Position Paper
August 26, 2003
(Generated in response to release of House Appropriations Bill)

FY04 Transportation Appropriations Buy America Amendment Adversely Impacts Public Transit Procurement

The House FY 04 Transportation and Treasury Appropriations Act (H.R. 2989) includes legislative language that significantly expands Buy America requirements for transit systems in a manner that will restrict competition, increase costs and impose enormous administrative burdens on procuring agencies.

The legislative language would: impose unprecedented statutory restrictions on the procurement of a wide range of technology by transit providers; usurp the FTA’s statutory authority to grant waivers for microcomputers; and provide an express right to bring a Federal lawsuit challenging Buy America decisions.

The legislative language would drastically expand Buy America restrictions to every “manufactured item” and all of its component parts procured in connection with a project funded to any degree by an FTA grant regardless of whether the item was merely a subcomponent, or sub-subcomponent of the procurement. FTA and transit authorities would be accountable for source verification of literally thousands of items regardless of value or function. Moreover, vendors unable to win a contract based on price and value could bring Federal lawsuits challenging competitors’ manufacturing plans.

FTA’s Buy America requirements under current law impose the most stringent preferences for procurement of technologically complex equipment. The FTA has invested substantial resources in developing precedent and procedures for applying Buy America requirements to a wide range of diverse and complex public transit procurements. Waivers are granted only after careful study. The FTA’s waiver for microcomputer equipment was renewed in February 2003 after more than three years of deliberation and public comment. The proposed legislative language would undercut decades of FTA precedent and inject massive uncertainty and confusion into the marketplace, creating market barriers for potential suppliers and imposing substantial administrative burdens on transit agencies.

This proposed change in current law is supported by a new special interest group, dubbed “U.S. Transit Suppliers Mean Business.” The group, led by a prominent supplier of Automatic Fare Collection (“AFC”) equipment, was apparently prompted by the emergence of serious competition for major AFC transit projects.

SUGGESTED ACTION: Urge the House Transportation and Infrastructure Committee to insist on a point of order (legislating on an Appropriations bill) to strike the Buy America language from the FY 04 Transportation and Treasury Appropriations bill when the legislation is considered on the House floor the week of September 3, 2003.

NOTE: Please see the LEGISLATIVE UPDATE page of this website for the latest information.