[Federal Register: September 28, 2007 (Volume 72, Number 188)]
[Notices]
[Page 55630-55635]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28se07-162]
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DEPARTMENT OF TRANSPORTATION
Federal Transit Administration
[Docket No. FTA-2007-29125]
Third Party Contracting Guidance; Notice of Proposed Program
Guidance; Proposed Circular
AGENCY: Federal Transit Administration (FTA), DOT.
ACTION: Notice of availability of proposed circular and request for
comments.
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SUMMARY: The Federal Transit Administration (FTA) has placed in the
docket and on its Web site, proposed guidance pertaining to
procurements financed in whole or part with Federal assistance awarded
by FTA through grants or cooperative agreements (third party
procurements). By this notice, FTA invites public comment on FTA's
proposed circular, ``Third Party Contracting Guidance.''
DATES: Comments should be submitted by November 27, 2007. Late-filed
comments will be considered to the extent practicable.
ADDRESSES: To ensure your comments are not entered more than once into
the docket, submit comments identified by the docket number [FTA-2007-
29125] by only one of the following methods:
1. Web site: http://www.regulations.gov. Follow the instructions for
submitting comments on the U.S. Government electronic docket site.
[Note: The U.S. Department of Transportation's (DOT's) electronic
docket is no longer accepting electronic comments. All electronic
submissions must be made to the U.S. Government electronic docket site
at http://www.regulations.gov. Commenters should follow the directions below
for mailed and hand-delivered comments.]
2. Fax: 202-493-2251.
3. Mail: U.S. Department of Transportation, 1200 New Jersey Avenue,
SE., Docket Operations, M-30, West Building, Ground Floor, Room W12-
140, Washington, DC 20590-0001.
4. Hand Delivery: U.S. Department of Transportation, 1200 New
Jersey Avenue, SE., Docket Operations, M-30, West Building, Ground
Floor, Room W12-140, Washington, DC 20590-0001 between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays.
See the SUPPLEMENTARY INFORMATION section for detailed instructions on
how to submit comments and access docket information.
FOR FURTHER INFORMATION CONTACT: For issues regarding third party
contracting procedures and practices, contact James Harper, Senior
Procurement Analyst, Office of Administration, Federal Transit
Administration, 1200 New Jersey Avenue, SE., East Building, Room E42-
333, Washington, DC 20590, phone: 202-366-1127, fax: 202-366-3808, or
e-mail, James.Harper@dot.gov. For legal issues, contact Kerry Miller,
Assistant Chief Counsel for General Law, Federal Transit
Administration, 1200 New Jersey Avenue, SE., East Building, Room E56-
314, Washington, DC 20590, phone: 202-366-1936, fax: 202-366-3809, or
e-mail, Kerry.Miller@dot.gov.
SUPPLEMENTARY INFORMATION:
Comment Instructions and Docket Access Information
Instructions: You must include the agency name (Federal Transit
Administration) and Docket number (FTA-2007-29125) for this notice at
the beginning of your comments. Submit two copies of your comments if
you submit them by mail. For confirmation that FTA has received your
comments, include a self-addressed stamped postcard. Note that all
comments received, including any personal information, will be posted
and will be available to Internet users, without change, to
http://www.regulations.gov. You may review DOT's complete Privacy Act
Statement in the Federal Register published April 11, 2000, (65 FR
19477), or you may visit http://www.regulations.gov.
Docket: For access to the docket to read background documents and
comments received, go to http://www.regulations.gov at any time or U.S.
Department of Transportation, 1200 New Jersey Avenue, SE., Docket
Operations, M-30, West Building, Ground Floor, Room W12-140,
Washington, DC 20590-0001 between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays.
Table of Contents
I. Overview
II. Chapter-by-Chapter Analysis
A. Chapter I--Introduction and the Role of the Federal Transit
Administration
B. Chapter II--Applicability
C. Chapter III--The Recipient's Responsibilities
D. Chapter IV--The Recipient's Property and Services Needs and
Federal Requirements Affecting Those Needs
E. Chapter V--Sources
F. Chapter VI--Procedural Guidance for the Open Market
[[Page 55631]]
G. Chapter VII--Protests, Changes and Modifications, Claims,
Disputes, and Settlements
Appendices
H. Appendix A. References
I. Appendix B. FTA Regional and Metropolitan Contact Information
I. Overview
This notice announces the availability of revised proposed guidance
on conducting procurements financed in whole or part with Federal
assistance awarded by FTA through a grant or cooperative agreement
(third party procurements). FTA Circular 4220.1E separated Federal
statutory and regulatory requirements from policy interpretations,
placing those interpretations in footnotes that could be accessed with
that circular. Upon enactment of the Safe, Accountable, Flexible,
Efficient Transportation Equity Act: A Legacy for Users, (SAFETEA-LU)
(Pub. L. 109-59, August 10, 2005), 49 U.S.C. 5334(l), FTA has been
required to provide public notice and opportunity for comment on
significant policy interpretations. Thus, FTA has broadened the scope
of FTA Circular 4220.1E from ``Third Party Contracting Requirements,''
to ``Third Party Contracting Guidance,'' to include within this
proposed circular significant FTA policy guidance in addition to
information about Federal statutory and regulatory requirements
affecting third party procurements.
The bulk of this proposed circular consists of restructuring of the
2003 edition of FTA Circular 4220.1E coupled with updates of Federal
statutory and regulatory citations. In addition, there are discussions
of topics pertaining to third party procurements that had been
previously omitted and new guidance clarifications. We have identified
those provisions reflecting a Federal statutory or regulatory
requirement and those expressing an FTA interpretation or policy
position. With few exceptions, nearly all requirements,
interpretations, and policy positions set forth in the text of FTA
Circular 4220.1E and its footnotes have been retained, and if not
included in this proposed circular or preamble, then added to FTA's
``Best Practices Procurement Manual.'' While the bulk of FTA assistance
is awarded to governmental recipients, many recipients participating in
cooperative agreements are not governmental authorities. For this
reason, the proposed circular places new emphasis on third party
procurement requirements for those recipients. FTA's recipients that
are educational institutions or private non-profit organizations must
comply with the DOT regulations, ``Uniform Administrative Requirements
for Grants and Agreements with Institutions of Higher Education,
Hospitals, and Other Non-Profit Organizations,'' 49 CFR part 19, which
in part differ from the provisions of DOT regulations, ``Uniform
Administrative Requirements for Grants and Cooperative Agreements to
State and Local Governments,'' 49 CFR part 18. (FTA refers to
regulations 18 and 19 as Common Grant Rules.) To provide a
comprehensive listing of procurement procedures for third party
contracting, we have supplemented this proposed circular with Common
Grant Rule requirements omitted in FTA Circular 4220.1E. To facilitate
compliance with substantive requirements that will, or that will be
likely to impact the results of third party procurements, we have added
references to pertinent requirements.
Because of the increased length of this proposed circular, the
circular has been divided into seven Chapters, preceded by a Table of
Contents and followed by an Index. Consistent with formats adopted in
FTA's latest circulars, references and citations have been consolidated
in a separate Appendix A.
This notice does not include the proposed circular; electronic
versions of the proposed circular may be found on the docket, at
http://www.regulations.gov docket number FTA-2007-29125, or on FTA's Web site,
at http://www.fta.dot.gov. Paper copies of the proposed circular may be
obtained by contacting FTA's Administrative Services Help Desk, at 202-
366-4865.
FTA seeks comments on the proposed circular, in particular those
portions of the circular reflecting new guidance, policies, or
interpretations.
II. Chapter-by-Chapter Analysis
A. Chapter I--Introduction and Background
The first four sections of this chapter are a general introduction
to FTA that is proposed to be included in all new and revised program
circulars for the orientation of readers new to FTA programs.
Section 5 of this chapter sets forth definitions of terms appearing
in the proposed circular. While many definitions within the Definitions
section or elsewhere in FTA Circular 4220.1E or its footnotes have been
retained, the following new definitions have been added:
a. A definition of Approval, Authorization, Concurrence, and Waiver
has been added to emphasize that these must be in writing.
b. We are defining Common Grant Rule to encompass both the uniform
administrative regulations applicable to governmental recipient and the
uniform administrative regulations for institutions of higher education
and private non-profit organizations.
c. A definition of Cooperative Agreement has been added in light of
our emphasis on ensuring our recipients understand that the proposed
circular applies to recipients of cooperative agreements as well as to
grantees.
d. Definitions of Governmental Recipient and Non-Governmental
Recipient have been added.
e. The definition of Electronic Commerce has been added.
f. Property, a term used frequently within this proposed circular,
has been defined.
g. Recipient, a term used frequently within this proposed circular
in lieu of Grantee, has been added to accommodate recipients of
cooperative agreements as well as grants.
Because the terms piggybacking and tag-on tend to be unfamiliar jargon
used chiefly by some participants in FTA projects, those terms have
been transferred from the formal definitions section of the proposed
circular to the discussion of use of existing contracts in Chapter V of
the proposed circular.
Section 6 consolidates FTA's role in complying with the various
third party procurement requirements, policies, and practices. The
subsections addressing third party contract reviews, procurement system
reviews, and training and technical assistance are substantially
similar to those of FTA Circular 4220.1E. The text on self-
certification has been revised for greater consistency with the Common
Grant Rules. Part 18 permits recipients to seek self-certification, but
does not require them to do so, nor does that Common Grant Rule permit
FTA to require self-certification. Part 19 has no provisions addressing
self-certification. When this came to our attention a few years ago, we
made the Procurement certification optional, but strongly encourage
applicants and recipients to self-certify their procurement systems. A
new subsection discussing FTA's prerogatives with respect to audits has
been added. New subsections addressing the Master Agreement and FTA's
``Best Practices Procurement Manual'' expand the discussion on these
topics in this proposed circular.
B. Chapter II--Applicability
1. Section 1 of this Chapter consolidates the types of recipients
and the types of projects to which this circular applies. Those
provisions are
[[Page 55632]]
substantially similar to their counterpart provisions within FTA
Circular 4220.1E or its footnotes, with a few important exceptions set
forth below:
a. FTA Circular 4220.1E inadvertently misstated FTA's long-standing
practice in administering its State managed programs when it took the
position that only States and State instrumentalities could use State
procedures when undertaking procurements financed with FTA's funding
for State managed programs. Changes have been made to the applicability
of State procedures to governmental subrecipients to conform to FTA's
years-long practice with respect to State managed programs. Whether
subrecipients other than States could use State procurement procedures
had been a matter of some controversy for many years. That matter was
resolved as set forth in the preamble to DOT regulations, ``Uniform
Administrative Requirements for Grants and Agreements with Institutions
of Higher Education, Hospitals, and Other Non Profit Organizations,''
49 CFR part 19, published (59 FR 15639, April 4, 1994). OMB authorized
governmental subrecipients of States to use State procedures for
procurements financed with funds provided through FTA's State managed
programs. OMB, however, did not authorize non-governmental
subrecipients of States to use State procedures, but required them to
use the procedures of part 19 for procurements financed through the
same State managed programs. Consequently, the guidance in this
circular has been amended to comport with these OMB decisions.
b. FTA is revisiting its policy on permitting recipients to
separate FTA assisted operations procurements from operations
procurements that do not receive FTA assistance. For that reason,
Chapter II, Subsection 1.b(2)(b) of the circular with the heading
``Operations Contracts Financed Entirely Without FTA Assistance'' is
RESERVED in the proposed circular. The reason for this review is that
the current FTA Circular 4220.1E expressly states that ``Congestion
Mitigation and Air Quality (CMAQ) and Job Access/Reverse Commute (JARC)
funds may be used for operations by all grantees. The circular must be
applied to all contracts that are funded, in part, by CMAQ or JARC
funds. Using CMAQ or JARC funds for a specific operating contract or
contracts does not trigger the requirement to apply the circular to
other operating contracts.'' In contrast, Footnote 2 to FTA Circular
4220.1E states, ``Those grantees authorized to use formula funds for
operating assistance must apply the circular to all operating
contracts-even if they are able to administratively segregate the
federal funds to non-contract operating expenses. The ability to use
formula funds for operating assistance hinges upon a grantee's total
operating expenses and the portion of those expenses not offset by
operating income.''
Now, however, because the JARC program is a ``formula'' program,
and because the New Freedom Program is a new formula program, FTA must
reconsider the issue of whether and to what extent recipients of
formula assistance should be able to separate Federal funds so that
operations contracts not financed with FTA funding may be exempt from
FTA procurement requirements.
In addition to contracts financed entirely without FTA assistance
by grantees that receive operating assistance only from the JARC and
CMAQ programs and which FTA determined are not subject to FTA
procurement requirements, FTA must determine the extent to which FTA
requirements should apply to operations contracts financed entirely
without FTA assistance by recipients of operating assistance under the
New Freedom program, 49 U.S.C. Section 5317, the Elderly Individuals
and Individuals with Disabilities Pilot program, 49 U.S.C. Section 5310
note, and even the Nonurbanized Area Formula program, all of which
involve some recipients or subrecipients that receive only a small
portion of their support from FTA.
At this time, recipients in large urbanized areas are generally
ineligible to use Urbanized Area Formula assistance to support
operations, apart from capital funding for preventive maintenance
funds, FTA has permitted those recipients to exempt all their
operations contracts from FTA requirements provided they are able to
trace their use of preventive maintenance funding to specific
contracts. If, however, they are unable to do so, and use FTA
assistance for general support of preventive maintenance costs, then
FTA requirements will apply to all their operations procurements. In
contrast, recipients in smaller urbanized areas currently must apply
FTA requirements to all their operations procurements, whether or not
they are financed with FTA assistance, if they use any of their
Urbanized Area Formula assistance to support operations.
FTA is seeking comments about the extent to which FTA requirements
should be applied to the operations contracts of recipients and
subrecipients financed entirely without Federal assistance, in
particular comments on the rationale for excluding other operating
contracts from the applicability of FTA requirements, technical
examples of how operating expenses could be tracked and managed to
segregate FTA funded expenses from other operating costs, and examples
of possible unintended consequences of a change in FTA policy. FTA also
seeks comments on the extent of agency operating expenses that are not
related to transit but are subject to FTA procurement requirements
under the concept that one dollar of FTA operating assistance brings an
agency's entire operating budget under the FTA requirements. If
determinations are made on a program by program basis, FTA seeks
comments on which programs should permit separation of operations
contracts funded entirely without FTA assistance from FTA-funded
operations contracts, and which programs should prohibit separation of
operations contracts funded entirely with FTA assistance from FTA
requirements, and reasons in support of those comments.
FTA is also seeking comments estimating the level of impact on
disadvantaged business enterprises if FTA approves separation of
operations contracts financed entirely without FTA funding, and reasons
in support of those estimates. Nevertheless, a recipient that enters
into third party contracts for operations or planning must comply with
the requirements of DOT regulations, ``Participation by Disadvantaged
Business Enterprises in Department of Transportation Financial
Assistance Programs,'' 46 CFR Part 26, applicable to those contracts,
regardless of the allocation of its FTA assistance to contracting or
other purposes.
c. A new category for Public-Private Partnerships has been added to
accommodate FTA's support for innovative project development
arrangements. FTA will work with the recipient to craft appropriate
procurement procedures when public-private partnerships are involved.
d. The text pertaining to leveraged leasing in a footnote to FTA
Circular 4220.1E has been modified to cover complex innovative finance
transactions in which FTA might participate.
Sections 2 and 3 discussing the applicability of Federal laws and
regulations and State laws and regulations remain substantially similar
to those of FTA Circular 4220.1E. A reference to the new SAFETEA-LU
requirement imposing Federal Acquisition Regulation standards on audits
connected with procurements of architect engineering services is used.
[[Page 55633]]
C. Chapter III--The Recipient's Responsibilities
Apart from specific procurement procedures discussed at length in
Chapter VI, this chapter consolidates the recipient's procurement
responsibilities. While much information has been retained from FTA
Circular 4220.1E, Common Grant Rule requirements not included in that
circular have been addressed in this proposed circular.
Section 1, discussing Written Standards of Conduct, is
substantially similar to the text of FTA Circular 4220.1E.
Section 2.a, pertaining to Self-Certification, has been modified to
conform more closely to the requirements of the Common Grant Rule for
governmental recipients in that recipients may, but are not compelled
to, self-certify their procurement systems, and that FTA strongly
encourages them to do so.
Section 3 contains many subsections, such as Procurement Capacity,
Requirements for Adequate Contract Provisions, Procurement History, and
Use of Electronic Commerce, which are substantially similar to their
counterparts in FTA Circular 4220.1E. Other subsections, such as
Record-Keeping, that were omitted from FTA Circular 4220.1E but
addressed in the Common Grant Rules, have been included in this
proposed circular.
One major change is that SAFETEA-LU expanded FTA and the
Comptroller General's authority to review all contract documents
pertaining to procurements financed under 49 U.S.C. Chapter 53.
Previously, the Comptroller General's authority to review contract
documents was limited to non-competitive procurements.
Another change is that the Special Notification Requirements,
formerly applicable to all recipients as provided in Federal
appropriations acts applicable to the entire Federal Government, have
been narrowed recently to apply exclusively to States. We caution,
however, that future appropriations acts may further amend the
notification requirements for recipients.
A new subsection has been added to caution the recipient to take
care when adopting an industry-prepared contract to assure that all
required Federal requirements and clauses have been addressed or
appended as a part of that contract.
Section 4 includes Audit provisions that have been added to the
proposed circular, with information about the use and restrictions of
use of the recipient's own auditors and the need for auditors
independent of the recipient to perform certain federally required
audits. The role Federal audit agencies might play is briefly noted.
D. Chapter IV--The Recipient's Needs and Federal Requirements Affecting
Those Needs
Section 1 of this chapter specifies that any federally-assisted
acquisition must be within the scope of the project from which funding
is derived. The amount or quantity of property or services to be
acquired can affect the procurement's eligibility for Federal
assistance. These provisions addressing necessity, procurement size,
options, lease vs. purchase, and specifications, while arranged
differently from the format of FTA Circular 4220.1E contain
substantially similar provisions supplemented by additional relevant
provisions of the Common Grant Rules. A new reference to FTA's spare
ratio standards requirements for vehicles has been added, as well as a
general prohibition on using FTA funds to finance unnecessary reserves.
In Section 2, FTA has identified the various Federal requirements
that will have an effect on the property and services a recipient
acquires. To facilitate compliance with those requirements, FTA has
compiled a list of Federal requirements and policies for contractors, a
list of Federal requirements and policies that are applicable to all
acquisitions, and lists of specific requirements and policies
applicable to some, but not all, acquisitions. FTA hopes these lists
will serve as useful reminders to a recipient seeking to acquire
property and services with Federal assistance. Again, the bulk of the
provisions set forth in this section have been included in FTA Circular
4220.1E or are part of the Procurement section of the Common Grant
Rules. Consequently, we are identifying in this preamble only those
provisions of the proposed circular that are new or that amend
previously established requirements and policies.
Section 2.a. contains requirements pertaining to the contractor's
internal operations in order to qualify for FTA assisted contracts.
While the Common Grant Rules require recipients to engage with
``responsible'' contractors, a statutory provision within SAFETEA-LU
expressly established a requirement restricting awards only ``to
responsible contractors possessing the ability to successfully perform
under the terms and conditions of a proposed procurement.'' For fixed
guideway projects, SAFETEA-LU expressly requires that contractors must
be considered in light of their past performance.
Along with a discussion of provisions in support of disadvantaged
business enterprise (DBE), we have also included the Common Grant
Rule's provisions requiring support for small and minority firms and
women's business enterprises, irrespective of whether or not they
qualify as DBEs.
We have also added provisions pertaining to the contractor's
obligation to protect sensitive security information consistent with
DOT and Homeland Security regulations. We have also included guidance
encouraging seat belt use required by Executive Order. While these
provisions have been in FTA's Master Agreement for the last few years,
they have not been addressed until now in the Common Grant Rules or in
FTA's third party contracting publications.
Section 2.b. contains lists of Federal requirements or policies
applicable to the 19 categories of procurement issues. While most of
the requirements applicable to each category have appeared in FTA
Circular 4220.1E or the Common Grant Rules, new provisions and amended
interpretations in the proposed circular are identified for each
category:
(1) Scope of the Project. This provision is now explicitly stated
in the proposed circular.
(2) Period of Performance. These provisions are derived from FTA
Circular 4220.1E.
(3) Federal Cost Principles. These requirements in FTA Circular
4220.1E and the Common Grant Rules are unchanged.
(4) Payment Provisions. These provisions are derived from FTA
Circular 4220.1E.
(5) Domestic Preference for Property--Buy America. Recipients are
cautioned that FTA's Buy America regulations for third party
procurements differ from Federal ``Buy American Act'' regulations that
apply to direct Federal procurements.
(6) Shipments of Property--U.S. Flag Requirements. Added to the
proposed circular are these domestic requirements as set forth in the
Common Grant Rules and the Master Agreement.
(7) Project Travel--Use of U.S. Flag Air Carriers. Added to the
proposed circular are these domestic requirements as set forth in the
Common Grant Rules and the Master Agreement.
(8) Wage and Hour Requirements. The proposed circular updates the
thresholds to $100,000 resulting from amendment of the Contract Work
Hours and Safety Standards Act. Previously, the Act's thresholds were
$2,000 for construction work and $2,500 for
[[Page 55634]]
Federal purchases and contracts other than construction.
(9) Environmental Protections. The Common Grant Rules indicate that
environmental requirements may well affect certain procurements, but
only refer to a few, such as Clean Air and Clean Water laws and
regulations. We recognize that many other requirements may impact the
implementation of procurement, and are including a list of those set
forth in our current Master Agreement to facilitate compliance.
(10) Energy Conservation. Energy conservation was not included as a
topic in FTA Circular 4220.1E, but we are adding it to the proposed
circular. These requirements in the Common Grant Rules remain
unchanged.
(11) Metric Measurements. Added to the proposed circular are these
metric use provisions as set forth in the Common Grant Rules and the
Master Agreement.
(12) Intelligent Transportation Systems. Added to the proposed
circular are these intelligent transportation system architectural
compatibility requirements as set forth in the Master Agreement.
(13) Electronic Reports and Information. Added to the proposed
circular are these accessibility requirements as set forth in the
Master Agreement.
(14) Rolling Stock--Special Requirements. These requirements
applicable to the types of rolling stock and procurements thereof have
been applicable to FTA-assisted projects for many years. Except for
procedural requirements pertaining to the five-year limitation and the
provisions authorizing award to other-than the low bidder, these
provisions have not been included in FTA Circular 4220.1E. But to
facilitate compliance, we have listed these requirements within the
proposed circular. The following are particularly notable:
(a) In consolidating procurement requirements of 49 U.S.C. Section
5325 and former Section 5326 into Section 5325, Congress did not retain
the provisions of former 49 U.S.C. 5326(d) authorizing a recipient's
sole source purchases of associated capital maintenance items from the
original manufacturer. Consequently, this circular does not include
discussions of associated capital maintenance items.
(b) SAFETEA-LU added a prohibition at 49 U.S.C. Section 5325(i)
against restricting bus procurements to in-State dealers.
(c) We are also adding a reference to FTA's minimum service life
requirements for buses that appear in FTA Circulars 5010.1, 9030.1, and
9300.1 to alert the recipient of its need to buy vehicles with an
adequate useful life.
(15) Architectural/Engineering and Related Services--Special
Requirements. Two important changes are included in the proposed
circular.
(a) We are clarifying the requirements as set forth in FTA Circular
4220.1E to stress that FTA considers the use of qualifications-based
procurement procedures appropriate only for contracts for services
involving construction or leading to or related to construction. FTA's
policy is that procurements for similar services not leading to
construction may not be undertaken using qualifications-based
procurement procedures.
(b) The SAFETEA-LU requirement for the use of Federal Acquisition
Regulation (FAR) standards for determining indirect costs for architect
engineering contracts set forth at 49 U.S.C. Section 5325(b)(3) has
been added.
(16) Construction--Special Requirements. These requirements have
been applicable to FTA-assisted construction projects for many years.
Some, but not all have been addressed in FTA Circular 4220.1E. Others
set forth in the Common Grant Rules and the Master Agreement are listed
to facilitate compliance. Except for the following, those requirements
remain unchanged. We have included notice that the threshold of $2,000
for construction safety requirements has been increased by law so that
those requirements apply only to federally-assisted construction
contracts in excess of $100,000.
(17) Public Transportation Services--Special Requirements. Added to
the proposed circular are requirements that apply to a recipient's
project involving transit services as set forth in the Master
Agreement.
(18) Research, Development, Demonstration, Deployment, and Special
Studies--Special Requirements. Added to the proposed circular are
provisions that might apply to a recipient's research and development
project as set forth in the Master Agreement.
(19) Audit Services--Special Requirements. FTA has consolidated
various procurement concerns the recipient needs to consider when
acquiring audit services for various purposes. The recipient is
cautioned to avoid duplicative audits. In addition, SAFETEA-LU added a
provision to 49 U.S.C. Section 5325(b)(3) expressly requiring the use
of FAR standards for determining indirect costs for architect
engineering contracts of the types listed in Section 5325(b)(1).
(20) Use of $1 Coins. To facilitate compliance with Section 104 of
the Presidential $1 Coin Act of 2006, 31 U.S.C. Section 5312(p), FTA-
assisted property that requires the use of coins or currency in public
transportation service or supporting service must be fully capable of
accepting and dispensing $1 coins.
Section 2(c) consolidates in the proposed circular various
provisions within the Common Grant Rules and Master Agreement that
address difficulties that the recipient may encounter during contract
performance. Except for the mention of contract termination, these were
not included in FTA Circular 4220.1E. But because they express FTA
policy, we are including them in the proposed circular.
E. Chapter V--Sources
This chapter consolidates information about the various sources
from which a recipient may acquire property or services. Most of the
information has been derived from the Common Grant Rules and FTA
Circular 4220.1E, with supplementary material describing recent laws
and regulations as described below:
Section 1, Force Account, adds a discussion of the recipient's use
of its own workforce to perform necessary services. FTA's concerns are
that those employees have sufficient technical capacity to perform the
work.
Section 2, Shared Use, encourages the recipient to consider whether
property or services might be shared.
Section 3, Joint Procurement, lists the advantages to be obtained
when recipients are able to acquire larger quantities by procuring
property and services for the use of all.
Section 4, State Purchasing Schedules, acknowledges the
availability of such sources, but cautions the recipient to assure that
all Federal requirements are met.
Section 5, Federal Excess and Surplus Property, identifies a
potential source of property endorsed by the Common Grant Rules.
Section 6, Federal Supply Schedules, has been modified to describe
changes resulting from enactment of laws expanding the types of
entities and types of property and services that may be obtained from
the General Services Administration's (GSA's) supply schedules compiled
for use by Federal agencies. GSA has granted unlimited use of the
Federal Supply Schedules to the District of Columbia and four U.S.
insular areas. State and local governments have unlimited access to
[[Page 55635]]
GSA's Information Technology supply schedules. In addition, State and
local governments have access to all GSA supply schedules when
procuring property or services for disaster or emergency relief.
Section 7, Exiting Contracts, recognizes that a recipient will
often find it advantageous to gain access to a contract between another
recipient and a vendor. In addition to describing permissible and
impermissible uses, this section highlights the pitfalls and
disadvantages of accessing existing contracts of other entities.
Section 8, the Open Market, will be addressed in detail in Chapter
VI of this circular.
F. Chapter VI--Procedural Requirements for Open Market Procurements
This chapter consolidates the various procurement procedures of the
Common Grant Rules and FTA Circular 4220.1F and its Footnotes,
supplemented by related information. Additions and changes are
highlighted below:
Section 1 describes ``full and open competition'' now broadened by
SAFETEA-LU to apply to all procurements supported by 49 U.S.C. Chapter
53, rather than specifically addressed to procurements supported by 49
U.S.C. Section 5307. In addition, information about the appropriate
treatment of unsolicited proposals has been added.
Section 2 sets forth requirements and prohibitions to assure
appropriate solicitations. A new reference to the Stafford Act has been
added because that Act permits local preferences for firms and
individuals using Stafford Act funding for major disaster or emergency
relief. Illustrations of acceptable descriptions of salient
characteristics of technical items have been transferred to the ``Best
Practices Procurement Manual.''
Section 3 describes eight methods of procurement: (a) Micro-
purchases, (b) small purchases, (c) sealed bids, (d) competitive
proposals, (e) architectural and engineering services, (f) design-bid-
build, (g) design-build, and (h) other than full and open competition.
These procedures are substantially similar to those set forth in the
Common Grant Rules and FTA Circular 4220.1E and its Footnotes
accompanied by closely related information. The most significant
modifications are in Section 3.e, pertaining to architectural and
engineering procurements. Requirements pertaining to the use of
qualifications-based procedures in architectural and engineering
procurements set forth in SAFETEA-LU have been modified. Audit and
indirect cost provisions, particularly with respect to the use of
Federal Acquisition Regulation standards and confidentiality of data,
applicable to architectural and engineering procurements have also been
modified to accommodate the new provisions of SAFETEA-LU. In addition,
FTA stresses its position that qualifications-based competitive
proposal procedures are suitable for use in procurements related to or
leading to a construction project. Qualifications-based competitive
procurement procedures are not to be used in connection with
procurements that are not related to or lead to construction.
Section 4 identifies as prohibited the cost plus a percentage of
cost procedure, and also sets forth restrictions pertaining to use of
time and materials contracts, but does not change previous
requirements.
Section 5 serves as a reminder that costs must be eligible under
the applicable Federal standards.
Section 6 discusses costs and price analysis as set forth in the
Common Grant Rules and FTA Circular 4220.1E and its Footnotes. In
addition, Section 6 adds a provision authorizing the payment of
incentive payments in furtherance of new SAFETEA-LU provisions
addressing incentives.
Section 7 discusses options as set forth in the Common Grant Rules
and FTA Circular 4220.1E and its Footnotes.
Section 8 consolidates requirements pertaining to contract award.
The new SAFETEA-LU requirements pertaining to awards to responsible
contractors are included in this section, along with SAFETEA-LU's
continued authority permitting recipients to award contracts to other-
than the lowest bidder if the award furthers an objective consistent
with the purposes of FTA's enabling legislation.
G. Chapter VII--Protests, Changes and Modifications, Claims, Disputes,
and Settlements
This chapter consolidates FTA guidance pertaining to third party
procurement protests with guidance pertaining to third party contract
changes and modifications, claims, disputes, and settlements.
Section 1 addresses FTA and the recipient's responsibilities
pertaining to the adjudication of protests of third party contract
decisions. These provisions are substantially similar to those within
FTA Circular 4220.1E, with the new addition explaining FTA's practice
of reviewing only those protests of an ``interested party,'' that is an
actual or prospective bidder or offeror with a direct economic interest
in the third party contract award.
Sections 2 through 5 add FTA guidance pertaining to third party
contract changes and modifications, claims, disputes, and settlements,
respectively. This guidance has been transferred from FTA Circular
5010.C, ``Grant Management Guidelines,'' and remains essentially
unchanged.
F. Appendix A--References
References that have appeared on the first pages of FTA Circular
4220.1E have been consolidated in Appendix A. This proposed circular
contains many more references than FTA Circular 4220.1E due to
identification of Federal substantive requirements that affect or are
likely to affect the results of procurements. The following references
within FTA Circular 42201.E have been omitted either because they have
been repealed or superseded:
1. Section 1555 of the Federal Acquisition Streamlining Act of
1994, 40 U.S.C. 481, pertaining to use of GSA supply schedules, has
been repealed, revised by law, and re-codified at 40 U.S.C. 502.
2. Executive Order No. 12612, ``Federalism'' dated 10-26-87 has
been superseded by Executive Order No.13132, ``Federalism,'' 8-4-99, 5
U.S.C. Section 601 note.
I. Appendix B--FTA Regional and Metropolitan Contact Information
FTA's contact list has been updated to the date of publication of
the circular.
Issued in Washington, DC, this 24th day of September, 2007.
James S. Simpson,
Administrator.
[FR Doc. E7-19116 Filed 9-27-07; 8:45 am]
BILLING CODE 4910-57-P