposes to use
the same, or substantially similar, car shells to those described in
the Brightline West Waiver.
Similar to the Brightline West High-Speed Passenger Train Project,
the Authority proposes to use the European Rail Traffic Management
System (ERTMS) for the Project. The Authority proposes to use ERTMS to
ensure safety of the high-speed rail system and expects to conform to
FRA's Tier III Rule, 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\
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\7\ ERTMS has not yet been tested, certified, and approved for
operation in the United States. Design documentation, testing, and
submission of a PTC Safety Plan and associated HSR-125 document will
be required to obtain PTC certification and approval to operate. The
operational experience of ERTMS across the European high-speed rail
network will provide operational safety and reliability data to
support the PTC Safety Plan and HSR-125 document.
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Although the Authority's procurement process for the signal system
is still ongoing, the Authority requested a waiver for eurobalises and
euroloops that can be used in the ERTMS for the Project, as these
products will be required for the ERTMS regardless of the selected
supplier. FRA previously considered the
[[Page 77227]]
availability of eurobalises and euroloops in the Brightline West Waiver
and concluded these products are not produced in the United States.
In addition, and similar to the Brightline West Waiver, the Project
will 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. The Project will also
require fire alarm panels and devices for use in stations, garages, and
maintenance facilities. The Authority has researched known suppliers
but did not identify a domestic manufacturer for these products, which
FRA also previously concluded are not produced in the United States.\8\
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\8\ 89 FR 45934.
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The Authority explains in the DSWP that over 98 percent of the
total direct dollar expenditures for the Project will be spent on
domestically sourced products and labor, including 100 percent of the
civil infrastructure costs. In addition, the Project has created
approximately 13,000 domestic jobs across the construction period and
includes a community benefits agreement designed to assist small
businesses and job seekers in finding or obtaining construction
contracts.\9\ The Authority has also reached an agreement with rail
labor, which may result in ongoing operations and maintenance work
being performed by union labor.\10\ The DSWP further explains efforts
the Authority will take to facilitate, where feasible, a ramp up in
domestic production capabilities.
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\9\ For more information on the Community Benefits Agreement,
see: <a href="https://hsr.ca.gov/business-opportunities/general-info/community-benefits-agreement/">https://hsr.ca.gov/business-opportunities/general-info/community-benefits-agreement/</a>.
\10\ In November 2023, 13 rail unions representing more than
160,000 workers signed a Memorandum of Understanding with California
High-Speed Rail Authority, establishing a commitment for the use of
highly skilled union labor required to operate and maintain the
system.
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At the time of this proposed waiver, the Authority has not selected
an OEM for the trainsets and has not completed its procurement process
for the Project. As noted above, the Authority's procurement process is
separate from FRA's consideration of nonavailability under 49 U.S.C.
22905(a)(2)(B). FRA expects the Authority to make its procurement
decision based on the needs for the Project and to select products that
meet the Authority's specifications. If, based on the final
procurement, there are changes to the items described in the final
waiver, the Authority may need to request additional waivers from FRA.
V. Findings and Proposed Waiver
FRA has preliminarily determined that these products are not
produced in the United States in a sufficient and reasonably available
amount or are not of a satisfactory quality, consistent with 49 U.S.C.
22905(a)(2)(B). FRA finds that the Authority has conducted appropriate
due diligence through market research to identify potential suppliers
for the Project. The Authority's research included discussions with
potential suppliers and coordination with Brightline West. FRA
previously considered the products described in the Authority's request
with respect to the Brightline West High-Speed Passenger Train Project
and determined the products were not produced in the United States,
which included consultation with NIST-MEP through its supplier scouting
program.\11\ Given the short amount of time between FRA's previous
findings and the Authority's request, FRA is relying on its findings in
the Brightline West Waiver to support its determination with respect to
the Authority's request. Based on its review of the waiver request, the
Authority's DSWP, and FRA's previous findings in the Brightline West
Waiver, FRA proposes to waive its Buy America requirements for the
products listed above in Section IV.
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\11\ 89 FR 45934.
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The proposed waiver would apply only to products listed in Section
IV for use in the Project. 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 recipients or to other grants that might be made
to the Authority for other projects (including any future phases
related to the Project). This proposed waiver will expire upon the end
of the period of performance and closeout of the grant agreement for
the Project.
VI. 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. 2024-21574 Filed 9-19-24; 8:45 am]
BILLING CODE 4910-06-P
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