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Decision To Rescind Buy America Waiver for Minivans and Minivan Chassis

American Government Special Collections Reference Desk

American Government

Decision To Rescind Buy America Waiver for Minivans and Minivan Chassis

Peter Rogoff
Federal Transit Administration
December 3, 2012


[Federal Register Volume 77, Number 232 (Monday, December 3, 2012)]
[Notices]
[Pages 71673-71678]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-29129]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket No. FTA-2012-0029]


Decision To Rescind Buy America Waiver for Minivans and Minivan 
Chassis

AGENCY: Federal Transit Administration, DOT.

ACTION: Decision on request to rescind Buy America waiver.

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SUMMARY: On June 21, 2010, the Federal Transit Administration waived 
its Buy America final assembly requirement for minivans and minivan 
chassis after confirming that no manufacturer was willing and able to 
supply minivans or minivan chassis that were assembled in the United 
States. Now, FTA rescinds the waiver after confirming that the Vehicle 
Production Group has started producing a substantially similar vehicle, 
the MV-1, in the United States.

FOR FURTHER INFORMATION CONTACT: Mary J. Lee at (202) 366-0985 or 
mary.j.lee@dot.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Vehicle Production Group (VPG) petitioned the Federal Transit 
Administration (FTA) to rescind the non-availability waiver it issued 
on June 21, 2010 (75 FR 35123). The waiver exempted minivans and 
minivan chassis from the Buy America final assembly requirement 
outlined at 49 CFR part 661, stating that it would remain in effect 
until such a time as a domestic source became available.
    With few exceptions, FTA's Buy America requirements prevent FTA 
from obligating an amount that may be appropriated to carry out its 
programs for a project unless ``the steel, iron, and manufactured goods 
used in the project are produced in the United States.'' 49 U.S.C. 
5323(j)(1). For FTA-funded rolling stock procurements, the Buy America 
requirements are two-fold: (1) At least 60 percent of the components, 
by dollar value, must be produced in the United States; and (2) final 
assembly must occur in the United States. 49 U.S.C. 5323(j).
    An exception to, or waiver of, the Buy America rules is allowed if 
``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.'' 49 U.S.C. 5323(j)(2)(B).
    On June 21, 2010, in response to formal requests from ElDorado 
National, Kansas (ElDorado) and the Chrysler Group LLC (Chrysler), and 
after ascertaining through notice and comment that no manufacturer of 
minivans or minivan chassis performed final assembly in the United 
States, FTA waived its Buy America final assembly requirement for 
minivans and minivan chassis. 75 FR 35123.
    When FTA waived the final assembly requirement for minivans, it 
declined to define the term ``minivan.'' FTA's reluctance to define the 
term stemmed from its understanding that (1) among the various 
classifications used by Federal regulatory agencies, minivans like the 
Chrysler Town and Country, and Dodge Caravan were not uniformly placed 
in the same class of vehicles; \1\

[[Page 71674]]

and (2) interested parties understood the waiver would apply to the 
type of vehicle produced by the parties that petitioned FTA--Chrysler 
and ElDorado.\2\ Because there is no uniform definition or 
classification for ``minivan,'' and FTA grantees understood that the 
waiver would apply to vehicles similar to those produced by Chrysler 
and ElDorado, FTA declined to create a new definition or 
classification.
---------------------------------------------------------------------------

    \1\ There is no uniform definition or classification for 
minivans. The closest things to a definition of a vehicle type, like 
``minivan,'' are the classifications used by the National Highway 
Traffic Safety Administration (NHTSA) and the Environmental 
Protection Agency (EPA) to regulate safety and control emissions. 
However, NHTSA's classifications do not uniformly group vehicles 
from one regulation to the next. For example, under NHTSA's 
Corporate Average Fuel Economy (CAFE) standards, most ``minivans,'' 
like Chrysler's Town and Country, fall under the class of ``light 
trucks.'' However, when regulating safety, the same vehicle is 
classified as a ``multipurpose passenger vehicle,'' which includes 
vehicles built on a truck chassis (or with special features for 
occasional off-road operation) that carry ten persons or less. See 
49 CFR 571.3. These distinct classification systems highlight the 
differences in vehicles based upon various factors, such as fuel 
economy or passenger capacity, but each classification system uses 
different factors.
    \2\ Chrysler is the Original Equipment Manufacturer (OEM) of 
specific model minivans. ElDorado modifies these same Chrysler model 
minivans into wheelchair-accessible vehicles.
---------------------------------------------------------------------------

    Recently, an original equipment manufacturer called the Vehicle 
Production Group (VPG) started producing a six-passenger vehicle called 
the Mobility Vehicle 1 (MV-1). The MV-1 is a purpose-built, wheelchair-
accessible vehicle that is substantially similar to a minivan. 
According to VPG sales materials, the MV-1 seats up to six adults, with 
one full-size wheelchair. Wheelchairs enter the MV-1 via a ramp that 
stows under the vehicle and deploys to the passenger side. It is 
available with a Ford Modular 4.6 liter V8 engine and can be purchased 
with an engine that runs on gasoline or compressed natural gas (CNG). 
AM General LLC (AM General) assembles the MV-1 at its plant in 
Mishawaka, Indiana. VPG certifies that the MV-1 complies with Buy 
America requirements for both domestic content and final assembly. 
Moreover, VPG maintains that it manufactures the MV-1 in sufficient 
quantity to meet the current and future demand on FTA-funded projects.
    Based on the fact that it produces the MV-1 in the United States, 
VPG petitioned FTA to rescind the Buy America final assembly waiver it 
issued on June 21, 2010, for minivans and minivan chassis.
    Pursuant to VPG's request, FTA published a notice in the Federal 
Register on August 3, 2012, calling for comments on VPG's request to 
rescind the 2010 Buy America waiver for minivans and minivan chassis. 
75 FR 35124. FTA sought comment from all interested parties regarding 
the availability of domestically manufactured minivans and minivan 
chassis in order to fully determine whether a waiver remained 
necessary.
    The August 3, 2012 notice established a deadline of September 4, 
2012, for interested parties to submit comments. Following a request 
from Chrysler, FTA published a second notice on August 28, 2012, 
extending the comment deadline by one week, from September 4 to 
September 11, 2012. 77 FR 52134.

II. Response to Public Comments

    FTA received approximately 836 comments in response to its notice. 
Of the 836 comments, three comments were posted to the docket in error, 
and 88 comments were filed after the September 11, 2012 deadline. FTA 
considered all comments submitted to the docket on or before September 
19, 2012.
    The commenters represent a broad spectrum of stakeholders from 
throughout the United States and include elected officials, state and 
local governments, transit and other local government agencies, 
transportation providers, trade associations, vehicle manufacturers, 
suppliers and retailers, a labor union, members of the disability 
community, and numerous persons in their individual capacity.
    The following is FTA's response to the substantive comments. FTA 
responds to public comments in the following topical order: (A) General 
Comments; (B) Definition of a ``Minivan''; (C) Minivan Use for 
Paratransit Transportation Services; (D) Minivan Use for Vanpool 
Services; (E) Competition and Price Concerns; (F) U.S. Employment; (G) 
Safety Concerns; and (H) Miscellaneous Comments. Several commenters 
raised issues that are outside the scope of FTA's request for comments. 
FTA declines to address those concerns in this Decision.

A. General Comments

    Many commenters expressed support for Buy America and its purposes, 
including its intent to support U.S. manufacturing and employment. Most 
commenters generally stated that these are difficult economic times and 
highlighted FTA's role in assisting U.S. manufacturers.
    Hundreds of employees from VPG, AM General, the International 
Union, United Automobile, Aerospace, and Agricultural Implement Workers 
of America (UAW), Amalgamated UAW Local 5, the Ford Motor Company, and 
many other VPG suppliers submitted comments in favor of rescinding the 
waiver. FTA also received favorable comments from retailers and 
consumers, elected officials, and other interested persons.
    Many other vehicle manufacturers, suppliers and retailers, 
including Chrysler, ElDorado National-Kansas, Thor Industries, Inc. 
(Thor Industries), the Braun Corporation (Braun), state government 
agencies (including Alabama, Florida, Indiana, Illinois, Montana, 
Nebraska, South Dakota, Virginia, and Wyoming Departments of 
Transportation), transit agencies or other local transportation 
providers, trade associations, an elected official, persons employed in 
the transit industry, and other interested parties or persons opposed 
or raised significant concerns about VPG's request to rescind the 
waiver.

B. The Definition of ``Minivan''

    The commenters opposing rescission of the waiver argued that the 
MV-1 is not a ``minivan,'' and thus, minivans remain unavailable from a 
U.S. source. These commenters asserted that minivans and the MV-1 
differ in several respects--size, sliding side doors, passenger 
capacity, wheelchair capacity, rear entry vs. side entry for 
wheelchairs, seating arrangements, rear- vs. front-wheel drive, and 
fuel economy. Chrysler, for example, stated that its customers ``will 
not consider the MV-1 to be a suitable replacement for our minivans[, 
which] * * * are front-wheel drive vehicles with a 6-cylinder engine.'' 
According to Chrysler, ``[t]he MV-1 is a rear-wheel drive vehicle with 
an 8-cylinder engine, which is more like an SUV than a minivan.'' 
Chrysler further stated that:
    As a paratransit vehicle, the MV-1 falls short of traditional 
minivans.

     Chrysler minivans converted for paratransit use have 
more seating capacity than the MV-1. The Chrysler wheelchair 
accessible minivan is typically configured to carry 4 ambulatory 
passengers and 2 wheelchair passengers. The MV-1 configuration that 
provides 2 wheelchair positions only have space for one ambulatory 
person--the driver.
    * * *

    ElDorado also commented that the MV-1 is ``not a minivan'' but a 
``Mobility Vehicle,'' the first of its kind. ElDorado reasoned that the 
MV-1 cannot be a minivan, as most minivans do not come equipped with a 
standard wheelchair ramp.
    Thor Industries, the parent company to ElDorado, made a similar 
comment and also stated that the MV-1 is not a minivan, but ``the first 
`Mobility Vehicle' of its kind.'' Moreover, according to Thor 
Industries, the MV-1 has significantly different features from

[[Page 71675]]

a ``typical ElDorado minivan.'' It provided a table to illustrate the 
differences it perceived between ElDorado's Amerivan Minivan (built on 
a Grand Dodge Caravan and Chrysler Town and Country chassis) and the 
MV-1. Thor Industries claimed the Amerivan Minivan has the following 
features that are lacking on the MV-1: one-touch automatic operation 
for the door and ramp, sliding power ramp door, kneeling rear 
suspension, removable driver seating for the wheelchair driver, a 
removable ``co-pilot'' seat, driver/passenger transfer seat option, 
three wheelchair securement locations, bus-tested at the Altoona Bus 
Research and Testing Center (Altoona), seven airbags, integrated lap/
shoulder seat belts for the wheelchair user, driver/front passenger 
advanced head restraints, front wheel drive, the ``lowest ground to 
floor height in the industry,'' and ``dependable structure as proven by 
Altoona and in-service record,'' a spare tire, various convenience or 
comfort options, rear heat and air conditioning, a 6-cylinder engine 
(compared to the MV-1's 8-cylinder engine), a fuel economy of 17 city 
miles per gallon (mpg) (compared to the MV-1's 13 city mpg), 25 highway 
miles per gallon (compared to the MV-1's 18 highway mpg), and a range 
of 500 miles (compared to the MV-1's range of 350 miles).
    Another commenter that claimed the MV-1 is not a minivan, Braun, 
noted the following differences:

    [The MV-1 is] limited to 5 ambulatory passengers with 1 
wheelchair, or a driver and 2 wheelchair passengers'' while ``the 
commercial Braun wheelchair accessible minivan is typically 
configured to carry 4 ambulatory passengers and 2 wheelchair 
passengers, and may also be reconfigured to carry 5 ambulatory and 1 
wheelchair passengers. The unconverted Chrysler vehicle covered by 
the waiver is a 7 passenger commuter vehicle configuration.

    Other differences identified by Braun include the fact that the MV-
1 has no fixed front passenger seat nor an airbag for this seat, is 
rear-wheel drive, utilizes a swing door for wheelchairs, ``which limits 
access through the front passenger door,'' has a V-8 engine while 
Chrysler minivans use a V-6 engine, and the MV-1 does not offer a rear-
entry option for wheelchairs.
    VPG rebutted these claims in its comments, stating that FTA 
classified the MV-1 as a minivan when FTA exempted the MV-1 from its 
bus testing requirements at 49 CFR part 665, and ``[w]hatever it [the 
MV-1] may be called in other contexts, for purposes of Buy America, it 
has been indisputably established by FTA under due authority that the 
MV-1 is qualified as a minivan.''
    Regarding comments about the MV-1's seating capacity, VPG responded 
that the MV-1 seats six (including the driver and 1 wheelchair) and 
stated that Braun's installation of a 2 passenger flip seat to seat 
seven passengers ``prevents wheelchair passengers from utilizing the 
vehicle for its intended purpose, specifically, providing wheelchair 
accessible transportation.'' In response to the MV-1's lack of a fixed 
front seat, VPG commented that:

    [The MV-1 was designed] without a fixed front seat in order to 
permit the wheelchair passenger the opportunity to ride in proximity 
to the driver, which our research informed us was the preferred 
position of the wheelchair passenger, despite the fact that 
``converted'' vehicles never allowed that freedom of choice and 
perspective to a wheelchair-using passenger. We note, however, that 
the MV-1 has multiple tracks for the restraint system, so that a 
wheelchair passenger, when desired or required, can be separated 
from the driver.

    Braun responded to VPG's comments by stating that the MV-1 does not 
have ``substantially similar attributes to'' a minivan based upon fuel 
economy because:

    * * * [I]t is evident that the VPG MV-1 has a [Gross Vehicle 
Weight Rating or] GVWR rating of 6,600 lbs, falling between the 2005 
Ford Econoline full size van and F-150 pickup truck. Since these two 
vehicles were the only Ford trucks using this powertrain [4.6L V8 
RWD 4-speed] in Model 2005 and the only Ford vehicles with 
``substantially similar attributes'' as required under [the U.S. 
Department of Energy's (DOE) Advanced Technology Vehicle 
Manufacturing or] ATVM program rules, it can only be concluded that 
these vehicles were used as the basis upon which DOE granted the 
loan to VPG. Ford did not manufacture a minivan in 2005 that 
employed the powertrain featured in VPG's loan application and in 
the current production MV-1.
    It can only be concluded based on the above comparison that the 
VPG's loan was based on a comparison to a full size van and a pickup 
truck, and never to a minivan. We maintain that the ``vehicles with 
substantially similar attributes'' found in the ATVM technical 
documentation were full size vans and/or pickup trucks, and not 
minivans.

    Braun also alleged that the MV-1 does not meet the National Highway 
Traffic Safety Administration's (NHTSA) definition of a minivan. Braun 
cited NHTSA's Final Rule for average fuel economy standards for light 
trucks model years 2008-2011 (49 CFR part 523) published in 71 FR 17566 
on April 6, 2006. Braun commented that:

    NHTSA's 2008-2011 final rule tightened the minivan definition 
[under 49 CFR 523.5(a)(5)(ii)] * * *
    The reason NHTSA created the new minivan definition was clearly 
explained in the final rule:
    ``Specifically, unlike the smaller passenger cars, all minivans 
feature three rows of seats, thus offering greater passenger 
carrying capability'' [footnote omitted.]''
    In addition to furthering our goal of subjecting all minivans to 
the CAFE standard for light trucks, the provision adopted today 
limits the number of vehicles that will be reclassified as light 
trucks.'' [Footnote omitted.]
    The practical effect of NHTSA's rule change was to make certain 
that vehicles with only two rows of seating as standard equipment 
would no longer be classified as minivans and no longer be able to 
compete under the non-passenger vehicle, or truck, CAFE standards.

Braun further stated that:

    A careful examination of the MV-1 vehicle provides the following 
information:
    1. The MV-1 does not have three rows of seats that are standard 
equipment,
    2. Even if NHTSA were to determine that a single seating 
position in the front of a vehicle (as provided in the MV-1) 
constitutes a ``row'' and that a single rear-facing jump seat in the 
middle constitutes a ``row,'' the middle jump seat is not standard 
equipment on the MV-1.
    3. The MV-1 does not have the ability to remove or stow seats to 
create a flat-leveled surface for cargo-carrying purposes. The aft 
seating of the MV-1 is fixed, and not removable or stowable.
    4. Whereas all minivans produced and sold in the U.S. today 
feature front-wheel drive unibody construction, the MV-1 is a rear-
wheel drive vehicle body-on-frame vehicle. Because of this, the 
propeller shaft mates to the rear-drive differential at the rear 
axle and the floor p[l]an rises under the aft vehicle seating to 
accommodate this component. The MV-1 has a two-tier floor p[l]an for 
both gasoline and CNG versions, it therefore is impossible to create 
a flat, leveled surface to the rear of the automobile as clearly 
specified under NHTSA's minivan definition.

    Braun also cited www.fueleconomy.gov, which is maintained by DOE 
using EPA fuel economy data, to show that the MV-1 is classified as a 
``Special Purpose Vehicle 2WD'' and not as a minivan.
    Finally, Braun supplemented its comments with a response that FTA 
classified the MV-1 as an ``unmodified mass-produced van,'' and not a 
minivan.
    FTA Response: Neither FTA's authorizing legislation nor its 
implementing regulations define the term ``minivan.'' NHTSA does 
classify vehicles for purposes of regulating emissions and safety, but 
these classifications do not uniformly group vehicles from one 
regulation to the next. This is why, for purposes of various Federal 
regulations, a minivan like Chrysler's Town and Country is not

[[Page 71676]]

always in the same class. For example, under NHTSA's CAFE standard, 
most ``minivans'' fall under the class of ``light trucks.'' The MV-1 is 
in a different class under the CAFE standard because it does not have 
three rows of removable seats or seats that stow away into a flat or 
level surface. See 49 CFR 523.5(a)(5). When regulating safety, however, 
both the MV-1 and traditional ``minivans'' fall under the class of 
``multipurpose passenger vehicles,'' which includes all vehicles that 
carry ten persons or less and are constructed on a truck chassis (or 
with special features for occasional off-road operation). See 49 CFR 
571.3. These distinct classification systems highlight the differences 
in vehicles based upon various factors, such as fuel economy or 
passenger capacity, but each classification system uses different 
factors. There is no uniform categorization.
    Braun also cites DOE and EPA categories based upon fuel economy to 
show that the MV-1 is a ``special purpose vehicle'' rather than a 
``minivan.'' These categories and their corresponding data are listed 
at www.fueleconomy.gov, which DOE maintains with data from EPA. EPA's 
Web site, however, specifically states that ``[t]hese categories are 
used for labeling and consumer information purposes and do not serve 
any other regulatory purpose.'' \3\ Accordingly, the fact that the MV-1 
may not fall under the ``minivan'' category for purposes of EPA's 
comparisons of vehicles based upon fuel economy is immaterial to Buy 
America.
---------------------------------------------------------------------------

    \3\ http://www.epa.gov/carlabel/gaslabelreadmore.htm. While EPA 
has its own classification system for purposes of regulating vehicle 
emissions (40 CFR part 86), this further shows that classifications 
systems differ based upon specifications and features. See 49 CFR 
86.1803-01.
---------------------------------------------------------------------------

    Thus, to avoid the confusion that may result from creating a new 
vehicle classification system, FTA will not differentiate or define a 
``minivan'' for purposes of Buy America. In applying or waiving Buy 
America rules, FTA will make decisions based upon the performance or 
functional specifications used by FTA grantees in actual procurements 
in conformance with Federal requirements and guidance, including the 
``Common Grant Rule'' (49 CFR parts 18 and 19) and the most recent 
edition of FTA Circular 4220.1 ``Third Party Contracting Guidance.''

C. Minivan Use for Paratransit Transportation Services

    Several commenters pointed out the differences between the MV-1's 
accessibility features and the accessibility features of traditional 
minivans. The comments noted performance problems (such as binding as a 
result of ice and gravel collection) with under-floor ramps like those 
equipped on the MV-1. They also questioned whether the MV-1 could, in 
fact, accommodate more than one wheelchair at a time. Other commenters 
stated that the MV-1 has smaller overall passenger capacity compared to 
traditional minivans. One local transit agency responsible for 
providing paratransit services commented that its fleet includes both 
the MV-1 and the Dodge Caravan and, while both are useful in providing 
paratransit services, they are very different vehicles and the MV-1's 
rear facing seat is not useable for many of the services it provides.
    FTA Response: As stated above, under FTA's Buy America law, a non-
availability waiver may be granted only if ``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.'' 49 
U.S.C. 5323(j)(2)(B). Therefore, as long as there is a domestic 
manufacturer for a product, FTA cannot grant a non-availability waiver 
or permit a non-availability waiver to stand. FTA finds here that there 
is a U.S.-made vehicle--the MV-1--that can sufficiently meet the needs 
for which the minivan non-availability waiver was issued. Procurement 
decisions must be made based on performance or functional needs defined 
in conformance with Federal regulations and guidance, including the 
``Common Grant Rule'' and the most recent edition of FTA Circular 
4220.1 ``Third Party Contracting Guidance.'' If the need arises for a 
non-compliant vehicle under Buy America, recipients of FTA financial 
assistance may petition FTA for waivers on a case-by-case basis. In 
reviewing any waiver request, FTA only will consider waiving Buy 
America if the petitioner can articulate and has included in its 
procurement a performance or functional specification in conformance 
with Federal requirements and guidance that failed to yield a compliant 
bid or offer for a U.S.-produced vehicle.

D. Minivan Use for Vanpool Services

    A significant number of commenters claim the MV-1 is solely a 
paratransit vehicle and does not qualify for FTA funding for vanpool 
services. The comments cite the Moving Ahead for Progress in the 21st 
Century Act (MAP-21), Public Law 112-141, Sec.  20016 (to be codified 
at 49 U.S.C. 5323(i)). MAP-21 changed the definition of ``vanpool 
vehicle'' to mean a vehicle that has a ``* * * seating capacity of 
which is at least 6 adults (not including the driver). * * *'' 
According to the comments, the MAP-21 definition excludes the MV-1 
(with a seating capacity of only 6, including the driver) and includes 
Chrysler minivans (with a slightly higher seating capacity). Therefore, 
these commenters stated that, while the MV-1 may be acceptable for 
paratransit service, the MV-1 would not qualify for FTA-funded vanpool 
service.
    FTA Response: While the definition of ``vanpool,'' now codified at 
49 U.S.C. 5323(i)(2)(C)(ii), applies to certain FTA-funded vanpool 
projects, FTA prefers to consider waiver requests for limited 
circumstances and on a procurement-by-procurement basis rather than 
waiving the Buy America requirements for an entire class of vehicles in 
all circumstances. If an FTA recipient requests a waiver for a vanpool 
purchase, FTA will review the procurement based upon established 
requirements and guidance for third party procurements, including the 
Common Grant Rule and the most recent edition of FTA Circular 4220.1 
``Third Party Contracting Guidance.

E. Competition and Price Concerns

    Most of the comments opposing rescission of the waiver stated that 
such a rescission would eliminate competition of vehicle manufacturers 
and suppliers and result in de facto sole-source procurements. 
According to Chrysler, ElDorado, Braun, and other vehicle manufacturers 
and suppliers, rescission of the waiver would create a public 
transportation monopoly in favor of VPG and indicated their prediction 
that prices would rise from the lack of competition. State DOTs, local 
transit agencies, and other transit providers made similar comments.
    FTA Response: This argument is similar to one presented by a 
manufacturer of motor coaches in 2010 when it sought a public interest 
waiver from FTA. As was the case with that request, by arguing that a 
single Buy America-compliant manufacturer has cornered the market and 
can thus control prices, the commenters ignore the FTA waiver that is 
intended to address this concern. If limited competition results in a 
product ceasing to be available to FTA-funded transit agencies at a 
competitive price (measured by a greater than 25 percent differential 
between foreign-produced and Buy America-compliant vehicles), the 
appropriate action would be for the grantee to apply for a waiver based 
on price-differential.
    Claims about price inflation, however, appear to be unfounded. 
Those in favor of rescinding the waiver stated that the

[[Page 71677]]

price of the MV-1 is similar to competing vehicles.

F. U.S. Employment

    Commenters in support of rescinding the waiver stated that a 
rescission would result in more U.S. jobs. Commenters opposing the 
rescission of the waiver stated that a rescission would benefit only 
VPG and AM General employees, and would negatively impact other vehicle 
manufacturers and suppliers, including their U.S. employees. Thor 
Industries, the parent company of ElDorado, commented that since the 
waiver, ElDorado has been able to create new jobs, both directly and 
indirectly through its distribution network. Thor Industries further 
stated that a rescission of the waiver would result in a 39 percent 
decrease in ElDorado's employment.
    FTA Response: Buy America is the mechanism used by FTA to protect 
and encourage U.S. manufacturing and U.S. jobs. The regulations do not 
prohibit Chrysler, ElDorado and other manufacturers from adjusting 
their business practices to perform final assembly in the United 
States. If they took such action, they also would be able to certify 
compliance with Buy America and offer their products to FTA's grantees.

G. Safety Concerns

    Braun, among other commenters, raised safety concerns about the MV-
1, including whether the MV-1 meets the Federal Motor Vehicle Safety 
Standards (FMVSS), and the number of airbags and seatbelts in the MV-1 
compared to Chrysler minivans. Many commenters opposed to the 
rescission also noted that the MV-1 has not undergone testing per FTA's 
bus testing requirements at 49 CFR part 665.
    VPG certified that the MV-1 has met all applicable FMVSS 
requirements and received an exemption from FTA from the bus testing 
requirements of 49 CFR part 665 because of its status as an unmodified, 
mass-produced van.
    FTA Response: All vehicles purchased with FTA funds must meet all 
applicable safety requirements, which generally include certifying 
compliance with FMVSS and FTA's bus testing regulations. The MV-1 has 
satisfied these requirements.

H. Miscellaneous Comments

    A number of parties submitted miscellaneous comments. These include 
commenters that expressed concern that the MV-1 is rear wheel drive, 
which typically does not perform as well as front-wheel drive in 
extreme weather conditions such as snow or ice; not produced in 
sufficient quantity; has an 8-cylinder engine, which consumes more fuel 
than the Chrysler minivan and other similar vehicles with 6-cylinder 
engines; and that there are too few MV-1 retailers. One commenter 
requested information about the potential number of vehicles and the 
amount of FTA funding that this request affects. Other commenters 
stated that FTA should not make a decision that will only benefit one 
U.S. company or ``artificially protect'' a company from competition.
    FTA Response: FTA responds to the foregoing miscellaneous comments 
with a general statement about Buy America waivers.
    The purpose of Buy America is for the taxpayer resources used on 
FTA-funded projects to preserve and encourage U.S. manufacturing jobs. 
FTA advances this purpose by strictly enforcing Buy America rules that 
require all steel, iron, and manufactured products on FTA-funded 
projects to be produced in the United States. Thus, when considering 
whether to grant (or rescind) a waiver, FTA seeks to grant the most 
narrowly construed waiver possible. In this instance, the current 
waiver is broadly construed; it applies to all minivans and minivan 
chassis purchased with FTA funds. A more narrow approach is to rescind 
the existing waiver and then consider waivers on a case-by-case basis 
only. This approach will ensure that waivers are granted only when 
absolutely necessary, and only when construed as narrowly as possible.
    Under FTA's Buy America law, a non-availability waiver may be 
granted only if ``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.'' 49 U.S.C. 5323(j)(2)(B). 
Therefore, as long as there is a manufacturer of the product in 
question that fully complies with Buy America, FTA cannot grant a non-
availability waiver or permit a non-availability waiver to stand. FTA 
finds here that there is a fully Buy America-compliant vehicle that 
meets the needs for which the original minivan waiver was granted.
    To the extent FTA is willing to consider waiver requests, they will 
be limited to procurements that include specifications based on 
performance or functional needs that cannot be met by a Buy America 
compliant product. Specifications may not be exclusionary and must 
conform to Federal requirements and guidance, including the Common 
Grant Rule and the most recent edition of FTA Circular 4220.1 ``Third 
Party Contracting Guidance.''
    Thus, the prohibition against exclusionary and discriminatory 
specifications notwithstanding, if the need arises for a non-compliant 
vehicle, recipients may petition FTA for waivers on a case-by-case 
basis. FTA will only consider waiving Buy America if the petitioner can 
articulate and has included in its procurement a performance or 
functional specifications in conformance with Federal requirements and 
guidance that failed to yield a compliant bid or offer for a U.S.-
produced vehicle.
    VPG, AM General, and Ford Motor Company responded to the commenters 
that expressed concern about adequacy of VPG's supply and network. They 
assert that the MV-1 can be produced in sufficient quantity. VPG and 
Ford commented that there are sufficient dealerships throughout the 
United States, including well-established automobile, bus, and mobility 
dealers, in addition to VPG's retail outlets, that can offer needed 
service and warranty. According to VPG, the high percentage of U.S.-
manufactured parts (approximately 75 percent U.S. content), including a 
Ford engine, in its vehicles means these parts are readily available in 
the United States.
    FTA does not collect data specifically on ``minivans'' as FTA does 
not define the term ``minivan.'' Rather, it measures the number of FTA-
funded purchases of ``vans, '' which includes minivan purchases, but 
also includes other vehicle purchases falling within the ``van'' 
category. In Fiscal Year (FY) 2011, FTA awarded $133,298,132 for 3,279 
vans.
    Regarding comments from Chrysler and others that FTA should avoid 
decisions that benefit a single entity, FTA notes that the current 
waiver has served to the near-exclusive benefit of Chrysler since 2010. 
Additionally, if Chrysler, ElDorado, or other manufacturers adjusted 
current business practices to perform final assembly in the United 
States, their vehicles also would be Buy America compliant.

III. Conclusion

    FTA has determined that a Buy America waiver for minivans and 
minivan chassis is no longer necessary because the Vehicle Production 
Group now produces a substantially similar vehicle in the United 
States, in accordance with FTA's Buy America rules. Therefore, FTA 
hereby rescinds the waiver it issued on June 21, 2010.


[[Page 71678]]


    Issued this 27th day of November, 2012.
Peter Rogoff,
Administrator.
[FR Doc. 2012-29129 Filed 11-30-12; 8:45 am]
BILLING CODE 4910-57-P

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