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T&I Republicans Call for IG Review of Whether Transit Contract with Chinese Government-Owned Company Defies Buy America

Transportation and Infrastructure Committee Ranking Member Sam Graves (R-MO); Highways and Transit Subcommittee Ranking Member Rodney Davis (R-IL);  and Railroads, Pipelines, and Hazardous Materials Subcommittee Ranking Member Rick Crawford (R-AR) are calling for a review of a Southeastern Pennsylvania Transportation Authority (SEPTA) railcar contract with a Chinese state-owned company to determine if it complies with Federal Transit Administration (FTA) Buy America requirements.

“It has come to our attention that the state-owned China Railway Rolling Stock Corporation MA (CRRC MA) is fully building passenger railcars in China and plans to ship them to SEPTA—apparently in contrast with FTA’s Buy America requirements for rolling stock procurement….  [W]e are concerned whether CRRC MA has met the Buy America requirements so far over the course of this contract and if CRRC MA will be able to meet these requirements as the contract progresses,” said Graves, Davis, and Crawford in their letter requesting a review by the Department of Transportation Inspector General (IG).

“It is important to the competitiveness and security of American industries that we ensure that companies that do business in our country comply with all U.S. laws and that there’s a level playing field,” added Ranking Member Graves.  “We are simply asking the Inspector General to determine whether CRRC is in compliance with Buy America requirements.”

“It’s now more important than ever that we are prioritizing manufacturing in America, especially in the transportation sector – that’s why my colleagues and I sent a letter to the Department of Transportation to ensure that our Buy America requirements are being followed and that federal funds are not being used to procure goods from State-Owned Enterprises run by the Chinese Communist Party,” said Davis.

“Despite Congress passing Buy America provisions and repeatedly emphasizing the threat of China’s Military-Civil Fusion development strategy, SOE’s like China’s Railway Rolling Stock continue to attempt to integrate into and weaken the U.S. economy. We have a responsibility to ensure that we are investing in American made products where possible and protecting taxpayer dollars. I look forward to hearing back from Inspector General Soskin on this matter and working on how we can safeguard Buy America requirements and critical transportation and infrastructure,” said Crawford.

Background

By law, SEPTA must comply with FTA’s Buy America requirements relating to how much of the components and subcomponents for rolling stock (railcars and buses) are produced in the United States, and how much of the final assembly for rolling stock occurs in the United States.

However, recent reports by the Philadelphia Inquirer raise serious questions about whether the SEPTA–CRRC MA contract is meeting the Buy America requirements and whether the railcars are in fact being built by CRRC MA in China.  The Members asked the IG to examine how FTA and SEPTA are certifying CRRC and CRRC MA’s adherence to the Buy America requirements, how FTA and SEPTA determine the total value of foreign components for the purpose of the Buy America requirements, and if any foreign components in the CRRC MA contract are undervalued against their domestic market rate in the United States.

CRRC MA is a subsidiary of CRRC Corporation Limited (CRRC), an entity the Department of Defense has designated as a company tied to the Chinese military.  Over the past eight years, CRRC has secured more than $2.6 billion in United States taxpayer-supported transit contracts to provide passenger railcars for the cities of Philadelphia, Boston, Chicago, and Los Angeles.

Congress was concerned enough with these taxpayer-funded orders that it passed the Transportation Infrastructure Vehicle Security Act (TIVSA) as part of the National Defense Authorization Act in 2019 to ensure additional taxpayer dollars wouldn’t go to companies that are State-Owned Enterprises (SOEs) like CRRC.  


Click here to read the full letter to Department of Transportation Inspector General Eric Soskin

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