FTA’s Oversight of SEPTA’s Compliance With Buy America Rolling Stock Requirements Faced Several Challenges

What We Looked At In 2017, the Southeastern Pennsylvania Transportation Authority (SEPTA) awarded a $138 million contract to the state-owned China Railway Rolling Stock MA Corporation (CRRC MA) for 45 passenger railcars. In 2022, three then-ranking Members of the House Transportation and Infrastructure Committee asked our office to examine the Federal Transit Administration’s (FTA) oversight of (1) SEPTA’s certification of CRRC MA’s adherence to FTA’s Buy America requirements and (2) SEPTA’s calculation of the total value of foreign components for determining compliance with FTA’s Buy America requirements. As such, our objective was to assess FTA’s oversight of SEPTA’s compliance with Buy America standards for its rolling stock contract with CRRC MA. What We Found Weaknesses in FTA’s Buy America guidance hindered its oversight of SEPTA’s compliance with Buy America rolling stock requirements. Specifically, FTA does not require recipients to retain supporting documentation for pre-award audits or to verify suppliers’ Buy America information, nor does FTA have regulations to address domestic shipping costs. Without clear guidance, FTA could not rely on SEPTA to provide oversight of rolling stock procurements and risks that recipients miscalculate domestic content costs—raising concerns about whether FTA’s Buy America rules are being met. In December 2022, FTA initiated an enhanced compliance review of SEPTA to verify compliance with Buy America rolling stock standards, but the Agency faced challenges in obtaining sufficient data from both SEPTA and CRRC MA. Although FTA suspended funds for the CRRC MA contract, the absence of policy on when to initiate an enhanced Buy America compliance review and take corrective action limits the Agency’s ability to address delays or compliance issues on future FTA-funded projects.Our Recommendations We made eight recommendations to improve FTA’s oversight of SEPTA’s compliance with Buy America rolling stock requirements and FTA’s oversight of future rolling stock procurements. FTA concurred with recommendations 1 through 6. FTA partially concurred with recommendations 7 and 8 and provided alternative actions that meet the intent of our recommendations. We consider all recommendations resolved but open pending completion of planned actions.