[Code of Federal Regulations]
[Title 49, Volume 7]
[Revised as of October 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 49CFR661.11]

[Page 83-86]
 
                        TITLE 49--TRANSPORTATION
 
CHAPTER VI--FEDERAL TRANSIT ADMINISTRATION, DEPARTMENT OF TRANSPORTATION
 
PART 661_BUY AMERICA REQUIREMENTS_SURFACE TRANSPORTATION ASSISTANCE ACT 
OF 1982, AS AMENDED--Table of Contents
 
Sec. 661.11  Rolling stock procurements.

    (a) The provisions of Sec. 661.5 do not apply to the procurement of 
buses and other rolling stock (including train control, communication, 
and traction power equipment), if the cost of components produced in the 
United States is more than 60 percent of the cost of all components and 
final assembly takes place in the United States.
    (b) The domestic content requirements in paragraph (a) of this 
section also apply to the domestic content requirements for components 
set forth in paragraphs (i), (j), and (l) of this section.
    (c) A component is any article, material, or supply, whether 
manufactured or unmanufactured, that is directly incorporated into an 
end product at the final assembly location.
    (d) A component may be manufactured at the final assembly location 
if the manufacturing process to produce the component is an activity 
separate and distinct from the final assembly of the end product.
    (e) A component is considered to be manufactured if there are 
sufficient activities taking place to advance the value or improve the 
condition of the subcomponents of that component; that is, if the 
subcomponents have been substantially transformed or merged into a new 
and functionally different article.
    (f) Except as provided in paragraph (k) of this section, a 
subcomponent is

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any article, material, or supply, whether manufactured or 
unmanufactured, that is one step removed from a component (as defined in 
paragraph (c) of this section) in the manufacturing process and that is 
incorporated directly into a component.
    (g) For a component to be of domestic origin, more that 60 percent 
of the subcomponents of that component, by cost, must be of domestic 
origin, and the manufacture of the component must take place in the 
United States. If, under the terms of this part, a component is 
determined to be of domestic origin, its entire cost may be used in 
calculating the cost of domestic content of an end product.
    (h) A subcomponent is of domestic origin if it is manufactured in 
the United States.
    (i) If a subcomponent manufactured in the United States is exported 
for inclusion in a component that is manufactured outside the United 
States and it receives tariff exemptions under the procedures set forth 
in 19 CFR 10.11 through 10.24, the subcomponent retains its domestic 
identity and can be included in the calculation of the domestic content 
of an end product even if such a subcomponent represents less than 60 
percent of the cost of a particular component.
    (j) If a subcomponent manufactured in the United States is exported 
for inclusion in a component manufactured outside the United States and 
it does not receive tariff exemption under the procedures set forth in 
19 CFR 10.11 through 10.24, the subcomponent loses its domestic identity 
and cannot be included in the calculation of the domestic content of an 
end product.
    (k) Raw materials produced in the United States and then exported 
for incorporation into a component are not considered to be a 
subcomponent for the purpose of calculating domestic content. The value 
of such raw materials is to be included in the cost of the foreign 
component.
    (l) If a component is manufactured in the United States, but 
contains less than 60 percent domestic subcomponents, by cost, the cost 
of the domestic subcomponents and the cost of manufacturing the 
component may be included in the calculation of the domestic content of 
the end product.
    (m) For purposes of this section, except as provided in paragraph 
(o) of this section:
    (1) The cost of a component or a subcomponent is the price that a 
bidder or offeror must pay to a subcontractor or supplier for that 
component or subcomponent. Transportation costs to the final assembly 
location must be included in calculating the cost of foreign components 
and subcomponents.
    (2) If a component or subcomponent is manufactured by the bidder or 
offeror, the cost of the component is the cost of labor and materials 
incorporated into the component or subcomponent, an allowance for 
profit, and the administrative and overhead costs attributable to that 
component or subcomponent under normal accounting principles.
    (n) The cost of a component of foreign origin is set using the 
foreign exchange rate at the time the bidder or offeror executes the 
appropriate Buy America certificate.
    (o) The cost of a subcomponent that retains its domestic identity 
consistent with paragraph (j) of this section shall be the cost of the 
subcomponent when last purchased, f.o.b. United States port of 
exportation or point of border crossing as set out in the invoice and 
entry papers or, if no purchase was made, the value of the subcomponent 
at the time of its shipment for exportation, f.o.b. United States port 
of exportation or point of border crossing as set out in the invoice and 
entry papers.
    (p) In accordance with 49 U.S.C. 5323(j), labor costs involved in 
final assembly shall not be included in calculating component costs.
    (q) The actual cost, not the bid price, of a component is to be 
considered in calculating domestic content.
    (r) Final assembly is the creation of the end product from 
individual elements brought together for that purpose through 
application of manufacturing processes. If a system is being procured as 
the end product by the grantee, the installation of the system qualifies 
as final assembly.
    (s) An end product means any item subject to 49 U.S.C. 5323(j) that 
is to be

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acquired by a grantee, as specified in the overall project contract.
    (t) Train control equipment includes, but is not limited to, the 
following equipment:
    (1) Mimic board in central control
    (2) Dispatcher's console
    (3) Local control panels
    (4) Station (way side) block control relay cabinets
    (5) Terminal dispatcher machines
    (6) Cable/cable trays
    (7) Switch machines
    (8) Way side signals
    (9) Impedance bonds
    (10) Relay rack bungalows
    (11) Central computer control
    (12) Brake equipment
    (13) Brake systems
    (u) Communication equipment includes, but is not limited to, the 
following equipment:
    (1) Radios
    (2) Space station transmitter and receivers
    (3) Vehicular and hand-held radios
    (4) PABX telephone switching equipment
    (5) PABX telephone instruments
    (6) Public address amplifiers
    (7) Public address speakers
    (8) Cable transmission system cable
    (9) Cable transmission system multiplex equipment
    (10) Communication console at central control
    (11) Uninterruptible power supply inverters/rectifiers
    (12) Uninterruptible power supply batteries
    (13) Data transmission system central processors
    (14) Data transmission system remote terminals
    (15) Line printers for data transmission system
    (16) Communication system monitor test panel
    (17) Security console at central control
    (v) Traction power equipment includes, but is not limited to the 
following:
    (1) Primary AC switch gear
    (2) Primary AC transformer rectifiers
    (3) DC switch gear
    (4) Traction power console and CRT display system at central control
    (5) Bus ducts with buses (AC and DC)
    (6) Batteries
    (7) Traction power rectifier assemblies
    (8) Distribution panels (AC and DC)
    (9) Facility step-down transformers
    (10) Motor control centers (facility use only)
    (11) Battery chargers
    (12) Supervisory control panel
    (13) Annunciator panels
    (14) Low voltage facility distribution switch board
    (15) DC connect switches
    (16) Negative bus boxes
    (17) Power rail insulators
    (18) Power cables (AC and DC)
    (19) Cable trays
    (20) Instrumentation for traction power equipment
    (21) Connectors, tensioners, and insulators for overhead power wire 
systems
    (22) Negative drainage boards
    (23) Inverters
    (24) Traction motors
    (25) Propulsion gear boxes
    (26) Third rail pick-up equipment
    (27) Pantographs
    (w) The power or third rail is not considered traction power 
equipment and is thus subject to the requirements of 49 U.S.C. 5323(j) 
and the requirements of Sec. 661.5.
    (x) A bidder on a contract for an item covered by 49 U.S.C. 5323(j) 
who will comply with section 165(b)(3) and regulations in this section 
is not required to follow the application for waiver procedures set out 
in Sec. 661.9. In lieu of these procedures, the bidder must submit the 
appropriate certificate required by Sec. 661.12.

               Appendix A to Sec. 661.11--General Waivers

    (a) The provisions of Sec. 661.11 of this part do not apply when 
foreign sourced spare parts for buses and other rolling stock (including 
train control, communication, and traction power equipment) whose total 
cost is 10 percent or less of the overall project contract cost are 
being procured as part of the same contract for the major capital item.
    (b) [Reserved]

         Appendix B to Sec. 661.11--Typical Components of Buses

    The following is a list of items that typically would be considered 
components of a bus. This list is not all-inclusive.

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    Engines, transmissions, front axle assemblies, rear axle assemblies, 
drive shaft assemblies, front suspension assemblies, rear suspension 
assemblies, air compressor and pneumatic systems, generator/alternator 
and electrical systems, steering system assemblies, front and rear air 
brake assemblies, air conditioning compressor assemblies, air 
conditioning evaporator/condenser assemblies, heating systems. passenger 
seats, driver's seat assemblies, window assemblies, entrance and exit 
door assemblies, door control systems, destination sign assemblies, 
interior lighting assemblies, front and rear end cap assemblies, front 
and rear bumper assemblies, specialty steel (structural steel tubing, 
etc.) aluminum extrusions, aluminum, steel or fiberglass exterior 
panels, and interior trim, flooring, and floor coverings.

  Appendix C to Sec. 661.11--Typical Components of Rail Rolling Stock

    The following is a list of items that typically would be considered 
components of rail rolling stock. This list is not all inclusive.

    Car shells, main transformer, pantographs, traction motors, 
propulsion gear boxes, interior linings, acceleration and braking 
resistors, propulsion controls, low voltage auxiliary power supplies, 
air conditioning equipment, air brake compressors, brake controls, 
foundation brake equipment, articulation assemblies, train control 
systems, window assemblies, communication equipment, lighting, seating, 
doors, door actuators, and controls, couplers and draft gear, trucks, 
journal bearings, axles, diagnostic equipment, and third rail pick-up 
equipment.

[61 FR 6302, Feb. 16, 1996, as amended at 62 FR 40954, July 31, 1997]