Court of Appeals rules on Buy American Act waiver in Alstom Transportation case

The U.S. Court of Appeals for the D.C. Circuit ruled in favor of the Federal Railroad Administration regarding its Buy America waiver for Brightline's $12 billion high-speed rail project between Rancho Cucamonga, California, and Las Vegas, Nevada. In a split decision, the court held that bidder Alstom had standing to challenge the waiver, but rejected Alstom's suit on the merits, ruling that the statutory requirement for domestic manufacturing applies to present capability at the time a waiver is granted.

Legal challenge to the Federal Railroad Administration waiver

• ▪The U.S. Court of Appeals for the D.C. Circuit upheld the Federal Railroad Administration's waiver, ruling that the Buy America statutory phrase 'produced in the United States' applies to present manufacturing capability when a waiver is granted.
• ▪Alstom filed an Administrative Procedure Act legal challenge against a Federal Railroad Administration Buy America waiver after prime contractor Brightline selected Siemens for a high-speed passenger rail contract.
• ▪Alstom argued in its lawsuit that the Federal Railroad Administration's waiver was contrary to law because Alstom possessed the future capability to manufacture compliant high-speed trains in the United States within the project performance schedule.

Court decisions on legal standing

• ▪A dissenting judge on the D.C. Circuit panel argued that Alstom failed to establish standing because Brightline and the Federal Railroad Administration could have pursued alternate options, such as ordering fewer trains.
• ▪The U.S. District Court for the District of Columbia initially dismissed Alstom's lawsuit after concluding that Alstom lacked legal standing to challenge the Federal Railroad Administration's waiver granted to a third party.
• ▪A two-judge majority on the D.C. Circuit panel ruled that Alstom had legal standing because it was predictable that Brightline would have used Alstom as the sole domestic manufacturer to avoid forfeiting $3 billion in federal funding.

Justification and terms of the waiver

• ▪The Federal Railroad Administration granted a Buy America nonavailability waiver because no high-speed trains meeting the project's 186-mph speed requirement were produced in the United States when the waiver was sought.
• ▪The Federal Railroad Administration's tailored waiver allowed Siemens to build its first two high-speed trains in Europe while training American workers, before manufacturing the remaining eight trains in the United States.

Bidding and proposed Buy America waiver

• ▪The Federal Railroad Administration initially published a proposed Buy America waiver during bidding that would have applied to both Siemens and Alstom.
• ▪During the procurement bidding, Siemens offered high-speed trains already operating in Europe at 220 mph, whereas competitor Alstom offered trains in the United States that maxed out at approximately 160 mph.

Funding for high-speed rail project

• ▪The Nevada Department of Transportation partly funded the high-speed passenger rail project connecting Rancho Cucamonga, California to Las Vegas, Nevada.
• ▪Brightline's planned $12 billion high-speed passenger rail project connecting Rancho Cucamonga, California to Las Vegas, Nevada includes $3 billion in federal funding from the Federal Railroad Administration.