The alliance said avoiding the provision, which is tied to about $460 million Metro receives each year for capital projects from the U.S. Department of Transportation, is especially egregious when unemployment slumps at 11 percent and as Metro survives off of a nearly $800-million bailout from the federal Cares Act and is seeking millions more in another stimulus.
"[Metro] survives on those tax dollars, and in this time of crisis [Metro] should do its part to support domestic manufacturers, American workers, and the communities they sustain,” Scott N. Paul, president of the Alliance for American Manufacturing, wrote in the letter. “We urge you to immediately stop the egregious outsourcing of the public infrastructure in our nation’s capital and reissue the pending request for bids with the inclusion of the federal Buy American laws.”
Metro said it is not violating the “Buy America” provision because it is not using federal money to build the 8000-series cars. Instead it is using funding from Maryland, Virginia and the District that is dedicated for capital projects. Federal funding the transit agency gets annually for capital expenses is being earmarked for other uses.
Metro said that it was still early in its process to secure a contract to build the 8000 Series, which is expected to look similar to the current 7000-series rail cars but with technological advancements including phone chargers, digital maps and advertising.
But the agency said it has its own contract clause requiring a builder to create an assembly plant and keep a percentage of the total contract’s value not just in-country but inside of the Mid-Atlantic region.
“Metro is committed to ensuring that our local region sees direct economic benefits from the dedicated funding established to support the system’s infrastructure needs,” Metro spokesman Dan Stessel said.
The Metro contract would require 8 percent of the project to be manufactured in the Mid-Atlantic region. By contrast, the federal “Buy America” provision requires that 70 percent remain domestic.
Metro is ordering more than 250 rail cars for its 8000 series and has options to buy up to 800 as it phases out older-model cars and modernizes its fleet. The 8000 series will replace its 2000-series cars, which were built in 1982, as well as the 3000-series cars built in 1987.
The first shipment of 8000-series cars could arrive in 2024, Metro has said.
The 8000-series cars will be Metro’s eighth model since the rail system opened four decades ago. Currently, there are no U.S.-based manufacturers of subway cars, but Kawasaki Heavy Industries Rolling Stock Company of Japan built Metro’s most recent model at a plant in Lincoln, Neb. Each of the cars is valued at $2 million and the 8000-series is expected to cost as much if not more.
Late last year, after representatives from the China Railway Rolling Stock Corp. (CRRC) began pitching their services to Metro, Congress — led by the senators representing Maryland and Virginia — passed a law banning any transit agency from contracting with a company that is not sanctioned under U.S. trade requirements.
While Metro cannot directly contract with Chinese companies, the Alliance for American Manufacturing claims parts from CRRC or companies from other unsanctioned countries could end up in Metro rail cars without guard rails, such as the “Buy America” clause because a contracted foreign builder could theoretically use parts from anywhere.
Stessel said Metro’s requirement that eight percent of the 8000-series contract be manufactured regionally belies the national impact the total contract will have. Local companies will be relying on domestic parts and services to do their work, he said.
But Paul said it’s paltry compared to what “Buy America” would require.
“What Metro is doing that concerns us is that it looks like it’s trying to evade ‘Buy America’ rules," he said in an interview. “Yes, it is using local dollars, but it’s it’s able to use local dollars because in part it gets federal dollars for other needs, other capital and operating needs. And so it strikes us as a pretty devious attempt to evade the federal procurement rules.”
Paul said Metro is capable of devoting much more of its contract to domestic companies. He also said a lack of U.S.-based rail car builders is just an excuse when he says there is no shortage of manufacturers that would start or move operations within the United States to acquire a $1 billion project that would last several years.
“If there wasn’t any capacity to build rail cars in the United States, perhaps they have an argument,” Paul said. “That’s simply not the case. There are plenty of qualified rail car manufacturers in the United States who can meet or exceed Metro’s needs, who can deliver a great product. And those dollars will be supporting American jobs, as well as an investment in the future of transit in the D.C. area.”
The possibility that fewer jobs could go to American workers did not sit well with U.S. Del. Eleanor Holmes Norton, (D-D.C.), who chairs the House Highways and Transit subcommittee. She wrote Metro a letter on April 7 saying Metro’s decision to not use “Buy America” requirements for the 8000-series project undermines her lobbying efforts on the agency’s behalf.
“This decision sets a dangerous precedent for similar procurements throughout the country could send valuable work opportunities abroad, endangering American companies, workers and communities,” Norton wrote. “Metro has long benefitted from special congressional funding in support of its capital costs, and I have supported this funding throughout my tenure in Congress."
In a reply to the letter, Metro General Manager Paul J. Wiedefeld wrote in June that Metro is using local dollars because it was “a predictable source” of funding for a lengthy “critical” investment. Maryland, Virginia and the District dedicate money annually for Metro’s capital needs while federal funding can be more vulnerable to politics.
He said he was limited in his response because Metro continues to try and secure a contract for the rail cars.
Stessel, the Metro spokesman, said Thursday that the agency has not yet picked a builder.