Buy America Policies Proposed for Rolling Stock Under FAST Act
The Federal Transit Administration (FTA) has proposed new policies on the applicability of the Buy America provisions in the Fixing America’s Surface Transportation (FAST) Act. Under the proposed policies, the Buy America provisions in the FAST Act do not apply to contracts entered into before October 1, 2015. FTA also proposed public interest waivers for contracts entered into between October 1, 2015 and December 4, 2015, and for some contracts entered into after December 4, 2015. For contracts entered into after December 4, 2015 that do not fall within the scope of a general public interest waiver, FTA proposed to consider individual public interest waivers, which are granted on a case by case basis.
The FAST Act Buy America provisions required an increase in the domestic content for vehicles delivered after FY2017. Under these provisions, the domestic content must be increased from the current level of 60 percent to more than 65 percent for vehicles delivered in FY2018 and FY2019, and to more than 70 percent for vehicles delivered in FY2020 and beyond. In the first of two notices issued in the Federal Register on April 6, FTA stated that the Buy America provisions in the FAST Act do not apply to contracts entered into before October 1, 2015, the effective date of the FAST Act, even if the contract provides for the delivery of vehicles after FY2017.
Further, the FTA policy proposes to continue to permit options to be exercised during the contract period, provided the contract was entered into prior to October 15, 2015. This is true even if the vehicles will be delivered outside the five- or seven-year contract term. However, recipients who are not direct parties to the original contract may not exercise or “piggyback” on these options. The policy also will not apply to assignment of options to a third party, as the option is considered a new contract after the effective date of the FAST Act.
In the second notice, FTA proposed public interest waivers for contracts entered into between the FAST Act’s effective date and date of enactment (i.e., between October 1, 2015 and December 4, 2015), and for contracts entered into after December 4, 2015 based on solicitations issued before December 4, 2015. For both of these categories, FTA stated that the increased domestic content requirements for FY2018 and beyond will not apply, regardless of when the vehicles are delivered.
The notice further stated that FTA would consider individual public interest waivers for contracts entered into after December 4, 2015, and others that do not fall within the scope of a general public interest waiver. Public interest waivers are granted under 49 U.S.C. 5323(j)(2)(A) on a case by case basis. For specific guidance on applying for a public interest waiver, please contact Saul Ewing attorneys Garry Boehlert or Sunu Pillai.
Please refer to Notice of Proposed Policy Statement on the Implementation of the Phased Increase in Domestic Content Under the Buy America Waiver for Rolling Stock and Notice of Proposed Public Interest Waiver of Buy America Domestic Content Requirements for Rolling Stock Procurements In Limited Circumstances for complete versions of the FTA notices.