Notice of Buy America Waiver |
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Paul A. Hemmersbaugh
National Highway Traffic Safety Administration
June 30, 2015
[Federal Register Volume 80, Number 125 (Tuesday, June 30, 2015)]
[Notices]
[Pages 37359-37362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-16099]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
[Docket No. NHTSA-2015-0065]
Notice of Buy America Waiver
AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).
ACTION: Notice of Buy America waiver; request for comment.
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SUMMARY: This notice provides NHTSA's finding that a public interest
waiver of the Buy America requirements is appropriate for any
manufactured product whose purchase price is $5,000 or less, excluding
a motor vehicle, when such product is purchased using Federal grant
funds administered under Chapter 4 of Title 23 of the United States
Code; and requests public comment.
DATES: The effective date of this waiver is July 30, 2015. Written
comments regarding this notice may be submitted to NHTSA and must be
received on or before July 30, 2015.
ADDRESSES: Written comments may be submitted using any one of the
following methods:
Mail: Docket Management Facility, M-30, U.S. Department of
Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
Fax: Written comments may be faxed to (202) 493-2251.
Internet: To submit comments electronically, go to the
Federal regulations Web site at http://www.regulations.gov. Follow the
online instructions for submitting comments.
Hand Delivery: West Building, Ground Floor, Room W12-140,
1200 New Jersey Avenue SE., between 9 a.m. and 5 p.m. Eastern Time,
Monday through Friday, except Federal holidays.
Instructions: All comments submitted concerning this notice must
include the agency name and docket number. Please note that all
comments received will be posted without change to http://www.regulations.gov, including any personal information provided. You
may also call the Docket at 202-366-9324.
FOR FURTHER INFORMATION CONTACT: Andrew DiMarsico, Office of Chief
Counsel, NHTSA (phone: 202-366-1834). You may send mail to Mr.
DiMarsico at the National Highway Traffic Safety Administration, 1200
New Jersey Avenue SE., Washington, DC 20590.
SUPPLEMENTARY INFORMATION:
[[Page 37360]]
Background
The statutory requirement (``Buy America'') states that the
Secretary ``shall not obligate any funds authorized to be appropriated
to carry out the Surface Transportation Assistance Act of 1982 (96
Stat. 2097) or [title 23 of the United States Code] and administered by
the Department of Transportation, unless steel, iron, and manufactured
products used in such project are produced in the United States.'' 23
U.S.C. 313(a). The Secretary of Transportation has delegated the
authority to administer Buy America for NHTSA programs to the
Administrator of NHTSA. 49 CFR 1.95; 49 CFR 501. Buy America provides
that NHTSA may waive those requirements if ``(1) their application
would be inconsistent with the public interest; (2) such materials and
products are not produced in the United States in sufficient and
reasonably available quantities and of a satisfactory quality; or (3)
the inclusion of domestic material will increase the cost of the
overall project contract by more than 25 percent.'' 23 U.S.C. 313(b).
Buy America establishes a preference for domestically produced
goods for use in Federally sponsored projects. The first Buy America
legislation conditioning the expenditure of Federal funds by NHTSA
grant recipients was enacted in 1978 as part of the Surface
Transportation Assistance Act of 1978. Pub. L. 95-599, 92 Stat. 2689.
The focus of that Buy America provision was on large procurements, such
as bridge replacement projects, and not on smaller, routine
purchases.\1\ The House of Representatives considered excluding up to
$5 million in project costs from the requirements of Buy America, but
ultimately did not pursue a threshold.\2\ The Senate bill sought to
limit Buy America requirements to projects whose costs exceeded $1
million to avoid imposing excessive requirements on small, routine
projects. See H.R. Conf. Rep. 95-1797 (1978), 1978 U.S.C.C.A.N. 6693,
6754. Ultimately, the Senate's proposed threshold was reduced in
conference to $500,000, and the provision became law, establishing a
preference for ``articles, materials, supplies mined, produced or
manufactured'' in the United States and costing more than $500,000.
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\1\ H.R. Rep. No. 95-1485, 1978 U.S.C.C.A.N. 6575, 6644 (August
11, 1978).
\2\ Id.
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In 1983, Congress repealed that Buy America provision and
substituted section 165 of the Surface Transportation Assistance Act of
1982. Pub. L. 97-424, 96 Stat. 2067.\3\ The 1982 enactment specified
that the Buy America prohibition applied to ``steel, cement and
manufactured products'' and eliminated the $500,000 threshold.\4\
Although the threshold was eliminated, Congress acknowledged
circumstances where the prohibition would be difficult to apply and
introduced exceptions under a waiver process that remains in place
today. Pub. L. 97-424, 96 Stat. 2067. One of these exceptions is the
public interest waiver. Id.
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\3\ Section 165 was originally included as a note to section 23
U.S.C. 101 and codified in 2005 to current its section, 23 U.S.C.
131. See Pub. L. 109-509, 119 Stat. 1464.
\4\ Congress amended section 165 of the STAA of 1982 by removing
``cement'' in 1984, Pub. L. 98-229. 98 Stat. 55, and by adding
``Iron'' in 1991, Pub. L. 102-240, 105 Stat. 1914.
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Agencies are permitted to waive the Buy America requirement when
they determine that ``it is inconsistent with the public interest.'' 23
U.S.C. 313(b)(1). In consideration of this authority and consistent
with the purposes of NHTSA's grant programs to reduce accidents and
resulting fatalities and injuries, the agency has determined that it is
appropriate to issue a public interest waiver for small, routine
purchases by States under the highway safety grant programs. In making
this decision and arriving at a reasonable threshold for waiver, NHTSA
remains mindful of the overarching purposes of Buy America, while
evaluating all relevant facts, including administrative burden, delay
and impact on the congressionally authorized State grant programs.
NHTSA Highway Safety Grant Programs
NHTSA's mission is to reduce deaths, injuries and economic losses
resulting from motor vehicle crashes. This is accomplished by setting
and enforcing safety performance standards for motor vehicles and motor
vehicle equipment, and through grants to States to enable them to
conduct effective State and local highway safety programs. NHTSA's
State highway safety programs are codified in Chapter 4 of Title 23,
United States Code. Chief among these programs is section 402, which
provides formula grants to States to administer a comprehensive highway
safety program designed to reduce traffic accidents and resulting
deaths, injuries and property damage. 23 U.S.C. 402. Section 402
authorizes State programs related to speeding, occupant protection,
impaired driving, accident prevention, school bus safety, unsafe
driving behavior (aggressive, fatigued and distracted driving), traffic
safety law enforcement, driver education, pedestrian and bicycle
safety, and traffic administration (record systems, accident
investigation and emergency services). In addition to the core section
402 grants, NHTSA also administers other grants to the States, which
Congress from time to time authorizes to address specific highway
safety needs. Most recently, under the ``Moving Ahead for Progress in
the 21st Century Act'' (Pub. L. 112-141), Congress authorized the
``National Priority Safety Programs,'' providing additional grants to
States in the areas of occupant protection, State traffic safety
information system improvements, distracted driving, motorcyclist
safety, and State graduated driver licensing laws. See 23 U.S.C. 405.
In general, States may expend Federal section 402 or 405 funds for
any item or service that is necessary and reasonable for proper and
efficient performance and administration of their highway safety
programs and activities, subject to the statutory requirements and
implementing regulations. See 23 CFR 1200 et seq. Because of the broad
reach of these Federally sponsored highway safety programs, States may
expend grant funds on thousands of different items and activities. In
the area of equipment, allowable purchases range from low cost items
such as office supplies (DVDs, printers and ink cartridges), computers,
cameras, child restraints, motorcycle helmets, and radar speed
detection devices to higher cost items such as police cruisers. In
recent years, NHTSA has seen an increase in waiver requests for
purchases of these smaller commercial items, based on non-availability
in the United States or availability only at a high price differential.
Many of these items cost $5,000 or less. See, e.g., 80 FR 9851 (Feb.
24, 2015) (printers); 79 FR 74811 (Dec. 16, 2014) (child restraints);
79 FR 74812 (Dec. 16, 2014) (training motorcycles); and 79 FR 55529
(Sept. 16, 2014) (DVDs and motorcycle safety vests).
Non-Availability and High Cost Differential Waivers Under Buy America
State grantees incur significant burdens when required to submit
waivers for small, routine purchases of items that are increasingly not
manufactured in the United States. As part of a waiver request, a State
must demonstrate through a market analysis that the item for which it
seeks a waiver is not available in the United States or will cost 25
percent more than a comparable non-domestic item. For each waiver
request, the agency must, in the exercise of due diligence, perform
[[Page 37361]]
an additional independent review and market analysis to confirm that
the item meets either the non-availability exemption or the high cost
differential exemption of Buy America. See 23 U.S.C. 313(b)(2), (b)(3).
This process substantially delays State grantees in obtaining the items
needed to administer and implement important highway safety programs.
It also consumes limited agency resources to administer the highway
safety grants. Moreover, the staff time needed by a State to prepare
individual waivers for many small purchases comes at the expense of
time devoted to implementing these life-saving programs. This is
especially concerning in an era of tight State budgets, where State
highway safety offices administering these grants face increasingly
serious staffing constraints.
It is important to consider these constraints and burdens in the
historical context of Buy America. During the many years Buy America
has been in place, a significant statutory focus has been on purchases
of materials used in construction and large-scale fabrication. Its
application to the grants of transportation agencies such as the
Federal Highway Administration (for road and bridge building materials)
and the Federal Transit Administration (for acquisition of rolling
stock and manufactured end products) is plain, because those materials
are of central importance to those grants. However, by statute, NHTSA
grant funds may not be used for construction. 23 U.S.C. 402(g)(1)(A).
As a result, while steel and iron purchases are not implicated in
NHTSA's grant programs, Buy America's reach to include the small amount
of manufactured products used in NHTSA's programs does not have any
effect on the manufacturer of those items. Under NHTSA's State grant
programs, purchases of small manufactured products that are largely
ancillary rather than central to the purposes of the highway safety
grants (e.g., laptops, printers, ink cartridges, DVDs, and other office
products) are captured by the restriction. Whereas the core expenses
under NHTSA's State grant programs are for reimbursing performance
(estimated at more than 90 percent), such as police enforcement of
State traffic safety laws, safety education, and the like, Buy America
has the effect of restricting or delaying the States' ability to
acquire ancillary support items necessary to successfully deploy these
important highway safety programs. The result is that critical safety
program delivery to the States, and from the States to their
localities, suffers.
Public Interest Waiver
Based upon the foregoing discussion, NHTSA believes that a public
interest waiver is appropriate to address these delays and burdens and
thereby promote the success of State highway safety programs. NHTSA
concludes that it is in the public interest to waive the Buy America
requirements for a manufactured product whose purchase price is $5,000
or less, with one exception--the purchase of a motor vehicle, as
defined in 49 U.S.C. 30102.\5\ We do not believe that the purchase of
motor vehicles can be reasonably viewed as ancillary in the context of
these highway safety programs, and therefore decline to extend this
public interest waiver to such purchases. The agency has selected this
per-item threshold based on our determination that it is the level
necessary to alleviate the burdens associated with purchases of low-
priced commercially available items that are required for the
successful implementation of the highway safety projects required under
NHTSA grants. In selecting this conservative threshold, we sought to
balance the goals of Buy America with the life-saving goals of the
State highway safety grant programs.
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\5\ Under that statutory provision, motor vehicle means ``a
vehicle driven or drawn by mechanical power and manufactured
primarily for use on public streets, roads, and highways, but does
not include a vehicle operated only on a rail line.'' We recognize
that the cost of most motor vehicles would fall above the threshold
in today's notice. However, this exception from the waiver is
included because the cost of some motor vehicles (for example,
certain motorcycles), may fall below the threshold.
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A threshold of $5,000 for this waiver is in step with government-
wide requirements and procedures applicable to grantee purchases of
equipment, where the Federal interest starts at the $5,000 level. Under
the Uniform Administrative Requirements, Cost principles, and Audit
Requirements for Federal Awards, equipment is defined as an item having
a per unit cost of $5,000 or more. 2 CFR 200.33. At levels of $5,000
and above, grantees are required to obtain prior approval and account
for equipment purchases. See 2 CFR 200.313; 2 CFR 200.439. In contrast,
at levels below $5,000, Federal procedures governing purchase,
administration, and disposition of items needed for performance of the
grant do not apply. This treatment has also been codified in the NHTSA
regulation implementing these programs, the Uniform Procedures for
State Highway Safety Grant Programs. See 23 CFR 1200.31.
Moreover, NHTSA's chosen threshold is very conservative when
compared to small purchase waivers or exclusions under Buy America
within the jurisdiction of other operating modes of the U.S. Department
of Transportation. For example, the Federal Transit Administration
issued a general public interest waiver for small purchases, as defined
in DOT's grants management common rule at 49 CFR 18.36(d).\6\ 60 FR
37930 et. seq. (July 24, 1995); 49 CFR 661.7, Appendix A(c). Also,
Congress codified the public interest need for a small purchase waiver
in the Buy America requirement applicable to the Federal Railroad
Administration, setting the threshold at $100,000. 49 U.S.C.
24405(a)(11).
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\6\ The DOT Grants Management common rule, 49 CFR part 18, was
repealed and replaced by 2 CFR part 2. See 78 FR 78590 (December 26,
2013).
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In light of the above discussion, and pursuant to 23 U.S.C.
313(b)(1), NHTSA finds that it is appropriate to waive Buy America
requirements for a manufactured product, excluding a motor vehicle,
whose cost per unit is $5,000 or less. Therefore, in accordance with
the provisions of Section 117 of the SAFFETEA-LU Technical Corrections
Act of 2008 (Pub. L. 110-244, 122 Stat. 1572), NHTSA is providing this
notice of its finding that a waiver of the Buy America requirements is
appropriate. Written comments on this finding may be submitted through
any of the methods discussed above. This waiver is consistent with the
general government initiatives that promote streamlined government
contracting by Federal agencies and use of Federal funds by grantees to
reduce administrative burdens and increase efficiency to accomplish
agency missions. See E.O. 12931, 59 FR 52387 (October 13, 1994). It
does not eliminate NHTSA's oversight of the State grantees' use of
Federal grant funds. NHTSA's Regional Administrators will continue to
ensure that Federal grantee purchases are necessary and reasonable for
the purposes of the specific highway safety grant program. After the
effective date, grantees must still request a waiver of Buy America
requirements for purchases that exceed the threshold published in
today's notice. The agency will monitor State purchases under the
highway safety grant programs and under this waiver to ensure that the
important policy goals and the spirit of Buy America are maintained.
Authority: 23 U.S.C. 313; Pub. L. 110-161.
[[Page 37362]]
Issued in Washington, DC, on June 25, 2015 under authority
delegated in 49 CFR part 1.95
Paul A. Hemmersbaugh,
Acting Chief Counsel.
[FR Doc. 2015-16099 Filed 6-29-15; 8:45 am]
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