Interpretation ID: 2628y

Donald C. J. Gray, Commissioner
Federal Supply Service
General Services Administration
Washington, DC 20406

Dear Mr. Gray:

This responds to your letter to Mr. Barry Felrice, our Associate Administrator for Rulemaking. Your letter noted that 49 CFR 571.7(c) provides that Federal motor vehicle safety standards promulgated by the National Highway Traffic Safety Administration do not apply to vehicles that are "manufactured for, and sold directly to, the Armed Forces of the United States, in conformity with contractual specifications." You asked if this exception could be interpreted as applying to school buses purchased by the General Services Administration for the sole use of the Army. The answer to your specific question is "yes." Those buses would be regarded as having been sold directly to the Armed Forces.

The exception in 49 CFR 571.7(c) reflects a balancing of competing interests. On the one hand, Congress specified in the National Traffic and Motor Vehicle Safety Act that all new motor vehicles sold in the United States must be certified as conforming with all applicable safety standards. On the other hand, NHTSA recognizes the unique transportation needs of the Armed Forces and the specialized functions of many military vehicles. When the Armed Forces include specifications in a contract stating how the vehicles shall be produced and as a result the vehicles do not conform with some safety standards, this presumably reflects a judgment by the Armed Forces that the specialized capabilities needed in the vehicle are sufficiently compelling to outweigh the general interest in ensuring that Armed Forces' vehicles comply with the applicable safety standards.

To reflect both of these competing interests, NHTSA tailored a narrow exception to the broad requirement that all motor vehicles sold in the United States be certified as complying with the safety standards. This exception, reflected in the language of 49 CFR 571.7(c), provides that the safety standards do not apply to vehicles or items of motor vehicle equipment that are:

manufactured for, and sold directly to, the Armed Forces of the United States, in conformity with contractual specifications.

We would regard the buses as having been sold directly to the Armed Forces despite the fact that the purchasing was performed by the GSA instead of some element of the Armed Forces. The essential element of this criterion is that the Armed Forces be the principal. In this case, the Armed Forces would be the principal, and the GSA would simply be acting as its agent. We see no meaningful difference between a sale to an element of the Armed Forces and one to the GSA acting as agent for the Armed Forces, as long as the vehicles are for the sole use of the military. Our conclusions in this regard are consistent with several 1975 agency interpretations informing brake hose manufacturers that brake hoses manufactured according to military specifications and sold to military contractors for incorporation in vehicles to be sold to the military could be regarded as equipment sold directly to the Armed Forces.

Please note that to qualify for this exemption, the buses must be manufactured for the Armed Forces "in conformity with contractual specifications." In the interest of safety, we strongly recommend that the GSA or the Army, as appropriate, include the substantive provisions of the Federal motor vehicle safety standards relating to school buses in those specifications, except insofar as they are actually inconsistent with the intended usage of the buses.

I hope this response is useful. If you can provide me with further information, I would be happy to provide further guidance.

Sincerely,

Paul Jackson Rice Chief Counsel

/ref: 571 d:8/23/90