1. Category:
Buy America
Question:
What cost is used in the Buy America calculation for domestic components?
Answer:
The entire cost of domestic components may be used in the content calculation. A component is considered domestic if it contains at least 60 percent domestic subcomponents, by cost, and is manufactured in the United States. The cost of a domestic component includes direct labor costs, direct material costs, sales costs, general and administrative costs, and overhead costs associated with manufacturing that component, plus freight-in costs. The total cost should be the actual cost of the component, not the bid price.
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2. Category:
Buy America
Question:
What is the responsibility of the resident inspector?
Answer:
A resident inspector is required to visit the manufacturer's final assembly facility during the manufacturing period. The inspector must prepare a report (1) providing accurate records of all vehicle construction activities and (2) summarizing how the construction and operation of the vehicles meet (or do not meet) the terms of the contract. The intent of the regulation is to help recipients ensure that the vehicles will comply with their contract specifications. It is not meant to require that a resident inspector remain "full-time" at the "manufacturer's site throughout the period of manufacture." Although this may be recommended for some vehicle procurement, the resident inspector requirements may be fulfilled through the use of periodic visits. For example, a recipient may wish to send the resident inspector to the manufacturer's site full-time if the vehicles have been recently developed or significantly modified in order to meet the contract specifications. Or, the recipient may wish to send the inspector to the manufacturer's site for several short visits if the manufacturing period is expected to be long. On the other hand, the recipient may wish that the resident inspector visit the manufacturer's site less often if the vehicle lead-time is short or if the recipient has previously purchased identical vehicles from the same manufacturer. While the in-plant inspector is required in all cases, the recipient must be certain that the resulting inspector's report is equally comprehensive, regardless of the choice of inspection services. The number of visits and the length of each visit should be based on the recipient's level of comfort with the manufacturer's capabilities. Remember that it is the recipient's responsibility to ensure that the vehicles comply with the contract specifications. The purpose of the resident inspector's report is to assist the recipient to verify that the vehicles meet the contract specifications.
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3. Category:
Buy America
Question:
What level of cost data does the FTA require to meet the requirements of 49 CFR part 663?
Answer:
The FTA will accept a level of documentation in which costs presented on the document comply with the definition presented in § 661.11(o)(1) of the Buy America regulation (49 CFR part 661): The cost of a component or a subcomponent is the price that a bidder or offeror must pay to a subcontractor or supplier for the component or subcomponent. * * * The cost used in the computation of domestic content may include appropriate fully allocated costs of the component or subcomponent, which would include overhead and profit allocations.
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4. Category:
Buy America
Question:
May the pre-award component and subcomponent information be presented as a commitment from the manufacturer that the domestic content information which is reported will be achieved?
Answer:
The pre-award data may be based on estimates used in developing the bid for the equipment. The post-delivery review will demonstrate the compliance with the pre-award certification that Buy America requirements have been met and will require presentation of any changes which have occurred during the production process. The Buy America legislation does not require exact conformance on a component-by-component or subcomponent-by-subcomponent basis between the two audits, only that Buy America requirements be complied with, and the purpose of the post-delivery audit is to verify such compliance.
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5. Category:
Buy America
Question:
Since Pre-Award and Post-Delivery audits are not required for non-revenue support vehicles, do we still need to keep for every support vehicles procurement Buy America information related to components/subcomponents listings showing the country of origin and their cost percentages? As a commuter rail service do we still need to obtain from the vendor and keep on file any Pre award or post delivery or purchaser’s specifications information and certification on non revenue support vehicles? Do we still need to issue a Pre award or Post delivery and Purchaser specifications certificates when these certificates are only required for audits and should be issued after a pre award or post delivery audit is done? Apart from the compliance certificate submitted by the vendor with the bid are there any other certificates we should maintain on file for non-revenue support vehicles?
Answer:
Although 49 CFR Part 663 does not require recipients of FTA funding to conduct pre-award and post-delivery audits for support vehicles acquired using FTA funds, those vehicles still must comply with the Buy America requirements in 49 CFR Part 661. Therefore, it may be in the recipient's best interest to request supporting documentation from the vendor/manufacturer by which the recipient can verify the vehicles' compliance with Part 661. In such cases, the grantee may want to look to Part 663 and FTA's pre-award/post-delivery handbooks for guidance (see http://www.fta.dot.gov/laws/leg_reg_458.html).
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6. Category:
Buy America
Question:
Is the 60 percent domestic content calculated as a percentage of the total bus price?
Answer:
No. The 60 percent domestic content is calculated as a percentage of the total cost of all components, before final assembly. The cost of an individual component is the price a bus manufacturer pays a supplier for that component, plus freight-in costs and (if foreign) any applicable duties.
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7. Category:
Buy America
Question:
If required, what is the responsibility of the resident inspector?
Answer:
A resident inspector is required to visit the manufacturer's final assembly facility during the manufacturing period for purchases of ten or more buses or vans. The inspector must prepare a report (1) providing accurate records of all vehicle construction activities and (2) summarizing how the construction and operation of the vehicles meet (or do not meet) the terms of the contract. The intent of the regulation is to help the recipients ensure that the vehicles will comply with their contract specifications. It is not meant to require that a resident inspector remain "full-time" at the "manufacturer's site throughout the period of manufacture." Although this may be recommended for some vehicle procurements, the resident inspector requirement may be fulfilled through the use of periodic visits. For example, a recipient may wish to send the resident inspector to the manufacturer's site full-time if the vehicles have been recently developed or significantly modified in order to meet the contract specifications. Or, the recipient may wish to send the inspector to the manufacturer's site for several short visits if the manufacturing period is expected to be long. On the other hand, the recipient may wish that the resident inspector visit the manufacturer's site less often if the vehicle lead-time is short or if the recipient has previously purchased identical vehicles from the same manufacturer. For buses or vans produced by multiple manufacturers, the resident inspector is only required to visit the final stage manufacturer's facility. While the in-plant inspector is required for purchases of ten or more buses or vans, the recipient must be certain that the resulting inspector's report is equally comprehensive, regardless of the choice of inspection services. The number of visits and the length of each visit should be based on the recipient's level of comfort with the manufacturer's capabilities. Remember that it is the recipient's responsibility to ensure that the vehicles comply with the contract specifications. The purpose of the resident inspector's report is to assist the recipient to verify that the vehicles meet the contract specifications.
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8. Category:
Buy America
Question:
What if the manufacturer is concerned about releasing proprietary information?
Answer:
If the manufacturer is concerned about releasing proprietary information, the recipient may contract with an external consultant to conduct the manufacturer's Buy America certification review. After the consultant has reviewed the component and subcomponent documentation, the consultant will inform the recipient whether or not the Buy America requirements have been fulfilled. Once the recipient, or consultant, has reviewed the Buy America information, the manufacturer has fulfilled the requirements of the Buy America certification assuming that compliance has been established. The manufacturer is not required to provide the recipient with hard copies of the Buy America calculations. A manufacturer may require the external consultant to sign a proprietary information disclosure statement.
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9. Category:
Buy America
Question:
Can you provide an explanation or definition of support vehicles as it relates to a commuter rail service? Would rubber tire vehicles such as police service vehicles or pool cars or trucks be regarded as support vehicles to be included in rolling stock for a rail service under the Buy America regulations? Please give examples of support vehicles that would be regarded as rolling stock for a commuter service. I have read conflicting explanations on the website, for instance some information indicate that rolling stock are items used in passenger revenue service, but only commuter trains and their applicable systems are really used in generating commuter service revenues. Also, since your examples on the pre and post audit on the FTA website focus on bus vehicles, would a commuter rail service require audits on fleet cars and other vehicles not directly used in generating revenue? Please confirm whether pre and post audits done on locomotives, rails cars etc and other train systems in the revenue rolling stock is necessary.
Answer:
The pre-award/post-delivery audit provisions in 49 CFR Part 663 provide additional guidance in distinguishing support vehicles such as police service vehicles and maintenance trucks from revenue service vehicles such as commuter rail cars. Section 663.5 defines "revenue service" vehicles as "rolling stock for transportation of fare-paying passengers as anticipated by the recipient." (see http://www.gpo.gov/fdsys/pkg/CFR-2010-title49-vol7/pdf/CFR-2010-title49-vol7-part663.pdf). At a minumum, this term would include both passenger railcars and the locomotives acquired to move them. Because police vehicles and maintenance trucks are not primarily intended for the carriage of fare-paying passengers, they would not be covered under Part 663. Please keep in mind that both support vehicles and revenue service vehicles are considered "rolling stock" and both are subject to the Buy America requirements in 49 CFR Part 661 (see http://www.gpo.gov/fdsys/pkg/CFR-2010-title49-vol7/pdf/CFR-2010-title49-vol7-part661.pdf), specifically section 661.11, "Rolling stock procurements." The key distinction is that non-revenue service vehicles are not subject to the pre-award/post-delivery audit requirements of Part 663 (see section 663.3, "Scope.").
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10. Category:
Buy America
Question:
Do any of the requirements of the Pre-Award and Post-Delivery Rule apply to the purchase of used rolling stock or public-to-public transfer of buses?
Answer:
No. However, any arrangement designed to avoid the regulations would be considered an illegal circumvention of the regulations, which would result in the withdrawal of Federal funding.
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11. Category:
Buy America
Question:
Several transit projects are currently advertised for bid, and one specifically for MATA in Memphis, Tennessee. The project is partially funded with ARRA funds, and with that there are "Buy America Provisions" that are attached to the vendors supplying products to this project. I am writing to request clarity as to exactly what this "Buy American" provision means, and what it requires a vendor to be in order to satisfy this language. Does the product have to manufactured in the Continental United States? Does a product qualify if it is purely assembled in the United States? If assembled in the U.S. is acceptable, is there a percentage that the product must meet? by this I mean can 25% of the product be assembled in the U.S.? Is it 50%? Is it 100%? If a foreign company has offices located in the United States, does that qualify as made in America? Many thanks for your assistance.
Answer:
Information on FTA's Buy America requirements can be found on this page: http://www.fta.dot.gov/laws/leg_reg_178.html. Security systems are classified as "end products" as defined in section 661.3 and paragraph (3) of Appendix A of FTA's implementing regulation (49 CFR Part 661), and as such, their components must be manufactured in the United States, as section 661.5(d) requires. Manufacturing entails much more than mere assembly. The key element of manufacturing is the alteration of subcomponents to form a new product. The processes of alteration may include "forming, extruding, material removal, welding, soldering, etching, plating, material deposition, pressing, permanent adhesive joining, shot blasting, brushing, grinding, lapping, finishing, vacuum impregnating, and, in electrical and electronic pneumatic, or mechanical products, the collection, interconnection, and testing of various elements." (see 56 Federal Register 926, January 9, 1991, online at: http://www.fta.dot.gov/laws/leg_reg_574.html). The requirements for rolling stock (vehicles) in section 661.11 differ slightly. The Buy America requirements for rolling stock are two-fold -- 1) the vehicles must undergo final assembly in the United States, and 2) at least 60% of the vehicle's components, by cost, must be manufactured in the United States. You should consult section 661.11 for specific details regarding the manufacturing of vehicle components. The location of headquarters or company offices is not a factor under FTA's Buy America's regulation - only the place of manufacture (or final assembly, with regard to rolling stock). If you have any additional questions, please refer to our website.
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12. Category:
Buy America
Question:
If a vehicle uses a component from a foreign source and we wish to order it later as a spare part, do we need to conduct a domestic content certification for that spare part?
Answer:
No. The Pre-Award and Post-Delivery Rule applies to the purchase of buses, vans, cars, railcars, locomotives, trolley cars and buses, ferry boats, and vehicles used on guideways and incline planes. The Rule does not apply to the purchase of spare parts. Spare parts must, however, comply with the Buy America Rule.
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13. Category:
Buy America
Question:
May cost information be presented in percentage format?
Answer:
The information on cost can be presented in either dollar or percentage format. See the "Domestic Content Sample Worksheet" below for an example of how a percentage format would be calculated. Domestic Content Sample Worksheet ITEM Cost Percent domestic One transit bus (ABC Bus Mfg. Co.) $100 At least 60% of total cost. How 60% Was Achieved Component Domestic content (1) Engine (XYZ Engine Co) $30.00 (30% of total bus cost). (2) Transmisison (MNO Co.) 20.00 (20% of total bus cost). (3) Wheels (DEF Wheel Co.) 15.00 (15% of total bus cost Sub-total 65.00 (65% of total bus cost) (5% more than required; no further components need be identified) Breakdown of Components re. Minimum Domestic Content Sub-components Domestic content (1) Engine (total cost $30.00): 1.1 Valves (PRQ Valve Co.) $12.00 (40% of cost of engine). 1.2 Block (GHI Block Co.) 10.50 (35% of cost of engine). Sub-total 22.50 (75% of cost of engine). (15% more than required; no further sub-components need be identified) (2) Transmission (total cost $20.00): 2.1 Gears (STV Gear Co.) 4.00 (20% of cost of transmission). 2.2 Housing (LMN Co.) 8.00 (40% of cost of transmission). Sub-total 12.00 (60% of cost of transmission). (minimum percentage achieved; no further sub-components need be identified) (3) Wheels (total cost $15.00): 3.1 Castings (RST Foundry) 10.00 (66.6% of cost of wheels). Sub-total 10.00 (66.6% of cost of wheels) (6.6% more than required; no further sub-components need be identified)
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14. Category:
Buy America
Question:
If a bus uses a component from a foreign source and we wish to order it later as a spare part, do we need to conduct a domestic content certification for that spare part?
Answer:
No. The Pre-Award and Post-Delivery Rule applies to the purchase of buses, vans, cars, railcars, locomotives, trolley cars and buses, ferry boats, and vehicles used on guideways and incline planes. The Rule does not apply to the purchase of spare parts. Spare parts must, however, comply with the Buy America Rule.
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15. Category:
Buy America
Question:
When must a recipient complete the "Certification of Compliance" as stipulated in Section 663.7 of the Rule?
Answer:
The Section 663.7 Certification of Compliance must be submitted as part of the grant application for any revenue service rolling stock grant. (See Exhibit 5-1 for a sample certification.) Once a recipient has submitted their first certification, the certification may be retained in the recipient's files and referenced in the "Statement of Continuing Validity" for any future rolling stock grants. PRE-AWARD AND POST-DELIVERY AUDIT CERTIFICATION OF COMPLIANCE As required by 49 CFR Part 663, Subpart A,________________________________ ________________(the recipient) certifies that it will conduct, or cause to be conducted, pre-award and post-delivery audits as prescribed in the "Pre-Award and Post-Delivery Audits of Rolling Stock Purchases; Final Rule." Date: _________________ Signature: ________________________Title: ______________________________ Exhibit 5-1. Sample Certification of Compliance
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16. Category:
Buy America
Question:
Where the contract provides for more than one delivery period, does the grantee conduct a post-delivery review for each delivery period?
Answer:
This question addresses the circumstances where a contract provides for multiple deliveries and the delivery periods are scheduled at substantially different time intervals, such as 6 months or 1 year apart. When a contract for buses provides for separately scheduled delivery periods, the recipient should complete a post-delivery review for each period. This does not mean that a separate review is necessary for each shipment within a delivery period.
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17. Category:
Buy America
Question:
Which FMVSS certifications are required?
Answer:
Title 49 of the Code of Federal Regulations, Part 571 covers the rulings concerning all Federal Motor Vehicle Safety Standards.
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18. Category:
Buy America
Question:
Must a Buy America certification be conducted for every procurement, even if identical buses are being purchased from the same contractor year after year?
Answer:
Yes. A manufacturer's past compliance with the Buy America Rule does not mean that the manufacturer's products will always be compliant. Changes in design, as well as technical developments, may make updated products noncompliant. If a pre-award and post-delivery Buy America review has been conducted for a given bus, then the same information may be used to demonstrate compliance at a later date if there has been no component or assembly changes to the bus since the last certification.
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19. Category:
Buy America
Question:
Do the requirements apply to the remanufacture of buses?
Answer:
Yes. A recipient must follow the procedures required in the regulations as a condition of Federal financial assistance in the remanufacture of buses. A project for the "remanufacture" of buses shall be defined as the "structural restoration of a standard, heavy-duty bus in addition to installation of new or rebuilt major components to extend its service life at least eight years." (FTA Circular C 9030.1A , Office of Grants Management [U.S. Department of Transportation, Federal Transit Administration, September 18, 1987], IV-4).
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20. Category:
Buy America
Question:
Must my ADA-compliant buses be FMVSS certified?
Answer:
Yes. All buses that are subject to the FMVSS regulations must meet the applicable standards.
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21. Category:
Buy America
Question:
For procurements of body-on-chassis type buses or modified vans, what manufacturing sites and activities must be observed by a resident inspector?
Answer:
In general, for procurements of body-on-chassis type buses and modified vans, the purpose and intent of the resident inspector requirement will be satisfied if an inspector visits the facility of the final-stage manufacturer where the completed bus's final assembly occurs to ensure that the buses will be in compliance with the contract specifications. An inspector would not be required to visit the incomplete vehicle or intermediate vehicle manufacturer's production facility.
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22. Category:
Buy America
Question:
What is the resident inspector requirement for subrecipients of FTA funds?
Answer:
Many States make arrangements with vehicle manufacturers on the behalf of the State's local subrecipients. If a subrecipient is purchasing ten or fewer buses, then the resident inspector requirements will be waived. However, the subrecipient, or original recipient, must verify that the buses meet the contract specifications by road testing and visually inspecting the buses.
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23. Category:
Buy America
Question:
Can components from foreign sources with domestic subcomponents be used in the calculation?
Answer:
Yes. If the vehicle contains foreign-manufactured components with domestic subcomponents, which received a tariff exemption for importation back into the United States, then the cost of those domestic subcomponents may be used in the domestic content calculation. The cost of manufacturing the component may not be used, because it has been manufactured outside the United States.
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24. Category:
Buy America
Question:
If a component contains less than 60 percent domestic subcomponents, how would it be used in the calculation?
Answer:
Components manufactured in the United States with less than 60 percent domestic subcomponents, by cost, may also be used in the domestic content calculation. However, the component's entire cost may not be used. The cost for such a component includes direct labor costs, domestic direct material costs (domestic subcomponent costs), sales costs, general and administrative costs, and overhead costs associated with manufacturing that component, plus freight-in costs.
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25. Category:
Buy America
Question:
Are only components of domestic origin allowed to be used in the Buy America calculations?
Answer:
No. Components manufactured in the United States with less than 60 percent domestic subcomponents, by cost, and foreign-manufactured components with domestic subcomponents, that received a tariff exemption for importation back into the United States, may be used in the Buy America content calculation.
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26. Category:
Buy America
Question:
Who must sign the Certification of Compliance?
Answer:
The certification must be signed by the recipient even if the funds will be passed on to another party. Further, if the funds are passed on, the initial recipient has the ultimate responsibility of ensuring that the final recipient of the funds carries out its duties and responsibilities as required by the Rule.
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27. Category:
Buy America
Question:
Who must conduct the pre-award and post-delivery reviews?
Answer:
The recipient, or an analyst appointed by the recipient must conduct the review. The analyst may not be an employee of the manufacturer or its agent. In many instances a recipient may retain the services of a consultant to conduct the review.
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28. Category:
Buy America
Question:
Is the 60 percent domestic content calculated as a percentage of the total vehicle price?
Answer:
No. The 60 percent domestic content is calculated as a percentage of the total cost of all components, before final assembly. The cost of an individual component is the price a vehicle manufacturer pays a supplier for that component, plus freight-in costs and (if foreign) any applicable duties.
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29. Category:
Buy America
Question:
I understood that for contracts entered into after the effective date of the FAST Act (10/15), that orders including options would be governed under the Buy America percentage in effective as of the date of the contract. The one exception to this is for piggyback contracts which the FTA viewed as a new contract. Is it correct then that for a contract entered into after 10/15 but for options exercised after that date, that the options would still be governed under the Buy America percentage in effect at the time the contract’s effective date even if the options are exercised after dates when the Buy America percentages increased? For example the option is exercised after FY 18 would still be governed under the more than 60% Buy America requirement.
Answer:
FTA is currently reviewing the application of the increase in domestic content for rolling stock in the FAST Act Buy America to contracts entered into after the effective date of the FAST Act, and will be issuing guidance in the next few weeks. That guidance will address, among other things, the question you pose in your email.
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30. Category:
Buy America
Question:
When must a recipient complete the "Certification of Compliance" as stipulated in Section 663.7 of the Rule?
Answer:
The Section 663.7 Certification of Compliance must be submitted as part of the grant application for any revenue service rolling stock grant. (See Exhibit 5-1 for a sample certification.) Once a recipient has submitted their first certification, the certification may be retained in the recipient's files and referenced in the "Statement of Continuing Validity" for any future rolling stock grants. PRE-AWARD AND POST-DELIVERY AUDIT CERTIFICATION OF COMPLIANCE As required by 49 CFR Part 663, Subpart A,________________________________ ________________(the recipient) certifies that it will conduct, or cause to be conducted, pre-award and post-delivery audits as prescribed in the "Pre-Award and Post-Delivery Audits of Rolling Stock Purchases; Final Rule." Date: _________________ Signature: ________________________Title: ______________________________ Exhibit 5-1. Sample Certification of Compliance
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31. Category:
Buy America
Question:
Where the contract provides for more than one delivery period, does the grantee conduct a post-delivery review for each delivery period?
Answer:
This question addresses the circumstances where a contract provides for multiple deliveries and the delivery periods are scheduled at substantially different time intervals, such as 6 months or 1 year apart. When a contract for vehicles provides for separately scheduled delivery periods, the recipient should complete a post-delivery review for each period. This does not mean that a separate review is necessary for each shipment within a delivery period.
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32. Category:
Buy America
Question:
Must a Buy America certification be conducted for every procurement?
Answer:
Yes. A manufacturer's past compliance with the Buy America Rule does not mean that the manufacturer's products will always be compliant. Changes in design, as well as technical developments, may make updated products noncompliant. If a pre-award and post-delivery Buy America review has been conducted for a given vehicle, then the same information may be used to demonstrate compliance at a later date if there has been no component or assembly changes to the vehicle since the last certification.
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33. Category:
Buy America
Question:
To what level of detail must the pre-award and post-delivery reviews be applied to confirm the veracity of the component and sub-component domestic content data?
Answer:
The applicable regulatory language requires only that the grant recipient based its certification on its own satisfaction that compliance has occurred, based upon its own review of documentation provided by the manufacturer. The only information required to be reviewed by the recipient is a listing of the component and subcomponent parts, identified by manufacturer, country or origin and costs (as defined above), as well as the actual location of the final assembly point with a description of the final assembly activities and cost. There is no requirement that the recipient perform a complete audit of detailed source documents to ascertain the veracity of the manufacturer's documentation.
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34. Category:
Buy America
Question:
Do the subcomponents have to be broken down into sub-subcomponents?
Answer:
No. The rule states that sub-subcomponents are not required to be identified in the Buy America calculations.
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