Changes to rolling stock rules threaten industry supply chain

Posted on May 25, 2016 by James Blue - Also by this author

In February, the FTA finalized its grant management requirements circular governing the administration and management of all FTA grant programs. This revision incorporates changes to these programs contained in both authorizations that have been enacted in recent years, the FAST Act and MAP-21. While some provisions the revised circular are welcome and needed because of enactment of these new laws, it also contains changes that are not only unnecessary but could threaten the industry’s health.

If it isn’t broken…
Part of the revisions to this circular involved reworking of how refurbishments, overhauls and remanufacturing of vehicles are eligible for grant funding, and how such funding is to be managed. The new proposed guidance seeks to treat remanufacturing as if it were a new bus, subject to all of the requirements of a new bus, including useful design-life mandates, Altoona testing and Buy America audits.

It seems odd that the FTA would seek these changes, particularly since there is no real evidence of any pattern of abuses of the previous practice regarding overhauls, refurbishments and remanufacturing. Moreover, it has been good public policy, allowing public transportation agencies to stretch precious dollars farther.

Industry shares concerns
Apparently, the industry agrees, because more than 50 comments posted to the FTA docket urge the agency to reconsider the proposed changes. The letter that APTA submitted on behalf of the industry summarizes what is at stake: “FTA’s proposal to require remanufactured buses to meet all requirements for new bus models would prove devastating to a significant segment of the public transportation community. Many small properties that are unable to obtain new buses rely on remanufactured equipment to keep up with service demands in an affordable manner. The equipment is available at greatly reduced prices, has proven reliable over many years and provides value to the communities served. Application of full new bus rules to this limited, specialized market would effectively shut it down.”

Although the APTA letter is confined to buses, many agencies that have procured remanufactured rail vehicles share very similar concerns. Undermining this tool that can help achieve a state of good repair with rail infrastructure could be an even greater problem than the bus issues cited in the APTA letter.

On balance, these changes seem to be a solution in search of a nonexistent problem. If anything, they risk creating even greater problems for the industry. For these reasons, the proposed changes to remanufacturing in the draft revised grant management circular should be discarded.

James Blue is the general manager of METRO Magazine.

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