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US tightens rules on rolling stock procurement

New guidance has been issued to help transit agencies and manufacturers understand the prohibitions on FTA-funded rolling stock procurements contained in the National Defense Authorization Act (NDAA).

New guidance has been issued to help transit agencies and manufacturers understand the prohibitions on FTA-funded rolling stock procurements contained in the National Defense Authorization Act (NDAA) for Fiscal Year 2020.

The new NDAA restricts the use of federal – and in some circumstances local – funds to buy or lease rolling stock from any manufacturer that is “owned, controlled by, is a subsidiary of or is otherwise related legally or financially to a corporation” based in countries identified as a non-market economy or on the country’s priority watch list. A list of nations that meet the criteria is yet to be confirmed, although commentators believe this is a further escalation of the US’ trade restrictions aimed at Chinese suppliers.

Orders placed before 20 December 2019 are exempt, as are options; existing agreements for transit vehicles for Boston, Chicago, Los Angeles and Philadelphia are therefore not affected. The act applies to any form of rolling stock, including monorails, and includes elements of contracts that specify spares and maintenance.

> For the latest guidance, see: www.transit.dot.gov/funding/procurement/frequently-asked-questions-regarding-section-7613-national-defense