U.S. DOT Federal Transit Administration Best Practices Procurement Manual

U.S.
Department Of Transportation Federal Transit Administration
400 Seventh St. S.W. Washington, D.C. 20590 Administrator C !" 0!
#ovem$er %, 200!
Dear Co&&eag'e( We&)ome to the *edera& Transit Administration+s ,est -ra)ti)es -ro)'rement .an'a& /e$site. Sin)e the origina& p'$&i)ation of the man'a& on .a0 1, !99%, /e have added a n'm$er of ne/ topi)s and have identified a variet0 of additiona& $est pra)ti)es. .an0 than2s to a&& of 0o' /ho have )ontri$'ted ideas, topi)s, and 3$est pra)ti)e4 )ontent, as /e&& as those /ho have he&ped to ma2e this do)'ment as 3)'stomer friend&04 as possi$&e. We )ontin'e to a)tive&0 see2 grantee and ind'str0 )omments, s'ggestions for ne/ topi)s, and 3$est pra)ti)e4 proposa&s, so the man'a& )an $e 2ept 'p to date and re&evant to 0o'r needs. 5o'r tho'ghtf'& )ontri$'tions /i&& he&p ens're that Ameri)a+s transit s0stems 2eep o'r )omm'nities safe and moving. Sin)ere&0,
6ennifer 7. Dorn Administrator
FEDERAL TRANSIT ADMINISTRATION

BEST PRACTICES PROCUREMENT MANUAL Preface Pur ose This .an'a& provides re)ipients of *edera& Transit Administration 8*TA9 f'nds s'ggestions on )ond')ting third part0 pro)'rements to assist them in meeting the standards of *TA Cir)'&ar 4220.!: 8the Cir)'&ar9. The .an'a& )onsists of s'ggested pro)ed'res, methods, and e;amp&es /hi)h *TA en)o'rages. These are $ased on the *edera& a)<'isition pro)ess, Comptro&&er =enera& de)isions, and >,est -ra)ti)es> of grantees and others in the ind'str0. Please Note! Su""ested Procedures Are Not Mandator#$ The .an'a& is envisioned as an ongoing and e;panding do)'ment. ?t /i&& $e 'pdated periodi)a&&0 /ith $oth ne/ s'$@e)ts as /e&& as additions or )hanges to e;isting s'$@e)ts. The additionsA)hanges /i&& $e $ased on( 8!9 )hanges in stat'tes, 829 the res'&t of re)ent )o'rt de)isions, 8"9 the need for f'rther )&arifi)ation, and 849 ne/ or innovative pra)ti)es of grantees. The .an'a& is &o)ated on the ?nternet Wor&d Wide We$ 'nder the *TA Bomepage. The internet &o)ation ena$&es *TA to provide its )'stomers /ith the &atest and ne/est information 'sing the fastest means possi$&e. Additiona&&0, *TA so&i)its >$est pra)ti)es> of its grantees and others in the ind'str0. After revie/ $0 *TA, ne/ and or innovative pra)ti)es /i&& $e added to the man'a&. *TA is $eing assisted in this endeavor $0 7eon Snead C Compan0, -.C. Their ?nternet address is( D&eonsnead.)ompan0p)Eero&s.)omF. A&& proposed >$est pra)ti)es> sho'&d $e sent to this ?nternet Address. Sco e The .an'a& )onsists of !! )hapters and Appendi)es as fo&&o/s( !. -'rpose and S)ope 2. -ro)'rement -&anning C OrganiGation ". Spe)ifi)ations 4. .ethods of So&i)itation and Se&e)tion 5. A/ard of Contra)ts %. -ro)'rement O$@e)t T0pes( Spe)ia& Considerations 1. Disadvantaged ,'siness :nterprise H. Contra)t C&a'ses 9. Contra)t Administration
!0. C&ose O't !!. Disp'tes Appendi; A( =overning Do)'ments Appendi; ,( :;amp&es Appendi; C( Ieserved Appendi; D( Annotated *TA Cir)'&ar 4220.!:. *or a )op0 of this Cir)'&ar, go to ///.fta.dot.govAftahe&p&ineAftaJ)4220J!:.do). Format The .an'a& is divided into !! Chapters and Appendi)es 8see a$ove9. This format /i&& a&&o/ *TA to send 'pdates as ne)essar0 and a&&o/s 0o' to &o)ate them easi&0. As se)tions of the .an'a& are 'pdated, the &ast revision date is indi)ated for that se)tion in parentheses. Introduction 5o' are responsi$&e for ens'ring f'&& and open )ompetition and e<'ita$&e treatment of a&& potentia& so'r)es in the pro)'rement pro)ess. 5o' are a&so responsi$&e for p&anning, so&i)itation, a/ard, administration and do)'mentation of a&& *edera&&0 f'nded )ontra)ts. D'ring the pro)'rement pro)ess, the -ro)'rement Offi)er is responsi$&e for ma2ing )omprehensive $'siness @'dgments $ased 'pon the app&i)ation of so'nd pro)'rement po&i)ies and pro)ed'res. This .an'a& /i&& not ma2e $'siness @'dgments for the -ro)'rement Offi)er. ?t /i&& aid himAher in performing the steps ne)essar0 to ens're p'$&i) f'nds are e;pended proper&0 and /i&& prote)t the integrit0 of the granteesK pro)'rement pro)ess.
,est -ra)ti)es -ro)'rement .an'a& L Ie)ent Updates to ,--.
-age !
BEST PRACTICES PROCUREMENT MANUAL RECENT UPDATES TO BPPM Re%ision Date O)to$er 2005 O)to$er 2005 O)to$er 2005 O)to$er 2005 O)to$er 2005 O)to$er 2005 Apri& 2005 Apri& 2005 Apri& 2005 Apri& 2005 Apri& 2005 Apri& 2005 Apri& 2005 Apri& 2005 Apri& 2005 .ar)h 2004 .ar)h 2004 .ar)h 2004 Section No$ !.".".!0 4.%.4 1.2.4 1.".5.4 1.".5.5 Appendi; A.! 2.".2 2.4.".! 2.4.4." 5.".2 %.!.1 H.2 H.2.! !0." Appendi; ,.20 !.".".5 4.4." %.5 Su&'ect Disposition of S'rp&'s (Revised) Unso&i)ited -roposa&s (New) -rompt -a0ment .e)hanisms (Revised) =ood *aith :fforts to .eet Contra)t =oa&s (Revised) Co'nting D,: -arti)ipation to/ard the =oa& (Revised) *edera&&0 Ie<'ired and Other .ode& Contra)t C&a'ses M2H 8Revised) ?ndependent =rantee Cost :stimate (Revised) *i;ed -ri)e Contra)ts (Revised) -rogress -a0ments (Revised) De$riefing of Offerors 8Revised9 -artnering 8Revised9 S'ret0 ,onds 8Revised9 -erforman)e ,onds 8Revised9 Ie)ord Ietention 8Revised9 ?ndependent Cost :stimate 8?C:9 *orm 8New9 ?ntergovernmenta& Agreements, 6oint -ro)'rements, -igg0$a)2ingAAssignments 8Revised9 Sing&e ,id (Revised) Ar)hite)t :ngineering Servi)es 8Revised9
,est -ra)ti)es -ro)'rement .an'a& L Ie)ent Updates to ,--.
-age 2
.ar)h 2004 #ovem$er 200" #ovem$er 200" #ovem$er 200" #ovem$er 200" #ovem$er 200" #ovem$er 200" #ovem$er 200" #ovem$er 200" #ovem$er 200" #ovem$er 200" #ovem$er 200"
Appendi; A.2 !.!.! !.!.1 !.!.9 !.".".4 !.".".!! 4.!.2 4.".2.4 4.".".2.2 4.5.2 %.% 9.4
Dear Co&&eag'e 7etters (Revised) *TA Cir)'&ar 4220.!: 8Revised9 *TA -ro)'rement S0stem Ievie/s 8-SIs9 8Revised9 -ro)'rement S0stem Se&f Assessment ='ide 8New9 Iea& :state Contra)ts 8Revised9 Operating Assistan)e, -reventive .aintenan)e, C.AN and 6AIC -ro@e)ts 8Revised9 Conso&idation of .i)ro -'r)hases 8New9 -re ,id and -re -roposa& Conferen)es 8Revised9 ,'0 Ameri)a Certifi)ation 8Revised9 :va&'ation of -roposa&s 8Revised9 ?ns'ran)e 8Revised9 Approva& of S'$)ontra)tors (formerly Section 5.1.5)
,est -ra)ti)es -ro)'rement .an'a& Ta$&e of Contents
-age !
(FEDERAL TRANSIT ADMINISTRATION

BEST PRACTICES PROCUREMENT MANUAL TABLE OF CONTENTS ( ) Pur ose and Sco e !.! Assistan)e, ='idan)e and Ie<'irements 85A9H9 !.!.! !.!.2 !.!." !.!.4 !.!.5 !.!.% !.!.1 !.!.H !.!.9 *TA Cir)'&ar 4220.!: 8!!A0"9 *TA Waivers and Approva&s 8%A0"9 .aster Agreement 8%A0"9 *edera& A)<'isition Ieg'&ation 8*AI9 8%A0"9 *TA Dear Co&&eag'e 7etters 8%A0"9 7o)ating *TA Do)'ments %A0"9 *TA -ro)'rement S0stem Ievie/s 8-SIs9 8!!A0"9 *TA Be&p7ine 8%A0"9 -ro)'rement S0stem Se&f Assessment ='ide 8!!A0"9
!.2 ?dentif0ing a Contra)t 85A9H9 !.2.! Offer, A))eptan)e, Consideration 85A9H9 !.2.2 Ora& v. Written 85A9H9 !.2." .'t'a& and Uni&atera& .ista2es 85A9H9 !.2.4 -ro)'rements Often Over&oo2ed 85A9H9 !." App&i)a$i&it0 of *edera& Ie<'irements 85A9%9 !.".! Ie)ipient and S'$re)ipient 85A9%9 !.".2 *edera& Contra)t'a& Sphere 85A9%9 !."." T0pes of Contra)t A)tions 85A9H9 !.".".! !.".".2 !."."." !.".".4 !.".".5 S'pp&ies, Servi)es, :<'ipment and Constr')tion 85A9H9 7ega& and Asso)iated Servi)es 85A9H9 :mp&o0ment Contra)ts 85A9H9 Iea& :state Contra)ts 8!!A0"9 ?ntergovernmenta& Agreements, 6oint -ro)'rements, -igg0$a)2ingAAssignments 8"A049 !.".".% S'$grants 8%A0"9 !.".".1 :<'ipment 7eases 85A9H9 !.".".H Ieven'e Contra)ts 8!A029 !.".".9 Transit Oriented 6oint Deve&opment -ro@e)ts 81A029 !.".".!0 Disposition of S'rp&'s 8!0A059
-age 2
!.".".!! Operating Assistan)e, -reventive .aintenan)e, C.AN and 6AIC -ro@e)ts 8!!A0"9 !.".".!2 : Commer)e 8%A0"9 * ) Procurement Plannin" + Or"ani,ation 2.! OrganiGation of -ro)'rement *'n)tions 85A9%9 2.!.! S)ope of Iesponsi$i&it0 85A9%9 2.!.2 A'tonom0 85A9%9 2.2 7ong Term -&anning 85A9%9 2.2.! Contra)t -eriod of -erforman)e 7imitation 8%A0"9 2.2.2 .'&ti 0ear vs. .'&tip&e 5ear Contra)ting 81A029 2." Ann'a& -&anning 85A9%9 2.".! So'r)es and Contents 85A9%9 2.".2 ?ndependent =rantee Cost :stimate 84A059 2.4 So'r)e Se&e)tion -&an 85A9%9 2.4.! *i&e Do)'mentation 85A9%9 2.4.2 *'&& and Open Competition 85A9%9 2.4.2.! *'&& and Open Competition -rin)ip&e 85A9%9 2.4.2.2 Iestraints on Competition 85A9%9 2.4.2.2.! ,rand #ames 8%A0"9 2.4.2.2.2 Written Standards of Cond')t and Conf&i)ts of ?nterest( -ersona& and OrganiGationa& 8%A0"9 2.4.2.2." =eographi) Iestri)tions 8%A0"9 2.4.2.2.4 -re<'a&ifi)ation 85A9H9 2.4." *i;ed -ri)e v. Cost Ieim$'rsement 85A9H9 2.4.".! *i;ed -ri)e Contra)ts 84A059 2.4.".2 Cost Ieim$'rsement Contra)ts 8%A0"9 2.4."." Time and .ateria&s Contra)ts 85A9H9 2.4.".4 7a$or Bo'r Conta)ts 85A9H9 2.4.".5 Cost -&'s -er)entage of Cost Contra)ts 8%A0"9
-age "
2.4.4 -a0ments 85A9H9 2.4.4.! -a0ment of the -ri)e 85A9H9 2.4.4.2 Advan)ed -a0ments 8%A0"9 2.4.4." -rogress -a0ments 84A059 2.4.4.4 Withho&ding and *ina& -a0ment 85A9H9 2.4.5 ?ndefinite De&iver0 Contra)ts 8!0A999 2.4.5.! Definite <'antit0 Contra)ts 8!0A999 2.4.5.2 Ie<'irement Contra)ts 8%A0"9 2.4.5." ?ndefinite <'antit0 Contra)ts 8%A0"9 - ) S ecifications ".0 Overvie/ 8%A0"9 ".! T0pes Of Spe)ifi)ations and Iis2s 8!A9H9 ".!.! Design Spe)ifi)ations 8!A9H9 ".!.2 -erforman)e Spe)ifi)ations 8!A9H9 ".!." ,rand #ame or :<'a& 8!A9H9 ".2 Using Cons'&tants to -repare Spe)ifi)ations 8!A9H9 "." Spe)ifi)ations for :<'ipment and S'pp&ies 8!A9H9 ".4 Spe)ifi)ations for Constr')tion 8!A9H9 ".5 Statements of Wor2 for Servi)es 8!A9H9 . ) Met/ods of Solicitation and Selection 4.0 Overvie/ 85A9%9 4.! .i)ro -'r)hases 8%A0"9 4.!.! -'r)hase Cards ,AIT 8%A9H9 4.!.2 Conso&idation of .i)ro -'r)hases 8!!A0"9 4.2 Sma&& -'r)hases 85A9%9 4." Competitive -ro)'rement .ethods 85A9%9 4.".! Overvie/ Sea&ed ,ids v. Competitive -roposa&s 85A9%9 4.".2 Common :&ements of So&i)itation -ro)ess 85A9%9 4.".2.! Advertising and -'$&i)iGing So&i)itation 85A9%9 4.".2.2 So&i)itation .ai&ing 7ist 85A9%9 4.".2." So&i)itation 85A9%9
-age 4
4.".2.4 -re ,id and -re -roposa& Conferen)es 8!!A0"9 4.".2.5 Amendment of So&i)itations 85A9%9 4."." Common :&ements of Offers 85A9%9 4.".".! Ie)eipt of Offers 85A9%9 4.".".2 *edera&&0 Ie<'ired S'$missions /ith Offers 85A9%9 4.".".2.! Certifi)ation Iegarding De$arment, S'spension, and Other Iesponsi$i&it0 .atters 85A9%9 4.".".2.2 ,'0 Ameri)a Certifi)ation 8!!A0"9 4.".".2." 7o$$0ing Certifi)ation 8%A0"9 4."."." Other S'$missions 85A9%9 4.".".".! A)2no/&edgment of So&i)itation Addenda 85A9%9 4.".".".2 ,id ='arant0 85A9%9 4.4 Sea&ed ,ids 8?nvitation for ,ids9 85A9%9 4.4.0 Overvie/ 85A9%9 4.4.! So&i)itation 85A9%9 4.4.2 ,id Opening 85A9%9 4.4." Sing&e ,id 8"A049 4.4.4 Iesponsive ,idder 85A9%9 4.4.5 ,id .ista2es 85A9%9 4.4.% ,id Withdra/a& 85A9%9 4.5 Competitive -roposa&s 8Ie<'est for -roposa&s9 85A9%9 4.5.! So&i)itation C Ie)eipt of -roposa&s 85A9%9 4.5.2 :va&'ation of -roposa&s 8!!A0"9 4.5." Competitive Iange 85A9%9 4.5.4 Dis)'ssions and C&arifi)ations 85A9%9 4.5.5 Additiona& S'$missions 85A9%9 4.5.5.! Ie<'est for Ievised -roposa&s 85A9%9 4.5.5.2 Ie<'est for ,est and *ina& Offer 85A9%9 4.5.% A/ard ,ased on ?nitia& -roposa&s 85A9%9 4.5.1 Withdra/a& of -roposa&s 85A9%9 4.5.H De$riefing Uns'))essf'& Offerors 85A9%9
-age 5
4.% #on Competitive 8So&e So'r)e9 -roposa&s 85A9%9 4.%.! 6'stifi)ation for Use 85A9%9 4.%.2 #egotiation of Contra)t 85A9%9 4.%." Asso)iated Capita& .aintenan)e ?tem 85A9%9 4.%.4 Unso&i)ited -roposa&s 8!0A059 4.1 Spe)ia& -ro)'rement .ethods 85A9%9 4.1.! .'&ti Step -ro)'rements 85A9%9 4.1.2 =overnmenta& -ri)es and Contra)ts 85A9%9 4.1.2.! -ro)'rements from =enera& Servi)es Administration S)hed'&es 85A9%9 4.1.2.2 State and 7o)a& S)hed'&es 8%A0"9 4.1.2." State vers's *TA Ie<'irements 85A9%9 4.1." : Commer)e( Ieverse A')tions 8%A0"9
0 ) A1ard of Contracts 5.0 Overvie/ 8!A9H9 5.! Iesponsi$i&it0 of Contra)tor 85A9H9 5.!.! =enera& Standards of Iesponsi$i&it0 85A9H9 5.!.2 Spe)ia& Standards of Iesponsi$i&it0 85A9H9 5.!." O$taining ?nformation for Determination of Iesponsi$i&it0 85A9H9 5.!.4 Determination and Do)'mentation 85A9H9 5.2 Cost and -ri)e Ana&0sis 8%A0"9 5." A/ard -ro)ed'res 85A9H9 5.".! -'$&i) Anno'n)ements of Contra)t A/ards 85A9H9 5.".2 De$riefing of Offerors 84A059 5.4 Do)'mentation of -ro)'rement A)tion 85A9H9 5.4.! Sea&ed ,id -ro)'rements 85A9H9 5.4.!.! A$stra)t of ,ids 85A9H9 5.4.!.2 Do)'mentation of A/ard De)ision 85A9H9 5.4.2 #egotiated -ro)'rements 85A9H9
-age %
5.4.2.! *i&e Do)'mentation of Se&e)tion De)ision 85A9H9 5.4.2.2 -re #egotiation -&an 85A9H9 5.4.2." .emorand'm of #egotiations 85A9H9 2 ) Procurement O&'ect T# es3 S ecial Considerations %.! Constr')tion 8!0A9H9 %.!.! The Traditiona& Constr')tion -ro)ess DesignA,idA,'i&d 8!0A9H9 %.!.2 Constr')tion .anagement 8>C.>9 8!0A9H9 %.!." >*ast Tra)2ing> -hased Design, A/ard and Constr')tion 8!0A9H9 %.!.4 >T'rn2e0> DesignA,'i&d Contra)ting 8!0A9H9 %.!.5 Oa&'e :ngineering 8%A0"9 %.!.% *a)i&ities .aintenan)e 6o$ Order Contra)ts 8!0A9H9 %.!.1 -artnering 84A059 %.! H Competitive -roposa&s vs. Sea&ed ,ids 8!0A9H9 %.!.9 ?n)entives to Ied')e -ro@e)t Comp&etion Time 8!0A9H9 %.!.!0 Spe)ia& Contra)t -rovisions 8!0A9H9 %.2 :<'ipment and S'pp&ies 82A009 %.2.! 7easeA.aintenan)e of Oehi)&es 82A009 %.2.!.! 7ease of Beav0 :<'ipment /ith Operators 82A009 %." Io&&ing Sto)2 8!0A9H9 %.".! ,'ses 8!0A9H9 %.".!.! Competitive -roposa&s vs. Sea&ed ,ids 8!0A9H9 %.".!.2 A-TA Standard ,'s -ro)'rement ='ide&ines 8!0A9H9 %.".2 Iai& Cars 8!0A9H9 %."." 6oint -ro)'rements of Io&&ing Sto)2 and 3-igg0$a)2ing4 8%A0"9 %.".4 -re A/ard and -ost De&iver0 Ievie/s for ,'0 Ameri)a A)t Comp&ian)e 8!0A009 %.".5 Warranties 8%A0"9 %.4 -rofessiona& Servi)es 85A9%9 %.5 Ar)hite)t :ngineering Servi)es 8"A049 %.% ?ns'ran)e 8!!A0"9 %.1 Art/or2 8%A0"9
-age 1
4 ) Disad%anta"ed Business Enter rise 1.! Comparison of O&d vs. #e/ D,: I'&es 8%A999 1.!.! App&i)a$i&it0 of D,: I'&es to =rantee -rograms 82A009 1.!.2 Definition of Terms 82A009 1.2 Administrative Ie<'irements 8%A999 1.2.! Who .'st Bave a D,: -rogram 8%A999 1.2.2 D,: 7iaison Offi)er 8%A999 1.2." Ie<'ired :fforts on ,eha&f of D,: *inan)ia& ?nstit'tions 8%A999 1.2.4 -rompt -a0ment .e)hanisms 8!0A059 1.2.5 D,: Dire)tor0 8%A999 1.2.% ,idders 7ist 8%A999 1.2.1 .onitoring Contra)torsK -erforman)e 82A009 1." =oa&s for D,: -arti)ipation 8%A999 1.".! DOT #ationa& =oa& of !0P 8%A999 1.".2 Use of N'otas and Set Asides 8%A999 1."." :sta$&ishing Overa&& =oa&s 82A009 1.".4 :sta$&ishing Overa&& =oa&s for Transit Oehi)&e .an'fa)t'rers 8%A999 1.".5 .eans of .eeting Overa&& =oa&s 8%A999 1.".5.! Ia)e #e'tra& .eans 8%A999 1.".5.2 Using Contra)t =oa&s 8%A999
-age H
1.".5." :va&'ation of Contra)tor -roposa&s for D,: -arti)ipation 82A009 1.".5.4 =ood *aith :fforts to .eet Contra)t =oa&s 8!0A059 1.".5.5 Co'nting D,: -arti)ipation to/ard the =oa& 8!0A059 1.4 Certifi)ation( Standards and -ro)ed'res 82A009 1.5 :;emptions and Waivers 8%A999 5 ) Contract Clauses 6(7859 H.! *edera& Ie<'irements 8!A9H9 H.!.! So'r)es of .ode& *edera& C&a'ses and App&i)a$i&it0 8!A9H9 H.!.2 Davis ,a)on A)t 8!A9H9 H.!." Cargo -referen)es 8!A9H9 H.!.4 ,'0 Ameri)a 8%A0"9 H.!.5 *&0 Ameri)a 8!A9H9
-age 9
H.2 S'ret0 ,onds 84A059 H.2.! -erforman)e ,onds 84A059 H.2.2 Options 8!A9H9 H.2." 7i<'idated Damages 8!A9H9 H.2.".! Ie&ationship /ith Defa'&t Termination 8!A9H9 H.2.4 ?nte&&e)t'a& -ropert0 Iights 8!A9H9 H.2.4.! Dis)&os're of Trade Se)rets 8!A9H9 H.2.4.2 Contra)t Wor2 -rod')ts, -atents and Cop0rights 8!A9H9 H.2.5 Termination 8!A9H9 H.2.5.! Termination for Convenien)e 8!A9H9 H.2.5.2 -artia& Terminations 8!A9H9 H.2.5." Termination for Defa'&t 8!A9H9 8 ) Contract Administration 9.! Do)'mentation of Contra)t Administration 8!A9%9 9.2 Changes 82A999 9.2.! Contra)t S)ope and Cardina& Changes 8!0A999 9.2.2 CostA-ri)e Ana&0sis of Changes 82A999 9.2." Constr')tion Changes 82A999 9.2.".! Differing Site Conditions 82A999 9.2.".2 *ie&d Change Orders 82A999 9.2."." -ri)ing of Constr')tion Changes 82A999 9.2.".4 Oariations in :stimated N'antities 82A999 9.2.".5 De&a0s 82A999 9.2.".% A))e&eration 82A999 9." ?mproving Oendor De&iver0 -erforman)e 8!0A009 9.4 Approva& of S'$)ontra)tors 8!!A0"9 (: ) Closeout !0.! C&oseo't -ro)ed'res 81A999 !0.2 A'dits 81A999 !0." Ie)ord Ietention 84A059
-age !0
(( ) Dis utes !!.! -rotests 8%A0"9 !!.2 C&aims, =rievan)es and Other Disp'tes /ith Contra)tors 8%A999 A endi; A ) <o%ernin" Documents A.! *edera&&0 Ie<'ired and Other .ode& Contra)t C&a'ses A.2 Dear Co&&eag'e 7etters A endi; B ) E;am les ,.! :;amp&e :va&'ation -ro)ess ,.2 Spe)ifi)ationAS)ope of Servi)e ='ide ,." 7i<'idated Damages Che)2&ist ,.4 ,id A$stra)t *orm ,.5 ,AIT -'r)hase Card S0stem ,.% -renegotiation -osition ,.1 Offer and A))eptan)e *orm ,.H A/ardAContra)t *orm ,.9 .emorand'm of #egotiations ,.!0 Dis)&os're of Conf&i)ts of ?nterest ,.!! ,idder+s N'a&ifi)ation N'estionnaire ,.!2 #egotiation .emorand'm Samp&e *ormat ,.!" Warrant0 C ='arantee Iegister ,.!4 Contra)t C&oseo't Che)2 7ist ,.!5 Ie<'est for -roposa& ,.!% -igg0$a)2ing Wor2sheet ,.!1 :;amp&e of Statement of N'a&ifi)ation of S'$)ontra)tor ,.!H Bia/atha 7ine -'$&i) Art and Design ,'dget ,.!9 .andator0 -ro)'rement Standards Wor2sheet ,.20 ?ndependent Cost :stimate 8?C:9 *orm A endi; C = >Reser%ed?
A endi; D = Annotated FTA Circular .**:$(E$ For a co # of t/is Circular! "o to ///.fta.dot.govAftahe&p&ineAftaJ)4220J!:.do)$
,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope
-age !
C/a ter ( Pur ose and Sco e !.! Assistan)e, ='idan)e and Ie<'irements 8!0A029 !.!.! !.!.2 !.!." !.!.4 !.!.5 !.!.% !.!.1 !.!.H !.!.9 *TA Cir)'&ar 4220.!: 8!!A0"9 *TA Waivers and Approva&s 8%A0"9 .aster Agreement 8%A0"9 *edera& A)<'isition Ieg'&ation 8*AI9 8%A0"9 *TA Dear Co&&eag'e 7etters 8%A0"9 7o)ating *TA Do)'ments 8%A0"9 *TA -ro)'rement S0stem Ievie/s 8-SIs9 8!!A0"9 *TA Be&p&ine 8%A0"9 -ro)'rement S0stem Se&f Assessment ='ide 8!!A0"9
!.2 ?dentif0ing a Contra)t 85A9H9 !.2.! !.2.2 !.2." !.2.4 Offer, A))eptan)e, Consideration 85A9H9 Ora& v. Written 85A9H9 .'t'a& and Uni&atera& .ista2es 85A9H9 -ro)'rements Often Over&oo2ed 85A9H9
!." App&i)a$i&it0 of *edera& Ie<'irements 85A9%9 !.".! !.".2 !."." Ie)ipient and S'$re)ipient 85A9%9 *edera& Contra)t'a& Sphere 8%A0"9 T0pes of Contra)t A)tions 85A9H9 !.".".! !.".".2 !."."." !.".".4 !.".".5 S'pp&ies, Servi)es, :<'ipment and Constr')tion 85A9H9 7ega& and Asso)iated Servi)es 85A9H9 :mp&o0ment Contra)ts 85A9H9 Iea& :state Contra)ts 8!!A0"9 ?ntergovernmenta& Agreements, 6oint -ro)'rements, -igg0$a)2ingAAssignments 8"A049 !.".".% S'$grants 8%A0"9 !.".".1 :<'ipment 7eases 85A9H9 !.".".H Ieven'e Contra)ts 8!A029 !.".".9 Transit Oriented 6oint Deve&opment -ro@e)ts 81A029 !.".".!0 Disposition of S'rp&'s 8!0A059 !.".".!! Operating Assistan)e, -reventive .aintenan)e, C.AN and 6AIC -ro@e)ts 8!!A0"9 !.".".!2 : Commer)e 8%A0"9
-age 2
($( ASSISTANCE! <UIDANCE AND RE@UIREMENTS The topi)s addressed $0 this .an'a& are deve&oped a))ording to a standardiGed format, /hi)h )onsists of three parts( 8!9 Ie<'irements, 829 Dis)'ssion and 8"9 ,est -ra)ti)es. RE@UIREMENT Where a requirement e;ists in the third part0 pro)'rement reg'&ations /hi)h grantees m'st fo&&o/, a ta$&e entit&ed I:NU?I:.:#T /i&& set forth the pertinent se)tions of the FTA Circulars, the aster A!reement 8.A9, the Code of Federal Re!ulations 8C*IKs9 or an *TA "ear Collea!ue #etter. When there is a mandator0 re<'irement it /i&& $e )&ear&0 set forth as s')h. DISCUSSION Follo1in" t/e statement of t/e reAuirement! or if t/ere is no reAuirement as suc/! t/ere 1ill &e a discussion section "i%in" some definition and "uidance concernin" t/e meanin" or ur ose of t/e to ic &ein" resented$ Best Practices ?n those sit'ations /here the *edera& or grantee pra)ti)es have proven to $e effe)tive, the .an'a& /i&& present these $est %ractices for the assistan)e and g'idan)e of the grantee. The pro)ed'res and pra)ti)es presented are not mandator0 'n&ess so identified. These $est pra)ti)es are meant to $e informative and he&pf'& to the grantee )omm'nit0. The0 are offered for the g'idan)e and assistan)e of the grantee, $'t it is a&so re)ogniGed that a grantee ma0 have a 'ni<'e sit'ation that pre)&'des it from adopting the pro)ed'res of another grantee in a )ertain area. ($($( FTA Circular .**:$(E
This Cir)'&ar sets forth the re<'irements a grantee m'st adhere to in the so&i)itation, a/ard and administration of its third part0 )ontra)ts. The Cir)'&ar )ontains 54 mandator0 pro)'rement standards that grantees m'st meet in their pro)'rement operations. These 54 standards are set forth in Appendi; ,.!9 L andatory &rocurement Standards 'or(s)eet. The 3Wor2sheet4 provides )ross referen)es to spe)ifi) paragraphs in the Cir)'&ar /here the standards ma0 $e fo'nd, and a )o&'mn for grantees to )ross referen)e the standards to their o/n po&i)ies and pro)ed'res. =rantees are en)o'raged to revie/ their /ritten pro)'rement po&i)ies to ens're that the0 )over ea)h of the 54 mandator0 standards. The re<'irements of the Cir)'&ar are $ased on the )ommon grant r'&es fo'nd at 49 C*I -art !H 8State and 7o)a& =overnments9 and 49 C*I -art !9 8?nstit'tions of Bigher :d')ation, Bospita&s, and Other #on -rofit OrganiGations9, and the *edera& Transit 7a/s. The ,est -ra)ti)es -ro)'rement .an'a& /i&& state the re<'irements of this Cir)'&ar /herever the0 pertain to a topi) $eing )overed $0 the .an'a&. Sin)e this Cir)'&ar is 'pdated periodi)a&&0, grantees m'st ens're that the0 )ons'&t the &atest edition of the Cir)'&ar.
-age "
This Cir)'&ar rep&a)es 4220.!D dated 4 !5 9% and Change !, dated H 4 9H. The Cir)'&ar in)orporates po&i)0 'pdates )ontained in severa& Dear Co&&eag'e &etters iss'ed sin)e !99%. Annotated Cir)'&ar *TA has a&so p'$&ished an annotated version of this Cir)'&ar /ith interpretive )omments. These )omments /ere deve&oped to he&p avoid in)orre)t interpretations of the Cir)'&ar that have evo&ved over time. The )omments e;p&ain /hat *TA $e&ieves the &a/ and reg'&ations )onve0ed thro'gh the Cir)'&ar a)t'a&&0 re<'ire of its grantees. As app&i)a$&e &a/s, reg'&ations and )ontra)ting pra)ti)es evo&ve, *TA /i&& 'se the annotated Cir)'&ar to )onve0 its vie/s to *TA grantees and the transit ind'str0 as a /ho&e. As )hanges are made in the )omments, a date /i&& $e inserted /ith the )hange to notif0 the reader of /hen the )hange /as made. The Annotated Circular is avai&a$&e on&ine at( ///.fta.dot.govAftahe&p&ineAftaJ)4220J!:.do). ($($* FTA Bai%ers and A ro%als
=rantees are re<'ired to pro)ess their re<'ests for /aivers and approva&s re<'ired $0 Cir)'&ar 4220.!: thro'gh their regiona& *TA offi)es. The regiona& *TA offi)es /i&& instr')t grantees as to the re<'ired )ontent and format of these re<'ests. The *TA Administrator has esta$&ished the *TA signator0 &eve&s for granting waivers, and for the a%%roval of actions /hi)h re<'ire *TA approva& in the Cir)'&ar, as fo&&o/s( A'thorit0 to grant /aivers Administrator A'thorit0 to grant approva&s Asso)iate Administrator for Administration 'aivers pertain to those third part0 )ontra)t a)tions /hi)h a grantee is not a'thoriGed to ta2e 'nder the Cir)'&ar, $'t for /hi)h *TA has a'thorit0 to ma2e e;)eptions. A%%roval*disa%%roval )overs third part0 )ontra)t a)tions /hi)h a grantee is a'thoriGed to ta2e 'nder the Cir)'&ar on&0 after re)eiving *TA approva&. An e;amp&e /o'&d $e the 'se of advan)e pa0ments for an individ'a& pro)'rement. ($($Master A"reement
The *TA .aster Agreement )ontains standard terms and )onditions governing the administration of a -ro@e)t s'pported /ith *edera& assistan)e a/arded $0 the *TA thro'gh a =rant Agreement or Cooperative Agreement /ith the Ie)ipient. The *TA .aster Agreement is 'pdated ann'a&&0 at the start of ea)h fis)a& 0ear 8O)to$er !9 and p'$&ished on the *TA /e$ site. ! The .aster Agreement )ontains pro)'rement re<'irements that ma0 $e referen)ed in the ,est -ra)ti)es -ro)'rement .an'a&.
http(AA///.fta.dot.govA!%H14J!%HH2J:#=JBT.7.htm.
-age 4
($($.
Federal AcAuisition Re"ulation 6FAR9
This .an'a& /i&& fre<'ent&0 )ontain referen)es to the *AI. These referen)es are, /ith one e;)eption, a&/a0s for information p'rposes and are not intended to s'ggest that grantees m'st fo&&o/ the *AI. 2 #either grantees nor their )ontra)tors are re<'ired to fo&&o/ the *AI. The *AI )itations are given in order to inform grantees ho/ the *edera& government treats a parti)'&ar iss'e $'t the *edera& pra)ti)es are not $inding on grantees. The *edera& A)<'isition Ieg'&ation is avai&a$&e at the fo&&o/ing internet address( http(AA///.arnet.govAfar. ($($0 FTA Dear Collea"ue Letters
The *TA Administrator periodi)a&&0 iss'es "ear Collea!ue #etters to the *TA grantee )omm'nit0. When these &etters affe)t grantee pro)'rement operations $0 imposing ne/ *TA re<'irements or )&arif0ing ear&ier *TA po&i)0 statements, the .an'a& /i&& $e 'pdated to ref&e)t the ne/ Dear Co&&eag'e 7etter. Those 7etters that affe)t grantee pro)'rement operations are )ontained in Appendi; A.2 of the .an'a&. ($($2 Locatin" FTA Documents
The FTA +el%#ine /e$ site 8see !.!.H $e&o/9 )ontains a &in2 to important *TA do)'ments, s')h as Cir)'&ars, Dear Co&&eag'e 7etters, et). 5o' ma0 a))ess these do)'ments $0 'sing the ,nline Tools - Resources ta$ at the fo&&o/ing ?nternet address( ///.fta.dot.govAftahe&p&ineAinde;.htm. 5o' ma0 a&so a))ess *TA do)'ments at the *TA /e$ site address( ///.fta.dot.gov 'nder the 3grantee4 page ta$. ($($4 FTA Procurement S#stem Re%ie1s 6PSRs9
*TA )ond')ts periodi) revie/s of its grantee+s pro)'rement s0stems. These revie/s are )ond')ted in a))ordan)e /ith the .uide for &rocurement System Reviews/ /hi)h *TA has deve&oped in order to eva&'ate the grantee+s )omp&ian)e /ith the re<'irements of *TA Cir)'&ar 4220.!:. =rantees no/ have a))ess to this .uide and )an effe)tive&0 eva&'ate their o/n pro)'rement s0stem+s )omp&ian)e /ith 4220.!: 'sing the .uide. Se)tion ???.2 of the .uide )ontains )he)2&ists for ea)h t0pe of )ontra)t to $e revie/ed as /e&& as for the pro)'rement s0stem /ide e&ements that *TA a&so eva&'ates. The ='ide is no/ avai&a$&e on the ?nternet at the fo&&o/ing *TA /e$ site address( http(AA///.fta.dot.govAgrantJprogramsAftaJoversightA4022JH4H0J:#=JBT.7.htm.
=rantees are re<'ired to 'se the *edera& )ost prin)ip&es in *AI -art "! to determine a&&o/a$&e )osts on )ost t0pe )ontra)ts and /hen negotiating 8fi;ed9 pri)es for )ontra)ts and modifi)ations that are $ased on estimated )osts. See ,--. Se)tions 2.4.".! and 2.4.".2.
-age 5
Best Practices A'dit *o&&o/ Up and Tra)2ing S0stem =rantees sho'&d )onsider adopting a tra)2ing s0stem for fo&&o/ing 'p on the findings generated $0 *TA -ro)'rement S0stem Ievie/s 8-SIs9, *TA Triennia& Ievie/s, and other p'$&i) a'dits or interna& a'dits )ond')ted $0 the agen)0Ks o/n management staff. The 7os Ange&es Co'nt0 .etropo&itan Transportation Agen)0 87AC.TA9 has deve&oped an in ho'se, .S A))ess $ased data$ase to manage a'dit findings and tra)2 )orre)tive a)tions to ens're the0 are imp&emented as proposed. This tra)2ing s0stem the *indings and Ie)ommendations .anagement S0stem 8*AI.S9 is a )entra& repositor0 for a&& a'dits, findings, re)ommendations, a'dit responses, proposed )orre)tive a)tions, and a'dit fo&&o/ 'p and )&ose o't information. ?nformation )an $e sorted in a variet0 of /a0s s')h as $0 e;e)'tive area, a'dit so'r)e, findings, dates, or re)ommendation stat's 8e.g., open, )&osed9. Ti)2&er reports are ro'tine&0 ro'ted to inform appropriate parties of approa)hing or missed dead&ines and <'arter&0 reports of imp&emented a)tions are ro'ted to management. This s0stem ena$&es the agen)0 to tra)2 /ho proposed to do /hat $0 /hen. The s0stem is espe)ia&&0 va&'a$&e /hen agen)0 management )hanges 8's'a&&0 /ith voting )0)&es9 and in)oming managers need to $e made a/are of )ommitments made $0 their prede)essors. 7AC.TA has seen a n'm$er of $enefits from their tra)2ing s0stem( .inimiGes &i2e&ihood of re)'rring findings that )an &ead to fines, s)hed'&e de&a0s, fra'd, /aste, or a$'se. Ass'res .anagement )orre)tive a)tion has $een ta2en. .a;imiGes a'dit va&'e $0 tra)2ing ea)h finding and re)ommendation thro'gh reso&'tion. A'tomati)a&&0 )ompi&es 7essons 7earned and ,est -ra)ti)es and great&0 enhan)es reporting options.
7AC.TA has agreed to ma2e their s0stem avai&a$&e to an0 agen)0 that /ishes to imp&ement an a'dit fo&&o/ 'p and tra)2ing s0stem )apa$i&it0. ! ($($5 FTA Cel line
*TA has initiated a T)ird &arty &rocurement +el%#ine to provide a means for *TA )'stomers to get ans/ers to their pro)'rement <'estions. The goa& is to ans/er <'estions /ithin 4H ho'rs of re)eiving them. The /e$ site a&so )ontains a topi)a& inde; to Frequently As(ed 0uestions and he&pf'& &in2s to important *TA do)'ments, the *AI, the ,--., et). The ?nternet address is( http(AA///.fta.dot.govAftahe&p&ineAinde;.htm.
Conta)t .i)hae& *&ores, 7AC.TA A'dit .anager, at 2!" 922 %"45 or f&oresmEmta.net.
-age %
($($8
Procurement S#stem Self)Assessment <uide
*TA has deve&oped a &rocurement System Self1Assessment .uide for grantees. This .uide is provided for assessing those parti)'&ar areas of pro)'rement that have histori)a&&0 $een the most pro$&emati), as determined $0 oversight revie/s of transit agen)0 pro)'rement s0stems 8the -ro)'rement S0stem Ievie/s )ond')ted $0 *TA9. The .uide dis)'sses the top ten areas of defi)ien)0 )onsistent&0 fo'nd d'ring the -ro)'rement S0stem Ievie/s. This ='ide ma0 $e a))essed on&ine at( http(AA///.fta.dot.govAftahe&p&ineACoverJSe&f AssessmentJ='ide.htm. ($* IDENTIFDIN< A CONTRACT As defined $0 the *edera& A)<'isition Ieg'&ation, a >)ontra)t> means a m't'a&&0 $inding &ega& re&ationship o$&igating the se&&er to f'rnish the s'pp&ies or servi)es 8in)&'ding )onstr')tion9 and the $'0er to pa0 for them. Contra)ts /o'&d in)&'de $i&atera& instr'ments, a/ards and noti)es of a/ardsQ @o$ orders or tas2 assignment &etters iss'ed 'nder $asi) ordering agreementsQ &etter )ontra)tsQ orders, s')h as p'r)hase orders, 'nder /hi)h the )ontra)t $e)omes effe)tive $0 /ritten a))eptan)e or performan)eQ and $i&atera& )ontra)t modifi)ations. Contra)ts do not in)&'de grants and )ooperative agreements. 2 The parties to a )ontra)t m'st possess the &ega& )apa)it0 to enter into the )ontra)t, and the0 m'st assent to the terms of the )ontra)t. The terms of the agreement m'st not re<'ire the performan)e of an i&&ega& a)t $0 the parties. Contra)ts ma0 $e either ora& or /ritten in form. The s'$@e)t matter of a )ontra)t determines /hi)h primar0 &a/ app&ies. =enera&&0, Common 7a/ r'&es app&0 for )ontra)ts. Bo/ever, the 2niform Commercial Code 8UCC9 Arti)&e 2 app&ies /hen the )ontra)t is for the sa&e of goods. ($*$( Offer! Acce tance! Consideration Offer, a))eptan)e and )onsideration are three essentia& e&ements of a )ontra)t. Offer The offer to enter into a )ontra)t )an $e made $0 either part0 to the )ontra)t. ?n third part0 )ontra)ting, the offer is norma&&0 made $0 the )ontra)tor. The grantee iss'es so&i)itations for offers either $0 an ?nvitation for ,id 8?*,9 or a Ie<'est for -roposa& 8I*-9. The offer is made /hen the )ontra)tor s'$mits a signed $id or proposa& in response to the granteeKs so&i)itation. ?n sma&& p'r)hases, ho/ever, the ro&es are reversed. The grantee iss'es a p'r)hase order, /hi)h is an offer, to $'0 s'pp&ies or servi)es at a spe)ified pri)e 8's'a&&0 o$tained $0 a Ie<'est for N'otation that the grantee has iss'ed ear&ier9. The part0 to /hom the offer is made, the offeree, ma0 a))ept the offer 'nti& it is terminated $0 the offeror. Termination of an offer )an o))'r in one of man0 different /a0s(
*AI 2.!0!.
-age 1
:;piration. The offer is not a))epted /ithin the spe)ified time period or /ithin a reasona$&e time, if no time period is stated. The offeree ma0 agree to e;tend its offer $e0ond the spe)ified time period /itho't an0 )hanges or <'a&if0ing terms to its offer. Ievo)ation. The offeror ma0 /ithdra/ the offer. The /ithdra/a& is effe)tive /hen re)eived $0 the offeree. =enera&&0, the revo)ation ma0 o))'r at an0 time prior to a))eptan)e $0 the offeree. Ie@e)tion. The offeree ma0 re@e)t the offer, and the re@e)tion is effe)tive /hen re)eived $0 the offeror. Co'nter offer. The offeree proposes ne/ terms, not an in<'ir0 regarding the possi$i&it0 of ne/ terms. The offereeKs )o'nter offer to the offeror is effe)tive /hen re)eived $0 the offeror. Death. The offer is terminated /hen either the offeror or offeree dies. Bo/ever, the offer passes to the persona& representative of the offereeKs estate in an option )ontra)t. ?&&ega&it0. The offer is void if the s'$@e)t matter is i&&ega&. Destr')tion. The offer is terminated if the s'$@e)t matter is destro0ed.
A))eptan)e The offer m'st $e a))epted 'ne<'ivo)a&&0. The offeree m'st a))ept the offer /itho't )hanging or <'a&if0ing the terms of the offer. ?f the terms are )hanged, the offer is re@e)ted and a )o'nter offer is made. This terminates the origina& offer. The offer ma0 $e a))epted $0 an0 reasona$&e means of )omm'ni)ation 8i.e., fa;, te&ephone, et).9 'n&ess the offeror indi)ates a spe)ifi) method of a))eptan)e. As a genera& r'&e, the a))eptan)e is effe)tive /hen mai&ed $0 the offeree, e;)ept /here the offeror spe)ifies the a))eptan)e m'st $e re)eived $0 a spe)ifi) date and time. =rantee pro)'rements invo&ve t/o pro)esses for a))eptan)e of offers. When the grantee has iss'ed an ?*, or I*-, a))eptan)e o))'rs /hen the grantee assents to the terms made $0 the $idder or offeror in its $id or proposa&. The grantee a))epts the offer $0 signing the )ontra)t and iss'ing the offeror a noti)e of a/ard. *or sma&& p'r)hases the )ontra)tor a))epts the offer made $0 the grantee in its p'r)hase order $0 either signing the order 8)ontra)t9, if so re<'ired $0 the p'r)hase order, or $0 a)t'a&&0 performing in a))ordan)e /ith the terms of the p'r)hase order. Consideration :a)h part0 m'st give )onsideration for an agreement to $e a )ontra)t. Consideration e;ists /hen something of va&'e is given 'p in a $argained for e;)hange. The fo&&o/ing m'st e;ist(
-age H
7ega& $enefit. Someone re)eives something the0 had no prior &ega& right to re)eive. 7ega& detriment. Someone gives 'p something the0 did not have to re&in<'ish. This detriment does not have to invo&ve a tangi$&e detriment, on&0 a &ega& detriment.
($*$* Oral %$ Britten Stat'te of *ra'ds =enera&&0, the Stat'te of *ra'ds di)tates /hether )ontra)ts sho'&d $e ora& or /ritten. ?n order to $e enfor)ea$&e, the Stat'te of *ra'ds re<'ires )ertain )ontra)ts to $e /ritten and signed $0 the part0 )harged /ith performing the )ontra)t. The fo&&o/ing )ontra)ts m'st $e in /riting(
An agreement in /hi)h the period of performan)e is greater than one 0ear. The time period starts the date the )ontra)t is made, not on the date the performan)e )ommen)es. Contra)ts regarding rea& propert0Q i.e., mortgages, easements, sa&e of rea& estate, et). Contra)ts of g'arant0Q i.e., /here someone g'arantees to pa0 the o$&igation of another 8send the de&ivera$&e item to R, and if R does not pa0, ? /i&&9. Contra)ts invo&ving the sa&e of investment se)'rities. -romises $0 an e;e)'torAadministrator to $e he&d persona&&0 &ia$&e for the de$ts in)'rred $0 an estate. Contra)ts for the sa&e of goods in e;)ess of S500.
Cons'&t 0o'r state &a/ for app&i)a$&e re<'irements. ($*$- Mutual and Unilateral MistaEes ?f a materia& mista2e has $een made $0 one or $oth parties, there is a possi$i&it0 the )ontra)t is voida$&e. ?f a materia& mista2e /as made $0 $oth parties 8m't'a& mista2e9, either part0 has the option to void the )ontra)t. ?f a materia& mista2e /as made $0 one part0 8'ni&atera& mista2e9, the )ontra)t remains va&id. Bo/ever, if the other part0 is a/are of or sho'&d have $een a/are of the mista2e, the )ontra)t is voida$&e. ($*$. Procurements Often O%erlooEed .an0 organiGations ma0 $e over&oo2ing pro)'rements /hi)h )o'&d $enefit from the app&i)ation of the pro)ed'res o't&ined in this man'a&. These over&oo2ed areas /o'&d in)&'de( 'ti&it0 servi)es, mai&ingAshipping servi)es, te&ephone servi)e, e&e)tri) and gas servi)e. ?n the past these
-age 9
areas have $een 'nder the )ontro& of a sing&e so'r)e s'pp&ier, $'t re)ent dereg'&ation has, or /i&& soon, open 'p man0 of these areas to )ompetitive pro)'rement possi$i&ities. ($- APPLICABILITD OF FEDERAL RE@UIREMENTS One of the prin)ip&es of )ontra)ting /ith *edera& f'nds re)eived dire)t&0 or indire)t&0 from *TA is a re)ognition that, as a )ondition of re)eiving the f'nds, )ertain spe)ifi) *edera& re<'irements m'st $e met not on&0 $0 the re)ipient of the f'nds 8the grantee9 $'t a&so $0 s'$ re)ipients and a grantee+s third part0 )ontra)tors. The *edera& re<'irements to $e met $0 the grantee+s third part0 )ontra)tors /i&& $e defined $0 the )&a'ses in)&'ded in the grantee+s third part0 )ontra)ts. ?t sho'&d a&so $e noted that third part0 )ontra)tors are not re<'ired to fo&&o/ *TA Cir)'&ar 4220.!: in their s'$)ontra)ting a)tivities. The spe)ifi) re<'irements for 0o'r parti)'&ar grant of f'nds /i&& $e fo'nd in the .aster Agreement in)orporated into the =rant Agreement or Cooperative Agreement that /as e;e)'ted $0 0o' as a grant re)ipient. Different r'&es app&0 depending 'pon /hether 0o', as the re)ipient or s'$re)ipient, are a state, &o)a&, or ?ndian tri$a& governmenta& entit0 or /hether 0o' are an instit'tion of higher &earning, a hospita&, or another non profit organiGation. A&so, depending 'pon the t0pe of *edera& f'nds 0o' re)eive 8e.g., operating assistan)e9 or the nat're of the )apita& pro@e)t 0o' are invo&ved in, the )ontra)t'a& sphere of *edera& re<'irements ma0 in)&'de 0o'r pro)'rements regard&ess of /hether *edera& f'nds are a)t'a&&0 dra/n do/n to f'nd pa0ments in a parti)'&ar pro)'rement. As the person responsi$&e for pro)'rement /ithin 0o'r agen)0, 0o' m'st $e a/are that )omp&ian)e /ith *edera& re<'irements is a )ondition of re)eipt of *edera& f'nds. *ai&'re to )omp&0 /ith these provisions ma0, in a))ordan)e /ith the terms of 0o'r =rant or Cooperative Agreement, $e gro'nds for defa'&t of that agreement and res'&t in the &oss of the f'nds. ($-$( Reci ient and Su&reci ient DEFINITIONS The .aster Agreement " provides the fo&&o/ing definitions for >Ie)ipient> and >S'$re)ipient>. Ie)ipient An0 entit0 that re)eives *edera& assistan)e dire)t&0 from *TA to a))omp&ish the pro@e)t. The term >Ie)ipient> in)&'des ea)h *TA >=rantee> as /e&& as ea)h *TA Ie)ipient of a Cooperative Agreement. :;)ept as *TA permits other/ise, the Ie)ipient is the entire &ega& entit0 even tho'gh on&0 a sing&e organiGation /ithin that entit0 is designated as the Ie)ipient in the =rant Agreement or Cooperative Agreement. 4
*orm *TA .A8!29, O)to$er !, 2005. ?d. at Se)tion !.m.
-age !0
S'$re)ipient An0 entit0 that re)eives *edera& assistan)e a/arded $0 an *TA re)ipient rather than from *TA dire)t&0. The term >s'$re)ipient> a&so in)&'des the term >s'$grantee,> $'t does not in)&'de >third part0 )ontra)tor> or >third part0 s'$)ontra)tor.> 5 DISCUSSION It is im ortant to determine 1/et/er #our a"enc# is a reci ient or su&reci ient so as to determine 1/at t/ird art# contractin" rules under t/e Circular and .8 CFR Parts (5 and (8 6t/e Fcommon "rantF rules9 are a lica&le to #our rocurements$ What Third Party Contracting Requirements Under 49 CFR Parts 18 and 19 and FTA Circular 422 !1" are A##lica$le to Reci#ients and %u$reci#ients& Section (0 of t/e Master A"reement contains t/e reAuirements to com l# 1it/ a lica&le rocurement standards of .8 CFR Part (5$-2 6state! local! and tri&al "o%ernments9 or .8 CFR Part (8$.: t/rou"/ (8$.5 and A endi; A 6/os itals! non) rofits! and institutions of /i"/er learnin"9$ For ur oses of t/is discussion! it is im ortant to recall t/at Freci ientF includes F"rantee!F and Fsu&reci ientF includes Fsu&"ranteeF ot/er t/an t/ird art# contractors and su&contractors$ Para"ra / . of t/e FTA Circular .**:$(E outlines four distinct rules relatin" to t/e a lica&ilit# of t/e rocurement reAuirements to reci ients7"rantees or su&reci ients7su&"rantees3 ($ If a transit aut/orit# is &ot/ a direct reci ient of Federal funds and a su&reci ient of a State! t/e State ma# ermit t/e transit aut/orit# to follo1 t/e reAuirements of t/e Circular instead of State rocurement reAuirements! alt/ou"/ it is not o&li"ated to do so$ If #our transit aut/orit# is in t/is situation! maEe sure t/at t/e rocurement reAuirements #ou are o&li"ated to follo1 for Federall# assisted rocurements are clearl# stated! refera&l# &# &ot/ t/e State and FTA$ *$ B/en a FStateF 2 rocures ro ert# or ser%ices under a "rant or coo erati%e a"reement 1it/ FTA! it 1ill follo1 t/e same rocurement olicies and rocedures it uses for rocurements usin" non)Federal funds$ States must! /o1e%er! com l# 1it/ t/e reAuirements of ara"ra /s 5$a 6Full and O en Com etition9 and & 6Pro/i&ition A"ainst <eo"ra /ic Preferences9! and 8$d 6Procurement of Arc/itectural and
0
?d. at Se)tion !.p.
See -aragraph %.$., *TA Cir)'&ar 4220.!: for definition of >State.> #ote that the definition in $oth this paragraph of the Cir)'&ar and 49 C*I -art !H." spe)ifi)a&&0 e;)&'des >&o)a& governments> 8as defined therein as /e&&9 from the definition of a >State.> Th's, if 0o' are a )it0 government and a re)ipientAgrantee, and if 0o'r state has a pro)'rement stat'te that app&ies to >&o)a& government> pro)'rements, 0o' sti&& m'st )omp&0 /ith the Cir)'&ar and the provisions of 49 C*I -art !H."%8$9 thro'gh 8t9. Bo/ever, if 0o' are a s'$re)ipientAs'$grantee of 0o'r state, 0o' sha&& fo&&o/ state &a/ and pro)ed'res. The differen)es $et/een these t/o instan)es ma0 $e s'$t&e, $'t the0 are rea& differen)es that sho'&d $e )onsidered and addressed.
-age !!
En"ineerin" Ser%ices 6A+E9 9 of t/e Circular and must include in all urc/ase orders and contracts e;ecuted &# it! or a su&"rantee usin" Federal funds! all clauses reAuired &# Federal statutes! e;ecuti%e orders and t/eir im lementin" re"ulations$ Su&"rantees of a FStateF 6e;ce t as indicated in su& ara"ra / 6.9 &elo19 s/all follo1 State la1 and rocedures 1/en a1ardin" and administerin" contracts$ -$ For t/e ur oses of t/is Circular! re"ional transit aut/orities are not State a"encies or instrumentalities$ .$ Su&"rantees of States 1/ic/ are institutions of /i"/er education! /os itals or ot/er non rofit or"ani,ations and all ot/er FTA reci ients7"rantees 1ill administer contracts in accordance 1it/ t/e reAuirements of t/e Circular$ <rantees and su&"rantees t/at fall 1it/in t/is cate"or# s/all use t/eir o1n rocurement rocedures t/at reflect a lica&le State and local la1s and re"ulations ro%ided t/at t/e rocurements conform to a lica&le Federal la1$ 4 ($-$* Federal Contractual S /ere
RE@UIREMENT >...the Ie)ipient agrees to in)&'de appropriate )&a'ses in ea)h third part0 )ontra)t stating the third part0 )ontra)torKs responsi$i&it0 'nder *edera& &a/, reg'&ation, or dire)tive, in)&'ding an0 ne)essar0 provisions re<'iring the third part0 )ontra)tor to e;tend app&i)a$&e re<'irements to its s'$)ontra)tors to the &o/est tier ne)essar0.> .aster Agreement T 2.e.8298a9. 3This Cir)'&ar app&ies to a&& *TA grantees and s'$grantees that )ontra)t /ith o'tside so'r)es 'nder *TA assistan)e programs. *TA grant re)ipients /ho 'ti&iGe *TA form'&a f'nds for operating assistan)e are re<'ired to fo&&o/ the re<'irements of this Cir)'&ar for a&& operating )ontra)ts. These re<'irements do not app&0 to pro)'rements 'nderta2en in s'pport of )apita& pro@e)ts )omp&ete&0 a))omp&ished /itho't *TA f'nds or to those operating and p&anning )ontra)ts a/arded $0 grantees that do not re)eive *TA operating and p&anning assistan)e.> *TA Cir)'&ar 4220.!:, -aragraph 4. >-ro@e)t means a)tivit0 or a)tivities 8tas2 or tas2s9, &isted in the -ro@e)t Des)ription, the Approved -ro@e)t ,'dget, and an0 modifi)ations stated in the Conditions to the =rant Agreement or Cooperative Agreement app&i)a$&e to the pro@e)t.> .aster Agreement T !.&.
3d. at -aragraph 1.a.
-age !2
There are severa& aspe)ts of 0o'r grant agreement /hi)h together esta$&ish the sphere of pro)'rements to /hi)h *edera& re<'irements ma0 app&0. ?n genera& 0o' ma0 'nderta2e )apita& pro@e)ts /ho&&0 /itho't *edera& f'nds, and $e )onfident that 0o'r grant agreements /i&& not affe)t those pro)'rements. Bo/ever, *edera& grant re<'irements app&0 to man0 )ontra)ts in addition to the )ontra)ts $et/een 0o' and 0o'r s'pp&iers for /hi)h 0o' intend to dra/ do/n *edera& pa0ments. =enera&&0, the )on)ept is that so&e&0 $e)a'se of the re)eipt of *edera& f'nds $0 a grantee, )ertain )&a'ses and federa& re<'irements are re<'ired to $e in)&'ded in )ontra)ts /ithin the )ontra)t'a& sphere. There are fo'r pro)'rement )onte;ts to /hi)h the )on)ept is important( !. The genera& >f&o/ do/n> of *edera& re<'irements in )ontra)tsQ 2. The in)&'sion of a&& *edera& re<'irements if the transit propert0 re)eives operating assistan)eQ ". The in)&'sion of a&& *edera& re<'irements in a&& e&ements and a)tivities if the overa&& )apita& pro@e)t 8as defined in a f'&& f'nding grant agreement9 in)&'des *edera& f'ndsQ and, 4. The )on)ept of a >minima& opera$&e segment.> These )on)epts are high&ighted $e&o/ so 0o' )an $e a/are of them in 0o'r )apita& pro@e)t p&anning and pro)'rement p&anning pro)esses. :a)h *edera& re<'irement has app&i)a$i&it0 )riteria deriving from stat'te, reg'&ation, or po&i)0. The sphere of )ontra)ts to /hi)h the re<'irements app&0, if the0 are other/ise app&i)a$&e, is affe)ted $0 these fo'r )on)epts( !. *&o/ Do/n L -erhaps the easiest determinant of the sphere to vis'a&iGe is the )on)ept of 3f&o/ do/n.4 *edera&&0 re<'ired )&a'ses and re<'irements, as a genera& r'&e, are re<'ired to $e in)&'ded in ea)h third part0 )ontra)t at ever0 tier and in ea)h s'$re)ipient agreement at ever0 tier. H When )&a'ses are re<'ired to f&o/ do/n, the )&a'ses and re<'irements f&o/ do/n to a&& &eve&s of the *edera& f'nding )hain $eginning /ith the grantee. 2. ?n)&'sion of *edera& Ie<'irements /hen Ie)eiving Operating Assistan)e The se)ond e;amp&e of the sphere invo&ves grantees re)eiving operating assistan)e. ?n this instan)e, a&& grantee pro)'rements e;)ept for )apita& pro@e)ts 'nderta2en /itho't *edera& f'nds, m'st in)&'de a&& of the *edera& re<'irements that /o'&d $e in)&'ded if the operating $'dget /ere f'&&0 *edera&&0 f'nded and m'st )omp&0 /ith the Cir)'&ar. 9 *TA maintains that one do&&ar of *edera& operating assistan)e )onverts the operating f'nds of the transit propert0 so that a&& s')h f'nds of the propert0 therefore $e)ome s'$@e)t to *edera& re<'irements. The r'&es on this dimension of the
5
The f&o/ do/n of )&a'ses is not an a$so&'te re<'irementQ e.g. Dr'g and A&)oho& Testing re<'irements app&0 on&0 to the /or2 of the prime )ontra)tor.
8
-aragraph 4, *TA Cir)'&ar 4220.!:.
-age !"
sphere are )&ear if 0o' re)eive operating assistan)e, the re<'irements of the Cir)'&ar app&0, even if 0o' do not intend to 'se that assistan)e in s'pport of an0 pro)'rement a)tion 8e.g., 0o' intend to app&0 a&& the operating assistan)e to pa0 sa&aries of 0o'r dire)t hire $'s operators9. ". ?n)&'sion of *edera& Ie<'irements in *edera&&0 *'nded Capita& -ro@e)ts *TA has re)ent&0 ta2en the position that, /hen a )apita& pro@e)t re<'ires a f'&& f'nding grant agreement, . . . t)e Federal 4underta(in!4 in a Fully Funded .rant A!reement (FF.A) will no lon!er $e se!mented into &ro5ect and #ocal Activities. All activities related to a Federal underta(in! will $e identified as t)e Federal &ro5ect. T)e Federal funds will $e distri$uted amon! all t)e activities in t)e %ro5ect at a level fundin! ratio equal to t)e %ercenta!e of Federal financial %artici%ation in t)e entire %ro5ect. T)us/ all t)e elements and activities of t)e %ro5ect/ as descri$ed in t)e FF.A will $e funded/ in %art/ wit) Federal funds6 and/ t)e requirements attac)ed to t)e use of Federal funds will a%%ly to eac) suc) tas(/ unless ot)erwise e7em%ted as %rovided in t)e a%%lica$le laws/ re!ulations and %olicies. !0 Iegard&ess of ho/ &arge or sma&& the per)entage of *edera& f'nding is, /here a f'&& f'nding grant agreement /ith the *TA is e;e)'ted, a&& e&ements of the pro@e)t identified in the agreement are /ithin the sphere and m'st $e pro)'red in )omp&ian)e /ith *edera& re<'irements. 4. .inima& Opera$&e Segment ?n the )ase of a m'&ti tas2 )apita& 'nderta2ing, the sphere in)&'des a segrega$&e portion of the 'nderta2ing, or a pro@e)t portion that has independent f'n)tiona& 'ti&it0. Under this )on)ept, *TA and 0o'r agen)0 identif0 a segment of the overa&& 'nderta2ing that represents t)e minimal se!ment t)at can $e feasi$ly o%erated inde%endently. ?magine 0o' are a$&e to overmat)h *edera& f'nds to )onstr')t a $ad&0 needed ne/ f'e&ing station /ith H5P state and &o)a& mone0. *TAKs po&i)ies ma0 not app&0 to ever0 re&ated e;pendit're of these state and &o)a& f'nds, e.g., &ands)aping or a near$0 tire storage str')t'reQ ho/ever, neither /i&& *TA app&0 its po&i)ies to the mathemati)a&&0 minim'm portion of the pro@e)t /ith no independent 'ti&it0 8e.g., app&0ing *TA po&i)ies to the roof, a&one9Q rather 0o' m'st define a segrega$&e pro@e)t /ith *TA to /hi)h the *edera& re<'irements app&0, and 0o' ma0 then have additiona& &atit'de in the remaining portions 'nderta2en /itho't *edera& f'nds. The f'&& f'nding grant agreement /i&& )over a&& of the ne)essar0 e&ements to $'i&d and operate the segment a station at ea)h end of the segment, &and to $'i&d the stations on, rai& )ars to r'n on the segment, s0stems to s'pport the rai& )ars, rai& on /hi)h the )ars /i&& r'n, et). *edera& re<'irements of the Cir)'&ar app&0 to a&& of the
(:
7etter from *TA Administrator to :;e)'tive Dire)tor, Da&&as Area Iapid Transit dated .ar)h ", !992, page 2.
-age !4
individ'a& )ontra)ts re&ating to these e&ements $e)a'se the0 are part of the minima& opera$&e segment and /ithin the *edera& )ontra)t'a& sphere. !! ($-$T# es of Contract Actions
Detai&s and ,est -ra)ti)es for meeting the re<'irements for vario's t0pes of )ontra)t a)tions that are des)ri$ed $e&o/ )an $e fo'nd in other se)tions of the man'a&. ($-$-$( Su lies! Ser%ices! EAui ment and Construction
RE@UIREMENT *TA Cir)'&ar 4220.!: defines the re<'irements a grantee m'st adhere to in the so&i)itation, a/ard and administration of its third part0 )ontra)ts. S')h )ontra)ts /o'&d in)&'de the pro)'rement of s'pp&ies, servi)es, e<'ipment and )onstr')tion. ($-$-$* Le"al and Associated Ser%ices RE@UIREMENT The re<'irements of *TA Cir)'&ar 4220.!: app&0 to the pro)'rement of &ega& and asso)iated servi)es, s')h as para&ega&s, investigators, e;pert /itnesses, et). if *edera& f'nds are $eing 'sed to f'nd these )ontra)ts 8i.e., if re)eiving operating f'nds or if the &ega& servi)es are f'nded $0 a )apita& grant9. DISCUSSION As noted a&o%e! t/e reAuirements of FTA Circular .**:$(E a l# to t/e rocurement of le"al and associated ser%ices! suc/ as arale"als! in%esti"ators! e; ert 1itnesses! etc$ if Federal funds are &ein" used to fund t/e contracts for le"al ser%ices$ FTA Circular .**:$(E 1ould not a l# if t/e le"al ser%ices are funded entirel# 1it/ local funds$ T/e Circular reAuires suc/ ser%ices to &e rocured com etiti%el#! as 1it/ ot/er t# es of ser%ices$ Co1e%er! t/ere ma# &e cases 1/ere t/e "rantee /as endin" liti"ation 1/ic/ mi"/t &e 'eo ardi,ed t/rou"/ a u&lic disclosure 1/ic/ 1ould result from ad%ertisin" t/e rocurement &efore/and$ In suc/ cases t/e "rantee ma# /a%e %alid "rounds for limitin"
((
?n dis)'ssing stat'tor0 and reg'&ator0 re<'irements, -aragraph !% of *TA Cir)'&ar 4220.!: advises grantees to )onta)t other *edera& agen)ies for spe)ifi) g'idan)e )on)erning the )ross )'tting re<'irements of those agen)ies. Se)tion H.! of the ,--., /hi)h dis)'sses the federa& )ontra)t )&a'ses, /i&& )ross referen)e other agen)ies re<'irements, /henever possi$&e.
-age !5
t/e com etition to t/e de"ree of not u&licl# ad%ertisin" t/e rocurement$ In suc/ cases a 1ai%er reAuest s/ould &e su&mitted to t/e FTA$ ($-$-$- Em lo#ment Contracts These are )ontra)ts /ith individ'a&s that res'&t in those individ'a&s $e)oming 3emp&o0ees4 of the agen)0. These are not >third part0 )ontra)ts> /ithin the meaning of *TA Cir)'&ar 4220.!:, and th's the re<'irements of that Cir)'&ar do not app&0 to emp&o0ment )ontra)ts. The term 3emp&o0ment )ontra)t4 does not refer to a )ontra)t that retains a )ons'&tant to perform temporar0 servi)es for the agen)0. The individ'a& retained on these )ons'&tant servi)es )ontra)ts remains an independent )ontra)tor and does not $e)ome an emp&o0ee of the agen)0Q th's these )ontra)ts are not 3emp&o0ment )ontra)ts,4 and the0 are s'$@e)t to the re<'irements of *TA Cir)'&ar 4220.!:. ($-$-$. Real Estate Contracts RE@UIREMENT Ie<'irements re&ated to the a)<'isition, 'se and disposa& of rea& propert0 ma0 $e fo'nd in the fo&&o/ing reg'&ations( 8a9 *TA Cir)'&ar 50!0.!C, .rant ana!ement .uidelines/ Chapter ?? 2 Real &ro%erty. This Cir)'&ar defines the re<'irements of the *edera& Transit 7a/s /hi)h are )odified at 49 U.S.C. Chapter 5". 8$9 49 C*I T !H."! Real &ro%erty/ and 49 C*I -art 24, S'$part , Real &ro%erty Acquisition. 8)9 .aster Agreement .A8!29 Se)tion !9. DISCUSSION T/e acAuisition of real ro ert#! eit/er &# urc/ase or lease! is not su&'ect to t/e reAuirements of FTA Circular .**:$(E$ Real #ro#erty is defined in .8 CFR G (5$- as Hland! includin" land im ro%ements! structures and a urtenances t/ereto! e;cludin" mo%a&le mac/iner# and eAui ment$I T/e acAuisition of easements and ri"/ts of 1a# are considered real estate acAuisitions and t/e reAuirements discussed /erein ertain to t/ese t# es of acAuisitions$ Real ro ert# acAuisition! use and dis osal is also co%ered &# FTA Circular 0:(:$(C! C/a ter II)*J .8 CFR Part (5$-(J .8 CFR Part *. Su& art BJ and &# t/e FTA Master A"reement! Section (8$ (* It is im ortant t/at t/e "rantee &e familiar 1it/ t/e reAuirements esta&lis/ed &# FTA in Circular 0:(:$(C! C/a ter II)*$ T/is circular esta&lis/es rocedures to &e follo1ed &# "rantees in t/e follo1in" areas3
(*
.A8!29, dated O)to$er !, 2005.
-age !%
T/e conduct of Ca,ardous Baste Site Assessments &efore acAuirin" real ro ert#$ T/e conduct of an inde endent a T/e reAuirement for a re%ie1 a raisal &# a certified a raisal of t/e initial a raiser$ raisal$
FTA re%ie1 and concurrence reAuirements related to t/e "ranteeKs offer to &u# t/e ro ert#$ Incidental use of acAuired real ro ert# as a means to su re%enues$ lement transit
Dis osition of e;cess real ro ert# &# sale! transfer to ot/er ro"rams! etc$ T/e reAuirement to re are an e;cess ro ert# utili,ation lan for all real ro ert# no lon"er used for its ori"inal ur ose$
($-$-$0 Inter)<o%ernmental A"reements! Loint Procurements! Pi""#&acEin" RE@UIREMENT *TA Cir)'&ar 4220.!:, paragraph 1.e. en)o'rages inter governmenta& pro)'rements( e. ?ntergovernmenta& -ro)'rement Agreements. 8!9 =rantees are en)o'raged to 'ti&iGe avai&a$&e state and &o)a& intergovernmenta& agreements for pro)'rement or 'se of )ommon goods and servi)es. When o$taining goods or servi)es in this manner, grantees m'st ens're a&& federa& re<'irements, re<'ired )&a'ses, and )ertifi)ations 8in)&'ding ,'0 Ameri)a9 are proper&0 fo&&o/ed and in)&'ded, /hether in the master intergovernmenta& )ontra)t or in the granteeKs p'r)hase do)'ment. ! 829 =rantees are a&so en)o'raged to @oint&0 pro)'re goods and servi)es /ith other grantees. When o$taining goods or servi)es in this manner, grantees m'st ens're a&& federa& re<'irements, re<'ired )&a'ses, and )ertifi)ations are proper&0 fo&&o/ed and in)&'ded in the res'&ting @oint so&i)itation and
(
S'$ paragraph 8!9 &oo2s primari&0 to State government )ontra)ts that a&&o/ s'$ordinate government agen)ies to $'0 from esta$&ished s)hed'&es a2in to the =SA s)hed'&es in *edera& pra)ti)e. *TA $e&ieves grantees ma0 $'0 thro'gh these )ontra)ts provided a&& parties agree to append the re<'ired *edera& )&a'ses in the p'r)hase order or other do)'ment that effe)ts the grantee+s pro)'rement. When $'0ing from these s)hed'&e )ontra)ts, grantees sho'&d o$tain ,'0 Ameri)a )ertifi)ation $efore entering into the p'r)hase order. Where the prod')t to $e p'r)hased is ,'0 Ameri)a )omp&iant, there is no pro$&em. Where the prod')t is not ,'0 Ameri)a )omp&iant, the grantee /i&& sti&& have to o$tain a /aiver from *TA $efore pro)eeding.
-age !1
)ontra)t do)'ments. 2 8"9 =rantees ma0 assign )ontra)t'a& rights to p'r)hase goods and servi)es to other grantees if the origina& )ontra)t )ontains appropriate assigna$i&it0 provisions. =rantees /ho o$tain these )ontra)t'a& rights 8)ommon&0 2no/n as Kpigg0$a)2ingK9 ma0 e;er)ise them after first determining the )ontra)t pri)e remains fair and reasona$&e. " DISCUSSION Pi""#&acEin" ) Dour A"enc# ma# &e a&le to taEe ad%anta"e of e;istin" contracts a1arded &# ot/er "o%ernmental entities for "oods and ser%ices 1/ic/ #ou currentl# need$ T/is ractice /as &ecome Eno1n as H i""#&acEin".4 Pi""#&acEin" is defined &# FTA Circular .**:$(E! ara"ra / 2$e! as follo1s3 'Piggy$ac(ing) is an assignment o* e+isting contract rights to #urchase su##lies, equi#ment, or ser-ices! . T/e use of i""#&acEin"! 1/ic/ in%ol%es assi"nment of contracts or ortions of contracts from t/e ori"inal urc/asin" a"enc# to anot/er a"enc#! is discussed in t/e BPPM! Section 2$-$- ) .oint Procurements o* Rolling %toc( and 'Piggy$ac(ing$I A endi; B$ (2 of t/e BPPM contains a Piggy$ac(ing Wor(sheet t/at 1ill assist a "rantee 1is/in" to i""#&acE anot/er a"enc#Ms contract to 1orE t/rou"/ t/e FTA reAuirements t/at must &e met in order for i""#&acEin" to &e ermissi&le$ Addin" Federal Clauses to E;istin" Contracts ) FTAMs olic# re"ardin" t/e addition of Federal clauses to e;istin" contracts distin"uis/es &et1een State <SA)t# e contracts and
S'$ paragraph 829 ref&e)ts *TA+s $e&ief that grantees sho'&d )onsider )om$ining efforts in their pro)'rements to o$tain $etter pri)ing thro'gh &arger p'r)hases. 6oint pro)'rements offer the additiona& advantage of $eing a$&e to o$tain goods and servi)es that e;a)t&0 mat)h ea)h )ooperating grantee+s re<'irements. We $e&ieve this is s'perior to the pra)ti)e of Upigg0$a)2ing+ sin)e Upigg0$a)2ing+ does not )om$ine $'0ing po/er at the pri)ing stage and ma0 &imit a grantee+s )hoi)es to those prod')ts e;)ess to another grantee+s needs.
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S'$ paragraph 8"9 ref&e)ts grantees+ )ontin'ing a$i&it0 to assign )ontra)t'a& rights to others L Upigg0$a)2ing.+ *TA $e&ieves it is e;treme&0 important that grantees ens're the0 )ontra)t on&0 for their reasona$&0 anti)ipated needs and do not add <'antities or options to )ontra)ts so&e&0 to a&&o/ them to assign these <'antities or options at a &ater date.
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*TA+s definition of 3-igg0$a)2ing4 in 4220.!: differentiates this pra)ti)e from @oint pro)'rements or other intergovernmenta& agreements.
-age !H
contracts a1arded &# ot/er "rantees$ For e;am le! in t/e recentl# issued Circular .**:$(E! ara"ra / 4$e$6(9! FTA allo/s grantees to modi*y %tate 0%A1ty#e contracts and add Federally1required clauses and certi*ications /hen the grantee issues the *irst #urchase order against the contract! 2o/e-er, FTA has ta(en the #osition that grantees may not add Federal clauses and certi*ications to their o/n contracts or those o* other grantees in order to #urchase against these contracts /ith Federal *unds! T/e rationale is t/at! in a State <SA) t# e contract! t/e urc/ase order is t/e transit communit#Ms initial 1orE on t/e contract = muc/ as an# &u# off t/e Federal <SA IT sc/edule 1ill &e 1/en a "rantee c/ooses to use t/is Federal contract$ In ot/er cases 6liEe transit a"enc# A &u#in" off transit BMs contract9! t/e transit)uniAue rules are in lace and Eno1n from t/e &e"innin"! t/ere is no e; ressed intent in t/e common "rant rule 6as 1it/ State sc/edules9 to &alance t/e rules a"ainst eac/ ot/er! and it 1ould infer t/at a transit a"enc# could essentiall# a%oid most Federal rules &# lacin" orders t/rou"/ anot/er transit a"enc#$ In s/ort! t/e inte"rit# of t/e s#stem 1ould &e t/reatened &# e;tendin" t/e after)t/e)fact o tion &e#ond sc/edule urc/ases$ Loint Procurements ) Dou ma# also 1is/ to lan rocurements in ad%ance 1it/ ot/er a"encies or "o%ernmental users! and com etiti%el# a1ard contracts t/at se%eral "o%ernmental entities can dra1 u on to meet t/eir needs$ Suc/ an a roac/ 1ould create economies of scale! reduce rocurement lead times in t/e case of &ein" a&le to use e;istin" contracts! and reduce administrati%e effort and e; ense$ An# t/ird art# contracts resultin" from or utili,ed &# "rantees under inter)"o%ernmental a"reements are su&'ect to t/e reAuirements of FTA Circular .**:$(E$ Inter)"o%ernmental a"reements not in%ol%in" t/ird art# contracts 1ould not &e su&'ect to FTA Circular .**:$(E$ T/e to ic of 'oint rocurements t/at maEes use of ad%ance lannin" &# se%eral a"encies is discussed in t/e BPPM! Section 2$-$- ) .oint Procurements o* Rolling %toc( and 'Piggy$ac(ing!) Best Practices -igg0$a)2ing ?f it appears that there ma0 $e an e;isting governmenta& )ontra)t /hi)h ma0 $e 'sed for a spe)ifi) need, 0o' /i&& first /ant to o$tain a )op0 of the entire )ontra)t and revie/ it )aref'&&0 to determine if it )ontains the provisions re<'ired $0 *TA Cir)'&ar 4220.!:. This is an important first step, $e)a'se the re<'irements of the Cir)'&ar app&0 to pro)'rements made thro'gh inter governmenta& )ontra)ts and assignments. ?f the )ontra)t &a)2s re<'ired provisions, 0o' ma0 $e a$&e to have it modified $0 the a/arding Agen)0 to in)&'de the ne)essar0 *edera& )&a'ses. Among the steps 0o' ma0 /ant to ta2e are the fo&&o/ing( !. Determine that the )ontra)t is sti&& in effe)t or )an $e modified $0 the a/arding Agen)0 to permit s'ffi)ient &ead time to ma2e the re<'ired de&iveries to 0o'r Agen)0. 2. Determine that the spe)ifi)ations in the e;isting )ontra)t /i&& meet 0o'r needs. ". Ievie/ the terms and )onditions )aref'&&0 to determine that the0 are a))epta$&e to 0o'Q e.g., /arrant0 provisions, ins'ran)e re<'irements, et).
-age !9
4. Determine that the re<'irements needed $0 0o'r Agen)0 /i&& not $e $eyond t)e sco%e of t)e e7istin! contract, )reating a so&e so'r)e 8non)ompetitive9 add on to the )ontra)t /hi)h /i&& have to $e @'stified in a))ordan)e /ith *TA Cir)'&ar 4220.!: -aragraph 9.h. =enera&&0, if 0o' are /or2ing /ith an indefinite <'antit0 )ontra)t 0o' sho'&d have the needed f&e;i$i&it0 to order additiona& <'antities /itho't having a >ne/ pro)'rement> a)tion re<'iring a so&e so'r)e @'stifi)ation. 5. Determine that the )ontra)t /as a/arded )ompetitive&0, either thro'gh sea&ed $ids or )ompetitive proposa&s. ?f the )ontra)t /as a so&e so'r)e a/ard, 0o' /i&& have to @'stif0 a so&e so'r)e a/ard in a))ordan)e /ith *TA Cir)'&ar -aragraph 9.h. and 0o'r Agen)0Ks pro)'rement pro)ed'res. %. 5o' are not re<'ired to do a se)ond pri)e ana&0sis if one /as origina&&0 performed. Bo/ever, 0o' m'st determine that the )ontra)t pri)es origina&&0 esta$&ished are sti&& fair and reasona$&e. Cir)'mstan)es sho'&d di)tate the steps to $e ta2en. *or e;amp&e, if the origina& a/ard /as made some time ago, 0o' ma0 /ant to do a mar2et s'rve0 andAor perform pri)e ana&0sis to ens're that the pri)es are sti&& fair and reasona$&e 8even if the origina& a/ard /as )ompetitive and a pri)e ana&0sis /as performed initia&&09. Simi&ar&0, if 0o'r de&iveries are to $e made to a &o)a& or )entra&iGed de&iver0 point and the origina& )ontra)t )a&&s for state/ide de&iveries, 0o' sho'&d $e entit&ed to a pri)e red')tion. See ,--. Se)tion 5.2 Cost and &rice Analysis for a dis)'ssion of pri)e ana&0sis te)hni<'es. 1. Determine that the )ontra)tor has s'$mitted a&& federa&&0 re<'ired )ertifi)ations to the a/arding Agen)0Q e.g., ,'0 Ameri)a, de$arment, restri)tions on &o$$0ing, et). See paragraph a$ove Addin! Federal Clauses to 87istin! Contracts and ,--. Se)tion 4.".".2 Federally Required Su$missions wit) ,ffers. H. Wor2 thro'gh the items in the -igg0$a)2ing Wor2sheet in Appendi; ,. !% 8and e;p&ained in Se)tion %."." 9oint &rocurements of Rollin! Stoc( and &i!!y$ac(in! of the ,--.9. #ote that some of the items on this Wor2sheet ma0 over&ap /ith items a&read0 mentioned a$ove. 9. 5o' sho'&d prepare a .emorand'm for the Ie)ord do)'menting 0o'r ana&0sis of the vario's items mentioned a$ove. This /i&& )onstit'te the 'ritten Record of &rocurement +istory re<'ired $0 -aragraph 1.i. of *TA Cir)'&ar 4220.!:. 6oint -ro)'rements When it appears that 0o'r agen)0 has a )ommon re<'irement /ith another governmenta& 'ser, and that a @oint pro)'rement is feasi$&e, 0o' /i&& /ant to )aref'&&0 )onsider /hether a @oint pro)'rement /i&& res'&t in o$taining the $est pri)e for a&& of the parties to the pro)'rement. ?t is <'ite possi$&e that s'$stantia& differen)es in the re<'irements 8de&iver0 s)hed'&e, <'antities, &o)ation, et).9 of one part0 to the @oint pro)'rement /i&& res'&t in in)reased )osts to the other parties and there$0 negate other $enefits of a @oint pro)'rement s')h as &o/er so&i)itation )osts. 5o' m'st a&so determine /hether the different f'nding so'r)es have different pro)'rement reg'&ations, espe)ia&&0 /here there are *edera& and non *edera& re<'irements
-age 20
affe)ting )ontra)t )&a'ses, et). Sho'&d )onf&i)ts o))'r, grantees sho'&d )ons'&t their respe)tive &ega& )o'nse&s or re<'est *TA pre a/ard revie/ of their pro)'rement 8as permitted $0 *TA Cir)'&ar 4220.!:, -aragraph 5.$.9 ($-$-$2 Su&"rants RE@UIREMENT *TA Cir)'&ar 4220.!:, paragraph 4, defines the app&i)a$i&it0 of the Cir)'&ar to s'$grants( 4. A--7?CA,?7?T5. This )ir)'&ar app&ies to a&& *TA grantees and s'$grantees that )ontra)t /ith o'tside so'r)es 'nder *TA assistan)e programs. . . . a. States. When pro)'ring propert0 and servi)es 'nder a grant, a State /i&& fo&&o/ the same pro)'rement po&i)ies and pro)ed'res that it 'ses for a)<'isitions that are not paid for /ith *edera& f'nds. States m'st, at a minim'm, )omp&0 /ith the re<'irements of paragraphs 1m, Ha and $, and 9e of this )ir)'&ar and ens're that ever0 p'r)hase order and )ontra)t e;e)'ted $0 it 'sing *edera& f'nds in)&'des a&& )&a'ses re<'ired $0 *edera& stat'tes and e;e)'tive orders and their imp&ementing reg'&ations. $. A&& Other Ie)ipients. S'$grantees of states and a&& other *TA grantees 8to in)&'de regiona& transit a'thorities9 /i&& administer )ontra)ts in a))ordan)e /ith this )ir)'&ar. 49 C*I T !H."1 L Su$!rants re<'ires States and a&& other grantees to ens're that their s'$grantees )omp&0 /ith )ertain re<'irements. These re<'irements are dis)'ssed $e&o/. DISCUSSION Su&"rants t/emsel%es are not Ft/ird art# contractsF 1it/in t/e meanin" of FTA Circular .**:$(E! and t/us t/e reAuirements of t/at Circular do not a l# to t/e su&"rant a1ards$ Co1e%er! to t/e e;tent t/at t/e su&"rantee contracts 1it/ t/ird arties! t/e FTA Circular a lies to suc/ contracts a1arded &# t/e su&"rantee$ All su$grantees are reAuired to include in t/eir contracts t/e clauses reAuired &# Federal statutes and e;ecuti%e orders and t/eir im lementin" instructions$ See BPPM A endi; A$( Federally Required and 3ther 4odel Contract Clauses$ %u$grantees /hich are institutions o* higher education, hos#itals or other non#ro*it organi5ations, and all su$grantees o* grantees /hich are not %tates, are reAuired to administer t/eir contracts in accordance 1it/ all of t/e reAuirements of t/e FTA Circular .**:$(E Third Party Contracting Requirements$ %u$grantees o* states 6e+cluding institutions
-age 2!
o* higher education, hos#itals or other non1#ro*it organi5ations7 are aut/ori,ed to follo1 state la1 and rocedures 1/en a1ardin" and administerin" contracts$ If #ou are a "rantee a1ardin" su&"rants 1it/ FTA funds! #ou 1ill 1ant to /a%e an o%er%ie1 s#stem in lace for eriodic re%ie1s of #our su&"rantees to ensure t/at t/e# are in com liance 1it/ t/e reAuirements of FTA Circular .**:$(E and t/e reAuirements of .8 CFR Part (5$-4$ T/e Federal "o%ernment ractice 6FTA9 is to erform eriodic Procurement S#stem Re%ie1s 6PSRKs9 of its "rantees! e%aluatin" t/eir rocurement acti%ities a"ainst t/e reAuirements of t/e circular$ FTA /as de%elo ed a Procurement %ystems Re-ie/ 0uide for its re%ie1 teams! and #ou ma# 1ant to o&tain a co # of t/is "uide for #our re%ie1 of su&"rantees$ 6See BPPM Section ($($4 ) FTA Procurement %ystem Re-ie/s a&o%e9$ Dou s/ould note t/at .8 CFR Part (5$-4 im oses a res onsi&ilit# on all "rantees to ensure t/at t/eir su&"rantees /a%e included all Federall# reAuired clauses in t/eir contracts and t/at t/e su&"rantees are a1are of reAuirements im osed on t/em &# Federal statute and re"ulation! includin" t/ose reAuirements im osed &# .8 CFR Part (5$ .8 CFR Part (5$-46a96-9 s ecificall# mentions a res onsi&ilit# to include a clause in all cost reim&ursement su&"rants t/at t/e su&"rantee com l# 1it/ Part (5$.*! 1/ic/ deals 1it/ retention and access reAuirements for records$ ($-$-$4 EAui ment Leases RE@UIREMENT Ie<'irements re&ated to the &ease of e<'ipment and fa)i&ities ma0 $e fo'nd in the fo&&o/ing reg'&ations( 8a9 *TA Cir)'&ar 4220.!: genera&&0, and -aragraph 1.d /hi)h re<'ires, /here appropriate, an ana&0sis of &ease vers's p'r)hase a&ternatives to determine the most e)onomi)a& approa)h. 8$9 *TA Cir)'&ar 50!0.!C, .rant ana!ement .uidelines/ Chapter ?? "8d9 #easin!1 ,ut A!reements. These g'ide&ines )ontain severa& re<'irements /hi)h grantees m'st in)orporate in their &ease agreements. 8)9 *TA .aster Agreement .A8!29, Se)tion !%, #eases$ 8d9 Capita& 7eases 849 C*I -art %"99. DISCUSSION Since eAui ment leases are considered Ft/ird art# contractsF 1it/in t/e meanin" of FTA Circular .**:$(E! t/e reAuirements of t/at Circular a l# to suc/ rocurements. FTA Circular .**:$(E reAuires a lease %ersus urc/ase anal#sis to determine t/e most economical a roac/ to an# "i%en rocurement$ FTA Circular 0:(:$(C! C/a ter II)-6d9!
-age 22
deals 1it/ maintenance reAuirements under leases$ T/e FTA Master A"reement references re"ulations dealin" 1it/ Ca ital Leases 6.8 CFR Part 2-89$ Lease %s$ urc/ase alternati%es ) It is usuall# less economical to lease eAui ment t/an to urc/ase it$ Co1e%er! t/ere are some instances 1/ere t/is is not true$ For e;am le! s/ort) term leases of eAui ment 1/ic/ is reAuired for a s/ort time or for a uniAue tasE ma# &e reasona&le and economicall# sound$ It ma# also &e ad%isa&le to lease eAui ment t/at under"oes ra id tec/nolo"ical c/an"e suc/ as ersonal com uters and ot/er IT related eAui ment$ In some cases! it is easier to /a%e eAui ment maintained if it is leased$ But lon" term leases and leases for items t/at s/ould &e urc/ased and ca itali,ed &ut cannot &e &ecause of &ud"et constraints are not economicall# rudent$ If a decision is made to lease eAui ment! a lease %s$ urc/ase anal#sis s/ould &e made$ T/e anal#sis s/ould &e a ro riate to t/e si,e and com le;it# of t/e rocurement$ In determinin" 1/et/er t/e lease of eAui ment is feasi&le! t/e follo1in" factors must &e considered3
Estimated len"t/ of t/e eriod t/e eAui ment is reAuired and t/e amount of time of actual eAui ment usa"eJ Tec/nolo"ical o&solescence of t/e eAui mentJ Financial and o eratin" ad%anta"es of alternati%e t# es and maEes of eAui mentJ Total rental cost for t/e estimated eriod of useJ Net urc/ase rice! if acAuired &# urc/aseJ Trans ortation and installation costsJ Maintenance! stora"e and ot/er ser%ice costsJ Trade)in or sal%a"e %alueJ Im uted interest costsJ and A%aila&ilit# of a ser%icin" facilit# es eciall# for /i"/l# com le; eAui ment 6can t/e A"enc# ser%ice t/e eAui ment if it is urc/ased9$
($-$-$5 Re%enue Contracts RE@UIREMENT 49 C*I -art !H.25 &ro!ram 3ncome states that !rantees are encoura!ed to earn income to defray %ro!ram costs.
-age 2"
*TA Cir)'&ar 4220.!: T)ird &arty Contractin! Requirements re<'ires grantees to 'se )ompetitive se&e)tion pro)ed'res in the a/ard of reven'e )ontra)ts. The *TA AdministratorKs "ear Collea!ue #etter C1:;1<5/ dated O)to$er !, !99H defined revenue contracts and stip'&ated re<'irements regarding )ompetitive se&e)tion pro)ed'res, five 0ear term &imits 8no &onger app&i)a$&e9 and re<'ests for /aivers. The *TA "ear Collea!ue #etter C 0H 02, dated .a0 29, 2002 res)inded the re<'irement that grantees o$tain *TA approva& for )ontra)t terms &onger than five 0ears.
DISCUSSION It is critical to *irst determine the #rimary #ur#ose o* the contract$ If it is to rocure su lies or ser%ices! t/en it is not a re-enue contract$ For e;am le! mana"ement and ara)transit contracts are not re-enue contracts &ecause t/e rimar# ur ose is to mana"e a ro'ect or o erate a ser%ice$ Ro#alties recei%ed as a &#) roduct of a de%elo ment or su l# contract! e$"$ soft1are! 1ould not &e considered a re-enue contract$ Dis osal of Pro'ect ro ert# 1ould &e anot/er e;am le t/at 1ould not &e considered a re-enue contract$ If t/e #rimary #ur#ose is to generate re-enue t/en t/e contract is a re%enue contract$ Ad%ertisin"! concessions 6food and ne1s)stands9! use of ri"/t)of)1a#s! licenses! and land leasin" are some e;am les of re%enue contracts$ T/e definition of a re%enue contract de%elo ed &# FTA is as follo1s3 A re-enue contract is any third #arty contract /hose #rimary #ur#ose is to either generate re-enues in connection /ith a transit1related acti-ity or to create $usiness o##ortunities utili5ing an FTA1*unded asset! T/ere are t/ree conce ts in%ol%ed in t/e definition of a re%enue contract$ First! t/e o&'ecti%e of re%enue contracts is to lo1er ro"ram costs! and t/ere&# reduce &ot/ t/e federal and t/e "ranteeMs financial contri&ution$ Creati%e 1a#s of "eneratin" t/ese re%enues are encoura"ed! and FTA uses &road latitude in a ro%in" t/em$ Second! re%enue "eneration for t/e transit a"enc# is a &usiness o ortunit# for t/e &usiness communit#$ Suc/ &usiness o ortunities can taEe %arious forms! suc/ as3 ad%ertisin"! land de%elo ment! concessions! and utili,ation of ri"/t)of)1a#s$ T/ird! an FTA)funded asset is an#t/in" t/at /as &een urc/ased! in 1/ole or in art! 1it/ FTA funds as art of an a ro%ed trans ortation &ud"et$ T/is can include funds for acAuisition! o eratin" e; ense or maintenance$ <rantees must /a%e a detailed familiarit# 1it/ t/e a ro%ed &ud"ets to Eno1 if a articular acti%it# is included and funded &# federal funds! in 1/ic/ case it 1ould &e "o%erned &# federal reAuirements$
-age 24
All re%enue "enerated acti%it# in%ol%in" t/ird) art# contracts must follo1 an im ortant reAuirement of FTA Circular .**:$(E3
T/e requirement *or com#etiti-e selection #rocedures a lies to all &usiness o ortunities includin" all re%enue "eneratin" contracts$
Com etition ) T/e com etiti%e rocess usuall# consists of a formal &id or ro osal rocess &ut it does not al1a#s /a%e to$ <rantees ma# use t/eir o1n 'ud"ment a&out /o1 to meet t/e intent of t/e com etition reAuirement! &ut t/e# must document t/e record to s/o1 /o1 com etition reAuirements 1ere met$ Disad%anta"ed Business Enter rises ) DBEs s/ould /a%e t/e ma;imum o ortunit# to artici ate in &ot/ contracts and su&contracts t/at use an# federal funds$ T/e "rantee is res onsi&le for taEin" all necessar# and reasona&le ste s to ensure t/at DBEs /a%e ma;imum o ortunit# to com ete for re%enue contracts since t/ese contracts are considered &usiness o ortunities! Contract Term ) T/e fi%e)#ear contract term limit 1as rescinded &# FTAMs Dear Collea"ue Letter of Ma# *8! *::*$ For a discussion of esta&lis/in" a ro riate contract terms! see BPPM Section *$*$( ) Contract Period o* Per*ormance 8imitation! Flo1)do1n ReAuirements ) <enerall#! if federal funds 6not assets9 are not used to "enerate re%enues! t/en t/ere are no reAuirements to include federal clauses in t/e re%enue contract itself$ Unsolicited Pro osals ) T/ese ma# come fort/ 1/en com anies see an o ortunit# to use t/e transit s#stem 6an FTA)funded acti%it#9 to en/ance t/eir &usiness interest$ It ma# a ear from suc/ ro osals t/at no ot/er com an# could offer t/e same roduct or ser%ice$ Co1e%er! t/is does not 'ustif# a sole source contract$ If t/e idea or acti%it# is of interest to #ou! t/e conce t s/ould &e e%aluated on its o1n merit and re%enue roducin" otential$ If t/e decision is to im lement it! t/en a com etiti%e rocess s/ould &e used to select t/e contractor! unless #ou determine t/at t/e ro osed conce t itself is ro rietar#$ Best Practices ?t is important to a&/a0s 2eep in mind the re<'irement for )ompetition. The #e/ 5or2 Cit0 Transit A'thorit0 8#5CTA9 has e;perien)e in man0 of the areas of reven'e generation(

advertising $'ses, trains, stations and other propert0 8$i&&$oards9, dire)t advertising on $a)2 of .etroCard &easeArenta& of .TA o/ned propert0 )on)essions, ne/s stands, retai& spa)e, s'$&easing of offi)e spa)e
-age 25
The #5CTA pro)'rement offi)e does not hand&e the reven'e generation )ontra)ts. Oario's departments of the transit agen)0 are responsi$&e for the reven'e )ontra)ts, &i2e the Advertising Department and Iea& :state Department. These Departments are a/are of the federa& re<'irements and fo&&o/ them to o$tain third part0 )ontra)tors. #5CTA /as approa)hed re)ent&0 $0 a )ompan0, /hi)h s'$mitted an 'nso&i)ited proposa&, /ho /anted to insta&& an e&e)troni) information s0stem on the s'$/a0 )ars. The )ompan0 /anted to program the s0stem so that riders /o'&d 2no/ /hat /as overhead, e.g. Wa&& Street, theater distri)t. #e/ 5or2 Cit0 de)ided to investigate the )on)ept first to determine if it /as something that the0 /anted to do to enhan)e the s'$/a0 s0stem. De)iding that the0 &i2ed the idea, the0 then prepared an I*- and so&i)ited vendors on a )ompetitive $asis. .etropo&itan At&anta Iapid Transit A'thorit0 8.AITA9 re)eived an 'nso&i)ited proposa& from a )ompan0 a$o't 'se of s'$/a0 right of /a0 for &in2ing At&anta /ith fi$er opti) )a$&e 'sing .AITA+s s0stem /ide )ond'its. .AITA determined that the0 had 'n'sed )ond'its and )o'&d &ease spa)e in them to vario's te&e)omm'ni)ation )ompanies. The0 )onta)ted the regiona& *TA offi)e and re)eived their approva& for a non e;)&'sive I*- to see2 )ompetitive proposa&s for t/ent0 0ear &eases. This has prod')ed s'))essf'& reven'e )ontra)ts. 5 ($-$-$8 Transit Oriented Loint De%elo ment Pro'ects RE@UIREMENT *TA Cir)'&ar 9"00.! Ca%ital &ro!ram= .rant A%%lication 3nstructions, Appendi; ,, 36oint Deve&opment -ro@e)ts.4 *edera& Iegister #oti)e, .ar)h !4, !991, FTA &olicy on Transit 9oint "evelo%ment. This clarifies the re&ationship $et/een transit &a/s and reg'&ations and *TA po&i)0 regarding propert0 disposition, &eases of propert0, and sa&e of propert0 affe)ting program in)ome and the definition of 3highest and $est transit 'se4 for @oint deve&opment. *TA Cir)'&ar 50!0.!C .rant ana!ement .uidelines states(
?? 2$. Use ...*TA en)o'rages in)identa& 'ses of rea& propert0 that )an raise additiona& reven'es for the transit s0stem or, at a reasona$&e )ost, enhan)e s0stem ridership. *TA approva& is re<'ired for these in)identa& 'ses of rea& propert0 /hi)h m'st $e )ompati$&e /ith the origina& p'rposes of the grant. *TA Cir)'&ar 4220.!: T)ird &arty Contractin! Requirements states the re<'irements the grantee m'st adhere to in third part0 )ontra)ting. Spe)ifi)a&&0, note(
0
Competitive Se&e)tion -ro)ed'res
.etropo&itan At&anta Iapid Transit A'thorit0 8.AITA9, )onta)t .r. D'rham Bami&ton, Dire)tor of -rogram .anagement, at 84049 H4H 4409, to dis)'ss At&anta+s fi$er opti) )a$&e )ontra)ts.
-age 2%
-ossi$&e *&o/ Do/n of Certain *edera& C&a'ses
DISCUSSION FTA is encoura"in" transit s#stems to undertaEe transit)oriented 'oint de%elo ment ro'ects 6TODs9 1it/ eit/er ne1 "rants or 1it/ ro ert# acAuired under re%ious "rants$ T/e ro ert# can &e associated 1it/ rail! &us or ot/er transit facilities$ T/e ur ose of a 'oint de%elo ment ro'ect is to3

secure a re%enue stream for t/e transit s#stemJ and! /el s/a e t/e communit# t/at is &ein" ser%ed &# t/e transit s#stem$
B/ere t/e "rantee retains effecti%e continuin" control for mass transit ur oses! all roceeds of sale! lease or ot/er encum&rance of t/e ro ert# 1ill &e treated as #rogram income for use &# t/e transit s#stem to meet ca ital and o eratin" needs$ T/e %er# nature of a 'oint de%elo ment ro'ect requires long1term relationshi#s &et1een t/e %arious contractin" arties due to issues related to land use! ,onin"! financial in%estment! lon")term leases! multi le contractin" arties! construction! and mana"ement$ T/e Federal Re"ister notice of Marc/ (.! (884! clarified and addressed a arent inconsistencies in t/e use of re%enues$ T/is Notice states3 ($ Loint de%elo ment ro'ects are considered Hmass trans ortation ro'ectsI eli"i&le for fundin" under FTA ca ital ro"rams$ *$ All ro'ects must "enerate a one)time a#ment or re%enue stream for transit use! t/e resent %alue of 1/ic/ eAuals or e;ceeds t/e fair marEet %alue of t/e ro ert#$ -$ B/en t/e "rantee retains continuin" control and use of t/e 'oint de%elo ment for mass trans ortation ur oses! all roceeds 1ill &e considered #rogram income$ <rantees are ad%ised to su&mit t/e 'oint de%elo ment ro osal to t/e FTA re"ional office in accordance 1it/ t/e Federal Re"ister notice of Marc/ (.! (884! ara"ra / entitled HProcedures$I T/e ro osals to FTA s/ould include3 ($ T/e ro osed 'oint de%elo ment a"reementJ *$ A marEet and financial assessment of t/e 'oint de%elo ment ro'ect and its im act on t/e transit s#stemJ -$ A statement of t/e outcome of lannin" and coordination &et1een t/e 'oint de%elo ment ro'ect and t/e transit facilit#J and
-age 21
.$ Documentation of t/e ro'ected &enefits for t/e transit s#stem as 1ell as t/e effecti%e continuin" control of t/e 'oint de%elo ment ro'ect for transit ur oses$ Com etition is an im ortant reAuirement in t/e de%elo ment of t/e ro'ect$ ReAuirements for full and o en com etition of t/e ro osed ro'ect can &e o&tained &#3 u&lic announcements in t/e ne1s a ers and trade 'ournalsJ &uildin" a solicitation list t/at is inclusi%e and not e;clusi%eJ de%elo in" a realistic res onse time for de%elo ers! Eno1in" t/at de%elo ers /a%e to freAuentl# &uild a HteamI to res ond to t/e RFPJ /a%in" realistic criteria to 'ud"e t/e res onsesJ /a%in" an e%aluation team 1it/ &road and di%erse e; erience rate t/e ro osalsJ and! com etiti%e ne"otiations$ Flo1)do1n reAuirements dealin" 1it/ Federal clauses in a 'oint de%elo ment ro'ect 1ill follo1 t/e federal funds$ It must &e determined 1/et/er and to 1/at de"ree Federal re"ulations a l#! articularl# to t/e ri%atel# funded! non)transit ortion of t/e ro'ect$ T/ese re"ulations could include3 National En%ironmental Polic# Act! Da%is)Bacon Act! Bu# America Act! la&or rotection arran"ements! and t/ird) art# rocurement reAuirements$ Dou s/ould determine 61it/ FTAMs assistance as necessar#9 t/e most a ro riate rocedures for satisf#in" an# flo1)do1n reAuirements! "i%en t/e articular circumstances of #our ro'ect$ Best Practices At&anta+s transit s0stem, .etropo&itan At&anta Iapid Transit A'thorit0 8.AITA9, is invo&ved in a @oint deve&opment pro@e)t )a&&ed the 7ind$ergh Center. Their o$@e)tive is to $'i&d a vi&&age that /i&&( in)rease ridership, $e high densit0 mi;ed 'se, $e a &iva$&e )omm'nit0, generate &ong term reven'e, integrate the station and deve&opment. The0 have addressed the iss'es, $een thro'gh the pro)'rement pro)ess, and se&e)ted a deve&oper. Bo/ did the0 do thisW The0 $egan $0 /or2ing first /ith their *TA regiona& offi)e in e;p&aining /hat the0 /anted to do. #e;t, the0 deve&oped three re<'ests for proposa&s 8I*-s9 &eading to three )ontra)ts for( mar2eting the propert0, eva&'ating the deve&opment proposa&s, and the deve&opment itse&f. The <'estion of open and f'&& )ompetition /as met thro'gh the mar2eting strateg0. The mar2eting p&an /as )riti)a& in rea)hing o't to deve&opers /ho might $id on the pro@e)t. .AITA set a target of 500 deve&opers to rea)h thro'gh a variet0 of methods( a predetermined &isting of potentia& deve&opers, advertising in ma@or ne/spapers 8Wa&& Street 6o'rna&9, nationa& and internationa& so&i)itations. An o'tside management )ons'&ting firm /as retained to assist .AITA in the eva&'ation of deve&opers+ proposa&s. The Deve&opment I*- detai&ed the re<'irements of the e;pe)ted deve&opment proposa&s. ?n)&'ded in the eva&'ation fa)tors /as a
-age 2H
)ategor0 of 3ma;imiGe reven'es and ret'rns to .AITA.4 The pro)ess /as s'))essf'&&0 )omp&eted and a deve&oper has $een )hosen. % ($-$-$(: Dis osition of Sur lus RE@UIREMENT Ie<'irements re&ated to the generation of program in)ome, and the disposition of s'rp&'s e<'ipment, s'pp&ies and rea& propert0 ma0 $e fo'nd in the fo&&o/ing reg'&ations( 8a9 *TA Cir)'&ar 4220.!: 8genera& prin)ip&es app&i)a$&e to a&& )ontra)ts invo&ving *edera& f'nds or *edera&&0 f'nded assets9. 8$9 *TA .aster Agreement .A8!29, Se)tion !9.g "is%osition of &ro5ect &ro%erty. 8)9 49 C*I !H.25 &ro!ram 3ncomeQ !H."! Real &ro%ertyQ !H."2 8qui%mentQ !H."" Su%%lies. 8d9 *TA Cir)'&ar 50!0.!C, .rant ana!ement .uidelines, Chapter ?? 2), Real &ro%erty > "is%osition6 Chapter ??? 4 &ro!ram 3ncome. 8e9 49 U.S.C. 5""48g9 Transfer of Assets No #on!er Needed. DISCUSSION FTA inter rets Circular .**:$(E as a l#in" to contracts for t/e dis osition of sur lus su lies! eAui ment or ro ert#$ <rantees are also ad%ised to &e familiar 1it/ ot/er re"ulations t/at s ecificall# address t/e dis osition of ro ert#! es eciall# FTA Circular 0:(:$(C! C/a ter II = 4anagement o* Real Pro#erty, "qui#ment and %u##lies! It is im ortant t/at t/e "rantee &e familiar 1it/ t/e dis osition reAuirements of FTA Circular 0:(:$(C! C/a ter II)*6c9 and -6f9$ T/is Circular esta&lis/es rocedures to &e follo1ed &# "rantees in a %ariet# of situations! and "rantees need to carefull# re%ie1 t/ese reAuirements$ T/e# ertain to circumstances suc/ as3 Sellin" ro ert# 6com etiti%el# to t/e e;tent ractica&le9 and reim&ursin" FTA
.etropo&itan At&anta Iapid Transit A'thorit0 8.AITA9, )onta)t .s. 7isa De=ra)e, Dire)tor of Contra)ts, -ro)'rement and .ateria&s at 84049 H4H 54%1, to dis)'ss At&anta+s transit oriented deve&opment and other reven'e )ontra)ts.
-age 29
its s/are of t/e fair marEet %alue$ Sellin" real ro ert# and usin" t/e roceeds to reduce t/e cost of t/e "rant if it is still o en or of ot/er FTA funded ca ital ro'ects$ Retainin" title to real ro ert# &# reim&ursin" FTA for its s/are of t/e current 6a raised9 marEet %alue$ Dis osin" of rollin" stocE &efore t/e end of ser%ice life$ Dis osin" of eAui ment$ ( Transfer of eAui ment to a u&lic a"enc# for non)transit use$ Sellin" and usin" roceeds for ot/er ca ital ro'ects$ *
Transfer of Assets No Lon"er Needed = .8 USC 0--. 6"96(9 allo1s for t/e transfer of assets no lon"er needed &# t/e "rantee$ If a "rantee decides an asset acAuired 1it/ FTA funds is no lon"er needed for t/e ur ose for 1/ic/ it 1as acAuired! t/e "rantee ma# reAuest FTA a ro%al to transfer t/e asset to a local "o%ernmental aut/orit# to &e used for a u&lic ur ose 1it/ no furt/er o&li"ation to FTA$ T/e Secretar# of Trans ortation ma# aut/ori,e a transfer for a u&lic ur ose ot/er t/an mass trans ortation! &ut onl# if t/e Secretar# decides ) A9 t/e asset 1ill remain in u&lic use for at least 0 #ears after t/e date t/e asset is transferredJ B9 t/ere is no ur ose eli"i&le for assistance under .8 USC C/a ter 0- for 1/ic/ t/e asset s/ould &e usedJ C9 t/e o%erall &enefit of allo1in" t/e transfer is "reater t/an t/e interest of t/e <o%ernment in liAuidation and return of t/e financial interest of t/e <o%ernment in t/e asset! after considerin" fair marEet %alue and ot/er factorsJ and D9 t/rou"/ an a ro riate screenin" or sur%e# rocess! t/at t/ere is no interest in acAuirin" t/e asset for <o%ernment use if t/e asset is a facilit# or land$
:<'ipment /ith a 'nit mar2et va&'e of S5,000 or &ess, or s'pp&ies /ith a tota& aggregate va&'e of S5,000 or &ess, ma0 $e retained, so&d or other/ise disposed of /ith no o$&igation to reim$'rse *TA, providing 'sef'& servi)e &ife re<'irements have $een met.
*
The sit'ations )overed $0 the Cir)'&ar in)&'de more than those &isted a$ove, and grantees need to )aref'&&0 revie/ the Cir)'&ar instr')tions.
-age "0
T/e decision to ermit t/e transfer must &e in 1ritin" and include t/e reasonin" t/at su orts t/e transfer$ Sale of Assets No Lon"er Needed = .8 USC 0--. 6"96.9 allo1s for t/e sale of assets no lon"er needed! su&'ect to t/e a ro%al of t/e Secretar# of Trans ortation$ B/en real ro ert#! eAui ment! or su lies acAuired 1it/ FTA funds are no lon"er needed for mass trans ortation ur oses as determined under t/e a lica&le assistance a"reement! t/e Secretar# ma# aut/ori,e t/e sale! transfer! or lease of t/e assets under conditions determined &# t/e Secretar#$ T/e net income from asset sales! uses! or leases 6includin" lease rene1als9 must &e used &# t/e "rantee to reduce t/e "ross ro'ect cost of ot/er ca ital ro'ects carried out 1it/ FTA funds$ Best Practices One transit agen)0 has deve&oped detai&ed pro)ed'res for disposing of s'rp&'s items. " These in)&'de(
Competitive $idding pro)ed'res for materia&s that are reg'&ar&0 generated, reg'&ar&0 removed, high vo&'me, and &o/ 'nit pri)e s')h as s)rap stee& or motor oi&. Deve&opment of spe)ifi)ations $0 the .ateria&s .anagement Department in )oordination /ith the User Department8s9 for the s'rp&'s items to $e offered for sa&e and revie/ $0 the -'r)hasing Department. -reparation of a so&i)itation and advertising of the items $eing offered for sa&e $0 the -'r)hasing Department /hen )ompetitive $ids are $eing so&i)ited. ?ss'an)e of a >?nvitation to N'ote> &etter to prospe)tive $idders $0 the -'r)hasing Department, or a &etter inviting 3offers to p'r)hase4 $0 the Sa&es Division /hen the se&&ing pri)e of the materia& is e;pe)ted to $e $e&o/ the sma&& p'r)hase thresho&d. . Ana&0sis of $ids $0 the -'r)hasing Department, /ith a /ritten re)ommendation for a/ard to the /inning $idder. ?nterna& agen)0 approva&s to a/ard a )ontra)t for the sale of A'thorit0 propert0 or servi)es para&&e&s that of the approva& pro)ess to a/ard a )ontra)t for the %rocurement of goods and servi)es.
($-$-$(( O eratin" Assistance! Pre%enti%e Maintenance! CMA@ and LARC Pro'ects
#e/ 5or2 Cit0 Transit. Conta)t .i2e Xa))hea, 8%4%9 252 %204.
?f the materia& to $e so&d does not meet the )riteria for )ompetitive $idding, so&i)itation and advertising of individ'a& items offered for sa&e /o'&d $e a responsi$i&it0 of the Sa&es Department, not -ro)'rement.
-age "!
RE@UIREMENT *TA Cir)'&ar 4220.!:, paragraph 4, addresses the iss'e of the Cir)'&ar+s app&i)a$i&it0 to 8a9 operating )ontra)ts, 8$9 )ontra)ts 'ti&iGing Congestion .itigation and Air N'a&it0 8C.AN9 and 6o$ A))essAIeverse Comm'te 86AIC9 pro@e)t f'nds, and 8)9 preventive maintenan)e )ontra)ts /hi)h are f'nded /ith *TA form'&a )apita& f'nds( This )ir)'&ar app&ies to a&& *TA grantees and s'$grantees that )ontra)t /ith o'tside so'r)es 'nder *TA assistan)e programs. *TA grant re)ipients /ho 'ti&iGe *TA form'&a f'nds for operating assistan)e are re<'ired to fo&&o/ the re<'irements of this )ir)'&ar for a&& operating )ontra)ts. These re<'irements do not app&0 to pro)'rements 'nderta2en in s'pport of )apita& pro@e)ts )omp&ete&0 a))omp&ished /itho't *TA f'nds or to those operating and p&anning )ontra)ts a/arded $0 grantees that do not re)eive *TA operating and p&anning assistan)e. ! Congestion .itigation and Air N'a&it0 8C.AN9 and 6o$ A))essAIeverse Comm'te 86AIC9 pro@e)t f'nds ma0 $e 'sed for operations. A&tho'gh grantees m'st fo&&o/ )ir)'&ar re<'irements for an0 spe)ifi) )ontra)ts that 'ti&iGe C.AN or 6AIC f'nds, the 'se of C.AN and 6AIC f'nds for operations does not trigger the app&i)a$i&it0 of the )ir)'&ar to a&& other operating )ontra)ts. 2 =rantees that 'ti&iGe form'&a )apita& f'nds for preventive maintenan)e )ontra)ts are s'$@e)t to the fo&&o/ing re<'irements of the )ir)'&ar( ?f *TA form'&a )apita& f'nds are f'&&0 a&&o)ated to dis)rete preventive maintenan)e )ontra)ts, then the re<'irements of this )ir)'&ar /i&& app&0 on&0 to those dis)rete )ontra)ts and m'st $e identified and tra)2ed $0 the grantee. ?f the *TA form'&a f'nds are not a&&o)ated to dis)rete )ontra)ts then a&& preventive maintenan)e )ontra)ts are s'$@e)t to the re<'irements of the )ir)'&ar. "
(
As a genera& r'&e, the )ir)'&ar, a&ong /ith the 'nder&0ing re<'irements in the *edera& transit &a/s and reg'&ations, app&ies /henever *edera& f'nds are invo&ved. Those grantees a'thoriGed to 'se form'&a f'nds for operating assistan)e m'st app&0 the )ir)'&ar to a&& operating )ontra)ts L even if the0 are a$&e to administrative&0 segregate the federa& f'nds to non )ontra)t operating e;penses. The a$i&it0 to 'se form'&a f'nds for operating assistan)e hinges 'pon a grantee+s tota& operating e;penses and the portion of those e;penses not offset $0 operating in)ome. Sin)e the entire range of operating e;penses is )onsidered in this )a&)'&ation, ea)h segment of those operating e;penses m'st $e s'$@e)t to *edera& standards. =rantees that are not a'thoriGed to 'se form'&a f'nds for operating assistan)e are not re<'ired to app&0 the )ir)'&ar to their operating )ontra)ts.
*
Congestion .itigation and Air N'a&it0 8C.AN9 and 6o$ A))essAIeverse Comm'te 86AIC9 f'nds ma0 $e 'sed for operations $0 a&& grantees. The )ir)'&ar m'st $e app&ied to a&& )ontra)ts that are f'nded, in part, $0 C.AN or 6AIC f'nds. Using C.AN or 6AIC f'nds for a spe)ifi) operating )ontra)t or )ontra)ts does not trigger the re<'irement to app&0 the )ir)'&ar to other operating )ontra)ts. This is $e)a'se the )a&)'&ation re<'ired to 'se form'&a f'nds for operations )ontra)ts is not re<'ired as a prere<'isite to 'sing C.AN or 6AIC f'nds for operating )ontra)ts.
-
=rantees /ho 'se form'&a )apita& f'nds for preventative maintenan)e )ontra)ts m'st app&0 the )ir)'&ar to those )ontra)ts. ?f, thro'gh their a))o'nting pro)ed'res, these grantees are a$&e to a&&o)ate the *edera& f'nds to dis)rete maintenan)e )ontra)ts, on&0 those dis)rete )ontra)ts m'st adhere to the )ir)'&ar. ?f 'na$&e to a&&o)ate federa& f'nds to dis)rete maintenan)e )ontra)ts, the )ir)'&ar app&ies to a&& maintenan)e )ontra)ts. Capita& pro@e)ts that don+t in)&'de *edera& f'nding are not re<'ired to )onform to the )ir)'&ar.
-age "2
DISCUSSION If a transit ro ert# recei%es FTA formula funds for o#erating assistance! all "rantee rocurements must com l# 1it/ FTA Circular .**:$(E e;ce t for ca ital ro'ects undertaEen 1it/out Federal funds or t/ose o eratin" and lannin" contracts a1arded &# "rantees t/at do not recei%e FTA o eratin" and lannin" assistance$ <rantees 1/ose net o eratin" deficit is financed &# Federal funds cannot se"re"ate an# of t/eir o eratin" or lannin" contracts so t/at t/e# are e;em t from t/e reAuirements of t/e Circular$ T/e Circular must &e a lied to all suc/ contracts$ B/en "rantees recei%e C4A9 and .ARC *unds for o erations ro'ects! t/e Circular reAuirements must &e follo1ed for t/ose s ecific contracts usin" CMA@ and LARC funds$ Co1e%er! t/e use of t/ese articular funds for o erations does not tri""er t/e a lica&ilit# of t/e Circular to all o eratin" contracts! as is t/e case 1it/ FTA formula funds$ ($-$-$(* E)Commerce RE@UIREMENT *TA Cir)'&ar 4220.!:, paragraph 1.<. re)ogniGes : Commer)e as an a&&o/a$&e means to )ond')t pro)'rements. ?f a grantee )hooses to 'ti&iGe : Commer)e, /ritten pro)ed'res m'st $e deve&oped and a&& re<'irements for f'&& and open )ompetition m'st $e met. DISCUSSION T/e Best Practices Procurement Manual 6BPPM9 intends to co%er t/e to ic of E) Commerce at a later date 1/en industr# e; erience /as &een sufficient to indicate some H&est racticesI for t/e transit industr#$ In t/e meantime! t/e :ear Colleague 8etter of Ma# *8! *::* reminds "rantees t/at E)Commerce is an allo1a&le means to conduct rocurements$ If a "rantee c/ooses to im lement an E)Commerce s#stem! 1ritten rocedures must &e de%elo ed and all t/e reAuirements of FTA Circular .**:$(E must &e met! includin" t/e reAuirement for Hfull and o en com etitionI as stated in FTA Circular .**:$(E! Para"ra / 5a$
,est -ra)ti)es -ro)'rement .an'a& L Chapter 2 L -ro)'rement -&anning C OrganiGation
-age !
C/a ter * * ) Procurement Plannin" + Or"ani,ation 2.! OrganiGation of -ro)'rement *'n)tions 85A9%9 2.!.! S)ope of Iesponsi$i&it0 85A9%9 2.!.2 A'tonom0 85A9%9 2.2 7ong Term -&anning 85A9%9 2.2.! Contra)t -eriod of -erforman)e 7imitation 8%A0"9 2.2.2 .'&ti 5ear vs. .'&tip&e 5ear Contra)ting 81A029 2." Ann'a& -&anning 85A9%9 2.".! So'r)es and Contents 85A9%9 2.".2 ?ndependent =rantee Cost :stimate 84A059 2.4 So'r)e Se&e)tion -&an 85A9%9 2.4.! *i&e Do)'mentation 85A9%9 2.4.2 *'&& and Open Competition 85A9%9 2.4.2.! *'&& and Open Competition -rin)ip&e 85A9%9 2.4.2.2 Iestraints on Competition 85A9%9 2.4.2.2.! ,rand #ames 8%A0"9 2.4.2.2.2 Written Standards of Cond')t and Conf&i)ts of ?nterest( -ersona& and OrganiGationa& 8%A0"9 2.4.2.2." =eographi) Iestri)tions 8%A0"9 2.4.2.2.4 -re <'a&ifi)ation 85A9H9 2.4." *i;ed -ri)e v. Cost Ieim$'rsement 85A9H9 2.4.".! *i;ed -ri)e Contra)ts 84A059 2.4.".2 Cost Ieim$'rsement Contra)ts 8%A0"9 2.4."." Time and .ateria&s Contra)ts 85A9H9 2.4.".4 7a$or Bo'r Conta)ts 85A9H9 2.4.".5 Cost -&'s -er)entage of Cost Contra)ts 8%A0"9
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2.4.4 -a0ments 85A9H9 2.4.4.! -a0ment of the -ri)e 85A9H9 2.4.4.2 Advan)e -a0ments 8%A0"9 2.4.4." -rogress -a0ments 84A059 2.4.4.4 Withho&ding and *ina& -a0ment 85A9H9 2.4.5 ?ndefinite De&iver0 Contra)ts 8!0A999 2.4.5.! Definite <'antit0 Contra)ts 8!0A999 2.4.5.2 Ie<'irements Contra)ts 8%A0"9 2.4.5." ?ndefinite <'antit0 Contra)ts 8%A0"9 *$( OR<ANINATION OF PROCUREMENT FUNCTION *$($( Sco e of Res onsi&ilit# RE@UIREMENT *TA Cir)'&ar 4220.!:, paragraph 5a L .rantee Self1Certification/ states that *TA intends to re&0 on granteesK Dann'a&F >se&f )ertifi)ations> that their pro)'rement s0stem meets *TA re<'irements to s'pport the re<'ired finding D$0 *TAF that a grantee has the te)hni)a& )apa)it0 to )omp&0 /ith *edera& pro)'rement re<'irements. *TA Cir)'&ar 4220.!:, paragraph 1$ > Contract Administration System/ re<'ires grantees to maintain a )ontra)t administration s0stem that ens'res that )ontra)tors perform in a))ordan)e /ith the terms, )onditions, and spe)ifi)ations of their )ontra)ts or p'r)hase orders. DEFINITIONS Centra&iGe To )on)entrate pro)'rement a)tions and de)isions in one person or gro'p /ithin an organiGation. Contra)ting Offi)er A pro)'ring offi)ia& /ho has de&egated a'thorit0, 's'a&&0 in)&'ding a'thorit0 to sign )ontra)ts and amendments on $eha&f of the pro)'ring agen)0 for one or more spe)ifi) )ontra)ts. Contra)ting Offi)erKs Te)hni)a& Iepresentative 8COTI9 A representative of the pro)'ring agen)0 /ho has more &imited a'thorit0 than the )ontra)ting offi)er, 's'a&&0 in)&'ding providing te)hni)a& dire)tion to the )ontra)tor.
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DISCUSSION As a Contractin" Officer #ou are res onsi&le &ot/ for #our contractMs cost)effecti%eness and its com liance 1it/ Federal and state reAuirements$ It is easier to fulfill t/ese res onsi&ilities if most of t/e decisions and contractual actions concernin" rocurement are focused in one or more indi%iduals 1/o are familiar 1it/ rocurement reAuirements and rocedures$ T/ese actions &e"in 1it/ lannin" and solicitation of offers! include communication 1it/ offerors and contractors! and continue t/rou"/ contract acce tance and 1arrant# enforcement$ E;ce t in %er# small or"ani,ations! t/e contractin" res onsi&ilities 1ill often reside 1it/ different indi%iduals t/an t/e indi%iduals 1/o 1ould &est understand t/e functional and erformance reAuirements of t/e "oods or ser%ices$ T/ese latter ersons are #our internal customers$ Pur ose 5o' and the &eadership of 0o'r organiGation need to )&ear&0 'nderstand the s)ope of the pro)'rement f'n)tion and organiGe responsi$i&ities to a))omp&ish severa& o$@e)tives( to o$tain the $est $'0 for 0o'r agen)0 /hi)h re<'ires an eva&'ation of a&& the servi)e <'a&it0, safet0, )ost, s)hed'&e, and other o$@e)tives of the agen)0Ks operating f'n)tionsQ to )omp&0 /ith *edera&, state, &o)a&, and agen)0 pro)'rement re<'irementsQ to ens're an 'nderstanding of the pre)ise a'thorit0 of 0o' and 0o'r agen)0 team mem$ers in dea&ing /ith s'pp&iers /ho, /hi&e partners in man0 respe)ts, have some interests that )onf&i)t sharp&0 /ith 0o'r agen)0KsQ and to )ontro& thro'gh finite, professiona& $o'ndaries, the possi$i&it0 of )orr'ption or 'nethi)a& pra)ti)es.
These o$@e)tives re<'ire the )&ear definition and assignment of pro)'rement responsi$i&ities. A spe)ifi) aspe)t of that assignment, the need for a'tonom0, is dis)'ssed in more detai& in the fo&&o/ing se)tion of the .an'a&. Best Practices ?dentifi)ation of #eed The initia& identifi)ation of need is one aspe)t of the pro)'rement )0)&e that is genera&&0 the so&e responsi$i&it0 of 0o'r interna& )'stomers 8i.e., program or te)hni)a& personne& for /hom 0o' are pro)'ring goods or servi)es9. Bo/ever, 0o' ma0 $e in a position to fa)i&itate the )onso&idation of pro)'rements of different interna& )'stomers /ith the same need.
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-ro)'rement -&anning L -reparation of pro)'rement p&anning, on the other hand, sho'&d $e e;)&'sive&0 a pro)'rement f'n)tion. ?f 0o'r agen)0 has not )ond')ted forma& p&anning, this pro)ess is a /a0 to esta$&ish the need for a separate pro)'rement f'n)tion and demonstrate its va&'e to the organiGation. Spe)ifi) s'ggestions for 'sef'& p&anning a)tivities are dis)'ssed $e&o/ 'nder &ong range and ann'a& p&anning )0)&es. -reparation of Spe)ifi)ations L -reparing spe)ifi)ations or statements of /or2 is 's'a&&0 a )'stomer f'n)tion. =enera&&0, )'stomers have the greatest 'nderstanding of f'n)tiona& and performan)e re<'irementsQ ho/ever, the pro)'rement f'n)tion sho'&d p&a0 at &east an advisor0 ro&e in order to avoid e;)&'sionar0 spe)ifi)ations and to en)o'rage free and open )ompetition. So&i)itation of Offers L The so&i)itation of offers 8in)&'ding invitation for $ids and re<'est for proposa&s9 is 's'a&&0 the first important p'$&i) a)tion the agen)0 ta2es, and it sho'&d )&ear&0 $e the responsi$i&it0 at this point of the pro)'rement staff. C'stomer team mem$ers are often he&pf'& in )ompi&ing &ists of potentia& offerors, and sho'&d parti)ipate in the pro)'rement pro)ess, $'t )omm'ni)ations /ith offerors and the offi)ia& a)tion of so&i)iting offers is a pro)'rement f'n)tion. Comm'ni)ations L ?f )omm'ni)ation /ith offerors is de)entra&iGed, one offeror ma0 o$tain more information a$o't the agen)0Ks preferen)es or eva&'ation pro)ess than the others. ?t is a genera& pra)ti)e 8e;)ept at the sma&&est agen)ies9 to restri)t )omm'ni)ation /ith offerors to on&0 pro)'rement personne& so that no offeror )o'&d gain an advantage or apparent advantage over another. :va&'ation of Offers L -ro)'rement personne& /i&& 's'a&&0 re<'est and re&0 'pon their te)hni)a& )'stomers to eva&'ate the te)hni)a& merits of proposa&s and assess the offeror+s a$i&it0 to perform the )ontra)t s'))essf'&&0. The -ro)'rement Offi)er m'st oversee the te)hni)a& eva&'ation to ens're it is )onsistent /ith the eva&'ation )riteria p'$&ished in the I*- and that the )ontra)t fi&e is ade<'ate&0 do)'mented to ref&e)t the re&ative strengths, defi)ien)ies, /ea2nesses and ris2s of the vario's proposa&s. ?t is important that the te)hni)a& eva&'ation provide a )&ear narrative of the proposa&s+ re&ative merits and not mere&0 a n'meri)a& rating of the proposa&s. To maintain the overa&& integrit0 of the pro)'rement, the pro)'rement f'n)tion norma&&0 m'st at &east approve the se&e)tion and 8if it does not have s'ffi)ient a'thorit09 /i&& often present the re)ommendation to the fina& a'thorit0. Administration L 5o' sho'&d p&a0 a )ontin'ing ro&e in the administration of the )ontra)ts, parti)'&ar&0 in )hanges and disp'tes. A))eptan)e of goods and servi)es and pa0ment approva&s a&/a0s re<'ire 0o'r revie/. ?n simp&er or ro'tine sit'ations, a re)eiving report or COTI a))eptan)e )an $e mat)hed to 0o'r origina& p'r)hase order to ens're proper )ontro&. Centra&iGation A De)entra&iGation L .an0 organiGations find it more effi)ient to permit )'stomer gro'ps, parti)'&ar&0 those /ith a &arge n'm$er of simi&ar, sma&& pro)'rements, to perform some of the f'n)tions norma&&0 performed $0 the pro)'rement offi)e 8e.g., so&i)itation and eva&'ation
-age 5
of offers 'p to a spe)ifi) do&&ar amo'nt9. Bo/ever, in these )ases, pro)'rement personne& )an provide a va&'a$&e oversight ro&e, providing forms, pro)ed'res, and te)hni)a& assistan)e. A&tho'gh de)entra&iGed pro)'rement )an red')e the administrative )ost of the pro)'rement and $e more responsive to a )'stomersK needs, if it is 'n)ontro&&ed, it )o'&d event'a&&0 res'&t in sit'ations invo&ving non )omp&ian)e, 'n/ise )ontra)ting, or 'nethi)a& pra)ti)es. ?t is a $est pra)ti)e to ens're that no emp&o0ee 'nderta2es an0 of the pro)'rement f'n)tions /itho't )&ear a'thorit0 and g'ide&ines. *$($* Autonom# DISCUSSION Autonom# of t/e rocurement function! or its inde endence from internal customers! is im ortant to carr#in" out rocurement res onsi&ilities 1it/out undue influence &# t/e customers and users of t/e "oods and ser%ices rocured$ B/ile t/e de"ree of autonom# and or"ani,ational re ortin" relations/i s 1ill %ar# 1it/ t/e si,e of t/e or"ani,ation and its olicies! autonom# ena&les rocurement ersonnel to "i%e un&iased consideration to rocurement rinci les and reAuirements! as 1ell as to t/e sc/edule! &ud"et! functional and ot/er reAuirements of t/e internal customers$ Pur ose A de$ate has raged for 0ears $et/een those /ho are pro)ess oriented 8pro)'rement offi)ia&s and )omp&ian)e departments s')h as &ega&, interna& a'dit, or grants9 and those /ho are program oriented 8maintenan)e managers, engineers, pro@e)t managers9. Sho'&d the pro)'rement f'n)tions des)ri$ed in the previo's se)tion $e )ontro&&ed $0 the program f'n)tionsW After a&&, it is the program offi)e /hose needs are to $e met, and, in most a))o'nting s0stems, the program to /hose $'dget the p'r)hase /i&& $e )harged. Sho'&d the pro)'rement offi)ia& $e entire&0 a'tonomo's and eva&'ate the needs of the program 8e.g., for immediate servi)es9 against the &ega& or pro)ed'ra& re<'irements of the f'nding so'r)e 8e.g., *TA Cir)'&ar 4220.!: if *edera& f'nds9W
Some degree of a'tonom0 of the pro)'rement f'n)tion is ne)essar0 organiGationa&&0 and f'n)tiona&&0 so that pro)'rement personne& /i&& $e free from 'nd'e inf&'en)e or press're in the a/ard and administration of )ontra)ts. The o$vio's so&'tion to the )onf&i)t $et/een >pro)ess> and >program> is to have a team in /hi)h ea)h mem$er re)ogniGes the strengths and )apa$i&ities of the other team mem$ers and appre)iates the ro&e ea)h side $rings to the )ontra)t ta$&e. This
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so'nds eas0 to a))omp&ish $'t, in most pra)ti)a& sit'ations, is ver0 diffi)'&t to a)hieve. ! *ai&'re to a)hieve 'nit0 and team/or2 /ithin the agen)0 in the a/arding and administration of p'$&i) )ontra)ts )reates fre<'ent opport'nities for a )ontra)tor to ta2e advantage of a )ontentio's staff re&ationship to its finan)ia& advantage 8and the agen)0Ks finan)ia& disadvantage9. A)hieving proper $a&an)e $et/een gro'ps re<'ires de&i)ate $a&an)ing of persona&ities and )orporate o$@e)tives, a strong e;e)'tive, and a /e&& trained staff. ?t m'st a&so $e re)ogniGed that there is no te;t$oo2 ans/er that /i&& /or2 in ever0 sit'ation and in ever0 agen)0. ?n addition to $a&an)ing the ro&es of program and pro)ess interests in ma2ing pro)'rement de)isions, the pa0ment of 0o'r agen)0Ks f'nds to )ontra)tors genera&&0 re<'ires three independent )on)'rring a)tions. The re<'irement for independent )on)'rring a)tions is sometimes )a&&ed >interna& )ontro&,> as it is a method for the agen)0 to )ontro& the propriet0 of its a)tions interna&&0, rather than re<'iring e;terna& revie/s and )ontro&. Whi&e $est pra)ti)es differ, a&& a'thorities re)ogniGe a f'ndamenta& need for a s0stem of )he)2s and $a&an)es in the overa&& pro)'rement pro)ess. ?n an organiGation /ith no )he)2s and $a&an)es, if an individ'a& per)eived a need for a staff )ar, that person )o'&d draft the spe)ifi)ations for the )ar, prepare the so&i)itation do)'ment, order the )ar, approve the )ontra)t, inspe)t the preparation of the )ar, administer the )ontra)t, a))ept the )ar after de&iver0, sign the agen)0 )he)2 to pa0 the dea&er, and 'se the )ar in a manner the person deemed appropriate. ?t sho'&d $e o$vio's that an organiGation and pro)'rement pro)ess s')h as this /o'&d not $e )redi$&e and /o'&d $e s'$@e)t to great a$'se, a)t'a& or per)eived. As a res'&t, most p'$&i) and private agen)ies divide those f'n)tions among, at &east, three distin)t e&ements /ithin its organiGation. The re<'iring a)tivit0 is represented $0 the program manager /ho is responsi$&e for determining the re<'irement, preparing the spe)ifi)ations and, then, a)ting as the te)hni)a& representative or advisor to the )ontra)ting offi)er d'ring )ontra)t performan)e. The pro)'rement a)tivit0 is represented $0 the )ontra)ting offi)er /ho is responsi$&e for ens'ring spe)ifi)ations are not restri)tive, preparing the so&i)itation do)'ment in a))ordan)e /ith the &a/ and r'&es and reg'&ations of the agen)0 and the *TA, so&i)iting the re<'irement, and a/arding the )ontra)t in a))ordan)e /ith the so&i)itation. Contra)t administration f'n)tions are 's'a&&0 shared /ith the re<'iring a)tivit0 and invo&ve s')h f'n)tions as approving pa0ment, a))epting the goods or servi)es $o'ght, and )&osing o't the )ontra)t.
*or forma& assistan)e in imp&ementing a team pro)ess see Bo/ard, 6ennifer .. and .i&&er, 7a/ren)e .., Team ana!ement= Creatin! Systems and S(ills for a Team1?ased ,r!ani@ation 8The .i&&er Cons'&ting =ro'p, ?n)., !9949 or 7ein$erger Io$in et a&, T)e Art of ?usiness &rocess ana!ement= A !uide$oo(, 8Y-.= -eat .ar/i)2, 77-, !99"9.
-age 1
The pa0ment a)tivit0 is represented $0 a third part0 8the finan)e department9 /ho ens'res that a&& approva&s are o$tained and that the pa0ment is /ithin the do&&ar amo'nt of the )ontra)t. Often, the a))o'nts pa0a$&e f'n)tion in finan)e either ph0si)a&&0 or e&e)troni)a&&0 mat)hes three do)'ments iss'ed $0 three different emp&o0ees 8the p'r)hase order, re)eiving report, and approved invoi)e9 $efore re&easing f'nds.
The pro)'rement and pa0ment a)tivities are >pro)ess> f'n)tions ens'ring that the goods are $o'ght and paid for in a))ordan)e /ith the terms of the )ontra)t. The >program> a)tivit0 is to determine /hat is needed and that it is o$tained /ithin the time re<'ired and $'dget a&&o)ated. Best Practices Degree of A'tonom0 *rom a narro/ pro)'rement perspe)tive, the pro)'rement a)tivit0 /o'&d en@o0 the highest degree of a'tonom0 /here it reports dire)t&0 to the governing po&i)0 $oard of 0o'r organiGation. .ost transit organiGations have too m')h dire)t operating responsi$i&it0 to permit this degree of a'tonom0. Three so&'tions are( -ro)'rement and )ontra)ting )an report to a )hief e;e)'tive. .ost t0pi)a&&0, the pro)'rement department reports to an administrative or finan)ia& f'n)tion that is independent of the primar0 interna& )'stomers 8fa)i&it0 e<'ipment and operating f'n)tions9. Some degree of a'tonom0 )an $e preserved even /ithin an operating or imp&ementation f'n)tion if pro)'rement is separated from the program de&iver0 s'$ gro'ps.
?n medi'm and &arge s0stems, if the )ontra)ting f'n)tion is not separated from the program offi)e, there is an inade<'ate s0stem of )he)2s and $a&an)es on the pro)'rement pro)ess. Overa&&, pro)'rement personne& sho'&d have eno'gh a'tonom0 or )he)2s and $a&an)es to a)hieve a <'a&it0 prod')t at a fair and reasona$&e pri)e /itho't rea& or apparent )onf&i)ts of interest in the so&i)itation, eva&'ation or a/ard. *$* LON< TERM PLANNIN< DISCUSSION Lon")term rocurement lannin" 6i$e$! lannin" more t/an one #ear in ad%ance9 is one o tion to &e considered &# lar"e transit s#stems and &# s#stems lannin" a ma'or transit in%estment! com le; ca ital ro'ect! or a su&stantial num&er of o eratin" contracts t/at 1ill s an se%eral #ears$ S#stems 1it/out current ma'or ca ital ro'ects ma# find t/at annual lannin" is adeAuate$
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Pur ose -ro)'rement p&ans )overing severa& 0ears ma0 $e an improvement over partitioning or )onso&idation in ma@or pro@e)ts as a /a0 to fa)i&itate the most )ost effe)tive pro@e)t management and de&iver0. The p&ans )an identif0 ma@or )hanges in pro)'rement /or2 &oad, and )an o$viate an0 tenden)0 to r'sh pro)'rement de)isions or a)tivities in /a0s that res'&t in /aste 8e.g., thro'gh fai&'re to )onso&idate ma@or pro)'rements9 or ris2 non )omp&ian)e 8e.g., thro'gh inade<'ate noti)e and non )ompetitive a/ards9. -&an Contents A &ong term pro)'rement p&an /o'&d identif0 the ma@or pro)'rements pro@e)ted over the ne;t t/o to five 0ears. The m'&ti 0ear e&ement of the Transportation ?mprovement -rogram 8T?-9 is a good starting point for identif0ing f't're )apita& pro@e)ts and their )orresponding pro)'rement re<'irements. T0pi)a&&0, the pro)'rement p&an in)&'des an0 fi;ed g'ide/a0 pro@e)ts, reven'e ro&&ing sto)2 rep&a)ements or f&eet e;pansions, and ma@or )onstr')tion pro@e)ts. ?n the )ase of fi;ed g'ide/a0 and other )onstr')tion pro@e)ts, /here m'&tip&e pro)'rements ma0 $e invo&ved, the p&an /o'&d identif0 the initia& strateg0 for pa)2aging the design, )onstr')tion, and e<'ipment. Consideration /o'&d a&so $e given to t'rn2e0 pro)'rements and to &ong term pro@e)ts that are not p'$&i) /or2s. The &atter /o'&d in)&'de ma@or soft/are s0stems, f&eet overha'& and ADA operationa& servi)e. .a@or -ro@e)ts Often ma@or designA)onstr')tion and rai& vehi)&e pro)'rements are p&anned seven to ten 0ears in advance of needed com%letion $e)a'se severa& interdependent )ontra)ts ma0 have to $e a/arded in order to a))omp&ish the pro@e)t. The time interva&s t0pi)a&&0 re<'ired to a))omp&ish these )ontra)t a/ards might in)&'de( One 0ear advan)e p&anning $efore Ie<'est for -roposa&s 8I*-9 for the engineering servi)esQ *o'r months from I*- to a/ard of the engineering servi)esQ T/o 0ears to prepare te)hni)a& spe)ifi)ationsQ Three months from )omp&etion of spe)ifi)ations to s0stem I*-Q Si; months from s0stem I*- to a/ardQ and Three 0ears for s0stem )onstr')tion.
The p&anning and design pro)esses )an )hange this s)hed'&e signifi)ant&0, and fe/ pro)'rements re<'ire this &ength of time. When ma@or pro@e)ts are 'nderta2en, a )omprehensive pro)'rement p&an that o't&ines these ma@or pro@e)ts a&ong /ith the rest of 0o'r pro)'rement /or2&oad /i&& $e e;treme&0 he&pf'&. ,'s pro)'rements and ma@or e&e)troni)Adata s0stems genera&&0 re<'ire at &east three 0ears of advan)e p&anning.
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*$*$( Contract Period of Performance Limitation RE@UIREMENT 49 USC T 5"2%8$9 &imits the pro)'rement of ro&&ing sto)2 and rep&a)ement parts to no more than five 0ears+ re<'irements 'nder a sing&e )ontra)t, even tho'gh de&iver0 ma0 ta2e p&a)e $e0ond five 0ears from the date of the initia& )ontra)t. *TA Cir)'&ar 4220.!:, paragraph 1.m, addresses the five 0ear )ontra)t term &imitation for ro&&ing sto)2 and rep&a)ement parts. ?t a&so re<'ires that )ontra)t terms for a&& other t0pes of )ontra)ts $e $ased on so'nd $'siness @'dgment. *TA Cir)'&ar 4220.!:, paragraph H L Com%etition, re<'ires a&& pro)'rement transa)tions to $e )ond')ted in a manner providing for f'&& and open )ompetition. *TA Cir)'&ar 4220.!:, paragraph 1i L 'ritten Record of &rocurement +istory, re<'ires grantees to maintain re)ords detai&ing the histor0 of a pro)'rement. DISCUSSION On Ma# *8! *::*! t/e FTA Administrator issued :ear Colleague 8etter C):5):* rescindin" FTAMs lon")standin" fi%e)#ear contract term limitation for all contracts e;ce t t/ose for rollin" stocE and re lacement arts$ T/e limitation on rollin" stocE and re lacement arts remains in effect since t/e limitation is a statutor# reAuirement and not an FTA olic#$* T/e ne1 FTA olic# is no1 e; ressed in FTA Circular .**:$(E! ara"ra / 4$m = Contract Term 8imitation$ Prior to t/is letter! FTA Circular .**:$(D! ara"ra / 4$m ) Contract Period o* Per*ormance 8imitation! /ad limited t/e eriod of erformance of DOT)assisted su l# and ser%ice contracts to fi%e #ears! inclusi%e of o tions! 1it/out rior FTA a ro%al$ - As a result of t/is rescission of t/e contract term limitation! "rantees 1ill no lon"er &e reAuired to o&tain rior FTA a ro%al for contract terms lon"er t/an fi%e #ears$ . T/e rescission of t/e fi%e) #ear term limit a lies not onl# to ne1 contract a1ards! &ut to e;istin" contracts as 1ell$ <rantee rocurements 1ill continue to &e re%ie1ed &# FTA for com liance 1it/ t/e Hfull
) The &imitation is e;pressed in terms of $'0ing no more than five 0ears+ re<'irements even tho'gh de&iver0 ma0 o))'r $e0ond five 0ears from the date of the )ontra)t.
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This &imitation did not app&0 to )onstr')tion )ontra)ts or to &eases of rea& propert0 for the &ife of the transit asset to $e )onstr')ted on s')h propert0.
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*TA "ear Collea!ue #etter C 0H 02 dated .a0 29, 2002.
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and o en com etitionI rinci le stated in FTA Circular .**:$(E ara"ra / 5a! and "rantees 1ill continue to &e res onsi&le for conductin" t/eir rocurements in accordance 1it/ sound &usiness ractices$ <rantees are e; ected to &e 'udicious in esta&lis/in" and e;tendin" t/eir contract terms$ Best Practices A&tho'gh *TA no &onger re<'ires prior approva& for )ontra)t terms &onger than five 0ears, grantees remain responsi$&e for )ond')ting their pro)'rement transa)tions in a))ordan)e /ith the 3f'&& and open )ompetition4 prin)ip&e e;pressed in *TA Cir)'&ar 4220.!:, paragraph Ha. As /ith an0 pro)'rement a)tion, grantees sho'&d ens're that their pro)'rement fi&es ade<'ate&0 do)'ment their de)ision ma2ing pro)ess. This re)ord sho'&d in)&'de the rationa&e for the )ontra)t period of performan)e. -eriod of -erforman)e Criteria L -eriodi) re )ompetition of )ontra)ts preserves )ompetition and 2eeps pri)es )ompetitive. Witho't periodi) )ompetition the in)'m$ent /i&& not have the press'res of a )ompetitive mar2et to 2eep pri)es reasona$&e or an in)entive to maintain satisfa)tor0 performan)e. There are, ho/ever, )riteria that the grantee )an emp&o0 /hen de)iding 'pon the term of a )ontra)t. Some of these )riteria are s'ggested $e&o/. Ieven'e Contra)ts L ?t is *TA po&i)0 to afford a&& persons an e<'a& opport'nit0 to a))ess *TA f'nded assets. *TA a&so en)o'rages its re)ipients to ma;imiGe non fare$o; reven'es. This )an $e done thro'gh )ontra)t'a& or other appropriate arrangements, /hi)h invo&ve the 'se of *TA f'nded assets /itho't interfering /ith its transit 'se. *TA had previo's&0 invo2ed a five 0ear term &imit as one /a0 to $a&an)e these potentia&&0 )onf&i)ting po&i)ies. ?t is important for grantees to do)'ment their reven'e )ontra)t fi&es /ith an economic analysis that demonstrates ho/ these d'a& o$@e)tives /ere a))omp&ished. ?f the )ontra)t opport'nities a&&o/ for free and open )ompetition, then the =rantee+s pro)'rement po&i)ies /i&& address *TA+s e<'a& opport'nit0 po&i)0. Where ho/ever, there is a &imit to the n'm$er of firms /ho /i&& $e a/arded )ontra)ts, then the grantee sho'&d in)&'de an economic analysis in the )ontra)t fi&e to @'stif0 the )ontra)t term. The economic analysis sho'&d e;p&ain /h0 the spe)ifi) period of performan)e /as ne)essar0 for the re)over0 of the )ontra)tor+s investment and a reasona$&e e)onomi) ret'rn. ?n performing this ana&0sis, grantees ma0 /ish to )ond')t a mar2et s'rve0 to o$tain information and re)ommendations from prospe)tive offerors to determine /hat the t0pi)a& 'p front investment /i&& $e and /hat 2ind of )ontra)t period /o'&d $e re<'ired for the offerors to re)over that investment and rea&iGe a reasona$&e e)onomi) ret'rn on that investment. =rantees sho'&d do)'ment their fi&es /ith this information, sho/ing the )on)&'sions rea)hed /ith respe)t to the )ontra)t period of performan)e fina&&0 se&e)ted. S'pp&ies L T0pi)a&&0 the )ontra)t period of performan)e for s'pp&ies /i&& $e di)tated $0 the grantee+s foreseea$&e needs and s')h fa)tors as e)onomi) <'antit0 $rea2s, /areho'sing spa)e, she&f &ife, te)hno&og0 )on)erns, et). When the grantee per)eives that there ma0 $e an opport'nit0 to in)rease )ompetition thro'gh a &arger p'r)hase, the grantee ma0 /ish to )ond')t a mar(et
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survey of potentia& s'pp&iers to determine if the0 /o'&d ma2e an offer 'nder a different )ontra)ting s)enario. *or e;amp&e, it ma0 $e that the0 /ere dis)o'raged from $idding $e)a'se the 'p front investment 8non re)'rring )osts of too&ing, et).9 /o'&d $e prohi$itive over a re&ative&0 short )ontra)t periodA&imited <'antit0 $'0. Bo/ever, if the period /ere e;tended and the <'antit0 in)reased, these potentia& s'pp&iers might $e ind')ed to parti)ipate. This is in effe)t /hat one &arge transit agen)0 has done s'))essf'&&0. 5 Th's, the shortest )ontra)t periodA minim'm <'antit0 $'0 ma0 not ne)essari&0 $e the optim'm de)ision. =rantees /i&& need to e;er)ise some di&igen)e in determining if &ongerA&arger )ontra)ts might $e in their $est interests. ?f the0 de)ide to do that, the0 sho'&d do)'ment their fi&es sho/ing the $enefits o$tained from the &onger )ontra)t periods. When de)iding the $est period of performan)e for on going servi)es )ontra)ts, grantees need to )onsider the 'p front investment $0 potentia& offerors for spe)ia&iGed personne& training and other non re)'rring start 'p )osts 8e.g., re&o)ation9 that m'st $e re)overed over the &ife of the )ontra)t. On)e again, grantees sho'&d )onsider a pre so&i)itation ind'str0 o'trea)h to dis)'ss /ith individ'a&s in the ind'str0 /hat the0 ma0 see as 'p front investments that m'st $e re)overed from the profits anti)ipated $0 the )ontra)t. These dis)'ssions sho'&d revea& /hat the ind'str0 needs in terms of a )ontra)t &ife in order to s'$mit )ompetitive pri)es against the in)'m$ent. These fa)ts need to $e do)'mented in 0o'r )ontra)t fi&es as 0o' rea)h an agen)0 de)ision on the proper period of performan)e of the servi)es )ontra)t. *$*$* Multi)Dear %s$ Multi le Dear Contractin" DISCUSSION <rantees are aut/ori,ed to rocure rollin" stocE or ot/er su lies and ser%ices &# a num&er of met/ods$ T/ese include &u#in" on an annual or on an as)needed &asis! and also on a multi)#ear or multi le)#ear &asis$ T/e distinction &et1een t/e multi)#ear and multi le #ear met/ods is as follo1s3 Multi)Dear Contractin" ) multi)#ear contractin" is a met/od &# 1/ic/ t/e "rantee rocures its needs for t/e entire life of t/e contract! e%en t/ou"/ fundin" for t/e entire contract is not a%aila&le at t/e time of contract a1ard$ T/e contract reAuires t/e contractor to deli%er t/e entire reAuirements of t/e contract$ O tion ro%isions are unnecessar#$ Because t/e "rantee does not /a%e sufficient funds for t/e entire contract at t/e outset of t/e contract! it 1ill &e necessar# to reco"ni,e in t/e contract t/at t/e "rantee ma# /a%e to cancel t/e contract at some oint if additional funds are not fort/comin"$ <rantees may ha-e to include cancellation costs in t/e contract in t/e form of an ad%ance a"reement for an# ro"ram #ear or ortion t/ereof canceled &# t/e "rantee 6&ut
) Conta)t .r. 6ohn Trotta, Oi)e -resident, -'r)hasingAWareho'sing, Chi)ago Transit A'thorit0, at 8"!29 222 %!!".
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cancellation costs are not reAuired to &e included if t/e contractor 1ill acce t a contract 1it/out t/em9$ Additional information on multi)#ear contractin"! 1/ile not &indin" on "rantees! is discussed in t/e Federal Acquisition Regulation 6FAR9! Su& art (4$( ) 4ulti1 ;ear Contracting$ Multi le Dear Contractin" ) multi le #ear contractin" is a met/od &# 1/ic/ t/e "rantee a1ards a contract for a &ase eriod of one or more #ears! 1it/ o tion ro%isions for future #earsK reAuirements$ T/e &ase eriod of t/e contract is a firm and full# funded reAuirement$ Be#ond t/e &ase eriod! t/e "rantee uses o tion ro%isions! 1/ic/ ma# &e e;ercised unilaterall# at t/e discretion of t/e "rantee as additional fundin" &ecomes a%aila&le$ T/ere is no need for t/e inclusion of cancellation a#ments since t/e e;ercise of t/e o tions is totall# 1it/in t/e discretion of t/e "rantee$ Additional information on multi le #ear contractin"! 1/ile not &indin" on "rantees! is discussed in t/e Federal Acquisition Regulation 6FAR9! Su& art (4$* ) 3#tions$ Term of Contracts = As noted a&o%e in Section *$*$( = Contract Period o* Per*ormance 8imitation, .8 USC G 0-*26&9 limits t/e rocurement of rollin" stocE and re lacement arts to no more t/an fi%e #ears under a sin"le contract! e%en t/ou"/ deli%er# ma# taEe lace &e#ond fi%e #ears from t/e date of t/e initial contract$ *$- ANNUAL PLANNIN< *$-$( Sources and Contents DISCUSSION E%er# transit or"ani,ation can carr# out annual lannin"J lar"e s#stems ma# maintain multi)ste lannin" rocesses 1it/ su&stanti%e documents t/at are carried for1ard from #ear to #ear$ Small s#stems ma# re are t/e lan sim l# t/rou"/ re aration of a list of Eno1n rocurements at t/e &e"innin" of a lannin" c#cle 6i$e$! in &ud"et re aration or in t/e mandated lannin" rocess9$ Pur ose A $asi) p'rpose for maintaining forma& p&ans regarding pro)'rements /e&& in advan)e of iss'ing the so&i)itations is to ena$&e more de&i$erate and )oordinated de)ision ma2ing in moving for/ard /ith the pro)'rements and re&ated a)tivities. ?n addition, pro)'rement p&anning is the $est opport'nit0 to identif0 potentia& )onso&idation of pro)'rements 8e.g., severa& interna& )'stomers p'r)hasing f'rnit're or persona& )omp'ters in the same time frame9. 7arger agen)ies ma0 find that pro)'rement )onso&idation 0ie&ds s'$stantia& savings. .ore spe)ifi)a&&0, an advan)e pro)'rement p&an is a good /a0 for the agen)0 to do)'ment its )omp&ian)e /ith paragraph 18d9 of Cir)'&ar 4220.!: /hi)h states, >=rantee pro)ed'res sha&& provide for revie/ of proposed
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pro)'rements to avoid p'r)hase of 'nne)essar0 or d'p&i)ative items. Consideration sho'&d $e given to )onso&idating or $rea2ing o't pro)'rements to o$tain a more e)onomi)a& p'r)hase.> The advan)e pro)'rement p&an a&so proves 'sef'& in responding to pro)'rement )ha&&enges. ?t provides an ear&0 re)ord of de)isions that /ere made for $'siness p'rposes $efore the re)eipt of offers and /itho't the possi$i&it0 of )ompetitive $ias. Contra)ting offi)ia&s sho'&d re)ogniGe that the p&an is f&'id and that their )'stomersK needs /i&& )hange, $'t even this )hange )an $e more order&0 if the $ase p&an has $een do)'mented. A )hange is simp&0 a))omp&ished thro'gh a p&an 'pdate, rather than $eing passed aro'nd $0 /ord of mo'th or memorand'm, /hi)h tends to res'&t in )onf'sion and inde)ision. Best Practices So'r)es for -&ans The preparation of an advan)e pro)'rement p&an )an $egin /ith data a&read0 prepared for servi)e and finan)ia& p&anning p'rposes. ,oth state and &o)a& Transportation ?mprovement -rograms &ist ma@or *edera&&0 f'nded pro@e)ts for a&& modes of transportation. Whi&e the preparation of the p&ans is the responsi$i&it0 of the &o)a& .etropo&itan -&anning OrganiGation and the state, most transit agen)ies are invo&ved in assisting /ith deve&opment of the transit e&ement of the p&ans, /hi)h &ists their pro@e)ts separate&0. An interna& )apita& $'dget is another so'r)e, /hi)h ma0 have more detai&ed or 'p to date information on p&anned )apita& pro)'rements. A&tho'gh pro@e)ts f'nded /ith operating f'nds are often sma&&er and the operating $'dget does not 's'a&&0 offer as m')h spe)ifi)it0, )ontra)ting offi)ia&s ma0 $e a$&e to identif0 man0 p&anned pro)'rements from the operating $'dget as /e&&. Bistori)a& 'sage is another va&'a$&e so'r)e for the p&an, parti)'&ar&0 /hen )ompared to the operating $'dget. Another method avai&a$&e to assist /ith preparation of the p&an is to )ond')t a s'rve0 of interna& )'stomers. The0 ma0 provide more detai& on the $'dgeted pro@e)ts and ma0 $e a$&e to identif0 pro@e)ts that are not differentiated in the $'dget. An ann'a& s'rve0 of the ma@or )'stomers /i&& en)o'rage the )'stomers themse&ves to p&an their needs for goods and servi)es. Ann'a& pro)'rements, /hi)h a))o'nt for a great dea& of a)tivit0, s')h as parts, f'e&, and other s'pp&ies, )an $e pro@e)ted at most agen)ies $ased on histori)a& need and agen)0 /ide p&ans and pro@e)ts. -&an Contents ?n addition to the identit0 of ea)h pro)'rement, p&ans norma&&0 identif0 the )'stomer )onta)t8s9 8at medi'm and &arge agen)ies9, time re<'irements, and f'nding so'r)es. Tentative start dates, p'$&i)ation dates, opening dates and a/ard dates are 's'a&&0 $ased on the t0pe and siGe of the pro)'rement )ontemp&ated. Time sho'&d $e a&&o/ed for( preparation of a so'r)e se&e)tion p&an 8if not a&read0 )omp&ete or in progress9, /here appropriateQ
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preparation of spe)ifi)ationsQ assem$&0 of the so&i)itation of offersQ p'$&i)ation period and time for preparation of offers, in)&'ding pre $idAproposa& )onferen)e, /here appropriateQ re)eipt and eva&'ation of offersQ and re<'ired revie/s and approva& a)tions.
Comp&e; pro@e)ts /i&& re<'ire more time for preparing spe)ifi)ations. #egotiated pro)'rements /i&& re<'ire more time after re)eipt of offers. ?f governing $oard approva& is re<'ired, and the governing $oard meets on a fi;ed s)hed'&e, time /o'&d $e added for this step. ?n a&& ma@or pro)'rements and )ases /here negotiated pro)'rement is 'ti&iGed, the p&anning pro)ess )an evo&ve into a so'r)e se&e)tion p&an for ea)h pro)'rement. ?n the )ase of pro)'rement of )omp&e; s0stems, s')h as rai& transit s0stems or advan)ed rai& vehi)&es, an advan)ed pro)'rement p&an )on)ept in)&'des p&anning, not on&0 for the protot0pe deve&opment, testing, and a))eptan)e of the s0stem, $'t a&so the &ife )0)&e s'pport of the s0stem, /hi)h in)&'des training of maintenan)e personne&, maintenan)e infrastr')t're, s')h as e&e)troni) design diagrams and parts )ata&ogs, &ong term avai&a$i&it0 of parts, and te)hni)a& s'pport. *$-$* Inde endent <rantee Cost Estimate RE@UIREMENT *TA Cir)'&ar 4220.!:, -aragraph !0 provides that grantees m'st perform a )ost or pri)e ana&0sis in )onne)tion /ith ever0 pro)'rement a)tion, in)&'ding )ontra)t modifi)ations. The method and degree of ana&0sis is dependent on the fa)ts s'rro'nding the parti)'&ar pro)'rement sit'ation, $'t as a starting point, grantees m'st ma2e independent estimates $efore re)eiving $ids or proposa&s. DISCUSSION A lo"ical element of #our annual rocurement lan is a cost estimate for eac/ ma'or rocurement$ It is normall# cost)effecti%e to /a%e an inde endent cost estimate t/at also satisfies t/e Federal reAuirement and to /a%e suc/ an estimate at some time &efore recei%in" &ids or ro osals$ Dou ma# o&tain suc/ estimates from u&lis/ed com etiti%e rices! results of com etiti%e rocurements! or estimates &# in)/ouse or outside estimators$ BPPM A endi; B$*: = <nde#endent Cost "stimate Form! ro%ides a format and "uidance for "rantee in)/ouse estimators t/at s/ould &e /el ful$ T/is form 1as de%elo ed &# one
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transit a"enc# to assist its user or"ani,ations 1it/ t/e de%elo ment of inde endent cost estimates and statements of 1orE$ Pur ose The fo&&o/ing are p'rposes of esta$&ishing a )ost estimate 'sing a method independent from the prospe)tive offerors in advan)e of the offer( it ens'res a )&ear $asis for the granteeKs determination that the $enefits of the pro)'rement /arrant its )ostQ it provides essentia& pro)'rement and finan)ia& p&anning information 8see >Advan)e -ro)'rement -&an,> a$ove9Q and it provides a $asis for pri)e ana&0sis, /hi)h ma0 assist in o$viating the need for a more $'rdensome )ost ana&0sis.
A&tho'gh it ma0 seem se&f evident that the agen)0 has at &east imp&i)it&0 prepared a )ost estimate in de)iding to pro)eed /ith a pro)'rement, man0 pro@e)ts )an )hange in s)ope /itho't )&ear )omm'ni)ation among the peop&e responsi$&e. *or e;amp&e, a management information s0stem for parts inventor0 )ontro& ma0 seem )ost effe)tive, $'t ma0 gro/ d'ring dis)'ssions to in)&'de 'nanti)ipated e&e)troni) imaging, s)anning of repair man'a& diagrams, 'nanti)ipated distri$'ted pro)essing devi)es, and m'&ti 'ser programming. An independent )ost estimate prepared /hen the agen)0 first 'ndertoo2 the pro@e)t )o'&d a&ert a&& invo&ved that the pro@e)t had gro/n $e0ond the s)ope origina&&0 intended. A de&i$erate de)ision to red')e the s)ope or revise the )ost estimate )an $e made at ea)h step of the pro@e)tKs deve&opment. The )ost estimate is essentia& information for pro)'rement p&anning. ?t gives the )ontra)ting offi)ia& some indi)ation of the )omp&e;it0 of the pro@e)t and the degree of investment that offerors /i&& /ant to ma2e in the pro)'rement pro)ess, th's a&&o/ing p&anning of pro)'rement time and personne&. ?t is a&so the $asis for determining /hi)h pro)'rement pro)ed'res app&0 to the pro@e)t. ?f the )ost estimate e;)eeds S!00,000, for e;amp&e, a )ompetitive so&i)itation is norma&&0 re<'ired. 8State or &o)a& re<'irements ma0 $e stri)ter.9 Simi&ar&0, )ertifi)ation and $onding re<'irements imposed $0 *edera& reg'&ations are triggered $ased on the va&'e of the )ontra)t. 8See >.ethods of -ro)'rement> *TA Cir)'&ar 4220.!:, T 9Q >,onding Ie<'irements,4 T !!Q >,'0 Ameri)a> .aster Agreement T !4 8a9Q >De$arment and S'spension> .aster Agreement T " $.9 Bo/ever, the app&i)ation of these and most other re<'irements depends not on the )ost estimate, $'t on the )ontra)t amo'nt. A fina& p'rpose of the independent )ost estimate is for pri)e ana&0sis. :ither a )ost or pri)e ana&0sis is re<'ired for ever0 )ontra)t and ever0 )hange order so that the essentia& o$@e)tive of a reasona$&e pri)e is ass'red. The ade<'a)0 of the pri)e or )ost ana&0sis is a )riti)a& responsi$i&it0 of the )ontra)ting offi)ia&. ?n man0 )ontra)t a/ards the $ids a&one ma0 $e ade<'ate to ass're a
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reasona$&e pri)e. Bo/ever, in a&& negotiated pro)'rements, most )ontra)t )hanges, sea&ed $ids /here pri)e )ompetition /as not s'ffi)ient, and non )ompetitive a/ards, f'rther ana&0sis is re<'ired. An independent )ost estimate prepared $efore re)eipt of offers is inva&'a$&e in these )ir)'mstan)es. The estimate a&one ma0, if prepared /ith s'ffi)ient detai& and re&ia$i&it0 in the )ontra)ting offi)ia&Ks @'dgment, $e s'ffi)ient to determine /hether the pri)e is reasona$&e. ?t /i&& at &east s'pp&ement other pri)ing data in ma2ing the determination. ,e)a'se )ost ana&0sis )an $e time )ons'ming, e;pensive, and raise disp'tes, the avai&a$i&it0 of an independent pre $id estimate, /hi)h a&&o/s for pri)e ana&0sis and o$viates )ost ana&0sis, is /orth materia& pre $id effort. ?n these )ir)'mstan)es, it is essentia& that the grantee+s )ost estimate $e deve&oped independent&0 from the offerors+ pri)ing s'$missions. ?f a $'s p'r)hase is $eing prepared, for e;amp&e, the prospe)tive offerors sho'&d not $e re&ied 'pon for the independent )ost estimate, e;)ept in the form of prior $ids s'$mitted /ith ade<'ate )ompetition. An0 pri)e ana&0sis or data )o&&e)tion performed after re)eipt of the offers, in addition to )ons'ming va&'a$&e time d'ring the &imited va&idit0 of the offers, /i&& not $e as pro$ative as data )o&&e)ted $efore the re)eipt of the offers. An independent )ost estimate prepared $efore the re)eipt of the offers does not raise the <'estion of /hether the parti)'&ar data and ana&0sis /as )ons)io's&0 or 'n)ons)io's&0 intended to @'stif0 the a/ard. Best Practices Constr')tion ?n some )ases, )ost estimates ma0 $e diffi)'&t to o$tain or ma0 &ie o'tside the )ompeten)e of agen)0 personne&. ?n the )ase of )onstr')tion pro@e)ts, a design firm ma0 a&read0 $e 'nder )ontra)t and ma0 perform this servi)e. ?n some )ases, the agen)0Ks in ho'se personne& /ho have parti)ipated in design or past )onstr')tion efforts ma0 $e the most professiona& and re&ia$&e )ost estimators. S'pp&ies and :<'ipment :<'ipment estimates )an often $e prepared from p'$&ished pri)e &ists or from past )ompetitive pro)'rements 'pdated /ith inf&ation fa)tors. =rantees ma0 find re&evant pri)ing data $0 )onta)ting other agen)ies that o$tained )ompetitive $ids for the same e<'ipment or s'pp&ies. ?n the )ase of spe)ia&iGed e<'ipment, )are m'st $e ta2en that the so'r)e of the estimates is not disproportionate&0 o$tained from one s'pp&ier. Servi)es -rofessiona& servi)es often range /ide&0 in $oth pri)e and <'a&it0, and are often $eing a)<'ired pre)ise&0 $e)a'se the agen)0 personne& are 'nfami&iar /ith the s'$@e)t matter. Therefore, 0o'r in ho'se personne& ma0 not $e <'a&ified to estimate the )ost of a ma@or professiona& servi)e )ontra)t. ?n these )ases, it ma0 $e /orth o$taining a professiona& )ost estimate $0 a firm not interested in the fina& pro)'rement. Other grantees are a va&'a$&e so'r)e of )ost estimating information if the0 have 'nderta2en simi&ar pro@e)ts. The )ontra)ting offi)ia& sho'&d o$tain and, /hen appropriate, 'pdate the independent )ost estimate in the manner $est s'ited to the )ir)'mstan)es of the parti)'&ar pro)'rement. ,e)a'se reasona$&e pri)e is a 2e0 o$@e)tive of ever0 pro)'rement, and is a&so a )riti)a& *edera& interest in *edera&&0 f'nded
-age !1
pro)'rements, an independent )ost estimate sho'&d $e prepared for ever0 a)tion $efore offers are re)eived. *$. SOURCE SELECTION PLAN *$.$( File Documentation RE@UIREMENT *TA Cir)'&ar 4220.!:, -aragraph 1.i 'ritten Record of &rocurement +istory re<'ires grantees to maintain re)ords detai&ing the histor0 of a pro)'rement. As a minim'm, these re)ords sha&& in)&'de( The rationa&e for the method of pro)'rementQ Se&e)tion of )ontra)t t0peQ Ieasons for )ontra)tor se&e)tion or re@e)tionQ and The $asis for the )ontra)t pri)e.
DISCUSSION A ro erl# documented rocurement file ro%ides an audit trail from t/e initiation of t/e acAuisition rocess to t/e &e"innin" of t/e contract$ T/e file ro%ides t/e com lete &acE"round! includin" t/e &asis for t/e decisions at eac/ ste in t/e acAuisition rocess$ A 1ell)documented file s eaEs for itself! 1it/out need of inter retation from t/e contract administrator$ A 1ell)documented file also su orts actions taEen! ro%ides information for re%ie1s and in%esti"ations! and furnis/es essential facts in t/e e%ent of liti"ation or le"islati%e inAuiries$ Pur ose Do)'ments re)ording the 2e0 steps in ea)h pro)'rement are important for a n'm$er of reasons, in)&'ding the fo&&o/ing( 5o' are ta2ing &ega&&0 and finan)ia&&0 signifi)ant a)tions on $eha&f of 0o'r agen)0 and the p'$&i). ?nformation re&ating to these a)tions needs to $e readi&0 retrieva$&e in the event that )ontra)t personne& are persona&&0 'navai&a$&e or their memor0 is not pre)ise eno'gh to assist the agen)0 in moving for/ard /ith the administration of its program. 5o' ma0 ro'tine&0 e;pe)t 0o'r )o&&eag'es to ta2e a)tions $ased on the fi&e. The 2e0 steps in a pro)'rement, in)&'ding those &isted 'nder >Ie<'irement,> a$ove, are fre<'ent&0 materia& e&ements in finan)ia& 8e.g., pa0ment or /ithho&ding9 determinations or &ega& disp'tes. Written do)'mentation /i&& have great va&'e to 0o'r agen)0 'nder those )ir)'mstan)es.
-age !H
The agen)0+s pro)ess ma0 $e revie/ed, a'dited, andAor ma0 $e the s'$@e)t of in depth investigation. This do)'mentation is the histor0 of the p'$&i) pro)'rement. .an0 ho'rs of re)onstr')ting events and de)isions, stret)hing memories, and eva&'ating s)enarios )an $e saved /ith a )on)ise fi&e that fa)t'a&&0 ans/ers the <'estions t0pi)a&&0 raised. *ina&&0, 0o' red')e the &i2e&ihood of additiona& s'pervision or $'rdensome restri)tions $eing p&a)ed on 0o'r agen)0 or 0o'r pro)'rement pro)ess /ith )on)ise do)'mentation of the de)isions 0o' are ma2ing.
.an0 pro)'rement revie/s, /hi&e finding fe/ pro$&ems /ith the 'nder&0ing de)isions or pro)'rement res'&ts, ma0 rea)h negative )on)&'sions and ma2e 'n/anted re)ommendations simp&0 $e)a'se /e&& )onsidered de)isions /ere not /e&& do)'mented. #oting $rief&0 /h0 0o' did /hat 0o' did ma0 he&p 0o' and 0o'r agen)0, as /e&& as satisf0 the re<'irements of the 3Third -art0 Contra)ting Ie<'irements4 Cir)'&ar. Best Practices Where appropriate, the pro)'rement do)'mentation fi&e sho'&d )ontain( -'r)hase re<'est, a)<'isition p&anning information, and other pre so&i)itation do)'mentsQ :viden)e of avai&a$i&it0 of f'ndsQ Iationa&e for the method of pro)'rement 8negotiations, forma& advertising9Q 7ist of so'r)es so&i)itedQ ?ndependent )ost estimateQ Statement of /or2As)ope of servi)esQ Copies of p'$&ished noti)es of proposed )ontra)t a)tionQ Cop0 of the so&i)itation, a&& addenda, and a&& amendmentsQ 7i<'idated damages determinationQ An a$stra)t of ea)h offer or <'oteQ Contra)torKs )ontingent fee representation and other )ertifi)ations and representationsQ So'r)e se&e)tion do)'mentationQ Contra)ting Offi)erKs determination of )ontra)tor responsiveness and responsi$i&it0Q Cost or pri)ing dataQ
-age !9
Determination that pri)e is fair and reasona$&e in)&'ding an ana&0sis of the )ost and pri)e data, re<'ired interna& approva&s for a/ardQ #oti)e of a/ardQ #oti)e to 'ns'))essf'& $idders or offerors and re)ord of an0 de$riefingQ Ie)ord of an0 protestQ ,id, -erforman)e, -a0ment, or other $ond do)'ments, and noti)es to s'retiesQ Ie<'ired ins'ran)e do)'ments, if an0Q and #oti)e to pro)eed.
-'r)hase order forms 8e&e)troni) or man'a&9 and standard fi&es for sma&& p'r)hases )an $e designed to ma2e the re)ording of most of the re&evant data for sma&& p'r)hases a'tomati). ,id and proposa& fi&es, parti)'&ar&0 if 0o' 'se sea&ed $ids 'nder S!00,000 )an a&so $e standardiGed to fa)i&itate re)ording the appropriate data. *or &arger pro)'rements, there are often memoranda or )orresponden)e that, if assem$&ed in the fi&e, address man0 of the 2e0 iss'es. The pro)'rement fi&e and the )ontra)t administration fi&e )an $e )oordinated $0 standard pra)ti)e, so that nothing $et/een $id opening 8or proposa& re)eipt9 and noti)e of a/ard is omitted. *$.$* Full and O en Com etition *$.$*$( Full and O en Com etition Princi le RE@UIREMENT *TA Cir)'&ar 4220.!:, -aragraph H.a re<'ires a&& pro)'rements to $e )ond')ted in a manner providing f'&& and open )ompetition. This re<'irement finds its /a0 into -aragraph 9.h of the Cir)'&ar /hi)h &imits the 'se of non)ompetitive )ontra)t a/ards to those sit'ations /hen the a/ard of a )ontra)t is infeasi$&e 'nder sma&& p'r)hase pro)ed'res, sea&ed $ids, or )ompetitive proposa&s and at &east one of severa& spe)ifi)a&&0 named )ir)'mstan)es are present. Th's, )ontra)ts /ith a va&'e of more than S!00,000 sha&& $e a/arded $0 sea&ed $id or )ompetitive negotiation 'n&ess there is an e;p&i)it e;)eption. *TA Cir)'&ar 4220.!:, -aragraph H.a )onsiders the fo&&o/ing pra)ti)es to $e restri)tive of )ompetition( Unreasona$&e re<'irements p&a)ed on firms in order for them to <'a&if0 to do $'sinessQ Unne)essar0 e;perien)e and e;)essive $onding re<'irementsQ #on)ompetitive pri)ing pra)ti)es $et/een firms or $et/een affi&iated )ompaniesQ
-age 20
#on)ompetitive a/ards to an0 person or firm on retainer )ontra)tsQ Iestri)tive 'se of $rand namesQ An0 ar$itrar0 a)tion in the pro)'rement pro)essQ and =eographi) preferen)es %
DEFINITIONS Competition The pro)ess $0 /hi)h t/o or more vendors attempt to se)'re the $'siness of a third part0 $0 the most favora$&e pri)e, <'a&it0, and servi)e. :;)&'sionar0 Tending to &imit )ompetition for reasons other than $'siness or $ona fide po&i)0 goa&s, s')h as pri)e, <'a&it0, and servi)e. DISCUSSION Full and o en com etition is t/e "uidin" rinci le of rocurement reAuirements and ractices$ Dou constantl# seeE to ermit and encoura"e meanin"ful interest and offers from all entities$ Dour ractices s/ould &e selecti%e or rule out offerors onl# for &usiness reasons 6cost! Aualit#! and deli%er#9$ Because it is often easier not to accommodate a otential ne1 offeror! and easier to deal 1it/ fe1er entities! #ou must %i"ilantl# culti%ate 1a#s to increase com etition at reasona&le e; ense$ Pur ose The prin)ip&e of f'&& and open )ompetition has one primar0 and t/o se)ondar0 p'rposes. The primar0 p'rpose is to o$tain the $est <'a&it0 and servi)e at minim'm )ost. ?n other /ords, to get the $est $'0. The se)ondar0 p'rposes are to g'ard against favoritism and profiteering at p'$&i) e;pense, and to provide e<'a& opport'nities to parti)ipate in p'$&i) $'siness to ever0 potentia& offeror. ,est ,'0 The primar0 p'rpose of free and open )ompetition is to o$tain for 0o'r )'stomers 8and the passengers, f'nding partners, and &o)a& )omm'nit0 or other vested interest9 the optim'm )om$ination of )ost /ith goods and servi)es. The most )ost effe)tive pro)'rement, the greatest va&'e, and the $est $'0 are a&& re&ated terms. The premise is that s'pp&iers )ompeting /ith ea)h other /i&& ma2e efforts to optimiGe the pri)e and <'a&it0 for 0o', even tho'gh it minimiGes their profit per)entage.
) =eographi) preferen)e is permitted in )ertain narro/ sit'ations, in)&'ding prin)ipa&&0 /here part of a &ega& &i)ensing re<'irement and for ar)hite)ts and engineersQ *TA Cir)'&ar 4220.!: T H.$.
-age 2!
A )o'ntervai&ing vie/ is that having to )ompete in)reases the )ost of the goods and servi)es. Some offerors /i&& state, >?f ? )an have a so&e so'r)e )ontra)t, ? )an ho&d the )ost do/n for 0o'.> This is a short term perspe)tive that is destr')tive in the &ong r'n. :ven if a &o/er pri)e )an $e o$tained in iso&ated )ir)'mstan)es, the odds are that in most )ases 0o' )an o$tain a $etter $'0 thro'gh open )ompetition. As in a&& pro)'rement pra)ti)es, 0o' )an a&so $enefit in the &ong r'n from esta$&ishing a high&0 )onsistent e;pe)tation on the part of 0o'r s'pp&iersQ the0 /i&& )ompete more )ost effe)tive&0 and /ith &ess diffi)'&t0, if the0 are )onfident that free and open )ompetition is 0o'r )onsistent pra)ti)e. To s'))eed, 0o' sho'&d di&igent&0 root o't the tenden)0 to p'rs'e fa&se, short term e)onomies of &imiting )ompetition in favor of free and open )ompetition. A provo)ative assertion is that, >A 'ni<'e )hara)teristi) of good p'$&i) p'r)hasing is the 'nder&0ing prin)ip&e that more importan)e is '&timate&0 atta)hed to the /a0s and means of o$taining pri)es than to pri)es themse&ves.> 1 Whether this is tr'e or /hether the $est $'0 is more important than the means of pro)'rement, it is )ertain&0 tr'e that 0o' ma0 $e the voi)e in 0o'r transit s0stem for prote)ting pro)'rement prin)ip&es, parti)'&ar&0 the prin)ip&e of free and open )ompetition, against the o))asiona& short sighted vie/s of 0o'r )'stomers. *avoritism and -rofiteering The )on)ern that s'pp&iers or p'$&i) agents ma0 profit 'n@'st&0 at p'$&i) e;pense thro'gh poor pro)'rement pra)ti)es is a )onstant theme in the histor0 of government pro)'rement. Whi&e e&iminating 'n@'st gains does serve to a)hieve the $est pri)e, the a)'te )on)ern that s'pp&iers or p'$i) offi)ia&s ma0 e;p&oit p'$&i) pro)'rements for their o/n gain at p'$&i) e;pense is of great signifi)an)e and p&a0s a ma@or ro&e in the p'$&i)Ks overa&& )onfiden)e in a transit operating entit0. OfferorsK Opport'nit0 S)r'p'&o's&0 fair treatment of a&& offerors /i&& foster the most satisfa)tor0 re&ations /ith the offerors in the &ong r'n. Simi&ar&0, a firm e;pe)tation of free and open )ompetition is genera&&0 va&'ed $0 the s'pp&ier )omm'nit0. Bo/ever, there )an $e )ir)'mstan)es /here a s'pp&ierKs right to parti)ipate is at odds /ith the pro)'ring agen)0Ks interest in the $est $'0. :;amine the )ase of fai&'re of a de&iver0 agen)0 or the posta& servi)e to de&iver a proposa& do)'ment. A&tho'gh missing the proposa& dead&ine /as not the fa'&t of the proposer, its right to parti)ipate in p'$&i) $'siness does not prevai& over the pro)'ring agen)0Ks interest in pro)eeding /ith p'$&i) $'siness. ?ndeed, in some @'risdi)tions, a disappointed $idder has no standing to enfor)e the )ompetitive pro)'rement &a/s. Bo/ever, to the e;tent *edera& pre)edents app&0 to 0o'r pro)'rement, 0o'r offerors have an imp&ied )ontra)t of fair dea&ing d'ring the pro)'rement pro)ess. H So /hi&e 0o'r primar0 goa& is the $est $'0, and an offeror ma0 have no vested right to parti)ipate nor vested profit interest in the possi$i&it0 of
) The Co'n)i& of State =overnments, #ationa& Asso)iation of State -'r)hasing Offi)ia&s, 7a/ :nfor)ement Assistan)e Administration, and -eat .ar/i)2 .it)he&& C Co., State and #ocal .overnment &urc)asin! 8!9159 p. %.2.
5
) United States v. 6ohn C. =rim$erg Co., 102 *.2d !"%2, !"%1 8*ed. Cir. !9H"9 8in $an)9.
-age 22
parti)ipating, the offeror does have a right to fair dea&ing d'ring the so&i)itation and se&e)tion pro)ess. To the e;tent that it is not in)onsistent /ith the $est $'0, 0o' /i&& /ant to treat a&& potentia& offerors as fair&0 as possi$&e. Best Practices The fo&&o/ing are i&&'strative of pra)ti)es 0o' )an 'nderta2e to advan)e )ompetition. -artner ?nformation 5o' )an 'nderta2e o'trea)h programs /ith 0o'r s'pp&ier partners $0 preparing $ro)h'res that give $a)2gro'nd information a$o't 0o'r agen)0 and )ontain assistan)e in the most pra)ti)a& /a0s to identif0 opport'nities to do $'siness /ith 0o'r agen)0. -artner Treatment 5o' )an esta$&ish an ethi) in 0o'r organiGation of treating s'pp&iers as partners in the de&iver0 of transit servi)e. :ver0thing from the te&ephone manner of agen)0 staff to the )onsideration sho/n in arranging )onferen)es and presentations )an )ontri$'te to an in)rease in )ompetition. Advertisement A traditiona& pra)ti)e to in)rease )ompetition, and sti&& one of the most meaningf'&, is /idespread advertising to the e;tent pra)ti)a&. Deve&oping e)onomi)a& means to /iden a))ess to 0o'r pro)'rement advertisements, s')h as 'se of the internet and private $id room servi)es, is an area /orth0 of )ontin'a& revie/ and effort. *$.$*$* Restraints on Com etition *$.$*$*$( Brand Names RE@UIREMENT *TA Cir)'&ar 4220.!: -aragraph H.a. re<'ires( >A&& pro)'rement transa)tions /i&& $e )ond')ted in a manner providing f'&& and open )ompetition. Some of the sit'ations )onsidered to $e restri)tive of )ompetition in)&'de, $'t are not &imited to . . . Spe)if0ing on&0 a U$rand name+ prod')t instead of a&&o/ing Uan e<'a&+ prod')t to $e offered /itho't &isting its sa&ient )hara)teristi)s.4 -aragraph H.). re<'ires( >...A&& so&i)itations sha&&( 8!9 ?n)orporate a )&ear and a))'rate des)ription of the te)hni)a& re<'irements for the materia&, prod')t, or servi)e to $e pro)'red. S')h des)ription sha&& not, in )ompetitive pro)'rements, )ontain feat'res that 'nd'&0 restri)t )ompetition.... ... When it is impra)ti)a& or 'ne)onomi)a& to ma2e a )&ear and a))'rate des)ription of the te)hni)a& re<'irements, a U$rand name or e<'a&+ des)ription ma0 $e 'sed as a
-age 2"
means to define the performan)e or other sa&ient )hara)teristi)s of a pro)'rement. The spe)ifi) feat'res of the named $rand /hi)h m'st $e met $0 offerors sha&& $e )&ear&0 stated.4 DEFINITIONS Approved :<'a& An item or servi)e /hi)h has $een approved $0 the pro)'ring agen)0 as e<'a& to the $rand name item origina&&0 spe)ified. Sa&ient Chara)teristi)s Those <'a&ities of an item that are essentia& to ens're that the intended 'se of the item )an $e satisfa)tori&0 rea&iGed. The term is main&0 'sed in )onne)tion /ith a $rand name or e<'a& des)ription, /hi)h sho'&d set forth those sa&ient ph0si)a&, f'n)tiona&, or other )hara)teristi)s of the referen)ed prod')t that an e<'a& prod')t m'st have in order to meet the A'thorit0Ks needs. ,rand #ame A name of a prod')t or servi)e that is &imited to the prod')t or servi)e prod')ed or )ontro&&ed $0 one private entit0 or $0 a )&osed gro'p of private entities. ,rand names ma0 in)&'de trademar2s, man'fa)t'rer names, or mode& names or n'm$ers that are asso)iated /ith on&0 one man'fa)t'rer. Design Spe)ifi)ations Spe)ifi)ations $ased on the design of a prod')t or servi)e. T0pi)a& design spe)ifi)ations ma0 in)&'de dimensions, materia&s 'sed, )ommon&0 and )ompetitive&0 avai&a$&e )omponents, and non proprietar0 methods of man'fa)t'ring. -erforman)e Spe)ifi)ations Spe)ifi)ations $ased on the f'n)tion and performan)e of a prod')t or servi)e 'nder spe)ified )onditions, prefera$&0 )onditions that )an $e reprod')ed for testing p'rposes. -erforman)e spe)ifi)ations ma0 in)&'de 'sef'& &ife, re&ia$i&it0 in terms of average interva&s $et/een fai&'re, and )apa)it0. DISCUSSION Brand names 6e$"$ FMotorola Metrocom!F FBe&asto CeaterF9 are amon" t/e most restricti%e t# es of s ecification$ Desi"n and erformance s ecifications are t/e referred alternati%es$ Co1e%er! in some cases usin" sealed &ids! #ou ma# not &e a&le to ensure #ou 1ill recei%e an acce ta&le roduct 1it/out mentionin" a &rand name$ 6In ne"otiated rocurements t/is is less often necessar# &ecause a erformance or desi"n s ecification can &e used and t/e ro osed &rands can &e re%ie1ed durin" ne"otiations$9 If #ou must use a &rand name in #our s ecification! #ou can still allo1 &idders to su&stitute an eAual roduct 1it/ a different &rand name$ Dou ma# reser%e t/e ri"/t to determine 1/et/er a articular &rand or model is eAual to t/e one #ou s ecified$ If #ou use a &rand name and allo1 eAual &rands! #ou must also s ecif# t/e salient c/aracteristics of t/e s ecified &rand t/at 1ill &e amon" t/e criteria used in determinin" 1/et/er a su""ested su&stitute is eAual to t/e s ecified &rand or not$
-age 24
If a "rantee &elie%es t/at a s ecific &rand name must &e used in a s ecification and t/at it cannot acce t an# alternati%e roductJ i$e$! it cannot allo1 a %endor to ro ose Han eAualI roduct! t/e "rantee must rocess t/is as a sole source 6non)com etiti%e9 rocurement action t/rou"/ t/e ro er a ro%in" officials 1it/in t/e "ranteeMs or"ani,ation rior to release of t/e solicitation$ Pur ose The restri)tion on $rand names serves the )entra& p'rpose of ma;imiGing free and open )ompetition to o$tain the $est $'0. ?f 0o' spe)if0 a $rand name /ith no opport'nit0 for s'$stit'tion, the origina& s'pp&ier of the $rand name has an effe)tive monopo&0. This res'&ts in e;or$itant pri)es and )essation of innovation and prod')t deve&opment. ?n )omp&e; e<'ipment and )onstr')tion )ontra)ts /here a &arge n'm$er of )omponents are spe)ified, the 'se of $rand names )an $e even more restri)tive than in pro)'rement of individ'a& 'nits $e)a'se the pro&iferation of $rand names dis)o'rages the prime )ontra)tor from )onsidering s'$stit'tes /hi)h might )ontri$'te to a more )ost effe)tive end prod')t. Therefore, in the &ong r'n, 0o' /i&& get the $est $'0 if 0o' avoid the 'se of $rand names as m')h as possi$&e. ?n pro)'ring )omp&e; s0stems, ho/ever, s')h as ro&&ing sto)2 and e&e)troni) s0stems, /here re&ia$i&it0 or other performan)e standards are mission )riti)a& to 0o'r transit servi)e, 0o' and 0o'r )'stomers ma0 not $e a$&e to spe)if0 a )omponent in terms of design or performan)e and sti&& ens're that 0o'r &o/est responsive and responsi$&e $idder /i&& offer 0o' a satisfa)tor0 )omponent. ?n these )ases, some pri)e and <'a&it0 )ompetition )an $e preserved $0 a&&o/ing the s'$stit'tion of e<'a& items /ith other $rand names. ?f 0o' are the one /ho /i&& determine /hi)h $rand names are e<'a& to the one spe)ified, then 0o' have not sa)rifi)ed an0 )ontro& over the <'a&it0 of the prod')t. This )ompetition $0 s'$stit'tion is fa)i&itated $0 &isting the sa&ient )hara)teristi)s, s')h as 0o' /o'&d 'se if 0o' 'sed a design or performan)e spe)ifi)ation, 8e.g., >!0 0ear &ife 'nder var0ing vo&tage )onditions of transit $'s e&e)tri)a& s0stems>9, so that $idders /i&& $e a$&e to @'dge /hi)h $rands ma0 $e e<'a& to the spe)ified $rand. Best Practices Design and -erforman)e Spe)ifi)ations 5o' )an /or2 /ith 0o'r )'stomers to see if $rand names )an $e removed from the spe)ifi)ation $0 s'$stit'ting design or performan)e spe)ifi)ations. 7i2e man0 of the <'a&ities of f'&&0 open and )ompetitive pro)'rement pra)ti)es, this is an effort that ma0 seem over Gea&o's 'nder the time press're of a spe)ifi) pro)'rement, $'t 0o' )an )onstant&0 see2 to remove restri)tions and improve the )ompetitiveness of 0o'r pro)'rement pro)esses so that 0o' genera&&0 a)hieve the $est $'0. ?f ade<'ate design and performan)e spe)ifi)ations )annot $e prepared, &isting severa& a))epta$&e $rand names is far $etter than spe)if0ing @'st one. >Or Approved :<'a&> Whenever $rand names are 'sed, there are severa& /a0s 0o' )an )&arif0 $e0ond a do'$t that the $rand name is 'sed mere&0 as a spe)ifi)ation and not as a statement of a
-age 25
preferen)e for the spe)ifi) prod')t spe)ified. One /a0 is to in)&'de a phrase s')h as >or e<'a&,> >or approved e<'a&,> or >simi&ar in design, )onstr')tion and performan)e> /ith the $rand name. .an0 standard e<'ipment and )onstr')tion do)'ments a&so )ontain a )&a'se in the genera& provisions that states that even if the phrase >or approved e<'a&> is inadvertent&0 omitted, it is imp&ied after an0 $rand name. ?f 0o' spe)if0 >or e<'a&,> 0o' sha&& )&ear&0 set forth those minim'm essentia& )hara)teristi)s and standards to /hi)h the materia&, prod')t or servi)e m'st )onform if it is to satisf0 its intended 'se. 9 Some of the on's of restri)tion is &ifted for a &arge vo&'me of transit pro)'rements $0 the 3Third -art0 Contra)ting Ie<'irements4 Cir)'&arKs san)tion for non)ompetitive pro)'rement of asso)iated )apita& maintenan)e items from the origina& e<'ipment man'fa)t'rer. The Cir)'&ar states( &rocurement $y noncom%etitive %ro%osals may $e used only w)en t)e award of a contract is infeasi$le under small %urc)ase %rocedures/ sealed $ids/ or com%etitive %ro%osals and at least one of t)e followin! circumstances a%%lies= (e) t)e item is an associated ca%ital maintenance item as defined in A: 2.S.C. B 5CDE(a)(1) t)at is %rocured directly from t)e ori!inal manufacturer or su%%lier of t)e item to $e re%laced.!0 The Cir)'&ar re<'ires, ho/ever, that >the grantee m'st first )ertif0 in /riting to *TAQ 8a9 that s')h man'fa)t'rer or s'pp&ier is the on&0 so'r)e for s')h itemQ and 8$9 that the pri)e of s')h item is no higher than the pri)e paid for s')h item $0 &i2e )'stomers.> !! Approva& -ro)ess ?f 0o' have &isted eno'gh sa&ient )hara)teristi)s and the $rand name is an insignifi)ant fa)tor in the overa&& pro)'rement, 0o' ma0 simp&if0 the pro)'rement $0 not re<'iring approva&. The )ontra)tor /o'&d then have the right to s'$stit'te a prod')t. The '&timate determination of /hether the s'$stit'te /as e<'a& to the $rand spe)ified, if )ontested, /o'&d $e thro'gh the disp'te reso&'tion pro)ess )'&minating in the )o'rts. The $etter pra)ti)e, ho/ever, is to provide an approva& pro)ess, prefera$&0 prior to $id opening, so that $idders, in fina&iGing their $ids /i&& $e )onfident a$o't their right to s'$stit'te a $rand the0 )onsider to $e more )ost effe)tive than the one spe)ified. This /i&& a&so give 0o' )onfiden)e a$o't the prod')t or servi)e 0o' /i&& re)eive. 8,rand names ma0 $e 'sed in )ompetitive negotiation for )omp&e; s0stems, $'t the approva& pro)ess need on&0 re<'ire approva& prior to a/ard rather than at proposa& s'$mission. Approva& of e<'a& $rands is 's'a&&0 simp&0 a part of the dis)'ssions or negotiations.9 5o' /i&& /ant to avoid re<'iring $idders to /ait
) *TA Cir)'&ar 4220.!: T H.).8!9. ) *TA Cir)'&ar 4220.!: T 9.h.8!9. ) 3d.
(:
((
-age 2%
'nti& after a/ard to o$tain approva&, $e)a'se a disapprova& at that time ma0 p&a)e a $idder 8no/ )ontra)tor9 in finan)ia& @eopard0 and ma0 prompt &itigation. ?f 0o' /ant to re<'ire pre $id approva&, the so&i)itation )an spe)if0 a time and format for re<'esting approva& of e<'a& $rands. T0pi)a&&0, this is the same time and format 'sed for re<'esting other )hanges in the spe)ifi)ations. Approve re<'ests for s'$stit'tion /henever 0o' determine that the offered prod')t is e<'a& in a&& materia& respe)ts to the prod')ts referen)ed. Offers need not $e re@e)ted $e)a'se of minor differen)es in design, )onstr')tion, or feat'res, /hi)h do not affe)t the s'ita$i&it0 of the prod')t for its intended 'se. Determinations t0pi)a&&0 identif0, or in)orporate $0 referen)e, identifi)ation of the spe)ifi) prod')ts, /hi)h the )ontra)tor is to f'rnish. S')h identifi)ation )an in)&'de an0 $rand name, ma2e or mode& n'm$er, and des)riptive materia&. 5o' ma0 /ant to iss'e 0o'r determination, parti)'&ar&0 an0 approva&, to a&& $idders $0 addend'm or as 0o'r pro)ed'res provide. 8?n some )ompetitive negotiations /here ear&0 and open dis)'ssion of )reative integration of s'$stit'te $rands is important, iss'an)e of approva&s to )ompeting proposers is )onsidered to )onstit'te &eve&ing the p&a0ing fie&d, /hi)h /o'&d dis)o'rage open negotiations. 5o' )an )onsider 2eeping design innovations )onfidentia& $'t iss'ing approva& of e<'a& $rand names to a&& proposers.9 As /ith other s'$stantive addenda to a so&i)itation, )onsider e;tending the $id period if the approva&s are iss'ed short&0 $efore the s)hed'&ed $id opening, to a&&o/ a&& $idders to ta2e advantage of the information prior to the $id opening. :ven if 0o' have a pre $id approva& pro)ess, a )ontra)tor )an norma&&0 re<'est additiona& approva&s after a/ard. Consider )&arif0ing in 0o'r so&i)itation that the )ontra)tor /ho /aits 'nti& after a/ard pro)eeds at its o/n ris2. *$.$*$*$* Britten Standards of Conduct and Conflicts of Interest3 Personal and Or"ani,ational Britten Standards of Conduct RE@UIREMENT 49 C*I T !H."%8$98"9 esta$&ishes for the Department of Transportation the government /ide re<'irement that state and &o)a& government grant re)ipients m'st have /ritten standards of )ond')t for pro)'rement personne&. =rantees and s'$ grantees /i&& maintain a /ritten )ode of standards of )ond')t governing the performan)e of their emp&o0ees engaged in the a/ard and administration of )ontra)ts. #o emp&o0ee, offi)er or agent of the grantee or s'$ grantee sha&& parti)ipate in se&e)tion, or in the a/ard or administration of a )ontra)t s'pported $0 *edera& f'nds if a )onf&i)t of interest, rea& or apparent, /o'&d $e invo&ved. S')h a
-age 21
)onf&i)t /o'&d arise /hen( 8?9 The emp&o0ee, offi)er or agent, 8ii9 An0 mem$er of his immediate fami&0, 8iii9 Bis or her partner, or 8iv9 An organiGation /hi)h emp&o0s, or is a$o't to emp&o0, an0 of the a$ove, has a finan)ia& or other interest in the firm se&e)ted for a/ard. The granteeKs or s'$ granteeKs offi)ers, emp&o0ees or agents /i&& neither so&i)it nor a))ept grat'ities, favors or an0thing of monetar0 va&'e from )ontra)tors, potentia& )ontra)tors, or parties to s'$ agreements. =rantee and s'$ grantees ma0 set minim'm r'&es /here the finan)ia& interest is not s'$stantia& or the gift is an 'nso&i)ited item of nomina& intrinsi) va&'e. To the e;tent permitted $0 State or &o)a& &a/ or reg'&ations, s')h standards or )ond')t /i&& provide for pena&ties, san)tions, or other dis)ip&inar0 a)tions for vio&ations of s')h standards $0 the granteeKs and s'$ granteeKs offi)ers, emp&o0ees, or agents, or $0 )ontra)tors or their agents. The a/arding agen)0 ma0 in reg'&ation provide additiona& prohi$itions re&ative to rea&, apparent, or potentia& )onf&i)ts of interest. 49 C.*.I. Se). !9.42 imposes the same re<'irement for instit'tions of higher ed')ation, hospita&s and other non profit organiGations. The re)ipient sha&& maintain /ritten standards of )ond')t governing the performan)e of its emp&o0ees engaged in the a/ard and administration of )ontra)ts. #o emp&o0ee, offi)er, or agent sha&& parti)ipate in the se&e)tion, a/ard, or administration of a )ontra)t s'pported $0 *edera& f'nds if a rea& or apparent )onf&i)t of interest /o'&d $e invo&ved. S')h a )onf&i)t /o'&d arise /hen the emp&o0ee, offi)er, or agent, an0 mem$er of his or her immediate fami&0, his or her partner, or an organiGation /hi)h emp&o0s or is a$o't to emp&o0 an0 of the parties indi)ated herein, has a finan)ia& or other interest in the firm se&e)ted for an a/ard. The offi)ers, emp&o0ees, and agents of the re)ipient sha&& neither so&i)it nor a))ept grat'ities, favors, or an0thing of monetar0 va&'e from )ontra)tors, or parties to s'$ agreements. Bo/ever, re)ipients ma0 set standards for sit'ations in /hi)h the finan)ia& interest is not s'$stantia& or the gift is an 'nso&i)ited item of nomina& va&'e. The standards of )ond')t sha&& provide for dis)ip&inar0 a)tions to $e app&ied for vio&ations of s')h standards $0 offi)ers, emp&o0ees, or agents of the re)ipient. -aragraph 1.) of *TA Cir)'&ar 4220.!: imp&ements this re<'irement for *TA grant re)ipients( =rantees sha&& maintain a /ritten )ode of standards of )ond')t governing the performan)e of their emp&o0ees engaged in the a/ard and administration of )ontra)ts. #o emp&o0ee, offi)er, agent, immediate fami&0 mem$er, or ,oard mem$er of the grantee sha&& parti)ipate in the se&e)tion, a/ard, or administration of a )ontra)t s'pported $0 *TA f'nds if a )onf&i)t of interest, rea& or apparent /o'&d $e invo&ved. S')h a )onf&i)t /o'&d arise /hen an0 of the fo&&o/ing has a finan)ia& or other interest in the firm se&e)ted for a/ard(
-age 2H
!. The emp&o0ee, offi)er, agent, or ,oard mem$er, 2. An0 mem$er of hisAher immediate fami&0, ". Bis or her partner, or 4. An organiGation that emp&o0s, or is a$o't to emp&o0, an0 of the a$ove. The granteeKs offi)ers, emp&o0ees, agents, or ,oard mem$ers /i&& neither so&i)it not a))ept gifts, grat'ities, favors, or an0thing of monetar0 va&'e from )ontra)tors, potentia& )ontra)tors, or parties to s'$ agreements. =rantees ma0 set minim'm r'&es /here the finan)ia& interest is not s'$stantia& or the gift is an 'nso&i)ited item of nomina& intrinsi) va&'e. To the e;tent permitted $0 state or &o)a& &a/ or reg'&ations, s')h standards of )ond')t /i&& provide for pena&ties, san)tions, or other dis)ip&inar0 a)tion for vio&ation of s')h standards $0 the granteeKs offi)ers, emp&o0ees, or agents, or $0 )ontra)tors or their agents. Conflicts of Interest3 Personal and Or"ani,ational RE@UIREMENTS As an ethi)s re<'irement, Se)tion "8a9 of the *TA .aster Agreement re<'ires the /ritten standards of )ond')t to en)ompass $oth persona& and organiGationa& )onf&i)ts of interest and defines them as fo&&o/s( !. -ersona& Conf&i)ts of ?nterest. The Ie)ipientKs )ode or standards of )ond')t sha&& prohi$it the Ie)ipientKs emp&o0ees, offi)ers, $oard mem$ers, or agents from parti)ipating in the se&e)tion, a/ard, or administration of a third part0 )ontra)t or s'$ agreement s'pported $0 *edera& f'nds if a rea& or apparent )onf&i)t of interest /o'&d $e invo&ved. S')h a )onf&i)t /o'&d arise /hen an0 of the fo&&o/ing parties has a finan)ia& or other interest in the entit0 se&e)ted for a/ard( 8a9 an emp&o0ee, offi)er, $oard mem$er, or agentQ 8$9 an0 mem$er of his or her immediate fami&0Q )9 his or her partnerQ or 8d9 an organiGation that emp&o0s, or intends to emp&o0, an0 of the a$ove. 2. OrganiGationa& Conf&i)ts of ?nterest. The Ie)ipientKs )ode or standards of )ond')t m'st in)&'de pro)ed'res for identif0ing and preventing rea& and apparent organiGationa& )onf&i)ts of interest. An organiGationa& )onf&i)t of interest e;ists /hen the nat're of the /or2 to $e performed 'nder a proposed third part0 )ontra)t or s'$ agreement ma0, /itho't some restri)tions on f't're a)tivities, res'&t in an
-age 29
'nfair )ompetitive advantage to the third part0 )ontra)tor or s'$ re)ipient or impair its o$@e)tivit0 in performing the )ontra)t /or2.
49 C*I T !H."%8)98v9 and 49 C*I T !9.4" prohi$it organiGationa& )onf&i)ts of interest as restri)tive of )ompetition. Se)tion !9.4" f'rther states as fo&&o/s( A&& pro)'rement transa)tions sha&& $e )ond')ted in a manner to provide, to the ma;im'm e;tent pra)ti)a&, open and free )ompetition. The re)ipient DD-age !%1FF sha&& $e a&ert to organiGationa& )onf&i)ts of interest as /e&& as non)ompetitive pra)ti)es among )ontra)tors that ma0 restri)t or e&iminate )ompetition or other/ise restrain trade. ?n order to ens're o$@e)tive )ontra)tor performan)e and e&iminate 'nfair )ompetitive advantage, )ontra)tors that deve&op or draft spe)ifi)ations, re<'irements, statements of /or2, invitations for $ids andAor re<'ests for proposa&s sha&& $e e;)&'ded from )ompeting for s')h pro)'rements. A/ards sha&& $e made to the $idder or offeror /hose $id or offer is responsive to the so&i)itation and is most advantageo's to the re)ipient, pri)e, <'a&it0 and other fa)tors )onsidered. So&i)itations sha&& )&ear&0 set forth a&& re<'irements that the $idder or offeror sha&& f'&fi&& in order for the $id or offer to $e eva&'ated $0 the re)ipient. An0 and a&& $ids or offers ma0 $e re@e)ted /hen it is in the re)ipientKs interest to do so. 40 C*I T !50%.58)9 )on)erns the engagement of a )ons'&tant for the preparation of an environmenta& impa)t statement. ?t states the fo&&o/ing( :nvironmenta& impa)t statements. :;)ept as provided in Se)s. !50%.2 and !50%." an0 environmenta& impa)t statement prepared p'rs'ant to the re<'irements of #:-A sha&& $e prepared dire)t&0 $0 or $0 a )ontra)tor se&e)ted $0 the &ead agen)0 or /here appropriate 'nder Se). !50!.%8$9, a )ooperating agen)0. ?t is the intent of these reg'&ations that the )ontra)tor $e )hosen so&e&0 $0 the &ead agen)0, or $0 the &ead agen)0 in )ooperation /ith )ooperating agen)ies, or /here appropriate $0 a )ooperating agen)0 to avoid an0 )onf&i)t of interest. Contra)tors sha&& e;e)'te a dis)&os're statement prepared $0 the &ead agen)0, or /here appropriate the )ooperating agen)0, spe)if0ing that the0 have no finan)ia& or other interest in the o't)ome of the pro@e)t. ?f the do)'ment is prepared $0 )ontra)t, the responsi$&e *edera& offi)ia& sha&& f'rnish g'idan)e and parti)ipate in the preparation and sha&& independent&0 eva&'ate the statement prior to its approva& and ta2e responsi$i&it0 for its s)ope and )ontents.
-age "0
#othing in this se)tion is intended to prohi$it an0 agen)0 from re<'esting an0 person to s'$mit information to it or to prohi$it an0 person from s'$mitting information to an0 agen)0. DISCUSSION A$ B/# Conflicts of Interest Pose a Pro&lem :ver0 )itiGen is entit&ed to have )onfiden)e in the integrit0 of government. Therefore, /hen 'sing p'$&i) f'nds for the p'r)hase of goods or servi)es, ea)h *TA grantee m'st prevent its personne& from ta2ing an0 a)tion that might res'&t in or even )reate the appearan)e of a persona& or organiGationa& )onf&i)t of interest. Avoiding )onf&i)ts of interest, thro'gh the imp&ementation of /ritten standards of )ond')t, $enefits the grantee in man0 /a0s and &eads to a more effi)ient and )redi$&e organiGation, /hi&e fai&'re to dea& /ith )onf&i)ts ma0 not on&0 adverse&0 impa)t the pro@e)t itse&f $'t ma0 a&so @eopardiGe the grantee+s a$i&it0 to re)eive or retain federa& f'nds. ! B$ Res onsi&ilit# of <rantee The grantee is responsi$&e for avoiding $oth persona& and organiGationa& )onf&i)ts of interest. Th's, grantees sho'&d $e vigi&ant in preventing and mitigating possi$&e )onf&i)ts$ C$ Standards of Conduct :a)h grantee m'st have /ritten standards of )ond')t governing the performan)e of its personne& invo&ved in the se&e)tion, a/ard andAor administration of )ontra)ts. ! The standards m'st prohi$it the granteeKs or s'$ granteeKs offi)ers, emp&o0ees or agents from so&i)iting or a))epting grat'ities, favors or things of monetar0 va&'e from )ontra)tors, potentia& )ontra)tors, or parties to s'$ agreements. The standards ma0 )ontain minim'm r'&es /here the finan)ia& interest is not s'$stantia& or the gift is an 'nso&i)ited item of nomina& intrinsi) va&'e. To the e;tent permitted $0 State or &o)a& &a/ or reg'&ations, the standards sho'&d provide for pena&ties, san)tions, or other dis)ip&inar0 a)tions for vio&ations of s')h standards $0 the granteeKs and s'$ granteeKs offi)ers, emp&o0ees, or agents, or $0 )ontra)tors or their agents. These /ritten standards m'st prohi$it %ersonal and or!ani@ational )onf&i)ts of interest/ real and a%%arent. D$ Personal Conflicts of Interest
) *TA .aster Agreement Se)tions "8a9 and "8a98!9Q 49 C*I T !H."%8"9Q *TA Cir)'&ar 4220.!: -aragraph 18)9. ?n addition, man0 state and &o)a& @'risdi)tions have &a/s and reg'&ations, /hi)h address $oth the )ond')t of p'$&i) emp&o0ees and the re&ationship $et/een p'$&i) entities and private $'sinesses. These var0 in nat're, and ma0 impose $oth )ivi& and )rimina& san)tions on vio&ators.
(
) See *TA .aster Agreement Se)tion "8a98!9.
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&ersonal Conflict of 3nterest( A persona& )onf&i)t of interest arises /hen one of the grantee+s emp&o0ees 8in)&'ding )ontra)tor emp&o0ees9, offi)ers, $oard mem$ers, or agents 8in)&'ding o'tside )ons'&tants9 invo&ved in the se&e)tion, a/ard or administration of a third part0 )ontra)t or s'$ agreement ! s'pported $0 *edera& f'nds or a mem$er of his or her immediate fami&0, partner, or o'tside emp&o0er or prospe)tive emp&o0er has a finan)ia& interest in the entit0
This interpretation app&ies to $oth s'$)ontra)tors and genera& )ontra)tors providing pro)'rement re&ated servi)es to a grantee.
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se&e)ted, or )ompeting, for the )ontra)t. 2 A persona& )onf&i)t of interest a&so arises /here an0 grantee emp&o0ee, offi)er, $oard mem$er, or agent so&i)its or a))epts gifts, grat'ities, favors, or an0thing of monetar0 va&'e from a )ontra)tor, potentia& )ontra)tor, or part0 to a s'$ agreement. " ?n addition, a persona& )onf&i)t of interest arises /here an0 s')h person 'ses his position, or non p'$&i) information gained d'ring his /or2 for the grantee, for persona& gain, in)&'ding gain in'ring to an immediate fami&0 mem$er, partner, or )'rrent or potentia& emp&o0er. These s)enarios )an res'&t in potentia& organiGationa& )onf&i)ts for emp&o0ers, or persona& )onf&i)ts of interest for the individ'a&. E$ Or"ani,ational Conflicts of Interest ,r!ani@ational Conflict of 3nterest( An organiGationa& )onf&i)t of interest o))'rs /here $e)a'se of other a)tivities, finan)ia& interests, re&ationships, or )ontra)ts a )ontra)tor is 'na$&e, or potentia&&0 'na$&e, to render impartia& assistan)e or advi)e to the granteeQ the )ontra)tor+s o$@e)tivit0 in performing the )ontra)t /or2 is or might $e impairedQ or a )ontra)tor has an 'nfair )ompetitive advantage. ! OrganiGationa& )onf&i)ts of interest )an )a'se t/o distin)t pro$&ems( $ias and unfair com%etitive advanta!e. 2
) A persona& )onf&i)t a&so arises /here a person /hose finan)ia& interests are attri$'ted to the emp&o0ee has a )onf&i)t L either $e)a'se that person is an emp&o0ee, prospe)tive emp&o0ee, offi)er, dire)tor, or agent of a )ontra)tor or )ompeting entit0, or $e)a'se that person has a finan)ia& interest in the )ontra)tor or )ompeting entit0. The finan)ia& interests of the fo&&o/ing are attri$'ted to an emp&o0ee( a mem&er of t/e em lo#eeMs immediate famil#! /is artner! or /is outside em lo#er or ros ecti%e em lo#er$ *TA Cir)'&ar 4220.!: -aragraph 18)9.
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) See *TA Cir)'&ar 4220.!: -aragraph 18)9Q !H C*I T !H."%8"98iv9Q *TA .aster Agreement Se)tion "8a9. Bo/ever, 3DtFhe Ie)ipient ma0 set minim'm r'&es /here the finan)ia& interest is not s'$stantia&, or the gift is an 'nso&i)ited item of nomina& intrinsi) va&'e.4 *TA .aster Agreement Se)tion "8a9Q see a&so *TA Cir)'&ar 4220.!: -aragraph 18)9Q !H C*I T !H."%8"98iv9. These are 2no/n as 3de minim's4 gifts, and do not res'&t in either a rea& or apparent )onf&i)t of interest. *or *TA and other *edera& emp&o0ees, the &eve& is set at S20 per o))asion, /ith a ma;im'm of S50 per )a&endar 0ear from the same so'r)e 8in)&'ding affi&iates9. ?n man0 )ases, ho/ever, the $est response to a gift offered is a simp&e, 3Than2 0o', $'t no than2 0o'.4 Se)tion "8a9 of the *TA .aster Agreement re<'ires that grantees in)&'de in the standards of )ond')t pena&ties, san)tions, or other dis)ip&inar0 a)tions for vio&ations of the )ode, to the e;tent permitted $0 state or &o)a& &a/.
(
) See *TA Cir)'&ar 4220.!: -aragraph H8a9859. The *edera& A)<'isition Ieg'&ations a&so provide a he&pf'& definition of organiGationa& )onf&i)t of interest( 3OrganiGationa& )onf&i)t of interest means that $e)a'se of other a)tivities or re&ationships /ith other persons, a person is 'na$&e or potentia&&0 'na$&e to render impartia& assistan)e or advi)e to the =overnment, or the person+s o$@e)tivit0 in performing the )ontra)t /or2 is or might $e other/ise impaired, or a person has an 'nfair )ompetitive advantage.4 4H C*I T 9.50!.
*
=enera&&0, an organiGationa& )onf&i)t arises $e)a'se a person or entit0 has or appears to have &o0a&ties to, or a finan)ia& interest in, t/o organiGations that ma0 have )ompeting or differing interests from ea)h other one of them $eing the grantee. *or e;amp&e, an organiGationa& )onf&i)t /o'&d arise if an emp&o0ee or a )ons'&tant serves as a mem$er of a p'$&i) or <'asi p'$&i) $od0 /ith reg'&ator0 a'thorit0 over a pro@e)t or has a sta2e in its o't)ome. This arises most often /here ar)hite)ts sit on design revie/ or Goning $oards.
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?ias arises /hen a )ontra)tor is p&a)ed in a sit'ation /here it ma0 have an in)entive to distort its advi)e or de)isions. Whenever the grantee is a/arding a )ontra)t that invo&ves the rendering of advi)e, the grantee m'st )onsider /hether there e;ists the potentia& for a )onf&i)t of interest on the part of the )ontra)tor rendering the advi)e. " 2nfair com%etitive advanta!e o))'rs /hen one )ontra)tor has information not avai&a$&e to other )ontra)tors in the norma& )o'rse of $'siness. *or e;amp&e, an 'nfair )ompetitive advantage /o'&d o))'r /hen a )ontra)tor deve&oping spe)ifi)ations or /or2 statements has a))ess to information that the grantee has paid the )ontra)tor to deve&op, or information /hi)h the grantee has f'rnished to the )ontra)tor for its /or2, /hen that information has not $een made avai&a$&e to the p'$&i). ,e)a'se this information enhan)es the )ontra)tor+s )ompetitive position in the pro)'rement pro)ess, it represents an 'nfair )ompetitive advantage over the other offerors. One so&'tion to this pro$&em is to f'&&0 dis)&ose a&& information to a&& prospe)tive offerors for a reasona$&e period of time prior to the grantee+s re)eipt of proposa&s for the fo&&o/ on /or2. Another e;amp&e /here an 'nfair )ompetitive advantage might arise is /here a )ontra)tor is a&&o/ed to /rite spe)ifi)ations or statements of /or2 aro'nd its o/n or an affi&iate+s )orporate strengths or prod')ts and then )ompete for a )ontra)t $ased on those spe)ifi)ations. The grantee )an prevent s')h an 'nfair advantage $0 p&a)ing reasona$&e restri)tions or even a prohi$ition on the )ontra)tor+s invo&vement in the s'$se<'ent pro)'rement. ?f an individ'a& emp&o0ee has a))ess to inside information, a possi$&e so&'tion /o'&d $e to /a&& off that emp&o0ee, so he )annot give his emp&o0er an 'nfair )ompetitive advantage. =rantees sho'&d e;er)ise )are that spe)ifi)ations do not provide an 'nfair )ompetitive advantage to an0 part0. =rantees sho'&d a&so $e a&ert to affi&iations among )ontra)tors that might give one )ontra)tor an 'nfair )ompetitive advantage over others. #ote( A )ompetitive advantage is not a&/a0s unfair. A )ontra)tor ma0 have a fair )ompetitive advantage $0 virt'e of its prior e;perien)e, its e;pertise, its more effi)ient operations, et). O))asiona&&0 an in)'m$ent )ontra)tor ma0 have /hat appears to $e an ins'rmo'nta$&e )ompetitive advantage $0 virt'e of its previo's /or2 for the grantee. An advantage of this t0pe ma0 not ne)essari&0 $e unfair. F$ T/e HA earance of ConflictI Standard
As stated a$ove, *TA r'&es prohi$it )onf&i)ts of interest $oth rea& and apparent. This r'&e app&ies to $oth persona& and organiGationa& )onf&i)ts of interest. Th's, ea)h grantee+s /ritten )ode of )ond')t m'st prohi$it rea& and apparent )onf&i)ts, not @'st a)t'a& )onf&i)ts of interest. The grantee sho'&d 'ti&iGe the 3reasona$&eness4 standard to determine /hether an 3apparent4 )onf&i)t
-(8
*edera& transit &a/ re<'ires grantees to a/ard )ontra)ts thro'gh a pro)ess of f'&& and open )ompetition. OrganiGationa& )onf&i)ts of interest that give an0 part0 an 'nfair )ompetitive advantage impede f'&& and open )ompetition, and th's are )onsidered 3restri)tive of )ompetition4 'nder -aragraph H8a9859 of *TA Cir)'&ar 4220.!:.
-age "4
of interest e;ists( 'ould a reasona$le %erson wit) all t)e material facts $elieve t)ere a%%ears to $e a conflictF <$ En%ironmental Consultants The Co'n)i& on :nvironmenta& N'a&it0 8C:N9 has ena)ted reg'&ations that address the 'se of )ons'&tants in the environmenta& pro)ess. ! These reg'&ations are intended to prevent )ontra)tors /ho are hired to st'd0 a&ternatives and potentia& environmenta& impa)ts of proposed pro@e)ts from presenting and profiting from $iased re)ommendations. The C:N reg'&ation at 40 C*I Se)tion !50%.5 3prohi$its a person or entit0 from entering into a )ontra)t /ith a federa& agen)0 to prepare an environmenta& impa)t statement 8:?S9 /hen that part0 has at that time and d'ring the &ife of the )ontra)t pe)'niar0 or other interests in the o't)omes of the proposa&. Th's, a firm /hi)h has an agreement to prepare an :?S for a )onstr')tion pro@e)t )annot, at the same time, have an agreement to perform the )onstr')tion, nor )o'&d it $e the o/ner of the )onstr')tion site.4 See 3='idan)e Iegarding #:-A Ieg'&ations,4 4H *ed. Ieg. "42%" 86'&0 !H, !9H"9. *TA re)ogniGed this prin)ip&e in the $id protest )ase of 6.A v. 7AC.TA, .TA I*- M-S 4"!0 09%4 8200!9, ho&ding as fo&&o/s( 3*TA 'nderstands the C:N reg'&ations to prohi$it an :?S )ontra)tor from $eing a/arded a )ontra)t that in)&'des /or2 dependent 'pon the )omp&etion of the :?S and iss'an)e of a IOD.4 C:N r'&es do not prohi$it a )ons'&tant responsi$&e for preparing an :?S from s'$mitting a proposa& on /or2 )onne)ted /ith the pro@e)t after the )omp&etion of the :?S. ?ndeed, in g'idan)e offered $0 the C:N, the Co'n)i& e;pressed )on)ern that 3some agen)ies have $een interpreting the )onf&i)ts provision in an over&0 $'rdensome manner.4 See 3='idan)e Iegarding #:-A Ieg'&ations,4 4H *ed. Ieg. "42%" 86'&0 !H, !9H"9. The Co'n)i& e;p&ained that, 3DiFn some instan)es, m'&tidis)ip&inar0 firms are $eing e;)&'ded from environmenta& impa)t statement preparation )ontra)ts $e)a'se of &in2s to a parent )ompan0 /hi)h has design andAor )onstr')tion )apa$i&ities. Some <'a&ified )ontra)tors are not $idding on environmenta& impa)t statement )ontra)ts $e)a'se of fears that their firm ma0 $e e;)&'ded from f't're design or )onstr')tion )ontra)tsZ. The res'&t of these mis'nderstandings has $een red')ed )ompetition in $idding for :?S preparation )ontra)ts, 'nne)essar0 de&a0s in se&e)ting a )ontra)tor and preparing the :?S, and )onf'sion and resentment a$o't the re<'irement.4 Th's, the Co'n)i& does not prohi$it an :?S )ontra)tor from $idding on /or2 )onne)ted /ith the pro@e)t after the )ontra)tor has )omp&eted a&& performan)e re<'ired for the :?S, $'t it does prohi$it sit'ations /here the )ontra)tor has an interest in the o't)ome of the :?S 3at that time or d'ring the &ife of4 the :?S )ontra)t.
) .ergers and a)<'isitions have had a strong effe)t on )ontra)ts in the environmenta& area, th's /arranting a separate dis)'ssion of this topi).
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C$ Insistin" on Im artialit# :a)h grantee is entit&ed to impartia& advi)e from its )ons'&tants, $ased so&e&0 on /hat is $est for the transit s0stem and the )omm'nit0, and not for the $enefit of persons /ith )onf&i)ting finan)ia& or other interests. *or additiona& prote)tion, the grantee not on&0 sho'&d enfor)e its o/n /ritten standards of )ond')t $'t insist, perhaps thro'gh the 'se of )ertifi)ations, that ea)h of its emp&o0ees, $oard mem$ers, offi)ers, or other agents 8as /e&& as )ontra)tor personne&9 o$serve an0 re&evant )ode of professiona& responsi$i&it0 governing his or her )ond')t, s')h as the )odes governing the )ond')t of &a/0ers, engineers, ar)hite)ts, p&anners, and a))o'ntants. Among other things, this re<'irement /o'&d demonstrate to the grantee+s emp&o0ees and )ontra)tors the importan)e p&a)ed $0 the grantee on avoiding )onf&i)ts of interest. I$ <rantee Decision to Proceed in S ite of Conflict of Interest$
*ina&&0, /hen a grantee has done a&& that reasona$&0 )an $e done to avoid, ne'tra&iGe, or mitigate a rea& or apparent )onf&i)t of interest, and if it is in the grantee+s $est interest to pro)eed /ith the )ontra)t despite the )onf&i)t, the grantee needs to do)'ment its de)ision. Do)'mentation sho'&d in)&'de /hat steps /ere ta2en or )onsidered, and @'stifi)ation for the )on)&'sion rea)hed, $efore pro)eeding /ith the )ontra)t. ! Best Practices :ver0 Agen)0 emp&o0ee invo&ved in the a/ard or administration of )ontra)ts m'st $e given a )op0 of the Agen)0Ks 8or StateKs9 /ritten standards of )ond')t, and the0 sho'&d $e re<'ired to sign a statement that the0 are fami&iar /ith and /i&& a$ide $0 these standards. 2 These statements sho'&d $e signed as a )ondition of emp&o0ment. ?t /o'&d $e /e&& to revie/ and sign them again ann'a&&0 as part of the emp&o0eeKs ann'a& performan)e eva&'ation as a means of reinfor)ing the importan)e of ethi)a& )ond')t $0 the Agen)0Ks emp&o0ees. ?n some Agen)ies, the =enera& .anager has iss'ed a memorand'm to a&& emp&o0ees s'mmariGing the most sensitive iss'es dea&ing /ith ethi)a& )ond')t and emphasiGing the importan)e of avoiding even the appearan)e of )onf&i)ts of interest. One p'$&i) Agen)0 has inserted s')h a memorand'm into its -ro)'rement .an'a&, together /ith the standards of )ond')t. "
) This is )onsistent /ith the approa)h 'sed in *edera& )ontra)ting as set forth in *AI 9.5048e9, /here a )ontra)t )an $e a/arded in spite of a )onf&i)t /hen the )ontra)ting offi)er determines that it is in the $est interest of the =overnment to do so.
*
) Ie)ommendation of the A,A .ode& -ro)'rement Code, T I!2 202.0!. ) ,AIT -ro)'rement .an'a&, Atta)hment ,.
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One area of parti)'&ar sensitivit0 )on)erns >o'tside emp&o0ment.> :mp&o0ees m'st 'nderstand /hat 2inds of a)tivities or o'tside emp&o0ment 8a)t'a& or prospe)tive9 are in)onsistent /ith their Agen)0 responsi$i&itiesQ e.g., f'rnishing advi)e or servi)es to a firm /hi)h is $idding on or p&anning to $id on a )ontra)t /ith the Agen)0, or /hi)h is doing $'siness present&0 /ith the Agen)0. One strateg0 emp&o0ed $0 firms $idding on )ontra)ts is to offer emp&o0ment to )riti)a& pro)'rement or te)hni)a& personne& /or2ing on the pro)'rement 8if the firm is se&e)ted for a/ard9. This 2ind of sit'ation )reates a finan)ia& )onf&i)t of interest for those emp&o0ees to /hom offers have $een made. :mp&o0ees need to $e fore/arned of these and simi&ar ta)ti)s /hi)h the0 ma0 en)o'nter in the )o'rse of their Agen)0 /or2. The Agen)0 ma0 /ant to )ond')t training sessions for a&& Agen)0 personne& doing sensitive /or2 in the a)<'isition of Agen)0 e<'ipment or servi)es. .an0 p'$&i) Agen)ies have adopted dis)&os're statement re<'irements for )ertain positions. These dis)&os're statements re<'ire that emp&o0ees o))'p0ing designated positions /ithin the Agen)0 dis)&ose their investments in $'sinesses /hi)h engage in )ertain a)tivities re&ated to the $'siness of the Agen)0. Ieporta$&e interests might in)&'de )ompanies engaged in man'fa)t'ring rai& transit ro&&ing sto)2 and re&ated )omponents, transit e<'ipment s'pp&iers, )onstr')tion )ompanies engaged in transit s0stems, et). The *TA Cir)'&ar re<'ires pena&ties, san)tions, or other dis)ip&inar0 a)tion for vio&ation of the standards of )ond')t $0 the granteeKs emp&o0ees or $0 )ontra)tors. The &a)2 of e;p&i)it pena&ties in granteesK pro)'rement po&i)ies and pro)ed'res is a re)'rring o$servation made in the *TA -ro)'rement S0stem Ievie/s. =rantees need to adopt e;p&i)it /ritten pena&ties for their emp&o0ees and )ontra)tors /ho vio&ate their standards of )ond')t. Procedural Su""estions The fo&&o/ing is an o't&ine of the steps that ea)h grantee sho'&d )onsider ta2ing $efore and d'ring the pro)'rement pro)ess and d'ring pro@e)t administration. Conf&i)ts a&so )an o))'r even $efore the pre )ontra)ting phase $egins, so grantees sho'&d always $e vigi&ant to the possi$i&it0 of a )onf&i)t. A$ T2" PR"1C3=TRACT<=0 P2A%"
($ Pre are Britten Codes of Standards of Conduct$ *TA re<'ires that ea)h of its grantees maintain a /ritten )ode of standards of )ond')t app&i)a$&e to its emp&o0ees 8in)&'ding )ontra)tor emp&o0ees9, offi)ers, $oard mem$ers, and agents 8in)&'ding o'tside )ons'&tants9 invo&ved in the se&e)tion, a/ard or administration of )ontra)ts. :a)h grantee sho'&d )ons'&t /ith its )o'nse&, as /e&& as its pro)'rement personne&, as to /hether its )ode of )ond')t )omp&ies /ith *TA+s re<'irements as set forth in Se)tion " of *TA+s .aster Agreement, -aragraphs 18)9 and H8a9859 of *TA Cir)'&ar 4220.!:, Third -art0 Contra)ting Ie<'irements, and 49 C*I T !H."% and -art !9, as app&i)a$&e. .oreover, the grantee sho'&d provide a )op0 of its )ode of )ond')t to ea)h of its emp&o0ees, $oard mem$ers, offi)ers, and other agents.
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*$ ReAuire Financial Disclosure Statements and7or Non)Conflict Certifications$ When determining ho/ to dea& /ith potentia& )onf&i)ts of interest, a grantee ma0 )hoose 3proa)tive4 meas'res, 3rea)tive4 meas'res, or a )om$ination approa)h. 3-roa)tive4 meas'res are designed to identif0 and prevent potentia& )onf&i)ts %ros%ectively. *or e;amp&e, a grantee interested in emp&o0ing proa)tive meas'res sho'&d )onsider re<'iring ea)h of its emp&o0ees 8and others potentia&&0 invo&ved in the pro)'rement pro)ess9 to fi&e an ann'a& dis)&os're statement )on)erning his or her finan)ia& and emp&o0ment stat's and that of immediate fami&0 mem$ers 8to the e;tent state and &o)a& &a/ permit s')h a finan)ia& dis)&os're re<'irement9. ! With this information on fi&e, the grantee )an 3proa)tive&04 determine, ahead of time, /hether an0 of its emp&o0ees 8et).9 have interests in an0 of the potentia& or a)t'a& )ontra)tors on a parti)'&ar pro@e)t. The grantee, for e;amp&e, )an r'n a sear)h on the parents, s'$sidiaries, and affi&iates of $idders and )ontra)tors, as /e&& as on an0 )ompanies &isted on emp&o0ee dis)&os're statements, and get a $road pi)t're of an0 potentia& )onf&i)ts. ?f a )onf&i)t is dis)overed, the grantee )an again, 3proa)tive&04 /a&& off an0 emp&o0ee /ho ma0 have a potentia& )onf&i)t from a parti)'&ar pro@e)t, th's avoiding the need for &ater a)tion. ?n some )ases a grantee ma0 re<'ire its )ontra)ting personne& 8offi)ers, $oard mem$ers, agents, et)., as app&i)a$&e9 to s'$mit a 3non )onf&i)t4 )ertifi)ation on a pro@e)t $0 pro@e)t $asis, $efore that person )ommen)es /or2 on the se&e)tion, a/ard or administration of a )ontra)t. S')h )ertifi)ation /o'&d state that neither the emp&o0ee 8et).9 nor an0 mem$er of his or her immediate fami&0 has a finan)ia& or emp&o0ment interest in an0 of the re&evant $idders or )ontra)tors for the pro)'rement in <'estion. ?f the emp&o0ee identifies a rea& or apparent )onf&i)t of interest, then the grantee )an ta2e a)tion to mitigate it. This is a different, some/hat 3rea)tive,4 approa)h than re<'iring ann'a& finan)ia& dis)&os're statements. There are pros and )ons to $oth approa)hes. With ann'a& finan)ia& dis)&os're statements, the grantee attempts to identif0 and mitigate )onf&i)ts as ear&0 as possi$&e in the pro)'rement pro)essQ $'t in order for this approa)h to $e effe)tive, the grantee+s revie/er m'st $oth revie/ the dis)&os're statements and perform re&evant resear)h as /e&& as $e a/are of the vario's )orporate inter)onne)tions. An advantage of a pro@e)t spe)ifi) dis)&os're statement is that it serves as a reg'&ar reminder to emp&o0ees of the importan)e of )onf&i)t avoidan)e, and th's ma0 prevent some )onf&i)ts of interest from arising in the first p&a)e. Iea&isti)a&&0, ho/ever, re<'iring dis)&os're statements on a pro@e)t $0 pro@e)t $asis genera&&0 is too onero's for the grantees that hand&e man0 pro)'rements ever0 0ear. .oreover, this some/hat 3rea)tive4 approa)h p'ts a serio's $'rden on the individ'a& emp&o0ee 8et).9 to 3se&f )ertif04 that he has no )onf&i)t on a parti)'&ar pro@e)t, /ith the 'nderstanding that the grantee /i&& ho&d him a))o'nta$&e for the vera)it0 of that )ertifi)ation. ?t is a&so possi$&e that an individ'a& emp&o0ee, 'na/are of the o/nership or other &in2s $et/een prospe)tive $idders or )ontra)tors and the finan)ia& interests he ho&ds, ma0 'n2no/ing&0 se&f )ertif0 that no )onf&i)t e;ists. The t/o approa)hes, ho/ever, are not m't'a&&0 e;)&'sive, and the $est approa)h ma0 $e a )om$ination of proa)tive and rea)tive too&s. U&timate&0, ea)h grantee m'st determine for itse&f the prefera$&e approa)h, )onsidering the )osts invo&ved in administering its program and an0
(
:a)h grantee a&so sho'&d )ons'&t /ith its )o'nse& $efore re<'iring ann'a& finan)ia& dis)&os're statements to )onfirm that the re<'irement )omp&ies /ith an0 &a$or agreements app&i)a$&e to the grantee.
-age "H
other matter the grantee deems pertinent to the de)ision. As indi)ated a$ove, an0 program re<'iring )ertifi)ations or dis)&os're statements from emp&o0ees a&so sho'&d app&0 those re<'irements to the other )ategories of individ'a&s &isted in *TA Cir)'&ar 4220.!:, spe)ifi)a&&0, offi)ers, $oard mem$ers, and agents, in)&'ding )ons'&tants and )ontra)tors invo&ved in the se&e)tion, a/ard or administration of )ontra)ts. *ina&&0, the grantee sho'&d as2 its )o'nse& to revie/ the form of its finan)ia& dis)&os're statements or non )onf&i)t )ertifi)ations for )omp&ian)e /ith &o)a&, state, and federa& &a/ $efore the0 are iss'ed. -$ O&tain Certifications of Com liance 1it/ Professional Codes of Conduct$ The grantee sho'&d )onsider re<'iring ea)h of its emp&o0ees, $oard mem$ers, offi)ers, and agents to identif0 in /riting an0 )ode of professiona& responsi$i&it0 governing his or her )ond')t, and to )ertif0 that to the $est of his or her a$i&it0 he or she /i&& )omp&0 /ith that )ode /henever )ond')ting $'siness on $eha&f of the grantee. To $e effe)tive, s')h a re<'irement m'st $e )o'p&ed /ith a me)hanism for reporting vio&ations to the appropriate enfor)ement entit0. .$ Pre are Britten Procedures for Addressin" Personal and Or"ani,ational Conflicts of Interest$ The grantees+ /ritten pro)ed'res sho'&d esta$&ish not on&0 a means of identif0ing )onf&i)ts $'t a&so a predi)ta$&e method of reso&ving them. *or e;amp&e, on)e a persona& )onf&i)t has $een identified, mitigating meas'res ma0 in)&'de )reation of $&ind tr'sts, re)'sa& or other &imits on s)ope of parti)ipation, pro)ed'res to a&&o/ the emp&o0ee $a)2 inside the information $'$$&e if the )onf&i)t ends 8e.g., the )ompan0 that the emp&o0ee o/ns sto)2 in does not /in the )ontra)t9, et). The /ritten pro)ed'res ma0 address( a. $. ). Iesponsi$i&it0 for identif0ing potentia& )onf&i)tsQ Iange of a&ternative a)tionsQ T0pi)a& sit'ations and the indi)ated response, for e;amp&e( i. Sit'ations that ma0 /arrant advan)e restri)tions( A )ontra)t for pro)'rement eva&'ation servi)esQ A )ontra)t for advi)e on )ompeting approa)hesQ A )ontra)t for te)hni)a& revie/ and pro@e)t oversight servi)esQ or ii. Sit'ations that ma0 /arrant other )onf&i)t mitigation meas'res, or even a possi$&e /aiver, rather than a prohi$ition against a )ontra)tor+s parti)ipation in the pro@e)t( Comp&e; design of integrated e&ements of a str')t're, pie)e of e<'ipment, or s0stemQ or S'))essive deve&opmentAdesign phases of innovative e<'ipment or s0stems. d. -arti)ipation of <'a&ified personne& in the reso&'tion of )onf&i)tsQ and
-age "9
e.
Ievie/ and approva& of )onf&i)t reso&'tions.
The grantee sho'&d see2 the assistan)e of )o'nse& in preparing /ritten pro)ed'res for reso&ving )onf&i)ts of interest. B$ T2" PR3P3%A8 %TA0"
($ Define t/e Pro'ect to A%oid Potential Conflicts$ =rantees sho'&d anti)ipate potentia& )onf&i)ts and str')t're pro)'rements a))ording&0. *or e;amp&e, the grantee sho'&d not a&&o/ a )ompan0 that prepares the spe)ifi)ations for pro)'rement to s'pp&0 the prod')ts as /e&&. A&so, the grantee sho'&d $e )aref'& to str')t're the pro@e)t so as to avoid )onf&i)ts among )ontra)tors and s'$)ontra)tors. *or e;amp&e, on a &arge pro@e)t, the grantee )o'&d avoid possi$&e $ias $0 pro)'ring one )ontra)tor to perform the needed eva&'ation independent&0, and then initiating a ne/ pro)'rement to o$tain an0 s0stem that ma0 $e re<'ired and e;)&'ding the first )ontra)tor from that se)ond )ompetition. 2 *$ Consider Ad%ance Restrictions$ When the grantee a/ards separate )ontra)ts on re&ated pro)'rements, it might )onsider p&a)ing noti)e of an advan)e restri)tion in the so&i)itation /here a )onf&i)t ma0 arise. ?t is far $etter to identif0 a potentia& )onf&i)t invo&ving t/o )ontra)ts in the first so&i)itation than to a/ard the first )ontra)t and then address the )onf&i)t /hen a/arding the se)ond )ontra)t. -rime )ontra)tors sho'&d $e re<'ired to inform prospe)tive s'$)ontra)tors 8and to give eviden)e that the0 have done so9 that the s'$)ontra)tors a&so )o'&d $e s'$@e)t to the restri)tions in f't're )ontra)ting. This /a0, ea)h $idder 8prime and s'$)ontra)tors9 for the first )ontra)t /i&& $e a/are of the sit'ation and )an ma2e its o/n )hoi)e a$o't /hi)h )ontra)t to p'rs'e. When an advan)e restri)tion is desired, )onsider in)&'ding(

An e;p&anation of the )onf&i)t or potentia& )onf&i)tQ The nat're of the proposed restri)tion 'pon f't're )ontra)tor a)tivitiesQ and The terms of an0 proposed )&a'se and /hether those terms are negotia$&e, depending on the nat're of the a)<'isition.
?n &arge 'nderta2ings, this ma0 invo&ve m'&tip&e, re&ated )ons'&ting, p&anning, design, te)hni)a& oversight or te)hni)a& eva&'ation )ontra)ts. =rantees )an /or2 /ith persons e;perien)ed in the fie&d to de)ide ho/ to segment the pro)'rements and /hat restri)tions to impose.
-age 40
-$ For En%ironmental Im act Statement Contracts! Com l# 1it/ CE@ Re"ulations$ Ieg'&ations prom'&gated $0 the Co'n)i& on :nvironmenta& N'a&it0 re<'ire ea)h )ontra)tor /ho deve&ops an environmenta& impa)t statement to sign a dis)&os're statement 8prepared $0 the grantee9 )ertif0ing that it has no finan)ia& or other interests in the o't)ome of the proposed pro@e)t. " This re<'irement is intended to prevent )ontra)tors /ho are hired to st'd0 a&ternatives and potentia& environmenta& impa)ts of proposed pro@e)ts from presenting and profiting from $iased re)ommendations. -'rs'ant to the reg'&ations, grantees m'st re<'ire the s'$mission of a dis)&os're statement in I*-s for )ons'&ting servi)es so that s')h )onf&i)ts )an $e identified ear&0 in the )ontra)ting pro)ess. The grantee a&so m'st )omp&0 /ith 40 C*I T !50%.5 and 3='idan)e Iegarding #:-A Ieg'&ations,4 4H *ed. Ieg. "42%" 86'&0 !H, !9H"9, e;p&ained a$ove in Se)tion = of the Dis)'ssion. .$ Consult Bit/ Le"al Counsel$ ,efore defining the s)ope of an0 pro@e)t or p'$&ishing an0 do)'ment des)ri$ing the pro@e)t, s')h as a statement of /or2, the grantee sho'&d as2 its )o'nse& to revie/ the pro@e)t and an0 des)riptive do)'mentation for )omp&ian)e /ith )onf&i)ts r'&es. C$ T2" %"8"CT<3= A=: AWAR: P2A%"
($ Re%ie1 Disclosure Statements 6if reAuired &# t/e "rantee9 for Potential Conflicts 1it/ Bidders$ ?f the grantee re<'ires its pro)'rement staff to s'$mit ann'a& finan)ia& dis)&os're statements or pro@e)t spe)ifi) dis)&os're statements, the grantee sho'&d revie/ the information on s')h statements for potentia& )onf&i)ts $efore an0 pro)'rement staff $egins /or2 on the se&e)tion pro)ess. ?f the emp&o0ee+s /or2 on the pro@e)t /o'&d )a'se a rea& or apparent )onf&i)t, then the grantee sho'&d reassign his or her d'ties on the pro@e)t to another emp&o0ee. *$ O&tain No)Conflict Certifications from contract ersonnel 6if reAuired &# t/e "rantee9$ ?f the grantee re<'ires its )ontra)t personne& /ho /i&& parti)ipate in the administration of a )ontra)t to s'$mit no )onf&i)t )ertifi)ations, then the grantee sho'&d f'rnish information on the &i2e&0 $idders to the )ontra)tor. :a)h )ontra)tor emp&o0ee /ho /i&& $e assigned to /or2 on the pro)'rement sho'&d s'$mit his or her )ertifi)ation to the grantee+s revie/ing offi)ia& $efore the se&e)tion pro)ess $egins. ?f a )ontra)tor emp&o0ee fai&s to s'$mit the re<'ired no )onf&i)t )ertifi)ation, then the grantee sho'&d dire)t the )ontra)tor to reassign that emp&o0ee+s d'ties to another emp&o0ee /ho has )omp&ied /ith the )ertifi)ation re<'irement. D$ T2" A:4<=<%TRAT<3= P2A%"
($ Monitor Contract Staff7Contractor Com liance 1it/ Conflicts Rules$ D'ring the administration phase of a pro@e)t, the grantee sho'&d re<'ire ea)h of its emp&o0ees 8et).9 invo&ved
) 40 C*I T !50%.5. #ote that if a )ontra)tor has a finan)ia& interest in the o't)ome of the proposed pro@e)t, the )ontra)tor sho'&d inform the grantee of its interest. Under appropriate )ir)'mstan)es, the grantee ma0 )hoose to /aive the )onf&i)t of interest after )aref'& )onsideration 8see Dis)'ssion Se)tion ?9.
-age 4!
in the pro@e)t to report an0 )hanges in his or her finan)ia& ho&dings or other interests that might )a'se a )onf&i)t of interest. Simi&ar&0, the grantee sho'&d re<'ire the )ontra)tor to report an0 )hanges in the )ompan0+s finan)ia& ho&dings, ne/&0 deve&oped )ontra)t'a& or other re&ationships, or those of its parents, s'$sidiaries, and affi&iates. ?n this /a0, the grantee )an monitor the sit'ation and address persona& or organiGationa& )onf&i)ts that might arise d'ring the administration phase of the pro@e)t. *$ O&tain Certifications from Contractor Personnel <o%erned &# Professional Codes of Res onsi&ilit#$ ,efore a )ontra)tor $egins /or2 on a pro@e)t, the grantee sho'&d )onsider re<'esting a /ritten statement from an0 )ontra)tor personne& /or2ing on the pro@e)t /hose )ond')t is governed $0 a professiona& )ode of responsi$i&it0, in ea)h )ase identif0ing an0 re&evant )ode and )ertif0ing that he or she /i&& )omp&0 /ith its r'&es on a&& grantee re&ated /or2. E$ T2R3U023UT T2" "=T<R" PR3C"%%
($ Consult 1it/ Le"al Counsel$ =rantee pro)'rement and te)hni)a& personne& are en)o'raged to /or2 )&ose&0 and proa)tive&0 /ith their &ega& )o'nse& thro'gho't the pro)'rement pro)ess to revie/ a&& sit'ations that appear to have the potentia& for a )onf&i)t of interest. Co'nse& )an he&p in an0 n'm$er of /a0s, in)&'ding revie/ing /ritten materia&s for )omp&ian)e /ith )onf&i)ts of interest r'&es, preparing restri)tive )ontra)ting )&a'ses s'ita$&e for the parti)'&ar sit'ation, and he&ping to restr')t're the pro@e)t to avoid )onf&i)t sit'ations. Co'nse& ma0 a&so s'ggest that invo&vement $0 *TA Iegiona& Co'nse& /o'&d $e appropriate and so&i)it Iegiona& Co'nse&+s advi)e /hen ne)essar0. *$ Miti"ate Conflicts$ As potentia& )onf&i)ts arise d'ring the pro)'rement pro)ess, the grantee m'st ta2e steps to avoid the )onf&i)t or, if that is not possi$&e, mitigate its effe)ts. *or e;amp&e, /here a grantee+s $oard is responsi$&e for a/arding )ontra)ts, a $oard mem$er /ith an interest in a pro@e)t $idder sho'&d dis)&ose his interest and re)'se himse&f from the se&e)tion pro)ess. As another e;amp&e, /here an emp&o0ee has an interest in a pro@e)t $idder, the grantee )o'&d )reate a 3fire /a&&4 preventing the emp&o0ee from providing the $idder /ith an0 information gained d'ring his emp&o0ment /ith the grantee that /o'&d give the $idder an 'nfair )ompetitive advantage. As a&/a0s, the grantee sho'&d )ons'&t /ith )o'nse& in form'&ating an appropriate approa)h to an0 )onf&i)t sit'ation. *$.$*$*$- <eo"ra /ic Restrictions RE@UIREMENT -aragraph !5.h of the .aster Agreement states( h. =eographi) Iestri)tions. The re)ipient agrees to refrain from 'sing State or &o)a& geographi) preferen)e, e;)ept those e;press&0 mandated or en)o'raged $0 *edera& stat'te, s')h as those set forth in S'$se)tion !5.i of this .aster Agreement $e&o/, or as permitted $0 *TA.
-age 42
i. Ar)hite)t'ra&, :ngineering, Design, or Ie&ated Servi)es. ...-rovided a s'ffi)ient n'm$er of <'a&ified firms are e&igi$&e to )ompete for the third part0 )ontra)t, geographi) &o)ation ma0 $e a se&e)tion )riterion.... -aragraph H.$ of *TA Cir)'&ar 4220.!: states( $. -rohi$ition Against =eographi) -referen)es. =rantees sha&& )ond')t pro)'rements in a manner that prohi$its the 'se of stat'tor0 or administrative&0 imposed in State or &o)a& geographi)a& preferen)es in the eva&'ation of $ids or proposa&s, e;)ept in those )ases /here app&i)a$&e *edera& stat'tes e;press&0 mandate or en)o'rage geographi) preferen)e. This does not preempt State &i)ensing &a/s. Bo/ever, geographi) &o)ation ma0 $e a se&e)tion )riterion in pro)'rements for ar)hite)t'ra& and engineering 8AC:9 servi)es provided its app&i)ation &eaves an appropriate n'm$er of <'a&ified firms, given the nat're and siGe of the pro@e)t, to )ompete for the )ontra)t. DISCUSSION T/e ro/i&ition a"ainst "eo"ra /ic references as stated in FTA Circular .**:$(E is &ased u on .8 CFR Part (5$-2 6c9 6*9$ T/e onl# e;ce tion noted to t/is ro/i&ition is in t/e rocurement of arc/itectural and en"ineerin" 6A+E9 ser%ices! 1/ere Eno1led"e of local conditions and &uildin" codes is a rele%ant factor in t/e Aualit# of t/e A+E ser%ices$ One u&lic A"enc#! in its rocurement rocedures manual for A+E contracts! reco"ni,es t/e im ortance of t/e A+EKs Eno1led"e of local conditions! and reAuires t/at A+E ro osals &e e%aluated in terms of t/eir3 >no/ledge o* the locality o* the #ro?ect, #ro-ided that a##lication o* this criterion lea-es an a##ro#riate num$er o* quali*ied *irms, gi-en the nature and si5e o* the #ro?ect. . T/is A"enc# /as stated its olic# in terms 1/ic/ are focused on t/e one "enerall# acce ted reason for allo1in" "eo"ra /ical references ) an A+E firmKs demonstrated Eno1led"e of local conditions! 1/ic/ is a factor affectin" t/e Aualit# of t/e final roduct$ T/is same A"enc# ro/i&its "eo"ra /ic restrictions! e;ce t for t/ose ermitted &# FTA for A+E ser%ices! not onl# for its o1n rocurements &ut for t/ose of its contractors as 1ell$ 0 Some "rantees /a%e used %er# locali,ed "eo"ra /ical restrictions in t/eir solicitations for arts or ser%ices 1/ic/ must &e furnis/ed on a s/ort lead)time &asisJ e$"$! 1it/in one or t1o /ours of t/e reAuest$ A muc/ &etter a roac/! and one t/at is not ro/i&ited &# t/e FTA
. 0
7os Ange&es Co'nt0 .etropo&itan Transportation A'thorit0. -ro)'rement .an'a& Se)tion 90H8e9. ?$id., Se)tion 2"!4.
-age 4"
Circular! 1ould &e to reAuire an a&ilit# &# t/e contractor to res ond 1it/in t/e time frame needed, and not to sti ulate a "eo"ra /ical restriction in t/e solicitation$ T/e reason is t/at man# arts su liers maintain a staff 1/ic/ is ca a&le of AuicE res onse e%en t/ou"/ t/e# are not in t/e immediate cit# or count# of t/e "rantee$ <rantee rocurement officials are sometimes confronted 1it/ ressure from t/eir Board mem&ers to lace contracts 1it/ local firms! and it is necessar# for t/e "rantees to include e; licit statements in t/eir rocurement olicies and rocedures t/at "eo"ra /ical restrictions are ro/i&ited e;ce t for A+E rocurements! citin" t/e FTA ro/i&itions in FTA Circular .**:$(E! ara"ra / 5$&$ *$.$*$*$. PreAualification RE@UIREMENT -aragraph H.d of *TA Cir)'&ar 4220.!: states( d. -re<'a&ifi)ation Criteria. =rantees sha&& ens're that a&& &ists of pre<'a&ified persons, firms, or prod')ts that are 'sed in a)<'iring goods and servi)es are )'rrent and in)&'de eno'gh <'a&ified so'r)es to ens're ma;im'm f'&& and open )ompetition. A&so, grantees sha&& not pre)&'de potentia& $idders from <'a&if0ing d'ring the so&i)itation period, /hi)h is from iss'an)e of the so&i)itation to its )&osing date. DISCUSSION PreAualification of &idders and roducts /as &een used in se%eral circumstances! suc/ as 1/en an A"enc# is rocurin" critical eAui ment 1it/ e;actin" erformance reAuirements! or critical ser%ices 1/ic/ are needed on a AuicE)reaction &asis$ A Aualified roducts list 6@PL9 is a listin" of roducts 1/ic/ /a%e &een tested and found to /a%e satisfied all of t/e s ecified reAuirements$ T/e roducts on t/e list ma# &e su lied &# an# res onsi&le %endor &iddin" on t/e rocurement$ T/e Aualified &idders list 6@BL9 is a listin" of &idders 1/o are manufacturin" more com le; items! suc/ as &uses! reAuirin" so /isticated manufacturin" and Aualit# control rocedures$ T/ese &idders must &e re%ie1ed carefull# to determine if t/eir internal controls and rocedures 1ill roduce satisfactor# end roducts$ T/ese re)Aualification rocedures ma# also &e a ro riate for com anies 1/o 1is/ to &id on rocurements for furnis/in" critical ser%ices! suc/ as AuicE reaction ser%ices for re airs! etc$ Onl# t/ose &idders on t/e Aualified &idders list ma# su l# t/e roducts or ser%ices s ecified$ T/e Federal "o%ernment /as used t/is ractice for critical militar# eAui ment! suc/ as 'et en"ine tur&ine &lades! or for critical AuicE)reaction ser%ices suc/ as s/i re airs$ Transit A"encies usin" t/is rocedure of esta&lis/in" a Aualified roducts list 6@PL9 often cite a rationale of3 FFor reasons of efficienc#! econom#! com ati&ilit#! or
-age 44
maintenance relia&ilit#! t/ere is a need for standardi,ation as to %arious su materials! and eAui ment$F 2 Best Practices
lies!
Documentin" #our decision to esta&lis/ a @PL or @BL ) Care m'st $e ta2en to ens're that pre<'a&ifi)ation pro)ed'res are not 'sed to restri)t f'&& and open )ompetition. To/ard this goa& *edera& Agen)ies are re<'ired to @'stif0 in /riting the ne)essit0 for esta$&ishing a pre<'a&ifi)ation re<'irement. 1 Some transit Agen)ies have a&so )hosen to fo&&o/ this pra)ti)e of do)'menting the reasons /h0 a parti)'&ar part or servi)e is $eing p&a)ed on a <'a&ified prod')ts &ist 8N-79 or a <'a&ified $idders &ist 8N,79, a&tho'gh the0 are not re<'ired to do so $0 *TA. H @ualif#in" durin" solicitation eriod Some Transit agen)ies have t/o different po&i)ies as to $ids offering prod')ts /hi)h have not $een <'a&ified prior to the so&i)itation. When 'sing non *edera& f'nds, the Agen)0 /i&& not a&&o/ $idders to offer non <'a&ified prod')ts in response to a so&i)itation $idders m'st o$tain )ertifi)ation of their prod')t $efore, and independent&0 of, an0 so&i)itation for that item. ')en usin! !rant funds/ )owever/ !rantees must allow vendors an o%%ortunity to qualify t)eir %roducts durin! t)e solicitation %eriod 8*TA Cir)'&ar 4220.!:, -aragraph H.d9. A grantee /o'&d not $e e;pe)ted, ho/ever, to de&a0 a proposed a/ard 8e;tend the so&i)itation period9 in order to afford a vendor the opport'nit0 to demonstrate that its prod')t meets the standards in the spe)ifi)ation. The *edera& pro)'rement r'&es do not re<'ire *edera& Agen)ies to de&a0 a/ards, and the standards app&i)a$&e to these Agen)ies sho'&d $e appropriate for grantees as /e&&. 9 *$.$- Fi;ed Price %$ Cost Reim&ursement RE@UIREMENT -aragraph 9.) of *TA Cir)'&ar 4220.!: a'thoriGes pro)'rement $0 the Sea&ed ,idA?nvitation *or ,ids 8?*,9 method /hen )ertain )onditions are present. Among those &isted is the )ondition that( 8)9 The pro)'rement &ends itse&f to a firm fi;ed pri)e )ontra)t and the se&e)tion of the s'))essf'& $idder )an $e made prin)ipa&&0 on the $asis of pri)e.
-aragraph 9.d a'thoriGes pro)'rement $0 the Competitive -roposa&AIe<'est for -roposa&s

2
?$id., Se)tion 401.5. A&so San *ran)is)o ,a0 Area Iapid Transit Distri)t 8,AIT9. -ro)'rement .an'a&, Se)tion ?? 1.
4 5 8
*AI 9.202. 7os Ange&es Co'nt0 .etropo&itan Transportation A'thorit0. -ro)'rement .an'a&, Se)tion 401.5 8!98a9. *AI, Se)tion 9.202 8e9.
-age 45
8I*-9 method and either a fi;ed pri)e or )ost reim$'rsement t0pe )ontra)t ma0 $e a/arded. -aragraph 1.i re<'ires that grantees do)'ment their reasons for se&e)ting the )ontra)t t0pe as a part of the /ritten re)ord of pro)'rement histor0. -aragraph !0.e prohi$its the )ost p&'s a per)entage of )ost method of )ontra)ting. DISCUSSION T/e selection of contract t# e is ro&a&l# t/e sin"le most im ortant decision t/at t/e rocurement s ecialist 1ill maEe in t/e acAuisition rocess$ A ro erl# selected contract t# e 1ill 1orE in t/e interests of t/e &u#in" A"enc# to ro%ide a roduct or ser%ice 1/ic/ meets t/e A"enc#Ks needs at a reasona&le rice 1it/out undue risEs to t/e contractor and 1it/out e;cessi%e contract administration costs and contractor claims$ A contract oorl# suited to t/e com le;it# of t/e reAuirement! and t/e de"ree of s ecificit# of t/e s ecifications or statement of 1orE! can cause a disastrous situation for &ot/ t/e contractor and t/e A"enc#$ B/en A"encies /a%e com le; reAuirements! and erformance uncertainties maEe it difficult to redict t/e costs of erformance in ad%ance! some t# e of fle;i&l#) riced contract s/ould &e considered$ B/ere t/e len"t/ of contract erformance e;tends o%er a lon" eriod of time! some t# e of economic rice ad'ustment terms ma# &e necessar#$ As reAuirements are re etiti%el# acAuired! and a /istor# is esta&lis/ed! t/e A"enc# s/ould &e a&le to more clearl# define t/e reAuirement! and contractors s/ould &e a&le to assume "reater risEs of erformance at fi;ed rices$ <rantees /a%e a %er# 1ide latitude in structurin" a contract t# e 1/ic/ affords t/e &est incenti%e to t/e contractor for deli%erin" t/e articular roduct or ser%ice &ein" acAuired! T/ere are t1o &road cate"ories of contract t# es3 fi;ed) rice contracts and cost) reim&ursement contracts$ Bit/in t/ese t1o families of contract t# es t/ere are a num&er of su&t# es offerin" differin" de"rees of incenti%es$ At t/e e;tremes are t/e firm)fi;ed) rice contract! in 1/ic/ t/e contractor /as com lete res onsi&ilit# for t/e costs of erformance and t/e resultin" rofit or loss! and t/e cost) lus)fi;ed)fee contract! in 1/ic/ t/e contractor /as %irtuall# no risE for erformance costs and t/e fee 6 rofit9 is fi;ed$ Bet1een t/ese t1o e;tremes are t/e %arious incenti%e)t# e contracts 1/ere t/e de"ree of cost risE and rofit incenti%e can &e tailored to meet almost an# s ecific ro"ram situation$ All fi;ed) rice contract t# es im ose u on t/e contractor an o&li"ation to deli%er t/e roduct s ecified in t/e contract! and /e is not entitled to a#ment of t/e sti ulated rice unless /e deli%ers t/e roduct and it meets t/e s ecifications called out in t/e contract$ On cost)reim&ursement contracts t/e contractor is o&li"ated onl# to "i%e its F&est effortsF in order to &e aid t/e costs of erformance$ T/e fee! /o1e%er! is earned for com lete erformance of t/e contract! and if less t/an full erformance is made! t/e &u#in" A"enc#
-age 4%
is entitled to a reduction of t/e fi;ed fee &ased on t/e ercenta"e of com letion of t/e 1orE$9 *$.$-$( Fi;ed Price Contracts DISCUSSION A firm)fi;ed rice contract esta&lis/es a sin"le rice! or a series of line item or unit rices! t/at are not su&'ect to an# ad'ustment on t/e &asis of t/e contractorKs cost e; erience in erformin" t/e contract$ T/e contractor taEes full res onsi&ilit# for t/e cost and rofit outcome! and t/us t/e contractor /as ma;imum incenti%e to control costs and com lete t/e contract on sc/edule$ T/is contract t# e re resents t/e least administrati%e &urden u on t/e contractin" artiesJ e$"$! it is not necessar# for t/e &u#er to monitor contractor costs or to erform contract closeout audits$ In some cases! /o1e%er! t/ere ma# &e a need for audits if! for e;am le! c/an"e orders /a%e &een issued on a cost)reim&ursa&le &asis$ Firm)fi;ed) rice contracts are a ro riate for acAuirin" commercial items! or for su lies or ser%ices 1/ic/ can &e clearl# defined 1it/ eit/er erformance7functional s ecifications or desi"n s ecifications! and 1/ere erformance uncertainties do not im ose unreasona&l# /i"/ risEs u on t/e contractor$ (: T/is as ect of erformance risE is im ortant to 'ud"e realisticall#! for if contractors are ut into ositions of undue risE and t/e 1orst case /a ens! t/e &u#in" A"enc# can looE for1ard to e;cessi%e claims! ossi&le liti"ation! a oor)Aualit# roduct 1/ere t/e contractor /as Fcut cornersF to sa%e mone#! and in some cases! t/e &anEru tc# of t/e contractor or refusal to com lete t/e contract$ Ci"/)risE erformance situations 1ill also result in contractors &uildin" costl# contin"encies into t/eir rices for risEs t/at ma# ne%er occur! resultin" in /i"/er t/an necessar# rices and e;cessi%e rofits on t/at contract$ Fi;ed Price Contracts Bit/ Economic Price Ad'ustment ) Fi;ed) rice contracts ma# ro%ide for rice ad'ustments 6u 1ard or do1n1ard9 1/en s ecified contin"encies occur$ T/ese contracts are t# icall# used 1/en t/ere is serious dou&t a&out t/e sta&ilit# of selected costs or rices o%er an e;tended eriod of contract erformance$ For e;am le! a fi%e)#ear fi;ed) rice contract ma# resent an unusuall# /i"/ cost risE to a contractor for certain commodit# rices or la&or costs! and t/e arties ma# a"ree to use an economic rice ad'ustment clause$ Price ad'ustments ma# &e &ased on u&lis/ed indices! actual cost e; eriences of t/e contractor for certain materials or la&or! or increases or decreases in u&lis/ed rices for s ecific items$ T/e contract 1ill define t/e circumstances under 1/ic/ t/e economic rice ad'ustment 1ill &e made and t/e means 1/ere&# it 1ill &e calculated$ Usin" economic rice ad'ustment clauses is an e;cellent 1a# to deal 1it/ /i"/)risE situations and a%oid /a%in" to rice t/e initial contract on t/e &asis of contin"encies t/at ma# ne%er occur$ T/is tec/niAue ma# also &e necessar# to "et contractors to acce t fi;ed) rice contracts t/at /a%e a len"t/# erformance eriod$ ((
(:
.an0 state &a/s re<'ire )onstr')tion )ontra)ts to $e a/arded at a firm fi;ed pri)e. ?t is important that the grantee+s pro@e)t $'dget ref&e)t an a&&o/an)e for an0 potentia& in)rease in vo&ati&e
((
-age 41
Best Practices 5o' ma0 /ant to refer to the Federal Acquisition Re!ulations 8*AI9, S'$part !%.20" Fi7ed1 %rice contracts wit) economic %rice ad5ustment, and the re&ated )ontra)t )&a'se &ang'age in *AI 52.2!% 2,",4. These *AI provisions and )ontra)t )&a'ses are not re<'ired to $e fo&&o/ed $0 *TA grantees $'t the0 ma0 prove he&pf'& in str')t'ring )ontra)t &ang'age for spe)ifi) )ontingen)ies. The *AI ma0 $e a))essed on&ine at http(AA///.arnet.govAfarA. Steel Price Escalation Clauses L *o&&o/ing are t/o e;amp&es of stee& pri)e es)a&ation )&a'ses 'sed $0 transit agen)ies. The first )&a'se 8So'nd Transit9 'ses a one time pri)e ad@'stment. The se)ond )&a'se 8#e/ 5or2 Cit0 Transit9 a&&o/s for m'&tip&e pri)e ad@'stments. One Time -ri)e Ad@'stment *o&&o/ing is an e;amp&e of an e)onomi) pri)e ad@'stment )ontra)t )&a'se 'sed $0 So'nd Transit one transit agen)0 to provide for one stee& pri)e in)rease d'ring the period of the )ontra)t. #ote that this )&a'se( !. ,ases the pri)e ad@'stment on the stee& s'pp&ier+s invoi)es to the Contra)tor from the time the $id /as prepared to the time the stee& /as ordered after the #oti)e to -ro)eed. 2. Ie<'ires that the -rod')er -ri)e ?nde; 8--?9 s'pport the pri)e in)rease as invoi)ed $0 the stee& s'pp&ier. This is an important safeg'ard in esta$&ishing the reasona$&eness of the s'pp&ier+s higher pri)e $0 )omparing it to the ind'str0 norm. ". 7imits the in)rease to the &esser of the per)entage in)rease in the invoi)ed pri)e vs. the --?. 4. Ie<'ires ade<'ate do)'mentation from the Contra)tor, and the agen)0+s right to revie/ the Contra)tor+s $id preparation do)'ments and s'pp&ier invoi)es. 5. Does not )ontain a ma;im'm per)entage $0 /hi)h the )ontra)t pri)e ma0 $e ad@'sted for stee& pri)e in)reases. Under norma& )ir)'mstan)es 0o' sho'&d in)&'de a ma;im'm &imit on the per)entage in)rease 0o' /i&& a&&o/ $'t the in)&'sion here of the &esser of the s'pp&ier+s in)rease vs. the --? provides a )ertain degree of pri)e prote)tion to the agen)0. !2
)ommodit0 pri)es 8e.g., stee&9.

(*
The *AI pri)e es)a&ation )&a'ses in *AI 52.2!% 2,",4 in)&'de a ma;im'm aggregate pri)e in)rease of !0 per)entQ ho/ever, the *AI a&so gives the Contra)ting Offi)er &atit'de to in)rease this ma;im'm per)ent if )ir)'mstan)es /arrant.
-age 4H
%. The )&a'se provides for do/n/ard pri)e ad@'stments as /e&& as in)reases. SP)8$(: STEEL PRICE ESCALATION
A. A pri)e ad@'stment )&a'se is in)&'ded in this Contra)t to provide additiona& )ompensation to the Contra)tor or a )redit to So'nd Transit for f&')t'ations in stee& pri)es. This pri)e ad@'stment is dependent 'pon either( an in)rease or de)rease in the pri)e of stee& 'sed in the prod')tion of prod')ts 'ti&iGed on this pro@e)t or an in)rease or de)rease in the ratio of the ,'rea' of 7a$or Statisti)s L -rod')er -ri)e ?nde; &isted $e&o/. -a0ment or )redit for stee& pri)e ad@'stments /i&& $e eva&'ated 'nder the fo&&o/ing )onditions. -a0ment or )redit /i&& $e made 'nder the Contra)t -a0 item( -rovisiona& S'm L Stee& -ri)e :s)a&ation. ,. The )onditions of this provision are as fo&&o/s( !. This provision sha&& on&0 app&0 to materia& )ost )hanges that o))'r $et/een the date of $id opening and the date of )ertified invoi)e. The Contra)tor is e;pe)ted to order materia&s prompt&0 'pon #oti)e to -ro)eed 8or 'pon shop dra/ing approva&9 and ta2e possession of materia&s as <'i)2&0 as reasona$&0 possi$&e. ! 2. A pri)e ad@'stment to provide additiona& )ompensation to Contra)tor /i&& $e )onsidered and paid on&0 /here the pri)e in)rease in stee& is d'e to mar2et )onditions $e0ond the )ontro& of Contra)tor and its s'pp&iers or vendors. #o ad@'stment is a&&o/ed 'nder this provision for in)reases d'e to an0 other )a'se or peri& 8in)&'ding, $'t not &imited to, stri2e, /eather, vendor $a)2&og, de&a0 in fa$ri)ation, et).9. ?f a pri)e ad@'stment is so'ght 'nder this provision, Contra)tor sha&& )ertif0 to So'nd Transit that the pri)e in)rease /as d'e so&e&0 to mar2et )onditions $e0ond its )ontro& or that of its s'pp&iers and that Contra)tor e;er)ised its $est efforts to mitigate an0 pri)e in)rease. So'nd Transit reserves the right to verif0 the a))'ra)0 of s')h )ertifi)ation as a )ondition of pa0ment. ". This pri)e ad@'stment )&a'se on&0 app&ies to str')t'ra& stee&, reinfor)ing stee&, rai&, stee& e;)avation s'pport e&ements, and overhead )atenar0 str')t're po&es. To $e )onsidered, the )ategor0 of materia& m'st have a tota& do&&ar va&'e of S25,000 or greater. 4. The Contra)tor sha&& s'$mit /ithin 5 da0s of #oti)e of A/ard, the fa$ri)ator+s or s'pp&ier+s materia& pri)e <'otes for the items &isted a$ove that meet the re<'irements of Arti)&e 9.!0,.". The Contra)tor m'st )ertif0 that the0 are the a)t'a& <'oted pri)es in)orporated into the Contra)tor+s $id amo'nt s'$mitted to So'nd Transit for the represented pa0 item. So'nd Transit has the right to inspe)t
(
When 'sing a stee& es)a&ation arti)&e on&0 the )ost of materia& is es)a&ated or dees)a&ated and no other )osts s')h as &a$or or ma)hiner0.
-age 49
Contra)tor+s $id preparation do)'ments to verif0 the a))'ra)0 of s')h )ertifi)ation. Ass'ming s')h )ertifi)ation is a))'rate, these )ertified <'otes /i&& )onstit'te the $ase&ine stee& materia& pri)e. The <'ote m'st )&ear&0 identif0 the pa0 item8s9 $0 n'm$er and des)ription, des)ri$e the /eights of the stee& materia&, ho/ the stee& materia& /i&& $e 'ti&iGed in the fina& pro@e)t, and a $rea2do/n of a&& )osts in)&'ding materia&, &a$or, e<'ipment, overhead, and profit. This stee& pri)e es)a&ation provision sha&& on&0 app&0 to the stee& )omponent of the materia& <'ote. ?t sha&& not app&0 to an0 other materia&s 'sed in the fa$ri)ation of an item s'pp&ied to the Contra)tor. 5. *or the items &isted a$ove that meet the re<'irements of Arti)&e 9.!0,.", the in)rease or de)rease in the stee& materia&s 'nit )ost m'st $e in e;)ess of 5 per)ent of the origina& <'oted pri)es or the --? as des)ri$ed $e&o/, for a pri)e ad@'stment to the Contra)tor to $e a&&o/ed. %. ?f there is an in)rease or de)rease in stee& materia&s )ost in e;)ess of 5 per)ent from the origina& <'oted 'nit pri)es 8or the --? as des)ri$ed in Arti)&e 9.!0* $e&o/9, So'nd Transit /i&& eva&'ate and determine an in)reased or de)reased pa0ment8s9 'nder this Contra)t as fo&&o/s( C. The ad@'stment /i&& $e determined $0 )omp'ting the mathemati)a& differen)e $et/een the 'nit pri)e that is 5 per)ent a$ove 8or $e&o/ for de)reases in pri)e9 the $ase 'nit pri)e 8$id <'ote9 and the a)t'a& invoi)e 'nit pri)e of the stee& )omponent. The fina& do&&ar va&'e /i&& $e determined $0 m'&tip&0ing this ad@'stment $0 the represented <'antit0 of stee&. D. The Contra)tor sha&& s'$mit to So'nd Transit )ertified invoi)es as soon as stee& materia& is p'r)hased. The invoi)es sha&& $e &isted in )hrono&ogi)a& order and )ontain a ta$'&ation of <'antit0, the order date, the date shipped from the stee& man'fa)t'rer, and the pri)e per 'nit /eight 8ref&e)ting a&& ded')tions for <'antit0 shipments9 /ith a $rea2do/n as stip'&ated in Arti)&e 9.!0,.4 a$ove. *reight )harges sha&& $e &isted separate&0 and are not in)&'ded in this pri)e ad@'stment. These invoi)es sha&& $e s'$@e)t to a'dit verifi)ation. :. So'nd Transit /i&& verif0 the in)reased or de)reased per)entage $et/een )ertified origina& <'ote and the a)t'a& invoi)e pa0ment. *. This )hange sha&& $e s'pported $0 the U.S. Department of 7a$or L ,'rea' of 7a$or Statisti)s inde; entit&ed 3-rod')ers -ri)e ?nde;4 8--?9. The va&'es )ontained in the --? are s'$@e)t to revision 4 months after origina& p'$&i)ation. The pri)e ad@'stment for stee& sha&& $e a f'n)tion of the per)entage of )hange of the pri)e inde; for 3Car$on Stee& S)rap4 Series ?D W-U!0!2!!. Do not 'se seasona&&0 ad@'sted indi)es. This
-age 50
inde; is avai&a$&e on the internet at( http(AAdata.$&s.govA&a$@avaAo'tside.@spWs'rve0[/p. =. The -rod')ers -ri)e ?nde; 8--?9 &isted a$ove m'st meet in)rease or de)rease $0 at &east 5 per)ent over the same time period for Arti)&e 9.!0C. to $e va&id. B. *or pri)e in)reases, if the invoi)ed pri)e in)reased, e;pressed as a per)entage, e;)eeds the --? in)rease, e;pressed as a per)entage, for the same period, the ad@'stment /i&& $e $ased on the --? per)ent in)reaseQ if the invoi)ed pri)e in)rease, e;pressed as a per)entage, is &ess than the --? in)rease, e;pressed as a per)entage, for the same period, the ad@'stment /i&& $e $ased on the invoi)ed pri)e in)rease. ?. *or pri)e de)reases, if the va&'e of the invoi)ed pri)e de)rease e;pressed as a per)entage is greater than the )a&)'&ated va&'e of the --? de)rease, e;pressed as a per)entage, for the same period, the ad@'stment /i&& $e $ased on the va&'e of the invoi)ed per)ent de)rease. ?f the va&'e of the invoi)ed pri)e de)rease, e;pressed as a per)entage, is &ess than the va&'e of the --? de)rease e;pressed as a per)entage for the same period, the ad@'stment /i&& $e $ased on the --? per)ent de)rease. 6. ?f the --? )ontro&s in determining the pri)e ad@'stment, So'nd Transit /i&& revie/ the --? 4 months after initia& p'$&i)ation to ens're that the data have not $een revised. *ina& pa0ments /i&& $e ad@'sted a))ording&0. Y. Ad@'stment *orm'&as( !. ?f ?nvoi)e -ri)e Contro&s( a. -ri)e ?n)rease( 8!9 *a)tor [ 8-CA-,9 L !.059 ?f *a)tor is e<'a& to or &ess than 0.0, no ad@'stment /i&& $e made. ?f *a)tor is greater than 0.0, )ontin'e( -A [ *a)tor\N\-, $. -ri)e De)rease( 8!9 *a)tor [ 8-CA-, L 0.959 ?f *a)tor is e<'a& to or greater than 0.0, no ad@'stment is made. ?f *a)tor is greater than 0.0, )ontin'e( -A [ *a)tor\N\-, Where( -A [ Stee& man'fa)t'ring pri)e ad@'stment, in &'mp s'm do&&ars -, [ *a$ri)ator A s'pp&ier <'oted pri)e in $id 8)onverted to do&&ars per po'nd9
-age 5!
-C [ C'rrent )ertified invoi)e pri)e 8)onverted to do&&ars per po'nd9 N [ N'antit0 of man'fa)t'red stee&, in po'nds 2. ?f --? Contro&s( a. -ri)e ?n)rease( 8!9 *a)tor [ 8?CA?,9 L !.059 ?f *a)tor is e<'a& to or &ess than 0.0, no ad@'stment is made. ?f *a)tor is greater than 0.0, )ontin'e( -A [ *a)tor\N\-, $. -ri)e De)rease( 8!9 *a)tor [ 8?CA?, L 0.959 ?f *a)tor is e<'a& to or greater than 0.0, no ad@'stment is made. ?f *a)tor is greater than 0.0, )ontin'e( -A [ *a)tor\N\-, Where( -A [ Stee& man'fa)t'ring pri)e ad@'stment, in &'mp s'm do&&ars -, [ *a$ri)ator A s'pp&ier <'oted pri)e in $id 8)onverted to do&&ars per po'nd9 ?, [ ,7S --? inde; at the time of $id ?C [ ,7S --? inde; at the time materia& is p'r)hased from mi&& 8invoi)e dateQ after fina& US DO7 ,7S ad@'stments9 N [ N'antit0 of man'fa)t'red stee&, in po'nds .'&tip&e -ri)e Ad@'stments *o&&o/ing is an e;amp&e of an e)onomi) pri)e ad@'stment )&a'se deve&oped $0 #e/ 5or2 Cit0 Transit for so&i)itations. This provision a&&o/s for m'&tip&e pri)e ad@'stments d'ring the period of the )ontra)t. #ote that this )&a'se refers to the 3S)rap Stee&4 inde;, $'t an0 inde; )o'&d $e 'sed depending on the materia& $eing pro)'red. SO7?C?TAT?O# -IOO?S?O# -I?C: AD6UST.:#T C7AUS: *OI ?T:.S CO#TA?#?#= ST::7 To A&& -rospe)tive ,idders( #e/ 5or2 Cit0 Transit 8#5CT9 is so&i)iting this item8s9 'ti&iGing a pri)e ad@'stment )&a'se. The )&a'se set forth $e&o/ is in)&'ded in this so&i)itation $e)a'se of the stee& )ontent of the item $eing pro)'red and the do&&ar amo'nt of the item. *or i&&'strative p'rposes, an e;amp&e of this form'&a is provided $e&o/ to assist 0o' in the preparation of 0o'r $id.
-age 52
?n order to app&0 the ad@'stment form'&a, #5CT /i&& 'ti&iGe the pre determined per)entage stee& )ontent of the item+s 'nit pri)e as set forth $0 #5CT in the ,id N'otation Sheets. This per)entage sha&& remain fi;ed for the d'ration of the )ontra)t. The 'nit pri)e8s9 that #5CT /i&& pa0 for the item8s9 d'ring the first si; months of the )ontra)t sha&& $e the 'nit pri)e <'oted in the $id $0 the s'))essf'& $idder. Thereafter, the 'nit pri)e ma0 $e ad@'sted, either 'p or do/n, ever0 si; months after a/ard, ref&e)ting the )hange in the S)rap Stee& inde; set forth in the Ameri)an .eta&s .ar2et. The ad@'stment /i&& $e in the form of a per)entage and sha&& $e determined $0 #5CT $0 )omparing the S)rap Stee& inde; on the da0 of $id opening to the inde; in effe)t on ea)h si; month anniversar0 of the )ontra)t a/ard date for the d'ration of the )ontra)t. This ad@'stment per)entage sha&& $e app&ied to the portion of the 'nit pri)e that represents the stee& )ontent of ea)h item as predetermined $0 #5CT to arrive at the ad@'stment amo'nt. The ad@'stment amo'nt is then app&ied to the origina& 'nit pri)e set forth in the s'))essf'& $idderKs $id to arrive at the ne/ 'nit pri)e for the fo&&o/ing si; months. #o pri)e ad@'stment sha&& $e instit'ted 'n&ess the ne/ pri)e res'&ts in a per)entage )hange of at &east five 859 per)ent 8in)rease or de)rease9 of the origina& 'nit pri)e <'oted $0 the s'))essf'& $idder. The 'nit pri)e reverts $a)2 to the origina& 'nit pri)e <'oted if the pri)e ad@'stment )a&)'&ation at ea)h s'))essive si; month interva& res'&ts in a per)entage )hange that is not at &east five 859 per)ent 8in)rease or de)rease9 of the origina& 'nit pri)e <'oted $0 the s'))essf'& $idder. -ri)es for re&ease orders /i&& $e the pri)e esta$&ished for the si; month time frame /ithin /hi)h the re&ease8s9 is dated, regard&ess of de&iver0 date. ?f, for an0 reason, the inde; $eing 'ti&iGed 'nder this )ontra)t is dis)ontin'ed for an0 reason, #5CT /i&& se&e)t a ne/ inde; to $e app&ied.
:RA.-7: A( A. S'))essf'& ,idderKs Unit -ri)e( S5.00 ,. P Of ?tem Containing Stee&( 50P
-age 5"
C. -ortion of the ?temKs -ri)e s'$@e)t to a pri)e ad@'stment( S2.50 D. S)rap Stee& inde; on da0 of $id opening( !50 :. S)rap Stee& inde; at the si; month anniversar0 date of the $id opening( !H0 *. -er)ent )hange )a&)'&ation( 8: D9 D [ per)entage )hange. *or e;amp&e( 8!H0 !509 !50 [ .20 =. * R C( S2.50 ; .20 [ S0.50 B. #e/ Unit -ri)e for ne;t si; months( A ] = [ S5.50 :RA.-7: ,( A. S'))essf'& ,idderKs Unit -ri)e( S!2.00 ,. P Of ?tem Containing Stee&( !00P C. -ortion of the ?temKs -ri)e s'$@e)t to a pri)e ad@'stment( S!2.00 D. S)rap Stee& inde; on da0 of $id opening( 15 :. S)rap Stee& inde; at the si; month anniversar0 date of the $id opening( "0 *. -er)ent )hange )a&)'&ation(8: D9 D [ per)entage )hange. *or e;amp&e( 8"0 159 15 [ 0.%0 =. * R C( S!2.00 ; 0.%0 [ S1.20 B. #e/ Unit -ri)e for ne;t si; months( A ] = [ S4.H0 :RA.-7: C( A. S'))essf'& ,idderKs Unit -ri)e( S24.00 ,. P Of ?tem Containing Stee&( 15P C. -ortion of the ?temKs -ri)e s'$@e)t to a pri)e ad@'stment( S!H.00 D. S)rap Stee& inde; on da0 of $id opening( !%2 :. S)rap Stee& inde; at the si; month anniversar0 date of the $id opening( !94 *. -er)ent )hange )a&)'&ation(8: D9 D [ per)entage )hange. *or e;amp&e( 8!94 !%29 !%2 [ .!915 =. * R C( S!H.00 ; .!915 [ S".555 B. #e/ Unit -ri)e for ne;t si; months( A ] = [ S21.555
-age 54
*$.$-$* Cost Reim&ursement Contracts RE@UIREMENT -aragraph !0.d of *TA Cir)'&ar 4220.!: re<'ires that *edera& )ost prin)ip&es 8des)ri$ed in *AI -art "!9 $e 'sed to determine the a&&o/a$i&it0 of )osts in)'rred on third part0 )ost reim$'rsement )ontra)ts finan)ed /ith *edera& f'nds. Bo/ever, grantees ma0 referen)e their o/n )ost prin)ip&es if the0 )omp&0 /ith *edera& )ost prin)ip&es. -aragraph !0.e of *TA Cir)'&ar 4220.!: prohi$its the )ost p&'s a per)entage of )ost method of )ontra)ting. DISCUSSION T/e cost)reim&ursement contract is one t/at ro%ides for a#ment of allo1a&le incurred costs! to t/e e;tent rescri&ed in t/e contract$ T/ese contracts esta&lis/ an estimate of total cost for t/e ur ose of o&li"atin" funds and esta&lis/in" a ceilin" on e; enditures t/at t/e contractor ma# not e;ceed 1it/out t/e a ro%al of t/e contractin" officer$ Cost) reim&ursement contracts are suita&le for use 1/en t/e uncertainties of erformance do not ermit costs to &e estimated 1it/ sufficient accurac# to use a fi;ed) rice contract$ Com letion %s$ Term Form) T1o forms of cost)t# e contracts are a%aila&le for descri&in" t/e contractorKs res onsi&ilit#3 t/e com letion form and t/e term form$ T/e com#letion *orm descri&es t/e sco e of 1orE &# s ecif#in" an end roduct or definite "oal$ T/is form reAuires t/e contractor to com lete t/e 1orE and deli%er t/e end item as a condition for a#ment of t/e entire fee$ If t/e contractor fails to com lete t/e contract! t/e &u#in" A"enc# is entitled to a reduction in t/e amount of t/e fee$ T/is 1ould mean t/at if t/e contractor e; ended all t/e estimated cost and t/e 1orE 1as not com lete! and t/e A"enc# decided not to add more funds 6estimated cost9 to t/e contract! t/e contractor 1ould not &e entitled to full a#ment of t/e ori"inal fi;ed fee$ T/e term form of contract descri&es t/e 1orE in "eneral terms and o&li"ates t/e contractor to de%ote a s ecified le%el of effort for a stated time eriod$ T/e fi;ed fee is a#a&le at t/e e; iration of t/e stated time eriod if t/e contractor /as indeed furnis/ed t/e s ecified le%el of effort$ E;tension of t/e time eriod is a ne1 acAuisition in%ol%in" ne1 cost and fee a"reements 6unless t/e ori"inal time eriod e; ires and t/ere remains a le%el of effort to &e ro%ided! in 1/ic/ case t/e A"enc# ma# /a%e t/e ri"/t to e;tend t/e eriod of erformance so as to use t/e remainin" le%el of effort9$ Federal Cost Princi les FTA Circular .**:$(E Para"ra / (:$d reAuires "rantees to use Federal Cost Princi les to determine allo1a&le costs under cost)t# e contracts$ .8 CFR (5$**! Allo/a$le Costs, defines t/e Federal Cost Princi les for %arious t# es of contractors$
-age 55
Contracts 1it/ commercial concerns are reAuired to use FAR Part -( Cost Princi les! or "rantees ma# use t/eir o1n cost rinci les if t/e# are consistent 1it/ FAR Part -($ Allo1a&le Cost and Pa#ment Clause = Cost)t# e contracts 1ill need to include a clause or clauses addressin" se%eral im ortant issues re"ardin" t/e a#ment of allo1a&le costs$ T/e clause used in Federal contracts 1ould &e useful as a "uide concernin" t/e issues t/at need to &e addressed$ * T/e matters co%ered &# t/e FAR clause! and t/at s/ould &e defined in a "ranteeMs contract 6t/ou"/ t/e FAR clause itself is not reAuired9! 1ould include3 a$ T/e freAuenc# of contractor &illin"s for costs incurredJ &$ T/e reference to su& art -($* of t/e FAR for determinin" allo1a&ilit# of costsJ c$ B/et/er t/e contractor must /a%e actuall# aid for t/e su lies or ser%ices used in contract erformance &efore it su&mits an in%oice! or 1/et/er t/e contractor ma# in%oice for costs incurred &ut not #et aidJ d$ T/e ro%isional &illin" rates to &e used durin" contract erformance for indirect costs rior to esta&lis/ment of final audited ratesJ e$ T/e rocedure to &e follo1ed in su&mittin" cost ro osals for esta&lis/in" final indirect cost rates for t/e contractJ f$ T/e reAuirement t/at final costs 6direct and indirect9 &e audited &efore final a#mentJ "$ T/e ContractorMs assi"nment to t/e "rantee of an# refunds! re&ates or credits accruin" to t/e Contractor t/at are alloca&le to costs for 1/ic/ t/e contractor /as &een aidJ /$ A release disc/ar"in" t/e "rantee from an# future claims arisin" out of t/e contract$ Fi;ed Fee = It is im ortant t/at t/e contract contain a clear statement as to /o1 t/e contractor 1ill &e aid t/e fi;ed fee called for in t/e contract 6i$e$! /o1 t/e fee is earned9$ T/e Federal clause states t/at t/e contractor is to &e aid t/e fi;ed fee Hfor erformin" t/is contract$I - <rantee CPFF contracts s/ould &e clear in definin" t/e contractorMs erformance res onsi&ilit# for earnin" t/e fee$ For e;am le! if it is a com letion form contract! t/en t/e contractor must com lete t/e statement of 1orE and deli%er all reAuired documents$ If! /o1e%er! it is a term form contract! t/e contractor must furnis/ t/e reAuired le%el of effort called for in t/e contract durin" t/e eriod of erformance in order to earn t/e full fee$ It s/ould &e noted t/at a cost)t# e contract! 1/ile it is a H&est effortsI contract in terms of entitlement to a#ment of allo1a&le costs! does in fact reAuire actual erformance for entitlement to a#ment of t/e full fi;ed fee$ An#t/in" less t/an com lete
*-.
*AI 52.2!%. 1 L Allowa$le Cost and &ayment. *AI 52.2!% H L Fi7ed Fee.
--0
-age 5%
erformance entitles t/e "rantee to a credit in t/e fee &ased on t/e ercent of actual com letion of t/e 1orE called for in t/e contract$ In t/is re"ard a CPFF contract o erates %er# muc/ liEe a fi;ed rice contract in reAuirin" com lete erformance &# t/e contractor for full a#ment of t/e fi;ed fee$ An e;am le of a a#ment of fi;ed fee clause used &# a Federal a"enc# t/at illustrates t/is rinci le of entitlement to fee for erformance is t/at of NASA! 1/ic/ reads3 HT/e fi;ed fee s/all &e aid in mont/l# installments &ased u on t/e ercenta"e of com letion of 1orE as determined &# t/e Contractin" Officer$I <rantees are encoura"ed to incor orate a Payment o* Fi+ed Fee clause in t/eir contracts t/at clearl# states t/e contractorMs res onsi&ilit# to erform t/e contract in order to &e aid t/e fee$ T/e clause s/ould also state /o1 t/e fee 1ill &e aid on a mont/l#7incremental &asis 6e$"$! &ased on a ercenta"e of com letion of 1orE as determined &# t/e Contractin" Officer9$ It is also su""ested t/at t/e "rantee consider a *ee /ithholding #ro-ision t/at ro%ides for a certain ercenta"e of t/e fee to &e 1it//eld until t/e contractor com letes and deli%ers all documentation called for in t/e contract$ Once a"ain "rantees ma# 1ant to re%ie1 t/e Federal clause for "uidance$ . Ad%ance A"reements = Certain t# es of costs ma# &e allo1a&le accordin" to t/e cost rinci les! and #et resent difficulties in determinin" after)t/e)fact 1/at is reasona&le for t/e articular circumstances of an# "i%en contract$ 0 It is ad%isa&le to antici ate t/ese areas of otential conflict and ne"otiate ad%ance a"reements &efore t/e costs are incurred 6t/is ma# &e &efore or durin" t/e contract &ut s/ould al1a#s &e &efore incurrence of t/e costs in%ol%ed9$ T/e t# es of costs t/at tend to &e ro&lematic! and for 1/ic/ ad%ance a"reements 1ould &e articularl# /el ful! 1ould include3 a$ Pre)contract costsJ &$ Ro#alties and ot/er costs for use of atentsJ c$ Com ensation for ersonal ser%ices! includin" location allo1ances! /ards/i a#! off)site a#! and incenti%e a#J d$ Time c/ar"ed directl# to t/e contract &# cor orate officers and senior mana"ement ersonnel 1/o normall# c/ar"e t/eir time to indirect cost accountsJ e$ Com ensation for rofessional consultants 6e$"$! le"al! accountin" and en"ineerin"9J f$ Tra%el and ersonnel relocation costsJ
.-2
*AI 52.2!% H L Fi7ed Fee.
0-4
Advan)e agreements )annot provide for the a&&o/a$i&it0 of )osts that the )ost prin)ip&es have determined to $e 'na&&o/a$&e 8e.g., interest9.
-age 51
"$ Se%erance a# to em lo#ees on su /$ Trainin" and education costsJ
ort ser%ices contractsJ
i$ <eneral and administrati%e costs 6e$"$! cor orate! di%ision or &ranc/ allocations9 attri&uta&le to t/e "eneral mana"ement! su er%ision and conduct of t/e contractorMs &usiness as a 1/ole9$ T/ese costs are es eciall# im ortant in construction! 'o&)site! and arc/itect)en"ineer contracts$ A ro%al of Su&contractors = T/ere 1ill ro&a&l# &e situations 1/en a "rantee ma# 1is/ to reAuire t/eir rime contractors on CPFF contracts to su&mit su&contracts for t/e "ranteeMs consent rior to a1ard of t/e su&contract &# t/e rime$ <rantees 1ill 1ant to e;ercise due dili"ence in t/e mana"ement and administration of CPFF contracts 1/ere t/e "rantee &ears muc/ of t/e risE of oor erformance! includin" cost o%erruns! for &ot/ t/e rime contractor and t/e rimeMs su&contractors$ For "uidance in t/is area of "rantee re%ie1 and consent to su&contracts! see t/e BPPM Section 8$. = A##ro-al o* %u$contractors$ AdeAuac# of ContractorKs Accountin" S#stem ) It is im ortant to determine t/e adeAuac# of t/e contractorKs accountin" s#stem for cost)t# e contracts &efore a1ardin" suc/ a contract$ 2 Care must &e taEen to assure t/at t/e accountin" s#stem can ro erl# identif# contract costs &# se"re"atin" t/em from t/e costs of ot/er 'o&s in t/e accountin" records$ LiEe1ise it is im ortant t/at t/e s#stem of allocatin" indirect costs to 'o&s7contracts roduces a distri&ution of costs 1/ic/ is fair and reasona&le$ *$.$-$- Time and Materials Contracts RE@UIREMENT -aragraph 1.@ of *TA Cir)'&ar 4220.!: states( @. Use of Time and .ateria&s Contra)ts. =rantees /i&& 'se time and materia&s )ontra)ts on&0( !. 2. After a determination that no other t0pe of )ontra)t is s'ita$&eQ and ?f the )ontra)t spe)ifies a )ei&ing pri)e that the )ontra)tor sha&& not e;)eed e;)ept at its o/n ris2.
?f a )ost t0pe s'$)ontra)t is to $e a/arded $0 the prime, the s'$)ontra)tor+s a))o'nting s0stem m'st a&so $e ade<'ate.
-age 5H
DISCUSSION Time)and)materials 6T+M9 contracts ma# &e used for acAuirin" su lies or ser%ices$ T/ese contracts ro%ide for t/e a#ment of la&or costs on t/e &asis of fi;ed /ourl# &illin" rates 1/ic/ are s ecified in t/e contract$ T/ese /ourl# &illin" rates 1ould include 1a"es! indirect costs! "eneral and administrati%e e; ense! and rofit$ T/ere is a fi;ed) rice element to t/e T + M contract ) t/e fi;ed /ourl# &illin" rates$ But t/ese contracts also o erate as cost)t# e contracts in t/e sense t/at la&or /ours to &e 1orEed! and aid for! are fle;i&le$ Materials are &illed at cost! unless t/e contractor usuall# sells materials of t/e t# e needed on t/e contract in t/e normal course of /is &usiness$ In t/at case t/e a#ment ro%ision can ro%ide for t/e a#ment of materials on t/e &asis of esta&lis/ed catalo" or list rices in effect 1/en t/e material is furnis/ed$ T/ese contracts also ma# ro%ide for t/e reim&ursement of material /andlin" costs! 1/ic/ are indirect costs! suc/ as rocurement! ins ection! stora"e! a#ment! etc$ T/ese indirect costs are &illed as a ercenta"e of material costs incurred 6similar to t/e &illin" of o%er/ead costs as a ercenta"e of direct la&or9$ Suc/ material /andlin" costs must &e se"re"ated in a se arate indirect cost ool &# t/e contractorKs accountin" s#stem and must not &e included in t/e indirect costs included as art of t/e fi;ed /ourl# &illin" rate for direct la&or$ It 1ould al1a#s &e rudent to o&tain a re)a1ard audit of t/e contractorKs accountin" s#stem to determine t/e adeAuac# of t/e s#stem to ro erl# se"re"ate material /andlin" costs from ot/er o%er/ead costs &ein" &illed 1it/ t/e fi;ed /ourl# rates for la&or$ Use Onl# B/en No Ot/er T# e Bill BorE The FTA Circular requires that you ma(e a determination, $e*ore using this ty#e o* contract, that no other ty#e o* contract is suita$le$ T/e reason 1/# t/is t# e of contract is t/e least refera&le of all allo1a&le t# es is t/at it creates a disincenti%e for t/e contractor to com lete t/e contract in a timel# manner$ Since eac/ la&or /our e; ended carries 1it/ it a rofit 6and a redetermined o%er/ead c/ar"e9 &uilt into t/e fi;ed /ourl# rate! t/e contractor is moti%ated to 1orE as man# /ours as ossi&le$ T/ere is no incenti%e to com lete t/e contract AuicEl#! and t/us minimi,e total costs to t/e &u#er$ 6In a CPFF contract t/e fee is fi;ed in dollar terms at t/e outset of t/e contract! allo1in" t/e contractor to earn t/e fee 1/ene%er t/e 1orE is com lete! t/us ro%idin" some incenti%e to finis/ t/e contract as AuicEl# as ossi&le$9 Su&contracts ) If #our T+M contract 1ill in%ol%e su&contracts for lar"e dollar items or ser%ices! #ou 1ill need to e%aluate 1/et/er t/e contractorKs material /andlin" costs s/ould &e c/ar"ed to t/ese lar"e dollar su&contracts as an indirect cost 6as an o%er/ead t# e of c/ar"e9! &ecause to do so ma# result in an ineAuita&le allocation of t/ese indirect costs to #our contract$ T/is is &ecause t/e lar"e dollar %alue su&contract 1ill a&sor& a far "reater ro ortion of t/e indirect cost ool t/an it s/ould! &ased on a reasona&le assessment of t/e material /andlin" costs actuall# "enerated &# t/e su&contract %ersus t/ose "enerated &# all ot/er materials rocured &# t/e contractor for ot/er customers$ B/en t/is situation arises #ou 1ill 1ant to ne"otiate an ad%ance a"reement 1it/ t/e contractor as to t/e c/ar"in" of material /andlin" costs$ It ma# &e more eAuita&le to a# for t/e cost of su&contract administration on a direct c/ar"e &asisJ i$e$! t/e la&or cost for t/e su&contract
-age 59
administrator c/ar"ed directl#$ Or #ou ma# 1ant to ne"otiate a reduced indirect material /andlin" cost rate to &e c/ar"ed to t/e su&contract 61/ic/ re resents a more eAuita&le allocation of t/e material /andlin" costs actuall# "enerated &# t/e su&contract9$ Ceilin" Price ) Dou 1ill need to s ecif# t/e A"enc#Ks ma;imum o&li"ation 6ceilin" rice9 in t/e contractJ i$e$! t/e limitation of t/e A"enc#Ks financial o&li"ation 1/ic/ t/e total funds allotted to t/e contract 1ill allo1$ T/e contractor ma# not e;ceed t/is fundin" limitation 1it/out #our 1ritten aut/ori,ation in t/e form of a contract modification addin" more funds$ Pro er A"enc# Sur%eillance ) T/is t# e of contract reAuires a /i"/ de"ree of A"enc# sur%eillance durin" erformance in order to ro%ide reasona&le assurance t/at efficient met/ods and cost controls are used &# t/e contractor$ A%oid Cost Plus Percenta"e of Cost Arran"ements ) As discussed &elo1 under CPPC contracts! care must &e taEen not to structure an a"reement 1/ic/ com ensates t/e contractor at a #redetermined #ercentage 6*or o-erhead or #ro*it7 o* actual costs incurred! If #ou &reaE out t/e o%er/ead and rofit from t/e la&or rate and call for t/em to &e &illed as se arate rates &ased on actual la&or costs incurred! #ou 1ill /a%e an ille"al cost) lus) ercenta"e)of)cost situation$ O%er/ead and rofit must &e reco%ered as a art of t/e fi;ed /ourl# &illin" rate for la&or! as discussed a&o%e$ Dou ma# allo1 t/e contractor to &ill material /andlin" costs as an indirect cost rate a lied to actual material costs! ro%ided t/e contractor se"re"ates material /andlin" costs in t/e accountin" s#stem$ Dou s/ould conduct a contract cost close)out audit of t/e material /andlin" cost ool and ad'ust t/e rates &illed to t/ose actuall# incurred 6as #ou 1ould do for an o%er/ead rate on a cost) reim&ursement contract9$ Co1e%er! 1/ere t/e actual material /andlin" costs are not lar"e! A"encies ma# elect to close out t/e T+M contract 1it/out a final cost audit of t/e material /andlin" cost ool$ *$.$-$. La&or Cour Contracts DISCUSSION La&or /our contracts are a %ariation of t/e time and materials contract! differin" onl# in t/at materials are not su lied &# t/e contractor$ Dou s/ould use t/is t# e of contract onl# 1/en no ot/er 1ould &e suita&le! and #ou need to document #our determination if #ou c/oose to use t/is t# e of contract$ *$.$-$0 Cost Plus Percenta"e of Cost Contracts 6CPPC9 DISCUSSION FTA Circular .**:$(E clearl# ro/i&its t/e use of t/is contractin" met/od$ CPPC contracts are ro/i&ited &# statute and FTA ma# not "rant 1ai%ers for "rantees to use t/is
-age %0
met/od of contractin"$ 4 <rantees must not onl# a%oid usin" t/is t# e of contract t/emsel%es! t/e# must also insert clauses in t/eir cost)t# e contracts t/at ro/i&it t/eir rime contractors from usin" CPPC su&contracts$ Care must &e taEen to a%oid an# Eind of a"reement 1/ere&# t/e contractorKs fee 1ould &e increased automaticall# 1it/ increases in a articular cost element$ <enerall#! an# contractual arran"ement 1/ere&# t/e contractor is assured of "reater rofits &# incurrin" additional costs 1ill &e /eld ille"al$ T/e o&%ious ro&lem 1it/ t/is form of contract is t/at rofits increase in ro ortion to dollars s ent! t/us ro%idin" a ositi%e incenti%e to inefficienc#$ To *all /ithin the de*inition o* CPPC, the agreement must #ro-ide that the contractor@s com#ensation, or some #ortion o* it, /ill $e com#uted as a #ercentage o* some o* the costs o* #er*ormance! So for e;am le! it is not ermissi&le to a# for o%er/ead 6indirect9 costs &# esta&lis/in" a redetermined ercenta"e in ad%ance and sti ulatin" t/at o%er/ead e; ense 1ill &e reim&ursed as a stated ercenta"e of some ot/er cost suc/ as direct la&or$ T/e ro&lem 1it/ t/is arran"ement is t/at suc/ com ensation ma# &e "reater t/an t/e contractorKs actual and final o%er/ead e; enses! 1/ic/ means t/e a#ment &ecomes additional rofit$ In t/e same 1a#! a time)and)materials contract 1/ic/ called for a#ment of o%er/ead and rofit at redetermined ercenta"es of (0O and (:O of cost incurred 1as /eld to &e ille"al$5 T/is is not to ro/i&it #ro-isional o-erhead rates 1/ic/ are audited and ad'usted to actuals at t/e end of t/e contract! nor does it ro/i&it ro%isional or interim fee a#ments &ased on costs &ein" incurred! &ecause t/e total fee is fi;ed at t/e ince tion of t/e contract and 1ill not increase 1it/ increases in actual costs$ It is also ermissi&le to a# a material /andlin" c/ar"e as a ercenta"e of material costs incurred if t/e contractor /as a se arate material /andlin" cost ool$ T/is indirect cost ool s/ould &e audited after contract com letion! and t/e &illed rates s/ould &e ad'usted to actuals &ased on t/e audit$ Anot/er 1a# of a%oidin" t/e ro&lem is to include o%er/ead and rofit in fi;ed rates for la&or$ T/is is done in time)and)materials and la&or /our contracts 1/ere contractors are aid one rate for eac/ /our of la&or erformed$ T/is t# e of arran"ement is not ille"al! &ut it still tends to o erate as a disincenti%e to control cost 6more /ours 1orEed eAuals more rofits9! and for t/is reason s/ould &e a%oided 1/ene%er ot/er contractin" o tions e;ist$ *$.$. Pa#ments -a0ment is the $'0erKs most important )ontra)t'a& o$&igation. -a0ments are the prin)ipa& so'r)e of f'nds d'ring )ontra)t performan)e a&&o/ing the )ontra)tor to )ontin'e /or2ing. De&a0s in pa0ments )an have a serio's effe)t on the )ontra)torKs a$i&it0 to )ontin'e performan)e. When &ess than f'&& pa0ment is made of a )ontra)torKs invoi)e, the terms Gwit))oldin!G and GsetoffG are
4-8
!0 U.S.C. 2"0%8a9 and 4! U.S.C. 2548$9. 4% Comp. =en. %!2 8, !591!"9 8!9%19.
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)ommon&0 'sed to des)ri$e the ref'sa& to ma2e f'&& pa0ment. The term Gfinal %aymentG 's'a&&0 imp&ies that $oth parties to the )ontra)t have f'&fi&&ed a&& of their responsi$i&ities. There are t/o ma@or t0pes of )ontra)t pa0ments( 8!9 pa0ments for )omp&eted items of /or2 8in)&'ding %artial %ayments9, and 829 %ro!ress %ayments $ased on )osts in)'rred or 'pon a per)entage of )omp&etion of the /or2. Another t0pe of pa0ment, /hi)h is 'sed on&0 'nder e;traordinar0 )ir)'mstan)es, is pa0ment in advan)e of doing the /or2 8advance %ayments9. *$.$.$( Pa#ment of t/e Price -a0ment of the )ontra)t pri)e is d'e 'pon )omp&etion of the /or2 and s'$mission of the )ontra)torKs invoi)e. When the )ontra)t a'thoriGes de&iver0 or performan)e in in)rements, pa0ment of a portion of the )ontra)t pri)e ma0 $e made $efore the )ontra)t is )omp&eted. S')h pa0ments are referred to as %artial %ayments. -artia& pa0ments are not )onsidered to $e a finan)ing te)hni<'e $'t the0 )an $e an important means of providing f'nds for performan)e, and the0 sho'&d $e 'sed /henever the )ontra)t )an $e str')t'red in terms of in)rementa& stages or de&iveries and there are appropriate a))eptan)e )riteria for the s'pp&ies, servi)es or )omp&eted s'$s0stems of a &arger s0stem. ?n other /ords, /hen the Agen)0 )an safe&0 inspe)t, test and a))ept these 'nits and ma2e a >fina&> pa0ment for those items de&ivered, /itho't having to /orr0 a$o't their f'n)tioning as part of a &arger s0stem, then partia& pa0ments sho'&d $e esta$&ished in the )ontra)t. *$.$.$* Ad%ance Pa#ments RE@UIREMENT *TA Cir)'&ar 4220.!:, -aragraph !2.a, 3Advan)e -a0ments,4 states( 3*TA does not a'thoriGe and /i&& not parti)ipate in f'nding pa0ments to a )ontra)tor prior to the in)'rren)e of )osts $0 the )ontra)tor 'n&ess prior /ritten )on)'rren)e is o$tained from *TA. There is no prohi$ition on a grant re)ipient+s 'se of &o)a& f'nds for advan)e pa0ments. Bo/ever, advan)e pa0ments made /ith &o)a& f'nds $efore a grant has $een a/arded, or $efore the iss'an)e of a &etter of no pre@'di)e or other pre a/ard a'thorit0, are ine&igi$&e for reim$'rsement.4 DISCUSSION Ad%ance a#ments are actuall# a met/od of financin" and not a met/od of a#in" for 1orE com leted or items deli%ered$ T/e# are made rior to a contractorMs incurrence of costs in order to ena&le t/e contractor to erform t/e contract$ T/e Federal <o%ernment laces se%ere restrictions on its o1n use of ad%ance a#ments 6FAR co%era"e ma# &e found at FAR Su& art -*$.9$ As indicated &elo1 in t/e ara"ra / HE;ce tions to t/e Prior A ro%al reAuirement!I 1/en ad%ance a#ments are "enerall# acce ted industr# ractice! FTA does not reAuire rior a ro%al$
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T/e FTA Circular reAuires FTA a ro%al &efore "rantees ma# use t/is form of financin" on t/ird) art# contracts$ Co1e%er! t/e Circular clearl# restricts t/e ad%ance a#ment ro/i&ition to t/ose contracts 1/ere t/e "rantee is usin" FTA funds for t/e ad%ance a#ment$ If t/e ad%ance a#ments are &ein" made 1it/ non)FTA funds! t/en FTA /as no in%ol%ement in t/e decision and need not a ro%e of it$ <rantees are free to use local funds to finance t/eir contractors in t/is manner if t/e# deem it a ro riate$ T/e Circular also co%ers t/e situation 1/ere a "rantee ma# 1is/ to use local funds for ad%ance a#ments &efore a "rant /as &een a1arded or &efore FTA /as issued a letter of no re'udice to t/e "rantee$ In t/ese cases FTA 1ill not reim&urse t/e "rantee later for suc/ a#ments$ E;ce tions to t/e Prior A ro%al ReAuirement = T/e FTA reAuirement for rior a ro%al of ad%ance a#ments does not a l# to transactions 1/ere it is H"enerall# acce ted industr# racticeI to a# in ad%ance$ In t/ese situations! "rantees ma# maEe ad%ance a#ments 1it/out rior FTA a ro%al$ T/ese situations 1ould include 6&ut not necessaril# &e restricted to9 t/e follo1in" t# es of transactions3 ($ *$ -$ .$ 0$ 2$ 4$ Best Practices #e/ 5or2 Cit0 Transit 8#5CT9 )omp&eted a ma@or pro)'rement for rai& )ars in /hi)h there /ere t/o pa0ment s)hed'&es in the Ie<'est for -roposa&s 8I*-9. The first /as a pa0ment s)hed'&e )ontaining mi&estone pa0ments tota&ing 20P of the pri)e of )ars paid prior to the a))eptan)e of the first test trains. A se)ond or >A&ternate> pa0ment s)hed'&e had mi&estone pa0ments of 42P of the pri)e of )ars paid prior to the a))eptan)e of the first test trains. Contra)tors /ere re<'ired to s'$mit proposa&s $ased on $oth pa0ment s)enarios, as /e&& as an0 a&ternative pa0ment p&an the0 /ished to propose. #5CT re<'ested that the *edera& Transit Administration 8*TA9 provide /ritten )on)'rren)e to ma2e advan)ed pa0ments 'p to appro;imate&0 45P of the pri)e of the )ars if there /as appropriate )onsideration for greater pa0ments made 'p front. ?n addition, #5CT re<'ired that an Advan)ed -a0ment ,ond or 7etter of Credit $e provided in the f'&& amo'nt of the pri)e of )ars paid prior to the a))eptan)e of the first test trains. *TA provided their /ritten )on)'rren)e to #5CTKs re<'est. ?n order to eva&'ate the proposa&s re)eived from the )ontra)tors, #5CT performed a #et -resent Oa&'e ana&0sis of the 20P, 42P and other )ontra)tor a&ternatives in order to <'antif0 the va&'e of the different pa0ment s)hed'&es. The ana&0sis too2 into a))o'nt the )ost of mone0 and a&& aspe)ts Rent Tuition Insurance remiums Su&scri tions to u&lications Soft1are licenses Construction mo&ili,ation costs Pu&lic utilit# connections
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of the timing of invoi)ing, starting /ith re)eipt of the invoi)e thro'gh the time for a)t'a& pa0ment. The #et -resent Oa&'e ana&0sis sho/ed that appropriate )onsideration /as given in the /inning proposa& and #5CT a))epted it. An Advan)ed -a0ment ,ond or 7etter of Credit /as re<'ired to prote)t a&& pa0ments for )ars prior to a))eptan)e of the test trains. This )ase sho/s a ver0 )onservative approa)h as to /hat is defined as an Advan)e -a0ment. The Advan)e -a0ment is )onsidered to $e the amo'nt paid to the )ontra)tor for )ars 'nti& the first trains are a))epted $0 #5CT. The )ontra)tor is re<'ired to design, $'i&d and test the first !H )ars /hi)h means that the )ontra)tor is in)'rring s'$stantia& )osts d'ring this period. These )osts in)&'de engineering and design ho'rs, s'pervision, ordering materia&s, set 'p of the prod')tion &ine, et). The )ontra)t has a mo$i&iGation pa0ment of "P 'pon a/ard of the )ontra)t and approva& of the Advan)e -a0ment ,ond or 7etter of Credit. Thereafter, the )ontra)t has mi&estone 8or )omp&etion t0pe progress pa0ments9 for vario's s'$missions of designs, approva&s of designs, starting of tests, )omp&etion of tests, et). A more &i$era& approa)h /o'&d define the mo$i&iGation )ost of "P to $e )onsidered an Advan)e -a0ment and the rest of the pa0ments to $e )onsidered progress pa0ments. *$.$.$- Pro"ress Pa#ments RE@UIREMENT Para"ra / (*$& of FTA Circular .**:$(E states3 $. -rogress -a0ments. =rantees ma0 'se progress pa0ments provided the fo&&o/ing re<'irements are fo&&o/ed( 9 !. -rogress pa0ments are on&0 made to the )ontra)tor for )osts in)'rred in the performan)e of the )ontra)t. !0 2. The grantee m'st o$tain ade<'ate se)'rit0 for progress pa0ments. Ade<'ate se)'rit0 ma0 in)&'de ta2ing tit&e, &etter of )redit or e<'iva&ent means to prote)t the grantee+s interest in the progress pa0ment. !!
*TA has redrafted the paragraph re&ated to progress pa0ments to a))o'nt for the pra)ti)a& rea&it0 that ta2ing tit&e to /or2 in progress ma0 not $e desira$&e in some )ases.
(:
-rogress pa0ments in )onstr')tion )ontra)ts ma0 $e made on a per)entage of )omp&etion method in a))ordan)e /ith 49 C*I !H.2!8d9. This pa0ment method ma0 not $e 'sed in non )onstr')tion )ontra)ts.
((
3Ade<'ate se)'rit04 sho'&d ref&e)t the pra)ti)a& rea&ities of different pro)'rement s)enarios and fa)t'a& )ir)'mstan)es. *or e;amp&e, ade<'ate se)'rit0 ma0 )onsist of ta2ing tit&e to /or2 in progress in a ro&&ing sto)2 pro)'rement, re)eiving a draft do)'ment in a )ons'&ting )ontra)t, or re)eiving some portion of re)'rring servi)es 'nder a servi)es )ontra)t. =rantees sho'&d a&/a0s )onsider the )osts asso)iated /ith this se)'rit0 8e.g., $onds or &etters of )redit m'st $e p'r)hased in the )ommer)ia& mar2etp&a)e9 and the impa)t those )osts have on the )ontra)t pri)e, as /e&& as the )onse<'en)es of in)omp&ete performan)e as the0 )onsider /hat )onstit'tes ade<'ate se)'rit0 for a given pro)'rement.
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DISCUSSION Pro"ress a#ments are a means of financin" contractors t/at are erformin" *i+ed1#rice contracts 6a9 under unusual circumstances 1/ere a contractor cannot "et ri%ate financin" at a reasona&le cost! or 6&9 1/ere t/e commercial ractice for t/e item &ein" rocured is for t/e &u#er to ro%ide financin" 6e$"$! rollin" stocE rocurements9$ ( T/ere are t1o ma'or t# es of ro"ress a#ments3 t/ose &ased on costs and t/ose &ased on a ercenta"e of com letion of 1orE$ Bot/ t# es are considered contract)financin" met/ods 6see FAR -*$(:*9$ Pro"ress a#ments ma# &e a ro riate if3 T/e contractor 1ill not &e a&le to &ill for t/e first)deli%er# of roducts! or ot/er erformance milestones! for a su&stantial time after 1orE &e"ins$ In Federal contractin" ractice! t/e usual contract duration for usin" ro"ress a#ments is four mont/s or more for small &usinesses and si; mont/s or more for ot/ers! and T/e contractorKs e; enditures rior to deli%er# of t/e first items 1ill /a%e a si"nificant im act on t/e contractorKs 1orEin" ca ital$ *
Progress #ayments are to &e distin"uis/ed from #artial #ayments$ Partial #ayments are a#ments made! as aut/ori,ed &# t/e contract! u on deli%er# and acce tance of one or more com lete units 6or one or more distinct items of ser%ice9 in accordance 1it/ t/e contract s ecifications! e%en t/ou"/ ot/er Auantities remain to &e deli%ered$ Note t/at #artial #ayments are *or com#leted units! 1/ereas #rogress #ayments are *or uncom#leted /or(1in1#rogress! Because t/e "rantee is maEin" a#ments for uncom leted! non)functional units! FTA reAuires t/at adeAuate securit# &e o&tained from t/e contractor rotectin" t/e "ranteeMs 6and FTAMs9 in%estment in case t/e contractor fails to com lete t/e deli%era&le units$ T/e form of securit# is to &e determined &# t/e "rantee &ased on 1/at is in t/e &est interests of t/e "rantee in t/e articular circumstances$ 6See footnote a&o%e re adequate security$9 Pro"ress Pa#ments Based on Percenta"e of Com letion ) T/e Federal <o%ernment aut/ori,es ro"ress a#ments on its contracts &ased on a ercenta"e or sta"e of com letion of t/e 1orE$ T/is t# e of ro"ress a#ment is standard for construction contracts for all Federal a"encies$ - .8 CFR Part (5$*(6d9 allo1s "rantees and su&"rantees to use t/e ercenta"e of com letion met/od to a# t/eir construction contractors! 1/ic/ is consistent 1it/ t/e re"ulations for Federal contracts$ 2o/e-er, grantees may not use the #ercentage o*
The term %ro!ress %ayments does not app&0 to )ost t0pe )ontra)ts, and is to $e disting'ished from advance %ayments/ /hi)h are pa0ments made $efore /or2 $egins 8see ,--. se)tion 4.4.4.29.
*
,oth of the )onditions noted are a&most a&/a0s present on )onstr')tion pro@e)ts. *AI C&a'se 52.2"2 5 &ayments 2nder Fi7ed1&rice Construction Contracts.
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com#letion method *or non1construction contracts! For those contracts, #rogress #ayments $ased on costs incurred must $e used! . Contract Clause = <rantees s/ould refer to t/e FAR clause at FAR 0*$*-*)(2 for "uidance on t/e s ecific issues t/at need to &e addressed in t/e ro"ress a#ments clause and ensure t/at t/eir a"enc#Ms clause adeAuatel# co%ers t/e im ortant issues! includin"3 Com utation of amounts = ercenta"e of total costs! definition of HcostsI to &e included in t/e calculation 6i$e$! onl# t/ose actuall# aid &# t/e contractor! incurred &ut not aid! etc$9$ LiAuidation = t/e met/od of linEin" %alue recei%ed to a#ments made$ Reduction or sus ension of a#ments = t/e circumstances under 1/ic/ t/e "rantee ma# reduce or sus end ro"ress a#ments$ Title = t/is ro%ision s/ould define t/e ro ert# considered alloca&le to t/e contract 6 arts! materials! s ecial toolin"! s ecial test eAui ment! dra1in"s and tec/nical data! etc$9 and t/e art# t/at retains title to t/e ro ert#71orE) in) rocess for 1/ic/ t/e ro"ress a#ments are made$ RisE of loss = t/e contract s/ould &e clear as to 1/ic/ art# assumes t/e risE of loss to contract ro ert# and 1orE)in) ro"ress &efore final acce tance of t/e units$ <n the Federal clause, the contractor assumes the ris( o* loss e-en though title to all #ro#erty acquired under the contract -ests in the 0o-ernment! Pro"ress a#ments to su&contractors = t/is ro%ision needs to define t/e circumstances under 1/ic/ t/e rime contractor must maEe ro"ress a#ments to fi;ed) rice su&contractors! and t/e su&contract terms to &e included 6co%erin" t/e same issues as t/e rime contractMs ro"ress a#ment clause9$ AdeAuate accountin" s#stem7re orts = t/e contract must reAuire an adeAuate 'o&)order accountin" s#stem to &e maintained t/at ro erl# accounts for t/e costs of t/e 'o& e%en t/ou"/ t/e contract is fi;ed) rice$ T/is ro%ision s/ould also "i%e t/e "rantee t/e ri"/t to reAuire certain re orts or ot/er data in su ort of t/e contractorMs in%oices$ Access to records ) t/is ro%ision must "i%e t/e "rantee t/e ri"/t to conduct audits of costs claimed in ro"ress a#ment in%oices$
49 C*I !H.2!8d9 a'thoriGes the per)entage of )omp&etion method for )onstr')tion )ontra)ts on&0.
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*$.$.$. Bit//oldin" and Final Pa#ment DISCUSSION A num&er of contract ro%isions e; ressl# aut/ori,e t/e 1it//oldin" of a#ments$ See! for e;am le! t/e Da%is)Bacon Act Clause 0 or t/e Contract BorE Cours and Safet# Standards Act Clause$ 2 T/e standard Federal "o%ernment clause for t/e a#ment of fi;ed fee on CPFF contracts calls for a (0O 1it//oldin" of t/e fi;ed fee until t/e contractor su&mits a certified final indirect cost rate ro osal and ot/er1ise com lies 1it/ t/e final deli%era&le documentation reAuirements of t/e contract 6e$"$! deli%er# of t/e final re ort concernin" in%entions made under t/e contract9$ Limitation on Bit//oldin" ) In t/e e%ent #ou decide to 1it//old a#ments on a contract! #ou must taEe care t/at t/e amount of mone# 1it//eld &ears a reasona&le relations/i to t/e unsatisfactor# 1orEJ in ot/er 1ords! t/e amount 1it//eld must re resent a reasona&le estimate of t/e contractorKs otential lia&ilit#$ 4 Moreo%er! t/e amount 1it//eld must not &e so "reat t/at it im airs t/e contractorKs a&ilit# to erform$ 5 Dou ma# also 1is/ to consider a clause limitin" t/e amount of a#ments t/at ma# &e 1it//eld in total under all clauses of t/e contract! as is t/e ractice on Federal contracts$ 8 Final Pa#ment ) Final a#ment is made to t/e contractor 1/en it /as satisfied all of t/e deli%era&le reAuirements called for &# all ro%isions of t/e contract! includin" all of t/e reAuired documentation$ Final a#ment si"nifies t/at t/e erformance o&li"ations of &ot/ arties to t/e contract /a%e &een satisfied$ Before maEin" a final a#ment! t/erefore! #ou s/ould o&tain a si"ned release from t/e contractor releasin" t/e A"enc# from an# furt/er claims &# t/e contractor$ Dou s/ould also ensure t/at t/e ro"ram office /as si"ned a recei%in" and ins ection re ort certif#in" t/at all deli%era&le items /a%e &een recei%ed! ins ected! and acce ted as &ein" in conformance 1it/ t/e contract s ecifications$ Retaina"e on Construction Contracts ) For a discussion of retaina"e on Construction Contracts! see BPPM! section (:$(! ara"ra / entitled HRetaina"e and t/e Pro&lems of Contractors 1/o @uit BorE$I
0 2 4 5 8
Appendi; A.!, C&a'se !%. Appendi; A.!, C&a'se !1. #orair :ngKg Corp., =S,CA "5"9, 15 ! ,CA, paragraph !!,0%2. ,ai&e0 v. Se)retar0 of 7a$or, H!0 *. S'pp. 2%! 8D. A&as2a !99"9. *AI C&a'se 52.2"2 9.
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*$.$0 Indefinite Deli%er# Contracts When the e;a)t times or the e;a)t <'antities of f't're de&iveries are not 2no/n at the time of )ontra)t a/ard, or /hen the she&f &ife of the prod')t needed is short, grantees ma0 /ish to )onsider some form of indefinite de&iver0 8?D9 )ontra)t. ?ndefinite de&iver0 )ontra)ts offer a n'm$er of advantages that /i&& $e dis)'ssed $e&o/ /ith ea)h t0pe of ?D )ontra)t. As a genera& r'&e, ho/ever, ?D )ontra)ts permit the grantee to maintain inventories at minim'm &eve&s and provide f&e;i$i&it0 /ith respe)t to shipments to vario's 'ser &o)ations. ?t a&so fa)i&itates de)entra&iGed ordering $0 'sers at different &o)ations. There are three t0pes of indefinite de&iver0 )ontra)ts( !. Definite <'antit0 )ontra)ts, 2. Ie<'irements )ontra)ts, and ". ?ndefinite <'antit0 8?N9 )ontra)ts 8)ommodities9ATas2 order )ontra)ts 8servi)es9. *$.$0$( Definite)Auantit# Contracts A definite1quantity contract is one /hi)h provides for de&iver0 of a definite <'antit0 of spe)ifi) s'pp&ies or servi)es d'ring a time period /hi)h is fi;ed, /ith de&iveries or performan)e to $e s)hed'&ed at designated &o)ations at the time ea)h order is p&a)ed 'nder the )ontra)t. This t0pe of )ontra)t is appropriate /hen the grantee 2no/s in advan)e ho/ man0 tota& items it /i&& need d'ring the )ontra)t period $'t is 'n)ertain as to the e;a)t time or the e;a)t amo'nt of its needed de&iveries to an0 given &o)ation. The s'pp&ies or servi)es )a&&ed for $0 this t0pe of )ontra)t m'st $e reg'&ar&0 avai&a$&e from the s'pp&ier or avai&a$&e after a short &ead time. *or g'idan)e as to ordering <'antities a$ove the <'antit0 stated in the )ontra)t, see se)tion 2.4.5." $e&o/, paragraph entit&ed ,rders a$ove t)e stated ma7imum. *$.$0$* ReAuirements Contracts A requirements contract is one in /hi)h the grantee )ommits to p&a)e a&& of its re<'irements for a parti)'&ar item or servi)e /ith a parti)'&ar )ontra)tor d'ring a spe)ified )ontra)t period, /ith de&iveries or performan)e to $e s)hed'&ed at the time ea)h order is p&a)ed 'nder the )ontra)t. This t0pe of )ontra)t is 'sed /hen <'antities andAor the times of needed de&iveries are 'n)ertain. ?t permits f&e;i$i&it0 to the grantee in $oth <'antities and de&iver0 s)hed'&es. ?t ma0 a&so shorten the de&iver0 time of a prod')t that has a &onger prod')tion &ead time $e)a'se the )ontra)tor 2no/s that the grantee /i&& o$tain a&& of its re<'irements 'nder its )ontra)t and in this sit'ation )ontra)tors ma0 $e /i&&ing to maintain some &eve& of inventor0. A requirements contract a&so a&&o/s for the ordering of s'pp&ies or servi)es after requirements $ecome (nown. ?t differs from the indefinite quantity contract in that it promises the )ontra)tor that a&& of the grantee+s re<'irements for the parti)'&ar item /i&& $e pro)'red from the )ontra)tor, /hereas the indefinite quantity contract ma2es no promise of this nat're and ma0 in fa)t $e one of severa& 8m'&tip&e9 )ontra)ts a/arded for the same item or servi)e. The requirements contract ma0 prod')e $etter pri)es for the grantee in that the )ontra)tor is ass'red from the $eginning that a&& s'pp&ies or
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servi)es of the t0pe )a&&ed for /i&& $e pro)'red from the )ontra)tor d'ring a stated period of time. The disadvantage to the grantee is that it /i&& $e )ommitted to order a&& of the designated s'pp&ies at the )ontra)ted pri)e even if it &ater &earns that the s'pp&ies )an $e ordered e&se/here more )heap&0. :stimated tota& <'antit0 L When this t0pe of )ontra)t is 'sed, grantees sho'&d state a rea&isti) estimated tota& <'antit0 in the so&i)itation and in the res'&ting )ontra)t. This estimate is not a g'arantee $0 the grantee that it /i&& $'0 the estimated <'antit0, $'t is a good faith estimate of /hat the re<'irements are &i2e&0 to $e. The estimate sho'&d $e $ased on re)ords of previo's re<'irements as /e&& as the most )'rrent information avai&a$&e. .a;im'm and minim'm <'antities L The )ontra)t sho'&d prote)t the )ontra)tor $0 stating a ma;im'm &imit of the )ontra)tor+s o$&igation to de&iver. This ma;im'm &imit ma0 $e e;pressed for the entire )ontra)t, as /e&& as for ea)h individ'a& order and for an0 parti)'&ar period of time /ithin the )ontra)t period of performan)e. .inim'm order amo'nts ma0 a&so $e e;pressed for ea)h order p&a)ed and for the )ontra)t as a /ho&e. .inim'm order amo'nts, ho/ever, are not re<'ired for this t0pe of )ontra)t $e)a'se the grantee+s )ommitment to $'0 its re<'irements from the )ontra)tor represents the &ega& )onsideration ne)essar0 to ma2e the )ontra)t $inding. *or g'idan)e as to ordering <'antities a$ove the ma;im'm amo'nt stated in the )ontra)t, see se)tion 2.4.5." $e&o/, paragraph entit&ed ,rders a$ove t)e stated ma7imum. ?t sho'&d $e noted that the minim'm and ma;im'm <'antities in a requirements contract are for the )ontra)tor+s prote)tion and do not ne)essari&0 &imit the grantee+s pro)'rement a'thorit0 to order more 'nits 8sin)e the grantee has )ontra)ted to a/ard all of its requirements to the )ontra)tor9. Th's the grantee+s a'thorit0 to add 'nits to a re<'irements )ontra)t /itho't re )ompetition is fo'nded on its initia& promise to a/ard a&& of its re<'irements to the s'))essf'& )ontra)tor and s')h additions /o'&d not )onstit'te an impermissi$&e in)rease in s)ope 8as /o'&d $e the )ase /ith an indefinite1 quantity contract /hen the grantee see2s to add 'nits a$ove the stated ma;im'm L see $e&o/9. *$.$0$- Indefinite)Auantit# Contracts An indefinite1quantity contract is one that provides for an indefinite <'antit0 of s'pp&ies or servi)es, /ithin &imits that are stated in the )ontra)t, to $e provided d'ring a time period that is fi;ed in the )ontra)t. De&iveries of the s'pp&ies or performan)e of the servi)es are s)hed'&ed $0 p&a)ing orders /ith the )ontra)tor. This t0pe of )ontra)t ma0 $e appropriate /hen the grantee )annot predetermine, a$ove a spe)ified minim'm, the pre)ise <'antit0 of s'pp&ies or servi)es that /i&& $e re<'ired d'ring the )ontra)t period, and it is inadvisa$&e for the grantee to )ommit itse&f for more than a minim'm <'antit0. 3ndefinite1quantity )ontra)ts offer severa& advantages( !. 2. ". 4. 5. minim'm inventor0 &eve&s of s'pp&ies )an $e maintained, shipments )an $e dire)t to 'sers in vario's &o)ations, the0 permit f&e;i$i&it0 in $oth <'antities and de&iver0 s)hed'&ing, s'pp&ies or servi)es )an $e ordered after re<'irements $e)ome 2no/n, and the grantee+s o$&igation is &imited to the minim'm <'antit0 spe)ified in the )ontra)t.
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.inim'm and ma;im'm <'antities L To ens're that the )ontra)t is $inding, a minim'm n'm$er of 'nits m'st $e stated in the )ontra)t, and it m'st $e more than a nomina& <'antit0. There m'st a&so $e a stated ma;im'm of 'nits that ma0 $e ordered. ?ndefinite <'antit0 )ontra)ts sho'&d never $e 3open ended,4 /here no ma;im'm <'antit0 is stated. This pra)ti)e has &ed to serio's pro$&ems /hen agen)ies attempt to 3pigg0 $a)24 the open ended )ontra)ts of other agen)ies $0 ordering <'antities that /ere never in)&'ded in the origina& )ompetitive pro)ess. 8See se)tion %."." 9oint &rocurements of Rollin! Stoc( and H&i!!y$ac(in!.I The )ontra)t ma0 a&so state ma;im'm or minim'm <'antities that ma0 $e ordered 'nder ea)h tas2 or de&iver0 order and the ma;im'm that ma0 $e ordered d'ring a spe)ified period of time /ithin the )ontra)t+s period of performan)e. Orders a$ove the stated ma;im'm L ?f it $e)omes ne)essar0 to order <'antities a$ove the ma;im'm stated in the )ontra)t, 8/hi)h /o'&d $e the n'm$er of 'nits in)&'ded in the origina& )ompetitive pro)ess9, s')h orders sho'&d genera&&0 not $e pro)essed as 3)hange orders,4 83)hange orders4 m'st $e /ithin the s)ope of the origina& )ompetition9, $'t sho'&d $e pro)essed as 3ne/ pro)'rements.4 These ne/ pro)'rements ma0 either $e )ompeted or, if )ir)'mstan)es /arrant, pro)essed as 3non)ompetitive pro)'rements4 in a))ordan)e /ith the grantee+s interna& approva& pro)ess for non)ompetitive 83so&e so'r)e49 pro)'rements. .rantees s)ould antici%ate t)e %ossi$ility of needin! additional quantities w)en t)ey com%ete t)e contract award initially and/ if necessary/ include o%tion %rovisions for additional quantities in t)e ori!inal com%etitive $iddin!. 3n t)is way if additional quantities are needed t)ey may $e %rocured under t)e ori!inal contract wit)out )avin! to 5ustify t)em as a Hsole sourceI add1on. .'&tip&e A/ardATas2 Order )ontra)ts L =rantees ma0 /ish to )onsider ma2ing m'&tip&e )ontra)t a/ards for the same or simi&ar s'pp&ies or servi)es 'nder a sing&e )ompetitive so&i)itation. This ma0 $e appropriate in order to ens're the <'a&it0 or time&iness of de&iveries $0 not &imiting the grantee to a sing&e s'pp&ier /ho ma0 not perform a))ording to the grantee+s e;pe)tations or needs or /ho ma0 not $e a$&e to meet pea2 de&iver0 re<'irements. ?n this event, another s'pp&ier is immediate&0 avai&a$&e to ass're that needs /i&& $e met. The *edera& A)<'isition Ieg'&ations 8*AI9, S'$part !%.504 L 3ndefinite10uantity Contracts/ addresses the iss'e of m'&tip&e a/ards in !%.5048)9. The *AI e;presses a preferen)e for ma2ing m'&tip&e a/ards of indefinite <'antit0 )ontra)ts 'nder a sing&e so&i)itation for the same or simi&ar s'pp&ies or servi)es if 8i9 a re)'rring need for the s'pp&ies or servi)es is anti)ipated, and 8ii9 the agen)0 )annot predetermine its needs a$ove a spe)ified minim'm, and 8iii9 /hen it /o'&d $e inadvisa$&e for the agen)0 to )ommit itse&f for more than a minim'm <'antit0. The *AI envisions the a/ard of m'&tip&e tas( order contracts in /hi)h individ'a& tas2 orders /o'&d $e iss'ed fo&&o/ing )ompetitive so&i)itations to the origina& a/ardees. ?f m'&tip&e a/ards are made, grantees m'st advise prospe)tive $idders of the pro)ed'res that /i&& $e 'sed in iss'ing orders to the )ontra)tors se&e)ted for a/ard, in)&'ding the )riteria that /i&& $e 'sed to provide the se&e)ted )ontra)tors /ith a fair opport'nit0 to $e )onsidered for ea)h order iss'ed. The )riteria ma0 in)&'de s')h items as past performan)e on ear&ier tas2s or orders iss'ed 'nder the )ontra)t, <'a&it0 of de&ivera$&es, time&iness of de&iveries, and other fa)tors )onsidered
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re&evant $0 the grantee. ?t is important that pri)e or )ost $e one of the se&e)tion fa)tors )onsidered for ea)h order a/arded. ?f the origina& )ontra)t did not esta$&ish the pri)e for the s'pp&0 or servi)e, the grantee /i&& have to so&i)it )ost or pri)e proposa&s for ea)h order. The *AI does provide for e;)eptions to the re<'irement that a&& a/ardees $e provided a fair opport'nit0 for ea)h order a/arded. These /o'&d in)&'de sit'ations /here L a. The agen)0+s needs for the s'pp&ies or servi)es are so 'rgent that providing a fair opport'nit0 /o'&d res'&t in 'na))epta$&e de&a0sQ $. On&0 one a/ardee is )apa$&e of providing the s'pp&ies or servi)es $e)a'se the0 are 'ni<'e or high&0 spe)ia&iGedQ ). The order m'st $e p&a)ed on a so&e so'r)e $asis in the interest of e)onom0 and effi)ien)0 as a &ogi)a& fo&&o/ on to an order a&read0 iss'ed 'nder the )ontra)t, provided that a&& a/ardees /ere given a fair opport'nit0 to $e )onsidered for the origina& orderQ and d. ?t is ne)essar0 to p&a)e an order to satisf0 a minim'm g'arantee. .'&tip&e a/ards /i&& not $e advisa$&e /hen( a. state &a/ prohi$its, $. more favora$&e terms /i&& $e provided if a sing&e a/ard is made, ). the )ost of administering m'&tip&e )ontra)ts o't/eighs an0 potentia& $enefits from ma2ing m'&tip&e a/ards, and d. tas2s &i2e&0 to $e ordered are so integra&&0 re&ated that on&0 a sing&e )ontra)tor )an reasona$&0 perform the /or2.
,est -ra)ti)es -ro)'rement .an'a& L Chapter " L Spe)ifi)ations
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C/a ter - ) S ecifications ".0 Overvie/ 8%A0"9 ".! T0pes of Spe)ifi)ations and Iis2s 8!A9H9 ".!.! Design Spe)ifi)ations 8!A9H9 ".!.2 -erforman)e Spe)ifi)ations 8!A9H9 ".!." ,rand #ame or :<'a& 8!A9H9 ".2 Using Cons'&tants to -repare Spe)ifi)ations 8!A9H9 "." Spe)ifi)ations for :<'ipment and S'pp&ies 8!A9H9 ".4 Spe)ifi)ations for Constr')tion 8!A9H9 ".5 Statements of Wor2 for Servi)es 8!A9H9 -$: OPERPIEB RE@UIREMENT T H.) 8!9 of *TA Cir)'&ar 4220.!: re<'ires that a&& so&i)itations sha&&( 8!9 ?n)orporate a )&ear and a))'rate des)ription of the te)hni)a& re<'irements for the materia&, prod')t, or servi)e to $e pro)'red. S')h des)ription sha&& not, in )ompetitive pro)'rements, )ontain feat'res that 'nd'&0 restri)t )ompetition. The des)ription ma0 in)&'de a statement of the <'a&itative nat're of the materia&, prod')t, or servi)e to $e pro)'red and /hen ne)essar0, sha&& set forth those minim'm essentia& )hara)teristi)s and standards to /hi)h it m'st )onform if it is to satisf0 its intended 'se. Detai&ed prod')t spe)ifi)ations sho'&d $e avoided if at a&& possi$&e. When it is impra)ti)a& or 'ne)onomi)a& to ma2e a )&ear and a))'rate des)ription of the te)hni)a& re<'irements, a >$rand name or e<'a&> des)ription ma0 $e 'sed as a means to define the performan)e or other sa&ient )hara)teristi)s of a pro)'rement. The spe)ia& feat'res of the named $rand /hi)h m'st $e met $0 offerors sha&& $e )&ear&0 stated. T !5 of the .aster Agreement states that( d. :;)&'sionar0 or Dis)riminator0 Spe)ifi)ations. Apart from in)onsistent re<'irements imposed $0 *edera& stat'te or reg'&ations, the Ie)ipient agrees to )omp&0 /ith the re<'irements of 49 U.S.C. T 5"2"8h9829 $0 refraining from 'sing an0 *edera& assistan)e a/arded $0 *TA to s'pport pro)'rements 'sing e;)&'sionar0 or dis)riminator0 spe)ifi)ations. e. ,'s Seat Spe)ifi)ations. A State or &o)a& government re)ipient ma0 'se spe)ifi)ations )onforming /ith the re<'irements of 49 U.S.C. T 5"2"8e9 to a)<'ire $'s seats.
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DISCUSSION As a reci ient of u&lic funds #ou 1ill /a%e to Eee in mind t/at #ou re resent t/e "o%ernment! 1/ose o&'ecti%es in s endin" ta; a#ersK mone# 1ill al1a#s include! as one of its "oals! t/e "oal of full and o en com etition$ It is eas# to lose si"/t of t/is under t/e ressure of com letin" a ro'ect on time$ Man# ro"rams in #our domain /a%e olitical sensiti%it# and media %isi&ilit#$ T/e tem tations 1ill &e "reat to F"et somet/in" out no1!F and it 1ill al1a#s &e easier to res ond to t/e immediate ressure t/an to do a careful and t/orou"/ 'o& at t/e outset$ But time taEen /ere! in t/e careful researc/ and draftin" of t/e s ecifications! 1ill in%aria&l# re1ard #ou 1it/ a &etter roduct! at a lo1er cost! and 1it/ far fe1er claims and dela#s durin" t/e life of t/e ro'ect$ Anot/er a"e)old ro&lem in t/is area of draftin" s ecifications is t/e desire to us/ t/e state of t/e art to a ne1 le%el! to /a%e t/e &est ossi&le s#stem! re"ardless of cost$ <o%ernment or"ani,ations tend to &e a lauded for t/e %isi&le Aualit# of t/e t/in"s t/e# do! 1/et/er itKs t/eir ser%ices! or ma'or transit s#stems$ But a"ainst t/ese real)life ressures stands t/e Federal and State <o%ernment olic# to define t/e Fminimum needsF and to a%oid s ecifications 1/ic/ mi"/t undul# restrict com etition$ Be need to remind oursel%es t/at our industrial su liers are also ta; a#ers 1/ose ta; dollars are /el in" to finance t/is rocurementJ as suc/ t/e# are to &e "i%en e%er# o ortunit# to com ete for t/e 1orE t/e# are /el in" to finance$ Tec/nical S ecifications and Statements of BorE must clearl# descri&e t/e roducts and ser%ices to &e rocured in terms 1/ic/ 1ill ermit full and o en com etition and 1/ic/ 1ill meet t/e &u#in" a"enc#Ks minimum essential needs$ -$( TDPES OF SPECIFICATIONS AND RISQS DISCUSSION S ecifications ma# &e %er# detailed in descri&in" t/e roduct or 1orE to &e done! or ma# sim l# reAuire an end result! or ma# contain com&inations of t/ese t1o a roac/es$ T/ere are different le%els of risEs and res onsi&ilities in/erent in t/ese different t# es of s ecifications$ As a "eneral rule t/e more desi"n details t/ere are in t/e s ecification! t/e more t/e &u#in" a"enc# &ecomes res onsi&le for t/e erformance of t/e roduct$ Con%ersel#! t/e more t/e s ecification descri&es t/e erformance of t/e roduct instead of its desi"n features! t/e more res onsi&le t/e contractor &ecomes for t/e end roduct$ T/e le"al t/eor# in%ol%ed in t/ese cases is t/e im lied 1arrant# of s ecifications$!0 Follo1in" is a discussion of t/e %arious t# es of s ecifications and t/e risEs in/erent in eac/ t# e$
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United States v. Spearin, 24H U.S. !"2 8!9!H9.
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-$($( Desi"n S ecifications DISCUSSION S ecifications detailin" t/e manner or met/od of erformance are often treated as design s ecifications$ Contrasted 1it/ t/ese are #er*ormance s ecifications! 1/ic/ lea%e t/e details of erformance! and t/e details of desi"n! to t/e contractorKs discretion$ :esign s ecifications are t/ose 1/ic/ set fort/ recise measurements! tolerances! materials! in rocess and finis/ed roduct tests! Aualit# control! ins ection reAuirements! dra1in"s and ot/er s ecific information$ It is t/is design t# e of s ecification! dealin" 1it/ t/e details of t/e 1orE! 1/ic/ t/e contractor is FreAuired to follo1 as one 1ould a road ma !F 1/ic/ "i%es rise to im lied 1arrant#$ Under t/is t# e of s ecification! t/e &u#in" a"enc# 6as t/e aut/or of t/e s ecifications9 1ill &e /eld res onsi&le for desi"n and related omissions! errors! and deficiencies in t/e s ecifications and dra1in"s$!! T/ere is an im lied 1arrant# t/at t/e detailed desi"ns or rocesses 1ill result in an end item 1/ic/ functions as reAuired$ Con%ersel#! t/ere is no im lied 1arrant# 1/ere t/e s ecification sim l# sets fort/ an o&'ecti%e or end result to &e ac/ie%ed! and t/e contractor is free to select t/e means of accom lis/in" t/e tasE! in 1/ic/ case /e assumes res onsi&ilit# for t/at selection$ (* In t/ose cases 1/ere t/e s ecification contains &ot/ desi"n and erformance reAuirements! it 1ill de end on 1/at ortion of t/e s ecification causes t/e contractorKs difficulties! 1/et/er /e /as discretion to c/oose /o1 to do t/e 1orE$ (S ecific situations 1orEin" to relie%e t/e contractor from end item erformance res onsi&ilit# 1ould include3 B/en t/e contractor is left no discretion or c/oice in t/e materials to &e used$ (. B/en s ecifications set fort/ dimensions and t/e item &uilt to t/e dimensions cannot &e used as antici ated &ecause of t/ose dimensions$ (0
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.onitor -&asti)s Co., AS,CA !4441, 12 2 ,CA ^ 9%2% at 44,91!. 6. 7. Simmons Co. O. United States, !HH Ct. C&. %H4, 4!2 *.d. !"%0 8!9%99 at %H9. :ngineering Te)hno&og0 Cons'&tants, AS,CA 4"%00, 92 " ,CA ^ 25,!"", re)ons. Denied, 9" ! ,CA ^ 25,501. 6. 7. Simmons Co., id. Barrison WesternA*ran2i Den0s, ?n)., :#=,CA 552", 92 ! ,CA ^ 24,5H2.
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B/en s ecifications define a met/od of erformance or t/e articular manufacturin" rocesses a contractor must follo1 6e$"$! detailed rocedures for ourin" concrete! detailed solderin" met/ods! etc$9 (2 B/en s ecified eAui ment cannot &e successfull# used in erformin" t/e contract$ (4 B/en detailed s ecifications reAuire erformance contradictor# to local codes or ordinances$ (5 B/en t/e s ecifications ro%ide for alternate met/ods of erformance! and t/e contractor selects a met/od from amon" alternati%es in t/e s ecification! t/e contractor 1ill not &e lia&le if t/e alternati%e does not accom lis/ t/e desired results$ (8
-$($* Performance S ecifications DISCUSSION Performance s ecifications dictate t/e erformance of t/e end roduct! not /o1 t/e contractor 1ill do t/e 1orE$ T/ese are s ecifications 1/ic/ "i%e t/e contractor discretion in /o1 to ac/ie%e t/e end result called for &# t/e contract$ 20 Performance s ecifications lace t/e "reatest de"ree of res onsi&ilit# on t/e contractor and re resent t/e lo1est de"ree of le"al risE 6&ut not necessaril# t/e lo1est ro"ram risE9 to t/e &u#in" a"enc#$ It must &e said! /o1e%er! t/at t/ere are %alid reasons for s ecif#in" Fdesi"nF t# e reAuirements 1it/in erformance s ecifications! as 1/ere standardi,ation is needed! 1/ere t/ere is an o ortunit# to a%oid du lication of desi"n costs 1/ic/ /a%e alread# &een incurred! etc$
As a "eneral rule! 1/en a erformance)t# e s ecification is used! t/e &u#in" a"enc# 1ill not &e lia&le for a contractorKs increased costs in erformin" t/e contract unless t/e erformance s ecification em&odies reAuirements 1/ic/ are im ossi&le to attain$ *(
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Bo$$s Constr. C Dev., ?n)., AS,CA "4H90, 9! 2 ,CA ^ 2",155. .ait&and ,ros. Co., AS,CA 2"H49, H" ! ,CA ^ !%,4"4. B'$er, B'nt C #i)ho&s, ?n)., =S,CA 4"!!, 15 2 ,CA ^ !!,451. So'thern -aving Corp., A=,CA 14 !0", 11 2 ,CA ^ !2,H!" at %2,"%". A&e'tian Constr')tors v. United States, 24 C&. Ct. "12 8!99!9. ) ?nter)ontinenta& .fg. Co. O. United States, 4 C&. Ct. 59! 8!9H49 at 595.
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-age 5
It s/ould also &e noted t/at t/e fact t/at t/e &u#in" a"enc# s ecifies a minimum reAuirement for some com onent or some as ect of erformance 6e$"$! Fat least - / FJ Fno more t/an *F 1ideF9 does not c/an"e a erformance s ecification into a desi"n s ecificationJ i$e$! t/e &u#in" a"enc# is not 1arrantin" t/at an item 1/ic/ meets t/e minimum reAuirement 1ill erform ro erl# 1/en incor orated into t/e s#stem$ For e;am le3
A ro%ision t/at surfaces &e at a certain s ecified minimum tem erature 1/en ainted 1as not a 1arrant# t/at satisfactor# results 1ould &e o&tained at t/at tem erature$ 22 B/ere t/e a"enc# s ecified a minimum of not less t/an (.)"au"e steel it 1as not 1arrantin" t/at (.)"au"e 1ould meet erformance reAuirements$ 2"
-$($- Brand Name Or EAual

DISCUSSION T/ese are s ecifications 1/ic/ reAuire a articular manufacturerKs roduct! art num&er! or model$ T/e s ecification ma# allo1 for an FeAualF roduct and s/ould clearl# set fort/ t/e salient /#sical and functional c/aracteristics of t/e &rand name roduct$ Under t/is t# e of s ecification if t/e contractor uses t/e &rand name roduct or an a ro%ed FeAual!F t/e &u#in" a"enc# assumes t/e res onsi&ilit# for ro er erformance 6assumin" t/e contractor used t/e roduct in t/e ro er 1a#9$ If t/e contractor elects to manufacture an eAual roduct in)/ouse! /e 1ill &e res onsi&le t/at t/e roduct erforms eAuall# 1it/ t/e s ecified &rand named roduct$ T/e BPPM Section *$.$*$*$( contains e;tensi%e "uidance on t/e use of F&rand name or eAualF s ecifications$
-$* USIN< CONSULTANTS TO PREPARE SPECIFICATIONS RE@UIREMENT T H.a.859 of the *TA Cir)'&ar 4220.!: re<'ires that grantees avoid sit'ations 2no/n as >organiGationa& )onf&i)ts of interest.> An organiGationa& )onf&i)t of interest arises /hen a )ontra)tor, $e)a'se of other a)tivities, re&ationships, or )ontra)ts, is 'na$&e or potentia&&0 'na$&e, to render impartia& assistan)e or advi)e to the grantee, or /hen a )ontra)torKs o$@e)tivit0 in performing the )ontra)t /or2 is impaired, or /hen a )ontra)tor has an 'nfair )ompetitive advantage.
**
Ahern -ainting Contra)tors, ?n)., DOTCA, %1 1, %H ! ,CA ^ %949. ?n&et Co., AS,CA 9095, !9%4 ,CA ^ 409".
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-age %
DISCUSSION T/e FTA Circular en%isions t1o distinct ro&lems 1/en usin" consultants to re are s ecifications or statements of 1orE3 6(9 t/at t/e consultant 1ill &e &iased to1ard a articular roduct or firm &ecause /e /as &usiness relations/i s 1it/ t/at firm or a financial interest in t/e roduct! or 6*9 t/at t/e consultant 1ill /a%e an unfair com etiti%e ad%anta"e if /e is allo1ed to com ete for a roduct or ser%ice 1/ic/ /e /el ed to define in a s ecification or statement of 1orE$ B/en a contractor is used to re are or assist in t/e re aration of s ecifications and statements of 1orE! care must &e taEen to ensure t/at t/e contractor 1ill &e com letel# un&iased in /is decisions$ Bu#in" a"encies must ascertain t/at t/e contractor /as no financial or or"ani,ational relations/i 1it/ a otential su lier 1/ic/ mi"/t moti%ate /im to slant a s ecification to1ard t/at su lier$ Bit/ res ect to t/e unfair com etiti%e ad%anta"e issue! contractors de%elo in" s ecifications s/ould not &e allo1ed to com ete on rocurements for 1/ic/ t/e# re ared s ecifications$ Best Practices Contra)tors /ho are /or2ing on spe)ifi)ations to $e 'sed for )ompetitive pro)'rements sho'&d $e re<'ired to a))ept a >7imitation on *'t're Contra)ting> provision in their )ontra)t for the spe)ifi)ationA )ons'&ting /or2 /hi)h pre)&'des them from $idding on the res'&ting pro)'rement. *'rther g'idan)e ma0 $e fo'nd in the ,--. Se)tion 2.4.2.2.2 >OrganiGationa& Conf&i)ts Of ?nterest.> ?t is a&so advisa$&e /hen 'sing )ons'&tants to draft pro)'rement spe)ifi)ations to o$tain a forma& /ritten )ertifi)ation /ith their proposa& /hi)h des)ri$es a&& of their past, present or p&anned organiGationa&, finan)ia&, )ontra)t'a& or other interests /ith organiGations /hose prod')ts or servi)es ma0 $e offered in response to the pro)'rement on /hi)h the0 /i&& $e )ons'&ting. Where there are s')h interests identified $0 the )ontra)tor, the )ontra)tor sho'&d a&so $e re<'ired to des)ri$e /h0 it $e&ieves that performan)e of the proposed )ons'&ting )ontra)t )an $e a))omp&ished in an impartia& and o$@e)tive manner. An e;amp&e of a )ertifi)ation re<'irement 'sed $0 the *edera& Department of Transportation ma0 $e fo'nd in Appendi; ,.!0*.. -$- SPECIFICATIONS FOR E@UIPMENT AND SUPPLIES DISCUSSION Plans! dra1in"s! s ecifications or urc/ase descri tions s/ould state onl# t/e minimum needs of t/e a"enc# and descri&e t/e su lies in a manner 1/ic/ 1ill encoura"e ma;imum com etition! a%oidin" restricti%e features 1/ic/ mi"/t restrict offers$
*.
Transportation A)<'isition Ieg'&ation 8TAI9 C&a'se !252.209 1! D?SC7OSUI: O* CO#*7?CTS O* ?#T:I:ST 8O)t !9949.
-age 1
Best Practices -&anning ) A mar2et s'rve0 sho'&d $e )ond')ted to determine so'r)es that offer prod')ts /hi)h meet the re<'irements. Ca'tion m'st $e e;er)ised to avoid dis)&os're of agen)0 $'dgets or other information /hi)h might give a s'pp&ier an 'nfair )ompetitive advantage. Des)riptive &iterat're from one prospe)tive s'pp&ier )annot $e 'sed as the so&e $asis for /riting spe)ifi)ations. Determine /hat 0o'r essentia& re<'irements are and separate these essentia&s from those /hi)h are >ni)e to have> or desira$&e. ?n 0o'r resear)h determine /hat the state of the art is and deve&op 0o'r spe)ifi)ation /ithin the state of the art. Content A performan)e t0pe spe)ifi)ation is genera&&0 prefera$&e to a design t0pe spe)ifi)ation 8i.e., donKt te&& the )ontra)tor ho/ to do the /or2 $'t rather spe)if0 the end itemKs performan)e9. This is in 2eeping /ith a goa& of ma;im'm )ontra)tor responsi$i&it0 and minim'm ris2 to the $'0ing agen)0. ?t ma0 $e ne)essar0, ho/ever, to 'se design t0pe des)riptions 8as for )omponents, to&eran)es, et).9 in )ertain sit'ations, s')h as the need for standardiGation. The spe)ifi)ation m'st set forth the minim'm essentia& )hara)teristi)s and standards re<'ired to satisf0 the intended 'se 8e.g., >no more than 2> /ide>Q >at &east " hp>Q >at &east on)e per month>9. When >$rand names> are $eing 'sed for spe)ifi) )omponents, it ma0 $e advisa$&e to in)&'de at &east t/o $rand names fo&&o/ed $0 the /ords >or e<'a&>. When so 'sed, the spe)ifi) feat'res /hi)h m'st $e met $0 offerors sho'&d $e )&ear&0 stated. See ,--. Se)tion 2.4.2.2.!. The spe)ifi)ation m'st not on&0 des)ri$e the prod')t $'t m'st a&so in)&'de re&ia$i&it0 and <'a&it0 ass'ran)e re<'irements 8N'a&it0 Contro& -&an9. Criteria for inspe)ting, testing and a))epting the prod')t /i&& have to $e in)&'ded in the spe)ifi)ation. -reservation, pa)2aging, pa)2ing, and mar2ing re<'irements /i&& a&so have to $e addressed. ?n)&'de a Contra)t Data Ie<'irements 7ist 8CDI79 to te&& the )ontra)tor /hat do)'mentation is re<'ired, /hen it is to $e de&ivered, and /hether the do)'ments need approva& 8e.g., dra/ings, maintenan)e re)ommendations, master parts &ist, shippingA hand&ingA storage pro)ed'res, et).9 When $'0ing ma@or s0stems $e s're to re<'ire a )omprehensive spare parts data pa)2age as a de&ivera$&e item. This /i&& $e
-age H
ne)essar0 for )ompeting the pro)'rement of spare parts after the initia& )omp&ement of spares has $een 'sed. ?s training needed for 'sers and those /ho m'st maintain the e<'ipmentW Are maintenan)e man'a&s neededW Do not in)&'de )ontra)t'a& terms and )onditions, s')h as, )ostApri)e information, /arranties, de&iver0 information, et). Write senten)es /hi)h are short, )on)ise and simp&e. Use de)ima&s instead of fra)tions. DonKt 'se open ended re<'irements s')h as >as dire)ted,> >satisfa)tor0 to,> et). Do not 'se 'nfami&iar /ords, )o&&o<'ia&isms or /ords /hi)h are am$ig'o's. When 0o' have finished, read 0o'r spe)ifi)ation and as2 0o'rse&f, >?s there an0 /a0 that an0one )o'&d misinterpret this statementW> 5o' ma0 /ish to )onsider standardiGing 0o'r Agen)0Ks approa)h to the format and )ontent of spe)ifi)ations and statements of /or2. Appendi; ,.2 provides a S%ecification* Sco%e of Service .uide /hi)h )ontains g'ide&ines and re)ommendations for deve&oping spe)ifi)ations, data sheets, and statements of /or2 for s'pp&ies, e<'ipment and servi)es. 25
-$. SPECIFICATIONS FOR CONSTRUCTION DISCUSSION T/e tec/nical ro%isions of construction s ecifications must &e in sufficient detail so t/at! 1/en used 1it/ t/e a lica&le dra1in"s and t/e documents incor orated &# reference! &ids can &e re ared on a fair and com etiti%e &asis$ In contractin" 1it/ u&lic funds t/e essential o&'ecti%e in draftin" s ecifications is to satisf# t/e fundamental u&lic olic# reAuirin" full and o en com etition$ T/is o&'ecti%e is not onl# a Federal reAuirement &ut most states and local "o%ernments /a%e similar statutes$ *2
*0
-repared $0 Offi)e of -ro)'rement, The .etropo&itan Transit A'thorit0, Barris Co'nt0, Te;as, dated 6an'ar0 !9H1.
*2
.-C T " 20".
-age 9
Best Practices Contra)ting $oo2s, man'a&s, et). Oo&'mes have $een /ritten a$o't the for$idding and e;oti) /or&d of )onstr')tion )ontra)ting, and /e /o'&d &i2e to $egin $0 advising 0o' to o$tain some essentia& roadmaps for this @o'rne0, $eginning /ith a )omprehensive te;t entit&ed, appropriate&0, Construction Contractin!. 21 We /o'&d a&so re)ommend 0o' o$tain a )op0 of the Construction Contract Administration anual 8/hi)h is devoted entire&0 to )onstr')tion )ontra)ting9 prod')ed $0 a p'$&i) agen)0 /or2ing /ith *TA grant f'nds. 2H Content ) .ateria&s, e<'ipment, )omponents or s0stems sho'&d $e des)ri$ed, /here possi$&e, $0 referen)e to do)'ments genera&&0 2no/n to ind'str0. S')h do)'ments in)&'de *edera&, mi&itar0, or nationa&&0 re)ogniGed ind'str0, and te)hni)a& so)iet0 spe)ifi)ations and standards. The standards /hi)h $est represent no more and no &ess than the $'0ing agen)0Ks minim'm needs sho'&d $e se&e)ted for in)orporation $0 referen)e into the )onstr')tion spe)ifi)ations. ?f 0o' emp&o0 an AA: firm to deve&op 0o'r spe)ifi)ations $e s're the0 are /arned against the 'se of proprietar0 spe)ifi)ations, i.e., /riting a spe)ifi)ation >aro'nd> a parti)'&ar man'fa)t'rerKs prod')t, effe)tive&0 pre)&'ding )ompetition. This is a )ommon pra)ti)e among AA: firms, espe)ia&&0 /hen a parti)'&ar prod')t has a proven tra)2 re)ord, $'t the pra)ti)e )onf&i)ts /ith the o$@e)tive of f'&& and open )ompetition in p'$&i) )ontra)ting. Yeep the spe)ifi)ations as simp&e as possi$&e$ One )o'rt 'sed these /ords( >A )ontra)tor sho'&d not $e re<'ired to /ade thro'gh a maGe of n'm$ers, )ata&og'es, )ross referen)e ta$&es and other data resem$&ing )ross /ord p'GG&es in order to find o't /hat the government re<'ires in an invitation for $ids.> 29
*4
The =eorge Washington Universit0Ks #ationa& 7a/ CenterKs =overnment Contra)ts -rogram has p'$&ished a n'm$er of e;)e&&ent $oo2s dea&ing /ith =overnment )ontra)ting. One s')h $oo2 is Construction Contractin! 8The =eorge Washington Universit0( Washington, D. C., !99!9. *or a )omp&ete )ata&og'e of )ontra)ting re&ated te;ts )onta)t( The =W ,oo2store, H00 2!st. St., #.W., Washington, D. C. 20052, -hone( 82029994 %H10, *a;( 8202929% 9445, http(AA///.g/'.$2str.)om.
*5
Construction Contract Administration anual, -ort A'thorit0 of A&&eghen0 Co'nt0, -ro)'rement Department, 22"5 ,eaver Aven'e, -itts$'rgh, -A !52"" !0H0, -hone( 84!292"1 1000, *AR( 84!292"1 1!0!. This .an'a& )ontains man0 /orth/hi&e things, s')h as pro)ed'res for $id do)'ment preparation, $idding, )ontra)t a/ard, and )ontra)t administrationQ =enera& Contra)t -rovisionsQ a m'&tit'de of forms for reporting, eva&'ating, administering, et).
*8
=orn Corp. O. U. S., 424 * 2d 5HH 8Ct. C&. !9109, noted at 592.
-age !0
5o' ma0 /ant to )onsider 'sing an >Order of -re)eden)e> )&a'se te&&ing $idders /hi)h $id do)'ments are to $e re&ied on in the event of a )onf&i)t /ithin the do)'ments. 5o' sho'&d )hoose a )&a'se that p&a)es the most important part of the $id pa)2age in the most important position. *or e;amp&e, if 0o' are )ertain that the dra/ings are )orre)t, 0o'r )&a'se )o'&d give the dra/ings priorit0 over the spe)ifi)ation. Comp&e; spe)ifi)ations are $est dis)'ssed /ith $idders at a pre $id )onferen)e $'t $e )aref'& to advise $idders that none of the e;p&anations at the )onferen)e /i&& <'a&if0 the terms of the spe)ifi)ations, /hi)h )an on&0 $e modified $0 /ritten amendments. ,e s're to revie/ )aref'&&0 *TA Cir)'&ar 4220 8&atest version9 and the .aster Agreement 8.A9 for re<'irements /hi)h ma0 affe)t 0o'r spe)ifi)ations. :;amp&es /o'&d in)&'de( -referen)e for re)0)&ed prod')ts. "0 Use of metri) s0stem. "! Seismi) safet0 for )onstr')tion pro@e)ts. "2 :nvironmenta& re<'irements. "" Ie<'irements of the Ameri)ans /ith Disa$i&ities A)t. "4
Des)ri$e a&& of the )ontra)torKs o$&igations as far as meeting )odes and standards that are app&i)a$&e to the pro@e)t 8&o)a&, State, and *edera&9. Ievie/ the s'ggestions a$ove for S'pp&ies and :<'ipment, Se)tion ".", for app&i)a$i&it0 to )onstr')tion spe)ifi)ations.
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*TA .A8!29 T !5g. *TA .A8!29 T "0. *TA .A8!29 T 2"e. *TA .A8!29 T 25. *TA .A8!29 T !2g.
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-age !!
-$0 STATEMENTS OF BORQ FOR SERPICES DISCUSSION A statement of 1orE! rat/er t/an a s ecification! is used for ser%ices contracts$ A statement of 1orE defines t/e 1orE reAuired of a contractor! eit/er to desi"n t/e eAui ment to &e rocured or to ro%ide ser%ices 1/ic/ are not related to t/e rocurement of /ard1are$ Best Practices Statements of /or2 sho'&d in)&'de the fo&&o/ing e&ements( When $'0ing servi)es on a >&eve& of effort> $asis, i.e., /hen spe)if0ing the n'm$er of &a$or ho'rs to $e f'rnished $0 the )ontra)tor, $e s're to define the &a$or )ategoriesAho'rs for ea)h and define the minim'm 0ears of e;perien)e and &i)ensing re<'irements 8C-A, -:, et).9 for ea)h. ?n)&'de, if app&i)a$&e, a detai&ed &ist of a&& data, propert0 and servi)es /hi)h /i&& $e provided to the )ontra)tor $0 0o'r Agen)0 for his 'se in performing the )ontra)t. Detai& a&& tas2s the )ontra)tor m'st perform, and spe)if0 )oordination re<'irements. Spe)if0 the data that m'st $e s'$mitted for approva&. A&so define the s)hed'&es for initia& s'$mission and the revie/Aapprova& time re<'ired. Des)ri$e a&& the standards the )ontra)tor m'st f'&fi&&, in)&'ding *edera&, State, and &o)a& standards that are app&i)a$&e to the pro@e)t. Acron#ms AS,CA Armed Servi)es ,oard of Contra)t Appea&s ,CA ,oard of Contra)t Appea&s DOTCA, Department of Transportation Contra)t Appea&s ,oard :#=,CA United States Arm0 Corps of :ngineers ,oard of Contra)t Appea&s *TA .A *edera& Transit Administration .aster Agreement =S,CA =enera& Servi)es Administration ,oard of Contra)t Appea&s .-C Ameri)an ,ar Asso)iation .ode& -ro)'rement Code for State and 7o)a& =overnment
,est -ra)ti)es -ro)'rement .an'a& L Chapter 4 L .ethods of So&i)itation and Se&e)tion
-age !
C/a ter . . ) Met/ods of Solicitation and Selection 4.0 Overvie/ 85A9%9 4.! .i)ro -'r)hases 8%A0"9 4.!.! -'r)hase Cards ,AIT 8%A9H9 4.!.2 Conso&idation of .i)ro -'r)hases 8!!A0"9 4.2 Sma&& -'r)hases 85A9%9 4." Competitive -ro)'rement .ethods 85A9%9 4.".! Overvie/ Sea&ed ,ids v. Competitive -roposa&s 85A9%9 4.".2 Common :&ements of So&i)itation -ro)ess 85A9%9 4.".2.! Advertising and -'$&i)iGing So&i)itation 85A9%9 4.".2.2 So&i)itation .ai&ing 7ist 85A9%9 4.".2." So&i)itation 85A9%9 4.".2.4 -re ,id and -re -roposa& Conferen)es 8!!A0"9 4.".2.5 Amendment of So&i)itations 85A9%9 4."." Common :&ements of Offers 85A9%9 4.".".! Ie)eipt of Offers 85A9%9 4.".".2 *edera&&0 Ie<'ired S'$missions /ith Offers 85A9%9 4.".".2.! Certifi)ation Iegarding De$arment, S'spension, and Other Iesponsi$i&it0 .atters 85A9%9 4.".".2.2 ,'0 Ameri)a Certifi)ation 8!!A0"9 4.".".2." 7o$$0ing Certifi)ation 85A9%9 4."."." Other S'$missions 85A9%9 4.".".".! A)2no/&edgment of So&i)itation Addenda 85A9%9 4.".".".2 ,id ='arant0 85A9%9 4.4 Sea&ed ,ids 8?nvitation for ,ids9 85A9%9 4.4.0 Overvie/ 85A9%9 4.4.! So&i)itation 85A9%9 4.4.2 ,id Opening 85A9%9 4.4." Sing&e ,id 8"A049
-age 2
4.4.4 Iesponsive ,idder 85A9%9 4.4.5 ,id .ista2es 85A9%9 4.4.% ,id Withdra/a& 85A9%9 4.5 Competitive -roposa&s 8Ie<'est for -roposa&s9 85A9%9 4.5.! So&i)itation C Ie)eipt of -roposa&s 85A9%9 4.5.2 :va&'ation of -roposa&s 8!!A0"9 4.5." Competitive Iange 85A9%9 4.5.4 Dis)'ssions and C&arifi)ations 85A9%9 4.5.5 Additiona& S'$missions 85A9%9 4.5.5.! Ie<'est for Ievised -roposa&s 85A9%9 4.5.5.2 Ie<'est for ,est and *ina& Offer 85A9%9 4.5.% A/ard ,ased on ?nitia& -roposa&s 85A9%9 4.5.1 Withdra/a& of -roposa&s 85A9%9 4.5.H De$riefing Uns'))essf'& Offerors 85A9%9 4.% #on Competitive 8So&e So'r)e9 -roposa&s 85A9%9 4.%.! 6'stifi)ation for Use 85A9%9 4.%.2 #egotiation of Contra)t 85A9%9 4.%." Asso)iated Capita& .aintenan)e ?tem 85A9%9 4.%.4 Unso&i)ited -roposa&s 8!0A059 4.1 Spe)ia& -ro)'rement .ethods 85A9%9 4.1.! .'&ti Step -ro)'rements 85A9%9 4.1.2 =overnmenta& -ri)es and Contra)ts 85A9%9 4.1.2.! -ro)'rements from =enera& Servi)es Administration S)hed'&es 85A9%9 4.1.2.2 State and 7o)a& S)hed'&es 8%A0"9 4.1.2." State vers's *TA Ie<'irements 85A9%9 4.1." : Commer)e( Ieverse A')tions 8%A0"9
-age "
.$: OPERPIEB RE@UIREMENT The methods of so&i)itation and se&e)tion a&&o/ed /ithin the *edera& )ontra)t'a& sphere "5 are &isted in T 9 of *TA Cir)'&ar 4220.!:. 5o' ma0 )hoose(

mi)ro p'r)hases on&0 for )ontra)t amo'nts &ess than S2,500Q sma&& p'r)hase pro)ed'res on&0 for )ontra)t amo'nts &ess than the simp&ified a)<'isition thresho&d 8)'rrent&0 S!00,0009Q sea&ed $ids /here 0o' have a )omp&ete, ade<'ate, and rea&isti) spe)ifi)ation or p'r)hase des)ription, t/o or more responsi$&e $idders are /i&&ing and a$&e to )ompete, the pro)'rement &ends itse&f to a firm fi;ed pri)e )ontra)t and the se&e)tion )an $e made primari&0 on the $asis of pri)e, and no dis)'ssion /ith $idders is needed after re)eipt of offersQ
)ompetitive proposa&sQ or non)ompetitive proposa&s 8so&e so'r)e9 pro)'rement on&0 if 0o' )an @'stif0 not so&i)iting additiona& )ompetition in the manner e;p&i)it&0 defined in *TA Cir)'&ar 4420.!: T 9.h.
State &a/ 's'a&&0 restri)ts the method of pro)'rement more tight&0 than these *edera& re<'irements. DEFINITION So&i)itation A p'r)hasing entit0Ks re<'est for offers, in)&'ding a te&ephone re<'est for pri)e <'otations, an invitation for $ids, or a re<'est for proposa&s. Offer A promise to provide goods or servi)es a))ording to spe)ified terms and )onditions in e;)hange for materia& )ompensation.
-0
See Se)tion !.".2, >*edera& Contra)t'a& Sphere.>
-age 4
A))eptan)e Agreement to the terms of an offer. ?n most @'risdi)tions, >a/ard> $0 a p'$&i) agen)0 )an )onstit'te a))eptan)e, and ma0 )reate an enfor)ea$&e )ontra)t. DISCUSSION Based on #our rocurement lans and t/e s ecification de%elo ed 1it/ #our customer! #ou 1ill "enerall# initiate t/e rocurement &# solicitin" offers$ De endin" on t/e reAuirements of t/e met/od of rocurement #ou c/oose! #ou ma# solicit offers in a tele /one call or in man# ot/er forms ran"in" u to multi)%olume reAuests for ro osals$ B/en #ou recei%e offers 61/et/er Auotations! &ids! or ro osals9! #ou ma# acce t one! re'ect t/em all! or 6unless #ou are usin" t/e sealed &iddin" met/od9 reAuest additional offers$ Re"ardless of t/e rocurement met/od! 1/en #ou acce t an offer! #ou create a &indin" contract accordin" to t/e terms of t/e offer$ Best Practices When 0o' and 0o'r )'stomer have spe)ified the re<'irement, 0o' /i&& genera&&0 so&i)it offers from s'pp&iers. The so&i)itation ranges from a te&ephone )a&& to ma2e a reasona$&e pri)e determination 8in the )ase of a mi)ro p'r)hase9, to a &ength0 re<'est for proposa&s in the )ase of a )ompetitive proposa&. The terms in 0o'r so&i)itation of offers are s'$stantia&&0 determined $0 the method of se&e)tion 0o' /i&& 'se. ,e)a'se 0o'r )ontra)t /i&& '&timate&0 $e $ased on the terms of the offers, the se&e)tion of a method of pro)'rement and the terms in 0o'r so&i)itation of offers are important and 0o' /i&& have the most s'))ess if the0 are $ased on /e&& tested pra)ti)es and do)'ments. The so&i)itation of offers p&a)es 0o' in the position of )ontro&&ing the )ompetitive pro)ess. 5o', rather than the s'pp&ier, de)ide /hether to a))ept or re@e)t the offers. A te)hni)a& e;)eption to this )ompetitive mode& o))'rs in some mi)ro p'r)hases and sma&& p'r)hases /hen, $ased on )ata&og'es or other s'pp&ier information, 0o' iss'e a p'r)hase order 8or simi&ar do)'ment9 /itho't re)eiving a dire)t offer. ?n this )ase 0o' are te)hni)a&&0 ma2ing the offer, and the s'pp&ier is in a position to a))ept 8's'a&&0 $0 performing9 or re@e)t 8's'a&&0 $0 noti)e to 0o'9. A so&i)itation does not $ind 0o'r agen)0 to p'r)hase the goods or servi)es so&i)ited, a&tho'gh it ma0 )reate an imp&ied )ontra)t of fair dea&ing /ith 0o'r s'pp&iers. -2 A&tho'gh 0o' /i&& /ant to treat s'pp&iers as partners and /ith respe)t for the p'rposes of &ong r'n )ompetition and )ost effe)tive $'siness re&ations, man0 agen)ies ma2e )&ear in their so&i)itations that the0 reserve the right to re@e)t a&& offers, i.e., that the0 are mere&0 so&i)iting offers and that the so&i)itation does not )reate an0 rights in s'pp&iers. The pri)e <'otations, $ids, or proposa&s s'$mitted $0 s'pp&iers sho'&d $e firm offers to 0o'r agen)0 to s'pp&0 the goods or servi)es 'pon the materia& terms in 0o'r so&i)itation.
-2
United States v. 6ohn C. =rim$erg Co., 102 *.2d !"%2, !"%1 8*ed Cir. !9H"9 8in $an)9.
-age 5
?n sea&ed $idding, there is genera&&0 no f'rther modifi)ation of materia& terms( 0o'r agen)0 either a))epts one of the offers or re@e)ts a&& $ids. ?n the other pro)'rement methods, 0o' ma0 re<'est or re)eive additiona& offers $efore 0o' a))ept one. A&tho'gh *TA Cir)'&ar 4220.!: provides 0o' $road )hoi)e and dis)retion, state &a/s and &o)a& po&i)0 often re<'ire that 0o' 'se sea&ed $ids in )ertain pro)'rements and that 0o' 'se )ompetitive proposa&s in others. ,ased on state &a/ and 0o'r o/n pra)ti)e, 0o' ma0 find the method of pro)'rement is &arge&0 determined $0 the t0pe of servi)es or goods 0o' are pro)'ring. "1 ?f the pro)'rement is too &arge for mi)ro p'r)hase or sma&& p'r)hase pro)ed'res, 0o' /i&& genera&&0 invite sea&ed $ids for se&e)tion primari&0 $ased on pri)e, or re<'est proposa&s /hi)h /i&& $e eva&'ated a))ording to additiona& )riteria $efore a se&e)tion is made. Under )ertain restri)ted )ir)'mstan)es, 0o' ma0 so&i)it a non )ompetitive proposa& from a so&e so'r)e. -'r)hases 'nder )ontra)ts /ith sister states or &o)a& agen)ies ma0 a&so meet the *edera& re<'irements. "H ?f the &ega& and po&i)0 re<'irements &eave 0o' /ith more than one avai&a$&e pro)'rement method, 0o'r )hoi)e among these methods /i&& depend &arge&0 on( the time and e;pense re<'ired of 0o' and 0o'r s'pp&iers for the respe)tive methods, and the &i2e&ihood of getting the $est $'0 for 0o'r )'stomers.
When 0o' a))ept an offer, 0o' esta$&ish a )ontra)t. .$( MICRO)PURCCASES RE@UIREMENT T 9.a. of *TA Cir)'&ar 4220.!: a'thoriGes the 'se of mi)ro p'r)hases as a method of pro)'rement, /hen appropriate. ?f 'sed, the fo&&o/ing app&0( !. .i)ro p'r)hases are defined as those p'r)hases 'nder S2,500. 2. .i)ro p'r)hases ma0 $e made /itho't o$taining )ompetitive <'otations if the grantee determines that the pri)e to $e paid is fair and reasona$&e. ". .i)ro p'r)hases are e;empt from the ,'0 Ameri)a re<'irements. "9
-4
See Chapter % for a dis)'ssion of the pro)'rement methods )ommon&0 'sed for ea)h o$@e)t of pro)'rement. *TA Cir)'&ar 4220.!: T 1.f. 49 C*I T %%!.1, Appendi; A to T %%!.1, s'$paragraph 8e9.
-5
-8
-age %
4. .i)ro p'r)hases sho'&d $e e<'ita$&0 distri$'ted among <'a&ified s'pp&iers in the &o)a& area and p'r)hases sho'&d not $e sp&it to avoid the re<'irements for )ompetition a$ove the S2,500 mi)ro p'r)hase thresho&d. 5. The re<'irements of the Davis ,a)on A)t app&0 to )onstr')tion )ontra)ts $et/een S2,000 and S2,500. 40 %. Other than the Davis ,a)on A)t )&a'ses for )onstr')tion )ontra)ts $et/een S2,000 and S2,500, no other *edera& )&a'ses are re<'ired. 1. .inima& do)'mentation is re<'ired( 8a9 a determination that the pri)e is fair and reasona$&e and 8$9 ho/ this determination /as derived. DEFINITION .i)ro p'r)hasing A method of pro)'ring goods and servi)es 'nder S2,500. A mi)ro p'r)hase does not re<'ire o$taining )ompetitive <'otations if 0o' determine that the pri)e to $e paid is fair and reasona$&e. DISCUSSION If ermitted &# state and local reAuirements! urc/ases under R*!0:: no lon"er reAuire more t/an one rice to satisf# Federal reAuirements! as lon" as #ou determine t/at t/e rice aid is fair and reasona&le$ Dou can include a Ffair and reasona&le riceF determination in #our forms used for micro) urc/ases$ Rotatin" t/rou"/ a list of t/e su liers is one met/od to eAuita&l# distri&ute t/e micro) urc/ases amon" Aualified su liers$ Best Practices A thresho&d <'estion 0o' m'st get an ans/er to is /hether or not 0o'r state &a/ a&&o/s 0o' to imp&ement a mi)ro p'r)hase method of pro)'rement that does not re<'ire >f'&& and open )ompetition.> ?f 0o' have the &ega& a'thorit0 'nder 0o'r state &a/ to imp&ement a mi)ro p'r)hase program, 0o' m'st )omp&0 /ith the pro)ed'ra& re<'irements stated as items !, 2, 4, C 5 'nder the Ie<'irements portion of this se)tion. On)e 0o' are satisfied that 0o' )an &ega&&0 have a
.:
As a pra)ti)a& matter, 0o' ma0 /ish to adopt the stat'tor0 thresho&d for the Davis ,a)on A)t of S2,000 as the mi)ro p'r)hase thresho&d for )onstr')tion servi)es. This is /hat has $een done /ith the *edera& A)<'isition Ieg'&ation see, *AI T !".%0!8a9 /hi)h defines mi)ro p'r)hases for )onstr')tion as $eing &imited to S2,000. Bo/ever, if 0o' have a re<'irement for S2,"00 of )onstr')tion, 0o' no &onger need )ompetitive <'otations, $'t 0o' sti&& need Davis ,a)on /age rate s'$missions and )omp&ian)e.
-age 1
mi)ro p'r)hase program 'nder 0o'r stateKs &a/s, 0o' need to deve&op a pro)ed're or reg'&ation that addresses the *TA re<'irements and provides pra)ti)a& g'idan)e to 0o'r organiGation 7imits and -ro)ed'res Co1 1ill #ou "uide t/e use of micro) urc/ase roceduresS ?n a))ordan)e /ith the genera& re<'irement to have pro)'rement pro)ed'res and a )ontra)t administration s0stem 8in)&'ding /ritten se&e)tion pro)ed'res9,.( &arger agen)ies often maintain forma& /ritten pro)ed'res that address the )ir)'mstan)es 'nder /hi)h mi)ro p'r)hase pro)ed'res sho'&d $e 'sed. A&tho'gh these )ir)'mstan)es sha&& not in)&'de p'r)hases greater than S2,500, 0o' ma0 /ish to set 0o'r &imit &o/er depending on state &a/ and 0o'r o/n e;perien)e /ith the )ost effe)tiveness of pri)e )ompetition 'sing sma&& p'r)hase pro)ed'res. ?f 0o' )an effi)ient&0 as)ertain the &o/est )ost s'pp&ier, 0o' ma0 not a&/a0s /ish to 'se mi)ro p'r)hase pro)ed'res. This method of pro)'rement is intended to $e 'sed as )reative&0 as possi$&e and to minimiGe the paper/or2 that is inherent in other pro)'rement pra)ti)es. ?n esta$&ishing po&i)ies re&ating to mi)ro p'r)hases at the grantee &eve&, 0o' m'st a&/a0s $e mindf'& of the >e<'ita$&0 distri$'te> re<'irement and the prohi$ition against sp&itting pro)'rements. 42 The &atter re<'irement is one 0o' a&read0 dea& /ith at a&& &eve&s of 0o'r pro)'rement pro)esses. Bo/ever, a signifi)ant re<'irement is to meet the do)'mentation re<'irement of the *TA a determination that the pri)e is fair and reasona$&e and ho/ this determination /as derived. :<'ita$&e Distri$'tion Co1 1ill #ou eAuita&l# distri&ute #our urc/ases amon" local su liersS Do 0o' have an a'tomated p'r)hasing and materia&s management s0stem in p&a)e that a&&o/s 0o' to tra)2 p'r)hases $0 &ine item and vendor the item /as p'r)hased fromW ?f so, and if 0o' have m'&tip&e vendors for that item or servi)e, 0o' )an a&ternate among those vendors. Do 0o' have $&an2et p'r)hase agreements in p&a)e /ith m'&tip&e vendors for m'&tip&e prod')ts /hi)h /ere esta$&ished as a )ompetitive pro)essW ?f so, mi)ro p'r)hases )o'&d $e made from those vendors, again on a rotating $asis. ?t is a good pra)ti)e to 2eep re)ords on do&&ar amo'nts a/arded d'ring the 0ear to assist in monitoring distri$'tion. ,id Sp&itting Co1 1ill #ou monitor rocurements so t/at reAuirements are not &ein" s lit to a%oid anot/er rocurement met/odS 5o' ma0 have a s0stem in p&a)e no/ that a&&o/s 0o' to monitor an0 tenden)0 to sp&it re<'irements over 0o'r sma&& p'r)hase ma;im'm into sma&& p'r)hases. .i)ro p'r)hasing /o'&d $e an additiona& method of pro)'rement addressed in 0o'r pro)ed'res and training /ithin 0o'r agen)0. ?f 0o' have an a'tomated s0stem /hi)h re)ords individ'a& pro)'rements, that s0stem ma0 have to $e revie/ed periodi)a&&0 to ana&0Ge the
.(
*TA Cir)'&ar 4220.!: T H.).
.*
5o' m'st not sp&it a pro)'rement that /o'&d $e in e;)ess of S2,500 8three /idgets /orth S!,500 apie)e for a tota& of S4,5009 into sma&&er p'r)hases 8three se<'entia& p'r)hases of S!,5009 in order to 'se this method of pro)'rement.
-age H
pro)'rement patterns for a parti)'&ar prod')t or servi)e. .an0 times, 0o' simp&0 re&0 on 0o'r $'0er or )ontra)ting offi)er to monitor not on&0 $id sp&itting $'t a&so e<'ita$&e distri$'tion. *air and Ieasona$&e Determination Co1 do #ou document #our determination t/at t/e rice is fair and reasona&le and t/e &asis for t/at determinationS 5o' ma0 /ant to prepare some >$oi&erp&ate> determinations for signat're that address spe)ifi) /a0s 0o' $'0 prod')ts or servi)es. 5o' ma0 /ant to sa0 that $ased 'pon a te&ephone <'ote from 6ohn Doe Compan0 for the /idget and )omparing that pri)e /ith a pri)e paid % months ago for the same /idget, it is fair and reasona$&e 0o' /o'&d fi&& in the $&an2s in 0o'r form, sign it, and fi&e in the pro)'rement fi&e. A&ternative&0, 0o' ma0 'se an e;isting form s')h as a $'0erKs ta$'&ation that is fi&ed. 5o' ma0 /ant to have another form that indi)ates the pro)'rement is $eing made from an e;isting ,&an2et -'r)hase Agreement for /hi)h )ompetition /as o$tained. 5o' ma0 /ant to prepare a form that addresses sa&es items 0o' are $'0ing this /idget from R Compan0 $ased 'pon an advertisement that the /idget norma&&0 se&&s for S"5 ea)h and is on sa&e for S29.50 and this is fair and reasona$&e. *ina&&0, 0o' ma0 /ant to have a form that simp&0 addresses a standard )ommer)ia& item the pri)e is fair and reasona$&e $e)a'se it is a standard )ommer)ia& item so&d in the open mar2etp&a)e. 4" ?n imp&ementing this re<'irement at the *edera& &eve&, the reg'&ations re)ogniGe the paper/or2 )ost of verif0ing the reasona$&eness of pri)e ma0 more than offset the potentia& savings. The pri)e is a&so essentia&&0 ass'med to $e reasona$&e 'n&ess the )ontra)ting offi)er s'spe)ts or has information to indi)ate that the pri)e ma0 not $e reasona$&e 8higher than re)ent pri)e paid or has persona& 2no/&edge of pri)e for the s'pp&0 or servi)e9, or a s'pp&0 or servi)e is $eing p'r)hased for /hi)h there is not )ompara$&e pri)ing information readi&0 avai&a$&e. 44 Other *edera& -re)edent ?n response to re<'ests from its o/n fie&d offi)es for more g'idan)e, the *edera& =overnment re)ent&0 revised its reg'&ations dea&ing /ith dire)t *edera& mi)ro p'r)hases. 45 ,e)a'se these )hanges give more f&e;i$i&it0 to pro)'ring agen)ies, 0o' might /ant to revie/ these provisions as 0o' )onsider po&i)ies and g'idan)e for 0o'r agen)0Ks mi)ro p'r)hases. Among the )hanges /ere(
.-
the =overnment /ide )ommer)ia& p'r)hase )ard is the preferred means 8$'t not the on&0 means9 to p'r)hase and pa0 for mi)ro p'r)hasesQ 4% agen)ies are en)o'raged to de&egate mi)ro p'r)hase a'thorit0 to emp&o0ees of the agen)0
A&tho'gh it is /ritten for the more detai&ed >pri)e ana&0sis> re<'ired in )ompetitive pro)'rements, *AI T !5.H05 dis)'sses pri)e ana&0sis te)hni<'es that ma0 $e 'sed or adapted to s'pport 0o'r determinations for these mi)ro p'r)hases.
..
*AI T !".!0%8a98"9.
.0
These )hanges /ere p'$&ished as part of *edera& A)<'isition Cir)'&ar 90 40 in Oo&'me %! of the *edera& Iegister on pages "9!H9 thro'gh "9!99 8%! *ed. Ieg. "9!H9 "9!99 86'&0 2%, !99%99.
.2
*AI T !".!0"8e9.
-age 9
/ho /i&& a)t'a&&0 $e 'sing the s'pp&ies or servi)es $eing p'r)hasedQ 41 )ontra)t )&a'ses are not re<'ired for mi)ro p'r)hasesQ and do)'mentation to s'pport mi)ro p'r)hases is to $e minimiGed. 4H
A re)ent report $0 the =enera& A))o'nting Offi)e 49 that addresses 'se of )redit )ards $0 *edera& agen)ies is e;pe)ted to res'&t in more re&a;ed g'idan)e $eing iss'ed $0 the *edera& agen)ies and in)reased 'sage of the )redit )ard. The report dis)'sses the savings in time and mone0 that an agen)0 )an rea&iGe $0 'ti&iGing )redit )ards for mi)ro p'r)hases and the fa)t that there has $een no apparent in)rease in pro)'rement fra'd thro'gh the 'ti&iGation of these )ards. There is no a$so&'te g'idan)e that )an $e given in this area as to /hat /or2s $est or even /e&&. The a'thorit0 to 'se mi)ro p'r)hases is intended to provide a ver0 f&e;i$&e pro)'rement method /hi)h /i&& a&&o/ 0o' to $'0 &o/ pri)ed items in a )ost effi)ient manner. .$($( Purc/ase Cards DISCUSSION T/is section deals 1it/ t/e use of urc/ase cards for micro) urc/ases! 1/ic/ are t/ose of R*!0:: or less$ Since micro) urc/ases are e;em t from t/e reAuirements of u&lici,in" and o&tainin" com etiti%e Auotes! t/e# are 1ell suited to &ein" dele"ated &# t/e rocurement de artment to t/e end users of t/e su lies or ser%ices$ And since urc/ase cards /a%e ro%en to /a%e certain ad%anta"es in maEin" micro) urc/ases! t/e dele"ation of aut/orit# to use urc/ase cards 1ill &e t/e focus of t/is section$ A #urchase card 1orEs liEe a ersonal credit card! suc/ as PISA or MasterCard$ Purc/ase cards offer a num&er of tan"i&le ad%anta"es o%er t/e traditional urc/asin" met/ods of issuin" indi%idual urc/ase orders or &lanEet urc/ase orders! &ut t/e# also resent ne1 c/allen"es! es eciall# in t/e area of internal controls and t/e eAuita&le distri&ution of t/e a"enc#Ks &usiness to %arious %endors! includin" Disad%anta"es Business Enter rises 6DBEKs9$
.4
*AI T_ !".!0%8a98"98i9 and !.%0" "8$9. See a&so Se)tion 2.!.2, >A'tonom0> regarding de)entra&iGation, genera&&0. *AI T !".!0%8$9.
.5
.8
=AOA#S?AD 9% !"H 8HA%A9%9. =AO Ieports are avai&a$&e on the ?nternet at the =overnment -rinting Offi)e /e$ site( ///.a))ess.gpo.gov.
-age !0
Best Practices The San *ran)is)o ,a0 Area Iapid Transit Distri)t 8,AIT9 instit'ted a pi&ot program for p'r)hase )ards on 6'&0 !, !99%. The res'&ts of the ,AIT program have genera&&0 $een ver0 positive. The ,AIT e;perien)e has demonstrated a n'm$er of important &essons, /hi)h other grantees sho'&d $e a/are of, and these are dis)'ssed $e&o/. The detai&ed pro)ed'res adopted $0 ,AIT for imp&ementing its p'r)hase )ard s0stem are in)&'ded in Appendi; ,.!", ?ART &urc)ase Card System. De&egation of A'thorit0 A&& p'r)hase )ards sho'&d $e )entra&&0 )ontro&&ed o't of the -ro)'rement Department$ The -ro)'rement Department m'st $e responsi$&e for training those individ'a&s /ho are to $e given a'thorit0 to 'se the p'r)hase )ards. ?n order to ma;imiGe the $enefits of mi)rop'r)hasing /ith p'r)hase )ards, the persons a'thoriGed to 'se the )ard sho'&d $e those /hose department /i&& $e 'sing the s'pp&ies or servi)es $eing p'r)hased. The de&egation of a'thorit0 to end 'sers sho'&d invo&ve the appointment in /riting of these end 'sers as >)ontra)ting offi)ers> 8or s')h other tit&e as the grantee ma0 'se to des)ri$e those having a'thorit0 to a/ard )ontra)ts9. S')h an appointment pro)ed're has $een adopted $0 ,AIT, and is a&so fo&&o/ed $0 *edera& agen)ies 8See *AI !.%0" ", A%%ointment9. A&& p'r)hase )ard a)tivit0 /o'&d f'n)tion, therefore, as re de&egated pro)'rement a'thorit0 re<'iring a va&id /arrant, training and periodi) revie/ $0 the -ro)'rement Department. Cardho&ders /o'&d $e s'$@e)t to the same Standards of Conduct as other pro)'rement personne& 8See ,--. T 2.4.2.2.2 'ritten Standards of Conduct). The0 /o'&d a&so $e s'$@e)t to the pro)'rement po&i)ies iss'ed $0 the -ro)'rement Department. The granteeKs /ritten pro)'rement pro)ed'res m'st $e e;panded to give spe)ifi) g'idan)e for p'r)hase )ard a)tivit0, in)&'ding the interna& )ontro&s and the $est $'siness pra)ti)es for 'sers to fo&&o/. Advantages of the -'r)hase Card ,AIT has identified a n'm$er of advantages in 'sing the p'r)hase )ard. These in)&'de( Oendors are no/ getting paid m')h more <'i)2&0Q i.e., /ithin ! 2 da0s. Oendors are responding rapid&0 to the agen)0Ks ordersQ i.e., /ithin 20 "0 min'tes of an order. ?f a vendor does not have the needed part, the end 'ser >shops> the street 'nti& the0 )an find another vendor /ho has the part, instead of ordering the part from the initia& vendor /ho /o'&d have to >$'0> the part and pass it thro'gh the $&an2et p'r)hase order /ith an additiona& >mar2'p.> There is more pri)e )ompetition /ith the )ard than /ith 'sing the traditiona& $&an2et p'r)hase order s0stem. ?n the past, vendors 2ne/ ho/ diffi)'&t it /as to get a $&an2et p'r)hase order esta$&ished, so their pri)ing tended to $e inf&e;i$&e. With the )ard, vendors 2no/ that ,AIT has the a$i&it0 to go to other vendors, so there is no/ more
-age !!
pri)e )ompetition. The $ottom &ine res'&t is that there are fe/er vehi)&es o't for parts and the $'dget performan)e has improved. The )ard provides a )omp&ete e&e)troni) &isting of a&& )ardho&der a)tivit0. This a)tivit0 )an $e ana&0Ged 'sing -C soft/are s')h as .S Offi)e A))ess and :;)e& to &oo2 at trends in the dataQ for e;amp&e( Were an0 individ'a& transa)tions over the mi)ro p'r)hase thresho&d of S2,500W Are re<'irements $eing artifi)ia&&0 sp&it to sta0 /ithin the S2,500 &imitW Were p'r)hases of simi&ar items for different vendors reasona$&0 'niform in pri)ingW ?n other /ords, does the data prove the reasona$&eness of pri)es $eing paidW ?s the $'siness $eing e<'ita$&0 distri$'ted among vendorsW Are Disadvantaged ,'sinesses re)eiving an e<'ita$&e portion of the $'sinessW This )an $e)ome a pro$&em area /ith the )ard, and end 'sers need to /or2 to identif0 potentia& D,: vendors. The agen)0+s /ritten pro)ed'res for the )ard sho'&d ma2e the )ardho&ders responsi$&e for meeting the agen)0+s reasona$&e and attaina$&e D,: goa&s. Consolidation of Micro)Purc/ases
.$($*
?f 0o' have a &arge vo&'me of repetitive $'0s, 0o' sho'&d )onsider /hether it is feasi$&e to )onso&idate these p'r)hases into &arger <'oting pa)2ages in order to get $etter pri)ing, red')e inventor0 &eve&s, and ma2e the pro)'rement operation more effi)ient in terms of effort e;pended. The $est pra)ti)e des)ri$ed $e&o/ ma0 $e something 0o' sho'&d )onsider for 0o'r agen)0 if 0o' have )ir)'mstan)es simi&ar to those at the Whid$e0 ?s&and #ava& Air Station. Best Practices This des)ri$es an initiative ta2en $0 the -'r)hasing .anager at Whid$e0 ?s&and #ava& Air Station to ana&0Ge the repetitive pro)'rements for standard items from the severa& different shops at this government fa)i&it0, and )onso&idate them into &arger <'oting pa)2ages. The res'&t /as a dramati) &o/ering of 'nit pri)es and a m')h more effi)ient pro)'rement offi)e in terms of effort spent. This pro)'rement manager a&so 'sed this te)hni<'e for her ne;t emp&o0er, Comm'nit0 Transit, /ith simi&ar savings. When she ass'med the d'ties of -'r)hasing .anager, this individ'a& $egan to deve&op &ists of items $o'ght repetitive&0 d'ring the &ast si; month period. She entered the items into a data$ase for eas0 retrieva& and 'pdating. A &ist of items /as deve&oped for ea)h of the f'n)tiona& 'ser shops that initiated pro)'rements. These in)&'ded( paint s'pp&ies, $'i&ding s'pp&ies, p&'m$ing s'pp&ies, gro'nds 2eeping s'pp&ies, &i<'id o;0gen p&ant s'pp&ies, vehi)&e maintenan)e, offi)e s'pp&ies, e&e)tri)a& s'pp&ies and /aste C heating p&ant )hemi)a&s. On)e the histori)a& p'r)hases
-age !2
information /as deve&oped, the -ro)'rement .anager sent the data to ea)h of the shop managers and had them revie/ it and 'pdate it for their anti)ipated needs in the 'p)oming si; month period. With the anti)ipated si; month re<'irements &ists in hand, the -'r)hasing .anager then deve&oped vendor &ists for ea)h of the different shop+s re<'irements. Oendors /ere notified that the anti)ipated needs for the ne;t si; month period /ere $ased on a)t'a& histori)a& 'sage so that there /as a )ertain degree of )onfiden)e that the items on the &ist /o'&d $e ordered d'ring the 'p)oming period, a&tho'gh no g'arantee /as given to the vendors that the #av0 /o'&d $'0 the same <'antities the0 had $o'ght in the past. ?t sho'&d a&so $e noted that the si; month )ontra)t period /as )hosen after dia&og'e /ith vendors /ho s'ggested the0 /o'&d $e /i&&ing to $id pri)es /itho't )ontingen)ies for inf&ation if the )ontra)t /as si; months and not, for e;amp&e, one 0ear. So the )ontra)t terms /ere )hosen /ith the vendors+ advi)e as to /hat /o'&d a)hieve the $est pri)ing arrangement. *or ea)h &ist of standard items $id, no more than t/o or three vendors /ere a/arded ea)h &ist. Then $&an2et agreements /ere pro)essed /ith 'nit pri)es that /ere firm for the si; month period of the )ontra)t. This entire pro)ed're /as then repeated ever0 si; months. The end res'&t /as not on&0 dramati)a&&0 &o/er pri)ing and more effi)ient pro)'rement operations, $'t a&so &o/er inventor0 &eve&s sin)e the vendors /ere /i&&ing to sto)2 the vario's items 2no/ing the0 /o'&d in a&& &i2e&ihood get orders for the items. This meant the #av0 re)eived the items e;peditio's&0 /hen orders /ere p&a)ed. 50 .$* SMALL PURCCASES RE@UIREMENT Sma&& p'r)hase pro)ed'res ma0 not $e 'sed if the servi)es, s'pp&ies, or other propert0 )osts more than S!00,000. ?f sma&& p'r)hases pro)ed'res are 'sed, pri)e or rate <'otations sha&& $e o$tained from an ade<'ate n'm$er of <'a&ified so'r)es. *TA Cir)'&ar 4220.!: T 9.$. DEFINITION Sma&& -'r)hase A)<'isition of servi)es, s'pp&ies or other propert0 that )ost &ess than the federa& simp&ified a)<'isition thresho&d, )'rrent&0 fi;ed at S!00,000. Sma&& -'r)hase -ro)ed'res Those re&ative&0 simp&e and informa& pro)'rement methods 'sed to ma2e sma&& p'r)hases. ?f these pro)ed'res are 'sed, pri)e or rate <'otations sha&& $e o$tained from an ade<'ate n'm$er of <'a&ified so'r)es.
0:
*or f'rther information )onta)t .s. Sandra Y'02enda&& at s2'02enda&&Eis&andtransit.org.
-age !"
DISCUSSION As a met/od of rocurement! small urc/ase rocedures reco"ni,e t/at u to some statutor# le%el 6R(::!::: for federal rocurements9 it could cost more to conduct formal com etition t/an t/e %alue e; ected to &e #ielded &# t/e formal com etition$ T/is rocedure reAuires o&tainin" onl# limited com etition from an FadeAuateF num&er of FAualifiedF sources 6at least t1o9$ Solicitations and Auotations for small urc/ases ma# &e eit/er oral or 1ritten$ Best Practices State and *edera& Thresho&ds As /ith most other pro)'rement methods, it is important that 0o' determine the do&&ar thresho&d for sma&& p'r)hases in 0o'r state &a/ and &o)a& re<'irements. ?n man0 )ases, the definition /i&& not define a sma&& p'r)hase $'t, rather, /i&& esta$&ish at /hat do&&ar va&'e )ompetitive sea&ed $ids or proposa&s are re<'ired e.g., >$efore a )ontra)t )an $e a/arded in e;)ess of S!5,000, the pro)ed'res of this stat'te re&ating to )ompetitive sea&ed $ids or )ompetitive sea&ed proposa&s sha&& $e 'sed.> Contra)ts a/arded at the &o/er of this state &eve& or S!00,000 are )onsidered sma&& p'r)hases for the p'rposes of this dis)'ssion and the provisions of *TA Cir)'&ar 4220.!:. ?f 0o'r state and &o)a& thresho&d for sma&& p'r)hases is s'$stantia&&0 &ess than S!00,000, 0o' ma0 /ish to re)ommend that these re<'irements $e )hanged to )onform more )&ose&0 to *edera& re<'irements. A&ternative&0, if the stateKs re<'irements a$ove its sma&& p'r)hase thresho&d are s'$stantia&&0 &ess )'m$ersome than *edera& re<'irements, 0o' ma0 /ish to )reate an intermediate pro)ed're for sma&& *edera& A )ompetitive state p'r)hases. *or e;amp&e, if 0o'r state re<'ired that in a&& )onstr')tion and e<'ipment )ontra)ts over S!0,000, )ompetition $e o$tained $0 a simp&e posting and so&i)itation /itho't advertisements, 0o' )o'&d esta$&ish a pro)ed're for $ids $et/een S!0,000 and S!00,000 that avoided the time and e;pense of advertising the pro)'rement and re&ied on dire)t so&i)itation to 2no/n so'r)es. ?nitiating a Sma&& -'r)hase B/at documentation do #ou use to initiate t/is rocurement met/odS .ost transit properties 'se some sort of re<'isition that is t0pi)a&&0 prepared $0 the 'nit that has the re<'irement 80o'r )'stomer9 /hi)h detai&s ho/ man0 /idgets are re<'ired and $0 /hen. .an0 times, this same do)'ment /i&& in)&'de estimated pri)ing and this estimate /i&& fre<'ent&0 di)tate /hi)h method of pro)'rement 0o' /i&& 'se. O$vio's&0, if the re<'irement is for S500,000 /orth of /idgets, 0o' /i&& 'se a )ompetitive pro)ess 8?*, or I*-9. 5o'r pro)ed'res )an en)o'rage 0o'r )'stomers to atta)h a draft spe)ifi)ation or s)ope of /or2 to the re<'isition, parti)'&ar&0 if the sma&& p'r)hase method is to $e 'sedQ other/ise 0o' ma0 assist 0o'r )'stomer. 8See Chapter ", >Spe)ifi)ations.>9 S/ould #ou esta&lis/ a ractice of rotatin" &u#ers t/at are in%ol%ed in usin" t/ese rocedures from one commodit# to anot/erS ?n rare instan)es, it has $een fo'nd that a $'0er gets >too )&ose> to a parti)'&ar vendor and, $e)a'se of the informa&it0 of the pro)ed'res, that vendor starts to re)eive most of the p'r)hase orders for those re<'irements. -'r)hase order
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re)ords )an $e revie/ed 8perhaps thro'gh 0o'r agen)0Ks a))o'nts pa0a$&e re)ords9 to see if one vendor has re)eived an a$norma& amo'nt of p'r)hase orders. On the other hand, a $'0er /ho is fami&iar /ith the s'pp&0 ind'str0 )hara)teristi)s of a )ommodit0, s')h as the man'fa)t'ring )0)&e, &ead time, distri$'tion pra)ti)es, et)., )an $ring $oth effi)ien)0 and more optima& $'0ing to the /or2. So&i)itation B/at le%el of com etition is reAuiredS Stated another /a0, ho/ man0 individ'a&s or firms m'st $e so&i)itedW ?t is not 'n's'a& to have a re<'irement that three firms $e so&i)ited 'p to an e;pe)ted )ontra)t va&'e of S5,000 and $et/een S5,000 and S!5,000 8the h0potheti)a& ma;im'm9, five firms /o'&d $e so&i)ited. ?f 0o'r so'r)e &ist has more firms than 0o' are re<'ired to notif0, do 0o' have a pro)ed're to rotate so'r)esW *or e;amp&e on one pro)'rement 0o' /i&& )onta)t firms ! thro'gh 5 and on the ne;t one, 0o' /i&& )onta)t firms % !0. ?t is not 'n's'a& to have pro)ed'res that re<'ire 0o' to rotate 0o'r so'r)es in this manner. ,0 doing so, 0o' are $roadening 0o'r $ase of )ompetitors and enhan)ing 0o'r )ompetition. Is t/e small urc/ase for arc/itectural or en"ineerin" 6A+E9 ser%icesS ?f so, AC: servi)es ma0 $e pro)'red 'sing sma&& p'r)hase pro)ed'res. Bo/ever, the &ang'age in *TA Cir)'&ar 4220.!: that re<'ires the pro)'rement of AC: servi)es 'sing the ,roo2s A)t pro)ed'res a&so app&ies. 5! The se&e)tion m'st $e $ased initia&&0 on <'a&ifi)ationsQ pri)e ma0 $e )onsidered on&0 for the most <'a&ified offeror. 5o' ma0 pro)eed to the ne;t most <'a&ified if 0o' )annot agree on a fair and reasona$&e pri)e. 52 B/at le%el of documentation is reAuired to solicit rices for small urc/ase non)BrooEs rocurementsS Can 0o' 'se ora& des)riptions on&0, 'p to a )ertain do&&ar va&'eW Are /ritten des)riptions 8spe)ifi)ations or statements of /or29 re<'ired a$ove a )ertain &eve&W ?t is not 'n's'a& for sma&& p'r)hase pro)ed'res to a&&o/ ora& des)riptions, 8parti)'&ar&0 if the pro)'rement is de)entra&iGed or the $'0er has e;pertise in the item9, 'p to one estimated do&&ar &eve& and then re<'ire /ritten des)riptions a$ove that &eve&. Iemem$er, that for )onstr')tion 'sing federa& do&&ars, the Davis ,a)on A)t re<'irements app&0 to a&& pro)'rements 8in)&'ding sma&& p'r)hases9 over S2,000. 5" The &eve& of do)'mentation ma0 a&so $e tied to /hether or not an off the she&f item is $eing $o'ght or /hether the item or servi)e $eing $o'ght is as per an agen)0 spe)ifi)ation. Ora& so&i)itations and <'otations ma0 $e a&&o/ed at a higher do&&ar &eve& for off the she&f prod')ts than for prod')ts $'i&t to agen)0 spe)ifi)ations.
0(
See *TA Cir)'&ar 4220.!: T 9.e >=rantees sha&& 'se Dthe ,roo2s A)tF for )ontra)ting for AC: servi)es. . . 8emphasis s'pp&ied9> See Se)tion %.5 Arc)itect18n!ineerin! Services for a )omp&ete dis)'ssion.
0*
See Se)tion %.5 Arc)itect18n!ineerin! Services . See dis)'ssion of these re<'irements in Se)tion H.!.", >Davis ,a)on A)t.>
0-
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Is t/ere a reAuirement t/at #ou include a certain num&er of DBE firms in t/e firms #ou contactS This is a fair&0 )ommon re<'irement transit properties 'se for D,: parti)ipation. Comp&ian)e /ith 0o'r po&i)ies )an $e s0stemati)a&&0 do)'mented. Co1 do %endors indicate t/eir rice6s9 to #ou in res onse to #our reAuestS Do 0o' a))ept ora& pri)esW Do 0o' re<'ire /ritten <'otationsW ?f so, do 0o' a&&o/ fa;esW 5o' )o'&d do an0 of these. 5o' m'st, ho/ever, determine /hat )omp&ies /ith the &a/s governing 0o'r propert0 and then deve&op and fo&&o/ appropriate pro)ed'res. The format and &eve& of detai& in these pro)ed'res sho'&d $e )ommens'rate /ith the siGe of 0o'r agen)0 and the0 )an $e /e&& eno'gh prom'&gated so that the0 are /e&& 2no/n to mem$ers of 0o'r pro)'rement staff and 0o'r interna& )'stomers. A/ard B/at /a ens if t/e Auotations are all /i"/er t/an #our small urc/ase t/res/oldS Can 0o' sti&& iss'e a p'r)hase order or do 0o' have to )hange methods and perform a )ompetitive pro)'rementW ?n man0 states, 0o' /i&& not $e a$&e to a/ard an order that is in e;)ess of 0o'r stateKs sma&& p'r)hase thresho&d. This is /h0 it is a good idea to tr0 to deve&op an estimate prior to initiating the <'otation pro)ess. ?f it is >)&ose>, it /i&& pro$a$&0 $e $etter to )ommen)e a forma& )ompetitive pro)'rement to $egin /ith. Co1 do I a1ard a small urc/aseS The most )ommon )ontra)t'a& instr'ment 'sed to a))omp&ish a sma&& p'r)hase is a p'r)hase order. T0pi)a&&0, after 0o' determine /ho /i&& provide the $est pri)e for the /idget, 0o' /i&& prepare a p'r)hase order /ith the pri)e and other terms and )onditions re<'ired $0 0o'r agen)0 and send it to the vendor. ?n most instan)es, this do)'ment transmission does not )reate a $inding )ontra)t it is 0o'r offer to the vendor to do the /or2 or provide the /idget at the pri)e <'oted. A )ontra)t )omes into e;isten)e /hen the vendor demonstrates some &eve& of a))eptan)e of the offer 's'a&&0 /hen a))epted in /riting, performan)e )ommen)es, or de&iver0 is made. 54 Do)'mentation Co1 muc/ documentation of t/e rocurement rocess do I need to Eee S One standard 0o' ma0 find 'sef'& is to ho/ m')h /o'&d satisf0 a third part0 8an a'ditor9, that 0o' have )omp&ied /ith 0o'r agen)0Ks po&i)ies and pro)ed'res and that the pri)e 0o' are pa0ing is >reasona$&e.> This /i&& t0pi)a&&0 in)&'de the re<'isition 8or p'r)hase re<'est9, /hat spe)ifi)ation /as 'sed 8if an09, /ho /ere <'otations re<'ested from, /hen and /hat <'otations /ere re)eived and from /hom 8a simp&e a$stra)t of <'otes re)eived9, and a )op0 of the p'r)hase order. .')h of the do)'mentation for sma&& p'r)hases )an $e a))omp&ished on pre printed forms or )omp&eted on &ine if 0o'r )omp'ter s0stem /i&& a&&o/ for that t0pe of inp't. Iemem$er, it is s'pposed to $e simp&e, $'t never forget that /e m'st ma2e an a'dit trai& that )an
0.
A >de&iver0 order> as opposed to a p'r)hase order, is iss'ed t0pi)a&&0 'nder the terms of a re<'irements t0pe )ontra)t that has $een )ompetitive&0 pro)'red 'nder forma& pro)ed'res. The de&iver0 order is simp&0 an ordering me)hanism 'nder that )ontra)t and is not an independent )ontra)t &i2e a p'r)hase order.
-age !%
$e fo&&o/ed L the )&earer and more )omp&ete the trai& is, the $etter. -ro)'rement do)'mentation is dis)'ssed in Se)tion 2.4.!, >*i&e Do)'mentation.> .$- COMPETITIPE PROCUREMENT METCODS .$-$( O%er%ie1 )) Sealed &ids %$ Com etiti%e Pro osals RE@UIREMENT There is no *edera& re<'irement that grantees 'se the sea&ed $id or )ompetitive proposa& method of pro)'rement for an0 pro)'rement. These are methods identified $0 the *TA as methods that ma0 $e 'sed as appropriate. 55 The fo&&o/ing )onditions sho'&d $e present for sea&ed $idding to $e feasi$&e( !. A )omp&ete, ade<'ate, and rea&isti) spe)ifi)ation or p'r)hase des)ription is avai&a$&eQ 2. T/o or more responsi$&e $idders are /i&&ing and a$&e to )ompete effe)tive&0 for the $'sinessQ ". The pro)'rement &ends itse&f to a firm fi;ed pri)e )ontra)t and the se&e)tion of the s'))essf'& $idder )an $e made prin)ipa&&0 on the $asis of pri)eQ and 4. #o dis)'ssion /ith $idders is needed. 5% Sea&ed $idding is the preferred method for )onstr')tion if the a$ove )onditions are present. 51 ?f sea&ed $idding is 'sed, *TA Cir)'&ar 4220.!: p&a)es genera& re<'irements on the advertisement, $id period, $id opening, pri)e ad@'di)ation, and )ontra)t a/ard or re@e)tion of $ids. 5H ?f, ho/ever, a grantee de)ides to 'se the )ompetitive proposa& method of pro)'rement, the *TA pres)ri$es re<'irements for p'$&i)ation in)&'ding eva&'ation fa)tors, so&i)itation, eva&'ation, se&e)tion, and a/ard. 59
00
*TA Cir)'&ar 4220.!: T 9. *TA Cir)'&ar 4220.!: T 9.).8!9. *TA Cir)'&ar 4220.!: T 9.).8"9. See Se)tion 4.4, >Sea&ed ,ids,> and *TA Cir)'&ar 4220.!: T 9.).829. See Se)tion 4.5, >Competitive -roposa&s,> and *TA Cir)'&ar 4220.!: T 9.d.
02
04
05
08
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*or some agen)ies, state &a/ re<'ires the sea&ed $idding or )ompetitive proposa& method in pro)'ring )ertain goods or servi)es, or in )ertain )ir)'mstan)es. DISCUSSION If #ou and #our customer 6usin" de artment9 can s ecif# 1/at #ou need accuratel# enou"/! #ou ma#&e confident #ou 1ill recei%e a satisfactor# roduct or ser%ice from an# res onsi&le and res onsi%e &idder$ In t/ese cases #ou can ma;imi,e rice com etition and sim lif# t/e rocess &# usin" sealed &ids$ E$"$! su l# of diesel fuel normall# fits t/is rocurement met/od$ T/ere are commodities and ser%ices t/at #our customers need t/at are %er# difficult! if not im ossi&le! to o&tain t/rou"/ a sealed &iddin" rocess under 1/ic/ a1ard is made to t/e lo1 res onsi%e res onsi&le &idder$ Dou ma# not &e a&le to define #our reAuirement recisel# enou"/ and7or #ou ma# &e concerned 1it/ erformance s ecifications 1/ic/ are! &# t/eir nature! more su&'ecti%e t/an desi"n s ecifications$ 2: T/ere ma# &e tec/nical and rice tradeoffs in 1/at #ou are tr#in" to &u#$ Dou ma# &e 1illin" to a# a some1/at /i"/er rice to o&tain a commodit# t/at does more for #our s#stem! &ut t/ere is a limit to 1/at #ou 1ill a#$ Dou ma# find t/at t/e Auantities or time reAuired are unEno1n$ T/e rice risE associated 1it/ a fi;ed rice contract ma# &e &urdensome on t/e contractor and 1ould &e &orne at too /i"/ a rice to t/e a"enc# to use t/at t# e of contract$ ConseAuentl#! #ou need t/e a&ilit# to ne"otiate cost elements for t/e contract t/at could result in a cost reim&ursement t# e contract$ T/ere ma# &e a %ariet# of "ood sound &usiness reasons 1/# #ou need t/e a&ilit# to ne"otiate a contract and are 1illin" to s end t/e time to do so$ T/e com etiti%e ro osal met/od is a fle;i&le rocurement tool for #ou to use$ E$"$! de%elo ment of a ne1 information s#stem to ser%e a uniAue need 1ould ro&a&l# reAuire a ne"otiated rocurement$ Pur ose Sea&ed $idding 8sometimes )a&&ed >invitation for $id method> or >forma& )ompetition>9 and )ompetitive proposa&s 8sometimes )a&&ed >re<'est for proposa& method, or >)ompetitive negotiation>9 are the t/o prin)ipa& pro)'rement methods. The sea&ed $id method is preferred $e)a'se(
2:
See Chapter ", >Spe)ifi)ations> for a dis)'ssion of these and other spe)ifi)ation iss'es.
-age !H
it is a simp&e pro)ess /itho't )omp&e; eva&'ation )riteria or repeated re<'ests for and re)eipt of offersQ it ma;imiGes pri)e )ompetition $0 $asing the se&e)tion among responsive, responsi$&e $idders on pri)e a&oneQ and it is the most easi&0 'nderstood $0 s'pp&iers and the p'$&i), ma;imiGing p'$&i) a))eptan)e and minimiGing the opport'nit0 for 'nethi)a& pra)ti)e.
Bo/ever, it re<'ires a ver0 )&ear spe)ifi)ation sin)e it )o'&d res'&t in 0o' not getting /hat 0o' /ant, and the s'))essf'& $idder )an 'se am$ig'it0 in the spe)ifi)ation to red')e its )osts and in)rease its profit. #everthe&ess, this method is re<'ired $0 man0 state &a/s for man0 ma@or transit pro)'rements. 5o'r )'stomers ma0 not em$ra)e sea&ed $idding as eager&0. ?n addition to the $'rden of spe)ifi)ation /hi)h often fa&&s on them, the0 ma0 $e&ieve that sea&ed $idding re<'ires them to set minim'ms on these parameters @'st to ma;imiGe pri)e )ompetition. Ben)e, the negative )onnotation of >&o/ $id> e<'ipment or servi)es. .ost states re<'ire, or at &east permit, 'se of the )ompetitive proposa& method for professiona& servi)es. Comp'ter s0stem pro)'rements /ere often )&assified as professiona& servi)es, re)ogniGing the design and soft/are deve&opment )ontent /hi)h made it diffi)'&t to spe)if0 )omp'ter s0stems for pri)e )ompetition. Toda0, soft/are s0stems often have their o/n e;emptions from )ompetitive $idding re<'irements. Where it is permissi$&e, there is a gro/ing trend to 'se )ompetitive proposa&s. An in)reasing n'm$er of states permit )ompetitive proposa&s for $'s pro)'rements and the Ameri)an -'$&i) Transit Asso)iation Standard ?us &rocurement .uidelines en)o'rage the 'se of this method. The )ompetitive proposa& method is intended to permit )ompetition on <'a&it0 and other fa)tors, as /e&& as on pri)e. %! ?t is a good pra)ti)e to $e)ome fami&iar /ith 0o'r state &a/s and /or2 /ith )o'nse& to ma;imiGe f&e;i$i&it0 of the pro)'rement pro)ess to $e 'sed. Best Practices Simi&arities $et/een the Sea&ed ,idding and Competitive -roposa& .ethods of -ro)'rement The )ompetitive proposa& method has man0 )ommon attri$'tes /ith the sea&ed $idding pro)ess( 7i2e an ?nvitation for ,ids, the Ie<'est for -roposa&s is a /ritten do)'ment p'$&ished to the >/or&d>, so&i)iting the s'$mission of offers in response to the Ie<'est. The o$@e)tive is to promote f'&& and open )ompetition.
2(
The ,roo2s A)t pro)ed'res, re<'ired for Ar)hite)t'ra& and :ngineering servi)es and des)ri$ed in Se)tion %.5, go one step f'rther $0 prohi$iting pri)e )ompetition and re<'iring se&e)tion $ased so&e&0 on te)hni)a& )riteria.
-age !9
The terms and )onditions of the so&i)itation and the res'&ting )ontra)t are spe&&ed o't in the ?nvitation or Ie<'est. ?f determined ne)essar0, an opport'nit0 is provided 8thro'gh a pre $id or pre proposa& )onferen)e9 for prospe)tive offerors to meet /ith pro)'ring agen)0 offi)ia&s to get ans/ers to <'estions prior to the s'$mission of the $ids or initia& proposa&s. A reasona$&e amo'nt of time is provided prospe)tive offerors in /hi)h to prepare and s'$mit their offers. I'&es are norma&&0 provided that spe)if0 treatment of offers that are s'$mitted &ate. A/ard /i&& on&0 $e made to an offeror determined to $e >responsi$&e.>
Differen)es $et/een the .ethods of -ro)'rement The )ompetitive proposa& pro)'rement method differs from the sea&ed $idding pro)ess in that( A )omp&ete, ade<'ate and rea&isti) spe)ifi)ation or p'r)hase des)ription a&&o/ing for )ompetition primari&0 on the $asis of pri)e a&one ma0 not $e avai&a$&e. The )ontra)t a/ard amo'nt, /hether a firm fi;ed pri)e or some t0pe of )ost reim$'rsement )ontra)t, )an on&0 $e determined on the $asis of )osts of the )ontra)tor derived from a negotiation pro)ess. Dis)'ssions or negotiations ma0 $e needed to address te)hni)a& re<'irements as /e&& as proposed )ost or pri)e aspe)ts of the offerorKs proposa&. Dis)'ssions ma0 $e )ond')ted /ith one or more offerors /ho have s'$mitted proposa&s. An opport'nit0 ma0 $e given to revise proposa&s and to s'$mit a fina& proposa& at the )omp&etion of the dis)'ssion phase of the pro)ess.
.$-$* Common Elements of Solicitation Process .$-$*$( Ad%ertisin" and Pu&lici,in" Solicitation RE@UIREMENT T H.a. of *TA Cir)'&ar 4220.!: re<'ires that a&& pro)'rement transa)tions $e )ond')ted in a manner providing f'&& and open )ompetition. T 9.). of *TA Cir)'&ar 4220.!: re<'ires that invitations for $ids are to $e >p'$&i)&0> advertised.
-age 20
T 9.d. of *TA Cir)'&ar 4220.!: re<'ires that re<'ests for proposa&s are to $e p'$&i)iGed. State &a/ re<'irements are sometimes more spe)ifi) as to the )ontent and manner of advertising, parti)'&ar&0 /hen 'sing the sea&ed $idding method. DISCUSSION IFBs and RFPs must &e u&licl# ad%ertised and u&lici,ed 6res ecti%el#9 &ut t/e recise manner and content is at #our discretion 1it/in #our state la1 reAuirements$ B/ile t/e ma'or local ne1s a ers in #our commercial communit# are t/e most commonl# used media! %ar#in" rocurements 1ill dictate %ar#in" media and %ar#in" notice eriods to most cost)effecti%el# notif# t/e "reatest feasi&le num&er of com etitors$ Outreac/ t/rou"/ di%erse media ma# &e t/e most cost)effecti%e means to increase com etition! e$"$ t/rou"/ marEet communication net1orEs suc/ as trade associations! commercial rocurement listin" ser%ices! or mailin" list en/ancement as discussed in Section .$-$*$*! FSolicitation Mailin" List$F Co1e%er! ad%ertisin" in a ro riate media is a rudent manner of ensurin" un&iased notification and of maEin" ne1 contacts$ In addition to increasin" com etition! ad%ertisin" rocurement actions also &roadens industr# artici ation in meetin" industr# reAuirements! as 1ell as ro%ides assistance to small &usinesses and DBE firms interested in o&tainin" contracts and su&contracts$ Best Practices 5o'r state &egis&at're, in re)ogniGing a )a'sa& re&ationship $et/een advertising and )ompetition, ma0 have addressed the need for advertising pro)'rements $0 ena)ting a re<'irement to advertise. As /ith other pro)'rement iss'es, 0o' sho'&d )he)2 to see /hat, if an0, spe)ifi) re<'irements 0o' are o$&igated to fo&&o/ 'nder 0o'r stateKs &a/. The re<'irement for advertisement genera&&0 ta2es the form of re<'iring a noti)e inviting $ids $e p'$&ished at &east on)e in at &east one ne/spaper of genera& )ir)'&ation in the state not &ater than the fo'rteenth da0 $efore the da0 set for re)eipt of $ids the n'm$ers var0 from state to state $'t these parameters are t0pi)a&. There are man0 variations to this genera& t0pe of noti)e re<'irement in)&'ding the n'm$er of times the noti)e m'st $e p'$&ished, the n'm$er of ne/spapers it m'st $e advertised in, the target )ir)'&ation of those ne/spapers, and the n'm$er of da0s prior to re)eipt of $ids it m'st $e p'$&ished. The )ontents of the noti)e itse&f are fre<'ent&0 mandated as /e&&( e.g., m'st in)&'de a genera& des)ription of the items to $e p'r)hased, m'st state the &o)ation at /hi)h $id forms and spe)ifi)ations ma0 $e o$tained, and m'st state the time and p&a)e for opening $ids. The same r'&es and noti)e re<'irements ma0 app&0 to $oth )ompetitive $ids and )ompetitive proposa&s. ?f 0o' have s)hed'&ed a pre $id or pre proposa& )onferen)e, this is a&so one of the first pie)es of information 'pon /hi)h the offerors /i&& a)t. Iemem$er, /hat 0o' /ant to gain from this advertisement are responses from potentia& $idders or proposers to 0o'r 'p )oming pro)'rement and their interest in re)eiving the so&i)itation 0o' p&an to iss'e.
-age 2!
?f 0o' are in a position to adopt reg'&ations governing the advertisement of so&i)itations, 0o' sho'&d 2eep in mind that one of 0o'r goa&s thro'gh this effort is to ma;imiGe )ompetition. With that as 0o'r goa&, the fo&&o/ing ma0 $e of assistan)e( De)iding into /hi)h ne/spapers to p&a)e 0o'r noti)es, determine /hi)h 8if 0o' have a )hoi)e9 rea)hes the $roadest readership, parti)'&ar&0 in the $'siness )omm'nit0 8i.e., prospe)tive $idder or proposer9. ,e)a'se advertisements are s')h an e;pense, tr0 to negotiate /ith the ne/spaper to in)&'de 0o'r noti)es for free as a >p'$&i) servi)e.> ?t doesnKt h'rt to as2, parti)'&ar&0 if 0o' have )ompetition for the $'siness. :ven if 0o' are 'ns'))essf'& in having the noti)es p&a)ed for free, 0o' might $e a$&e to o$tain a red')ed rate. Does the )it0 or )o'nt0 have a p&a)e /here the0 post noti)es and is it 'sed $0 $iddersW Can 0o' post thereW 5o' ma0 have a p&a)e /here 0o'r agen)0 is re<'ired $0 &a/ to post noti)es of its meetings 8a p'$&i) meeting a)t noti)e9 /hi)h ma0 $e a good p&a)e to p&a)e these pro)'rement noti)es as /e&&. Does 0o'r agen)0 have a >home page> on the ?nternetKs Wor&d Wide We$W =etting the /ord o't on 'p)oming pro)'rements is one of the primar0 p'rposes man0 transit agen)ies esta$&ish a home page in the first p&a)e 8the other is posting @o$ va)an)ies9. 5o' ma0 a&so /ant to )onsider 'sing e;isting state &eve& home pages or $'&&etin $oards. DonKt over&oo2 this as a rea& medi'm to rea)h potentia& $idders and proposers. The federa& government is rea&&0 en)o'raging )ompanies of a&& siGes to 'ti&iGe )omp'ters in the pro)'rement pro)ess, and has man0 initiatives to go >paper&ess.> This is parti)'&ar&0 evident in sma&& p'r)hases. As the pro)'rement )omm'nit0 $e)omes more sophisti)ated in a))essing and effe)tive&0 'sing the ?nternet, )onsider 'ti&iGing this re&ative&0 ine;pensive medi'm to advertise 0o'r pro)'rements to a nationa& a'dien)e. ?f 0o'r )ommer)ia& environment s'pports man0 $road $ased ne/spapers, it ma0 $e appropriate to )ompetitive&0 pro)'re ne/spaper advertising. ?f 0o'r advertising vo&'me is signifi)ant and 0o'r media mar2et )omp&e;, 0o' ma0 find that an agen)0 )an )ost effe)tive&0 negotiate media avai&a$i&it0. One of the most effe)tive /a0s to in)rease D,: parti)ipation in 0o'r pro)'rement pro)esses is to advertise in media read $0 that target )omm'nit0. 5o'r D,: program ma0 re<'ire 0o' to advertise in target spe)ifi) ne/spapers to enhan)e parti)ipation $0 those entities. 5o'r agen)0Ks program ma0 $e &arge eno'gh to distri$'te a reg'&ar p'$&i)ation to a&& vendors )ertified 'nder 0o'r program or to mem$ership &ists of s')h organiGations as minorit0 )ham$ers of )ommer)e. Whatever is $eing done $0 0o'r agen)0 in terms of advertising the program, 0o' )an ta2e advantage of that opport'nit0 and advertise 'p )oming pro)'rements as /e&&. ,e)a'se of time re<'irements in advan)e
-age 22
of the a)t'a& p'$&i)ation, 0o' ma0 not $e a$&e to give a&& of the detai& a$o't a spe)ifi) pro)'rement, $'t 0o' sti&& )an p't the )omm'nit0 on genera& noti)e a$o't the opport'nit0. Does the )onstr')tion ind'str0 in 0o'r )omm'nit0 8A=C, ASA, et).9 advertise to its mem$ership noti)es of 'p )oming pro)'rements in the p'$&i) se)torW ?f so, tr0 to get 0o'r noti)es p'$&ished there as /e&&. *re<'ent&0 there is no )harge for this servi)e.
We have identified in the >Ie<'irements> dis)'ssion a$ove, the on&0 *TA re<'irements that e;ist in terms of p'$&i)iGing noti)es a$o't 'p )oming pro)'rements. :ven tho'gh there are no detai&ed dis)'ssion or set of g'ide&ines other than these genera& statements. %2 ?t is a good pra)ti)e to advertise 0o'r pro)'rements in a manner that /i&& en)o'rage ma;im'm )ompetition. *ind o't if 0o'r >genera& )ir)'&ation> ne/spaper has nationa& )ir)'&ation. That is the sort of information that )ir)'&ation departments of ne/spapers &ove to pass on to prospe)tive )'stomers` Consider advertising 0o'r &arge ro&&ing sto)2 and s0stems t0pe )ontra)ts in nationa& trade asso)iation p'$&i)ations s')h as A-TAKs &assen!er Trans%ort and other trade magaGines. A&so, )onsider advertising 0o'r pro)'rements in the Commerce ?usiness "aily 8C?"9 /hi)h is the re<'ired p'$&i)ation for federa& government )ontra)t a)tions. %" .$-$*$* Solicitation Mailin" List RE@UIREMENT ?n addition to the genera& re<'irement for f'&& and open )ompetition /hi)h /e have dis)'ssed a$ove, the on&0 additiona& re<'irement dea&ing 8indire)t&09 /ith a mai&ing &ist is the re<'irement in *TA Cir)'&ar 4220.!: T 9.). that, if the ?*, method is 'sed, >$ids sha&& $e so&i)ited from an ade<'ate n'm$er of 2no/n so'r)es.> DISCUSSION T/e de%elo ment and use of a solicitation mailin" list is a critical art of t/e rocurement rocess$ T/is list includes all eli"i&le and Aualified concerns t/at /a%e e; ressed an
2*
?n !990, the *TA p'$&ished &rocurement .uidelines for T)ird &arty Contractin! /hi)h in)&'ded, in Chapter ??, -aragraph 1.?, a statement that >A&& ?*,s sho'&d $e advertised in a manner that promotes parti)ipation in the $idding $0 a&& <'a&ified and )apa$&e firms. Advertising on&0 in the &o)a& ne/s media is not norma&&0 ade<'ate.> This do)'ment /as )an)e&ed $0 the p'$&i)ation of *TA Cir)'&ar 4220.!C in !995 and no f'rther g'ide&ines have $een iss'ed. The )on)ept of >a&& <'a&ified and )apa$&e firms> is a via$&e one 'nder federa& &a/, and s'ggests that 0o' sho'&d tai&or 0o'r p'$&i)it0 programs to the s'pp&0 mar2ets for 0o'r pro)'rement. This is /h0 /e have dis)'ssed nationa& and &o)a& advertisement in the te;t of this s'$se)tion and /h0, 'nder the s'$se<'ent dis)'ssion of mai&ing &ists, it is important that a&& 2no/n firms that provide the item or servi)e $eing pro)'red $e so&i)ited.
2-
?f 0o' are interested in more detai&s a$o't the C?" and other federa& government po&i)ies re&ating to p'$&i)iGing )ontra)t a)tions, those detai&s are spe&&ed o't in *AI -art 5. *AI T 5.201 detai&s /ith the spe)ifi)s of preparing and transmitting the noti)es for in)&'sion in the C?".
-age 2"
interest in recei%in" t/e solicitation! or t/at t/e a"enc# considers ca a&le of fillin" t/e reAuirements of a articular rocurement$ O%er a eriod of time and after re etiti%e rocurements for t/e same items or ser%ices! #our mailin" list for some items 1ill sta&ili,e and #ou 1ill not &e addin" too man# ne1 names to t/e list! e%en after an a""ressi%e and com re/ensi%e ad%ertisement cam ai"n$ Co1e%er! it is im ortant t/at #ou continue to Fmana"eF t/at list and ensure it is Ee t current and t/at firms e; ressin" an interest or desire to artici ate in u )comin" rocurements are added$ Durin" t/e actual solicitation rocess 6after t/e solicitation is released9! t/e list taEes on added si"nificance &ecause it is t/e record detailin" 1/ic/ firms recei%ed t/e solicitation and to 1/om amendments s/ould &e issued$ Best Practices -ro)'rement Io&e of So&i)itation .ai&ing 7ists Oer0 simp&0 p't, the so&i)itation mai&ing &ist )ontains the names, addresses and fre<'ent&0 the point of )onta)t for entities that /i&& re)eive 0o'r so&i)itation. Deve&opment of So&i)itation .ai&ing 7ists This &ist )an $e deve&oped from a variet0 of so'r)es( -rior pro)'rements are revie/ed and the names of entities that s'$mitted $ids or proposa&s in response to those pro)'rements are in)&'ded in the &ist for this ne/ pro)'rement. ?f /hat 0o' are going to $'0 is )'rrent&0 'nder )ontra)t, the in)'m$ent )ontra)tor is norma&&0 in)&'ded on the &ist. %4 *irms that responded to 0o'r advertisement e;pressing an interest in o$taining the so&i)itation 0o' are iss'ing sho'&d $e added to the mai&ing &ist. 5o' ma0 en)o'rage 0o'r interna& )'stomer to provide 0o' /ith names of firms it )onsiders )apa$&e of fi&&ing the re<'irements of the pro)'rement for in)&'sion on 0o'r &ist. ?f the spe)ifi)ations for 0o'r re<'irement /ere prepared $0 third part0 )ons'&tants or
2.
?f 0o' are not satisfied /ith the performan)e of the )'rrent )ontra)tor, the appropriate remed0 is not to ar$itrari&0 de)ide not to iss'e the firm a so&i)itation for the fo&&o/ on pro)'rement. ?f 0o'r performan)e )on)erns are /e&& do)'mented, 0o' have t/o a&ternatives. *irst, in)&'de the firm on the &ist, address performan)e re)ord 'nder an0 appropriate te)hni)a& )riteria. ?f it is '&timate&0 the apparent a/ardee, address 0o'r performan)e )on)erns as part of the responsi$i&it0 determinations the firm ma0 $e a$&e to address 0o'r )on)erns at this time to 0o'r satisfa)tion. Se)ond, if the performan)e )on)erns are irretrieva$&0 deep, it ma0 even $e possi$&e to initiate de$arment or s'spension at the &o)a&, state, or *edera& &eve&. De$arments and S'spensions as /e&& as Iesponsi$i&it0 Determinations are spe)ifi) topi)s that are dis)'ssed in s'$se<'ent se)tions of this .an'a&.
-age 24
)ontra)tors, the0 ma0 $e a so'r)e for firms that are )onsidered )apa$&e of fi&&ing the re<'irements. %5 The D,: program offi)e /ithin 0o'r agen)0 )an identif0 an0 D,: firms that ma0 $e interested in re)eiving the so&i)itation. Depending 'pon ho/ 0o'r data$ase is esta$&ished, 0o' ma0 need to identif0 the Standard ?nd'stria& C&assifi)ation 8S?C9 Code n'm$er 8or ho/ever 0o'r agen)0 identifies firms /ithin 0o'r data$ase9 and f'rnish that Code to the appropriate offi)e to aid in their sear)h. An0 firms so identified )an $e added to 0o'r &ist as /e&&. #ationa&, state, and &o)a& agen)ies ma0 $e a$&e to assist /ith &istsQ e.g., 0o'r state e)onomi) deve&opment offi)e or nationa& trade asso)iations. -arti)'&ar&0 in )onstr')tion so&i)itations, 0o' /i&& /ant to add to 0o'r mai&ing &ist p&an rooms that are operated $0 vario's trade asso)iations or )ham$ers of )ommer)e and an0 Dodge Ioom servi)es in 0o'r &o)a&e. These are idea& &o)ations for spe)ia&t0 s'$)ontra)tors to revie/ the p&ans and spe)ifi)ations that are app&i)a$&e to on&0 their parti)'&ar spe)ia&t0 /itho't $'0ing the entire so&i)itation pa)2age. The more 2no/&edgea$&e m'&tip&e s'$)ontra)tors are a$o't 0o'r pro)'rement, the $etter the )ompetition to the prime )ontra)tors /ho /i&& $e s'$mitting $ids or proposa&s.
?f 0o' /i&& $e )harging $idders or offerors for 0o'r so&i)itation pa)2age 8t0pi)a&&0 the )ase in )onstr')tion servi)e so&i)itations9, 0o' ma0 /ant to send o't a pre so&i)itation noti)e indi)ating the )ost and ho/ pa0ment 8or deposit9 is to $e made. Bave that pa0ment information ret'rned to 0o'r offi)e. 5o' ma0 then in)&'de those firms that have provided the re<'ired pa0ment or deposit in 0o'r '&timate so&i)itation &ist. Simi&ar&0, if 0o'r mai&ing &ist is ver0 &ong, 0o' ma0 /ant to mai& a pre so&i)itation notifi)ation to a&& entities on 0o'r &ist advising them of the 'p)oming so&i)itation and as2ing if the0 /ant to re)eive the so&i)itation for this pro)'rement. ?f the0 fai& to respond, 0o' ma0 ass'me the0 do not /ish to re)eive the so&i)itation. This a)tion )o'&d res'&t in a sma&&er 8and therefore &ess e;pensive9 so&i)itation pro)ess, /hi&e sti&& a&&o/ing ever0one on 0o'r &ist the opport'nit0 to )ompete in the pro)'rement. 5o' ma0 a&so as2 in some or a&& of these mai&ings if the firm /ishes to /ithdra/ from the &istQ the <'a&it0 and maintenan)e of the mai&ing &ists is important to fostering ro$'st )ompetition. .anagement of So&i)itation .ai&ing 7ists 5o' are no/ read0 to iss'e 0o'r so&i)itation 'sing the &ist that has $een deve&oped. There are a n'm$er of management iss'es asso)iated /ith the &ist at this time(
20
?f 0o' do re)eive names of firms from the )ons'&tant that prepared the spe)ifi)ations, it is re)ommended 0o' tr0 to ens're there are no )onf&i)t of interest sit'ations e;isting 8e.g., the re)ommended firm is /ho&&0 o/ned s'$sidiar0 of the spe)ifi)ation preparer9 or that the spe)ifi)ations are not drafted in s')h a manner as the on&0 prod')t that /i&& meet the spe)ifi)ation re<'irement is the prod')t of the firm the0 /ant added to the &ist. DonKt &et this )aveat dis)o'rage 0o'r so&i)itation of re)ommendations from that )ons'&tant 8the0 are a ver0 good so'r)e9, @'st $e sensitive to the firms provided.
-age 25
When mai&ing the so&i)itation to the entities on the &ist, some agen)ies in)&'de a post )ard indi)ating that if the entit0 does not respond to the so&i)itation 8f'rnish a $id or proposa&9 it /i&& $e removed from the &ist for f't're so&i)itations 'n&ess the0 indi)ate 8on the post )ard9 that the0 /ant to $e in)&'ded on f't're &ists. This is a pra)ti)a& re)ognition that the iss'an)e of so&i)itations is an e;pensive pro)ess for the agen)0 and on&0 entities that have a rea& interest in the pro)'rements sho'&d re)eive f't're so&i)itations. ?f 0o' have a separate mai& room, that gro'p ma0 $e responsi$&e for the a)t'a& ph0si)a& iss'an)e of the so&i)itation. 5o' ma0 /ish to do'$&e )he)2 that the &ist of entities f'rnished for the so&i)itation is the same as the &ist 0o' have maintained $e parti)'&ar&0 )on)erned that the in)'m$ent )ontra)tor 8if there is one9 is on the &ist. #otif0 the mai& room that if a so&i)itation is ret'rned $e)a'se of an in)orre)t address or no for/arding address is avai&a$&e for the entit0, 0o' are to $e notified immediate&0 so that 0o' )an tr0 to determine the )a'se of the ret'rn.
On)e the so&i)itation has $een iss'ed, 'sing the mai&ing &ist to ens're that an0 so&i)itation amendments are f'rnished to a&& entities that re)eived the origina& so&i)itation is important, as dis)'ssed in Se)tion 4.".2.5, >Amendment of So&i)itations.> After the so&i)itation pro)ess is )omp&eted, the fina& administrative tas2 asso)iated /ith the mai&ing &ist is to 'pdate it. ?ndi)ate /hi)h firms on the &ist responded to the so&i)itation, /hi)h firms did not $'t as2ed to re)eive f't're so&i)itations 8if 0o' as2ed for this9, and /hi)h firms did not respond nor indi)ate the0 /anted f't're so&i)itations. An 'pdated &ist /i&& ma2e preparation of the ne;t so&i)itation that m')h easier to a))omp&ish. .$-$*$- Solicitation RE@UIREMENT T 9.).829 of *TA Cir)'&ar 4220.!: re<'ires that invitations for $ids $e iss'ed /ith s'ffi)ient time to prepare $ids prior to the date set for opening the $ids. *'rther, the invitation for $ids /i&& in)&'de an0 spe)ifi)ations and pertinent atta)hments and sha&& proper&0 define the items or servi)es so'ght in order for the $idder to proper&0 respond. T 9.d.8!9 of *TA Cir)'&ar 4220.!: re<'ires that re<'ests for proposa&s identif0 a&& eva&'ation fa)tors a&ong /ith their re&ative importan)e. %% DISCUSSION
22
Whi&e the ?*, re<'irements of _ 9.).829 are good pra)ti)es for $oth ?*,s and I*-s, the eva&'ation )riteria re<'irement of T 9.d.8!9 is re&evant on&0 to I*-s and is dis)'ssed in Se)tion 4.5.!, >So&i)itation C Ie)eipt of -roposa&s.>
-age 2%
Dour solicitation! 1/et/er an in%itation for &ids or a reAuest for ro osals! identifies t/e rocurement! t/e a"enc# and t/e contact erson6s9$ It contains sim le! clear instructions for re arin" an offer! often includin" a c/ecElist of t/e items in t/e offer$ It clearl# states t/e time and manner for su&mittin" t/e offer! and t/e len"t/ of time for 1/ic/ t/e offer must remain firm 6not su&'ect to 1it/dra1al9$ Man# a"encies use a t/ree) art! one a"e form for sim le &idsJ called a Fsolicitation! offer! and a1ard form$F T/e form in%ites &ids on a list of items! ro%ides s ace for rices and t/e &idderKs e;ecution of t/e offer! and s ace for t/e a"enc# acce tance$ In more com le; rocurements 1/ere t/e s ecification or sco e of 1orE is more e;tensi%e! a t1o) art FOffer and A1ardF form incor orates t/e s ecification &# reference &ut still cr#stalli,es t/e essence of t/e solicitation in one a"e to &e si"ned and su&mitted &# t/e offeror! and si"ned u on a1ard &# t/e contractin" officer$ T/e most e; editious rocurements often result from t/e inclusion of a com lete contract in t/e solicitation$ B/en t/is is incor orated in t/e offer! no furt/er terms /a%e to &e discussed or e;ecuted 1/en t/e a"enc# acce ts t/e offer$ It is im ortant not to include an# unnecessar# reAuirements and Eee t/e solicitation as sim le as ossi&le$ Lar"e or com le; solicitation acEa"es discoura"e some otential offerors$ Best Practices Iegard&ess of the method 'sed, there are )ertain )ommon e&ements that /i&& $e present in a so&i)itation iss'ed 'nder either the )ompetitive $idding or )ompetitive proposa& method of pro)'rement. %1 .an0 transit properties have deve&oped pro)'rement forms that detai& /hat is in)&'ded as >$oi&erp&ate> in the so&i)itation pro)ess and in)&'de the )ommon e&ements of $oth methods. Other properties have esta$&ished, as a pro)ed're, a re<'irement that >$oi&erp&ate> )ommon provisions $e in)&'ded in a&& so&i)itations that are then prepared as origina&s for ea)h pro)'rement. Iegard&ess of /hi)h method 0o' 'se 8or an0 variation of them9, the )ommon e&ements in)&'de(
24
As a matter of information on&0, referen)e is made to the *AI T !4.20! ! and !5.40% ! for the >Uniform Contra)t *ormat> and *AI T !4.20! 9 for the >Simp&ified Contra)t *ormat> 'sed in $idding fi;ed pri)e )ontra)ts. These are optiona& formats 'sed $0 *edera& departments /hi)h in)&'de a good dis)'ssion of /hat is in)&'ded in those formats and /h0.
-age 21
Common So&i)itation Contents 8?*, and I*-9 !. A form 1/ic/ acts as t/e solicitation document ) When signed $0 the $idder or proposer, this a)ts as the offer /hi)h, if a))epted $0 the )ontra)ting offi)er or $'0er, res'&ts in a $inding )ontra)t. A&tho'gh it is t0pi)a&&0 a sing&e page, it is not 'n's'a& for the a))eptan)e do)'ment 8the )ontra)t9 to $e a separate form. The form t0pi)a&&0 identifies( A so&i)itation n'm$er for referen)eQ Who to )onta)t for <'estionsQ ?f there /i&& $e a pre $id or pre proposa& )onferen)e and /here and /hen it /i&& $e he&dQ The date, time, and p&a)e $ids or proposa&s are to $e re)eivedQ What additiona& do)'ments are in)&'ded in the so&i)itation and /hat do)'ments /i&& $e in)&'ded in the )ontra)tQ Spa)e for the pri)e 8offer9 to $e in)&'dedQ Spa)e /here amendments to the so&i)itation )an $e a)2no/&edgedQ Spa)e /here the firm )an $e identifiedQ and Spa)e for the firm offi)ia& to sign and date the $id or proposa&.
?f the form is m'&ti p'rpose and a&so a)ts as the )ontra)t, it /i&& t0pi)a&&0 have spa)e for the )ontra)t n'm$er, )ontra)t amo'nt, &ine items a/arded 8if app&i)a$&e9, and a p&a)e for the )ontra)ting offi)er to sign and date the )ontra)t. ?f the instr')tions are &ength0, and $e)a'se of the man0 )ertifi)ation forms t0pi)a&&0 re<'ired, it is $e)oming more )ommon to provide a separate )he)2&ist of a&& the do)'ments or other s'$missions re<'ired in a responsive offer. Of spe)ia& importan)e is the address to 1/ic/ offers s/ould &e su&mitted. .an0 agen)ies 'ti&iGe post offi)e $o; addresses for their mai&, and that is a&& that is in)&'ded in the so&i)itation. A&& so&i)itations norma&&0 )&ear&0 indi)ate a mai&ing address to /hi)h offers )an $e mai&ed as /e&& as a street address to /hi)h offers )an $e de&ivered, $e)a'se of the in)reased 'se of overnight and )o'rier servi)es. ?f 0o'r agen)0 has the a$i&it0, it is re)ommended that 0o' have a
-age 2H
'ni<'e post offi)e $o; n'm$er to /hi)h on&0 offers are mai&ed. ?n 0o'r >de&iver0> address, 0o' red')e errors $0 in)&'ding a spe)ifi) room n'm$er to /hi)h offers sho'&d $e de&ivered. %H 2. A document t/at descri&es t/e %arious re resentations and certifications t/at are reAuired to &e made &# t/e &idder or offeror in con'unction 1it/ t/e rocurement at t/e time of &id or ro osal su&mission$ 28 .an0 of these re&ate to responsi$i&it0 t0pe iss'es and t0pi)a&&0 in)&'de( A representation as to the t0pe of $'siness the offeror is 8individ'a&, partnership, so&e proprietorship, et).9Q A representation as to the D,: stat'sQ A representation that no grat'ities have $een offered or given /ith a vie/ to/ard se)'ring the )ontra)tQ A )ertifi)ation of independent pri)e determination 8pri)es in offer have $een arrived at independent&0 /itho't an0 )omm'ni)ations for the p'rposes of restri)ting )ompetition9Q A )ertifi)ation regarding )omp&ian)e /ith the D,: provisions of the )ontra)tQ A )ertifi)ation of restri)tions on &o$$0ingQ 10 A )ertifi)ation regarding de$arment, s'spension, ine&igi$i&it0 and vo&'ntar0 e;)&'sionQ 1! A )ertifi)ation regarding )omp&ian)e or non )omp&ian)e /ith the ,'0 Ameri)a
25
A ver0 he&pf'& item to in)&'de /ith 0o'r so&i)itation pa)2age is an address &a$e& /hi)h in)&'des the e;a)t address 0o' /ant offers mai&ed to and a separate address &a$e& /hi)h in)&'des 0o'r street address and room n'm$er for offers that are de&ivered to 0o'. With these &a$e&s, offerors )an affi; the app&i)a$&e one to their offer and 0o' /i&& $e ass'red it is )oming to the right p&a)e. ?t is a&so a good idea for 0o' to in)&'de the so&i)itation n'm$er on the &a$e&s /hi)h is of aid to 0o'r mai&room and 0o'r staff responsi$&e for re)eipt of offers.
28
These representations and )ertifi)ations have &ega& signifi)an)e that sho'&d not $e over&oo2ed $0 either the offeror or the agen)0. The offeror )ertifies, for instan)e, that it is not present&0 de$arred or s'spended $0 an0 federa& agen)0. The )ontra)ting offi)er )an re&0 on that )ertifi)ation and does not have to >&oo2 $ehind it> in determining the firmKs responsi$i&it0. ?f it is &ater dis)overed that the firm /as in fa)t de$arred $0 a federa& agen)0, it has made a fa&se )ertifi)ation. There are administrative san)tions that )an $e imposed 8)ontra)t terminated for defa'&t9 and possi$&e )rimina& san)tions 'nder either federa& or state &a/s 8or $oth9 for s'$mitting a fa&se statement.
4:
This )ertifi)ation is dis)'ssed in more detai& in Se)tion 4.".".2.", >7o$$0ing Certifi)ation.>
4(
This )ertifi)ation is dis)'ssed in more detai& in Se)tion 4.".".2.!, >Certifi)ation Iegarding De$arment, S'spension, and Other Iesponsi$i&it0 .atters.>
-age 29
provisions of the *edera& Transit A)t and 49 C*I -art %%! andQ 12 ". An0 s'$missions re<'ired $0 state &a/.
A document t/at includes solicitation instructions and conditions ) These t0pi)a&&0 in)&'de instr')tions re&ating to( offer preparationQ instr')tions re&ating to a)2no/&edging amendments to the so&i)itationQ r'&es re&ating to &ate s'$missions, modifi)ations and /ithdra/a&s of offersQ instr')tions re&ating to the D,: parti)ipation goa&s and programQ instr')tions as to ho/ the )ontra)t /i&& $e a/ardedQ advi)e as to agen)0 and *TA $idAproposa& protest pro)ed'resQ advi)e as to a$i&it0 of agen)0 to )an)e& the so&i)itationQ and esta$&ishment of an order of pre)eden)e )overing ho/ in)onsisten)ies $et/een provisions of the so&i)itation are to $e reso&ved. A document t/at includes s ecial contract reAuirements or ro%isions 6as o osed to "eneral ro%isions9 relatin" to t/is articular solicitation and contract t/at are not addressed else1/ere in t/e solicitation These provisions t0pi)a&&0 address s')h things as $onding re<'irementsQ ins'ran)e re<'irementsQ an0 spe)ia& permits or &i)enses re<'iredQ /hat propert0 the a'thorit0 /i&& f'rnish the )ontra)tor and r'&es re&ating to that propert0Q &i<'idated damagesQ /arrantiesQ indemnit0 provisionsQ optionsQ )ontra)t administrationQ and r'&es re&ating to ro0a&ties and patents. ?f 0o' are going to a/ard a )ost t0pe )ontra)t, spe)ia& provisions re&ating to those )ontra)ts are t0pi)a&&0 in)&'ded in the spe)ia& provisions. S ecial ro%isions reAuired &# t/e FTA t/rou"/ FTA Circular .**:$(E or t/e Master A"reement 1/ic/ must &e included in t/e solicitation and t/e contract ) .ode& )&a'ses for )omp&ian)e /ith these re<'irements are dis)'ssed in Se)tion H.! and Appendi; A.!, and in)&'de s')h provisions as ::O )&a'sesQ affirmative a)tion )&a'sesQ D,: program )&a'sesQ Contra)t Wor2 Bo'rs and Safet0 Standards A)t provisionsQ Davis ,a)on A)t provisionsQ Tit&e O? of the Civi& Iights A)t of !9%4 )omp&ian)e provisionsQ C&ean Air and Water A)ts provisionsQ :nerg0 -o&i)0 and Conservation A)t provisionsQ Cargo -referen)e A)t )&a'seQ ,'0 Ameri)a -rovisionsQ Offi)ia&s #ot to ,enefit )&a'se, and Iestri)tions on 7o$$0ing provisions. Some properties in)&'de these as part of the spe)ia& provisions do)'ment, and state &a/ ma0 re<'ire simi&ar provisions. T/e contractual reAuirements of t/e DBE ro"rams ) 8Sometimes in)&'ded in spe)ia& provisions.9 A&tho'gh the D,: programs for *TA f'nded pro@e)ts m'st )omp&0 /ith 49 C*I -art 2", the )ontra)t'a& &ang'age detai&s in)&'ded in the )ontra)ts var0 $et/een the individ'a& a'thorities. Chapter H in)&'des mode& D,: )ontra)t )&a'ses that )o'&d $e 'sed in 0o'r )ontra)t. T/e last of t/e F&oiler lateF forms are t/e "eneral ro%isions$ 5o' ma0 have different forms for )onstr')tion servi)es, AC: servi)es, s'pp&ies, servi)es )ontra)ts and )ost t0pe )ontra)ts. ?t is in the genera& provisions that 0o' in)&'de s')h )&a'ses as(
This )ertifi)ation is dis)'ssed in more detai& in Se)tion 4.".".2.2, >,'0 Ameri)a Certifi)ation.>
4.
5.
%.
1.
4*
-age "0
)hanges )&a'seQ termination for defa'&t and )onvenien)eQ inspe)tionQ assignmentQ the impa)t of federa&, state and &o)a& ta;esQ differing site )onditionsQ e;)'sa$&e de&a0Q variation in <'antit0Q disp'tesQ governing &a/Q indemnifi)ationQ order of pre)eden)eQ pri)ing of ad@'stmentsQ e;amination of re)ordsQ and pa0ment terms. H. Eac/ solicitation 1ill /a%e some sort of s ecification or statement of 1orE or sco e of 1orE descri&in" 1/at it is t/at #ou are &u#in". As /e dis)'ssed in the Spe)ifi)ation se)tion of the .an'a&, the detai& f'rnished /i&& var0 from )ontra)t to )ontra)t, $'t it is against this do)'ment that 0o' /i&& meas're satisfa)tor0 performan)e of the )ontra)tor did the )ontra)tor f'rnish 0o' /ith /hat 0o' re<'estedW
There is no rea& >$est> /a0 to )reate 0o'r so&i)itation. We have presented the )ommon e&ements of the so&i)itation and high&ighted those iss'es or matters that so&i)itation do)'ments t0pi)a&&0 address. Bo/ 0o' pa)2age it is in man0 respe)ts a f'n)tion of /hat is a&read0 in p&a)e in 0o'r organiGation or, if 0o' are )reating a so&i)itation for the first time, a f'n)tion of /hat 0o'r prior pro)'rement e;perien)es have $een. The $ottom &ine is that 0o' /ant to )reate a do)'ment that /i&& get 0o' thro'gh the so&i)itation and )ontra)t a/ard pro)ess /ith &itt&e or no )ontrovers0 and thro'gh )ontra)t performan)e on time and /ithin $'dget /hi&e )omp&0ing /ith the terms of 0o'r )ontra)t. .$-$*$. Pre)Bid and Pre)Pro osal Conferences DISCUSSION Pre)&id and re) ro osal conferences are "enerall# used in com le; acAuisitions as a means of &riefin" ros ecti%e offerors and e; lainin" com licated s ecifications and reAuirements to t/em as earl# as ossi&le after t/e solicitation /as &een issued and &efore offers are recei%ed$ T/is is also an o en forum for otential res ondents to address am&i"uities in t/e solicitation documents t/at ma# reAuire clarification$ Notice of t/e conference is included in t/e solicitation at t/e time of issuance$ Best Practices When 'ti&iGed proper&0, a pre $id or pre proposa& )onferen)e is a va&'a$&e too& for $oth the agen)0 and the prospe)tive offerors. There are )ertain )ommon pra)ti)es and po&i)ies re&ating to this )onferen)e that /i&& aid 0o' in a)hieving a s'))essf'& pro)'rement. 5o' /i&& de)ide /ith 0o'r )'stomer in 0o'r so&i)itation preparation pro)ess /hether or not 0o' /i&& )ond')t a pre proposa& or pre $id )onferen)e. ?t is re)ommended that 0o' ho&d one if 0o' $e&ieve that 0o'r a)<'isition is so )omp&e; or )ontains pe)'&iar re<'irements that )an on&0 $e
-age "!
addressed $0 ho&ding a )onferen)e for the $enefit of 0o'r prospe)tive offerors. ?t ma0 $e advantageo's if 0o' anti)ipate that the offerors /i&& not $e fami&iar /ith 0o'r pro)'rement pro)ess. Determine if a )onferen)e is ne)essar0 and p't the time and &o)ation detai&s in 0o'r so&i)itation. ?f 0o' ho&d a )onferen)e, it is he&pf'& to in)&'de in 0o'r so&i)itation a format for <'estions s'$mitted in advan)e of the )onferen)e that /i&& $e ans/ered at the )onferen)e. :;p&ain that if 0o' have the <'estions in advan)e, $etter and more time&0 responses )an $e made to those <'estions. 5o' norma&&0 do not pre)&'de <'estions from $eing raised at the )onferen)e itse&f. Deve&op an agenda for the )onferen)e and arrange to have the appropriate staff mem$ers at the )onferen)e /ho )an respond 2no/&edgea$&0 to <'estions. ?n addition to the pro)'rement offi)ia&, &arge agen)ies genera&&0 have a te)hni)a& representative and a representative from the D,: department, if appropriate, at the )onferen)e. At the )onferen)e, have someone present /ho )an deve&op a re)ord of /hat transpired, in)&'ding a sign in &ist of attendees. #orma&&0, this &ist is made avai&a$&e to attendees as a matter of information. One of the 'ses of this &ist $0 potentia& offerors is determining /ho e&se is interested in the pro@e)t and /ho might $e interested in teaming. At the )onferen)e, advise )onferees that remar2s and e;p&anations at the )onferen)e sha&& not <'a&if0 the terms of the so&i)itation, 'n&ess a /ritten amendment is f'rnished to ever0one. 5o' ma0 a)t'a&&0 /ant to deve&op a s)ript for this and ma2e it a matter of pra)ti)e to repeat this at ever0 )onferen)e it is that important. 5o'r pre $id )onferen)e or genera& provisions in 0o'r so&i)itation do)'ment ma0 a&so &imit the effe)t of 'n/ritten statements at the )onferen)e or of an0 other ora& or 'na'thoriGed )hanges or <'a&ifi)ations of the so&i)itation terms. The spe)ifi)ations and so&i)itation do)'ment m'st stand a&one representing the )ontra)t'a& )ommitment. D'ring the )onferen)e, in addition to responding to an0 <'estions raised $0 the )onferees, e;p&ain an0thing 'n's'a& a$o't the spe)ia& provisions or $idding )onditions. 5o'r D,: staff mem$er ma0 e;p&ain the D,: program and the goa&s set for the pro)'rement. 5o'r te)hni)a& staff mem$er ma0 give an overvie/ of the spe)ifi)ations or s)ope of /or2. ?f 0o' have re)eived <'estions in advan)e, 0o' )an provide $oth the <'estions and ans/ers. At the )on)&'sion of the )onferen)e, determine /hi)h <'estions have $een raised that /i&& ne)essitate the iss'an)e of a so&i)itation amendment. 5o' ma0 have re)eived other <'estions d'ring this period of time that high&ighted the need for an amendment, or an iss'e might have $een raised $0 interna& revie/s that ne)essitated an amendment. ?t is re)ommended that 0o' do not &eave materia& <'estions 'nans/ered if 0o' donKt ans/er them, 0o' ma0 end 'p shifting the ris2 for that am$ig'it0, )onf&i)t or other pro$&em from the )ontra)tor $a)2 to 0o'r agen)0.
-age "2
As soon as possi$&e after the )onferen)e, fina&iGe the re)ord of the )onferen)e and prompt&0 f'rnish it to a&& prospe)tive offerors 8those on 0o'r fina& so&i)itation mai&ing &ist9Q /hether the0 /ere in attendan)e at the meeting or not. ?t is important that a&& prospe)tive offerors $e f'rnished the same information )on)erning the proposed a)<'isition. This )an $e f'rnished /ith the amendment if one is to $e iss'ed. A&tho'gh it is not norma&&0 part of a pre $id or pre proposa& )onferen)e, if 0o' /ant to offer prospe)tive offerors an opport'nit0 to a)t'a&&0 visit the site 8in an appropriate pro)'rement9 it is a good time to do this in )on@'n)tion /ith this )onferen)e. 5o' sho'&d $e sensitive to the )ost offerors in)'r in preparing a $id or proposa& and tr0 to a&&o/ them to a))omp&ish m'&tip&e tas2s on the same trip, parti)'&ar&0 for those entities that are trave&ing to 0o'r &o)ation from another )it0, state or )o'ntr0. .andator0 Attendan)e L The <'estion sometimes arises as to /hether grantees ma0 re<'ire prospe)tive offerors to attend pre $id or pre proposa& )onferen)es in order to s'$mit $ids or proposa&s. The ans/er to this <'estion is that *TA has iss'ed no spe)ifi) po&i)0 statement on this iss'e. Bo/ever, the )onsens's of opinion is that attendan)e at pre $id )onferen)es sho'&d not $e made mandator0. An0thing that happens at a pre $id )onferen)e to )hange /hat is e;pe)ted 'nder the )ontra)t m'st $e in)&'ded in the )ontra)t do)'ment $0 means of an amendment to the so&i)itation. ?t+s tr'e that a $etter 'nderstanding ma0 $e o$tained $0 $eing present for fa)e to fa)e dis)'ssions regarding )ontra)t iss'es $'t the $ottom &ine remains the )&arit0 of the )ontra)t. :;perien)e /o'&d s'ggest that pre $id )onferen)es sometimes $ring o't the e;isten)e of am$ig'ities or in)onsisten)ies in )ontra)t &ang'age. These are then )hanged in the so&i)itationA)ontra)t and made avai&a$&e to a&& offerors. The res'&t of this pro)ess is that )hanges in the )ontra)t'a& o$&igations of the parties find their /a0 into the so&i)itation $0 means of an amendment to the origina& so&i)itation that is iss'ed to a&& potentia& offerors. 1" ?t )an a&so $e )on@e)t'red that mandator0 attendan)e at the )onferen)e )o'&d /or2 a hardship on some potentia& $idders, espe)ia&&0 sma&& $'sinesses. .andator0 attendan)e ma0 a&so tend to promote poor )ontra)t &ang'age $e)a'se of the fee&ing that ever0one 'nderstands the intent of the )ontra)t as a res'&t of the dis)'ssions at the pre $id )onferen)e, /ith the res'&t that )&arifi)ations to the /ritten )ontra)t re<'irements are not iss'ed. .$-$*$0 Amendment of Solicitations DISCUSSION FreAuentl#! in t/e course of t/e solicitation rocess and rior to recei t of offers! #ou 1ill find somet/in" 1it/in t/e solicitation acEa"e t/at needs to &e corrected$ T/is is
4-
*AI -art !5.20!8f9, for e;amp&e, re<'ires the CO to ma2e avai&a$&e to 3a&& potentia& offerors,4 'pon re<'est, an0 information distri$'ted at a pre so&i)itation )onferen)e. The )&ear pres'mption of the *AI is that 3potentia& offerors4 ma0 not $e 8and need not $e9 present at the )onferen)e.
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somet/in" t/at can &e done easil# and ma# en/ance com etition if t/e c/an"es are si"nificant 6i$e$! im act Auantit#! s ecifications! or deli%er#9$ Eac/ reci ient of t/e solicitation s/ould recei%e t/e amendments and s/ould acEno1led"e t/at recei t &# t/e time of su&mittin" its offer$ Dou s/ould consider e;tendin" t/e time for recei t of offers! if necessar#! to ermit offerors to com ete effecti%el# under t/e modified terms$ Best Practices ?n man0 so&i)itations, someone /i&& $ring to 0o'r attention a pro$&em /ith the pa)2age that ne)essitates a )hange. The pro$&em ma0 have something to do /ith the >$oi&erp&ate>, )hanges in <'antit0, the spe)ifi)ations, de&iver0 s)hed'&es, opening dates, or dra/ings. ?t ma0 have to do /ith )orre)ting an am$ig'o's provision or reso&ving )onf&i)ting provisions. Iegard&ess of /hat 8or /ho9 re<'ires the amendment, there are a fe/ simp&e stepsA)onsiderations that are norma&&0 fo&&o/ed. As /e dis)'ssed in the pre $idApre proposa& )onferen)e se)tion, even if a )hange /as mentioned d'ring that )onferen)e, an amendment to the so&i)itation sho'&d $e iss'ed. When 0o' )hange the /ritten terms of the so&i)itation, it m'st $e done forma&&0 in /riting. This serves t/o p'rposes( 8!9 ?t do)'ments the )hange in /riting so there are no mis'nderstandings, and 829 ?t provides the )hanges to offerors /ho /ere not at the )onferen)e. As /ith other norma&&0 repetitive re<'irements in the pro)'rement pro)ess, man0 agen)ies have adopted a pre printed form for amending so&i)itations. Those forms norma&&0 in)&'de the fo&&o/ing e&ements 8/hi)h )an a&so $e in)&'ded in 0o'r amendment if 0o' do not 'se a form9( ?dentif0 the so&i)itation n'm$er of the origina& so&i)itationQ ?dentif0 the amendment n'm$erQ ?dentif0 the )onta)t person and phone n'm$er /ithin 0o'r department for f'rther informationQ ?ndi)ate /hether or not the time and date spe)ified in the origina& so&i)itation is )hanged as a res'&t of the amendmentQ Advise offerors of the need to and ho/ the0 sho'&d a)2no/&edge re)eipt of the amendmentQ Advise offerors /hat the )hanges areQ and Bave the amendment signed $0 the appropriate pro)'rement offi)ia&, most fre<'ent&0 the )ontra)ting offi)er.
Amendments are t0pi)a&&0 sent to ever0 firm that has $een f'rnished the origina& so&i)itation 8the ?*, or I*-9. On)e the so&i)itation has $een iss'ed, 'sing the mai&ing &ist to ens're that an0
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so&i)itation amendments are f'rnished to a&& entities that re)eived the origina& so&i)itation is important, as dis)'ssed in Se)tion 4.".2.2, >So&i)itation .ai&ing 7ist.> This is an o$vio's iss'e, $'t some agen)ies donKt rea&iGe there is a pro$&em 'nti& $ids are re)eived that do not a)2no/&edge a materia& amendment. 5o' then de)&are the $idder non responsive. Some agen)ies in)&'de )&a'ses in so&i)itations ma2ing it the offerorKs responsi$i&it0 to o$tain addenda. Whi&e this ma0 assist in over)oming a protest from a $idder he&d non responsive, it /i&& not ne)essari&0 transform the $id into a responsive or a))epta$&e one. 5o' )annot over emphasiGe the administrative importan)e of f'rnishing amendments to a&& entities /ho re)eived the origina& so&i)itation. ?t is important to have a sing&e point of )onta)t /ithin 0o'r organiGation responsi$&e for iss'ing so&i)itations and addenda. Some agen)ies post a noti)e at the re)eipt of offers of the addenda that have $een iss'ed. Whi&e there is &itt&e an offeror )an do other than ho&d $a)2 the offer at that point, the offeror ma0 $e a$&e to perfe)t the a)2no/&edgment of addenda and &ive /ith the rest of the offer as prepared /itho't the addend'm. One of the )riti)a& iss'es /hen iss'ing an amendment is /hether or not to e;tend the time and date for re)eipt of offers. 5o' sho'&d )onsider the impa)t of the )hanges 0o' are ma2ing in &ight of the time it /i&& ta2e a pr'dent offeror to in)orporate those )hanges. This in)&'des the time impa)t on the /or2 a&read0 done in preparing the $id or proposa&. The impa)t )o'&d $e minima& or ver0 signifi)ant and there is no >)oo2ie )'tter> ans/er to ho/ m')h additiona& time, if an0, sho'&d $e a&&o/ed 0o' /ant to a&&o/ s'ffi)ient time for the )hanges to $e )onsidered in a meaningf'& manner. One >/arning(> this ma0 $e the first time in the so&i)itation pro)ess 0o' r'n into the s)hed'&e 0o'r interna& )'stomer has esta$&ished. 5o'r instin)ts ma0 sa0 that the time and date set for re)eipt sho'&d $e e;tended $'t 0o'r )'stomer ma0 sa0 the )hange is neg&igi$&e and no time is /arranted. :ar&0 p&anning and )omm'ni)ation /ith 0o'r )'stomer ma0 $'i&d in some time for )hanges &i2e this. ?f not, the )onse<'en)es ma0 $e fe/er )ompetitors, a protest, pri)ing that in)&'des 'nne)essar0 )ontingen)ies, or post a/ard dis)over0 of spe)ifi)ation )onf&i)ts that re<'ire )ompensation for )hanges. ?f a de)ision is made to amend the so&i)itation /ith $ids d'e in t/o da0s, )onsider notif0ing prospe)tive offerors $0 te&ephone, *AR, or te&egram of the ne/ date and time and fo&&o/ that notifi)ation 'p /ith an amendment to the so&i)itation. ?f 0o' have a&read0 re)eived offers in 0o'r $id room, it is re)ommended that 0o' notif0 the offeror of the amendment to in<'ire if the0 /ant their offer ret'rned. 14
4.
?f 0o' )annot identif0 /ho the offeror is in this sit'ation /itho't opening the $id or proposa&, it is re)ommended that 0o' open it in the presen)e of a /itness. Write do/n the name and address of the offeror on&0, and resea& the enve&ope or pa)2age. Iet'rn it to the offeror /ith a )over &etter that the pa)2age /as opened on&0 so the offeror )o'&d $e identified. ?t is a&so re)ommended that a memorand'm to the fi&e $e made $0 0o' and 0o'r /itness des)ri$ing /hat happened and /h0. 5o' might /ant to )op0 the o'tside of the enve&ope to sho/ no identifi)ation $'t it is re)ommended that no )opies $e made of an0 of the offer do)'mentation.
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There are spe)ia& r'&es regarding so&i)itation amendments that in)orporate revisions or modifi)ations of Davis ,a)on A)t /age determinations. These r'&es are dis)'ssed in detai& in Se)tion H.!.". ?f, $e)a'se of s)hed'&e distress, 0o' pro)eed /ith the pro)'rement /itho't a ne)essar0 amendment, adverse )onse<'en)es are &i2e&0 /hen the )hange is $ro'ght for/ard /ith the '&timate )ontra)tor and the )ontra)t m'st $e modified. 15 ?t is even possi$&e that the )hange /o'&d )onstit'te a )ardina& )hange if attempted after a/ard, and /o'&d re<'ire a ne/ )ompetitionQ in this )ase 0o' have &itt&e )hoi)e $'t to amend and postpone. .$-$- Common Elements of Offers .$-$-$( Recei t of Offers DISCUSSION T/e culmination of #our solicitation rocess is t/e recei t of &ids or ro osals$ Re"ardless of t/e met/od used! "reat im ortance is attac/ed to t/e time of recei t$ Pre arations are made to ensure t/at offers are not dela#ed and are ro erl# recorded$ Dour solicitation ma# contain a c/ecElist of items to &e su&mitted 1it/ t/e offers! and t/e indi%idual su&mittals are discussed in t/e follo1in" sections$ Best Practices Time&iness 1% Wh0 do 0o' )are if a $id or offer is &ate or notW ?f the pri)e is the &o/est or the $est response of the gro'p, /hat differen)e does it ma2e if it /as re)eived on time or notW The rationa&e for having r'&es against )onsidering &ate $ids or offers is tied to the importan)e of maintaining the integrit0 of the )ompetitive pro)'rement pro)ess and that this o't/eighs the possi$i&it0 of an0 savings the p'$&i) entit0 might rea&iGe in a parti)'&ar pro)'rement $0 )onsidering a &ate offer. Unfort'nate&0, &ate offers are s')h a )ommon pro$&em that &ang'age has $een deve&oped to address /hat r'&es /o'&d $e fo&&o/ed if an offer is re)eived &ate. 11 That &ang'age is t0pi)a&&0 in)&'ded in the so&i)itation so that offerors 2no/ ahead of time /hat the )onse<'en)es /i&& $e if
40
See Se)tion 9.2, >Changes> for a more genera& dis)'ssion of the )osts of )hanges. See a&so the dis)'ssion of time&iness in Se)tion 4.4.2, >,id Opening.>
42
44
As a matter of referen)e, 0o'r attention is invited to *AI T 52.2!4 1 and 52.2!5 !0 for &ang'age addressing &ate s'$missions, modifi)ations, and /ithdra/a&s of offers that is in)orporated in *AI )overed so&i)itations for ?*,s and I*-s respe)tive&0. *or )ommentar0 in the *AI itse&f re&ating to those so&i)itation )&a'ses, see *AI T !4."04 and !5.4!2 respe)tive&0. -rimari&0 $e)a'se of the $od0 of &a/ that has deve&oped interpreting these )&a'ses, man0 transit properties have either adopted this &ang'age or have modified it s&ight&0 to meet their individ'a& re<'irements.
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their offer is re)eived &ate at the p&a)e designated for re)eipt. A so&i)itation provision, and the e;p&anator0 r'&es re&ating to the provision, genera&&0 in)&'de some or a&& of the fo&&o/ing( !. B/at are t/e conseAuences of an offer t/at is recei%ed after t/e e;act time s ecified for recei tS =enera&&0, the offer /i&& not $e )onsidered at a&&. 1H 5o' ma0 /ant to )arve o't e;)eptions to this a$so&'te r'&e, and some /i&& $e s'ggested $e&o/. These e;)eptions )onsist genera&&0 of the sets of )ir)'mstan)es /hi)h 0o' )an determine in advan)e and set o't in 0o'r so&i)itation /hi)h, /hen proven /ithin a spe)ified time $0 the offeror, /o'&d demonstrate that the de&a0 /as d'e so&e&0 to some independent event or a)tion, s')h as the do)'mented fai&'re of a registered de&iver0 servi)e. ?f the offer is re)eived after the )ontra)t is a/arded, there are genera&&0 no e;)eptions. That offer /i&& not $e )onsidered at a&&. If #ou decide to allo1 consideration of FlateF offers! under 1/at conditions 1ill #ou consider t/emS 'ill you consider offers t)at are )and1 delivered lateF ?t is the responsi$i&it0 of the offeror to ma2e s're its offer is at the p&a)e designated in the so&i)itation $0 the time indi)ated. ?f it )hooses to 'se a de&iver0A)o'rier servi)e or de&iver its offer in person, it m'st a&&o/ s'ffi)ient &ead time to get it there on time. #orma&&0, s')h e;)'ses as >? /as in an a))ident>, >The traffi) /as heavier than 's'a&>, or >? )o'&dnKt find a p&a)e to par2> are not a))epta$&e to e;)'se a &ate hand de&ivered offer. ?f, ho/ever, the reason the proposa& is &ate is $e)a'se of pro$&ems at 0o'r agen)0 8e.g., 0o'r se)'rit0 g'ard dire)ted the )o'rier to the /rong room9 0o' ma0 /ant to )onsider those e;)'ses in effe)t, 0o' 8the agen)09 /ere the reason the offer /as &ate. 'ill you consider offers t)at were mailed $ut not received until after t)e time and date setF ?t is not 'n's'a& to )onsider mai&ed offers if )ertain fa)ts )an $e esta$&ished. ?f the0 /ere sent $0 registered or )ertified mai& five )a&endar da0s 8or some greater or &esser n'm$er of da0s9 prior to the date spe)ified for re)eipt of offers, the0 /i&& $e )onsidered if the postmar2 on $oth the enve&ope or offer /rapper and the origina& re)eipt )&ear&0 esta$&ishes the offer /as mai&ed $efore the five da0 /indo/. ?f 0o' /ant to a&&o/ this e;)eption, a provision /hi)h )&ear&0 and 'nam$ig'o's&0 esta$&ishes the r'&es /hi)h /i&& $e a))epta$&e to 0o' /i&& save e;tended arg'ment and resentment in the inevita$&e test )ases.
2.
45
Some pra)titioners erroneo's&0 refer to the )onse<'en)es of a &ate offer as one of >non responsiveness.> ?n fa)t, 0o' never open the offer 8'n&ess needed to for identifi)ation p'rposes9 and th's )annot determine /hether it is responsive to the materia& re<'irements of the so&i)itation 8the genera& definition of responsiveness9. Bad the offer $een re)eived on time, it ma0 /e&& have $een responsive $'t, in this )ase, the offer is not even )onsidered`
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'ill you consider an offer t)at was mailed (not re!istered or certified) $ut you are a$le to ascertain t)at it was mis)andled in t)e mailroomF ?t /as proper&0 addressed and, in the norma& )o'rse of $'siness at 0o'r agen)0, sho'&d have $een de&ivered to 0o'r $id room on time. Bo/ever, it /as sent to the /rong department or fe&& $ehind a des2 in the mai&room. Again, if 0o' )an esta$&ish it /as re)eived in 0o'r agen)0 prior to the time and date set for re)eipt $'t didnKt get to 0o' 'nti& >&ate>, 0o'r po&i)0 might /ant to a&&o/ )onsideration of that offer. ?f so, spe&&ing that e;)eption o't in 0o'r so&i)itation )&a'se avoids man0 <'estions. 'ill you consider offers t)at were sent via an Governi!)tG serviceF 3f so/ w)ic) service(s) will you considerF ?t is not 'n's'a& to &imit the servi)e to the U.S. -osta& Servi)e :;press .ai& #e;t Da0 Servi)e and, even in that &imited sit'ation, the pa)2age m'st $e dispat)hed $0 5(00 p.m. at the p&a)e of mai&ing t/o /or2ing da0s prior to the date set for re)eipt of offers. ?f 0o' in)&'de *edera& :;press and other re&ia$&e overnight )o'rier servi)es, $e s're 0o' spe&& o't e;a)t&0 /hat servi)e8s9 0o' /i&& a&&o/. As a res'&t of an in)rease in pro)'rements $eing )ond')ted via e&e)troni) )ommer)e, r'&es have $een deve&oped addressing &ate offers re)eived thro'gh that medi'm. =enera&&0, the offer m'st have $een re)eived $0 the )ontra)ting agen)0 no &ater than 5(00 p.m. one /or2ing da0 prior to date spe)ified for re)eipt of offers. ?f 0o' are into e&e)troni) )ommer)e pro)'rements, 0o' need to )onsider the )onse<'en)es of &ate offers thro'gh that medi'm as /e&&.
>?Kve got this great po&i)0 patterned after the *AI )&a'ses on )onsideration of &ate offers and here it is, a da0 after ? opened $ids and another $id )omes to m0 offi)e thro'gh the mai&. What do ? doW> ?f it /as mai&ed >reg'&ar> first )&ass mai&, 0o' norma&&0 /o'&d retain the $id, 'nopened, and advise the offeror that its $id /as re)eived &ate and /i&& not $e )onsidered. ?f the enve&ope or /rapping indi)ates it /as mai&ed registered or )ertified 8the )&a'se ma0 have $een )omp&ied /ith9, 0o' need to notif0 the $idder that its $id /as re)eived &ate and /i&& not $e opened 'n&ess, $0 a reasona$&e date esta$&ished in 0o'r notifi)ation, it )an f'rnish 0o' /ith the origina& post offi)e re)eipt esta$&ishing )omp&ian)e /ith the e;)eptions 0o' have adopted in 0o'r provision. ,e)a'se these iss'es have s')h a high pro$a$i&it0 of $eing protested or &itigated, it is re)ommended that as soon as 0o' $e)ome a/are of the re)eipt of a &ate offer, 0o' notif0 0o'r &ega& )o'nse& for advi)e on /hat a)tion to ta2e. .an0 of the e;)eptions re)ogniGed in the &a/ are ver0 fa)t intensive and )are m'st $e ta2en in as)ertaining a&& of the fa)ts and responding appropriate&0 to /hat fa)ts e;isted. Comp&eteness of Offer ,esides the o$vio's things 8&i2e the $id or pri)e s)hed'&e9, there are a n'm$er of matters that are norma&&0 s'$mitted /ith the offer, /hether it is a $id or a proposa&. These items either are re<'ired $0 &a/ or the nat'ra& deve&opment of the pro)'rement pro)ess
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has res'&ted in this $eing a good 8or the $est9 time for some things to get into the hands of the pro)'rement offi)ia&s. .an0 of these matters are ta2en )are of in the vario's representations and )ertifi)ations that are s'$mitted /ith the offer and /hi)h norma&&0 address responsi$i&it0 t0pe <'estions that aid in pro)essing the '&timate )ontra)t for a/ard. Others, s')h as a)2no/&edgment of so&i)itation amendments and $id $onds )an go to the iss'e of /hether the offeror is responsive did it )onsider a materia& amendment /hen it s'$mitted its offerW ?n o'r dis)'ssion on )ommon e&ements of the so&i)itation 8see Se)tion 4.".2."9, /e )overed the )ommon pra)ti)e of deve&oping a separate do)'ment to in)&'de in 0o'r so&i)itation for a&& the representations and )ertifi)ations that 0o' /ant ea)h offeror to )omp&ete and ret'rn /ith its offer to 0o'. ?f the0 are a&& in one p&a)e, it is m')h easier for the offeror to ens're it has f'rnished 0o' ever0thing 0o' need as /e&& as 0o' donKt have to /orr0 a$o't forgetting to as2 for something :ver0thing 0o' need is on one form. .$-$-$* Federall# ReAuired Su&missions 1it/ Offers RE@UIREMENT T !% of *TA Cir)'&ar 4220.!:, entit&ed >Stat'tor0 and Ieg'&ator0 Ie<'irements> states that( >A )'rrent $'t not a&& in)&'sive and )omprehensive &ist of stat'tor0 and reg'&ator0 re<'irements app&i)a$&e to grantee pro)'rements 8s')h as Davis ,a)on A)t, Disadvantaged ,'siness :nterprise, C&ean Air, and ,'0 Ameri)a9 is )ontained in the *TA .aster Agreement. 19 =rantees are responsi$&e for eva&'ating these re<'irements for re&evan)e and app&i)a$i&it0 to ea)h pro)'rement. *or e;amp&e, pro)'rements invo&ving the p'r)hase of iron, stee& and man'fa)t'red goods /i&& $e s'$@e)t to the K,'0 Ameri)aK re<'irements in 49 C*I -art %%!. *'rther g'idan)e )on)erning these re<'irements and s'ggested /ording for )ontra)t )&a'ses ma0 $e fo'nd in *TAKs Third -art0 -ro)'rement .an'a&.> DISCUSSION T/e FTA /as included a com re/ensi%e listin" of contract clause reAuirements in t/e Master A"reement$ A co # of t/at A"reement is an a ro riate item for t/e rocurement officialKs desE &ooE of reference materials$ Be 1ill! in t/is su&section! /i"/li"/t "enerall# t/e federal reAuirements t/at are "ermane to our discussion /ere of items t/at s/ould &e su&mitted to t/e transit ro ert# as art of t/e solicitation rocess in%ol%in" eit/er IFBs or RFPs$ Be 1ill also discuss in more de t/ four s ecific certifications t/at are federall# reAuired$ 5: .$-$-$*$( Certification Re"ardin" De&arment! Sus ension! and ot/er Res onsi&ilit# Matters
48
These re<'irements and app&i)a$&e )&a'ses are dis)'ssed in depth in Chapter H. See a&so Chapter H/ >Contra)t C&a'ses,> and Appendi; A.!, >*edera&&0 Ie<'ired .ode& C&a'ses.>
5:
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RE@UIREMENT :;e)'tive departments and agen)ies sha&& parti)ipate in a government /ide s0stem for 8nonpro)'rement9 de$arment and s'spension. H! DISCUSSION Muc/ liEe t/e Fcommon "rant ruleF 6.8 CFR Part (59! t/e federal "o%ernment /as ado ted a Fcommon ruleF on t/e "o%ernment)1ide effect of de&arments and sus ensions$ DOTKs im lementation of t/at common rule is found at .8 CFR Part *8$ T/e olic# &e/ind t/is rule is t/at a erson or entit# 1/o is de&arred or sus ended s/all &e e;cluded from Federal financial and non)financial assistance and &enefits under Federal ro"rams and acti%ities$ As stated in t/e re"ulations! de&arment 5* and sus ension 5- are serious actions 1/ic/ s/ould &e used onl# in t/e u&lic interest and for t/e rotection of t/e federal "o%ernment and not for t/e ur oses of unis/ment$ 5. In order to rotect t/e u&lic interest! it is t/e olic# of t/e federal "o%ernment to conduct &usiness onl# 1it/ res onsi&le ersons$ 50 Persons 1/o /a%e &een de&arred or sus ended are not Fres onsi&leF and! unless a ro%ed &# t/e FTA! contracts 1ill not &e a1arded to t/ose ersons$ 52 T/e certification reAuired &# t/is common rule must &e su&mitted 1it/ t/e offers! and is also an aid to e; edite t/e rocurement rocess &# ro%idin" critical information as to t/e res onsi&ilit# determination t/at t/e contractin" officer must ultimatel# maEe$ 54
5(
49 C*I -art 29, >De$arment and S'spension 8#onpro)'rement9 and =overnment/ide Ie<'irements for Dr'g *ree Wor2p&a)e 8=rants9.>
5*
>"e$arment. An a)tion ta2en $0 a de$arring offi)ia& in a))ordan)e /ith these reg'&ations to e;)&'de a person from parti)ipating in )overed transa)tions. A person so e;)&'ded is Kde$arredK.> 49 C*I T 29.!05.
5-
>Sus%ension. An a)tion ta2en $0 a s'spending offi)ia& in a))ordan)e /ith these reg'&ations that immediate&0 e;)&'des a person from parti)ipating in )overed transa)tions for a temporar0 period, pending )omp&etion of an investigation and s')h &ega&, de$arment, or -rogram *ra'd Civi& Iemedies A)t pro)eedings as ma0 ens'e. A person so e;)&'ded is Ks'spendedK.> 49 C*I T 29.!05.
5.
49 C*I T 29.!!58$9. 49 C*I T 29.!!58a9. See T "$ of the .aster Agreement, *orm *TA .A8!29.
50
52
54
,e)a'se it is dis)'ssed as an aspe)t of responsi$i&it0, and )an $e o$@e)tive&0 determined at an0 time 'p to the time of a/ard, &ate s'$mission of the de$arment )ertifi)ation )an $e permitted.
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Best Practices The de$arment and s'spension )ertifi)ation fo'nd at Appendi; , of -art 29 8and as set forth in Appendi; A.! of this man'a&9 is mandator0 for 'se in )ontra)ts over S!00,000 invo&ving federa& f'nds. ?n)&'de the instr')tions for the )ertifi)ation as /e&& as the )ertifi)ation. DonKt tr0 to save spa)e in 0o'r so&i)itation $0 on&0 in)&'ding the )ertifi)ation the instr')tions are too )riti)a&. ?t is re)ommended that 0o' ma2e this )ertifi)ation a topi) at 0o'r pre $id or pre proposa& )onferen)e if the res'&ting )ontra)t /i&& e;)eed S!00,000. :ven tho'gh 0o' re<'est this )ertifi)ation from a&& offerors, fai&'re to re)eive it /ith a $id 8in the sea&ed $idding method of pro)'rement9 is not a responsiveness <'estion this goes to a )ontra)torKs responsi$i&it0 and ma0 $e re)eived and ta&2ed a$o't after $ids are re)eived. ?t m'st $e re)eived prior to a/ard. The )ertifi)ation and reg'&ations a&&o/ 0o' to re&0 on 0o'r )ontra)torKs )ertifi)ation that it is not de$arred, s'spended, proposed for de$arment, de)&ared ine&igi$&e, or vo&'ntari&0 e;)&'ded from parti)ipation in 0o'r )ontra)t as an e&ement of 0o'r responsi$i&it0 determination. Bo/ever, if 0o' 2no/ that the )ertifi)ation is erroneo's, 0o' ma0 not re&0 on the )ertifi)ation. The )ertifi)ation and reg'&ations state that 0o' ma0, $'t are not re<'ired to, )he)2 the #ist of &arties 87cluded from Federal &rocurement and Non%rocurement &ro!rams to determine the e&igi$i&it0 of 0o'r )ontra)tor and its s'$)ontra)tors. The #ist of &arties 87cluded from Federal &rocurement and Non%rocurement &ro!rams is avai&a$&e from the =enera& Servi)es Administration in either a printed version or an e&e)troni) version. The printed version is p'$&ished month&0 and ma0 $e o$tained $0 p'r)hasing a 0ear&0 s'$s)ription. HH The e&e)troni) version is 'pdated dai&0 and provides a))ess to the names of firms and individ'a&s on the &ist thro'gh 0o'r )omp'ter. H9 =SA a&so offers a te&ephone in<'ir0 servi)e to ans/er genera& in<'iries a$o't entries on the #ist at 82029 50! 4H1" or 4140. 90 A&tho'gh not re<'ired $0 the *TA, some transit properties )he)2 the #ist on a&& their pro)'rements, /hether or not federa&&0 f'nded. :ven if 0o' are 'sing &o)a& do&&ars, do 0o' /ant to a/ard a )ontra)t to, or approve a s'$)ontra)t for, a )ontra)torAs'$)ontra)tor that has $een
55
5o' ma0 s'$s)ri$e $0 /riting the S'perintendent of Do)'ments, U.S. =overnment -rinting Offi)e, Washington, DC 20402 or $0 )a&&ing the =overnment -rinting Offi)e ?n<'ir0 and Order Des2 at 82029 1H" "2"H.
58
The &ist )an $e a))essed 1 da0s a /ee2, 24 ho'rs per da0 and aside from norma& )osts of &o)a& or &ong distan)e te&ephone )a&&s, the a))ess is free to the 'ser. To o$tain a )op0 of the 'serKs man'a& for a))essing the s0stem, )onta)t =SA at 82029 50! 4140.
8:
=SA advises that responses to these in<'iries sho'&d $e f'rnished /ithin one /or2ing da0.
-age 4!
de$arred, s'spended, or proposed for de$arment $0 the federa& governmentW ?s that entit0 responsi$&eW 5o' ma0 at &east /ant to in<'ire a$o't the a)tion prior to ma2ing 0o'r fina& responsi$i&it0 determination. ?f 0o' 2no/ 0o' /o'&d /ant to 'se de$arment information in a non *edera&&0 f'nded pro)'rement, 0o' ma0 /ish to mention it in 0o'r so&i)itationKs responsi$i&it0 )&a'se. ?f the apparent a/ardee of 0o'r so&i)itation 8e.g., the &o/est responsive $idder9 has s'$mitted a )onditioned )ertifi)ation, 0o' )an 'se that information in arriving at 0o'r responsi$i&it0 determination and find the firm non responsi$&e. Bo/ever, the firm ma0 have s'$mitted information 0o' $e&ieve is e;ten'ating eno'gh to /arrant a/ard )onsideration. Iemem$er, if 0o' /ant to a/ard a )ontra)t to a firm that has s'$mitted a )onditioned )ertifi)ation, 0o' )annot ma2e an a/ard 'nti& 0o' have re)eived approva& for the a/ard from the *TA. 9! ?t is re)ommended as soon as it appears 0o' /i&& $e fa)ed /ith this sit'ation, 0o' notif0 0o'r regiona& *TA offi)e for g'idan)e and instr')tions on /hat information the0 need and s'$mit it prompt&0. .$-$-$*$* Bu# America Certification RE@UIREMENT T !4.a of the .aster Agreement states that( a. ,'0 Ameri)a. The Ie)ipient agrees to )omp&0 /ith 49 U.S.C. T 5"2"8@9, *TA reg'&ations, >,'0 Ameri)a Ie<'irements,> 49 C.*.I. -art %%!, and an0 imp&ementing g'idan)e *TA ma0 iss'e. SUMMARD The ,'0 Ameri)a re<'irements app&0 to a&& )ontra)ts for ro&&ing sto)2, stee&, iron, or man'fa)t'red prod')ts /ith a va&'e greater than S!00,000. *or these )ontra)ts, the grantee m'st o$tain a )ertifi)ation of )omp&ian)e or non )omp&ian)e /ith the ,'0 Ameri)a re<'irements /ith ea)h $id or offer. ?f the $idder or offeror is not a$&e to )omp&0 $0 'sing the re<'isite Ameri)an )ontent and )ertifies non )omp&ian)e, it ma0 <'a&if0 for a /aiver, /hi)h the grantee m'st re<'est $efore a/ard. *TA ma0 grant a /aiver if it is fo'nd that it is in the p'$&i) interest, there are no U.S. prod')ts avai&a$&e, or there is a 25 per)ent pri)e differen)e $et/een the foreign and domesti) prod')ts. RE@UIREMENTS Stee& and iron( A&& stee& and iron man'fa)t'ring pro)esses m'st ta2e p&a)e in the U.S. These re<'irements app&0 to a&& )onstr')tion materia&s made primari&0 of stee& or iron and 'sed in
8(
See T "$ of the .aster Agreement, *orm *TA .A8!29.
-age 42
infrastr')t're pro@e)ts s')h as transit or maintenan)e fa)i&ities, rai& &ines, and $ridges. The re<'irements do not app&0 to stee& or iron 'sed as )omponents or s'$)omponents of other man'fa)t'red prod')ts or ro&&ing sto)2. 49 C.*.I. %%!.58a9, 8$9, and 8)9. .an'fa)t'red prod')ts( The prod')t itse&f m'st $e man'fa)t'red in the U.S. /ith !00 per)ent U.S. )omponentsQ foreign s'$)omponents are a&&o/ed. 49 C.*.I. %%!.58d9. Constr')tion )ontra)ts :;)ept for the iron and stee& 'sed in a )onstr')tion )ontra)t, *TA treats the pro)'rement of a )onstr')tion pro@e)t as the pro)'rement of a >man'fa)t'red prod')t> s'$@e)t to 49 C*I %%!.58d9. *ina& assem$&0 of the pro@e)t ta2es p&a)e at the )onstr')tion site, and items dire)t&0 in)orporated into the pro@e)t at the @o$ site are )onsidered >)omponents.> *or instan)e, if the de&ivera$&e 'nder a parti)'&ar )ontra)t is the $'i&ding of a passenger termina&, the termina& itse&f is the end prod')t, and the main e&ements in)orporated into the termina&, e.g., she&ters, e&evators, and p&atforms, are )omponents of the end prod')t. These main e&ements are genera&&0 spe)ified in the )onstr')tion )ontra)t. +owever/ you must first satisfy t)e steel and iron requirements/ as discussed in JJ1.5($) and (c)/ $efore a%%lyin! t)e manufactured %roduct section as discussed a$ove/ to t)e $alance of t)e construction contract. Io&&ing sto)2 8in)&'ding train )ontro&, )omm'ni)ation, and tra)tion po/er e<'ipment9( The )ost of )omponents and s'$)omponents prod')ed in the U.S. m'st $e more than %0 per)ent of the )ost of a&& )omponents and fina& assem$&0 m'st ta2e p&a)e in the U.S. 49 U.S.C. 5"2"8@98298C9 and 49 C.*.I. %%!.!!. -art %%!.!! is a road map for grantees and )ontra)tors to fo&&o/ /hen determining )omp&ian)e /ith the domesti) )ontent re<'irements for ro&&ing sto)2. ?t dis)'sses in detai& /hat )onstit'te )omponents and s'$)omponents. ?t a&so i&&'strates train )ontro& e<'ipment, )omm'ni)ation e<'ipment, and tra)tion po/er e<'ipment 8at s'$se)tions 8t9, 8'9, and 8v99Q and provides a &ist of t0pi)a& )omponents of rai& and $'s ro&&ing sto)2 in the Appendi;. The .ar)h !H, !991, Dear Co&&eag'e &etter &a0s o't the re<'irements for fina& assem$&0. The .ar)h "0, 200!, Dear Co&&eag'e &etter dis)'sses )a&)'&ation of domesti) )ontent, spe)ifi)a&&0 noting that a&& items in)&'ded in the &ist of t0pi)a& )omponents in the Appendi; to %%!.!! m'st $e )onsidered )omponents, not s'$)omponents. *or more dis)'ssion, p&ease see the #oti)e of Dear Co&&eag'e &etter p'$&ished in the *edera& Iegister. %% *ed. Ieg. "24!2 86'ne !4, 200!9. D#ote( The ,'0 Ameri)a re<'irements are different from the ?uy American re<'irements. The &atter app&ies to dire)t federa& pro)'rements. The ,'0 Ameri)a reg'&ations dis)'ssed here, app&0 on&0 to federa& assistan)e programs f'nded $0 the *edera& Transit Administration.F Best Practices ?f 0o' spend m')h time in pro)'rement, a )op0 of 49 C.*.I. -art %%! is one of those >mandator0> do)'ments for 0o'r pro)'rement des2 $oo2. 5o' /i&& $e )onstant&0 referring to these r'&es thro'gho't 0o'r )areer in transit, /hether 0o' are $'0ing $'ses, rai& )ars, )omp'ters or a )onstr')tion pro@e)t. ,e)a'se these r'&es are so )riti)a&, it is a&so important that 0o' 2eep a$reast of *TA g'idan)e and fina& r'&es impa)ting these reg'&ations as p'$&ished in the Federal Re!ister or on the /e$site. *TA+s ,'0 Ameri)a /e$ page is
-age 4"
http(AA///.fta.dot.govA&ega&A$'0Jameri)aA!4"2HJ:#=JBT.7.htm. The /e$ site has &in2s to the reg'&ations, a&& re&evant *edera& Iegister p'$&i)ations, /aivers and &etters of interpretation, fre<'ent&0 as2ed <'estions, ro&&ing sto)2 hand$oo2s, and re&ated Dear Co&&eag'e &etters. Notice ReAuirements When a )ontra)t for ro&&ing sto)2, stee&, iron, or man'fa)t'red prod')ts is estimated to e;)eed S!00,000, 49 C.*.I. %%!.!" re<'ires that the so&i)itation in)&'de >an appropriate noti)e of the ,'0 Ameri)a provision.> A mode& )&a'se addressing that re<'irement is in)&'ded in Appendi; A.!, >*edera&&0 Ie<'ired .ode& C&a'ses> of this .an'a&. This s'ggested &ang'age is /ritten as a pream$&e to the )ertifi)ations re<'ired $0 -arts %%!.% and %%!.!2. Other grantees have satisfied this noti)e re<'irement in their genera& or spe)ia& provisions $0 in)&'ding &ang'age s'$stantia&&0 as fo&&o/s( ?uy America &rovision T)is solicitation and t)e resultin! contract are su$5ect to t)e ?uy America requirements of A: 2.S.C. T5C<C(5) and t)e Federal Transit Administration4s im%lementin! re!ulations found at A: C.F.R. &art JJ1. T)ese re!ulations require/ as a matter of res%onsiveness/ t)at t)e $idder or offeror su$mit wit) its offer a com%leted certification in accordance wit) &art JJ1.J or JJ1.1</ as a%%ro%riate. T)ese certifications are set fort) in t)is solicitation at Kidentify w)ere t)e certifications areL. Certification ReAuirements 49 C.*.I. %%!.!"8$9 re<'ires that 0o' in)&'de in 0o'r so&i)itation a re<'irement, as a )ondition of responsiveness, that the $idder or offeror s'$mit /ith the $id or offer a )omp&eted ,'0 Ameri)a )ertifi)ate in a))ordan)e /ith -art %%!.% for stee&, iron, and man'fa)t'red prod')ts, or -art %%!.!2, for ro&&ing sto)2 8in)&'ding train )ontro&, tra)tion po/er, and )omm'ni)ation e<'ipment9. ?n a sea&ed $id, the $idder is $o'nd $0 its )ertifi)ation and )annot )hange it after $id opening, e;)ept as provided for )&eri)a& error. ?f the $idder does not s'$mit a signed )ertifi)ation /ith the $id, s'$mits the /rong )ertifi)ation of )omp&ian)e, or )ertifies $oth )omp&ian)e and non )omp&ian)e, that $id is non responsive and )annot $e )onsidered. :;)ept as dis)'ssed $e&o/ for )&eri)a& error, 0o' )annot go $a)2 and as2, in a )ompetitive sea&ed $idding pro)'rement, for the $idder to )omp&ete the )ertifi)ation and s'$mit it after $ids are opened. ?n )ompetitive negotiated pro)'rements 8i.e., re<'ests for proposa&s9, )ertifi)ations s'$mitted as part of an initia& proposa& ma0 $e s'perseded $0 s'$se<'ent )ertifi)ations s'$mitted /ith revised proposa&s, and the )ertifi)ation s'$mitted /ith the offeror+s fina& revised proposa& 8or $est and fina& offer9 /i&& )ontro&. Bo/ever, /here the grantee a/ards on the $asis of initia& proposa&s /itho't dis)'ssion, the )ertifi)ation s'$mitted /ith the initia& proposa& /i&& )ontro&.
-age 44
The )&eri)a& error provision a&&o/s $idders and offerors to )hange a )ertifi)ation of non )omp&ian)e to one of )omp&ian)e only if t)e $idder or offeror certified wron!ly due to a clerical or inadvertent error. 49 C.*.I. %%!.!"8$9. .ore e;p&anation of this provision )an $e fo'nd in the *ina& I'&e p'$&ished in the *edera& Iegister. %H *ed. Ieg. 9191 8*e$. 2H, 200"9. ?f the $idder or offeror )ertifies it /i&& )omp&0 /ith the ,'0 Ameri)a re<'irements, it /i&& not $e e&igi$&e &ater for a /aiver of those re<'irements. 49 C.*.I. %%!.!"8)9. The )ertifi)ation re<'irement for pro)'ring stee&, iron, or man'fa)t'red prod')ts is at 49 C.*.I. -art %%!.%. This )ertifi)ation &ang'age refers to se)tions of the S'rfa)e Transportation Assistan)e A)t of !9H2 8stee& and man'fa)t'red prod')ts9 and not to the most re)ent version of the stat'te, fo'nd in 49 U.S.C. 5"2"8@9 8stee&, iron, and man'fa)t'red prod')ts9. The )ertifi)ation &ang'age in Appendi; A.!, >*edera&&0 Ie<'ired .ode& C&a'ses> a))'rate&0 referen)es the )orre)t stat'tor0 provision. 5o' sho'&d 'se this 'nti& the *TA p'$&ishes te)hni)a& )orre)tions to this C.*.I. se)tion. The $idder or offeror has a )hoi)e of t/o )ertifi)ations to )omp&ete, either(

it /i&& )omp&0 /ith 49 U.S.C. 5"2"8@98!9 and 49 C.*.I. %%!.5Q or it )annot )omp&0 /ith 49 U.S.C. 5"2"8@98!9 and 49 C.*.I. %%!.5, $'t ma0 <'a&if0 for an e;)eption 'nder 49 U.S.C. 5"2"8@98298A9, 5"2"8@98298,9, or 5"2"8@98298D9, and 49 C.*.I. %%!.1.
The )ertifi)ation re<'irement for pro)'ring ro&&ing sto)2 8in)&'ding tra)tion po/er, train )ontro&, and )omm'ni)ation e<'ipment9 is at -art %%!.!2. This )ertifi)ation &ang'age a&so refers to se)tions of the S'rfa)e Transportation Assistan)e A)t of !9H2 and not to the most re)ent version of the stat'te, fo'nd in 49 U.S.C. 5"2"8@9. The )ertifi)ation &ang'age for %%!.!2 in Appendi; A.!, >*edera&&0 Ie<'ired .ode& C&a'ses> of this .an'a& a))'rate&0 referen)es the )orre)t stat'tor0 provision. 5o' sho'&d 'se this 'nti& the *TA p'$&ishes te)hni)a& )orre)tions to this C.*.I. se)tion. The $idder or offeror has a )hoi)e of t/o )ertifi)ations to )omp&ete, either(

it /i&& )omp&0 /ith 49 U.S.C. 5"2"8@98298C9 and 49 C.*.I. %%!.!!Q or it )annot )omp&0 /ith 49 U.S.C. 5"2"8@98298C9 and 49 C.*.I. %%!.!!, $'t ma0 <'a&if0 for an e;)eption 'nder 49 U.S.C. 5"2"8@98298A9, 5"2"8@98298,9, or 5"2"8@98298D9, and 49 C.*.I. %%!.1.
Bai%er ReAuirements ?f a $idder or offeror e;e)'tes the )ertifi)ation indi)ating that it )annot )omp&0 $'t ma0 <'a&if0 for an e;)eption, 0o' m'st revie/ the )ir)'mstan)es to determine if 0o' sho'&d re<'est a /aiver from *TA. ?f 0o' do not re<'est a /aiver or 0o' re<'est it and it is denied, 0o' m'st a/ard to a )omp&iant $idder or offeror if 0o' p&an to 'se federa& f'nds. The ,'0 Ameri)a re<'irements ma0 $e /aived in three spe)ifi) instan)es(
-age 45
?f the re<'irements are in)onsistent /ith p'$&i) interest Un&ess a genera& e;)eption is set o't in the Appendi; to -art %%!.1 of the reg'&ation, this /aiver re<'ires a determination $0 the *TA Administrator, on a )ase $0 )ase $asis, that to re<'ire )omp&ian)e is >in)onsistent /ith the p'$&i) interest.> 49 U.S.C. 5"2"8@98298A9 and 49 C.*.I. %%!.18$9. ?f the materia&s are not avai&a$&e in from the U.S. This /aiver re<'ires a determination $0 the *TA Iegiona& Administrator that the materia&s for /hi)h a /aiver is re<'ested are not prod')ed in the U.S. in s'ffi)ient and reasona$&0 avai&a$&e <'antities and of a satisfa)tor0 <'a&it0. ?f no responsive and responsi$&e $id is re)eived offering an item prod')ed in the U.S., it /i&& $e pres'med the )onditions e;ist to grant this non avai&a$i&it0 /aiver. ?n the )ase of a so&e so'r)e pro)'rement, the /aiver /i&& $e granted on&0 if the grantee provides s'ffi)ient information /hi)h indi)ates that the item to $e pro)'red is on&0 avai&a$&e from a sing&e so'r)e or that the item to $e pro)'red is not prod')ed in s'ffi)ient and reasona$&0 avai&a$&e <'antities of a satisfa)tor0 <'a&it0 in the U.S. 49 U.S.C. 5"2"8@98298,9 and 49 C.*.I. %%!.18)9. ?f the )ost of the domesti) prod')t is more than 25 per)ent higher than the foreign prod')t This /aiver re<'ires a determination $0 the *TA Iegiona& Administrator that in)&'ding a domesti) item or domesti) materia& /i&& in)rease the )ost of the )ontra)t $et/een the grantee and its s'pp&ier of that item or materia& $0 more than 25 per)ent. This /aiver )annot $e app&ied to )omponents or s'$)omponents. 49 U.S.C. 5"2"8@9829 8D9 and 49 C.*.I. %%!.18d9. =enera& /aivers Appendi; A to -art %%!.1 &ists spe)ifi) /aivers for /hi)h app&i)ations are not ne)essar0. This &ist in)&'des a&& /aivers p'$&ished in 4H C.*.I. 25.!04, 92 Chr0s&er vans, mi)ro)omp'ters and sma&& p'r)hases 'nder S!00,000. A genera& /aiver has a&so $een granted 'nder the ro&&ing sto)2 re<'irements of -art %%!.!! at Appendi; A. Under this /aiver, the provisions of this se)tion do not app&0 /hen foreign so'r)e spare parts for $'ses and other ro&&ing sto)2 /hose tota& )ost is !0 per)ent or &ess of the overa&& pro@e)t )ontra)t )ost are $eing pro)'red as part of the same )ontra)t for the ma@or )apita& item. ?f the prod')t offered <'a&ifies for a permanent dis)'ssed here, the $idder or offeror sho'&d )ertif0 )omp&ian)e /ith ,'0 Ameri)a.
=enera&&0, on&0 grantees ma0 app&0 for a /aiver. Bo/ever, if a $idder or offeror is see2ing a /aiver 'nder -art %%!.18f98/aiver for )omponent or s'$ )omponent 'nder ro&&ing sto)2 pro)'rements9 or -art %%!.18g9 8/aiver for spe)ifi) item 'sed a man'fa)t'red prod')t9, *TA /i&& )onsider a re<'est for /aiver dire)t&0 from the $idder, offeror, or s'pp&ier. The grantee ma0 re<'est a /aiver from *TA /hen there is a via$&e p'$&i) interest arg'ment s'pporting a/ard to a non )omp&iant $idder or offeror /hen there is a )omp&iant $idder or offerorQ /hen there are no )omp&iant $ids or offers 8in)&'ding a @'stified so&e so'r)e to a non )omp&iant $idder or offeror9Q or /hen there is more than a 25 per)ent pri)e differen)e $et/een
8*
The te;t of the reg'&ation refers to -art 25.!0H, $'t this se)tion has $een moved to -art 25.!04.
-age 4%
the )omp&iant and non )omp&iant $id or offer. ,t)erwise/ t)e !rantee must award to t)e com%liant $idder or offeror meetin! all requirements for award. App&i)ations for /aivers are pro)essed fo&&o/ing 49 C.*.I. %%!.9. :;)ept as noted a$ove, the /aiver re<'est m'st $e o$tained >in a time&0 manner> thro'gh the grantee. =rantees sho'&d therefore revie/ the $ids or offers and re<'est a /aiver, if one is ne)essar0, $efore a/ard. The granteeKs re<'est for /aiver m'st $e made in /riting and in)&'de a&& fa)ts and @'stifi)ation to s'pport the /aiver, and $e s'$mitted to the *TA Administrator thro'gh the appropriate *TA Iegiona& Offi)e. The Administrator 8or Iegiona& Administrator, in )ases /here a'thorit0 has $een de&egated9 /i&& iss'e a /ritten determination setting forth the reasons for granting or den0ing the /aiver. In%esti"ations *TA+s ,'0 Ameri)a investigative pro)ed'res esta$&ish a pres'mption that a $idder /ho has s'$mitted a ,'0 Ameri)a )ertifi)ate is in )omp&ian)e /ith the reg'&ation. *TA /i&& investigate if it finds that this pres'mption has $een over)ome. *TA ma0 initiate an investigation on its o/n or in response to a third part0 petition. The reg'&ation re<'ires that the petition in)&'de a statement of the gro'nds of the petition and an0 s'pporting do)'mentation. 49 C.*.I. %%!.!5. Intentional Piolations 49 C.*.I. %%!.!H, states that an0 person determined $0 a *edera& agen)0 or )o'rt to have intentiona&&0 affi;ed a fa&se >.ade in Ameri)a> &a$e& to, or misrepresented the origin of, a prod')t that /as 'sed in the pro@e)t $'t /hi)h /as not prod')ed in the United States is ine&igi$&e to re)eive an *TA f'nded )ontra)t. *or instan)e, if a person has $een )onvi)ted $0 a )o'rt of ma2ing a fa&se )ertifi)ation 'nder these provisions, that person /o'&d $e ine&igi$&e for a/ard of a )ontra)t. ?f there /as a vio&ation $'t not a )onvi)tion, the information )o'&d sti&& affe)t 0o'r responsi$i&it0 determination. Simi&ar&0, if it /as determined 8perhaps thro'gh a s'spension or de$arment pro)eeding )ond')ted $0 a federa& agen)09 that the person fa&se&0 represented the Ameri)an origin of a prod')t, that person /o'&d simi&ar&0 $e ine&igi$&e for a/ard of a )ontra)t. ?f the vio&ation is dis)overed after a/ard, the )ontra)tor remains responsi$&e for performing the )ontra)t, in)&'ding satisf0ing the ,'0 Ameri)a re<'irements. A t0pi)a& reso&'tion is to permit the )ontra)tor to s'$stit'te a different prod')t that meets the spe)ifi)ations in)&'ding the ,'0 Ameri)a re<'irement at the )ontra)torKs e;pense. ?n rare instan)es, *TA ma0 approve a p'$&i) interest /aiver a&&o/ing the non )omp&iant prod')t to $e 'sed.
-age 41
.$-$-$*$- Lo&&#in" Certification RE@UIREMENT T".d of the .aster Agreement states that( d. 7o$$0ing Iestri)tions. The Ie)ipient agrees as fo&&o/s( 8!9 Iefrain from 'sing *edera& assistan)e f'nds to s'pport &o$$0ing, and 829 Comp&0, and ass're the )omp&ian)e $0 ea)h third part0 )ontra)tor at an0 tier and ea)h s'$re)ipient at an0 tier, /ith app&i)a$&e re<'irements of U.S. DOT reg'&ations, >#e/ Iestri)tions on 7o$$0ing,> 49 C*I -art 20, modified as ne)essar0 $0 "! U.S.C. T !"52. DISCUSSION T/e reAuirements set fort/ a&o%e /a%e &een included in all "rants &et1een t/e FTA and its "rantees 1it/ a reAuirement t/at t/e certification flo1 do1n to all contractors and su&contractors for 1/om a contract in%ol%in" federal funds in e;cess of R(::!::: is contem lated$ T/e reAuirement /as t1o as ects to it3 First! t/e certification itself must &e e;ecuted and returned 1it/ t/e &id or ro osal$ Second! in t/e e%ent funds of an# sort /a%e &een used for lo&&#in" acti%ities 8- &# t/e contractor or an# su&contractorJ a Standard Form)LLL! FDisclosure Form to Re ort Lo&&#in"F must also &e com leted$ It is #our ultimate res onsi&ilit# to ensure t/at t/ese certifications and disclosure forms are su&mitted to t/e FTA$ 8. Best Practices Certifi)ations Ie<'ired ?n a&& so&i)itations that are e;pe)ted to res'&t in )ontra)t amo'nts in e;)ess of S!00,000, the )ertifi)ation set forth in Appendi; A to 49 C*I -art 20 m'st $e
8-
The pa0ment to an0 >person> to inf&'en)e or attempt to inf&'en)e an offi)er or emp&o0ee of an0 federa& department or agen)0, a mem$er of Congress, an offi)er or emp&o0ee of Congress, or an emp&o0ee of a mem$er of Congress in )onne)tion /ith the a/arding of an0 federa& )ontra)t, the ma2ing of an0 *edera& grant, the ma2ing of an0 federa& &oan, the entering into of an0 )ooperative agreement, and the e;tension, )ontin'ation, rene/a&, amendment, or modifi)ation of an0 federa& )ontra)t, grant, &oan, or )ooperative agreement. 49 C*I T 20.!008a9.
8.
,e)a'se the &ang'age of the reg'&ations refers to needing the )ertifi)ation and app&i)a$&e dis)&os'res at time of a/ard, 'n&ess 0o'r so&i)itation spe)ified other/ise, fai&'re to s'$mit the e;e)'ted )ertifi)ation /ith the offer /o'&d pro$a$&0 not $e )onsidered a responsiveness iss'e in a )ompetitive $idding pro)'rement, and /o'&d not dis<'a&if0 the offer.
-age 4H
in)&'ded. The )ertifi)ation is a&so in)&'ded in Appendi; A.!, >*edera&&0 Ie<'ired .ode& C&a'ses> of this .an'a& 'nder the >7o$$0ing> )ontra)t provisions. A&tho'gh it is not re<'ired that 0o' in)&'de a )op0 of the Standard *orm 777 in the so&i)itation, it is re)ommended that 0o' have a )op0 avai&a$&e to f'rnish to an offeror if one is re<'ested. A )op0 is in)&'ded in the C*I se)tion and ma0 $e reprod')ed. 95 A )op0 ma0 a&so $e avai&a$&e from 0o'r &ega& )o'nse& or federa& grants offi)e $e)a'se the agen)0 had to f'rnish a )op0 to the *TA as /e&& as part of the =rant ma2ing pro)ess. Time&iness The )ertifi)ation 8and Standard *orm 777 if app&i)a$&e9 sho'&d $e e;e)'ted and ret'rned /ith the $id or proposa&. ,e)a'se the &ang'age of the reg'&ations refers to needing the Certifi)ation and app&i)a$&e dis)&os'res at time of a/ard, fai&'re to s'$mit the e;e)'ted )ertifi)ation /ith the offer /o'&d not $e )onsidered a responsiveness iss'e in a )ompetitive $idding pro)'rement. S'$)ontra)ts 5o' ma0 not a&/a0s 2no/ /ho 0o'r prime )ontra)tor s'$)ontra)ts /ith, parti)'&ar&0 in fi;ed pri)e )ontra)ts. ?t is re)ommended that d'ring an0 pre performan)e )onferen)e 0o' have /ith the prime, 0o' remind him or her of the re<'irement to for/ard the )ertifi)ation and dis)&os're statements made $0 s'$)ontra)tors at an0 tier /ho have s'$)ontra)ts in e;)ess of S!00,000 thro'gh the tiers to the )ontra)ting offi)er. .$-$-$- Ot/er Su&missions .$-$-$-$( AcEno1led"ment of Solicitation Addenda DISCUSSION Alt/ou"/ t/e to ic /as &een discussed in different conte;ts! 82 one of t/e most critical su&missions t/at s/ould &e recei%ed 1it/ offers is an acEno1led"ment of an# amendments to t/e solicitation$ T/ese are t/e c/an"es to t/e terms of t/e solicitation 6includin" to t/e F&oiler late!F t/e dra1in"s! s ecifications! sco e of 1orE! etc$9 t/at in all liEeli/ood /a%e an im act on rice or sc/edule$ If an amendment is not acEno1led"ed! #ou do not Eno1 if t/e offeror is reall# offerin" t/e same roduct or ser%ice t/at #ou 1ant$
80
The >7o$$0ing Dis)&os're A)t of !995> 8-'$. 7. !04 %59 made some amendments to "!U.S.C. T !"52, /hi)h simp&ified the information that needed to $e dis)&osed on this *orm. Those )hanges are detai&ed at %! Fed. Re!. !4!2 86an'ar0 !9, !99%9 and /i&& $e event'a&&0 in)orporated into a ne/ Standard *orm. Three items of the S* 777 are impa)ted( ?tem !0a is amended $0 revising >#ame and Address of 7o$$0ing :ntit0> to read >#ame and Address of 7o$$0ing Iegistrant>Q in ?tem !0, the statement >8atta)h Contin'ation Sheet8s9 S* 777 A, if ne)essar09> is removedQ and ?tems !! thro'gh !5 are removed.
82
See dis)'ssion at Se)tion 4.".2.5, >Amendment of So&i)itations.>
-age 49
Best Practices There are t/o /a0s most agen)ies a&&o/ offerors to a)2no/&edge re)eipt of amendments. As /e dis)'ssed in the se)tion on the So&i)itation, 91 man0 agen)ies in)&'de on the solicitation form itse&f, spa)e for so&i)itation amendments to $e a)2no/&edged. A se)ond /a0 is for the offeror to a)t'a&&0 sign and date the amendment )over sheet and ret'rn it either at the time of re)eipt or in)&'de it /ith the offer. Se&dom is it re<'ired $0 the agen)0, $'t it is not 'n's'a& for an offeror to fi&& in the spa)e on the so&i)itation form and ret'rn the amendment too. #o pro$&em from 0o'r standpoint @'st >over2i&&> $0 a )on)erned offeror. ?f 0o' see this sit'ation fre<'ent&0, 0o' ma0 /ant to )he)2 the instr')tions 0o' have provided to offerors and determine if there is some am$ig'it0 a$o't 0o'r a)2no/&edgment re<'irements. ?f 0o' re)eive a $id or proposa& and one or more of the iss'ed amendments are not a)2no/&edged, /hat do 0o' doW .an0 times 0o' are initia&&0 on&0 &oo2ing at the &o/ $idderKs $id &oo2 at the other $idders and see if the0 a)2no/&edged the amendment. ?f not, there ma0 $e a mai&room or time&iness pro$&em. Are the )hanges to the so&i)itation made $0 the amendment materia&W ?f the amendment is materia&, a))'m'&ate the do)'ments and see2 the advi)e of 0o'r &ega& )o'nse&. -arti)'&ar&0 in an ?*, pro)'rement, 0o' ma0 have a &o/ $id that is non responsive and )annot $e )onsidered for a/ard. Depending 'pon ho/ 0o'r agen)0 )ond')ts I*-s, the fai&'re to a)2no/&edge an amendment is not 's'a&&0 >fata&> and 0o' )an as2 for an a)2no/&edgment d'ring negotiations or dis)'ssions. 5o' ma0 /ish to in)&'de in 0o'r pro)ed'res or so&i)itations a provision for 0o'r determination regarding the responsiveness of offers /hi)h do not a)2no/&edge materia& addenda. S')h a provision /i&& reinfor)e 0o'r dis)retion.
84
See dis)'ssion at Se)tion 4.".2.", >So&i)itation.>
-age 50
.$-$-$-$* Bid <uarantee RE@UIREMENT ?n dis)'ssing $onding re<'irements, T !! of *TA Cir)'&ar 4220.!: provides( *or those )onstr')tion or fa)i&it0 improvement )ontra)ts or s'$)ontra)ts e;)eeding S!00,000, *TA ma0 a))ept the $onding po&i)0 and re<'irements of the grantee, provided *TA determined that the po&i)0 and re<'irements ade<'ate&0 prote)t the *edera& interest. *TA has determined that grantee po&i)ies and re<'irements that meet the fo&&o/ing minim'm )riteria ade<'ate&0 prote)t the *edera& interest( a. A $id g'arantee from ea)h $idder e<'iva&ent to five 859 per)ent of the $id pri)e. The >$id g'arantee> sha&& )onsist of a firm )ommitment s')h as a $id $ond, )ertified )he)2, or other negotia$&e instr'ment a))ompan0ing a $id as ass'ran)e that the $idder /i&&, 'pon a))eptan)e of its $id, e;e)'te s')h )ontra)t'a& do)'ments as ma0 $e re<'ired /ithin the time spe)ifiedQ T!5.m of the .aster Agreement states that( 8m9 ,onding The Ie)ipient agrees to )omp&0 /ith the fo&&o/ing $onding re<'irements. 8!9 Constr')tion A)tivities L The re)ipient agrees to provide $id g'arantee, )ontra)t performan)e, and pa0ment $onding to the e;tent deemed ade<'ate $0 *TA and app&i)a$&e *edera& reg'&ations, and )omp&0 /ith an0 other $onding re<'irements *TA ma0 iss'e. 829 Other A)tivities L The Ie)ipient agrees to )omp&0 /ith an0 other $onding re<'irements or restri)tions *TA ma0 impose. 9H State &a/s are sometimes spe)ifi) in re<'iring or prohi$iting se)'rit0 and g'arantees in p'$&i) pro)'rements. -erforman)e $onds are often re<'ired, and the re<'irement ma0 a&so affe)t $id g'aranties. DISCUSSION T/e rimar# function of o&tainin" a &id "uarantee is to financiall# rotect t/e o1ner from loss s/ould t/e successful offeror fail to e;ecute furt/er contractual instruments and furnis/ erformance &onds or insurance certificates as reAuired$ As reAuired &# t/e FTA!
85
The re<'irements of T !5.m of the .aster Agreement mirror those of T !! of *TA Cir)'&ar 4220.!: and refer the grantee to the provisions of 49 C*I T !H."%8h9.
-age 5!
t/is financial rotection on construction contracts is 0O of t/e amount of t/e offer$ Bid "uaranties are usuall# used onl# 1/ere t/ere is a reAuirement for erformance and7or a#ment &onds are reAuired rior to t/e commencement of erformance$ Be 1ill discuss in ot/er sections of t/e Manual &ondin" reAuirements in articular t# es of rocurements! suc/ as for construction! 88 eAui ment and su lies! (:: and rollin" stocE$ (:( In t/is section! 1e 1ill discuss t/e su&mission reAuirements for t/e %arious t# es of &id "uarantee! suc/ as &id &onds! certified c/ecEs! and ot/er allo1a&le ne"otia&le instruments$ As 1it/ man# ot/er as ects of t/e rocurement rocess! t/e use of &id securit# and t/e t# es of securit# ma# &e addressed in #our state la1s$ In t/ese cases! #ou 1ill &e o&li"ated to follo1 t/ose la1s as lon" as t/e# meet t/e minimum reAuirements of t/e federal re"ulations set fort/ a&o%e$ Best Practices So&i)itation ?f a $id g'arantee is to $e re<'ired, a so&i)itation )&a'se is in)&'ded that detai&s(

the re<'irementQ the amo'nt of the g'arantee 8t0pi)a&&0 5 per)ent of offer pri)e9 and ho/ it sho'&d $e )a&)'&atedQ a))epta$&e forms of g'arantee 8's'a&&0, )ashierKs )he)2, &etter of )redit, or $ond from a &i)ensed agen)09Q and that the g'arantee m'st $e s'$mitted /ith the offer.
#onresponsiveness 5o' )an in)&'de in 0o'r po&i)0 regarding $id g'aranties the a)tions to $e ta2en if one is not f'rnished in a))ordan)e /ith the so&i)itation re<'irement.
#orma&&0 in a $iddin! environment, if the proper g'arantee is not f'rnished /ith the $id, the $id is non responsive. ?f 0o' a&&o/ed the $idder to s'$mit the missing g'arantee or )orre)t a defe)tive g'arantee after the $ids /ere >e;posed>, 0o' /o'&d $e a&&o/ing >t/o $ites from the app&e.> On)e the $ids are 2no/n, the $idder )o'&d de)ide to s'$mit 8or not9 the $id g'arantee $ased on ho/ m')h mone0 is &eft on the ta$&e`
88
See Se)tion %.!, >Constr')tion.> See Se)tion %.2, >:<'ipment and S'pp&ies.> See Se)tion %." >Io&&ing Sto)2.>
(::
(:(
-age 52
?n a com%etitive %ro%osal pro)ess, if a g'arantee /as re<'ired and /as not s'$mitted, 0o'r so&i)itation do)'ment /o'&d determine /hether it )o'&d $e as2ed for d'ring negotiations. ,'t /hat do 0o' do if 0o' )o'&d a/ard a )ontra)t /itho't negotiations, 8a right 0o' /i&& fre<'ent&0 reserve to 0o'rse&f9W ?f 0o' have to as2 one offeror for its $id g'arantee, is that )onsidered dis)'ssions or negotiationsW ?f so, that /o'&d ne)essitate opening dis)'ssions /ith a&& offerors in the )ompetitive range. !02 *or these reasons, and $e)a'se proposers have other means of effe)tive&0 /ithdra/ing from )ompetitive proposa& pro)esses, proposa& g'arantee is &ess fre<'ent&0 'sed than $id g'arantee 8even if a performan)e $ond is '&timate&0 re<'ired9.
What if the $id g'arantee is not signed, $'t the $id isW What if 0o' on&0 re)eived one offer and the g'arantee /as not in)&'ded /ith that offerW What if the g'arantee is re)eived &ateW What if the amo'nt of the g'arantee is ins'ffi)ientW What if the g'arantee is not dated or has an in)orre)t dateW These are a&& <'estions that )o'&d arise and )an $e )onsidered in 0o'r po&i)0 form'&ation.!0" 5o'r po&i)0 /o'&d provide, e.g., that defi)ien)ies affe)ting offer pri)e /o'&d $e materia& and /o'&d esta$&ish nonresponsiveness. C'stod0 of ='arantee What do ? do /ith the $id g'aranteeW ?t is re)ommended that if the g'arantee is a $ond or &etter of )redit, it $e retained /ith the pro)'rement fi&e. ?f it is other than a $id $ond, it is re)ommended that it $e p&a)ed in a se)'re area 8safe or &o)2ed fi&e )a$inet9 /ith a notation in the pro)'rement fi&e its &o)ation. Un'sed ='arantee ='aranties have a finan)ia& impa)t on proposers as &ong as the0 are in effe)t. Therefore, 0o' /i&& /ant to ret'rn it to the 'ns'))essf'& offerors as soon as it is pr'dent to do so 8e.g., 0o' have a/arded the )ontra)t or the offeror is too far do/n the $id &ist to reasona$&0 e;pe)t an a/ard9. 5o' ma0 esta$&ish a r'&e that a&& offerors $e0ond a )ertain ran2 8e.g., the fo'rth &o/est and a&& higher $ids, a&& proposers o'tside the )ompetitive range9 /i&& immediate&0 have their g'arantee ret'rned. Iet'rn 'n'sed g'arantees to )ontra)tors after the )ontingen)ies have $een met a&& )ontra)t'a& re<'irements have $een met and the re<'ired performan)e and pa0ment $onds and ins'ran)e )ertifi)ates are in p&a)e as prote)tion for the o/ner in the event of defa'&t or non performan)e of the )ontra)tor. Co&&e)tion of ,ond A&tho'gh 0o' /i&& se&dom $e invo&ved in )o&&e)ting f'nds from a $onding agen)0 'nder a $id $ond, )o&&e)tion is &i2e the )apt're of the 2ing in )hess. ?t di)tates man0 of the moves 0o' /i&& /ant to ma2e to 'se a $id $ond effe)tive&0 /itho't imposing 'nne)essar0
(:*
See dis)'ssion in Se)tion 4.5.4, >Dis)'ssions and C&arifi)ations.>
(:-
As an e;amp&e of ho/ these and other sit'ations have $een addressed in the federa& environment, see *AI T 2H.!0! 4.
-age 5"
$'rden on 0o'r offerors. The )onditions /hi)h dis)harge the $ond sho'&d $e spe)ified in 0o'r so&i)itation. =enera&&0, the prin)ipa& )ondition that dis)harges the $ond or g'arantee is the f'rnishing of a performan)e $ond. Often the terms of the $id g'arantee a&so g'arantee that the offeror /i&& provide e;e)'ted )ontra)t do)'ments, ins'ran)e )ertifi)ates, pa0ment $onds, or eviden)e of D,: )omp&ian)e. On)e the performan)e $ond is in p&a)e, it g'arantees performan)e of a&& other )ontra)tor o$&igations. The most &i2e&0 reasons a performan)e $ond /o'&d not $e f'rnished 8/hi)h are the )onditions 0o' might &oo2 for in de)iding /hether to re<'ire $id g'arantee9 are( a finan)ia& )ondition so /ea2 that $onding )ompanies /i&& not parti)ipate, s')h a &arge amo'nt of $onds a&read0 iss'ed that the $ond )annot $e o$tained, se)ond tho'ghts a$o't the )ontra)t $ased on the information revea&ed 'p to the point in time of $onding, or a frivo&o's $id. ?f the performan)e $ond is not provided, 0o' )an spe)if0 the right 'nder 0o'r $id g'arantee provision to immediate&0 a))ept the ne;t ran2ed offer and to )o&&e)t from t)e defaultin! offeror the pri)e and va&'e differen)e $et/een the offers. 8:stimating this differen)e is one /a0 to set the amo'nt of the $id g'arantee.9 ?f the g'arantee is a $ond or e<'iva&ent &etter of )redit, 0o' ma0 need to o$tain a @'dgment against the offeror $efore 0o' )an a)t'a&&0 )o&&e)t from the $onding )ompan0 or $an2. As indi)ated a$ove, it is )riti)a& to most s'pp&iers /ho provide $id g'arantee that the0 retain the )onfiden)e of $onding )ompanies. The $onding )ompan0Ks )on)ern ma0 assist in )o&&e)tion from a defa'&ting offeror. .$. SEALED BIDS 6INPITATION FOR BIDS9 .$.$: O%er%ie1 RE@UIREMENT The *TA does not re<'ire 'se of the sea&ed $id 8invitation for $ids9 method of pro)'rement for an0 parti)'&ar pro)'rement. This method is simp&0 one of man0 that ma0 $e 'sed, as appropriate. ?f, ho/ever, the grantee de)ides this method of pro)'rement is appropriate, T 9.). of *TA Cir)'&ar 4220.!: sets forth some definitions, parameters for 'se, and some spe)ifi) re<'irements to $e fo&&o/ed( ). -ro)'rement $0 Sea&ed ,idsA?nvitation for ,id 8?*,9. ,ids are p'$&i)&0 so&i)ited and a firm fi;ed pri)e )ontra)t 8&'mp s'm or 'nit pri)e9 is a/arded to the responsi$&e $idder /hose $id, )onforming /ith a&& the materia& terms and )onditions of the invitation for $ids, is the &o/est in pri)e. 8!9 ?n order for sea&ed $idding to $e feasi$&e, the fo&&o/ing )onditions sho'&d $e present( 8a9 A )omp&ete, ade<'ate, and rea&isti) spe)ifi)ation or p'r)hase des)ription is avai&a$&eQ
-age 54
8$9 T/o or more responsi$&e $idders are /i&&ing and a$&e to )ompete effe)tive&0 for the $'sinessQ 8)9 The pro)'rement &ends itse&f to a firm fi;ed pri)e )ontra)t and the se&e)tion of the s'))essf'& $idder )an $e made prin)ipa&&0 on the $asis of pri)eQ and 8d9 #o dis)'ssion /ith $idders is needed. 829 ?f this pro)'rement method is 'sed, the fo&&o/ing re<'irements app&0( 8a9 The invitation for $ids /i&& $e p'$&i)&0 advertised and $ids sha&& $e so&i)ited from an ade<'ate n'm$er of 2no/n s'pp&iers, providing them s'ffi)ient time to prepare $ids prior to the date set for opening the $idsQ 8$9 The invitation for $ids, /hi)h /i&& in)&'de an0 spe)ifi)ations and pertinent atta)hments, sha&& define the items or servi)es so'ght in order for the $idder to proper&0 respondQ 8)9 A&& $ids /i&& $e p'$&i)&0 opened at the time and p&a)e des)ri$ed in the invitation for $idsQ 8d9 A firm fi;ed pri)e )ontra)t a/ard /i&& $e made in /riting to the &o/est responsive and responsi$&e $idder. When spe)ified in $idding do)'ments, fa)tors s')h as dis)o'nts, transportation )osts, and &ife )0)&e )osts sha&& $e )onsidered in determining /hi)h $id is &o/estQ -a0ment dis)o'nts /i&& on&0 $e 'sed to determine the &o/ $id /hen prior e;perien)e indi)ates that s')h dis)o'nts are 's'a&&0 ta2en advantage ofQ and 8e9 An0 or a&& $ids ma0 $e re@e)ted if there is a so'nd do)'mented reason. 8"9 The sea&ed $id method is the preferred method for pro)'ring )onstr')tion if the )onditions in paragraph )8!9 a$ove app&0. State &a/ t0pi)a&&0 p&a)es additiona& and more spe)ifi) re<'irements on the sea&ed $idding pro)ess. DISCUSSION Ca%in" said t/ere is no FTA reAuirement t/at "rantees use t/e sealed &iddin" met/od of rocurement! it s/ould &e reco"ni,ed t/at! as a ractical matter! man# more "rantee rocurements are accom lis/ed 1it/ t/is met/od as o osed to t/e com etiti%e ro osal7reAuest for ro osal met/od 1/ic/ 1ill &e discussed in more detail &elo1$ T/ere is a mi;ture of /istor# and tradition &e/ind t/e use of sealed &iddin" in t/e u&lic sector
-age 55
1/ic/ is freAuentl# em&odied in le"islati%e reAuirements at &ot/ t/e federal and state le%els$ Alt/ou"/ federal le"islati%e reAuirements mandatin" t/e use of t/is met/od /a%e &een rela;ed in recent #ears! man# states still reAuire its use for man# commodities or ser%ices &ein" rocured and it is still t/e F referredF met/od for t/e acAuisition of construction ser%ices in t/e u&lic sector! e%en &# t/e FTA$ Sealed &iddin" is ercei%ed to &e a faster met/od of rocurementJ 1/o "ets t/e contract can &e determined fairl# o&'ecti%el#J and t/e fi;ed rice contract 1/ic/ results is eas# to understand and &ud"et! as 1ell as mana"e after a1ard$ Pur ose As /ith so man0 other aspe)ts of p'$&i) pro)'rement, /e m'st $egin /ith a re)ommendation that 0o' )he)2 0o' state or &o)a& &a/ or ordinan)e to determine if a &egis&ative $od0 has de)ided for 0o' /hat f&e;i$i&it0, if an0, 0o' have to 'se a pro)'rement method other than the ?*, method. ?f 0o' are &imited on /hat methods 0o' )an 'se 'nder /hat )ir)'mstan)es, 0o' /i&& $e o$&igated to )omp&0 /ith those &a/s, ordinan)es or reg'&ations. We /i&& address this method in this se)tion as tho'gh there /ere no &imiting )onstraints on 0o'r a$i&it0 to 'se this method. As a pra)ti)a& matter, the )onstraints 0o' are &i2e&0 to $e fa)ed /ith /o'&d $e &imitations on 0o'r a$i&it0 to 'se the )ompetitive proposa& method rather than the sea&ed $idding method. ,e)a'se of the /a0 this .an'a& has $een drafted, it is important to read Se)tion 4." in )on@'n)tion /ith this Se)tion $e)a'se man0 of the feat'res or e&ements of $oth the ?*, and I*methods of pro)'rement are, if not the same, ver0 simi&ar. Iather than d'p&i)ate the dis)'ssion of those feat'res in o'r dis)'ssions of $oth methods, /e s'ggest 0o' read that se)tion first and then this se)tion on the sea&ed $idding method$ Best Practices When do ? 'se the sea&ed $idA?*, method of pro)'rementW
?n de)iding /hether or not to 'se the sea&ed $idding method of pro)'rement, the )onditions detai&ed in T 9.).8!9 of *TA Cir)'&ar 4220.!: are e;)e&&ent and ver0 se&f e;p&anator0. =o do/n the &ist, do a&& of the )onditions e;istW ?f 0o' need more information a$o't a parti)'&ar )ondition, this .an'a& is designed to provide 0o' /ith that additiona& detai&. *or information a$o't spe)ifi)ations, refer to Chapter "/ >Spe)ifi)ations.> *or more information a$o't >responsi$i&it0>, refer to Se)tion 5.!, >Iesponsi$i&it0 of Contra)tor.> *or <'estions a$o't /hat a firm fi;ed pri)e )ontra)t is, refer to Se)tion 2.4.".!, >*i;ed -ri)e.>
What steps are invo&ved in the sea&ed $idding method of pro)'rementW .ost of these steps have $een addressed in Se)tion 4.", >Competitive -ro)'rement .ethods,> $'t the fo&&o/ing is an overvie/ of those ne)essar0 steps(
-age 5%
-reparation of the ?nvitation The invitation m'st des)ri$e 0o'r re<'irements as )omp&ete&0, )&ear&0, a))'rate&0 and 'nam$ig'o's&0 as possi$&e. Stated another /a0, the invitation sho'&d define the items or servi)es so'ght in order for the $idders to proper&0 respond. ?n addition to the danger of inade<'ate goods or servi)es, the )&aims arising from errors ma2e this a da'nting tas2, $'t not an impossi$&e one. !04 Ie<'irements that restri)t or a)t as restraints on f'&& and open )ompetition sho'&d $e avoided. !05 The invitation t0pi)a&&0 in)&'des a&& do)'ments 8/hether a)t'a&&0 atta)hed or in)orporated $0 referen)e9 f'rnished to a&& prospe)tive $idders for the p'rpose of $idding.
-'$&i)iGing the ?nvitation The invitation m'st $e p'$&i)&0 advertised and distri$'ted to prospe)tive $idders. !0% The amo'nt of time after p'$&i)ation and distri$'tion of the invitation to prepare and s'$mit their $ids and prior to the time and date set for opening of $ids is important.
S'$mission of $ids Sea&ed $ids are s'$mitted to 0o' $0 $idders $0 the time and p&a)e stated in the invitation. ,ids are p'$&i)&0 opened at the time and p&a)e des)ri$ed in the invitation.
:va&'ation of $ids *TA re<'ires that sea&ed $idding $e 'sed on&0 if no dis)'ssion /ith $idders >is needed>Q $ids are, as a r'&e, eva&'ated /itho't an0 dis)'ssions /ith $idders. !01
(:.
See Chapter "/ >Spe)ifi)ation> for g'idan)e on spe)ifi)ation deve&opment.
(:0
See Se)tion 2.4.2.!, >*'&& and Open Competition -rin)ip&e,> for a dis)'ssion of f'&& and open )ompetition and the effe)t of restraints on )ompetition.
(:2
See dis)'ssion of advertisement and p'$&i)iGing invitations in Se)tion 4.".2.!, >Advertising and -'$&i)iGing So&i)itation.>
(:4
One instan)e re<'iring dis)'ssion is the eva&'ation of apparent errorsQ see Se)tion 4.4.5, >,id .ista2es.>
-age 51
Contra)t A/ard A fi;ed pri)e )ontra)t /i&& $e a/arded to the responsi$&e $idder /hose $id, )onforming to the terms and )onditions of the invitation, !0H is the &o/est in pri)e. ?f stated in the invitation, pri)e re&ated fa)tors ma0 $e )onsidered in determining the &o/est pri)e e.g., dis)o'nts, !09 transportation )osts, &ife )0)&e )osts. A provision in the ?*, that e;p&ains ho/ the )a&)'&ation of $ids /i&& $e made /i&& avoid )onf'sion at the time of $id opening. The e;p&anation )an in)&'de options, es)a&ators, )'rren)0 iss'es, 'nit pri)es, et). To preserve the right to e;er)ise options /ith *edera& f'nds, *TA re<'ires that the option pri)es $e eva&'ated in the se&e)tion pro)ess. 5o' )an a&so address ho/ the rare instan)e of tie $ids /i&& $e treated, e.g., /ith the traditiona& )oin toss.
.$.$( Solicitation DISCUSSION In addition to t/e material in Section .$-$*$-! 6t/e common elements of t/e solicitation rocess for &ot/ t/e IFB and RFP9! t/e ri"idit# and recision of t/e sealed &id met/od reAuire t/at #our solicitation antici ate t/e rocedural issues t/at ma# arise$ Alt/ou"/ t/ese items ma# &e a ro riate to an RFP as 1ell! an IFB s/ould &e articularl# clear re"ardin" reAuested amendments and a ro%al of items eAual to t/ose s ecified! &id o enin" time and lace! t/e rice sc/edule! t/e offer form! and t/e clarit# of t/e tec/nical s ecifications$ Best Practices ?n this se)tion, /e /i&& provide 0o' /ith a nomina& )he)2&ist of things for 0o' to )onsider in the deve&opment of 0o'r so&i)itation some of the items noted here ma0 not $e app&i)a$&e to ever0 pro)'rement. ?dentifi)ation of So&i)itation So&i)itation n'm$er Date of so&i)itation iss'an)e
?dentifi)ation of agen)0
(:5
#ame and address 8street and mai&ing if different9 of 0o'r
See dis)'ssion in Se)tion 4.4.", >Iesponsive ,idder.>
(:8
As stated in the Ie<'irements dis)'ssion, dis)o'nts, s')h as prompt pa0ment dis)o'nts, sho'&d on&0 $e 'sed in the )a&)'&ation of &o/ $id if the histor0 /ithin 0o'r agen)0 indi)ates dis)o'nts offered are 's'a&&0 ta2en advantage of.
-age 5H
agen)0 #ame and te&ephone n'm$er 8voi)e and fa)simi&e9 of )onta)t /ithin 0o'r agen)0 ?nstr')tions to $idders Date, time, and p&a)e of $id opening ?nstr')tions )hanne&ing )omm'ni)ation regarding the pro)'rement L t0pi)a&&0 /ith the designated pro)'rement offi)ia& on&0 - ?nstr')tions re&ating to r'&es regarding &ate s'$mission of $ids - ?nstr')tions re&ating to ho/ amendments of the so&i)itation sho'&d $e a)2no/&edged ?nstr')tions on /hat do)'ments sho'&d $e ret'rned /ith $id ,id g'arantee -ri)e s)hed'&e Iepresentations and )ertifi)ations ,id samp&es Des)riptive &iterat're #otifi)ation of $id a))eptan)e period is a )on)ept that ma0 a&so $e addressed in the )ompetitive proposa& method, $'t is more preva&ent in the ?*, pro)ess. 5o' )an te&& $idders in the so&i)itation that the0 m'st a&&o/ a minim'm period in /hi)h 0o'r agen)0 )an a))ept their $id after its s'$mission. *'rther, if the0 /ant to in)&'de a &esser period than 0o'r minim'm, the $id /i&& $e re@e)ted as nonresponsive. What is 0o'r norma& pro)essing time for $ids "0, %0, 90, !20 da0sW ,e rea&isti) $'t a&so 'nderstand that the &onger the period 0o' a&&o/ to a))ept, the greater /i&& $e the )ontingen)0 the $idder p't in its $id to ref&e)t pri)e f&')t'ations in the mar2etp&a)e. A&so ta2e into )onsideration that 0o' )an 8and sometimes /i&&9 re<'est offerors to vo&'ntari&0 e;tend their offers for an additiona& period if 0o' en)o'nter a de&a0. ,oi&erp&ate atta)hments or e;hi$its ?nstr')tions and Conditions of So&i)itation =enera& -rovisions Spe)ia& -rovisions ,onds 8,id, -erforman)e, -a0ment9
Spe)ifi)ations, S)ope of Wor2, Dra/ings .$.$* Bid O enin"
-age 59
RE@UIREMENT >A&& $ids /i&& $e p'$&i)&0 opened at the time and p&a)e pres)ri$ed in the invitation for $idsQ> !!0 DISCUSSION T/e da# t/at #ou /a%e all &een 1aitin" for /as arri%ed$ Bids for #our ro'ect are due in Room .:4 at * P$M$ Bill 1e "et an# &idsS B/ere 1ill t/e rice of t/e &ids &e in relation to t/e estimateS B/at do I do if all of t/e &ids e;ceed m# &ud"etS B/at if t/ereKs onl# one &idS B/at if a &idder deli%ers its &id at *3:* P$M$S B/at do I actuall# do at * P$M$S Do I read t/e &ids out loudS B/at if t/e &idders 1ant to looE at t/e &ids 1e recei%edS T/ese are some of t/e man# concerns t/at #ou ro&a&l# /a%e e%er# da# #ou recei%e &ids$ Alt/ou"/ man# of t/ese issues are &e#ond t/e sco e of t/is manual since t/e# are defined &# #our a"enc# and its o1n eculiar ersonalit#! a fe1 of t/ese issues are %er# im ortant to t/e sealed &iddin" rocurement rocess$ T/e time and date set for t/e recei t of &ids and t/e u&lic announcement of t/ose &ids are %er# critical to t/e success and inte"rit# of a u&lic rocurement rocess$ Best Practices As /ith the other sea&ed $idding iss'es, the pro)ed'res s'rro'nding the re)eipt and opening of $ids ma0 $e di)tated $0 0o'r state &a/ or pro)ed'res. As a genera& )on)ept of p'$&i) pro)'rement, the opening of $ids is the point in time /hen )omp&etion of the pro)'rement 8a)<'isition9 pro)ess $egins and the )ontra)t administration pro)ess starts. ?t a&so initiates the r'&es re&ating to >responsiveness> and >responsi$i&it0> /hi)h are dis)'ssed in Se)tions 4.4." and 5.! respe)tive&0. The pro)ess of re)eiving $ids. As 0o' approa)h the date and time set in 0o'r so&i)itation for re)eipt of $ids, 0o' /i&& $egin to re)eive $ids. A simp&e step to e&iminate man0 <'estions that )o'&d arise &ater is to 2eep the $ids 'nopened in a se)'red &o)ation, prefera$&0 a &o)2ed $id $o;, fi&e )a$inet, or safe.
V
The identit0 and n'm$er of $ids re)eived need not $e dis)&osed /ithin 0o'r agen)0 prior to the time and date set for re)eipt of $ids e;)ept to those personne& /ith a rea& >need to 2no/.>
((:
*TA Cir)'&ar 4220.!: T 9.).8298)9.
-age %0
As dis)'ssed in Se)tion 2.".2, >?ndependent =rantee Cost :stimate,> /hen 0o' re)eive the 3independent estimate> it )an a&so $e se)'red, &ogi)a&&0 in this same &o)ation. ?t is a&so a good pra)ti)e to have on 0o'r >pro)'rement )he)2&ist> to $e s're 0o' have re)eived this estimate, parti)'&ar&0 if this is a federa&&0 f'nded pro)'rement. On the da0 of re)eipt of $ids 8ma0$e an ho'r ahead of time9, 0o' ma0 /ant to esta$&ish a p&a)e in the room /here the $ids /i&& $e read /here $ids )an $e deposited and time stamped in.
O enin"! readin"! and recordin" &ids$

V V
,id opening is a p'$&i) event and is open to the genera& p'$&i). As the time for re)eipt of $ids approa)hes on the da0 $ids are d'e, if 0o' are the $id opening offi)ia&, )onsider )he)2ing the time /ith a re&ia$&e so'r)e and 'sing that time as the offi)ia& time. Short&0 8!0 min'tesW9 $efore the time for re)eipt of $ids, 0o' ma0 a&so /ant to )a&& 0o'r offi)e, the mai&room, the se)'rit0 des2, and an0/here e&se 0o' )an thin2 of /here a $id might $e and get it &ogged in. >Do 0o' have an enve&ope indi)ating it is a $id for ?*, #o. !2" 445%W ?f so, p&ease $ring it to Ioom 401 immediate&0.> ,idders are apt to $e )oming into the room at the &ast min'te to s'$mit $ids. DonKt $e s'rprised /hen a $reath&ess $idder )omes r'nning into the $id room franti)a&&0 /aving a $id and /anting 0o' to )onsider it. At the designated time, 0o' ma0 anno'n)e to those in attendan)e that the time set for re)eipt of $ids has arrived and that no f'rther $ids /i&& $e re)eived. At that time, persona&&0 and p'$&i)&0 open the $ids, read the $ids a&o'd 8if pra)ti)a&9 to those persons present, and have the $ids re)orded. Some pro)ed'res a&so in)&'de opening, reading a&o'd, and re)ording the independent estimate. Other agen)ies $e&ieve this information )o'&d he&p a disappointed $idder to interfere /ith the pro)ess, or )o'&d $e 'sed $0 a sing&e $idder to the agen)0Ks disadvantage. The $ids are 's'a&&0 re)orded on a do)'ment )a&&ed an A$stra)t of ,ids and this do)'ment is avai&a$&e for p'$&i) inspe)tion after )omp&etion. Un&ess it 'nd'&0 interferes /ith the )ond')t of 0o'r $'siness, 0o' ma0 a&&o/ time after the $ids are read for interested mem$ers of the p'$&i) to revie/ the $ids s'$mitted 'nder the immediate s'pervision of an agen)0 offi)ia& and 'nder )onditions that pre)&'de the possi$i&it0 of a destr')tion, s'$stit'tion, addition, de&etion, or a&teration of the $id.
-age %!
?f irreg'&arities or dis)repan)ies are dis)overed d'ring this revie/ pro)ess, or if 0o' noti)ed something irreg'&ar d'ring the p'$&i) reading, it is $est to simp&0 note them and not dis)'ss these in p'$&i). These matters are $est dis)'ssed on&0 /ith appropriate agen)0 personne&, in)&'ding the appropriate pro)'rement, engineering, maintenan)e, and &ega& staff mem$ers. !!!
7ate $ids .an0 instr')tions for $idders in)&'de a )&a'se that addresses the &ate s'$mission, modifi)ation, and /ithdra/a& of $ids. The )&a'se ma0 $e re<'ired $0 state &a/ or patterned after a *edera& provision. !!2 The )&a'se spe)ifies an0 )ir)'mstan)es 8e.g. do)'mented fai&'re $0 spe)ifi) mai& or de&iver0 servi)es9 that are e;)eptions to the genera& r'&e $ids re)eived at the p&a)e designated in the ?*, after the e;a)t time set for $id opening are &ate and /i&& not $e )onsidered 'nder an0 )ir)'mstan)es. !!" Whether or not the &ate $id /o'&d have $een &o/ in pri)e is of no )onse<'en)e. ?t m'st $e re@e)ted, the arg'ment goes, $e)a'se maintaining the integrit0 of the sea&ed $id pro)'rement pro)ess is more important than the possi$&e advantage to $e gained $0 )onsidering a &ate $id in a parti)'&ar pro)'rement. !!4 A&tho'gh the $'rden of getting the $ids to the $id opening &o)ation on time is on the $idder, it is easier to ta2e e;tra pre)a'tions to ens're a&& $ids are at the proper &o)ation at the proper time, than to e;p&ain &ater the integrit0 of the pro)ess. As /e a&&'ded to ear&ier, 0o' might /ant to )onsider the fo&&o/ing as >preventive> meas'res designed to red')e the possi$i&it0 of this happening to 0o'( Consider p&a)ing )&ear instr')tions in the mai&room and at the re)eption area as to /hat is to happen /ith $ids and $idders, parti)'&ar&0 on the da0 $ids are d'e. Consider )a&&ing 0o'r mai&room, 0o'r offi)e, and the &o)ation /here $ids are >norma&&0> re)eived and se)'red short&0 $efore the time for re)eipt of $ids and in<'ire if an0 $ids /ere re)eived in the &ast mai& de&iver0 or de&ivered to the other &o)ation8s9. ?n)&'de &a$e&s or enve&opes )&ear&0 mar2ed /ith ,id M and date and time d'e in the so&i)itation pa)2age for 'se $0 $idders.
(((
5o' sho'&d 'nderstand that if an 'ns'))essf'& $idder dis)overs an error, the0 /i&& &i2e&0 fi&e a protest 8or forma& <'er09 a&most immediate&0. ?t is ver0 important, therefore, that 0o' pro)eed ver0 )aref'&&0. Some pro)ed'res, to dis)o'rage fa&se hopes and res'&ting arg'ments, prohi$it the reading of $ids that are )&ear&0 defe)tive 8e.g., missing $id g'arant09.
((*
See the e;tensive dis)'ssion of this in Se)tion 4.".".!, >Ie)eipt of Offers,> /here /e addressed the )onsiderations that are t0pi)a&&0 /eighed /hen po&i)ies are adopted )on)erning the re)eipt of offers. The *AI provision t0pi)a&&0 'sed as a >mode&> is *AI T 52.2!4 1.
((-
See/ e.!./ 9. C. Mim$erly Co., Comp. =en. , 2550!H.2, 94 ! C-D !H2 19 8A $id that /as hand )arried to the $id opening room se)onds after the $id opening offi)er de)&ared that time had arrived /as proper&0 re@e)ted as &ate.9 One of the e;)eptions addressed in *AI T_52.2!4 1 and e&a$orated 'pon in *AI T !4."04 !8a9829 addresses the sit'ation /hen &ate re)eipt of the $id is d'e so&e&0 to mishand&ing $0 the agen)0 after re)eipt at the agen)0 &o)ation.
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3d. See also/ Swinerton - 'al$er! Co., Comp. =en. , 242011.", 9! ! C-D "!H.
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.$.$- Sin"le Bid RE@UIREMENT Within the dis)'ssion of so&e so'r)e )ontra)ts, the *TA Cir)'&ar 4220.!:, -aragraph 9.h L &rocurement ?y Noncom%etitive &ro%osals (Sole Source) a&so dea&s /ith the sit'ation /hen a n'm$er of offerors are so&i)ited $'t on&0 one response is re)eived( Sole Source %rocurements are accom%lis)ed t)rou!) solicitation of a %ro%osal from only one source/ or after solicitation of a num$er of sources/ com%etition is determined inadequate. . . .!!5 *TA Cir)'&ar 4220.!:, -aragraph !0 re<'ires grantees to perform a )ost or pri)e ana&0sis in )onne)tion /ith ever0 pro)'rement a)tion( !0.a. Cost Ana&0sis. A )ost ana&0sis /i&& $e ne)essar0 /hen ade<'ate pri)e )ompetition is &a)2ing and for so&e so'r)e pro)'rements . . .'n&ess pri)e reasona$&eness )an $e esta$&ished on the $asis of a )ata&og or mar2et pri)e of a )ommer)ia& prod')t so&d in s'$stantia& <'antities to the genera& p'$&i) or on the $asis of pri)es set $0 &a/ or reg'&ation. !0.$. -ri)e Ana&0sis. A pri)e ana&0sis ma0 $e 'sed in a&& other instan)es to determine the reasona$&eness of the proposed )ontra)t pri)e. DEFINITIONS Sing&e ,id On&0 one $id has $een re)eived at the time and date set for $id opening. Sing&e Iesponsive ,id On&0 one responsive $id re)eived at the time and date set for $id opening. This ma0 res'&t from having on&0 one $idder or from a&& other $idder8s9 $eing nonresponsive. #o Iesponsive ,ids A&& $ids re)eived at the time and date set for $id opening are nonresponsive. DISCUSSION State or Local La1 ) As 1it/ man# ot/er areas of rocurement! rocedures for /andlin" a sin"le &id in res onse to an in%itation for &id ma# &e addressed s ecificall# &# #our state or
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This paragraph /as )hanged from prior versions of the )ir)'&ar to e&iminate the phrase 3or a))eptan)e4 of a sing&e proposa& /hen dis)'ssing /hat )onstit'tes a so&e so'r)e pro)'rement. *TA $e&ieves that, 'pon re)eiving a sing&e $id 8or proposa&9 in response to a so&i)itation, the grantee sho'&d determine if )ompetition /as ade<'ate. This determination ma0 in)&'de a revie/ of the spe)ifi)ations to determine if the0 /ere 'nd'&0 restri)tive or )onta)ting so'r)es that )hose not to s'$mit a $id or so&i)itation. ?t is on&0 if the grantee determines that )ompetition /as inade<'ate that the pro)'rement sho'&d pro)eed as a so&e so'r)e pro)'rement. The mere fa)t that on&0 one $id or proposa& /as re)eived does not a'tomati)a&&0 mean )ompetition /as inade<'ate sin)e man0 'nre&ated fa)tors )o'&d )a'se potentia& so'r)es not to s'$mit a $id or proposa&.
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local la1$ In t/e a&sence of a rescri&ed rocedure! t/is section resents 1a#s to anal#,e and mo%e for1ard 1it/ #our rocurement$ AdeAuac# of Com etition ) B/en onl# one &id is recei%ed in res onse to a solicitation t/at 1as issued to multi le sources! #ou 1ill first /a%e to determine if t/ere 1as adeAuate com etition$ T/e FTA inter reti%e comment in t/e annotated Circular .**:$(E! ara"ra / (:! maEes clear t/e fact! t/at 1/en onl# one &id is recei%ed! t/is does not! in itself! mean t/at com etition 1as inadeAuate$ In order to maEe t/is determination! it ma# &e necessar# to talE to t/ose firms solicited to find out 1/# t/e# did not su&mit &ids$ If t/e reason is a restricti%e s ecification or a deli%er# reAuirement t/at onl# one &idder could meet! #ou /a%e a situation of inadeAuate com etition$ If t/is is t/e case t/en t/e rocurement is a sole source and #ou must rocess it as suc/ 1it/ internal a"enc# a ro%als! or cancel t/e solicitation! c/an"e t/e reAuirements to allo1 for more &ids! and re)solicit &ids$ On t/e ot/er /and! if t/e reasons "i%en &# t/e non)res onders are unrelated to t/e s ecification and7or solicitation terms! t/en #ou ma# resume com etition 1as adeAuate and roceed 1it/ t/e a1ard as a com etiti%e one$ Dou s/ould document #our file so t/at t/ere is a clear audit trail for re%ie1ers to understand /o1 #ou reac/ed #our determination$ Cost or Price Anal#sis ) If t/e com etition is deemed to &e adeAuate! t/en a #rice analysis must &e erformed to determine t/e reasona&leness of t/e &id rice. ((2 If! on t/e &asis of a rice anal#sis! #ou are a&le to document #our determination t/at t/e rice is fair and reasona&le! and if t/e &id is res onsi%e and t/e &idder res onsi&le! #ou ma# roceed 1it/ a1ard$ If! /o1e%er! #ou cannot determine t/e reasona&leness of t/e &id on t/e &asis of a rice anal#sis! t/en #ou 1ill /a%e to reAuest a detailed &reaEdo1n of costs and rofit from t/e &idder and erform a cost analysis$ If com etition is deemed to &e inadeAuate! and #ou decide to rocess t/e a1ard as a sole source! t/en #ou 1ill /a%e to erform a cost analysis 6i$e$! reAuest from t/e &idder a detailed &reaEdo1n of t/e estimated costs and rofit9 unless #ou can esta&lis/ t/e reasona&leness of t/e rice &ased on t/e &idderMs catalo"ue or marEet rice 6note t/at t/e item must &e sold in su&stantial Auantities to t/e "eneral u&lic9! or t/e rice is set &# la1 or re"ulation$ For a discussion of cost and rice anal#sis tec/niAues! see BPPM section 0$* = Cost and Price Analysis$ If t/e &idder refuses to furnis/ a cost &reaEdo1n for #our anal#sis! t/en #ou 1ill /a%e to reAuest a 1ai%er from FTA of t/e Circular reAuirement in ara"ra / (:$a t/at a cost anal#sis &e conducted on e%er# sole source rocurement! or cancel t/e rocurement and re)solicit &ids$ ((4
((2
Se)tion 5.2 Cost and &rice Analysis dis)'sses vario's pri)e ana&0sis te)hni<'es, and the0 in)&'de 8among others9 )omparison to previo's p'r)hases, )omparison to a va&id grantee independent )ost estimate, and va&'e ana&0sis.
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5o' ma0 have, for e;amp&e, data from previo's p'r)hases, an independent )ost estimate, et). /ith /hi)h to )ompare the $id pri)e, $'t not have a 3)ata&og'e or mar2et pri)e of a prod')t so&e in s'$stantia& <'antities to the genera& p'$&i)+ as re<'ired $0 paragraph !0.a of the Cir)'&ar.
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Ne"otiation ) If #ou /a%e &een unsuccessful in determinin" t/rou"/ a rice or cost anal#sis t/at t/e &id rice is fair and reasona&le! #ou ma# 1is/ to enter ne"otiations 1it/ t/e offeror to attem t to esta&lis/ a different rice t/at can ultimatel# &e determined to &e reasona&le$ Some aut/orities %ie1 t/is as cancelin" t/e sealed &iddin" met/od of rocurement and con%ertin"! t/rou"/ documentation! t/e rocurement eit/er to a com etiti%e ro osal 6a ne"otiated rocurement9 or a sole source rocurement$ T/is is anot/er area t/at ma# &e controlled or re"ulated &# state la1$ For instance! #our state ma# reAuire t/at construction ser%ices onl# &e a1arded &# acce tin" a sealed &id! 1it/ no e;ce tions$ 6If t/is is t/e case! #ou reall# /a%e no c/oice &ut to cancel t/e solicitation and! if #our reAuirement continues! to re)ad%ertise t/e rocurement$9 If! /o1e%er! #our state allo1s fle;i&ilit# and #ou are a&le to 'ustif# con%ersion of t/e rocurement to a ne"otiated rocess! t/is ma# allo1 #ou to ne"otiate a contract 1it/ a rice t/at is fair and reasona&le so t/at a1ard can &e made$ .$.$. Res onsi%e Bidder RE@UIREMENT The )on)ept of >responsiveness> is dis)'ssed in T 9 of *TA Cir)'&ar 4220.!: as an integra& e&ement of the sea&ed $idding method of pro)'rement( ). -ro)'rement $0 Sea&ed ,idsA?nvitation for ,id 8?*,9. ,ids are p'$&i)&0 so&i)ited and a firm fi;ed pri)e )ontra)t 8&'mp s'm or 'nit pri)e9 is a/arded to the responsi$&e $idder /hose $id, )onforming /ith a&& the materia& terms and )onditions of the invitation for $ids, is the &o/est in pri)e. S'$paragraph 9.).829 of *TA Cir)'&ar 4220.!:, in dis)'ssing the re<'irements to $e 'sed if the sea&ed $id method of pro)'rement, &ists the fo&&o/ing( 8d9 A firm fi;ed pri)e )ontra)t a/ard /i&& $e made in /riting to the &o/est responsive and responsi$&e $idder. When spe)ified in $idding do)'ments, fa)tors s')h as dis)o'nts, transportation )osts, and &ife )0)&e )osts sha&& $e )onsidered in determining /hi)h $id is &o/estQ
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DEFINITION Iesponsive ?f an offer )onforms in a&& materia& aspe)ts to the re<'irements of the so&i)itation at the s)hed'&ed time of s'$mission and does not re<'ire f'rther dis)'ssions /ith the offeror, the offer is responsive. DISCUSSION Alt/ou"/ it ma# &e stated differentl# in t/e rules or statutes "o%ernin" #our rocurement rocesses! t/e conce t of a1ardin" a contract to t/e lo1est res onsi%e and res onsi&le &idder is a common rece t in u&lic contractin" at t/e Federal! state! and local le%els t/rou"/out t/e countr#$ It is /el ful to maintain t/e distinction amon" t/ese conce ts in re%ie1in" &ids! and to consider t/em in t/e stated seAuence$ First identif# t/e lo1est &id! t/en find t/e lo1est res onsi%e &id! t/en find t/e lo1est res onsi%e and res onsi&le &idder$ :va&'ation Se<'en)e The fo&&o/ing is a se<'en)e of eva&'ation that is 'sef'& for e;p&anation and ma0 a&so $e 'sef'& in pra)ti)eQ ho/ever, the )on)epts and )orre)t determinations are far more important to s'))essf'& pro)'rement than is the se<'en)e. :;amination of $ids &ogi)a&&0 $egins /ith the &o/est $idder. On)e the &o/est $idder is determined, &oo2 to see if the $idder is responsive. >Iesponsiveness> is a )on)ept )riti)a& to the sea&ed $idding pro)ess. ?n p'$&i) )ontra)ting, in order for a $id to $e a))epta$&e, it m'st )onform in a&& materia& respe)ts to the re<'irements stated in the invitation. Iesponsiveness is determined from the $id do)'ments themse&ves and, /ith ver0 fe/ e;)eptions, is determined /ith no dis)'ssions or f'rther inp't from the $idder. The pre)ise definition of >responsiveness> ma0 var0 from @'risdi)tion to @'risdi)tion and the definition app&i)a$&e to 0o'r organiGation ma0 $e stated in 0o'r pro)'rement reg'&ations or stat'te. ?f the initia& &o/ $idder is not responsive 8the $id does not )onform to the materia& re<'irements of the invitation9, 0o' need go no f'rther /ith that $idder. ?nstead 0o' ma0 go $a)2 and &oo2 at the se)ond &o/est $id and determine if it is responsive. On)e 0o' have determined that 0o' have a &o/ pri)ed $idder /ho is responsive, 0o' then $egin the more s'$@e)tive pro)ess of determining the $idderKs responsi$i&it0. >Iesponsi$i&it0> is a&so a term /ith spe)ifi) )onnotations in pro)'rement. What is invo&ved in determining a $idderKs responsi$i&it0 ma0 var0 from @'risdi)tion to @'risdi)tion. *TA defines >responsi$i&it0> to $e a )ontra)tor /ho possesses the a$i&it0 to perform s'))essf'&&0 'nder the terms and )onditions of the proposed pro)'rement. ?n determining /hether a )ontra)tor possesses this a$i&it0, 0o' ma0 )onsider s')h matters as )ontra)tor integrit0, )omp&ian)e /ith p'$&i) po&i)0 8e.g., ::O re)ord, attainment of D,: goa&, not de$arred or s'spended, et).9, re)ord of past performan)e, and finan)ia& and te)hni)a& reso'r)es. Un&i2e responsiveness, /hi)h norma&&0 )an $e fina&&0 determined $ased on the $ids, a determination of
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responsi$i&it0 ma0 $e affe)ted $0 ne/ information 'p to the time of )ontra)t a/ard. Th's, in as)ertaining /hether or not a $idder is responsi$&e, dis)'ssions ma0 $e he&d /ith the $idder to dis)'ss these fa)tors so that, $0 the time of a/ard, a positive determination )an $e made. ?f 0o' do not determine that the $idder is responsi$&e, &oo2 thro'gh the &ist of $idders again to determine a &o/, responsive, responsi$&e $idder to /hom a )ontra)t )an $e a/arded. Stri)t Iesponsiveness To 'nderstand the )on)ept of >responsiveness> and its pra)ti)a& rigidit0 in the p'$&i) )ontra)ting environment, re)a&& that the ?*, iss'ed $0 the agen)0 is designed so that a&& $idders /ho respond )an ma2e )ompara$&e offers 'nder the same terms and )onditions. When a $idder s'$mits its $id to the entit0 in response to the ?*,, the entit0 m'st $e a$&e to a))ept that $id as s'$mitted, there$0 )reating a $inding )ontra)t. !!H The fo&&o/ing dis)'ssion of responsiveness /i&& )over genera& prin)ip&es and parameters of *edera& pro)'rement pre)edents. 5o' ma0 have to ens're )omp&ian)e /ith 0o'r stateKs &a/s and pre)edents and 0o'r agen)0Ks pro)ed'res. The $est pra)ti)e is to esta$&ish a )&ear, 'nam$ig'o's agen)0 po&i)0 on /hi)h $idders )an re&0, so that, in preparing their $ids, the0 )an $e )onfident that no materia& deviations /i&& $e a&&o/ed to an0 $idder in )omp&0ing /ith the so&i)itation and its spe)ifi)ations. Pur ose Ie<'iring stri)t responsiveness, i.e. )omp&ian)e in a&& materia& respe)ts /ith the ?*, >ena$&es $idders to stand on an e<'a& footing and maintains the integrit0 of the sea&ed $idding s0stem.> !!9 :;amp&es of $ids t0pi)a&&0 )onsidered nonresponsive in)&'de( The $id fai&s to )onform to materia& re<'irementsQ The $id does not )onform to app&i)a$&e spe)ifi)ations 8'n&ess the invitation a&&o/ed a&ternates9Q The $id fai&s to )onform to de&iver0 s)hed'&e or permissi$&e a&ternatesQ The $id imposes )onditions that /o'&d modif0 the re<'irements of the invitation or &imit the $idderKs &ia$i&it0 to the entit0Q There is a )ondition of the $id /hi)h affe)ts the s'$stan)e of the $id 8i.e., affe)ts pri)e, <'antit0, <'a&it0, or de&iver0 of the items offered9 or /or2s an in@'sti)e on other $iddersQ
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>,id responsiveness invo&ves the <'estion of /hether the $id as s'$mitted, represents an 'ne<'ivo)a& offer to do e;a)t&0 /hat the government has spe)ified, so that a))eptan)e of the $id /i&& $ind the )ontra)tor to meet the governmentKs re<'irements in a&& materia& aspe)ts.> +an(ins #um$er Co., Comp. =en. , 24H!0!, 92 2 C-D Q50.
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*AI T !4."0!8a9.
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The $id )ontains pri)es for &ine items that are materia&&0 'n$a&an)ed, i.e., fig'res in the $id )onf&i)t /ith the tota& $id pri)eQ dateQ The $idder fai&s to f'rnish a $id g'arantee in a))ordan)e /ith the re<'irements of the invitationQ !20 or *ai&'re to s'$mit ,'0 Ameri)a Certifi)ation.
Iesponsiveness is a fair&0 o$@e)tive )on)ept and is as)ertaina$&e at the time of $id opening. !2! *'rther, the $idderKs intent to $e $o'nd $0 the ?*,s re<'irements )an norma&&0 $e determined from the $id itse&f. !22 A >se)ond $ite at the app&e> is a phrase )ommon&0 heard in dis)'ssions pertaining to the pre)ept that responsiveness $e determined at the $id opening so&e&0 from the $id do)'ments and /itho't e;p&anation. 5o' /i&& not /ant an apparent&0 &o/ $idder to re eva&'ate its $id after the p'$&i) opening and effe)tive&0 /ithdra/ the $id $0 ref'sing to respond or responding in a s'$versive /a0Q the $idder sho'&d not have a se)ond $ite at the app&e. This means that the $id pa)2age m'st $e e;amined thoro'gh&0. Some of the <'estions 0o' ma0 as2 are( Does the )over &etter ta2e e;)eption to an0 materia& terms and )onditionsW ?s the $id am$ig'o'sW ?s it s's)epti$&e to t/o or more reasona$&e interpretationsW Were a&& materia& amendments to the so&i)itation a)2no/&edgedW Was the $id signedW Were a&& materia& representations and )ertifi)ations )omp&etedW ?s the ,'0 Ameri)a )ertifi)ate re<'ired $0 49 C*I T %%!.% or T %%!.!2 signedW !2"
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*AI T !4.404 2. Nort)western otor Co., Comp. =en. , 244""4, 9! 2 C-D 249.
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Record &ress/ 3nc., Comp. =en. , 229510.2, HH ! C-D !%!.
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49 C*I T %%!.!"8$9 provides( The grantee sha&& in)&'de in its $id spe)ifi)ation for pro)'rement /ithin the s)ope of these reg'&ations an appropriate noti)e of the ,'0 Ameri)a provision. S')h spe)ifi)ations sha&& re<'ire, as a )ondition of responsiveness, that the $idder or offeror s'$mit /ith the $id a )omp&eted ,'0 Ameri)a )ertifi)ate in a))ordan)e /ith T %%!.% or T %%!.!2 of this part, as appropriate. 8emphasis added9
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Were re<'ired des)riptive &iterat're and $id samp&es in)&'ded /ith the $idW ?f re<'ired, /as a $id $ond or $id g'arantee s'$mittedW Was the $id defe)tiveW Was the pri)e offered firm and definiteW Were the materia& items or information re<'ired $0 the invitation s'$mitted /ith the $idW Was the $id re)eived at the p&a)e designated in the invitation at the e;a)t time spe)ified or /as it &ateW
?f something is <'estiona$&e, is the iss'e one of responsi$i&it0 or responsivenessW !24 5o'r )'stomers ma0 /ant to gain greater )onfiden)e in the $ids $0 spe)if0ing, p'rported&0 as a )ondition of responsiveness, that $idders have spe)ifi) )apa)ities. 5o' ma0 a&so find a defe)t 8e.g. in )ertifi)ations or re<'ested information9 that re&ates primari&0 to the a$i&it0 of the $idder to perform. -re)edent for dire)t *edera& pro)'rement is that mere&0 $0 the &ang'age in an ?*,, a )ontra)ting agen)0 )annot )hange a matter of responsi$i&it0 8a$i&it0 to perform9 into one of responsiveness 8'ne<'ivo)a& offer to perform9. !25 The $est pra)ti)e is to maintain this distin)tion. .ateria&it0 Who&e )o'rses are ta'ght on sea&ed $idding and the iss'e of responsiveness. The &ist of <'estions and iss'es raised in this dis)'ssion sho'&d not $e )onsidered as a&& en)ompassing. ?nstead, the0 are intended to raise sensitivit0 to some of the iss'es that impa)t responsiveness. ?t sho'&d $e apparent from this dis)'ssion that the sing&e most important )on)ept impa)ting responsiveness is >materia&it0> does the in)&'sion or omission of the fa)t, item, or re<'irement affe)t pri)e, <'antit0, <'a&it0, or de&iver0 of the items offeredW ?f so, the $id is pro$a$&0 nonresponsive. ?f not, the $id is pro$a$&0 responsive. There are, ho/ever, man0 fa)ts and sit'ations that do not )&ear&0 fa&& /ithin these parameters and $e)ome iss'es that ma0 re<'ire ana&0sis and inp't from 0o'r &ega& advisor. ?f in do'$t, as2` D,: A&tho'gh D,: program )omp&ian)e is more often a responsi$i&it0 re<'irement, some pro)esses ma2e D,: )omp&ian)e a )ondition of responsiveness. This iss'e is dis)'ssed f'rther
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The Comptro&&er =enera&, in Sta%les1+utc)inson - Associates/ 3nc., Comp. =en. , 245001, 9! 2 C-D 49! stated( Whereas $id responsiveness )on)erns /hether the $id itse&f as of the time of $id opening 'ne<'ivo)a&&0 offers to perform in a))ordan)e /ith a&& materia& terms and )onditions of the so&i)itation, responsi$i&it0 refers to a $idderKs a$i&it0 to perform the )ontra)t re<'irements and is determined not at $id opening $'t at an0 time prior to a/ard $ased on information re)eived $0 the agen)0 'p to that time.
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8"T Construction/ 3nc./ et al., Comp. =en. , 240"4", 9! ! C-D "14.
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in the dis)'ssion of D,: s'$missions and a/ard in Chapter 1, >Disadvantaged ,'siness :nterprise.> .$.$0 Bid MistaEes DISCUSSION It ma# not &e as certain as deat/ and ta;es! &ut ine%ita&l# and unfortunatel#! a mistaEe ma# &e disco%ered in #our lo1 &id$ A mistaEe doesnKt necessaril# mean #ou cannot a1ard a contract to t/e lo1 &idder! &ut t/at could &e t/e result$ Co1 #ou t# icall# treat t/e mistaEe 1ill de end u on 1/at t/e mistaEe is and 1/en it is disco%ered$ State la1 in some states e; licitl# addresses &id mistaEes$ Best Practices .ista2es in $ids are 's'a&&0 dis)overed after $ids are opened !2% and $efore the )ontra)t is a/arded. The mista2e, or s'spi)ion of a mista2e, ma0 $e dis)overed $0 the pro)'rement offi)ia& in its revie/ of the $ids. Some pro)ed'res )a&& for the identifi)ation of )&ear defe)ts 8e.g., a$sen)e of a $id $ond9 at the $id opening and the re@e)tion /itho't reading of the $id. This minimiGes the dis)'ssion and &i2e&ihood of protest. The mista2e ma0 $e dis)overed $0 an 'ns'))essf'& $idder 8not @'st the &o/ $idder9 /hen it is revie/ing the $ids after $id opening. Or it ma0 $e dis)overed $0 the apparent &o/ $idder 'pon ret'rning to its offi)e after $id opening sometimes driven to an e;amination of its $id after it has &earned ho/ m')h mone0 /as >&eft on the ta$&e`> Iegard&ess of ho/ it is dis)overed, it is a pro$&em in the sea&ed $idding method of pro)'rement $e)a'se of the stri)t r'&es of responsiveness, $e)a'se $ids have $een e;posed, and $e)a'se the integrit0 of the pro)'rement pro)ess is at sta2e. The fo'r genera&&0 a))epted )ategories of $id mista2es are( !. .inor informa&ities or irreg'&arities in $ids prior to a/ard of the )ontra)tQ 2. O$vio's or apparent )&eri)a& mista2es dis)overed prior to a/ardQ ". .ista2es other than minor informa&ities or irreg'&arities in $ids, or o$vio's or apparent )&eri)a& mista2es that are dis)overed prior to a/ardQ or
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A&tho'gh 'n's'a&, it is possi$&e that $efore the time and date set for re)eipt of $ids, a $idder ma0 dis)over a mista2e in a $id it has a&read0 s'$mitted to 0o'. ?f 0o' have in)&'ded a )&a'se in the so&i)itation 8or adopted a po&i)09 as s'ggested in o'r ear&ier dis)'ssion on >Ie)eipt of Offers> 8see Se)tion 4.".".!9 and the pro$&ems /ith &ate s'$missions, modifi)ations and /ithdra/a&s of offers, the0 sho'&d $e fo&&o/ed. :ssentia&&0, the $idder is advised that modifi)ation of its $id /o'&d $e treated the same as the origina& $id m'st $e re)eived time&0 and sho'&d )&ear&0 identif0 the $id it is modif0ing.
-age 10
4. .ista2es dis)overed after a/ard. ?f a mista2e fits /ithin one of these )ategories, three things )an happen( the mista2e )an $e )orre)ted, the mista2e /i&& $e re)ogniGed and the $id a&&o/ed to $e /ithdra/n, or the mista2e /i&& not $e re)ogniGed and the $id not a&&o/ed to $e /ithdra/n. We /i&& dis)'ss ea)h of these )ategories of mista2es and /hat the )onse<'en)es of ea)h are if it is esta$&ished that a mista2e has $een made. One fina& tho'ght $efore that dis)'ssion( man0 transit properties in their pro)'rement reg'&ations have adopted r'&es re&ating to the treatment of these )ategories of mista2es and, in most )ases, have patterned their r'&es after the r'&es in either the *AI !21 or the Recommended Re!ulations for the Ameri)an ,ar Asso)iationKs odel &rocurement Code for State and #ocal .overnments. !2H ?f 0o' have r'&es addressing this )ommon pro$&em, it ma2es the administration of 0o'r pro)'rement pro)ess m')h easier $e)a'se the r'&es are 2no/n, not de)ided on a )ase $0 )ase $asis. The fo&&o/ing ta$&es ana&0Ge the t0pes of mista2e and one set of a)tionsQ man0 variations on the i&&'strative r'&es presented here are s'))essf'&&0 in 'se. Minor informalities or irre"ularities in &ids rior to a1ard of t/e contract$ .ere&0 a matter of form and not of s'$stan)e. .a0 $e an immateria& defe)t in a $id that )an $e )orre)ted or /aived /itho't $eing pre@'di)ia& to other $idders. The defe)t is >immateria&> /hen the effe)t on pri)e, <'antit0, <'a&it0, or de&iver0 is neg&igi$&e /hen )ontrasted Remed#3 the )ontra)ting offi)er sha&& give the $idder an opport'nit0 to )'re the defi)ien)0 or /aive it, /hi)hever is in the $est interests of the o/ner. E;am les of minor informa&ities or irreg'&arities in)&'de fai&'re of the $idder to( Iet'rn the in)orre)t n'm$er of signed $ids re<'ired $0 the ?*, 8! s'$mitted, " re<'ired9. Sign the $id, $'t on&0 if the 'nsigned $id is a))ompanied $0 other materia& indi)ating the $idderKs intent to $e $o'nd, s')h as a $id g'arantee or &etter signed $0 the $idder referring to and )&ear&0 identif0ing the $id itse&f. A)2no/&edge re)eipt of an amendment to the ?*,, $'t on&0 if it is )&ear from the $id itse&f that the $idder re)eived the
(*4
See *AI T !4.40%.
(*5
See T I" 202.!" 8.ista2es in ,id9, Recommended Re!ulations approved A'g'st 2, !9H0, imp&ementing T)e odel &rocurement Code for State and #ocal .overnments, approved $0 the Ameri)an ,ar Asso)iation on *e$r'ar0 !", !919 8hereinafter referred to as the Recommended Re!ulations9.
-age 1!
/ith the tota& )ost or s)ope of the re<'irement $eing pro)'red.
amendment and intended to $e $o'nd $0 its terms !29 or the amendment invo&ved had no 8or a neg&igi$&e9 effe)t on pri)e, <'antit0, <'a&it0, or de&iver0. *'rnish re<'ired information that goes to the iss'e of responsi$i&it0 8e.g., n'm$er of emp&o0ees $idder has, information )on)erning parent )ompan0 and an0 affi&iates, )ertifi)ations )on)erning ::O and Affirmative A)tion programs, )ertifi)ation )on)erning 7o$$0ing. !"09
O&%ious or a arent clerical mistaEes disco%ered rior to a1ard$ (-( .ista2e m'st $e o$vio's or apparent on the fa)e of the $id. This is the )ategor0 of mista2e most fre<'ent&0 dis)overed $0 the )ontra)ting offi)er d'ring its e;amination of the $id after $id opening. ?f 0o' 2no/, or have reason to 2no/ or s'spe)t, that a mista2e in a $id has $een made, there is a rea& iss'e of /hether 0o' )an, in good faith, a))ept that $id.
E;am les in)&'de( O$vio's misp&a)ement of de)ima& point. O$vio's reversa& of the pri)e f.o.$. destination and pri)e f.o.$. origin Lhigher pri)e for 0o' pi)2ing the prod')t 'p at the origin than for the $idder to de&iver the prod')t to the p&a)e designated $0 0o'. O$vio's mista2e in designation of 'nit. T0pographi)a& errors. :rror in e;tending 'nit pri)es. Transposition errors. Arithmeti)a& errors.
The $idder ma0 a&so dis)over

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Procedure3 What do 0o' do if 0o' have this )ategor0 of
*or instan)e, Amendment #'m$er ! to the so&i)itation )hanged the <'antities for &ine item 4 on the S)hed'&e from 5 to !2. The $id in)&'ded a S)hed'&e that sho/ed the <'antit0 for &ine item 4 to $e !2. #o other amendments /ere iss'ed and the $idder did not forma&&0 a)2no/&edge Amendment #o. !. There /as no /a0 it )o'&d have 'sed the )orre)t S)hed'&e page 'n&ess it had re)eived the Amendment )&ear from the $id that it re)eived Amendment #o. !.
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See dis)'ssion at Se)tion 4.".".2, >*edera&&0 Ie<'ired S'$missions /ith Offers.>
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The Recommended Re!ulations to the odel &rocurement Code Dat T I" 202.!".48$9F refers to this t0pe of mista2e as >mista2es /here intended )orre)t $id is evident.> The mista2e and the intended $id are )&ear&0 evident on the fa)e of the $id do)'ment.
-age 12
this )ategor0 of mista2e and $ring it to 0o'r attention and re<'est that it $e a&&o/ed to )orre)t the mista2e.
mista2eW Ie)ommend 0o' ma2e 0o'r &ega& )o'nse& a/are of sit'ation so proper &ega& advi)e )an $e o$tained as 0o' pro)eed thro'gh the mista2e eva&'ation pro)ess. This is an area that is prime for a &ater protest $0 either the firm re<'esting re&ief from a >mista2e> or from another $idder that fee&s it )o'&d $e impa)ted $0 0o'r de)ision regarding the mista2e. Ie<'est verifi)ation of the $id. This is ne)essar0 to ass're the )ontra)ting offi)er that the $id as )onfirmed is /itho't error, or to e&i)it the a&&egation of a mista2e $0 the $idder. This pro)ess norma&&0 in)&'des the fo&&o/ing steps( -repare a /ritten re<'est to the $idder that it verif0 its $id pri)e. The re<'est p'ts the $idder on noti)e of a mista2e s'spe)ted $0 the )ontra)ting offi)er as appropriate. *or instan)e, the $id is so m')h &o/er than the other $ids or the agen)0 independent estimate as to indi)ate a possi$i&it0 of error. Or, high&ight important or 'n's'a& )hara)teristi)s of the spe)ifi)ation. -oint o't the fa)t that there /ere )hanges in the spe)ifi)ations or re<'irements from previo's p'r)hases of a simi&ar item. 5o'r noti)e )an in)&'de an0 information, /hi)h is proper for dis)&os're, that &ead 0o' 8as the )ontra)ting offi)er9 to $e&ieve that there is a mista2e in the $id. :va&'ate the verifi)ation response from the $idder. ?f the $idder verifies its origina& $id, 0o' ma0 )onsider the $id as origina&&0 s'$mitted. ?f, ho/ever, the $idder a&&eges a mista2e /as made, it is re)ommended 0o' ta2e the fo&&o/ing a)tions. Advise the $idder to ma2e a /ritten re<'est to /ithdra/ or modif0 its $id. Advise the $idder that it m'st s'pport its re<'est /ith an0 and a&& eviden)e to s'pport the position it is ta2ing. Advise the $idder of definite time dead&ines in /hi)h to provide the information re<'ested.
,e s'spi)io's L donKt forget that ever0oneKs $id has $een
-age 1"
e;posed to the /or&d` Remed#( After verifi)ation, the )ontra)ting offi)er ma0 )orre)t an apparent or o$vio's )&eri)a& mista2e. ?t is re)ommended that 0o'( Atta)h the verifi)ation to the origina& $id. Ief&e)t the )orre)tion in the a/ard do)'ment. Do)'ment the pro)'rement fi&e to indi)ate /h0 0o' too2 the a)tion 0o' did. 5o' sho'&d on&0 a&&o/ a $id to $e )orre)ted if the $id, as s'$mitted, /as responsive 0o' sho'&d not a&&o/ )orre)tion of a $id that /o'&d ma2e a non responsive $id a responsive $id. ?f )orre)tion of the $id /o'&d disp&a)e one or more &o/er $ids, it is re)ommended that 0o' not a&&o/ )orre)tion 'n&ess the eviden)e of the mista2e and $id a)t'a&&0 intended are as)ertaina$&e s'$stantia&&0 from the invitation and $id itse&f as opposed to eviden)e $ro'ght in to 0o' $0 the $idder in response to 0o'r re<'est for verifi)ation. Do not a&&o/ the $id to $e /ithdra/n. MistaEes ot/er t/an minor informalities or irre"ularities in &ids! or o&%ious or a arent clerical mistaEes t/at are disco%ered rior to a1ard$ (-* These mista2es are genera&&0 raised $0 the $idder a&ong /ith a re<'est to /ithdra/ its $id. Procedures3 ?t is re)ommended that 0o' fo&&o/ the pro)ed'res o't&ined in the previo's dis)'ssion /hen a $idder a&&eges a mista2e has $een made. -a0 parti)'&ar attention to the eviden)e the $idder f'rnishes that esta$&ishes the e;isten)e of the mista2e L remem$er, it is not o$vio's from the $id itse&f. ,e parti)'&ar&0 sensitive to the $idder that /ants o't of its $id simp&0 $e)a'se it made a @'dgmenta& error in preparing its $id and, after $id opening, dis)overed it >&eft too m')h mone0 on the ta$&e.>
:;amp&es in)&'de( A pri)ing e&ement from a

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Remed#3 5o' sho'&d a&&o/ the $idder to /ithdra/ its $id if( The mista2e is )&ear&0 evident on the fa)e of the $id do)'ment
The Recommended Re!ulations to the odel &rocurement Code Dat T I" 202.!".48)9F refers to this t0pe of mista2e as >mista2es /here intended )orre)t $id is not evident.>
-age 14
vendor /as re)eived $'t not in)&'ded in the $id L the e&e)tri)a& s'$)ontra)torKs <'ote /as not in)&'ded. The materia& )ost for an e&ement of /or2 /as in)&'ded $'t the &a$or to insta&& it /as not in)&'ded.
$'t the intended )orre)t $id is not simi&ar&0 evidentQ or The $idder s'$mits proof /hi)h )&ear&0 and )onvin)ing&0 demonstrates that a mista2e /as made. 5o' ma0 ma2e a determination to )orre)t the $id and not a&&o/ its /ithdra/a& if( The $idder re<'ests permission to /ithdra/ a $id rather than )orre)t itQ !"" The eviden)e is )&ear and )onvin)ing $oth as to the e;isten)e of a mista2e and as to the $id a)t'a&&0 intendedQ and The $id, $oth as origina&&0 s'$mitted and as )orre)ted, is the &o/est $id re)eived.
MistaEes disco%ered after a1ard.(-. A&tho'gh it is m')h rarer than other a&&egations of mista2e, a )ontra)tor ma0 raise the iss'e of mista2e in $id after a/ard of the )ontra)t is made. O$vio's&0, the $'rden of proving a mista2e /as made at this time is great and m'st $e )arried $0 the )ontra)tor. !"5
Remed#( What 0o' do /ith mista2es dis)overed and proven after a/ard are rea&&0 po&i)0 <'estions that 0o' sho'&d )onsider /hen adopting 0o'r reg'&ations. There rea&&0 is no >$est> pra)ti)e in this area $'t it appears that transit properties have ta2en one of the t/o approa)hes o't&ined $e&o/( The >hard &ine> approa)h( do not a&&o/ )orre)tion e;)ept /here the )ontra)ting offi)er ma2es a /ritten determination that it /o'&d $e 'n)ons)iona$&e not to a&&o/ the mista2e to $e )orre)ted. !"%
The *AI approa)h !"1 offers more a&ternatives other than the >'n)ons)iona$&e> approa)h( The mista2e ma0 $e $0 )ontra)t amendment if )orre)ting the
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5o' sho'&d )onsider a&& the &ong r'n )osts of for)ing the $idder to perform 'n/i&&ing&0.
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*or an e;tended treatment of this topi) 8and a&so as the so'r)e for most po&i)ies of transit properties on the matter9, it is re)ommended that 0o' revie/ *AI T !4.40% 4 and the Recommended Re!ulations at T I" 202.!".5.
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See *AI T !4.40% 48e9 for re)ommended pro)ed'res to fo&&o/ in the event this t0pe of mista2e has $een a&&eged or dis)&osed.
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This is the position ta2en in the Recommended Re!ulations at T I" 202.!".5. See *AI T !4.%04 48a9 and 8$9.
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-age 15
mista2e /o'&d $e favora$&e to the transit propert0 /itho't )hanging the essentia& re<'irements of the spe)ifi)ation. Additiona&&0, a determination )o'&d $e made to 8a9 res)ind the )ontra)tQ 8$9 reform the )ontra)t to de&ete the items invo&ved in the mista2e or to in)rease the pri)e if the )ontra)t pri)e 8as )orre)ted9 does not e;)eed that of the ne;t &o/est a))epta$&e $id 'nder the origina& ?*,Q or 8)9 a&&o/ no )hange to $e made. ?t is re)ommended that 0o' pro)eed ver0 )aref'&&0 thro'gh this pro)ess and /ith advi)e of &ega& )o'nse&. .$.$2 Bid Bit/dra1al DISCUSSION ItKs t1o da#s after &id o enin"$ DouKre sittin" at #our desE &asEin" in t/e "reat rocurement #ou conducted and all t/e com etiti%e &ids #ou recei%ed$ T/e /one rin"s! &reaEin" t/e self)con"ratulator# mood! and #ou icE it u $ FCi! IKm Mr$ Lo1 Bidder and 1e /a%e decided 1e reall# donKt 1ant t/is contract and 1ant to 1it/dra1 our &idTF TalE a&out messin" u #our da#$ B/at do #ou do ne;tS Section .$.$0 addresses t/e rules relatin" to t/e 1it/dra1al of &ids &ecause of a mistaEe in &id$ T/ose rules "o%ern almost all of t/e instances in u&lic contractin" in 1/ic/ a &idder is allo1ed to 1it/dra1 its &id after &id o enin" in t/e sealed &iddin" rocess$ Bidders are usuall# ermitted to modif# or 1it/dra1 t/eir &ids rior to &id o enin"$ Best Practices When to a&&o/ /ithdra/a& of $ids ?f 0o' re)eive a /ritten re<'est from a $idder prior to the time and date set for re)eipt of $ids that it /ishes to /ithdra/ a $id it has previo's&0 s'$mitted, that re<'est is honored 'nder most
-age 1%
pro)'rement po&i)ies. ?f the re<'est to /ithdra/ is re)eived after the time and date set for re)eipt of $ids, the same r'&es app&0 to that re<'est as /o'&d app&0 to the &ate re)eipt of a $id. As /e dis)'ssed in Se)tions 4.".2.", >So&i)itation,> and 4.4.!, >So&i)itation> 8Sea&ed ,ids9, /e re)ommended in)&'sion of a )&a'se that addresses the 7ate S'$missions, .odifi)ations, and Withdra/a&s of ,ids. This )&a'se sets forth the on&0 )ontra)t'a& period d'ring /hi)h $ids )an $e /ithdra/n. S'$paragraph 8g9 of the *AI )&a'se, /hi)h forms the $asis for man0 transit propert0 )&a'ses, provides( 8g9 ,ids m0 $e /ithdra/n $0 /ritten noti)e or te&egram 8in)&'ding mai&gram9 re)eived at an0 time $efore the e;a)t time set for re)eipt of $ids. ?f the so&i)itation a'thoriGes fa)simi&e $ids, $ids ma0 $e /ithdra/n via fa)simi&e re)eived at an0 time $efore the e;a)t time set for re)eipt of $ids, s'$@e)t to the )onditions spe)ified in the provision entit&ed K*a)simi&e ,ids.K A $id ma0 $e /ithdra/n in person $0 a $idder or its a'thoriGed representative if, $efore the e;a)t time set for re)eipt of $ids, the identit0 of the person re<'esting /ithdra/a& is esta$&ished and the person signs a re)eipt for the $id. ?f a $idder has esta$&ished the e;isten)e of a mista2e in its $id prior to a/ard of the )ontra)t, it sho'&d $e a&&o/ed to /ithdra/ its $id if( The mista2e is )&ear&0 evident on the fa)e of the $id do)'ment $'t the intended )orre)t $id is not simi&ar&0 evidentQ or The $idder s'$mits proof /hi)h )&ear&0 and )onvin)ing&0 demonstrates that a mista2e /as made.
What if the re<'est to /ithdra/ does not fit into those )ategoriesW *or the reasons that fo&&o/, 0o' /i&& pro$a$&0 not a&&o/ the $idder to /ithdra/ its $id /itho't &ega& )o'nse&. This is an iss'e that ma0 $e impa)ted $0 an interpretation of 0o'r state &a/ on p'$&i) )ontra)ting, parti)'&ar&0 in the a$sen)e of a )&a'se as /i&& $e dis)'ssed ne;t. Of )riti)a& importan)e to $eing a$&e to ta2e this position is the in)&'sion in 0o'r so&i)itation do)'ment of t/o )&a'ses /hi)h /e have referred to in previo's se)tions of the .an'a&. The first )&a'se 8/hi)h /e have in)&'ded a s'ggested provision ear&ier in this dis)'ssion9 is the 7ate S'$missions, .odifi)ations, and Withdra/a&s of ,ids )&a'se. The se)ond is a )&a'se addressing the $id notifi)ation period as dis)'ssed in Se)tion 4.4.!, >So&i)itation.> 6'st as an e;amp&e, the fo&&o/ing is the )&a'se that a))omp&ishes this &eve& of prote)tion $0 federa& agen)ies( Period of Acce tance of Bids ?n )omp&ian)e /ith the so&i)itation, the $idder agrees, if this $id is a))epted /ithin JJJJ )a&endar da0s 8%0 )a&endar da0s 'n&ess a different period is inserted $0 the $idder9 from
-age 11
the date spe)ified in the so&i)itation for re)eipt of $ids, to f'rnish an0 or a&& items 'pon /hi)h pri)es are $id at the pri)e set opposite ea)h item, de&ivered at the designated point8s9, /ithin the time spe)ified in the S)hed'&e. !"H There is nothing magi)a& a$o't the parti)'&ar &ang'age in this )&a'se, $'t the &ega& )onte;t is ver0 important. ?f this &ang'age is part of the so&i)itation that the $idder signs /hen s'$mitting its $id, as part of its offer, it is te&&ing 0o' that 0o' have %0 da0s to a))ept its $id. ?t has agreed to ho&d its offer open for that period of time and 0o' )an ta2e that &ong to a)t 'pon that offer. Under this e;amp&e, 0o' do not, ho/ever, have %! da0s to a))ept the $id` >What is the rationa&e for this res'&tW ? tho'ght 0o' )o'&d a&/a0s /ithdra/ 0o'r offer prior to it $eing a))epted.> There is a &ot of &a/ on this s'$@e)t, $'t one of the ear&iest arti)'&ations of this phi&osoph0 is )ontained in the <'ote from a !909 de)ision of the United States Co'rt of C&aims that is sti&& good &a/ on this iss'e( What are the rights of $idders as to the /ithdra/a& of their $ids after the0 have $een opened and the0 have $een informed thereof, $'t $efore the0 have $een a))eptedW The agents of the =overnment stand 'pon a different footing from private individ'a&s in the matter of advertising for the &etting of )ontra)ts in $eha&f of the United States. The0 have no dis)retion. The0 m'st a))ept the &o/est or the highest responsi$&e $id, or re@e)t a&& and re advertise. -rivate individ'a&s are not re<'ired th's to a)t. Ben)e, it is apparent that the government agents sho'&d $e a&&o/ed a reasona$&e time after the opening of $ids $efore the0 are a&&o/ed to $e /ithdra/n, so the0 )an $e afforded opport'nities to as)ertain /hether )o&&'sion or fra'd had $een perpetrated against the United States $0 the parties engaged in the $idding. ?t is a&so apparent that if the r'&e of a&&o/ing immediate /ithdra/a&s after the res'&ts of the $idding are 2no/n, fra'ds inn'mera$&e )o'&d $e perpetrated against the United States and th's p'$&i) @'sti)e /o'&d $e great&0 hampered. !"9 5o' need to )he)2 /ith 0o'r &ega& )o'nse& to see ho/ this &ang'age might $e addressed 'nder 0o'r parti)'&ar state &a/. ?f the matter has not $een )ha&&enged and 0o' are fa)ed /ith a )ha&&enge, this )ase is a good starting point to see ho/ and /h0 this r'&e has deve&oped in the /a0 it has. This r'&e is a&so referred to as the >firm $id r'&e.> >,'t ? didnKt have that &ang'age in the so&i)itation. What do ? doW> Again, the ans/er ma0 /e&& &ie in 0o'r state &a/s and 0o'r &a/0er /i&& have to advise 0o' on /hat to do.
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*AI T 52.2!4 !5. '. A. Scott v. 2nited States, 44 C.C&. 524, 521 8!9099.
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-age 1H
Bo/ever, in the a$sen)e of this )&a'se, 0o' might /ant to )he)2 T 2.205 of the Uniform Commer)ia& Code, /hi)h ma0 $e the &a/ in 0o'r state. !40 ?n addressing the *AI )&a'se 8or a prede)essor )&a'se9, the =enera& Servi)es ,oard of Contra)t Appea&s opined 8and reiterated the Scott rationa&e9( This r'&e for =overnment pro)'rements a&so finds s'pport in )ommer)ia& settings. Under the Uniform Commer)ia& Code, UCC 2 205, KfirmK offers are irrevo)a$&e. ?n 'estern Ad)esives, =S,CA #o. 1449, H5 2, ,CA T !1,9%!, the appe&&ant attempted to disp'te the va&idit0 of a )ontra)t and defa'&t termination on the $asis that it /ithdre/ its $id prior to a/ard. The ,oard fo'nd that =overnment a))eptan)e of a $id d'ring an e;tended a))eptan)e period granted $0 the $idder )reated a va&id )ontra)t $e)a'se the so&i)itation /as a forma&&0 advertised pro)'rement for /hi)h $ids /ere irrevo)a$&e d'ring the a))eptan)e period. *ai&'re to perform after a))eptan)e @'stified defa'&t termination. The ,oard )on)&'ded, Kthis appea& t'rns on the firm $id r'&e. A $id s'$mitted in a forma&&0 advertised pro)'rement sea&ed $id is irrevo)a$&e, and an a))eptan)e after an attempted /ithdra/a& /i&& )reate a )ontra)t.K 'estern Ad)esives, H5 2 ,CA DT!1.9%!F at 90,0!H. !4! ?f a $idder /ithdra/s its $id a))ording to the a&&o/an)es in the prior se)tion, 0o' /i&& norma&&0 pro)eed to the ne;t &o/est $idder /itho't e;pe)ting )ompensation from the erring $idder. Bo/ever, if the $idder is ref'sed permission to /ithdra/, and attempts to /ithdra/ $0 fai&'re to perform 8e.g., fai&'re to prod')e a performan)e $ond9, 0o' ma0 $e in a position to terminate the $idder for defa'&t, minimiGe 0o'r damages $0 a/arding to the ne;t &o/est $idder, and re)over the damages in)&'ding the $id differentia& from the defa'&ting )ontra)tor. 5o' sho'&d eva&'ate a&& the )osts of 'nderta2ing this )o'rse of a)tion, 8in)&'ding &ong r'n effe)t on )ompetition and pri)ing9 if an0, $efore pro)eeding. .$0 COMPETITIPE PROPOSALS 6RE@UEST FOR PROPOSALS9 .$0$( Solicitation + Recei t of Pro osals RE@UIREMENT Ie<'ests for proposa&s sha&& $e p'$&i)iGed. !42 I*-s sha&& identif0 a&& eva&'ation fa)tors a&ong /ith their re&ative importan)e. !4"
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See/ e.!., T 2.205 of the Te7as ?usiness and Commerce Code /hi)h provides( T 2.205. *irm Offers.
An offer $0 a mer)hant to $'0 or se&& goods in a signed /riting /hi)h $0 its terms gives ass'ran)e that it /i&& $e he&d open is not revo)a$&e, for &a)2 of )onsideration, d'ring the time stated or if no time is stated for a reasona$&e time, $'t in no event ma0 s')h period of irrevo)a$i&it0 e;)eed three monthsQ $'t an0 s')h term of ass'ran)e on a form s'pp&ied $0 the offeree m'st $e separate&0 signed $0 the offeror.
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Nation1'ide Re%ortin! and Convention Covera!e, =S,CA #o. H"09, HH 2 ,CA 20,52! at !0",14!. *TA Cir)'&ar 4220.!: T 9.d.8!9.
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-age 19
-roposa&s /i&& $e so&i)ited from an ade<'ate n'm$er of <'a&ified so'r)es .!44 5o' sha&& ma2e a/ard on&0 to responsi$&e )ontra)tors possessing the a$i&it0 to perform s'))essf'&&0 'nder the terms and )onditions of a proposed agreement. Consideration sha&& $e given to s')h matters as )ontra)tor integrit0, )omp&ian)e /ith p'$&i) po&i)0, re)ord of past performan)e, and finan)ia& and te)hni)a& reso'r)es. !45 A/ards /i&& $e made to the responsi$&e firm /hose proposa& is most advantageo's to the granteeKs program /ith pri)e and other fa)tors )onsidered. !4% ?n ar)hite)t'ra& and engineering servi)es pro)'rements, grantees sha&& 'se )ompetitive proposa& pro)ed'res $ased on the ,roo2s A)t, /hi)h re<'ires se&e)tion $ased on <'a&ifi)ations and e;)&'des pri)e as an eva&'ation fa)tor provided the pri)e is fair and reasona$&e. 8See Se)tion %.5 L Arc)itect18n!ineerin! Services.9 !41 DISCUSSION A reAuest for ro osals t# icall# includes all of t/e elements of an in%itation for &ids! and in addition s/all contain t/e e%aluation factors and t/eir relati%e im ortance! e$"$! &# statin" t/at t/e factors are listed in declinin" order of im ortance$ T/e reAuest can s ecif# t/e information needed to erform t/e e%aluation! and ma# reAuire t/at cost7 rice information &e /#sicall# se arated so t/at t/e tec/nical e%aluation can &e erformed se aratel# from rice e%aluation$ RFPs are t# icall# u&lici,ed in ne1s a ers and7or trade 'ournals! and are issued to Aualified mailin" lists maintained in a manner similar to IFB lists$ 6See Section .$-$*$*! FSolicitation Mailin" ListF9 Pur ose The re<'ired feat're that prin)ipa&&0 disting'ishes an I*- from an ?*, is the &isting of eva&'ation fa)tors. These fa)tors t0pi)a&&0 in)&'de not on&0 responsi$i&it0 fa)tors 8s')h as finan)ia&, h'man, and ph0si)a& )apa)it0 to perform9, $'t a&so te)hni)a& fa)tors 8s')h as the degree to /hi)h the proposer is e;pe)ted, $ased on information s'$mitted and avai&a$&e, to a)hieve the performan)e o$@e)tives, to provide the <'a&it0 e;pe)ted, and on the re&ative <'a&ifi)ations of the proposerKs personne&9. .an0 I*-s go $e0ond &isting these fa)tors in order of importan)e, and a&so des)ri$e the eva&'ation pro)ess in detai&, &isting /eights for ea)h fa)tor, i&&'strating the s)oring method, and spe)if0ing the pro)ed're for /eighing pri)e into the se&e)tion.
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*TA Cir)'&ar 4220.!: T 9.d.8!9. *TA Cir)'&ar 4220.!: T 9.d.829. *TA Cir)'&ar 4220.!: T 1.h. *TA Cir)'&ar 4220.!: T 9.d.849. *TA Cir)'&ar 4220.!: T 9.e.
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-age H0
The p'rposes for dis)&osing of the eva&'ation pro)ess are so that( offerors )an more a))'rate&0 respond to 0o'r needs rather than so&e&0 re&0 on the te)hni)a& spe)ifi)ations a&oneQ proposers /i&& $e a$&e to )&ear&0 present the information 0o' need to )ond')t 0o'r eva&'ationQ and the appearan)e of favoritism or 'nethi)a& pra)ti)e in offeror se&e)tion /i&& $e diminished.
The )ompetitive proposa& pro)ess invo&ves a s'$@e)tive eva&'ation pro)ess and dis)'ssions that are t0pi)a&&0 )onfidentia&. -'$&i) a))eptan)e and a))eptan)e $0 disappointed offerors might $e &ess than in the )ase of sea&ed $ids, if the eva&'ation and se&e)tion pro)ess is not /e&& do)'mented and dis)&osed in advan)e. Best Practices :va&'ation and A/ard The fo&&o/ing is a &isting of e&ements )ommon&0 fo'nd in the )ompetitive proposa& method of pro)'rement. ,oth a te)hni)a& and )ost proposa& are re<'ested so that the0 ma0 $e eva&'ated, fre<'ent&0 $0 separate staff. Where the appearan)e of te)hni)a& o$@e)tivit0 is important, it is a $etter pra)ti)e to initia&&0 eva&'ate the te)hni)a& proposa&s /itho't 2no/&edge of )osts, so that an o$@e)tive and impartia& eva&'ation )an $e o$tained. The eva&'ation fa)tors to $e )onsidered in the a/ard are identified in the I*- a&ong /ith the re&ative importan)e of ea)h. Whi&e this re<'ires on&0 the ran2ing of the fa)tors /itho't <'antif0ing the importan)e or des)ri$ing the pro)ess for app&0ing the fa)tors to proposa&s, some agen)ies dis)&ose their se&e)tion pro)ess in detai&. Dis)&os're Disadvantages. Dis)&osing the spe)ifi) /eights and s)oring pro)esses ma0 en)o'rage proposers to distort their proposa&s, and ma0 strengthen the disappointed proposerKs atta)2 on the agen)0 de)isionQ Dis)&os're Advantages. The f'&& des)ription of the pro)ess g'ides proposers in 'nderstanding 0o'r needs, $o&sters the o$@e)tivit0 of 0o'r eva&'ation team, en)o'rages )andor from the proposers d'ring negotiations, and en)o'rages )ompetition thro'gh the per)eption of fair treatment. .an0 standard I*-s notif0 prospe)tive offerors that a/ard ma0 $e made on the $asis of initia& proposa&s s'$mitted /itho't an0 negotiations or dis)'ssions. The imp&i)ation is )&ear&0, that the initia& proposa& sho'&d $e their $est effort.
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-roposa& ='arantee A&tho'gh performan)e $onds are often appropriate and re<'ired $0 I*-s, the 'se of a proposa& g'arantee is &ess )ommon than $id g'arantee. ,e)a'se the proposers genera&&0 have 'navoida$&e opport'nit0 d'ring negotiations to render their proposa&s 'na))epta$&e, part of the p'rpose of $id g'aranties )annot $e a)hieved in the )ase of proposa&s. 8See Se)tion 4.".".".2, >,id ='arantee> and Se)tion H.2.!/ >-erforman)e ,onds.>9 Bo/ever, if it is parti)'&ar&0 important that the initia& proposa&s $e firm )ommitments $0 the offerors, that frivo&o's proposa&s not $e s'$mitted, or that proposers $e a$&e to provide performan)e $onds, then a proposa& g'arantee in the form of a )ashierKs )he)2, &etter of )redit, or approved $ond ma0 $e )ost effe)tive. .$0$* E%aluation of Pro osals RE@UIREMENT *TA Cir)'&ar 4220.!:, paragraph 9.d, re<'ires the fo&&o/ing /hen pro)'ring $0 )ompetitive proposa&s( d. -ro)'rement ,0 Competitive -roposa&AIe<'est for -roposa&s 8I*-9. . . . ?f this pro)'rement method is 'sed the fo&&o/ing re<'irements app&0( 8!9 Ie<'ests for proposa&s /i&& $e p'$&i)iGed. A&& eva&'ation fa)tors /i&& $e identified a&ong /ith their re&ative importan)eQ 829 -roposa&s /i&& $e so&i)ited from an ade<'ate n'm$er of <'a&ified so'r)esQ 8"9 =rantees /i&& have a method in p&a)e for )ond')ting te)hni)a& eva&'ations of the proposa&s re)eived and for se&e)ting a/ardeesQ 849 A/ards /i&& $e made to the responsi$&e firm /hose proposa& is most advantageo's to the granteeKs program /ith pri)e and other fa)tors )onsideredQ and 859 ?n determining /hi)h proposa& is most advantageo's, grantees ma0 a/ard 8if )onsistent /ith State &a/9 to the proposer /hose proposa&s offer the greatest $'siness va&'e to the Agen)0 $ased 'pon an ana&0sis of a tradeoff of <'a&itative te)hni)a& fa)tors and pri)eA)ost to derive /hi)h proposa& represents the 3$est va&'e4 to the -ro)'ring Agen)0 as defined in Se)tion %, "efinitions. ?f the grantee e&e)ts to 'se the $est va&'e se&e)tion method as the $asis for a/ard,
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ho/ever, the so&i)itation m'st )ontain &ang'age /hi)h esta$&ishes that an a/ard /i&& $e made on a 3$est va&'e4 $asis. !4H ?n ar)hite)t'ra& and engineering servi)es pro)'rements, grantees sha&& 'se )ompetitive proposa& pro)ed'res $ased on the ,roo2s A)t, /hi)h re<'ires se&e)tion $ased on <'a&ifi)ations and e;)&'des pri)e as an eva&'ation fa)tor provided the pri)e is fair and reasona$&e. 8See Se)tion %.5 L Arc)itect18n!ineerin! Services.9 !49 DISCUSSION FTA Circular .**:$(E = T/e most recent edition of t/e FTA Procurement Circular added an item 609 in ara"ra / 8$d$ )Procurement Ay Com#etiti-e Pro#osalsBRequest *or Pro#osals 6RFP7 in order to reco"ni,e t/e conce t of &est %alue in e%aluatin" offerorsM ro osals and selectin" successful contractors in ne"otiated rocurements$ T/e FTA Circular! ara"ra / 2$"! defines $est -alue in t/ese terms3 Aest CalueD A selection #rocess in /hich #ro#osals contain $oth #rice and qualitati-e com#onents, and a/ard is $ased u#on a com$ination o* #rice and qualitati-e considerations! 9ualitati-e considerations may include technical design, technical a##roach, quality o* #ro#osed #ersonnel, andBor management #lan! The a/ard selection is $ased u#on consideration o* a com$ination o* technical and #rice *actors to determine 6or deri-e7 the o**er deemed most ad-antageous and o* the greatest -alue to the #rocuring agency! (0: For ur oses of t/is discussion it ma# &e /el ful to distin"uis/ t/e conce t of H&est %alueI selections from t/e more traditional ractice of identif#in" t/e lo1est rice! tec/nicall# acce ta&le ro osal 6alt/ou"/ t/at too actuall# re resents 1/at t/e "rantee feels 1ill &e t/e H&est %alueI selection "i%en t/e nature of t/e reAuirements it is rocurin"9$ Bot/ a roac/es 1ill reAuire tec/nical e%aluations and rice anal#sis! and &ot/ 1ill reAuire t/e solicitation to clearl# inform t/e ros ecti%e offerors of /o1 t/e selection decision 1ill &e made3
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S'$ paragraph 859, &i2e paragraph %.g., re)ogniGes the )on)ept of $est value. On)e again, *TA does not /ish to di)tate an0 parti)'&ar fa)tors or ana&0ti) pro)ess. So&i)itations m'st, of )o'rse, te&& potentia& )ompetitors for the )ontra)t /hat the $asis for a/ard /i&& $e.
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*TA Cir)'&ar 4220.!: T 9.e.
This ne/ definition /as intended to re)ogniGe the )on)ept of $est va&'e. The &ang'age is intended neither to &imit nor di)tate <'a&itative meas'res grantees ma0 emp&o0.
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Aest -alue ) reAuires tradeoffs &et1een rice and non) rice factors to select t/e &est o%erall %alue to t/e "rantee$ 8o/est #rice technically acce#ta$le #ro#osal ) reAuires selection of t/e lo1est rice ro osal meetin" t/e minimum RFP reAuirements$
T/e FAR BacE"round ) T/e conce t of H&est %alueI o1es its ori"in to acAuisition reforms es oused in t/e Clinton)<ore administrationMs HRe ort of t/e National Performance Re%ie13 Creatin" a <o%ernment T/at BorEs Better and Costs Less$I In t/at re ort! it 1as recommended t/at Federal acAuisition re"ulations s/ould &e re%ised and restated 1it/ a ma'or o&'ecti%e &ein" 6amon" ot/ers9 a H $ $ $ s/ift to a ne1 em /asis on c/oosin" &est %alue roducts$I (0( T/at reform o&'ecti%e 1as e%entuall# translated into a com letel# re) 1ritten Federal AcAuisition Re"ulation 6FAR9 Part (0 E Contracting Ay =egotiation! (0* No1 t/e FAR maEes $est -alue t/e one stated o&'ecti%e of e%er# ne"otiated rocurement3 1F!G 2 E %ource %election 3$?ecti-e3 The o$?ecti-e o* source selection is to select the #ro#osal that re#resents the $est -alue$ Best Practices T/e Federal A roac/
The *AI des)ri$es a 3$est va&'e )ontin''m4 in negotiated pro)'rements /here agen)ies are free to 'se an0 one of a )om$ination of so'r)e se&e)tion approa)hes. *or e;amp&e, in a)<'isitions /here the re<'irement is )&ear&0 defina$&e and the ris2s of 'ns'))essf'& performan)e are sma&&, )ost or pri)e ma0 p&a0 a dominant ro&e in so'r)e se&e)tionQ i.e., the se&e)tion ma0 $e $ased on the &o/est pri)e te)hni)a&&0 a))epta$&e proposa&. !5" Where, ho/ever, the agen)0+s re<'irement is &ess definitive, or /here there is deve&opment /or2, or greater performan)e ris2, then the &ess important pri)e /i&& $e and the more important /i&& $e te)hni)a& or past performan)e )onsiderations in the so'r)e se&e)tion. !54 The *AI goes on to des)ri$e $oth t)e tradeoff %rocess that is 'sed /hen se&e)ting a proposa& other than the &o/est pri)e te)hni)a&&0 a))epta$&e proposa&, as /e&& as the pro)ess to $e 'sed /hen the &o/est pri)e te)hni)a&&0 a))epta$&e proposa& method is appropriate. Severa& important prin)ip&es ma0 $e noted from the *AI g'idan)e on so'r)e se&e)tion that grantees sho'&d )onsider in their o/n a)<'isitions(
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*edera& Iegister Oo&. %2, #o. !H9, Sept. "0, !991. *AI -art !5 /as reiss'ed $0 *edera& A)<'isition Cir)'&ar 8*AC9 91 02 dated O)to$er !0, !991.
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The *AI no/ sees &o/est pri)e te)hni)a&&0 a))epta$&e proposa& se&e)tion as one end of the $est va&'e spe)tr'm $'t /e have disting'ished it from $est va&'e for )&arit0 of dis)'ssion p'rposes.
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*AI S'$part !5.!0! L ?est Nalue Continuum.
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!. ,est va&'e se&e)tion methodo&og0 affords the agen)0 an opport'nit0 to str')t're the so'r)e se&e)tion pro)ess in a /a0 that is s'ita$&e for the nat're of the agen)0+s re<'irement. #o &onger is the emphasis on defining one+s 3minim'm needs,4 /ith its )oro&&ar0 se&e)tion pro)ess of )hoosing the &o/est pri)e te)hni)a&&0 a))epta$&e proposa&. Whi&e that approa)h /i&& pro$a$&0 $e the one most often 'sed $0 grantees, agen)ies are no/ en)o'raged to str')t're se&e)tion pro)ed'res $ased on the rea&ities of their re<'irements, and the0 are not e;pe)ted to for)e fit a&& a)<'isitions into a &o/est pri)e te)hni)a&&0 a))epta$&e proposa& mo&d /hen that ma0 res'&t in 'na))epta$&e performan)e ris2s or pre)&'de the agen)0 from se&e)ting prod')ts that are a $etter value to them than the &o/est pri)e prod')ts or servi)es. 2. When the agen)0 de)ides that its re<'irements are s'ffi)ient&0 defined to 'se the &o/est pri)e te)hni)a&&0 a))epta$&e se&e)tion pro)ess, t)e evaluation factors t)at esta$lis) t)e requirements of acce%ta$ility must $e stated in t)e solicitation. So&i)itations m'st spe)if0 that a/ard /i&& $e made on the $asis of the &o/est eva&'ated pri)e of proposa&s meeting or e;)eeding the a))epta$i&it0 standards for non pri)e fa)tors. ". When the agen)0 de)ides that its re<'irements are not defined /ith s'ffi)ient pre)ision, or /here there are performan)e ris2s, so that se&e)tion of the &o/est pri)ed proposa& is not in the $est interests of the agen)0, then a tradeoff pro)ess sho'&d $e 'sed to se&e)t the $est va&'e proposa&. ?n this )ase the importan)e of the non pri)e eva&'ation fa)tors that /i&& affe)t the )ontra)t a/ard m'st $e stated in the so&i)itation. The *edera& approa)h in the so&i)itation is to state /hether a&& eva&'ation fa)tors other than pri)e, /hen )om$ined, are signifi)ant&0 more important than, appro;imate&0 e<'a& to, or signifi)ant&0 &ess important than pri)e. This permits the agen)0 to ma2e tradeoffs $et/een pri)e and te)hni)a& merit. ?t a&so permits the offerors to 2no/ /hat is important to the agen)0 /hether to fo)'s on higher <'a&it0 at the e;pense of )ost, or &o/er )ost at the e;pense of <'a&it0. ?t is not ne)essar0 to p'$&ish the spe)ifi) /eights 8n'meri)a&&09 of the individ'a& eva&'ation fa)tors, on&0 their re&ative importan)e 8i.e., )on)ept'a&&0 or ad@e)tiva&&09. Some *edera& agen)ies have fo'nd thro'gh pra)ti)e that the approa)h /hi)h gives the greatest degree of f&e;i$i&it0 in se&e)ting the $est va&'e proposa& is to p&a)e e<'a& /eight on the pri)e and te)hni)a& fa)tors. This then a&&o/s a )hoi)e in either dire)tion as )ir)'mstan)es /arrant. 4. ?t is important to note that the per)eived $enefits of the higher pri)ed proposa& m'st merit the additiona& )ost, and the rationa&e for tradeoffs m'st $e do)'mented in the fi&e. ?t is not s'ffi)ient to sa0 in the fi&e that )ompan0 R re)eived a higher tota& s)ore than )ompan0 5, and therefore deserves the a/ard. S)ores, /itho't s'$stantive e;p&anations of the re&ative strengths and /ea2nesses of the )ompetitive proposa&s, in)&'ding the per)eived $enefits to the agen)0, are an ins'ffi)ient $asis for pa0ing a
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higher pri)e. The fi&e m'st e;p&ain /h0 )ompan0 R represents the $est va&'e to the agen)0. The ne)essit0 of do)'menting the spe)ifi) reasons /h0 proposa& A offers a $etter va&'e to the grantee than proposa& , is /h0 a mathemati)a&&0 driven se&e)tion de)ision is not appropriate. Pro osal E%aluation Mec/anics There are man0 different methods of )ond')ting proposa& eva&'ations to determine $est va&'e, and man0 opinions as to /hi)h is the $est approa)h. =rantees ma0 emp&o0 an0 rating method or )om$ination of methods, in)&'ding( )o&or or ad@e)tiva& ratings, n'meri)a& /eights and ordina& ran2ings. Whatever the method, the important thing is that a statement of the re&ative strengths, defi)ien)ies, signifi)ant /ea2nesses, and ris2s s'pporting the eva&'ation ratings $e do)'mented in the )ontra)t fi&e. Some agen)ies have emp&o0ed a <'antitative approa)h of assigning s)ores to $oth te)hni)a& and )ost proposa&s, there$0 )ompe&&ing a so'r)e se&e)tion that is $asi)a&&0 mathemati)a&&0 derived. -roponents of this method 's'a&&0 arg'e it is the most 3o$@e)tive,4 and therefore the fairest, approa)h to determining a /inner. On )&oser e;amination, ho/ever, a&& approa)hes are to one degree or another, s'$@e)tive. The de)ision regarding /hat s)ore to assign an0 given fa)tor is s'$@e)tive, and an0 form'&as emp&o0ed after the initia& s)oring )annot ma2e the pro)ess an 3o$@e)tive4 one. *'rther, grantees m'st $e a&&o/ed the f&e;i$i&it0 of ma2ing so'nd, fa)t'a&&0 $ased de)isions that are in their agen)0+s $est interests. An0 approa)h that assigns a predetermined n'meri)a& /eight to pri)e, and then see2s to 3s)ore4 pri)e proposa&s and fa)tor that s)ore into a fina& overa&& n'meri)a& grade to a'tomati)a&&0 determine )ontra)t a/ard, is a mista2e. Iather, agen)ies sho'&d eva&'ate the pri)es offered $'t not s)ore the pri)e proposa&s. -ri)es sho'&d $e eva&'ated and $ro'ght a&ong side the te)hni)a& proposa& s)ores in order to ma2e the ne)essar0 tradeoff de)isions as to /hi)h proposa& represents the $est overa&& va&'e to the agen)0. Agen)ies sho'&d )aref'&&0 )onsider the te)hni)a& merits of the )ompetitors and the pri)e differentia&s to see if a higher pri)e proposa& /arrants the a/ard $ased on the $enefits it offers to the agen)0 as )ompared to a &o/er pri)e proposa&. This is a s'$@e)tive de)ision ma2ing, tradeoff pro)ess. The diffi)'&ties in tr0ing to assign a predetermined /eight to pri)e and then s)oring pri)e proposa&s is that no one is smart eno'gh to predi)t in advan)e ho/ m')h more sho'&d $e paid for )ertain in)rementa& improvements in te)hni)a& s)ores or ran2ings 8depending on /hat s)oring method is 'sed9. *or e;amp&e, no one )an predi)t the nat're of /hat /i&& $e offered in the te)hni)a& proposa&s 'nti& those proposa&s are opened and eva&'ated. On&0 then )an the nat're of /hat is offered $e as)ertained and the va&'e of the different approa)hes proposed $e meas'red. ?t is against the a)t'a& te)hni)a& offers made that the pri)es m'st $e )ompared in a tradeoff pro)ess. Agen)ies )annot predi)t in advan)e /hether a rating of 3:;)e&&ent4 for a te)hni)a& proposa& /i&& $e /orth RS more that a rating of 3=ood,4 or /hether a s)ore of 95 is /orth )onsidera$&0 more or on&0 margina&&0 more than a s)ore of H1. ?t is /hat is 'nderneath the 3:;)e&&ent4 and the 3=ood4 ratings, or /hat has )a'sed a s)ore of 95 vs. a s)ore of H1, that is )riti)a&. The goa& is to determine if more do&&ars sho'&d $e paid to $'0 the improvement, and
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e<'a&&0 important, ho/ man0 more do&&ars those improvements are per)eived to $e /orth. ?t )o'&d /e&& $e that the improvements ref&e)ted in the higher ratings are /orth &itt&e in terms of per)eived $enefits to the agen)0. ?n this )ase the grantee does not /ant to get 3&o)2ed in4 to a mathemati)a&&0 derived so'r)e se&e)tion de)ision. This ma0 ver0 /e&& happen /hen pri)e has $een assigned a n'meri)a& s)ore and the se&e)tion is $ased on a mathemati)a& form'&a instead of a /e&& reasoned ana&0sis of the re&ative $enefits of the )ompeting proposa&s. Some agen)ies have re)ogniGed the pitfa&&s of 'sing arithmeti) s)hemes to ma2e so'r)e se&e)tion de)isions. The0 have opted to not 'se n'meri)a& s)ores to eva&'ate te)hni)a& proposa&s and the0 have gone to ad@e)tive ratings insteadQ e.g., 3A))epta$&e,4 3Oer0 =ood,4 and 3:;)e&&ent.4 The0 have a&so heavi&0 emphasiGed the need for s'$stantive narrative e;p&anations of the reasons for the ad@e)tive ratings, and the So'r)e Se&e)tion Offi)ia& then fo)'ses on the narrative e;p&anations in determining if it is in the agen)0+s $est interest to pa0 a higher pri)e for the te)hni)a& improvements $eing offered. ?n this s)enario pri)e is eva&'ated and )onsidered a&ongside te)hni)a& merit in a tradeoff fashion 'sing good $'siness @'dgment to )hoose the proposa& that represents the $est va&'e to the agen)0. Pro osal E%aluation Criteria The so&i)itation /i&& $e more easi&0 p&anned and deve&oped, the )riteria /i&& $e more a))'rate&0 &isted and ran2ed, and the eva&'ation pro)ess /i&& $e smoother and more o$@e)tive if the eva&'ation pro)ess is thoro'gh&0 p&anned in advan)e. The eva&'ation pro)ess $egins /ith the identifi)ation of the )riteria that /i&& $e most meaningf'& in assessing the re&ative advantage of the proposa&s to 0o'r agen)0. 5o' /i&& genera&&0 in)&'de( !. -ast -erforman)e L The so&i)itation sho'&d advise offerors of 0o'r approa)h in eva&'ating past performan)e, in)&'ding eva&'ating offerors that have no re&evant performan)e histor0, and sho'&d a&so advise offerors to identif0 past re&evant )ontra)ts for efforts simi&ar to 0o'r re<'irement. The so&i)itation sho'&d a&so a&&o/ offerors to provide information on pro$&ems en)o'ntered on the identified )ontra)ts and )orre)tive meas'res ta2en. This eva&'ation sho'&d a&so )onsider the past performan)e of 2e0 personne& and s'$)ontra)tors that /i&& perform ma@or or )riti)a& aspe)ts of the /or2. This eva&'ation of past performan)e, as one indi)ator of an offeror+s a$i&it0 to perform the )ontra)t s'))essf'&&0, is separate from the responsi$i&it0 determination dis)'ssed in Se)tion 5.!. 2. Te)hni)a& Criteria L Te)hni)a& fa)tors regarding the spe)ifi) methods, designs, and s0stems proposed to $e 'sed $0 the offeror /i&& $e )onsidered and the0 m'st $e tai&ored to the spe)ifi) re<'irements of 0o'r so&i)itation. These fa)tors m'st represent the 2e0 te)hni)a& areas of importan)e that 0o' intend to )onsider in the so'r)e se&e)tion de)ision. Tec)nical factors s)ould $e c)osen to su%%ort meanin!ful com%arison and discrimination $etween com%etin! %ro%osals. ?f the agen)0 has esta$&ished minim'm standards for determining te)hni)a& a))epta$i&it0 of proposa&s, these standards m'st $e )&ear&0 set forth in the so&i)itation.
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". Ye0 -ersonne& L An eva&'ation of 2e0 personne& is often s'ggested /hen the pro)'rement invo&ves servi)es or re<'irements /here management of the /or2 is a )riti)a& fa)tor in determining its s'))ess. N'a&ifi)ations and e;perien)e of 2e0 personne& ma0 $e an important eva&'ation fa)tor. Some agen)ies have re<'ired ora& presentations $0 2e0 personne& d'ring /hi)h the agen)0 offi)ia&s ma0 as2 these 2e0 personne& re&evant <'estions to determine the depth of their 2no/&edge in )riti)a& areas. 4. Cost or -ri)e L Cost or pri)e m'st $e )onsidered in ever0 pro)'rement, even those for professiona& servi)es 8e.g., &ega&, a))o'nting, et).9, 'n&ess the servi)es are those defined $0 *edera& stat'tes as re<'iring a <'a&ifi)ations $ased se&e)tion. !55 Competition norma&&0 esta$&ishes pri)e reasona$&eness. Therefore, /hen )ontra)ting on a fi;ed pri)e $asis, )omparison of the proposed pri)es /i&& norma&&0 satisf0 the re<'irement to perform a pri)e ana&0sis and no )ost ana&0sis /i&& $e ne)essar0. ?f the )ontra)t is to $e a )ost reim$'rsement one, then a cost realism analysis sho'&d $e performed to determine /hat the grantee sho'&d rea&isti)a&&0 e;pe)t to pa0 for the proposed effort. =rantees sho'&d never simp&0 a))ept at fa)e va&'e the tota& estimated )ost in the proposa& and $ase a se&e)tion de)ision on the proposed amo'nt sin)e man0 offerors tend to 'nderstate the estimated )ost in hopes of /inning the )ontra)t as the 3&o/ $idder.4 A )ost rea&ism ana&0sis /o'&d 'se ea)h offeror+s spe)ifi) &a$or and overhead rates as estimating fa)tors 8ass'ming the0 are not 'nderstated9 and the agen)0+s o/n estimates for &a$or ho'rs, trave&, materia&s, et). The a/ard de)ision /o'&d $e made /ith the )ost rea&ism ana&0sis in mind. 5. Ie&ative ?mportan)e of -ri)e and #on -ri)e *a)tors The so&i)itation m'st advise offerors if the se&e)tion is to $e made on a 3$est va&'e4 $asis. And as a&read0 noted, the so&i)itation m'st a&so advise offerors if pri)e is appro;imate&0 e<'a& to, &ess than, or greater in importan)e than the te)hni)a& eva&'ation fa)tors as a /ho&e. One agen)0 /ith e;tensive e;perien)e in )ond')ting negotiated pro)'rements 'ses &ang'age in its so&i)itations that informs offerors of ho/ the agen)0 /i&& se&e)t that proposa& that is the most advantageo's to the agen)0, /hi)h ma0 not ne)essari&0 $e the highest ran2ed te)hni)a&&0 nor the &o/est proposed pri)e. The0 a&so inform offerors of ho/ pri)e ma0 $e)ome a more important se&e)tion fa)tor than te)hni)a& merit /hen the te)hni)a& proposa&s are eva&'ated as essentia&&0 e<'a&. *o&&o/ing is the &ang'age 'sed( T)e Aut)ority will ma(e t)e award to t)e res%onsi$le &ro%oser w)ose %ro%osal is most advanta!eous to t)e Aut)ority. Accordin!ly/ t)e Aut)ority may not necessarily ma(e an award to t)e &ro%oser wit) t)e )i!)est tec)nical ran(in! nor award to t)e &ro%oser wit)
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See Se)tion %.5 L Arc)itect18n!ineerin! Services.
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t)e lowest &rice &ro%osal if doin! so would not $e in t)e overall $est interest of t)e Aut)ority. . . . T)e overall criteria listed $elow are listed in relative order of im%ortance. As %ro%osals are considered $y t)e Aut)ority to $e more equal in t)eir tec)nical merit/ t)e evaluated cost or %rice $ecomes more im%ortant so t)at w)en tec)nical %ro%osals are evaluated as essentially equal/ cost or %rice may $e t)e decidin! factor. !5% 8valuation Criteria= A. Tec)nical 0ualifications ('it) "etails) ?. ,verall &rice C. ,t)er Relevant atters ('it) "etails) .$0$- Com etiti%e Ran"e RE@UIREMENT =rantees /i&& have a method in p&a)e for )ond')ting te)hni)a& eva&'ations of the proposa&s re)eived and for se&e)ting a/ardees. !51 As dis)'ssed in this se)tion, >)ompetitive range determination> is a )on)ept that )an $e 'sed /hen deve&oping methods for se&e)ting a/ardees 'nder the )ompetitive proposa& method of pro)'rement. DISCUSSION At t/is sta"e in t/e com etiti%e ro osal rocurement! #ou /a%e recei%ed t/e ro osals from interested offerors and /a%e &e"un t/e rocess of e%aluation and selection$ Ne"otiation and t/e re eated anal#ses and e%aluations reAuired can &e %er# time consumin" and t/ere is often a 1ide ran"e of com etence or cost)effecti%eness in t/e initial ro osals$ Dou ma# not 1is/ to e; end t/is effort on all t/e ro osals for t1o reasons3 certain ro osals! u on e%aluation! ma# &e so muc/ 1orse t/an ot/ers for rice or ot/er reasons! t/at t/e ossi&ilit# of acce tin" a su&seAuent offer is so remote as to maEe ne"otiations unnecessar#J and
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#e/ 5or2 Cit0 Transit L for more information )a&& .r. Wi&&iam DeSantis at 1!H %94 4""9. *TA Cir)'&ar 4220.!: T 9.d.8"9.
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-age H9
#ou ma# /a%e enou"/ ro osals so t/at #ou can &e assured of ne"otiatin" t/e &est &u# in dealin" onl# 1it/ se%eral of t/e &estJ ne"otiatin" 1it/ more 1ould &e 1asteful of &ot/ #our resources and t/e mar"inal ro osersK$
For t/ese reasons! a commonl# used tec/niAue is to conduct ne"otiations onl# 1it/ offerors determined to &e 1it/in t/e com etiti%e ran"e$ In assessin" t/e com etiti%e ran"e! com etition remains an im ortant o&'ecti%e! and t/e effort in determinin" t/e com etiti%e ran"e is to reser%e t/ose ro osals 1/ic/ stand a reasona&le c/ance of &ein" found acce ta&le! not to undul# limit com etition &# eliminatin" %ia&le ro osers$ Pur ose Competitive range is a diffi)'&t )on)ept to define in spe)ifi) terms /hi)h /o'&d app&0 to a&& potentia& pro)'rements, $e)a'se professiona& @'dgment m'st $e 'sed in esta$&ishing the )ompetitive range. -ro)ed'res and fa)tors for determining the )ompetitive range ma0 differ from pro)'rement to pro)'rement. The )ompetitive range )an $e determined so that it is( #ot 'sed to 'nfair&0 e&iminate offerorsQ ,ased on fa)tors and )riteria 2no/n to a&& offerorsQ App&ied 'niform&0 to a&& proposa&sQ and We&& do)'mented in the pro)'rement fi&es.
One of 0o'r )onsiderations ma0 $e that as man0 offerors as possi$&e $e given the opport'nit0 to $e )onsidered /ithin the )ompetitive range, so as to attain the goa& of f'&& and free )ompetition. On&0 those offerors /hose proposa&s are determined to $e so defi)ient or so o't of &ine as to pre)&'de meaningf'& negotiation need $e e&iminated from the )ompetitive range. The )ompetitive range )an )onsist of those offerors /hose proposa&s have a reasona$&e )han)e of $eing se&e)ted for a/ard, i.e., are a))epta$&e as s'$mitted or )an $e made a))epta$&e thro'gh modifi)ation. A&& responsi$&e offerors /hose proposa&s are determined to $e /ithin the )ompetitive range /o'&d $e invited to parti)ipate in an0 ora& andAor /ritten dis)'ssions. Best Practices Whi&e it is not possi$&e to identif0 a&& of the spe)ifi) steps and ana&0ses that )o'&d $e performed in determining /hi)h proposa&s are /ithin the )ompetitive range, the fo&&o/ing are provided for )onsideration in ma2ing this determination( The determination of /hi)h proposa&s are /ithin the )ompetitive range is 's'a&&0 made $0 the eva&'ation team 8or pro)'ring offi)ia&, if there is no eva&'ation team9.
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Competitive range determinations )an $e made 'sing )ostApri)e, te)hni)a& and other fa)tors identified in the so&i)itation. Detai&ed independent estimates prepared $0 the initiating department or pro@e)t offi)e )an $e )onsidered /hen assessing the )ostApri)e aspe)ts of )ompetitive range. The eva&'ation teamKs s)oring of offerorsK te)hni)a& and management proposa&s is a &ogi)a& $asis for esta$&ishing /hi)h proposa&s are /ithin the )ompetitive range, as is s)oring of other eva&'ationAa/ard )riteria spe)ified in the so&i)itation. Bo/ever, 0o' ma0 paint 0o'rse&f into a )orner if 0o' )ommit to )ompetitive range determinations $ased on predetermined >)'toff s)ores.> ,order&ine proposa&s need not a'tomati)a&&0 $e e;)&'ded from the )ompetitive range, if the0 are reasona$&0 s's)epti$&e of $eing made a))epta$&e. Iemem$er that as a genera& r'&e, if there is do'$t as to /hether a proposa& sho'&d $e in the )ompetitive range, the goa& of )ompetition is served $0 in)&'ding it. On&0 those proposa&s that are @'dged to $e so defi)ient or so o't of &ine as to pre)&'de f'rther meaningf'& negotiations need $e e&iminated from the )ompetitive range. Competitive range determinations are signifi)ant do)'ments in the pro)'rement fi&e. This do)'mentation is he&pf'& to serve as a $asis for de$riefing offerors, and for responding to in<'iries and protests. .an0 s0stems notif0, in /riting, an0 offerors /hose proposa&s have $een e&iminated from )onsideration for a/ard. S')h notifi)ation o))'rs at the ear&iest pra)ti)a$&e time after this determination is made. Written andAor ora& dis)'ssions are 's'a&&0 )ond')ted /ith a&& offerors determined to $e /ithin the )ompetitive range. At the )on)&'sion of dis)'ssions /ith offerors in the )ompetitive range, the pro)'ring offi)ia& ma0 as2 a&& offerors to s'$mit their $est and fina& offers in /riting. This )om$ines )omp&ete fairness for ea)h offeror, /ith )ompetitive in)entive for ea)h to ma2e its $est rea&isti) offer. *or a dis)'ssion on $est and fina& offers, referen)e Se)tion 4.5.5.2 3Request for ?est and Final ,ffer.4
.$0$. Discussions and Clarifications DEFINITIONS #egotiation A pro)ed're that in)&'des the re)eipt of proposa&s from offerors, permits $argaining and 's'a&&0 affords offerors an opport'nit0 to revise their offers $efore a/ard of a )ontra)t. Dis)'ssion An0 ora& or /ritten )omm'ni)ation $et/een a pro)'rement offi)ia& and a potentia& offeror 8other than )omm'ni)ation )ond')ted for the p'rpose of minor )&arifi)ation9 /hether or
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not initiated $0 the pro)'rement offi)ia&, that 8!9 invo&ves information essentia& for determining the a))epta$i&it0 of a proposa&, or 829 provides the offeror an opport'nit0 to revise or modif0 its proposa&. C&arifi)ation A )omm'ni)ation /ith an offeror for the so&e p'rpose of e&iminating minor irreg'&arities, informa&ities, or apparent )&eri)a& mista2es in a proposa&. DISCUSSION Dou ma# 1is/ to o&tain clarifications from one or more ro osers! or /old discussions 1it/ all ro osers immediatel# after recei t of ro osals$ Co1e%er! it is also ossi&le to roceed 1it/ e%aluations and determination of a com etiti%e ran"e as descri&ed in t/e follo1in" sections! &efore discussions are /eld$ Most t# icall#! t/e first discussions are oral resentations made &# a s/ort list of ro osers 1it/in a com etiti%e ran"e$ If discussions are /eld 1it/ an# ro oser at an# /ase of t/e rocurement! /oldin" discussions 1it/ all remainin" ro osers 6not alread# e;cluded from t/e com etiti%e ran"e as descri&ed in Section .$0$-! FCom etiti%e Ran"eF9 1ill increase t/e liEeli/ood and t/e a earance of t/e most accurate and o&'ecti%e e%aluation and ne"otiation$ Best Practices 5o' are not re<'ired to )ond')t dis)'ssions /ith an0 offeror provided( 8!9 the so&i)itation did not )ommit in advan)e to dis)'ssions or notified a&& offerors that a/ard might $e made /itho't dis)'ssion, and 829 the a/ard is in fa)t made /itho't an0 /ritten or ora& dis)'ssion /ith an0 proposer. #orma&&0, ho/ever, 0o' /i&& need to )ond')t dis)'ssions. ?f this is the )ase, 0o' /i&& preserve the )ompetitiveness and fairness of 0o'r pro)'rement $0 )ond')ting dis)'ssions /ith a&& offerors /ho s'$mitted proposa&s in the )ompetitive range. The )ompetitive range is determined on the $asis of )ost or pri)e and other fa)tors and in)&'des the proposa&s that have a reasona$&e )han)e of $eing se&e)ted for a/ard. The )ontent and e;tent of the dis)'ssions is a matter of 0o'r @'dgment $ased on the parti)'&ar fa)ts of the pro)'rement. Confidentia&it0 has man0 advantages d'ring the eva&'ation pro)ess. The name and n'm$er of proposa&s re)eived is not norma&&0 )onsidered a p'$&i) re)ord and need not 's'a&&0 $e re&eased to the )ompetitors or the p'$&i) at &arge. 5o'r )ontro& of this information ma0 ease the proposersK )ompetitive tension and a&&o/ 0o' to )ond')t more meaningf'& negotiations. Competitive information provided re&ative to $oth the te)hni)a& and )ost proposa&s ma0 in)&'de trade se)rets prote)ted $0 stat'te and )an 's'a&&0 $e 2ept )onfidentia& d'ring the eva&'ation pro)ess, and, in some instan)es, after the a/ard of )ontra)t. Bo/ever, state p'$&i) information &a/s and the *edera& *reedom of ?nformation A)t )an a&so affe)t 0o'r &atit'de, parti)'&ar&0 if there is p'$&i) interest in the pro)'rement and in<'iries are made $0 non )ompetitors. ?f 0o' enter negotiations or dis)'ssions 8as opposed to simp&e re<'ests for )&arifi)ation9 /ith one offeror, an a'tomati) impression of 'nfairness is avoided $0 entering them /ith a&& remaining offerors. An o))asiona& mista2e is to )ir)'mvent the pro)ess mere&0 $0 re<'esting >)&arifi)ations> /hen 0o' are in fa)t )ond')ting dis)'ssions. ?f the <'estions, and the )on)'rrent
-age 92
opport'nit0 to respond, are s'ffi)ient to &ead an offeror into areas of per)eived defi)ien)0 in its proposa&, dis)'ssions have $een he&d. ?f dis)'ssions are he&d, /hat sho'&d the )ontent $e or ho/ sho'&d the0 startW Competition and fairness are served $0 )ond')ting meaningf'& dis)'ssions /ith offerors. This in)&'des advising them of defi)ien)ies in their proposa&s and affording them the opport'nit0 to satisf0 the re<'irements $0 the s'$mission of revised proposa&s. 5o' are not, ho/ever, o$&igated to afford offerors a&& en)ompassing dis)'ssions, or to dis)'ss ever0 e&ement of a te)hni)a&&0 a))epta$&e, )ompetitive range proposa& that has re)eived &ess than a ma;im'm possi$&e s)ore. A&so, if a proposa& is te)hni)a&&0 'na))epta$&e as s'$mitted and /o'&d re<'ire ma@or revisions to $e)ome a))epta$&e, 0o' are not re<'ired to in)&'de the proposa& in the )ompetitive range for dis)'ssion p'rposes. Sometimes 0o' ma0 $e in the 'n)omforta$&e position of having )on)&'ded dis)'ssions on&0 to dis)over there is a signifi)ant mista2e or an aspe)t the eva&'ators do not 'nderstand in one proposa&. Sin)e a&&o/ing one $idder to )orre)t its proposa& /o'&d )onstit'te dis)'ssions /ith that firm, dis)'ssions m'st reopened /ith a&& $idders in the )ompetitive range and the m'st $e a&&o/ed the opport'nit0 to s'$mit revised proposa&s. D'ring dis)'ssions /ith offerors, 0o' ma0 $e re<'ested to as2 a&& proposers to s'$mit proposa&s /ith an advantageo's approa)h proposed $0 one of them. Someone on 0o'r team ma0 s'ggest that a te)hni<'e 'sed $0 proposer A /o'&d )omp&ement proposer ,Ks approa)h /e&& and )o'&d res'&t in an advantageo's offer from ,. A&so, after pri)e proposa&s have $een eva&'ated, someone ma0 s'ggest that a proposer /ith a high te)hni)a& s)ore sho'&d $e as2ed if it )an meet a pri)e /hi)h happens to $e the pri)e of a )ompetitor. S')h te)hni<'es are )onsidered te)hni)a& &eve&ing, te)hni)a& transf'sion or a')tioning. The disadvantage of these te)hni<'es is that proposers ma0 rea)t adverse&0. ,e)a'se the0 are )on)erned a$o't their position re&ative to their )ompetitors, and /ant to 2eep their strengths )onfidentia& from their )ompetitors, the0 ma0 $e)ome more se)retive in their dis)'ssions /ith 0o' if the0 sense 0o' ma0 re&a0 their ideas, pri)ing, or positions to their )ompetitors. This is not to dis)o'rage dis)'ssion of pri)e or s'ggesting ma@or revisions in a proposa&, $'t rather to dis)o'rage the dis)&os're, even indire)t, of one proposerKs information to another. The0 ma0 ho&d $a)2 their strengths and va&'a$&e information, /aiting for a ,A*O. This )an great&0 inhi$it the negotiation of the most advantageo's proposa&. .$0$0 Additional Su&missions .$0$0$( ReAuest for Re%ised Pro osals DISCUSSION T/e most common tool used &# rocurement officials in com etiti%e ne"otiations is a reAuest for a re%ised ro osal$ T# icall#! t/e deficiencies of a ro osal are listed and e; lained$ A com lete re%ised ro osal! includin" rice 6e;ce t under t/e BrooEs Act9 is
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reAuested from eac/ offeror in t/e com etiti%e ran"e$ Unless e; licitl# stated ot/er1ise! t/e re%ised offer e;tin"uis/es t/e rior offer$ T/e ro oser s/ould identif# all c/an"es in t/e re%ised offer$ T/e su&mission of t/e re%ised offers can tri""er anot/er round of e%aluations! determination of a ne1 com etiti%e ran"e! and discussions$ Dou ma# re eat t/is c#cle as man# times as necessar# to o&tain t/e most ad%anta"eous offers$ If #ou conclude #ou /a%e o&tained t/e most ad%anta"eous offer ossi&le! #ou ma# recommend a1ard$ Pur ose The p'rpose of the re<'est for revised proposa&s, &i2e the origina& re<'est for proposa&s, is to harness the )ompetitiveness and )reativit0 of the proposers to prod')e the most advantageo's proposa& for 0o'r )'stomers. 5o' and the proposer ma0 'nderstand on&0 grad'a&&0 ea)h otherKs )apa$i&ities and )onstraints. :a)h /ritten proposa& ma0 raise ne/ <'estions and ne/ possi$i&ities. 5o' )an e&i)it the $est improvement ea)h time a revised proposa& is prepared $0 &isting )&ear&0 the defi)ien)ies of the )'rrent proposa& as 0o' 'nderstand it. A&tho'gh 0o' e;pe)t proposers to respond primari&0 to 0o'r re<'ests in preparing revised offers, 0o' a&so /ant to &earn ho/ 0o'r re<'ests affe)t other aspe)ts of their proposa&s. ,ased on the format of the proposa&s and the nat're of the )hanges 0o' are re<'esting, 0o' ma0 re<'ire that revised proposa&s $e s'$mitted in a form that /i&& $oth easi&0 a&&o/ 0o' to identif0 the )hanges and a&so form the $asis of a )oherent )ontra)t, if a))epted. -rivate parties in $i&atera& negotiations /o'&d pro$a$&0 ma2e )o'nter offers to ea)h other to advan)e the pro)ess. There are disadvantages to 0o'r ma2ing a )o'nter offer in a )ompetitive proposa& pro)'rement. #ot on&0 /o'&d a )o'nter offer on 0o'r part e;ting'ish the proposerKs &ast offer, it /o'&d p&a)e the proposers 8possi$&0 more than one9 in the position to a))ept or re@e)t. Therefore )o'nter offers are 's'a&&0 not made $0 pro)'ring agen)ies. .$0$0$* ReAuest for Best and Final Offer DEFINITION A $est and fina& offer 8,A*O9 )an $e re<'ested of ea)h offeror in the )ompetitive range at the )on)&'sion of dis)'ssions 8negotiations9 /ith those offerors. ?f an offeror does not respond to 0o'r re<'est, 0o'r pro)ed'res ma0 a&&o/ 0o' to )onsider the most re)ent offer to $e the $est and fina& offer. DISCUSSION As t/e rocurin" official! #ou are no1 at t/e sta"e of #our com etiti%e ne"otiation rocess 1/ere #ou are read# to recei%e final offers from t/e offerors still 1it/in t/e com etiti%e ran"e$ Dou no1 asE for a F&est and final offerF from t/ose offerors$ If t/e ot/er offers /a%e no %ia&le c/ance of &ein" made com etiti%e &# t/is time! t/en #ou ma# reAuest t/e
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BAFO from onl# one ro oserJ of course t/ere is little com etiti%e ressure under t/ose circumstances$ U on timel# recei t of t/e BAFO6s9 and final e%aluation &# t/e a"enc#! #ou s/ould &e in a osition to recommend a1ard to a firm or indi%idual in accordance 1it/ t/e terms and conditions of t/e solicitation$ Pur ose D'ring the )o'rse of the eva&'ation pro)ess of the )ompetitive proposa& pro)'rement, 0o' have entered into dis)'ssions 8negotiations9 and )&arifi)ations !5H /ith those offerors sti&& in the )ompetitive range. !59 As a res'&t of those dis)'ssions, 0o' ma0 have amended some parts of the so&i)itation and ma0 have as2ed for revised proposa&s d'ring the negotiation pro)ess. 5o' no/ fee& that 0o' have )omp&eted negotiations and are read0 to as2 for and then eva&'ate the offerorsK $est and fina& offers. ?f 0o' $e&ieve there is a signifi)ant possi$i&it0 that even if a ,A*O is re<'ested, 0o' /i&& pro$a$&0 /ant to improve f'rther on the ne;t offers, then 0o' are not read0 to re<'est ,A*Os and sho'&d, instead, re<'est revised offers. This provides the offerors an opport'nit0 to respond to the re<'ests and to provide their $est offer in response to the )'rrent so&i)itation. Best Practices The a$i&it0 to enter into dis)'ssions /ith offerors in the )ompetitive range is one of the greatest advantages of 'ti&iGing the )ompetitive proposa& method of pro)'rement. This pro)ess a&&o/s offerors to reso&ve <'estions and )on)erns the0 ma0 have a$o't the )ommodit0 or servi)e $eing pro)'red and the p'$&i) agen)0 to reso&ve <'estions and )on)erns it ma0 have a$o't the offerorsK proposa&s. At some point d'ring the negotiation pro)ess, a de)ision is made that a&& o't standing iss'es have $een reso&ved to the satisfa)tion of the parties invo&ved. This is the time to forma&&0 )on)&'de the dis)'ssions $0 re<'esting that ea)h offeror remaining in the )ompetitive range s'$mit its $est and fina& offer. The re<'est norma&&0 /o'&d in)&'de the fo&&o/ing e&ements( Spe)ifi) noti)e that dis)'ssions are )on)&'dedQ #oti)e that this is the opport'nit0 for the offeror to s'$mit a $est and fina& offerQ A definite, )ommon )'toff date and time that a&&o/s a reasona$&e opport'nit0 for the preparation and s'$mission of the $est and fina& offerQ and #oti)e that the fina& offer m'st $e re)eived at the p&a)e designated $0 the time and date set in the re<'est and is s'$@e)t to an0 provisions dea&ing /ith &ate s'$missions, modifi)ations and /ithdra/a&s of proposa&s set forth in the so&i)itation.
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See dis)'ssion in Se)tion 4.5.4, >Dis)'ssions and C&arifi)ations.> See dis)'ssion in Se)tion 4.5.", >Competitive Iange.>
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*o&&o/ing re)eipt of the $est and fina& offers, 0o' /i&& eva&'ate them in a))ordan)e /ith terms of the so&i)itation and re)ommend a/ard in a))ordan)e /ith those terms. Ie<'est for s'$se<'ent $est and fina& offers ?t is the preferred pra)ti)e to on&0 as2 for one >$est and fina& offer.> Ie<'ests for additiona& $est and fina& offers sho'&d $e avoided if at a&& possi$&e. !%0 Bo/ever, additiona& te)hni)a& or pri)eA)ost re&ated iss'es ma0 s'rfa)e as a res'&t of the offerorKs fina& s'$mission or other fa)tors that pre)&'de a reasona$&e @'stifi)ation for )ontra)tor se&e)tion and a/ard. ?f it is )&ear&0 in the pro)'ring agen)0Ks $est interests, dis)'ssions ma0 $e reopened and the iss'es reso&ved. Again, at the )on)&'sion of the ro'nd of dis)'ssions, an additiona& re<'est for $est and fina& offers /o'&d $e iss'ed to a&& offerors sti&& /ithin the )ompetitive range. .$0$2 A1ard Based on Initial Pro osals RE@UIREMENT 5o' sha&& ma2e a/ard on&0 to responsi$&e )ontra)tors possessing the a$i&it0 to perform s'))essf'&&0 'nder the terms and )onditions of a proposed agreement. Consideration sha&& $e given to s')h matters as )ontra)tor integrit0, )omp&ian)e /ith p'$&i) po&i)0, re)ord of past performan)e, and finan)ia& and te)hni)a& reso'r)es. !%! A/ards /i&& $e made to the responsi$&e firm /hose proposa& is most advantageo's to the granteeKs program /ith pri)e and other fa)tors )onsidered. !%2 5o' ma0 a))ept one of the initia& proposa&s if it )an $e )&ear&0 demonstrated that a))eptan)e of the most favora$&e initia& proposa& /itho't dis)'ssion /o'&d res'&t in a fair and reasona$&e pri)e. Therefore, as a genera& matter, it is advantageo's for so&i)itations to )ontain a noti)e that a/ard ma0 $e made /itho't dis)'ssion of proposa&s re)eived, and that proposa&s sho'&d $e s'$mitted initia&&0 on the most favora$&e terms possi$&e, from a pri)e and te)hni)a& standpoint. 5o' are not re<'ired to )ond')t dis)'ssions /ith an0 offeror provided( 8!9 the so&i)itation did not )ommit in advan)e to dis)'ssions or notif0 offerors that a/ard might $e made /itho't
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.'&tip&e ro'nds of $est and fina&s tend to )reate s'spi)ion in the minds of offerors a$o't /hat the motive is for the s'$se<'ent re<'ests, parti)'&ar&0 if does not appear that negotiations are $eing reopened for a dis)'ssion of s'$stantive matters. The preparation of proposa&s )an $e a ver0 time )ons'ming and e;pensive pro)ess and it is possi$&e that, for one of these or some other reason, an offeror ma0 de)ide not to s'$mit a response to a "rd or 4th re<'est for a $est and fina& offer. A&so, if 0o' ma2e a pra)ti)e of m'&tip&e ,A*Os, 0o' ma0 not re)eive >$est> offers in the first ro'nd d'ring f't're pro)'rements.
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*TA Cir)'&ar 4220.!: T 1.h. *TA Cir)'&ar 4220.!: T 9.d.849.
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dis)'ssion, and 829 the a/ard is in fa)t made /itho't an0 /ritten or ora& dis)'ssion /ith an0 proposer. This is often the )ase /here the proposa& is for servi)es /here rates are reg'&ated and the )ompetition is on the $asis of servi)e, e.g., )ertain t0pes of ins'ran)e. ?f 0o' a))ept an initia& offer, the determination of fair and reasona$&e pri)e /i&& $e an important do)'ment in 0o'r fi&e. #orma&&0, ho/ever, 0o' /i&& need to )ond')t dis)'ssions. .$0$4 Bit/dra1al of Pro osal DEFINITION *irm offer A promise to 'nderta2e spe)ified o$&igations in e;)hange for )onsideration /hi)h promise ma0 $e a))epted for a spe)ified or imp&ied period of timeQ a firm offer )annot $e /ithdra/n d'ring the period for /hi)h it remains firm. DISCUSSION Dour solicitation normall# states a date and time &# 1/ic/ offers must &e su&mitted! and a eriod follo1in" t/at date durin" 1/ic/ t/e offers remain firm$ 6See Section .$-$*$-! FSolicitationF9 Com etition is &est ser%ed and unnecessar# alternate ro osals are a%oided &# allo1in" ro osers to 1it/dra1 or modif# t/eir ro osals u to t/e time due$ Co1e%er! after t/e due date! t/e ro osals are usuall# firm and cannot &e 1it/dra1n durin" t/e %alidit# eriod$ To ensure t/e le"itimac# of ro osals and discoura"e fri%olous ro osals! #ou s/ould /a%e t/e ri"/t to acce t an initial ro osal 1it/out re"ard to 1/et/er t/e ro oser /as /ad second t/ou"/ts$ Pur ose As in the )ase of sea&ed $ids, it is important to the integrit0 of 0o'r pro)'rement that a&& offers are serio's and not s'$mitted for e;p&orator0 reasons or to )ast a )ertain &ight on other offers. A&tho'gh the negotiation pro)ess, in )ontrast to sea&ed $idding, red')es the in)entive to this sort of gamesmanship, the )on)ern is sti&& va&id, parti)'&ar&0 /here 0o' ma0 /ish to a))ept an initia& offer. ?t /i&& $e important to pro)eed from offer to offer, e&iminating offerors from the )ompetitive range on a firm $asis, to ens're that 0o' arrive smooth&0 at a )on)&'sion. ?t is )'stomar0, therefore, not permit proposa&s to $e /ithdra/n after s'$mission. Best Practices The terms of 0o'r so&i)itation and 0o'r re<'ests for revised offers or ,A*Os )an state a period d'ring /hi)h the offers remain firm. 8See Se)tion 4.".2.", >So&i)itation>9 A good pra)ti)e is to note this period on the offer form 'sed $0 proposers to s'mmariGe their proposa&s. So&i)itations a&so often state that modifi)ations or /ithdra/a&s /i&& $e permitted 'nti& the time d'e. ?n the )ase of a revised offer or ,A*O, 0o'r so&i)itation )an provide that the /ithdra/a& of the offer /o'&d res'&t in the )ontin'ed va&idit0 of the most re)ent offer.
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.$0$5 De&riefin" Unsuccessful Offerors DISCUSSION Pro osers e;cluded from t/e com etiti%e ran"e or from a1ard ma# reAuest a de&riefin" or #ou ma# offer to ro%ide a de&riefin"$ A candid e; lanation of t/e rocess can ser%e t/e ur oses of defusin" an# otential dis ute &# t/e disa ointed ro oser and encoura"in" future ro osals$ If a dis ute is alread# ro&a&le! t/ere is no reAuirement to notif# or de&rief unsuccessful offerors! &ut t/e liti"ation and ot/er risEs must &e carefull# 1ei"/ed$ Best Practices 5o'r de)ision not to in)&'de a proposer in the )ompetitive range or to re)ommend a/ard to another proposer ma0 have to $e e;p&ained to the p'$&i) and to the offeror. !%" ?f the reasons and rationa&e are do)'mented, 0o' )an pro)eed /ith )onfiden)e. Bere, the advantages of an o$@e)tive, <'antified s)oring pro)ess !%4 imp&emented $0 a <'a&ified )ommittee $e)ome o$vio'sQ even if 0o' )hoose not to revea& the detai&s of the s)oring, 0o' /i&& $e more )onvin)ing /hen spea2ing /ith the s'pport of a /ea&th of independent, o$@e)tive data. ?n some )ases, the detai&s of the s)oring ma0 $e s'$@e)t to dis)&os're as p'$&i) information after the )ontra)t is a/arded. ,0 notif0ing the disappointed firm e;peditio's&0, 0o' /i&& not permit do'$ts to gro/, 0o' )an approa)h the firm on the $asis of openness and )andor, and 0o' /i&& share the )ommon perspe)tive of the events to date of 0o'r de)ision, rather than an0 s'$se<'ent deve&opments /hi)h ma0 )ast a different &ight. ,e prepared to dis)'ss the reasons /ith the offeror. This ma0 $e a good opport'nit0 to ed')ate a firm or individ'a& on the )ompetitive proposa& pro)ess. Avoid )omparisons to the s'))essf'& offeror. *o)'s on the strengths and /ea2nesses of the offer itse&f $e spe)ifi). ?f done proper&0 and professiona&&0, 0o' ma0 see this >smarter> proposer again in a f't're pro)'rement. This is 0o'r '&timate goa&, to ma;imiGe )ompetition. On the other hand, 'n&ess 0o'r pro)ed'res re<'ire 0o' to notif0 the disappointed proposer immediate&0, 0o' ma0 $e a$&e to /ait to inform the firm 'nti& )ontra)t a/ard is made to the s'))essf'& proposer. -arti)'&ar&0 if 0o' have reason to $e&ieve a firm is in)&ined to disp'te or de&a0 the a)tion, 0o' ma0 $e a$&e to pro)eed 'ni&atera&&0 /itho't en)o'raging an0 de&a0ing ta)ti)s. To ma;imiGe the &i2e&ihood of a/ard /itho't de&a0, this a&ternative s)hoo& of tho'ght fa)es a n'm$er of pro$&ems. The disappointed firm ma0 $e s'spi)io's $e)a'se 0o' have not )onta)ted himAher a$o't an0 f'rther dis)'ssions, or ma0 other/ise &earn that its offer is not $eing
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A ver0 signifi)ant )aveat m'st $e iss'ed at this time. ?f 0o'r governing $od0 8)it0 )o'n)i&, )o'nt0 )ommissioners, $oard of dire)tors, et).9 has reserved 'nto itse&f the so&e a'thorit0 to re@e)t $ids for /hatever reason, 0o', as the pro)'rement offi)ia&, have no a'thorit0 to ma2e that fina& determination and notif0 the $idder 'nti& 0o'r governing $od0 has )on)'rred /ith 0o'r re)ommendation.
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See Se)tion 4.5.2, >:va&'ation of -roposa&s.>
-age 9H
)onsidered for a/ard. ?f 0o' /ait 'nti& a/ard is made 8/hi)h is a p'$&i) a)tion9, the proposer /i&& $e &eft /ith on&0 t/o )hoi)es, to do nothing or to fi&e &ega& a)tion. ?f the firm )hooses the first )o'rse of a)tion, heAshe ma0 $e re&')tant to propose on 0o'r @o$s again $e)a'se the0 ma0 $e&ieve >games> /ere p&a0ed. ?f the proposer )hooses the se)ond )o'rse of a)tion, to fi&e either a protest or a &a/s'it, this ma0 res'&t in a de&a0 in the )ommen)ement of )ontra)t performan)e and s'$stantia& other )osts to 0o'r agen)0. .$2 NON)COMPETITIPE 6SOLE SOURCE9 PROPOSALS .$2$( Lustification for Use RE@UIREMENT ?n addressing the vario's methods of pro)'rement that ma0 $e 'sed, Se)tion 9.h of *TA Cir)'&ar 4220.!: provides( -ro)'rement ,0 #on)ompetitive -roposa&s 8So&e So'r)e9. So&e so'r)e pro)'rements are a))omp&ished thro'gh so&i)itation or a))eptan)e of a proposa& from on&0 one so'r)e, or after so&i)itation of a n'm$er of so'r)es, )ompetition is determined inade<'ate. A )ontra)t amendment or )hange order that is not /ithin the s)ope of the origina& )ontra)t is )onsidered a so&e so'r)e pro)'rement that m'st )omp&0 /ith this s'$paragraph. !. -ro)'rement $0 non)ompetitive proposa&s ma0 $e 'sed on&0 /hen the a/ard of a )ontra)t is infeasi$&e 'nder sma&& p'r)hase pro)ed'res, sea&ed $ids, or )ompetitive proposa&s and at &east one of the fo&&o/ing )ir)'mstan)es app&ies( 8a9 The item is avai&a$&e on&0 from a sing&e so'r)eQ 8$9 The p'$&i) e;igen)0 or emergen)0 for the re<'irement /i&& not permit a de&a0 res'&ting from )ompetitive so&i)itationQ 8)9 *TA a'thoriGes non)ompetitive negotiationsQ 8d9 After so&i)itation of a n'm$er of so'r)es, )ompetition is determined inade<'ateQ or 8e9 The item is an asso)iated )apita& maintenan)e item as defined in 49 U.S.C. T 5"018a98!9 that is pro)'red dire)t&0 from the origina& man'fa)t'rer or s'pp&ier of the item to $e rep&a)ed. The grantee m'st first )ertif0 in /riting to *TA( 8i9 that s')h man'fa)t'rer or s'pp&ier is the on&0 so'r)e for s')h itemQ and 8ii9 that the pri)e of s')h item is no higher than the pri)e paid for s')h item $0 &i2e )'stomers.
-age 99
2. A )ost ana&0sis, i.e., verif0ing the proposed )ost data, the pro@e)tions of the data, and the eva&'ation of the spe)ifi) e&ements of )osts and profit, is re<'ired. DISCUSSION Sole source solicitations ma# not &e issued nor ma# noncom etiti%e ro osals &e acce ted e;ce t under t/e unusual conditions listed a&o%e$ Often! t/ere are ractical means of o&tainin" com etition 1/ic/ are not at first a arent$ If a non)com etiti%e ro osal is acce ted! a careful cost anal#sis must &e done$ Because of t/e strict scrutin# a lied to sole source rocurements! ainstaEin" documentation of t/e 'ustification for t/e noncom etiti%e ro osal and of t/e cost anal#sis is %alua&le in t/e lon" run$ FTA a ro%al for noncom etiti%e ne"otiation is not reAuired unless #ou are rel#in" on 'ustification 6c9 in t/e Circular$ T/is laces a /ea%# &urden on #ou to ensure #ou use noncom etiti%e ne"otiation onl# in t/e u&lic interest and accordin" to t/e Federal reAuirements$ State reAuirements ma# &e more restricti%e t/an Federal$ Pur ose -'$&i) pro)'rement essentia&&0 operates in an environment /here f'&& and open )ompetition is the primar0 goa& or aspiration and, in man0 )ases, is a mandate. !%5 Bo/ever, there ma0 $e ver0 &egitimate reasons or sit'ations /hen, as opposed to >f'&& and open> )ompetition, &imited or no )ompetition e;ists The *TA, thro'gh the re<'irements set forth a$ove, has esta$&ished g'ide&ines /hen so&e so'r)e pro)'rements ma0 $e 'sed if *TA f'nds are invo&ved. :ven tho'gh /e /i&& address federa& re<'irements in this se)tion, 0o' sho'&d a&so $e a/are of an0 &imitations or restri)tions that 0o'r state &a/ or agen)0 reg'&ations ma0 p&a)e on 0o'. ,e)a'se pro)'rement $0 so&e so'r)e is a non)ompetitive pro)'rement, it is treated as an >e;)eption to the norm> in p'$&i) pro)'rements and, as a res'&t, 0o'r a$i&it0 to 'se it re<'ires @'stifi)ation and, fre<'ent&0, pre approva& $efore 0o' a/ard a so&e so'r)e )ontra)t. ?n this )onte;t, >@'stifi)ation> e<'ates to paper/or2 and do)'mentation, the $ane of a&& pro)'rement professiona&s $'t a ne)essar0 part of o'r geneti) ma2e 'p. Best Practices As <'oted a$ove, *TA Cir)'&ar 4220.!: esta$&ishes a matri; that sho'&d $e fo&&o/ed in @'stif0ing the 'se of non)ompetitive or so&e so'r)e pro)'rements.
(20
See/ e.!., *TA Cir)'&ar 4220.!: T H.a.( >A&& pro)'rement transa)tions /i&& $e )ond')ted in a manner providing f'&& and open )ompetition.>
-age !00
Step One 5o' m'st first determine that 0o'r re<'irement )annot $e o$tained 'nder sma&& p'r)hase pro)ed'res, !%% sea&ed $ids, !%1 or )ompetitive proposa&s. !%H Does more than one so'r)e e;istW Does ade<'ate time e;ist to o$tain 0o'r re<'irement thro'gh a )ompetitive pro)essW ?s ?tem , 8for /hi)h )ompetition e;ists9 an a))epta$&e s'$stit'te for ?tem C 8for /hi)h there is on&0 one so'r)e9W Stated another /a0, )ontra)ting offi)ers sho'&d ta2e reasona$&e steps to avoid 'sing so&e so'r)e pro)'rement e;)ept in )ir)'mstan)es /here it is $oth ne)essar0 and in the $est interest of the agen)0. ?f one of the three methods )an $e 'sed 8or is feasi$&e9, even if 0o' /o'&d rather not, so&e so'r)e is not an option for 0o'.
Step T/o ?f one of the )ompetitive pro)esses is not feasi$&e in 0o'r sit'ation, 0o' ma0 'se so&e so'r)e pro)'rement if at &east one of the fo&&o/ing )ir)'mstan)es is present( The item is avai&a$&e on&0 from a sing&e so'r)e ?n @'stif0ing the 'se of this )ir)'mstan)e, 0o' /i&& fre<'ent&0 address s')h fa)tors as( E;am les( 2tility services 8ho/ man0 so'r)es do 0o' have for e&e)tri)it0 in 0o'r )omm'nit0W9 #imited ri!)ts in data/ %atent ri!)ts/ co%yri!)ts/ or secret %rocesses 8?f one entit0 o/ns the patent on a pro)ess or prod')t 0o' re<'ire, )an an0one e&se meet 0o'r needW9 Relocation of a ma5or natural !as distri$ution line from your rail ri!)t of way 8the nat'ra& gas 'ti&it0 )ompan0 is the on&0 so'r)e avai&a$&e to /or2 on the gas &ine9
Sin"le Source Factors3 Bo/ did 0o' arrive at the )on)&'sion this item represents 0o'r minim'm need or re<'irementW ?s this a >ni)e to have> /ith a&& the >$e&&s and /hist&es> or does it rea&&0 represent 0o'r re<'irement or minim'm needW Bo/ did 0o' determine avai&a$i&it0W Did 0o' )he)2 on prior pro)'rements for the same or simi&ar itemsW Are there other so'r)esW Are the0 responsi$&eW Are identi)a& or )ompati$&e parts or e<'ipment avai&a$&e from an0 other so'r)eW
(22
See dis)'ssion of sma&& p'r)hase pro)ed'res in Se)tion 4.2, >Sma&& -'r)hases.> See dis)'ssion of sea&ed $idding pro)ed'res in Se)tions 4." and 4.4. See dis)'ssion of )ompetitive proposa&s in Se)tions 4." and 4.5.
(24
(25
-age !0!
Who prepared the spe)ifi)ation or statement of /or2W Did a vendor or )ontra)tor assistW ?f so, /i&& the0 $enefit someho/ $0 the de)ision to pro)eed /ith a so&e so'r)e )ontra)tW The p'$&i) e;igen)0 or emergen)0 for the re<'irement /i&& not permit a de&a0 res'&ting from )ompetitive so&i)itation T/o fa)tors( p'$&i) e;igen)0 or emergen)0 and no time to )ompetitive&0 pro)'re` When 0o'r agen)0Ks need for the s'pp&ies or servi)es is of s')h an 'n's'a& or )ompe&&ing 'rgen)0 that the agen)0 /o'&d $e serio's&0 in@'red 'n&ess so&e so'r)e pro)'rements /ere 'ti&iGed, it )an $e @'stified. ?n an emergen)0 sit'ation, it is not 'n's'a& for hea&th and safet0 iss'es to $e a fa)tor in the de)ision to pro)eed /ith a so&e so'r)e. ?f the agen)0 itse&f is responsi$&e for $eing short of time i.e., &a)2 of advan)e p&anning, de&a0s in pro)'rement administration d'e to shortage of pro)'rement personne& or in)ompeten)e of pro)'rement personne&, mone0 in the $'dget $a&an)e e;pires the end of ne;t month, parti)'&ar )a'tion sho'&d $e e;er)ised in ma2ing a determination regarding /hether the emergent )onse<'en)es of de&a0 /arrant non)ompetitive negotiation and to /hat e;tent the agen)0 )ontri$'tedQ an independent opinion ma0 $e /arranted. ?f the emergen)0 is to repair a ho&e in the roof of 0o'r maintenan)e fa)i&it0 /here a tree &im$ fe&& thro'gh it $e)a'se of the storm &ast night, is the so&e so'r)e pro)'rement a pat)h @o$ or a rep&a)ement of the roof $e)a'se it /as getting o&d an0/a0W One s)hoo& of tho'ght is that 0o' sho'&d on&0 perform the minima& /or2 ne)essar0 to a&&eviate the e;igen)0 or the emergen)0. DonKt 'se it as an e;)'se to do remedia& /or2 or $'0 a 0earKs s'pp&0 of something 0o' intended to do )ompetitive&0 ne;t month an0/a0. Whi&e man0 state &a/s para&&e& the other )onditions 'nder /hi)h *edera& f'nds ma0 $e 'sed for non )ompetitive proposa&s, state &a/s for emergen)0 sit'ations are often more restri)tive. *'rthermore, t)e most critical delay in an emer!ency may $e o$tainin! your a!ency4s aut)ority, e.g. at a month&0 $oard meetingQ in<'ire a$o't 8and re)ommend )hanges to, if appropriate9 0o'r ,oardKs po&i)0 for emergen)0 pro)'rements. *TA a'thoriGes non)ompetitive negotiations 5o' ma0 have a sit'ation 0o' fee& /arrants the 'ti&iGation of so&e so'r)e pro)'rements $'t it doesnKt <'ite fit into one of the other )ir)'mstan)es. 5o' are a sma&& transit propert0 /ith a vehi)&e monitoring s0stem 0o' insta&&ed &ast 0ear. The a))'ra)0 and 'ti&it0 of the s0stem is e;)eeding a&& e;pe)tations and 0o' no/ need to disp&a0 the s)hed'&e adheren)e information in three ne/ do/nto/n transfer &o)ations. Co'&d 0o' go so&e so'r)e to ,rand RW ?f 0o' @'stif0 /h0 8)ompati$i&it0
-age !02
re<'irements, interfa)es /ith proprietar0 soft/are, 'navai&a$i&it0 of interested )ompetition, et).9, this ma0 $e the sort of pro)'rement 0o' sho'&d dis)'ss /ith the *TA and re<'est its permission to 'se so&e so'r)e. After so&i)itation of a n'm$er of so'r)es, )ompetition is determined inade<'ate 5o' have iss'ed an ?*, and on&0 re)eived one $id from a responsi$&e )ontra)tor, $'t 0o' )annot determine its pri)e to $e reasona$&e. ?f 0o' are satisfied a$o't the $idding environment and the reasons /h0 0o' on&0 re)eived one $id, 0o' )an negotiate a so&e so'r)e )ontra)t to arrive at a reasona$&0 pri)ed )ontra)t. The item is an asso)iated )apita& maintenan)e item as defined in 49 U.S.C. T 5"018a98!9 that is pro)'red dire)t&0 from the origina& man'fa)t'rer or s'pp&ier of the item to $e rep&a)ed. This topi) is dis)'ssed in greater detai& in T 4.%.", >Asso)iated Capita& .aintenan)e ?tem.>
Step Three DOCUMENTATION of @'stifi)ation. ?t is re)ommended that 0o' do)'ment ver0 thoro'gh&0 and )aref'&&0 the rationa&e 0o' /ent thro'gh to @'stif0 0o'r so&e so'r)e pro)'rement. 5o'r agen)0 ma0 have ver0 spe)ifi) re<'irements for >*indings and Determinations> that m'st $e fo&&o/ed. 5o' ma0 have pre approva& re<'irements at a )ertain do&&ar thresho&d that m'st $e met 0o'r ,oard of Dire)tors ma0 re<'ire its approva& of an0 proposed so&e so'r)e pro)'rement in e;)ess of S250,000 prior to the )ommen)ement of the negotiations. 5o' ma0 have other do)'mentation re<'irements pe)'&iar to 0o'r agen)0, state, or &o)a& government that 0o' m'st meet prior to the initiation of negotiations /hi)h m'st $e met. .$2$* Ne"otiation of Contract DISCUSSION FOnce I /a%e 'ustified t/e use of rocurement &# noncom etiti%e ro osals! 1/at do I do ne;tS Co1 do I ne"otiate t/is t/in"SF Best Practices Sing&e Offer after Competitive So&i)itation As previo's&0 dis)'ssed in Se)tion 4.4.", >Sing&e ,id,> 0o' ma0 )on)&'de after re)eiving on&0 a sing&e $id that )ompetition is inade<'ate and that 0o' sho'&d negotiate /ith the sing&e $idder to esta$&ish a fair and reasona$&e pri)e. 5o' ma0 $e in this sit'ation $e)a'se 0o' on&0 re)eived one $id or proposa& from one so'r)e or 0o' have determined that the )ompetition 0o' re)eived /as other/ise >inade<'ate.> To pro)eed in this )ase, 0o' m'st meet the re<'irements for non)ompetitive negotiation. Bo/ever, 0o' do not need to iss'e a ne/ so&i)itation $e)a'se 0o'r re<'irement is ade<'ate&0 stated. 5o' ma0, after meeting the re<'irements of the previo's se)tion, pro)eed to negotiate a reasona$&0 pri)ed )ontra)t 'sing the negotiation pro)ed'res dis)'ssed in Se)tions 4.5.2, >:va&'ation of -roposa&s,> thro'gh 4.5.H, >De$riefing Uns'))essf'& Offerors.>
-age !0"
A&& Other Cases ?n other )ir)'mstan)es 0o' have @'stified, it is re)ommended that 0o' re<'est a proposa& from the so'r)e. There is no need to advertise there /i&& $e no )ompetition` 5o'r re<'est for a proposa& )an $e as forma& as 0o' /ant from &etter re<'ests 'p to a f'&& $&o/n so&i)itation do)'ment. Iegard&ess of the form 'sed, 0o' /ant to( refer to, or atta)h, a&& terms and )onditions of the so&i)itation. 5o' sti&& need to )omp&0 /ith federa& representation and )ertifi)ation re<'irements. 5o' sti&& /i&& /ant to have spe)ia& and genera& provisions. 5o' ma0 have additiona& agen)0 re<'irements that m'st $e met. What is the D,: goa& for this pro)'rement ho/ /i&& it $e metW refer to, or atta)h, the spe)ifi)ations or statement of /or2 for the s'pp&0 or servi)e $eing pro)'red. re<'est the app&i)a$&e )ost or pri)ing data. !%9
A&&o/ ade<'ate time for the )ontra)tor to prepare its proposa& prior to s'$mission $a)2 to 0o'. Ievie/ the proposa& /ith impa)ted interna& agen)0 staff /ith this so&e so'r)e. rea&&0 prepare for 0o'r negotiations
#egotiate the fina& terms and )onditions of the )ontra)t 'sing the negotiation pro)ed'res 0o' /o'&d 'se in 0o'r )ompetitive proposa& method of pro)'rement. !10 These negotiations )an $e more pointed and open $e)a'se there is no )ompetitive environment invo&ved the integrit0 of a pro)'rement pro)ess is not invo&ved so iss'es &i2e >te)hni)a& &eve&ing> and >transf'sion> do not have to $e )onsidered. As dis)'ssed in Se)tion 5.2, >Cost and -ri)e Ana&0sis,>aand as re<'ired $0 *TA Cir)'&ar 4220.!: T 9.h.829b, a )ost ana&0sis is re<'ired. This in)&'des verif0ing the proposed )ost data, the pro@e)tions of the data, and the eva&'ation of spe)ifi) e&ements of )osts and profit. .$2$- Associated Ca ital Maintenance Item RE@UIREMENT Origina& :<'ipment .an'fa)t'rer )omponents ma0 $e pro)'red $0 )ompetitive negotiations on&0 if( 8e9 The item is an asso)iated )apita& maintenan)e item as defined in 49 U.S.C. T 5"018a98!9 that is pro)'red dire)t&0 from the origina& man'fa)t'rer or s'pp&ier of the item to $e rep&a)ed. The grantee m'st first )ertif0 in /riting to *TA( 8i9 that s')h man'fa)t'rer or s'pp&ier is the on&0 so'r)e for s')h itemQ and 8ii9 that the pri)e of s')h item is
(28
See dis)'ssion of the s'$mission of )ost and pri)ing data in Se)tion 5.2, >Cost and -ri)e Ana&0sis.> See dis)'ssion of negotiations 'nder )ompetitive proposa& method at Se)tion 4.5.2, >:va&'ation of -roposa&s.>
(4:
-age !04
no higher than the pri)e paid for s')h item $0 &i2e )'stomers. !1! DEFINITION Asso)iated )apita& maintenan)e item :<'ipment, tires, t'$es, or materia&, ea)h )osting at &east 0.5 per)ent of the )'rrent fair mar2et va&'e of ro&&ing sto)2 )ompara$&e to the ro&&ing sto)2 for /hi)h the e<'ipment, tires, t'$es, and materia& are to $e 'sed. !12 DISCUSSION If #ou can urc/ase a re lacement art or com onent for rollin" stocE onl# from t/e ori"inal manufacturer! and t/e item costs at least :$0O of t/e %e/icle rice! t/en #ou ma# rocure t/e item &# noncom etiti%e ro osal ro%ided #ou maEe t/e reAuisite certifications in ad%ance to FTA and determine t/e rice to &e reasona&le &ased on a cost anal#sis$ Best Practices ?n order to ><'a&if0> to 'se this )ir)'mstan)e to @'stif0 so&e so'r)e, the *TA has esta$&ished the fo&&o/ing re<'irements( The item m'st $e an asso)iated )apita& maintenan)e item as defined a$ove. The item m'st $e pro)'red dire)t&0 from the origina& man'fa)t'rer or s'pp&ier of the item to $e rep&a)ed. -rior to e;e)'tion of the )ontra)t, 0o' m'st first )ertif0 in /riting to the *TA that s')h man'fa)t'rer or s'pp&ier is the on&0 so'r)e for s')h itemQ and that the pri)e of s')h item is no higher than the pri)e paid for s')h item $0 &i2e )'stomers. @'st )ertifi)ation of the grantee 80o'9.
Approva& of the *TA is not re<'ired
When 0o' read these re<'irements )aref'&&0, 0o' are sti&& essentia&&0 @'stif0ing a so&e so'r)e aas in *TA Cir)'&ar 4220.!: T 9.h.8!98a9b and )ertif0ing that fa)t to the *TA. A&so, even tho'gh 0o' are )ertif0ing that the pri)e of the item is no higher than the pri)e paid for s')h item $0 &i2e )'stomers, 0o' are sti&& re<'ired to perform a )ost ana&0sis as part of the )ontra)t negotiation and a/ard pro)ess. .$2$. Unsolicited Pro osals
(4(
*TA Cir)'&ar 4220.!: T 9.h.8!98e9. 49 U.S.C. T 5"018a98!9.
(4*
-age !05
DISCUSSION T/e su&'ect of unsolicited ro osals is one not co%ered in transit la1 or t/e common "rant rule$ In cases liEe t/is! FTA 1ould looE to t/e Federal AcAuisition Re"ulations 6FAR9 ro%isions as a "uide concernin" t/e circumstances under 1/ic/ a sole source a1ard 1ould &e a ro riate$ T/e FAR co%ers t/is su&'ect as FAR Part (0$2$ T/e FAR is a%aila&le online at /tt 377111$arnet$"o%7far7$ B/en unsolicited ro osals are su&mitted to a "rantee! t/e a"enc# must ne%er assume t/at t/e roduct &ein" offered in t/e unsolicited ro osal is t/e onl#! or &est! roduct a%aila&le to meet t/e needs or o&'ecti%es of t/e a"enc#$ T/e essential consideration in 1/et/er or not to acce t an unsolicited ro osal 1it/out com etition 6i$e$! to maEe a sole source contract a1ard9 is 1/et/er or not t/e ro osal is resentin" an inno%ati%e! ro rietar# conce t t/at is itself essential to accom lis/in" t/e a"enc#Ms o&'ecti%e$ If a com an# is merel# resentin" a rationale for doin" certain 1orE t/at could &e done &# ot/ers if "i%en t/e c/ance to com ete! t/en t/ere is no ermissi&le &asis to a1ard a sole source contract$ In t/e case of a ro rietar# soft1are roduct t/at is &ein" offered to ac/ie%e a certain "oal! t/e transit a"enc# recei%in" t/e ro osal could not! for e;am le! release t/e offerorMs ro rietar# ro"rammin" codes in a com etiti%e solicitation$ But t/e a"enc# s/ould! if it deems t/e mission one it 1ants to ursue! com ete t/e contract a1ard in terms of descri&in" 1/at t/e a"enc#Ms o&'ecti%e or mission is in order to see 1/at ot/er firms mi"/t offer in terms of soft1are solutions$ Ne1 DorE Cit# Transit 6NDCT9 reAuires t/at an# contract resultin" from an unsolicited ro osal &e 'ustified in 1ritin" &# t/e Procurement Office! re"ardless of t/e de artment t/at recei%ed t/e ro osal$ Eac/ ro osal is re%ie1ed to determine if t/e "oods or ser%ices &ein" offered are essential to NDCT and 1/et/er t/e ro oser is sim l# offerin" somet/in" t/at can &e o&tained t/rou"/ o en and com etiti%e &iddin"$ If it is determined t/at t/e "oods or ser%ices &ein" offered 1ould &enefit NDCT! and could &e o&tained t/rou"/ com etiti%e &iddin"! t/en t/ere is not sufficient 'ustification for a sole source a1ard! Re%enue Contracts ) T/e su&'ect of unsolicited ro osals is discussed in t/e conte;t of re%enue contracts in BPPM section ($-$-$5 = Re-enue Contracts! Bit/ res ect to unsolicited ro osals in t/e conte;t of com anies seeEin" to use FTA funded assets for &usiness ur oses! t/e BPPM offers t/e follo1in" "uidance3 HUnsolicited Pro osals ) T/ese ma# come fort/ 1/en com anies see an o ortunit# to use t/e transit s#stem 6an FTA)funded acti%it#9 to en/ance t/eir &usiness interest$ It ma# a ear from suc/ ro osals t/at no ot/er com an# could offer t/e same roduct or ser%ice$ Co1e%er! t/is does not 'ustif# a sole source contract$ If t/e idea or acti%it# is of
-age !0%
interest to #ou! t/e conce t s/ould &e e%aluated on its o1n merit and re%enue roducin" otential$ If t/e decision is to im lement it! t/en a com etiti%e rocess s/ould &e used to select t/e contractor! unless you determine that the #ro#osed conce#t itsel* is #ro#rietary$I Ne1 DorE Cit# Transit 6NDCT9 1as a roac/ed recentl# &# a com an#! 1/ic/ su&mitted an unsolicited ro osal! 1antin" to install an electronic information s#stem on t/e su&1a# cars$ T/e com an# 1anted to ro"ram t/e s#stem so t/at riders 1ould Eno1 1/at 1as o%er/ead! e$"$ Ball Street! t/eater district$ Ne1 DorE Cit# decided to in%esti"ate t/e conce t first to determine if it 1as somet/in" t/at t/e# 1anted to do to en/ance t/e su&1a# s#stem$ Decidin" t/at t/e# liEed t/e idea! t/e# t/en re ared an RFP and solicited %endors on a com etiti%e &asis$ Metro olitan Atlanta Ra id Transit Aut/orit# 6MARTA9 recei%ed an unsolicited ro osal from a com an# a&out use of su&1a# ri"/t)of)1a# for linEin" Atlanta 1it/ fi&er o tic ca&le usin" MARTAKs s#stem)1ide conduits$ MARTA determined t/at t/e# /ad unused conduits and could lease s ace in t/em to %arious telecommunication com anies$ T/e# contacted t/e re"ional FTA office and recei%ed t/eir a ro%al for a non)e;clusi%e RFP to seeE com etiti%e ro osals for t1ent#)#ear leases$ T/is /as roduced successful re%enue contracts$ .$4 SPECIAL PROCUREMENT METCODS .$4$( Multi)Ste Procurements DISCUSSION Dou /a%e discussed in detail t/e differences &et1een t/e com etiti%e &iddin" rocess and t/e com etiti%e ro osal rocess &ut IK%e "ot one of t/ose Kt1eenersK )) somet/in" t/at falls some1/ere &et1een t/ose t1o rocesses$ T/ere are a num&er of %arious tec/nical a roac/es t/at 1ould ro&a&l# meet our reAuirement and! if 1e determined 1/ic/ firms met our minimal tec/nical reAuirements! 1e could com ete amon"st t/em on t/e &asis of t/e lo1est res onsi%e! res onsi&le &idder$ But 1e ma# /a%e to enter into discussions 1it/ all offerors in order to determine tec/nical acce ta&ilit#$ Can t/is &e doneS FTA Circular .**:$(E ermits a "reat num&er of rocedures t/at %ar# from t/e classic rocedures discussed in most of t/is Manual$ For e;am le! a %ariation t/at /as lon")&een reco"ni,ed in u&lic rocurement is referred to as t/e t1o)ste ! sealed &iddin" met/od of rocurement$ B/ile it /as some c/aracteristics of &ot/ sealed &iddin" and com etiti%e ro osals! it com lies 1it/ all FTA Circular .**:$(E reAuirements for t/e com etiti%e ro osal rocess$ T/is rocess allo1s! in t/e first /ase! for t/e su&mission of un riced tec/nical ro osals in res onse to t/e reAuest$ In t/e second /ase! onl# t/ose firms t/at /a%e &een found to &e tec/nicall# Aualified in t/e first /ase are in%ited to su&mit sealed &ids! as t/ou"/ it 1ere a re"ular sealed &id rocurement$ A1ard is t/en made to t/e lo1est! res onsi%e and res onsi&le &idder$
-age !01
Best Practices Overvie/ T/o step $idding is a t/o phase pro)ess genera&&0 )onsisting of a te)hni)a& first phase )omposed of one or more steps in /hi)h $idders s'$mit 'npri)ed te)hni)a& proposa&s 8and dis)'ssions are he&d /ith offerors of those proposa&s, if ne)essar09 to $e eva&'ated $0 the transit propert0, and a se)ond phase in /hi)h those $idders /hose te)hni)a& offers are determined to $e a))epta$&e d'ring the first phase have their pri)ed $ids )onsidered. The pro)ess is designed to( O$tain the $enefit of sea&ed $idding $0 a/ard of a )ontra)t to the &o/est responsive, responsi$&e $idder, and, at the same time, O$tain the $enefit of the )ompetitive proposa& method of pro)'rement thro'gh the so&i)itation of te)hni)a& offers and )ond')ting dis)'ssions to determine the a))epta$i&it0 of the te)hni)a& offers.
The pro)ess ma0 $e re)ogniGed $0 0o'r state &a/ as a separate method of pro)'rement or ma0 $e a&&o/ed as a variation of a sea&ed $idding stat'te, parti)'&ar&0 in those states /here &imitations on the 'se of the )ompetitive proposa& method e;ists. Conditions for Use Transit properties genera&&0 fo&&o/ one of t/o stated po&i)ies. :ither this method ma0 $e 'sed /hen it is not )onsidered pra)ti)a& to initia&&0 prepare a definitive p'r)hase or )ontra)t des)ription /hi)h is s'ita$&e to permit an a/ard $ased on pri)e. Or a&ternative&0, in the a$sen)e of fa)tors or &a/s that re<'ire the 'se of sea&ed $idding, some a'thorities !1" esta$&ish a preferen)e of the t/o stepped pro)ess over negotiations /hen a&& of the fo&&o/ing )onditions are present( Avai&a$&e spe)ifi)ations are not definite or )omp&ete or ma0 $e too restri)tive /itho't te)hni)a& eva&'ation 8and an0 ne)essar0 dis)'ssion9, of the te)hni)a& aspe)ts of the re<'irement to ens're m't'a& 'nderstanding $et/een ea)h so'r)e and the A'thorit0Q Definite )riteria e;ist for eva&'ating te)hni)a& proposa&sQ .ore than one te)hni)a&&0 <'a&ified so'r)e is e;pe)ted to $e avai&a$&eQ
(4-
This is a&so the position ta2en in the *AI T !4.502.
-age !0H
S'ffi)ient time /i&& $e avai&a$&e for 'se of the t/o step methodQ and A firm fi;ed pri)e )ontra)t or a fi;ed pri)e )ontra)t /ith e)onomi) pri)e ad@'stment /i&& $e 'sed.
-hase One of -ro)ess This pro)ess norma&&0 in)&'des the fo&&o/ing steps( Solicitation %)ase ?n addition to the norma& re<'irements for an ?*,, !14 the first phase so&i)itation a&so genera&&0 provides( That 'npri)ed te)hni)a& offers are re<'estedQ !15 That the pro)'rement is a t/o step sea&ed $id pro)'rement and that pri)ed $ids /i&& $e )onsidered in the se)ond phase and on&0 from those $idders /hose 'npri)ed te)hni)a& offers are fo'nd to $e a))epta$&e in the first phaseQ The )riteria to $e 'sed in eva&'ating the 'npri)ed te)hni)a& offersQ That the A'thorit0, to the e;tent determined to $e ne)essar0, ma0 )ond')t ora& or /ritten dis)'ssions regarding the te)hni)a& offersQ A statement that $idders sho'&d s'$mit proposa&s that are a))epta$&e /itho't additiona& e;p&anation or information and that the A'thorit0 ma0 ma2e a fina& determination regarding the a))epta$i&it0 of the proposa&s $ased so&e&0 on the $asis of the proposa&s as s'$mitted and ma0 pro)eed /ith the se)ond step /itho't re<'esting f'rther information from an0 $idderQ That $idders ma0 designate those portions of the te)hni)a& offers /hi)h )ontain trade se)rets or other proprietar0 data /hi)h are to remain )onfidentia&Q and That the item $eing pro)'red sha&& $e f'rnished genera&&0 in a))ordan)e /ith the $idderKs te)hni)a& offer as fo'nd to $e te)hni)a&&0 a))epta$&e and sha&& meet the re<'irements of the so&i)itation.
(4.
See dis)'ssion at Se)tion 4.4.!, >So&i)itation.>
(40
One variation that )o'&d $e 'sed if time is parti)'&ar&0 tight, /o'&d $e to as2, as part of -hase One, that the $idders in)&'de a sea&ed $id in a separate enve&ope that /o'&d on&0 $e opened in the event the te)hni)a& offer /as )onsidered a))epta$&e. This )reates some additiona& se)'rit0 on the part of the pro)'rement staff $e)a'se 0o' /o'&d /ant to ens're that the te)hni)a& a))epta$i&it0 determination /as made /itho't 2no/&edge of the pri)es for the different offers.
-age !09
Amendments to solicitation in two1 ste% %rocess( Amendments iss'ed prior to the re)eipt of te)hni)a& offers are important to a&& prospe)tive $idders as in a >norma&> ?*,. !1% Amendments iss'ed after re)eipt of the te)hni)a& offers need $e s'$mitted on&0 to those $idders /ho s'$mitted 'npri)ed te)hni)a& offers and the0 sho'&d $e a&&o/ed to s'$mit ne/ te)hni)a& offers or amend those previo's&0 s'$mitted. !11
Recei%t of un%riced tec)nical offers. Un&ess re<'ired $0 &a/, 'npri)ed te)hni)a& offers need not $e p'$&i)&0 opened. Offers are t0pi)a&&0 opened in front of t/o or more a'thorit0 emp&o0ees as /itnesses. Offers are 's'a&&0 not dis)&osed to 'na'thoriGed persons.
8valuation of un%riced tec)nical offers s)ould $e in accordance wit) t)e criteria set fort) in t)e solicitation. The 'npri)ed te)hni)a& offers sho'&d $e )ategoriGed as A))epta$&eQ -otentia&&0 a))epta$&e 8i.e., reasona$&0 s's)epti$&e of $eing made a))epta$&e9Q or Una))epta$&e, in /hi)h )ase the )ontra)ting offi)er re)ords in /riting the $asis for this finding and ma2es it part of the pro)'rement fi&e. !1H An0 proposa& /hi)h modifies or fai&s to )onform to the essentia& re<'irements or spe)ifi)ations of the so&i)itation )an $e )onsidered nonresponsive and )ategoriGed as 'na))epta$&e. When an 'npri)ed te)hni)a& offer has $een determined to $e 'na))epta$&e, the $idder ma0 $e notified of that fa)t and is not norma&&0 afforded additiona& opport'nities to s'$mit s'pp&ementa& information amending its te)hni)a& offer.
(42
See Se)tion 4.".2.5, >Amendment of So&i)itation.>
(44
?f, in the opinion of the Contra)ting Offi)er, a )ontemp&ated amendment /o'&d signifi)ant&0 )hange the nat're of the pro)'rement to the e;tent that other entities 8/ho did not s'$mit 'npri)ed te)hni)a& offers9 /o'&d &i2e&0 $e)ome a proposed offeror as a res'&t of the amendment, )onsideration sho'&d $e given to )an)e&ing the so&i)itation and iss'e a ne/ so&i)itation.
(45
Do)'mentation of an 'na))epta$&e finding )annot $e over stressed. Disp'tes over this determination are the most )ommon area of $id protest in the m'&ti step pro)ess.
-age !!0
"iscussions involvin! un%riced tec)nical offers may $e conducted wit) any offeror w)o su$mitted an acce%ta$le or %otentially acce%ta$le tec)nical offer. Dis)'ssions )an $e )ond')ted in a))ordan)e /ith the prin)ip&es dis)'ssed in T 4.5.4 invo&ving the )ompetitive proposa& method of pro)'rement. On)e dis)'ssions have )ommen)ed, an0 offeror /ho has not $een notified that its offer has $een fo'nd 'na))epta$&e ma0 s'$mit s'pp&ementa& information amending its te)hni)a& offer at an0 time 'nti& the )&osing date esta$&ished. S')h s'$mission ma0 $e made at the re<'est of the Contra)ting Offi)er, or 'pon the offerorKs o/n initiative.
&)ase Two of t)e %rocess may $e initiated wit)out discussions if there are a s'ffi)ient n'm$er of a))epta$&e proposa&s to ens're ade<'ate pri)e )ompetition 'nder -hase T/o. ,ased 'pon the res'&ts of -hase !, 0o' ma0 /ish to revise the te)hni)a& spe)ifi)ations 8minim'm te)hni)a& re<'irements9 in 0o'r -hase 2 ?*,, in a manner that does not )onf&i)t /ith the fina& 'npri)ed proposa&s. Whi&e 0o' have no ass'ran)e that the pri)es /i&& $e )&ose to ea)h other, 0o' 2no/ to /hat degree the proposa&s have )ompetitive te)hni)a& merit. -hase T/o of the -ro)ess The pro)ed'res dis)'ssed in Se)tion 4.4, >Sea&ed ,ids,> )an $e fo&&o/ed in -hase T/o. :a)h $idder /ho s'$mitted an 'npri)ed offer that /as determined to $e a))epta$&e in -hase One is invited to s'$mit a pri)ed offer. The ?*, states that the $idder sha&& )omp&0 /ith the spe)ifi)ations and the offerorKs a))epta$&e te)hni)a& proposa&. #o additiona& p'$&i) noti)e or advertisement of the ?*, need $e given $e)a'se s')h noti)e /as given d'ring the -hase One -ro)ess. A/ard /o'&d $e made to the &o/est, responsive responsi$&e offeror as dis)'ssed in Se)tion 4.4, >Sea&ed ,ids.> .$4$* <o%ernmental Prices and Contracts .$4$*$( Procurements from <eneral Ser%ices Administration Sc/edules CURRENT STATUS The *edera& S'pp&0 S)hed'&e program has provided *edera& agen)ies /ith a simp&ified pro)ess of a)<'iring )ommon&0 'sed s'pp&ies and servi)es in var0ing <'antities at &o/er pri)es /hi&e o$taining dis)o'nts asso)iated /ith vo&'me $'0ing. Congress, in ena)ting K !555 of the *edera&
-age !!!
A)<'isition Stream&ining A)t of !994 8-'$&i) 7a/ !0" 4559, !19 e;tended the )ooperative p'r)hasing provisions of =SA ena$&ing &egis&ation( 8$98298A9 The Administrator ma0 provide for the 'se of *edera& s'pp&0 s)hed'&es of the =enera& Servi)es Administration $0 an0 of the fo&&o/ing entities 'pon re<'est( 8i9 a State, an0 department or agen)0 of a State, and an0 po&iti)a& s'$division of a State, in)&'ding a &o)a& government. . . Bo/ever, Se)tion 4"09 of the #ationa& Defense A'thoriGation A)t for *is)a& 5ear !99% !H0 s'spended the a'thorit0 of the Administrator of the =enera& Servi)es to a&&o/ state and &o)a& governments to 'se the federa& s'pp&0 s)hed'&es. The provision s'spended the a'thorit0 'nti& the &ater of the period ending !H months after the date of ena)tment of this A)t or the period ending "0 da0s after the date after the Administrator has revie/ed a =enera& A))o'nting Offi)e report that assesses the effe)ts of state and &o)a& governments 'se of the federa& s'pp&0 s)hed'&es and has s'$mitted the report and )omments on the report to Congress. The A)t a&so dire)ted the =enera& A))o'nting Offi)e to in)&'de in its report to the Administrator an assessment of the impa)t on )osts to federa& agen)ies from the 'se of federa& s'pp&0 s)hed'&es $0 state and &o)a& governments. ?n &ight of this re)ent &egis&ation, /hat is the stat's of state and &o)a& government 8in)&'ding most transit properties theoreti)a&&09 $eing a$&e to 'se the =SA federa& s'pp&0 s)hed'&esW ?t is 'nderstood that at &east one transit propert0 8Washington .etropo&itan Area Transit A'thorit09 has at &east &imited a'thorit0 from the =SA to 'ti&iGe the federa& s'pp&0 s)hed'&es. Bo/ever, /e are not a/are of other A'thorities $eing a$&e to 'ti&iGe those S)hed'&es. With this &egis&ation, /e m'st a/ait at &east 'nti& A'g'st !991 8!H months from the date of ena)tment of the Defense A'thoriGation A)t of !99%9 $efore /e 2no/ /hat the =SA and =AO reports to Congress /i&& sa0 and it )o'&d $e &onger than that if the re<'ired reports are &ater than then. This does not appear to $e a so'r)e that /e sho'&d e;pe)t to $e a$&e to 'se an0time soon. At s')h time as this matter is )&arified, the *TA, thro'gh this .an'a&, /i&& provide instr')tion and g'idan)e to its grantees. .$4$*$* State and Local Sc/edules RE@UIREMENT An additiona& genera& pro)'rement standard app&i)a$&e to third part0 pro)'rements in)&'ded in *TA Cir)'&ar 4220.!: en)o'rages 8at T 1.e9 the 'se of intergovernmenta& pro)'rement agreements as fo&&o/s( 8e9 ?ntergovernmenta& -ro)'rement Agreements.
(48
Codified at 40 U.S.C. T 4H!8$9. -'$&i) 7a/ !04 !0%, T 4"09, !!0 Stat. !H%, %10 8!99%9.
(5:
-age !!2
8!9 =rantees are en)o'raged to 'ti&iGe avai&a$&e state and &o)a& intergovernmenta& agreements for pro)'rement or 'se of )ommon goods and servi)es. When o$taining goods or servi)es in this manner, grantees m'st ens're a&& federa& re<'irements, re<'ired )&a'ses, and )ertifi)ations 8in)&'ding ,'0 Ameri)a9 are proper&0 fo&&o/ed and in)&'ded, /hether in the master intergovernmenta& )ontra)t or in the grantee+s p'r)hase do)'ment. 829 =rantees are a&so en)o'raged to @oint&0 pro)'re goods and servi)es /ith other grantees. When o$taining goods or servi)es in this manner, grantees m'st ens're a&& federa& re<'irements, re<'ired )&a'ses, and )ertifi)ations are proper&0 fo&&o/ed and in)&'ded in the res'&ting @oint so&i)itation and )ontra)t do)'ments. 8"9 =rantees ma0 assign )ontra)t'a& rights to p'r)hase goods and servi)es to other grantees if the origina& )ontra)t )ontains appropriate assigna$i&it0 provisions. =rantees /ho o$tain these )ontra)t'a& rights 8)ommon&0 2no/n as Upigg0$a)2ing+9 ma0 e;er)ise them after first determining the )ontra)t pri)e remains fair and reasona$&e. DISCUSSION FTA /as /istoricall# encoura"ed "rantees to consider com&inin" efforts in t/eir rocurements to o&tain &etter ricin" t/rou"/ lar"er urc/ases$ Loint rocurements offer t/e additional ad%anta"e of &ein" a&le to o&tain "oods and ser%ices t/at e;actl# matc/ eac/ coo eratin" "ranteeMs reAuirements$ FTA &elie%es t/is is su erior to t/e ractice of H i""#&acEin"I since H i""#&acEin"I does not com&ine &u#in" o1er at t/e rice sta"e and ma# limit a "ranteeMs c/oices to t/ose roducts e;cess to anot/er "ranteeMs needs$ Does #our state! count#! cit#! or ot/er local "o%ernment /a%e a sc/edule ro"ram similar to t/e <SA Federal Su l# Sc/eduleS Are #ou le"all# eli"i&le to utili,e t/ose sc/edulesS In man# 1a#s! t/is is a to ic t/at is so State and locale)s ecific! it is im ractical to address 1it/ an# s ecificit# in t/is Manual$ T/is is an area of t/e Manual 1/ere 1e solicit comments and &est ractices from #our 'urisdiction t/at 1ould 6or could9 /a%e a lication on a national &asis$ Pur ose One of the )ha&&enges of a transit a'thorit0Ks pro)'rement offi)e is to tr0 to $e more responsive to its )'stomers from time&iness and )ost effi)ient perspe)tives. ?t is a&most inevita$&e that someone /i&& ta2e months tr0ing to de)ide /hat is re<'ired and then is perp&e;ed that the pro)'rement staff )annot pro)'re it >0esterda0`> We devoted an e;tensive dis)'ssion in Chapter
-age !!"
2 on the importan)e of p&anning in the pro)'rement pro)ess and the need for )ooperative efforts among the different staff e&ements of the A'thorit0. One of the /a0s that *edera& and State governments 8to a greater e;tent9 and &o)a& governments 8to a m')h &esser e;tent9 have tried to address the time&iness iss'e is thro'gh the 'se of >s)hed'&e> )ontra)ts that )an $e mandated for 'se on a government /ide $asis. ?f an entit0 at the state /ide &eve& has a )ontra)t that )onso&idates a&& re<'irements for sedans and $'0s those off a s)hed'&e )ontra)t, a&& p'$&i) p'r)hasers theoreti)a&&0 $enefit from this &arger <'antit0 $'0 and do not have to go thro'gh a pro)'rement pro)ess to o$tain those $enefits. Best Practices As)ertain if 0o'r State has a s)hed'&e program. ?t ma0 $e for standard )ommodities s')h as offi)e s'pp&ies and e<'ipment in)&'ding vehi)&es of a&& sorts and siGes as /e&& as )omp'ter e<'ipment on either a &ease or p'r)hase $asis. As)ertain if 0o'r a'thorit0 is e&igi$&e to parti)ipate in the program and, if so, ho/. ?s an intergovernmenta& agreement re<'ired $efore 0o' )an parti)ipateW ?s the order iss'ed /ith the State agen)0 or the )ontra)torW Do 0o' have an0 f&e;i$i&it0 to ma2e minor )hanges to the item $eing $o'ghtW Bo/ is the order f'ndedW
These <'estions, and o$vio's&0 man0 others, a&& m'st $e /or2ed o't /ith the >parent> agen)0. ?t ma0 $e diffi)'&t to tra)2 a&& of this information do/n the first time, $'t after 0o' go thro'gh the pro)ess on)e, it /i&& $e m')h easier /ith ea)h s'))essive pro)'rement 0o' pro)ess thro'gh these )entra&iGed )ontra)ts. 5o' /i&& then $e a$&e to ga'ge the savings in time and mone0 that ma0 a))r'e to 0o'r agen)0 $0 'sing these )ontra)ts. The same <'estions )an $e addressed at the &o)a& &eve&. A program might e;ist at a )it0, )o'nt0, parish, s)hoo& distri)t or an0 other p'$&i) spe)ia& distri)ts. One of the most effe)tive /a0s to parti)ipate in )ooperative p'r)hases at the &o)a& &eve& is thro'gh some sort of inter &o)a& )ooperative p'r)hasing agreement. To $e a$&e to do this ma0 re<'ire spe)ia& &egis&ative a'thorit0, $'t most States have some sort of ?ntergovernmenta& !H! andAor ?nter &o)a& !H2 Cooperation A)t. These stat'tes 's'a&&0 define not on&0 /hat )an $e the s'$@e)t of agreements )ons'mmated p'rs'ant to their provisions, $'t a&so define /ho )an parti)ipate and 'nder /hat )onditions.
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See/ e.!., Chapter 14!, Te;as =overnment Code, O.T.C.A. See/ e.!., Chapter 19!, Te;as =overnment Code, O.T.C.A.
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#ever 'nderestimate the $'0ing po/er 8in terms of <'antit0 0o'9 $ring to the &o)a& p'$&i) government $'0ing )omm'nit0, parti)'&ar&0 in s')h areas as diese&, vehi)&e parts, offi)e s'pp&ies and vehi)&es. There is some rea& p'$&i) re&ations $enefit for 0o'r agen)0 $0 $eing a)tive&0 invo&ved in the &o)a& government $'0ing )omm'nit0 in he&ping a&& p'$&i) $odies get >more $ang for the $')2> thro'gh vo&'me $'0ing of simi&ar&0 'sed )ommodities. .$4$*$- State %ersus FTA ReAuirements RE@UIREMENT The re<'irements and standards of *TA Cir)'&ar 4220.!: app&0 to pro)'rements entered into 'nder s')h agreements 'sing *TA f'nds. !H" DISCUSSION FIK%e "ot no control o%er 1/at t/e State uts into its contracts in terms of FTA reAuirements$ T/e State is concerned 1it/ state la1s and t/at contracts full# com l# 1it/ t/e com etiti%e reAuirements of t/e state$ B/at do I doSF T/ere reall# is no eas# ans1erT T/e ro&lem most a"encies face 1it/ t/is reAuirement is not t/e com etiti%e met/ods utili,ed &# t/e State 6or local9 "o%ernmental entit# in esta&lis/in" t/ese contracts )) most States /a%e a small urc/ase rocedures! sealed &iddin" and sealed ro osal met/ods of rocurement t/at in all liEeli/ood com l# 1it/ t/e federal standards set fort/ in FTA Circular .**:$(E and discussed earlier in Section .$ Most States similarl# &u# arc/itect and en"ineerin" ser%ices in a rocedure similar to t/e federal reAuirements of t/e BrooEs Act and as discussed in FTA Circular .**:$(E ara"ra / 8$e and in ara"ra / 2$0 L Architect1"ngineering %er-ices! T/e ro&lem most of us face is sAuarin" State la1s or re"ulations t/at differ su&stanti%el# 1it/ t/e FTA reAuirements of FTA Circular .**:$(E$ Co1 do 1e reconcile State)"eo"ra /ic reference statutes 1it/ t/e full and o en com etition reAuirements of t/e FTA and t/e Common <rant RuleS T/ese statutes freAuentl# esta&lis/ a reference for certain ser%ices or commodities to in)State sources and ma# e%en set)aside certain rocurements to in)State sources$ If #ou are usin" federal funds to rocure somet/in" off a State sc/edule and #our State /as suc/ a restriction! can #ou artici ateS Pro&a&l# not$
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*TA Cir)'&ar 4220.!: T 1.e.
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Recent c/an"es in t/e a lica&ilit# of t/e Bu# America ro%isions of .8 CFR Part 22( 6and discussed in Section .$-$-$*$*! FBu# America CertificationF9 maEe com liance 1it/ t/ose reAuirements less of an issue no1 t/an it used to &e &ecause of t/e R(::!::: t/res/old$ Co1e%er! for rocurements in e;cess of t/at amount! #ou 1ill ro&a&l# /a%e ro&lems artici atin" &ecause of t/e certification reAuirements im osed &# Part 22($ T/e current R*!::: t/res/old of t/e Da%is)Bacon Act ma# reclude #ou from artici atin" in an# State construction contract &ecause! in all liEeli/ood! an# 1a"e rate reAuirement of t/e State is "oin" to &e a State la1 issue! not t/e Da%is)Bacon Act$
T/e list could "o on$ Under current federal statutor# and re"ulator# "uidance and reAuirements! some of t/e conflicts &et1een t/ose reAuirements and t/e rocurement rocedures and ractices of #our State are irreconcila&le$ Unless t/e State or local a"enc# is 1illin" to include t/e FTA reAuirements in its solicitations and contracts! #ou ma# &e effecti%el# recluded from artici atin" in t/ose inter"o%ernmental or inter)local rocurements$ Some relief could come in t/e future as t/e FTA continues to e;amine its olic# relati%e to t/e a lica&ilit# of FTA Circular .**:$(E to all rocurements if t/e "rantee acce ts o eratin" assistance$ (5. Until more clarification is o&tained and as lon" as o eratin" assistance is an issue! #ou ma# not &e a&le! realisticall#! to artici ate in t/ese rocurements$ Dou can! /o1e%er! effecti%el# artici ate at t/e trul# local le%el 1/ere #ou can eit/er control t/e rocurement 6#ou &u# t/e diesel fuel usin" all t/e federal reAuirements9 and allo1 t/e cit# and sc/ool district dra1 off #our contract or! &ecause of t/e one)on)one interface t/is rocess reAuires! #ou are a&le to /a%e t/e cit# or sc/ool &oard include t/e federal reAuirements in its unleaded re"ular "asoline contract #ou 1ant to order from$ T/at 1orEsT A"ain! 1e s ecificall# solicit in ut from #ou on #our successes 6and failures9 in t/e area of utili,in" State and local "o%ernment contract sc/edules or inter)local7inter"o%ernmental rocurement a"reements and /o1 t/e# /a%e &een reconciled 1it/ conflictin" State and Federal reAuirements$ .$4$- E)Commerce3 Re%erse Auctions RE@UIREMENT Ieverse a')tions are s'$@e)t to a&& the pro)'rement re<'irements of *TA Cir)'&ar 4220.!:, -aragraph 1.<.
3: Commer)e is an a&&o/a$&e means to )ond')t pro)'rements. ?f a grantee

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*TA Cir)'&ar 4220.!: T 4.
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)hooses to 'ti&iGe : Commer)e, /ritten pro)ed'res need to $e deve&oped and in p&a)e prior to so&i)itation and a&& re<'irements for f'&& and open )ompetition m'st $e met in a))ordan)e /ith this Cir)'&ar.4 We /o'&d note that some states, s')h as #e/ 5or2, re<'ire a sea&ed $id pro)ed're for )ompetitive pro)'rements. ')ere state law requires sealed $iddin!/ reverse auctions may not $e le!al. ?n these sit'ations grantees ma0 sti&& ma2e 'se of on&ine $idding $'t the $ids m'st $e 2ept sea&ed and not dis)&osed. =rantees m'st )he)2 their state pro)'rement stat'tes to determine if reverse a')tions are permissi$&e. *or e;amp&e, the state of Te;as re)ent&0 ena)ted &egis&ation a&&o/ing reverse a')tions. =rantees sho'&d )ons'&t /ith their )o'nse& to determine /hether reverse a')tions are &ega&&0 permissi$&e 'nder State &a/. DISCUSSION One of t/e inno%ations arisin" out of e)commerce /as &een t/e use of re-erse auctions$ T/e term re-erse auction refers to a li%e online auction in 1/ic/ t/e roles of &u#er and seller are Hre%ersed$I In a normal 6*or/ard9 auction! sellers offer to sell at rices determined &# t/e &ids of &u#ers$ In a re-erse auction! &u#ers are offerin" to &u# somet/in" at rices &ein" &id &# sellers$ HRe%erseI refers to t/e relations/i of &u#er and seller and 1/o does t/e &iddin"$ Sellers &id for t/e ri"/t to sell to t/e &u#in" or"ani,ation and &u#ers a"ree to &u# at t/e rice esta&lis/ed &# t/e auction rocess$ In a re%erse auction roceedin"! t/e &u#er ad%ertises and defines on line t/e commodit# for 1/ic/ it is solicitin" &ids$ T/e &u#er ma# also ost a rice at 1/ic/ t/e &iddin" 1ill &e"in$ T/ese rices 1ill usuall# &e t/e &u#erMs Hlast "ood &u#I rice or an industr# standard rice! and it s/ould &e a rice t/at 1ill encoura"e su liers to &id$ If t/e rice is set too lo1! it 1ill discoura"e sellers from artici atin"$ Su liers! 1/ose identit# is Ee t confidential! t/en ost rices online an#time 1it/in t/e duration of t/e auction 6usuall# one da# to se%eral 1eeEs9 so t/at su liers can see t/eir com etitorsM &ids and res ond immediatel# 1it/ counter offers$ Su liers can ree%aluate and ad'ust t/eir &id in res onse to ot/er &iddersM offerin"s$ Some auctions ro%ide for automatic time e;tensions if a &id is laced in t/e last fi%e minutes of an auction! in 1/ic/ case an automatic fi%e)minute e;tension re%ents last)second &iddin" and Eee s all artici ants on an e%en la#in" field$ It is ossi&le to /a%e se%eral automatic time e;tensions 1/en &ids are su&mitted in t/e last fi%e minutes of t/e e%ent$ T/e trans arenc# of t/e marEet lace creates ri"orous com etition amon" t/e artici ants! 1/ic/ tends to dri%e rices lo1er$ Re%erse auctions li%e u to t/eir name &# /a%in" rices fall$ E; erience to date 1it/ re%erse auctions indicates t/at sa%in"s of (0O ) *:O from rices re%iousl# aid ma# &e ossi&le! es eciall# if additional %endors can &e found to &id on t/e reAuirement$ Most of t/e 1orE to &e done in a re%erse auction taEes lace rior to t/e actual e%ent$ T/is includes identif#in" su liers 1/o 1ill &id! re)Aualif#in" t/em and informin" t/em a&out t/e tec/nolo"# t/at is &ein" used$ It is im ortant to define e%er#t/in" u front! includin"
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Aualit#! deli%er# terms! a#ment terms! location of use! Auantit# reAuired and in 1/at lot si,e$ In some cases &u#ers /a%e issued a ReAuest for Pro osals 6RFP9 as a first ste in a H&est %alueI com etition in order to e%aluate ros ecti%e &iddersM roducts! ca a&ilities! etc$ A re%erse auction is t/en conducted amon" Aualified su liers as a tec/niAue to elicit t/e &est ossi&le rices$ An#t/in" t/at can &e descri&ed 1ell can &e re%ersed auctioned$ T/is includes "oods and ser%ices$ T/e Ee# is t/at t/e item /a%e features t/at are measura&le! 1it/ a clear urc/ase descri tion in terms of Aualit# and s ecificit#! so t/at su liers are &iddin" on a reAuirement t/at is clear to e%er#one$ Doin" t/is 1ill ensure #ou are a&le to com are &ids for essentiall# identical "oods or ser%ices$ In decidin" if a re%erse auction is ri"/t for a articular commodit#! t/e a"enc# 1ill need to determine if it /as lon")term relations/i s 1it/ an# one or t1o su liers for t/e commodit#! and if so! 1/#S B/at is %alua&le a&out t/e relations/i S Bould an auction /arm t/e relations/i S Anot/er consideration 1ill &e 1/et/er t/ere are enou"/ su liers of t/is commodit# to maEe it com etiti%e$ An# efforts taEen to increase t/e num&er of &idders 1/o artici ate in t/e auction 1ill a# di%idends in t/e end$ Finall#! t/e commodit# must &e suc/ t/at t/ere is a sufficient rofit mar"in to maEe rices com ressi&le! so t/at su liers /a%e room to &id$ And finall#! as /as alread# &een su""ested! re%erse auctions need not &e limited to lo1est ) rice contract a1ardsJ t/e# ma# &e used in H&est %alueI rocurements 1/ere tec/nical ro osals are reAuired and rice auctions follo1! 1it/ contract a1ard &ein" made to t/e firm offerin" t/e &est o%erall %alue to t/e &u#in" a"enc#! 1it/ &ot/ rice and tec/nical merits considered$ Best Practices Federal <o%ernment E; erience A n'm$er of *edera& agen)ies are no/ 'sing reverse a')tions. The *edera& =overnment $egan to 'se this te)hni<'e /ith the re /rite of the *AI -art !5 in !991. *AI !.!02.48e9 no/ states that if a pra)ti)e is not e;press&0 addressed or prohi$ited $0 stat'te or reg'&ation, =overnment emp&o0ees sho'&d fee& free to innovate and 'se so'nd $'siness @'dgment in ma2ing pro)'rement de)isions. With respe)t to a')tions, *AI !5."0%8e9 8"9 re<'ires $idders to agree to dis)&ose their pri)es prior to their parti)ipation in an a')tion event. ,ased on the *AI, government pro)'rement personne& ma0 'se reverse a')tions as &ong as the vendors agree to parti)ipate. 8=rantees are not re<'ired to fo&&o/ the *AI, and this information on *edera& pro)ed'res is provided for information p'rposes9. #av0 Department The #av0 Department+s first a')tion /as for air)raft e@e)tion seat me)hanisms. This a')tion &asted 5! min'tes, /ith three $idders, and #av0 estimates it saved over 2HP off the histori)a& pri)e for these me)hanisms. #av0 has )ond')ted over fifteen additiona& reverse a')tions sin)e the first in .a0 2000, for s'pp&ies as /e&& as servi)es, 'sing $oth pri)e and $est va&'e as eva&'ation )riteria. *o&&o/ing are some of the 3&essons &earned4 $0 the #av0 Department, as p'$&ished at their /e$ site( !H5
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The reverse a')tion te)hni<'e ma0 not drasti)a&&0 )hange or stream&ine the pro)'rement
#av0 )an $e )onta)ted $0 phone at 82!59 %91 2H50. #av0 /e$ site info for reverse a')tions is( http(AA///.a$m.rda.h<.nav0.mi&Anav0aosAa)<'isitionJtopi)sA)ontra)tingJAreverseJa')tioningAreverseJa')tioning.
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pro)ess. ?t is a high&0 effe)tive pri)ing too&. -rior to opening the a')tion, a&& parti)ipating vendors sho'&d &og on and verif0 their )onne)tion to the s0stem. A set period of time for the reverse a')tion sho'&d $e esta$&ished $ased on the n'm$er of parti)ipants and the )omp&e;it0 of the a)<'isition. The time esta$&ished for the a')tion needs to $e f&e;i$&e in )ase there is an offer at )&osing time. *or e;amp&e, if a $id is re)eived /ithin one min'te of the )&osing time for the a')tion, the a')tion period sho'&d $e e;tended for an additiona& n'm$er of min'tes to a&&o/ $idders to respond to the &ast $id.
.arine Corps The U.S. .arine Corps has a&so p'$&ished their e;perien)es /ith reverse a')tions. The .arine Corps too2 )on)erted efforts to $'i&d a data$ase of vendors for vario's prod')t t0pes and to in)&'de more vendors, train them on the reverse a')tion too&, and get them to parti)ipate in their first a')tion. The res'&t /as signifi)ant&0 in)reased )ompetition. The average a')tion has &asted "0 min'tes /ith a/ard made dire)t&0 thereafter. The average savings for the eight a')tions th's far have $een 25P from the estimated va&'es $ased on histori)a& and retai& pri)es. The .arine Corps reports that vendors a)t'a&&0 prefer this pro)ess to the sea&ed $id pro)ess. The .arine Corps Iegiona& Contra)ting Offi)e So'th/est 8ICO SW9 re)eived the Department of the #av0 Competition :;)e&&en)e A/ard for the imp&ementation of this innovative pra)ti)e. Arm0 The Arm0 is 'sing reverse a')tions for $est value t0pes of pro)'rements. *o&&o/ing is an e;)erpt from the Arm0 pro)'rement pro)ed'res g'ide as reprod')ed in the DOD "efense Acquisition "es($oo(( A##lica$ility to Aest Calue Acquisitions Reverse auctions are le!al as lon! as t)e identity of t)e $idders is not disclosed. Oou may use t)em for trade1off acquisitions as a %ricin! tool. ,nce you )ave finis)ed wit) tec)nical discussions/ you may conduct a reverse auction to esta$lis) t)e offerorsP final %rices. &rovide t)ese %rices/ alon! wit) t)e rest of t)e evaluation results/ to t)e Source Selection ,fficial for )is*)er use in selectin! t)e %ro%osal t)at re%resents t)e $est value. A %otential $enefit is t)at com%etition will drive t)e %rices down as t)e offerors )ave visi$ility of t)e ot)er %rices $ein! %ro%osed. Oou may use reverse auctions to %urc)ase a variety of %roducts and services. Reverse auctions wor( es%ecially well on acquisitions of manufactured items. ')ile you can use reverse auctions to $uy commodities/ t)ese items usually )ave smaller %rofit mar!ins and t)erefore/ t)e %otential $enefits are less.
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')en usin! reverse auctions in a $est value acquisition/ ensure t)e auction does not drive %rices down to t)e %oint t)at t)e resultant contract does not %rovide enou!) incentive for t)e contractor to %rovide quality su%%lies and services. 2se of reverse auctions is a%%ro%riate at different %oints in an acquisition. For e7am%le/ you may use t)em to ac)ieve t)e offerorsP final %rice or you may use t)em to downsi@e t)e num$er of offerors/ $ut decide not to use t)em for t)e final ne!otiations. 18H Air *or)e The Air *or)e Contractin! &olicy emo on Reverse Auctions 8*e$r'ar0 !9, 200!9 /as iss'ed after resear)h on ho/ reverse a')tions are $eing 'sed in private ind'str0, and the memo provides a n'm$er of 3&essons &earned.4 Among these /ere( Ieverse a')tions are $eing 'sed $0 ind'str0 more for 3$est va&'e4 a)<'isitions than for &o/est pri)e a)<'isitions. 8The S'n .i)ros0stems+ )ase dis)'ssed $e&o/ 'nder 3-rivate ?nd'str0 :;perien)e4 i&&'strates this.9 S'pp&iers are norma&&0 pre <'a&ified, in)&'ding past performan)e, and then a reverse a')tion is 'sed for the s'$mission of )ompetitive pri)es. A responsi$i&it0 determination is performed on the apparent s'))essf'& $idder.
The Air *or)e pro)'red a motoriGed se)'rit0 gate for one of its fa)i&ities and re<'ested te)hni)a& proposa&s first. Those firms s'$mitting a))epta$&e te)hni)a& proposa&s then s'$mitted pri)es on&ine thro'gh a reverse a')tion. The apparent &o/ $idder /as then re<'ired to s'$mit a )ost proposa& for eva&'ation. *inding the proposa& satisfa)tor0, a )ontra)t /as a/arded. Air *or)e /as p&eased /ith the res'&ts of the pro)ess. Treas'r0 Department L The U.S. Treas'r0 Department 8?IS9 )ond')ted, in .a0 200!, its first a')tion and one of the &argest *edera& a')tions to date( S!"! mi&&ion for -Cs, &aptops and monitors. Treas'r0 estimates it saved a$o't S%H mi&&ion in a ver0 s'))essf'& a')tion. An e;amp&e of the savings a)hieved /as the red')tion in the 'nit pri)e of a top end des2top )omp'ter from a pre a')tion pri)e of S!,4"4 to S%25 8a savings of 5% per)ent9. There /ere three distri$'tors that s'$mitted $ids, representing ?,., =ate/a0 and De&&. The ?IS re<'irements /ere so&i)ited on a $est va&'e $asis. !H1
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Arm0 So'r)e Se&e)tion ='ide, 6'ne 200!, ma0 $e fo'nd at( http(AA///.am).arm0.mi&Aam)ArdaArda apAdo)sAassg 200!.pdf. C&i)2 on Appendi; ? for information on On 7ine Ieverse A')tions.
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Conta)t .r. =eoff =a'ger at Treas'r0 for additiona& information( 82029 %22 020".
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Treas'r0 has a&so had s'))ess /ith sma&& $'0s. .an0 of those $'0s /ere $e&o/ S25,000 and severa& /ere $e&o/ S!,000. .ore than S"00,000 in p'r)hases have $een made in 2002, /ith some impressive res'&ts. C'stoms saved 4" per)ent on the p'r)hase of a shredder and the *inan)ia& Crimes :nfor)ement #et/or2 saved H1 per)ent on t/o 2%5 mega$0te memor0 2its. Oendor interest has $een great. *or e;amp&e, the ,'rea' of -'$&i) De$t has $een averaging 12 $ids per a')tion. ?n a&&, )&ose to 2,000 $ids have $een re)eived from over ""0 firms. Another note/orth0 a)hievement is that the ,'rea' of -'$&i) De$t, the AT* and C'stoms have a/arded !00 per)ent of their a')tion res'&ts to sma&& $'sinesses. !HH =enera& Servi)es Administration 8=SA9 L =SA maintains a reverse a')tion /e$ site for *edera& agen)ies. On 6'&0 25, 2002 the =SA *edera& Te)hno&og0 Servi)e a/arded a n'm$er of )ontra)ts for reverse a')tion servi)es to vario's )ompanies 83ena$&ers49 that provide servi)es ranging from )ond')ting the )omp&ete a')tion 83Bosted Servi)es49 to providing ena$&ing soft/are so that the 'ser agen)0 )an )ond')t its o/n a')tions 83Des2top Servi)es49. The ena$&ers that re)eived =SA )ontra)ts are &isted on the /e$ site. !H9 =SA )ond')ted a reverse a')tion pi&ot program from .a0 2000 to .a0 200!. =SA reports that vario's government agen)ies parti)ipating in the pi&ot program rea&iGed savings of !2P 4HP thro'gh the reverse a')tion pro)ess. *or e;amp&e, the Defense *inan)ing and A))o'nting Servi)e paid 22 per)ent, or S2.! mi&&ion &ess, than norma& pri)es for des2top )omp'ters, &aptops and printers. The #ationa& ?nstit'tes of Bea&th 8#?B9 paid 25 per)ent, or S"95,000, &ess than norma& pri)es for 'ti&it0 /ipes, a t0pe of )&eaning s'pp&ies. The Coast ='ard paid 22 per)ent, or S"00,000, &ess than norma& pri)es for spare parts for BU 25 *a&)on @ets. The Dep't0 Assistant Commissioner for Servi)e Deve&opment, =SA *edera& Te)hno&og0 Servi)e, .r. .ann0 DeOera, is )redited /ith deve&oping 3Ten Commandments for Ieverse A')tions(4 Re%erse Auction Ten Commandments 1. #in( reverse auction strate!y to acquisition strate!y. ')en develo%in! t)e acquisition strate!y as(/ HCould reverse auctionin! a%%ly to t)is requirementFI <. Follow t)e Federal Acquisition Re!ulation. T)ese !uidin! %rinci%les still a%%ly. !90
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8lectronic ?a@aar > Reverse Auctions Save ?uyers Time/ oney $0 =eoff =a'ger. *edera& Times, #ovem$er 4, 2002. This arti)&e ma0 $e a))essed at( http(AAfedera&times.)omAinde;.phpWS[!2%4522
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http(AA///.gsa.govA-orta&AgsaAepA)ontentOie/.doW)ontentT0pe[=SAJOO:IO?:WC)ontent?d[!0%55
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=rantees are not re<'ired to fo&&o/ the *AI. Bo/ever, the0 are re<'ired to fo&&o/ *TA Cir)'&ar 4220.!:, /hi)h /o'&d app&0 to pro)'rements 'sing reverse a')tions.
-age !2!
C. C)oose a solid %erformin! ena$ler. (8na$lers are firms t)at %erform reverse auctions.) 'it) t)e trou$les currently $ein! e7%erienced in t)e di!ital economy/ a few ena$lers may not $e around in t)e future and could %resent ris(s. A. 8ducate su%%liers in advance of conductin! a reverse auction. Full service ena$lers %rovide t)is service in t)eir fees. 5. ?e %re%ared for %u$licity and use it to your advanta!e. &u$licity )a%%ens $ecause reverse auctions are relatively new and t)e media/ trade associations/ senior !overnment officials and ot)ers are all carefully watc)in! t)e !overnmentPs entry into t)is new way of doin! $usiness. 8na$lers are also a!!ressively %u$lici@in! t)eir activities. J. ?e!in wit) sim%le requirements and move !radually to more com%le7 ones. T)e more e7%erience an or!ani@ation )as wit) conductin! auctions/ t)e more com%le7 requirements t)ey can %ut out for $id. E. 8sta$lis) t)e rules of t)e reverse auction u% front. Some e7am%les of t)ese rules are t)e $id increments to $e used/ time e7tensions/ lo!istics and ot)er considerations. ;. Conduct a moc( auction. T)e ada!e H%ractice ma(es %erfectI is very a%%ro%riate )ere. :. Consider conductin! an auction w)ere $idders $id to %rovide a quantity of a commodity/ as o%%osed to %rice $ased $iddin!. For e7am%le/ reverse auctions are $ein! conducted w)ere t)e $uyer )as a set amount t)ey want to s%end/ say Q1 million for &Cs/ and is not focused on t)e unit cost. 3n t)ese auctions/ $idders $ase t)eir $ids on t)e num$er of &Cs t)at t)ey will %rovide for t)e Q1 million. 1D. T)e Contractin! ,fficer is in control of t)e reverse auction event at all times. *?IST=OO.gov L The U.S. =overnment+s offi)ia& /e$ porta& is ///.firstgov.gov. !9! ?nserting 3reverse a')tions4 in the Searc) $o; /i&& give 0o' a))ess to more than !H% mi&&ion /e$ pages from federa& and state governments /here 0o' /i&& find information regarding these agen)ies+ e;perien)e /ith reverse a')tions. Pri%ate Industr# E; erience = The private ind'str0 se)tor has $een 'sing reverse a')tions sin)e the mid !990+s. A re)ent /hite paper presented data indi)ating that 20 per)ent of a&&
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http(AA///.firstgov.govAinde;.shtm&.
-age !22
private ind'str0 firms ma0 $e 'sing on &ine a')tions 8rea& time $idding9 to pro)'re a portion of their goods and servi)es. !92 A )'rrent magaGine arti)&e dis)'sses the e;perien)e of one ma@or private ind'str0 p&a0er in the reverse a')tion arena L S'n .i)ros0stems. S'n imp&emented its "ynamic ?iddin! program in .a0 2000 /ith a goa& of 20 per)ent red')tion of their targeted $'dget, and the0 a)hieved this in their first pi&ot a')tion. ?t has sin)e $een 'sed for more than !00 pro)'rements and )overs a&& the )ommodities S'n $'0s. One of the important fa)ets of the S'n method is that the )ompan0 'ses a 3$est va&'e4 approa)h to so'r)e se&e)tion /ith their pri)e a')tions. S'n $e&ieves its s'pp&ier re&ationships are strategi) and it /i&& not s/it)h to an 'ntested )ompan0 simp&0 to get a &o/er pri)e. -ast performan)e in areas s')h as <'a&it0, man'fa)t'ring f&e;i$i&it0, fa)i&it0 &o)ation and engineering s'pport are a&so )onsidered in the fina& de)ision. S'n emphasiGes that the reverse a')tion approa)h does not rep&a)e the strategi) re&ationship $et/een )ompanies. -ri)es $id are on&0 one fa)tor in the fina& se&e)tion de)ision pro)ess, $'t the a')tions mean that &ess time is spent on negotiating the pri)e, terms and )onditions than /as previo's&0 the )ase. 3The end res'&t is that it ta2es S'n an ho'r to find the tr'e mar2et pri)e, e&iminating /ee2s or even months of negotiating $a)2 and forth. ?t has a&so res'&ted in signifi)ant $ottom &ine savings for S'n. The0 'sed this pro)ess on S! $i&&ion of their dire)t spend in fis)a& 0ear 200!, and have raised the goa& for this fis)a& 0ear.4 !9" A re)ent arti)&e in an : $'siness p'$&i)ation s'ggested a n'm$er of areas that might $e good )andidates for reverse a')tions. !94 The a'thor+s re)ommendations for reverse a')tions in)&'de(
Strate!ic Relations)i% is #ess 3m%ortant The a'thor $e&ieves it is diffi)'&t to $'i&d )ooperative re&ationships /ith s'pp&iers thro'gh an a')tion pro)ess and th's a')tions are more s'ita$&e for p'r)hases of off the she&f, near )ommodit0 dire)t materia&s. &rice is ain "ecision Factor A')tions /or2 $est for )ategories /here the main dis)riminator $et/een s'pp&iers is pri)e.
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T)e Strate!ic Need for Real1Time Com%etitive ?iddin! in t)e &u$lic Sector &rocurement &rocess , $0 David C. W0&d and Ianda&& -. Settoon, Septem$er 2002, p.!H. This paper ma0 $e a))essed at( http(AA&earning)enter.ari$a.)omA/pJreso'r)e.)fm.
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Reverse Auctions L Strate!ies and #essons #earned from a Successful 3m%lementation $0 =i&&ian Oerga, 6an 2002. This arti)&e ma0 $e a))essed at( ///.api)s.org.
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1 ')en to 2se an Auction $0 :d =oetting, Septem$er 4, 2002. This arti)&e ma0 $e a))essed at( ///.&ine5%.)omAprintAdefa'&t.aspWArti)&e?D["9H"
-age !2"
any 0ualified Su%%liers A')tions need ade<'ate )ompetition to s'))eed. Where there is &imited )ompetition $e)a'se of a s)ar)it0 of s'pp&iers, a )ommitment of s'pp&0 is more important than an0 in)rementa& pri)e savings that )o'&d $e a)hieved thro'gh an a')tion. #ow to edium Strate!ic 3m%ortance The most strategi) )ategories sho'&d not $e s'$@e)t to a stand a&one a')tion. This /o'&d in)&'de )omponents )riti)a& to the )ompan0+s end prod')t. ?n these )ases the a')tion, if )ond')ted, sho'&d $e )om$ined /ith some sort of fa)e to fa)e dis)'ssions /ith 2e0 s'pp&iers. &urc)ases Can $e H#ottedI ?t ma0 $e )'m$ersome to r'n individ'a& a')tions for ea)h of man0 &ine items. 7ine items )an $e $'nd&ed into 3&ots4 and s'pp&iers /i&& $e re<'ired to $id on a&& the parts in that &ot or none. This )on)ept of 3&otting4 /or2s /e&& /ith offi)e prod')ts. ?enc)mar(s When a )ompan0 is satisfied /ith a )'rrent s'pp&ier $'t fee&s a need to test the mar2et to ens're the0 are re)eiving a )ompetitive pri)e, the0 ma0 do this thro'gh an a')tion. -otentia& s'pp&iers )an $e re<'ired to respond to an I*- in order to <'a&if0 for the a')tion. The 2e0 is to ade<'ate&0 do)'ment one+s servi)e, de&iver0, pa0ment terms and other 3non pri)e4 re<'irements 'p front to ens're that s'pp&iers are $idding on an app&es to app&es $asis.
Transit A"enc# E; erience L Transit Agen)0 e;perien)e /ith reverse a')tions has $een e;treme&0 &imited in )omparison to $oth the private se)tor and the *edera& government. The 7os Ange&es Co'nt0 .etropo&itan Transit A'thorit0 87AC.TA9 has 'sed this pro)ess s'))essf'&&0 on a &imited $asis $'t does not fee& it has signifi)ant potentia& for their needs. !95 7AC.TA $e&ieves it )an /or2 /e&& for )ommon materia&s $'t ma0 $e in)onsistent /ith good &ong term partnership re&ationships /ith s'pp&iers. *or e;amp&e, /here there is a need for te)hni)a& s'pport or for <'i)2 rea)tion time in order to meet )riti)a& agen)0 needs, the a')tion pro)ess does not &end itse&f to the 2ind of agen)0As'pp&ier re&ationships that are re<'ired for &ong term mission s'))ess. ,'t 7AC.TA $e&ieves that if pri)e is the on&0 )onsideration, and s'pp&ier partnerships for the )ommodit0 a&so is not a )onsideration, then reverse a')tioning )an /or2 /e&&. The So'theastern -enns0&vania Transportation A'thorit0 8S:-TA9 )ond')ted a pi&ot program to test the pro)ess on a pro)'rement of f&'ores)ent t'$es and the0 /ere s'))essf'&. ,'t the0 a&so do not fee& that their agen)0 /i&& adopt this te)hni<'e to an0 signifi)ant degree. One of the &essons
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*or information re 7A.TA )a&& the Dire)tor of -'r)hasing at 2!" 922 12!0.
-age !24
&earned $0 S:-TA is the )riti)a&it0 and diffi)'&t0 of informing potentia& $idders of the a')tion and getting them prepared to $id. !9% The Bo'ston .etropo&itan Transit A'thorit0 8.TA9 is )onsidering the 'se of a reverse a')tion for f'rnit're. !91
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*or information a$o't S:-TA+s pi&ot program, )a&& 2!5 5H0 H25!. *or information a$o't Bo'ston .TA, )a&& -a'& Como at( 1!" 1"9 4H0".
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,est -ra)ti)es -ro)'rement .an'a& L Chapter 5 L A/ard of Contra)ts
-age !
C/a ter 0 0 ) A1ard of Contracts 5.0 Overvie/ 8!A9H9 5.! Iesponsi$i&it0 of Contra)tor 85A9H9 5.!.! =enera& Standards of Iesponsi$i&it0 85A9H9 5.!.2 Spe)ia& Standards of Iesponsi$i&it0 85A9H9 5.!." O$taining ?nformation for Determination of Iesponsi$i&it0 85A9H9 5.!.4 Determination and Do)'mentation 85A9H9 5.2 Cost and -ri)e Ana&0sis 8%A0"9 5." A/ard -ro)ed'res 85A9H9 5.".! -'$&i) Anno'n)ements of Contra)t A/ards 85A9H9 5.".2 De$riefing of Offerors 84A059 5.4 Do)'mentation of -ro)'rement A)tion 85A9H9 5.4.! Sea&ed ,id -ro)'rements 85A9H9 5.4.!.! A$stra)t of ,ids 85A9H9 5.4.!.2 Do)'mentation of A/ard De)ision 85A9H9 5.4.2 #egotiated -ro)'rements 85A9H9 5.4.2.! *i&e Do)'mentation of Se&e)tion De)ision 85A9H9 5.4.2.2 -re #egotiation -&an 85A9H9 5.4.2." .emorand'm of #egotiations 85A9H9 0$: OPERPIEB This )hapter )on)erns the more important pro)ed'res and do)'mentation re<'irements /hi)h are )&osest to and re&ate most dire)t&0 to the time of the a)t'a& )ontra)t a/ard. These are the fina& steps in the &ong pro)ess &eading to the se&e)tion de)ision, the negotiation of a )ontra)t, the signing of the )ontra)t, and the notifi)ations to 'ns'))essf'& offerors and the genera& p'$&i) of /ho the /inner is.
-age "
Dou ma# /a%e a rocurement 1/ere it is necessar# to determine t/e res onsi&ilit# of a critical su&contractor in order for #ou to maEe a ositi%e determination a&out t/e rime contractorKs res onsi&ilit#$ (88 If t/at is necessar#! #ou ma# use t/e same standards in determinin" t/e res onsi&ilit# of t/e su&contractor as #ou 1ould in determinin" t/e res onsi&ilit# of t/e rime contractor$ 0$($( <eneral Standards of Res onsi&ilit# To $e determined responsi$&e, a prospe)tive )ontra)tor m'st meet a&& of the fo&&o/ing re<'irements( 8a9 8$9 8)9 8d9 8e9 8f9 8g9 8h9 8i9 *inan)ia& reso'r)es ade<'ate to perform the )ontra)t, or the a$i&it0 to o$tain them. A$i&it0 to meet the re<'ired de&iver0 or performan)e s)hed'&e, ta2ing into )onsideration a&& e;isting )ommer)ia& and governmenta& $'siness )ommitments. A satisfa)tor0 performan)e re)ordQ A satisfa)tor0 re)ord of integrit0 and $'siness ethi)sQ The ne)essar0 organiGation, e;perien)e, a))o'nting, and operationa& )ontro&s, and te)hni)a& s2i&&s, or the a$i&it0 to o$tain themQ Comp&ian)e /ith app&i)a$&e &i)ensing and ta; &a/s and reg'&ationsQ The ne)essar0 prod')tion, )onstr')tion, and te)hni)a& e<'ipment and fa)i&ities, or the a$i&it0 to o$tain themQ Comp&ian)e /ith Affirmative A)tion and Disadvantaged ,'siness -rogram re<'irementsQ and Other <'a&ifi)ations and e&igi$i&it0 )riteria ne)essar0 to re)eive an a/ard 'nder app&i)a$&e &a/s and reg'&ations.
0$($* S ecial Standards of Res onsi&ilit# 5o' ma0 have a parti)'&ar pro)'rement or )&ass of pro)'rements /hi)h, d'e to the )omp&e;it0 of the prod')ts $eing a)<'ired, re<'ire that prospe)tive )ontra)tors meet spe)ia& standards of responsi$i&it0. These pro)'rements /i&& re<'ire that )ontra)tors have spe)ia&iGed e;pertise or
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#orma&&0, the prime )ontra)tor is responsi$&e for determining the responsi$i&it0 of its s'$)ontra)tors. Bo/ever, as indi)ated in *AI _ 9.!04 4, it ma0 $e ne)essar0 for 0o' as the pro)'rement offi)ia& to determine a prospe)tive s'$)ontra)torKs responsi$i&it0 s')h as /hen the prospe)tive )ontra)t invo&ves 'rgent re<'irements or s'$stantia& s'$)ontra)ting.
-age 4
fa)i&ities in order to perform the )ontra)t ade<'ate&0. These spe)ia& standards of responsi$i&it0 m'st $e set forth in the so&i)itation. *ai&'re to meet the spe)ia& standards /i&& dis<'a&if0 a $idder from )onsideration for a/ard. An e;amp&e of a Spe)ia& Iesponsi$i&it0 Standard /o'&d $e the Spe)ia& N'a&it0 Ass'ran)e re<'irement )on)erning meas'ring and testing fa)i&ities and man'fa)t'ring )ontro&s /hi)h m'st $e met $0 prospe)tive $'s man'fa)t'rers. 200 0$($- O&tainin" Information for Determination of Res onsi&ilit# ,efore ma2ing a determination of responsi$i&it0, 0o' m'st possess or o$tain information s'ffi)ient to satisf0 0o'rse&f that a prospe)tive )ontra)tor meets the app&i)a$&e standards and re<'irements for responsi$i&it0 set forth in this se)tion. Appendi; ,.!! represents an e;amp&e of a >Iesponsi$i&it0 N'estionnaire> 'sed $0 a ma@or transit a'thorit0 to o$tain information from $idders /hi)h is ne)essar0 in order to ma2e a determination of responsi$i&it0. So'r)es of information avai&a$&e to 0o'r for 0o'r determinations )o'&d in)&'de( 8a9 8$9 8)9 =enera& Servi)es Administration p'$&i)ation tit&ed 7ist of -arties :;)&'ded from *edera& -ro)'rement or #onpro)'rement -rogramsQ Ie)ords and e;perien)e data, in)&'ding verifia$&e 2no/&edge of 0o'r agen)0Ks personne&Q ?nformation s'pp&ied $0 the prospe)tive )ontra)tor, in)&'ding $id or proposa& information, <'estionnaire rep&ies, finan)ia& data, information on prod')tion e<'ipment, and personne& informationQ -re a/ard s'rve0 reportsQ and Other so'r)es, s')h as p'$&i)ations, s'pp&iers, s'$)ontra)tors, and )'stomers of the prospe)tive )ontra)tor, finan)ia& instit'tions, government agen)ies, and $'siness and trade asso)iations.
8d9 8e9
0$($. Determination and Documentation The *TA Cir)'&ar 4220.!: -aragraph 18i9 re<'ires grantees to maintain a /ritten re)ord of the pro)'rement histor0, in)&'ding >reasons for )ontra)tor se&e)tion or re@e)tion.> Whi&e the a/ard of a )ontra)t itse&f )an in some instan)es 8e.g. sma&& p'r)hases9 $e )onsidered imp&i)it affirmation that a )ontra)tor has $een determined to $e responsi$&e, /here appropriate the /ritten re)ord sho'&d state the spe)ifi) $asis for a responsi$i&it0 determination.
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Ameri)an -'$&i) Transit Asso)iation 8A-TA9 Standard ?us &rocurement .uidelines, Se)tion !.!.4.".! 0ualification Requirements 8???9, 6an'ar0 !991.
-age 5
When an offer on /hi)h an a/ard /o'&d other/ise $e made is re@e)ted $e)a'se the prospe)tive )ontra)tor is fo'nd to $e nonresponsi$&e, the Contra)ting Offi)er sho'&d ma2e, sign, and p&a)e in the )ontra)t fi&e a determination of nonresponsi$i&it0 /hi)h states the $asis for the determination. Do)'ments and reports s'pporting a determination of responsi$i&it0 or nonresponsi$i&it0, in)&'ding an0 pre a/ard s'rve0 reports, sho'&d $e in)&'ded in the )ontra)t fi&e. Discussions 1it/ Offeror ?n doing the resear)h ne)essar0 to ma2e a responsi$i&it0 determination, 0o' are free to dis)'ss /ith the $idderAofferor an0 )on)erns /hi)h 0o' ma0 have regarding the $idderKsAofferorKs responsi$i&it0. 5o' are free to dis)'ss iss'es of >responsi$i&it0> /ith the $idder, 'n&i2e iss'es regarding >responsiveness,> /hi)h )annot $e dis)'ssed /ith $idders 8See ,--. Se)tion 4.4.49. 0$* COST AND PRICE ANALDSIS RE@UIREMENT -aragraph !0 of *TA Cir)'&ar 4220.!: re<'ires a )ost or pri)e ana&0sis for ever0 pro)'rement a)tion( =rantees m'st perform a )ost or pri)e ana&0sis in )onne)tion /ith ever0 pro)'rement a)tion, in)&'ding )ontra)t modifi)ations. The method and degree of ana&0sis is dependent on the fa)ts s'rro'nding the parti)'&ar pro)'rement sit'ation, $'t as a starting point, grantees m'st ma2e independent estimates $efore re)eiving $ids or proposa&s. 8a9 Cost Ana&0sis A )ost ana&0sis m'st $e performed /hen the offeror is re<'ired to s'$mit the e&ements 8i.e., 7a$or Bo'rs, Overhead, .ateria&s, et).9 of the estimated )ostQ e.g., 'nder professiona& )ons'&ting and ar)hite)t'ra& and engineering servi)es )ontra)ts. A )ost ana&0sis /i&& $e ne)essar0 /henever ade<'ate pri)e )ompetition is &a)2ing and for so&e so'r)e pro)'rements, in)&'ding )ontra)t modifi)ations or )hange orders, 'n&ess pri)e reasona$&eness )an $e esta$&ished on the $asis of a )ata&og'e or mar2et pri)e of a )ommer)ia& prod')t so&d in s'$stantia& <'antities to the genera& p'$&i) or on the $asis of pri)es set $0 &a/ or reg'&ation. 8$9 -ri)e Ana&0sis A pri)e ana&0sis ma0 $e 'sed in a&& other instan)es to determine the reasona$&eness of the proposed )ontra)t pri)e. 8)9 -rofit =rantees /i&& negotiate profit as a separate e&ement of the pri)e for ea)h )ontra)t in /hi)h there is no pri)e )ompetition and in a&& )ases /here )ost ana&0sis is performed.
-age %
8d9 *edera& Cost -rin)ip&es Costs or pri)es $ased on estimated )osts for )ontra)ts 'nder grants /i&& $e a&&o/a$&e on&0 to the e;tent that )osts in)'rred or )ost estimates in)&'ded in negotiated pri)es are )onsistent /ith *edera& )ost prin)ip&es. =rantees ma0 referen)e their o/n )ost prin)ip&es that )omp&0 /ith app&i)a$&e *edera& )ost prin)ip&es. DEFINITIONS Cost Ana&0sis A )ost ana&0sis entai&s the revie/ and eva&'ation of the separate )ost e&ements and the proposed profit of an offerorKs )ost or pri)ing data and the @'dgmenta& fa)tors app&ied in estimating the )osts. A )ost ana&0sis is genera&&0 )ond')ted to form an opinion on the degree to /hi)h the proposed )ost, in)&'ding profit, represents /hat the performan)e of the )ontra)t sho'&d )ost, ass'ming reasona$&e e)onom0 and effi)ien)0. -ri)e Ana&0sis A pri)e ana&0sis invo&ves e;amining and eva&'ating a proposed pri)e /itho't eva&'ating its separate )ost and profit e&ements. -ri)e ana&0sis is $ased essentia&&0 on data that is verifia$&e independent&0 from the offerorKs data. *edera& Cost -rin)ip&es ?t is important to 'nderstand that grant f'nds ma0 on&0 $e 'sed $0 the grantee to pa0 for allowa$le costs w)en t)e contract is a cost1%lus1fi7ed1fee contract or w)en a fi7ed %rice contract is $ein! ne!otiated on t)e $asis of cost estimates su$mitted $y t)e contractor. The term allowa$le cost is defined in 4H C*I "!.20! 2. 84H C*I "! is -art "! of the *edera& A)<'isition Ieg'&ation 8*AI9. The )ommon grant r'&e, fo'nd in 49 C*I !H.22 Allowa$le Costs, re<'ires that the )ost prin)ip&es fo'nd in the *AI 84H C*I "!9 $e 'sed to determine a&&o/a$&e )osts for )ommer)ia& 8>for profit>9 organiGations. The *AI ma0 $e a))essed on the ?nternet. 20! =rantees ma0 'se their o/n )ost prin)ip&es if t)ey are consistent wit) t)e Federal cost %rinci%les. This re<'irement to 'se the *AI )ost prin)ip&es affe)ts the a&&o/a$i&it0 of )osts not on&0 on )ost reim$'rsement )ontra)ts $'t a&so /hen eva&'ating and negotiating )ost e&ements in order to esta$&ish a pri)e on a fi;ed pri)e )ontra)t. Th's, /henever 0o' do a cost analysis of an offerorKs )ostApri)e proposa& 0o' /i&& need to 'se the *edera& )ost prin)ip&es 8or prin)ip&es )onsistent /ith them9 to determine /hat )osts are a))epta$&e. DISCUSSION In "eneral! t/e ur ose of cost or rice anal#sis is to ensure t/at #ou do not a# unreasona&l# /i"/ rices$ Co1e%er! rices 1/ic/ are unreasona&l# lo1 can also &e detrimental to #our a"enc#Ks ro"ram if t/e# ro%e to &e an indication t/at t/e offeror /as made a mistaEe or doesnKt understand t/e 1orE to &e erformed$ It is im ortant to do a cost)realism anal#sis of cost ro osals su&mitted for cost reim&ursement contracts t/at are
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?nternet address for Code of *edera& Ieg'&ations is( http(AA///.arnet.govAfarA
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to &e com etiti%el# a1arded in order to determine t/e realism of t/e %arious ro osals and not ermit a H&u# inI 6an unrealisticall# lo1 estimated contract cost and fee9 t/at 1ill e%entuall# result in a su&stantial cost o%errun$ Before issuin" a solicitation! de%elo an inde endent estimate of t/e ro er rice le%el for t/e su lies or ser%ices to &e urc/ased$ T/e estimate can ran"e from a sim le &ud"etar# estimate to a com le; estimate &ased on ins ection of t/e roduct itself and re%ie1 of suc/ items as dra1in"s! s ecifications! and rior data 6suc/ as cost data from rior rocurements9$ T/e estimate can t/en assist in a determination of reasona&leness or unreasona&leness of rice and7or t/e estimated costs to do t/e 'o&$ If #ou 1ill &e reAuestin" a ro osal 1it/ a &reaEdo1n of estimated costs! &e sure to reAuire a format for t/e cost ro osal t/at 1ill allo1 #ou to com are t/e cost elements ro osed 1it/ t/ose t/at 1ere de%elo ed for #our in)/ouse estimate$ Best Practices The *edera& A)<'isition Ieg'&ation 8*AI9, S'$part !5.404 !8a9819 L &ro%osal Analysis Tec)niques/ referen)es a five vo&'me set of Contract &ricin! Reference .uides to g'ide pri)ing and negotiation personne&. These g'ides are informationa& and not dire)tive. The0 are avai&a$&e via the ?nternet. 202 The #ationa& Transit ?nstit'te 8#T?9 at I'tgers Universit0 offers a )o'rse for *TA grantees tit&ed 3Cost and -ri)e Ana&0sis and Contra)t #egotiation.4 ?t is a fo'r da0 )o'rse offered free of )harge to *TA grantees $'t it is a&so open to the p'$&i) for a fee. 20" -art of the #T? )o'rse man'a& materia& in)&'des a &ricin! .uide for FTA .rantees that is $ased in part on the Defense Contra)t A'dit Agen)0+s 8DCAA9 &ricin! anual. The &ricin! .uide for FTA .rantees is no/ avai&a$&e on &ine at http(AA///.fta.dot.govAftahe&p&ineA-ri)eJ='ide.do), and grantees are 'rged to 'ti&iGe this reso'r)e. Price Anal#sis L The a))epted forms of %rice analysis te)hni<'es dis)'ssed in the &ricin! .uide for FTA .rantees are( !. 2. ". 4. Ade<'ate pri)e )ompetitionQ -ri)es set $0 &a/ or reg'&ationQ :sta$&ished )ata&og pri)es and mar2et pri)esQ Comparison to previo's p'r)hasesQ
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http(AA///.a)<.osd.mi&AdpapA)ontra)tpri)ingAinde;.htm Conta)t #T? at 81"29 9"2 !100 or on&ine at ///.ntion&ine.)om
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5. Comparison to a va&id grantee independent estimateQ and %. Oa&'e ana&0sis. 8!9 Adequate %rice com%etition re<'ires the fo&&o/ing )onditions( At &east t/o responsi$&e offerors respond to a so&i)itation. :a)h offeror m'st $e a$&e to satisf0 the re<'irements of the so&i)itation. The offerors m'st independent&0 )ontend for the )ontra)t that is to $e a/arded to the responsive and responsi$&e offeror s'$mitting the &o/est eva&'ated pri)e. :a)h offeror m'st s'$mit pri)ed offers responsive to the e;pressed re<'irements of the so&i)itation.
?f the fo'r )onditions a$ove are met, pri)e )ompetition is ade<'ate 'n&ess( The so&i)itation /as made 'nder )onditions that 'nreasona$&0 den0 one or more 2no/n and <'a&ified offerors an opport'nit0 to )ompete. The &o/ )ompetitor has s')h an advantage over the )ompetitors that it is pra)ti)a&&0 imm'ne to the stim'&'s of )ompetition. The &o/est fina& pri)e is not reasona$&e, and this finding )an $e s'pported $0 fa)ts.
829 &rices set $y law or re!ulation are fair and reasona$&e. =rantees sho'&d a)<'ire a )op0 of the rate s)hed'&es set $0 the app&i)a$&e &a/ or reg'&ation. On)e these s)hed'&es are o$tained, verif0 that the0 app&0 to 0o'r sit'ation and that 0o' area $eing )harged the )orre)t pri)e. *or 'ti&it0 )ontra)ts, this po&i)0 app&ies on&0 to pri)es pres)ri$ed $0 an effe)tive, independent reg'&ator0 $od0. 8"9 8sta$lis)ed catalo! %rices re<'ire the fo&&o/ing )onditions( :sta$&ished )ata&og pri)es e;ist. The items are )ommer)ia& in nat're. The0 are so&d in s'$stantia& <'antities. The0 are so&d to the genera& p'$&i).
The idea $ehind )ata&og pri)es is that a )ommer)ia& demand e;ists and s'pp&iers have $een deve&oped to meet that demand. 5o' are tr0ing to ens're that 0o' are getting at &east the same pri)e as other $'0ers in the mar2et for these items. 5o' need to $e s're that the )ata&og is not simp&0 an interna& pri)ing do)'ment. Ie<'est a )op0 of the do)'ment or at &east the page on /hi)h the pri)e appears. 8sta$lis)ed mar(et %rices are $ased on the same prin)ip&e as )ata&og pri)es e;)ept there is no )ata&og. A mar2et pri)e is a )'rrent pri)e esta$&ished in the 's'a& or ordinar0 )o'rse of $'siness $et/een $'0ers and se&&ers free to $argain. These pri)es m'st $e verified $0 $'0ers
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and se&&ers /ho are independent of the offeror. ?f 0o' do not 2no/ the names of other )ommer)ia& $'0ers and se&&ers, 0o' ma0 o$tain this information from the offeror. 849 Com%arison to %revious %urc)ases L Changes in <'antit0, <'a&it0, de&iver0 s)hed'&es, the e)onom0, and in)&'sion of non re)'rring )osts s')h as design, )apita& e<'ipment, et). )an )a'se pri)e variations. :a)h differing sit'ation m'st $e ana&0Ged. A&so ens're that the previo's pri)e /as fair and reasona$&e. This determination m'st $e $ased 'pon a ph0si)a& revie/ of the do)'mentation )ontained in the previo's fi&es. 859 Com%arison to a valid !rantee inde%endent estimate > Oerif0 the fa)ts, ass'mptions, and @'dgments 'sed $0 0o'r estimator. Bave the estimator give 0o' the method and data 'sed in deve&oping the estimate. *or e;amp&e, did pri)es )ome from )'rrent )ata&ogs or ind'str0 standardsW ,e s're that 0o' fee& )omforta$&e /ith the estimate $efore re&0ing on it as a $asis for determining a pri)e to $e fair and reasona$&e. 8%9 Nalue analysis re<'ires 0o' to &oo2 at the item and the f'n)tion it performs so 0o' )an determine its /orth. The de)ision of pri)e reasona$&eness remains /ith the )ontra)ting offi)erQ ho/ever, the re<'iring a)tivit0 sho'&d a&/a0s $e )ons'&ted for their e;pertise, and the0 sho'&d parti)ipate in ma2ing the de)ision. Cost Ana&0sis L Cost analysis is the revie/ and eva&'ation of the separate )ost e&ements and profit in an offeror+s or )ontra)tor+s proposa& and the app&i)ation of @'dgment to determine ho/ /e&& the proposed )osts represent /hat the )ost of the )ontra)t sho'&d $e, ass'ming reasona$&e e)onom0 and effi)ien)0. Cost realism analysis is the pro)ess of independent&0 revie/ing and eva&'ating spe)ifi) e&ements of ea)h offeror+s proposed )ost estimate to determine /hether the proposed )ost e&ements are rea&isti) for the /or2 to $e performedQ ref&e)t a )&ear 'nderstanding of the re<'irementsQ and are )onsistent /ith the 'ni<'e methods of performan)e and materia&s des)ri$ed in the offeror+s te)hni)a& proposa&. Cost rea&ism ana&0ses sho'&d $e performed on )ompetitive&0 a/arded )ost reim$'rsement )ontra)ts to determine the pro$a$&e )ost of performan)e for ea)h offeror. The pro$a$&e )ost ma0 differ from the proposed )ost and sho'&d ref&e)t the grantee+s $est estimate of the )ost of an0 )ontra)t that is most &i2e&0 to res'&t from the offeror+s proposa&. The pro$a$&e )ost is determined $0 ad@'sting ea)h offeror+s proposed )ost to ref&e)t an0 additions or red')tions in )ost e&ements to rea&isti) &eve&s $ased on the res'&ts of the )ost rea&ism ana&0sis. T)e %ro$a$le cost s)ould $e used for %ur%oses of evaluation to determine t)e $est value.
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Cost proposa&s and cost analysis are t0pi)a&&0 asso)iated /ith negotiated pro)'rements, in)&'ding modifi)ations and )hange orders to e;isting )ontra)ts. ?n order to fa)i&itate the eva&'ation of )ontra)tor )ost proposa&s, it is 's'a&&0 he&pf'& to pres)ri$e the format of the )ost proposa&s in 0o'r so&i)itation. This /i&& ens're that a&& offerors s'$mit proposa&s that )an $e easi&0 )ompared to one another on a )ost e&ement $asis 8if the pro)'rement is )ompetitive9, and it /i&& fa)i&itate 0o'r eva&'ation of proposa&s against the in ho'se estimate and for p'rposes of a )ost rea&ism ana&0sis. A tec)nical analysis of the proposed t0pes and <'antities of materia&s, &a$or, spe)ia& too&ing, e<'ipment, trave& re<'irements, and other dire)t )osts /i&& 's'a&&0 $e ne)essar0. These ana&0ses /i&& have to $e performed $0 personne& spe)ia&iGed in engineering, s)ien)e or other dis)ip&ines. At a minim'm, the te)hni)a& ana&0sis sho'&d e;amine the t0pes and <'antities of materia& proposed and the need for the t0pes and <'antities of &a$or ho'rs and the &a$or mi;. Advisory audit assistance is strong&0 re)ommended /henever the va&'e of an offeror+s proposa& is signifi)ant and the )osts of o$taining the a'dit assistan)e do not o't/eigh the potentia& $enefits. ?f the offeror has performed /or2 for *edera& agen)ies, there ma0 ver0 /e&& $e a *edera& a'dit agen)0, s')h as DCAA, that )an $e )onta)ted $0 phone for the &atest avai&a$&e a'dit information regarding dire)t &a$or rates, indire)t )ost rates, and other pertinent )osts. ?f there are no *edera& a'ditors, 0o' sho'&d )onsider )onta)ting the independent C-A firm that a'dits and )ertified the )ontra)tor+s &atest ann'a& finan)ia& statements. Oftentimes these C-A firms )an provide a'dit assistan)e. ?f 0o' do re<'est an advisor0 pri)ing a'dit for the p'rpose of )ond')ting negotiations, $e s're to inform the a'ditor that the *AI -art "! )ost prin)ip&es m'st $e 'sed to determine a&&o/a$&e )osts. *:. And a&so $e s're to eva&'ate the proposed )osts of an0 s'$)ontra)tor that has s'$mitted )ost data to the prime )ontra)tor. -rofitA*ee To negotiate a fair and reasona$&e profit, )onsideration sho'&d $e given to( The )omp&e;it0 of the /or2 to $e performed, The ris2 $orne $0 the )ontra)tor, The )ontra)torKs investment, The amo'nt of s'$)ontra)ting, The <'a&it0 of its re)ord of past performan)e, and ?nd'str0 profit rates in the s'rro'nding geographi)a& area for simi&ar /or2.
Ne"otiation and Documentation L -re negotiation .emorand'm Some form of pre negotiation do)'ment sho'&d $e prepared for a&& negotiations. The e;tent of detai& and the )ontent /i&& depend on the magnit'de and
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*TA C4220.!: paragraph !0.d.
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)omp&e;it0 of the negotiation. T)ere are a num$er of im%ortant reasons for !rantees to ma(e use of a %re1ne!otiation memorandum( !. ?t /i&& fa)i&itate effective cost and*or %rice analysis. A &a)2 of effe)tive )ost or pri)e ana&0sis has $een one of the most )ommon pro$&em areas 'n)overed $0 *TA -ro)'rement S0stem Ievie/s 8-SIs9. 205 2. ?t /i&& encoura!e ne!otiations /ith the offeror $0 revea&ing those areas /here the )osts or pri)e needs to $e <'estioned and dis)'ssed /ith the offeror. Bere again the -SIs have sho/n that man0 grantees simp&0 a))ept )ontra)tor proposa&s /itho't negotiations. ". ?t /i&& do)'ment the fi&e /ith an e7%lanation of t)e $asis for t)e contract %ri)e and it )an $e 'sed to %rovide a )istory of t)e %rocurement. This fai&'re to do)'ment ho/ the )ontra)t pri)e /as determined and to provide a histor0 of the pro)'rement is 0et another pro$&em area dis)&osed $0 -SIs. 20% 4. ?t /i&& afford the grantee an e7cellent met)od of su%ervisory*mana!ement review and a%%roval of t)e contract ne!otiatorPs strate!y for t)e ne!otiations. This /o'&d in)&'de the )on)'rren)e of the te)hni)a& personne& 8'ser offi)e9 in that strateg0, /hi)h is an important point if the negotiations are to $e s'))essf'& and a&& of the agen)0+s goa&s are to $e met. A samp&e -. is in)&'ded in the &ricin! .uide for FTA .rantees and is reprod')ed $e&o/. 201 This -. )an $e tai&ored to meet an0 negotiation s)enario that 0o' might have, from &arge )ompetitive pro)'rements to the negotiation of )ontra)t )hange orders or modifi)ations. PRE)NE<OTIATION MEMORANDUM 6PM9 FORMAT !. ". 4. 5. =rantee Contra)ting A)tivit0 JJJJJJJJJJJJJJJJJJJJJ 2. DateJJJJJJJJJJJJJ I*-A?*, or Contra)t #'m$er JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ .odifi)ation #'m$er JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ This a)<'isition is $eing a))omp&ished $0 8)he)2 one9 *'&& and Open Competition JJJJJJJJJJJJJ Other than *'&& and Open Competition JJJJJ
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*TA C4220.!: paragraph !0. *TA C4220.!: paragraph 1.i. A--:#D?R C( #egotiation C Do)'mentation.
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State reasons for other than f'&& and open )ompetition. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J %. Contra)t T0pe JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 1. OfferorKs 8#ame, Address9 JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJ H. ,'siness SiGe and T0pe 8Sma&&, 7arge, D,:, WO,9 JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 9. OfferorKs -roposed Amo'nt JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ !0. -ro)'rement Des)ription 8$rief&0 des)ri$e the pro)'rement9 JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJ !!. -ri)ing Str')t're Cost *eeA-rofit 8JJJJJJP9 Tota& -ri)e -renegotiation O$@e)tive SJJJJJJJJJJJJJJJJJJ SJJJJJJJJJJJJJJJJJJ SJJJJJJJJJJJJJJJJJJ
!2. De&iver0 or -erforman)e -eriod JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ !". -oints of Conta)t for this Do)'ment 8name and phone n'm$er9 a. Contra)tsJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ $. Te)hni)a&JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ PART A INTRODUCTION
!. ?n this paragraph, des)ri$e the a)<'isition, in)&'ding a $rief histor0 of the re<'irement, the p&a)e of performan)e, and an0 other pertinent information. N'estions to $e ans/ered in)&'de( What is itW Wh0 is it neededW What is it forW N'antit0W ?f this is a )ontra)t modifi)ation, /hat events or )ir)'mstan)es )ontri$'ted to the needed )hangeW State the =ranteeKs estimated amo'nt of the proposed a)<'isition.
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2. ?n this paragraph, address the e;tent of )ompetition 'nder the a)<'isition. ?s the a)<'isition $eing a))omp&ished 'nder f'&& and open )ompetitionW ?f other than f'&& and open, in)&'de a statement regarding so&e so'r)e approva&. Additiona&&0, /as the re<'irement p'$&i)iGed in a))ordan)e /ith =ranteeKs pro)ed'resW 8?f not, )ite the e;)eption.9 Bo/ man0 re<'ests for so&i)itations /ere re)eivedW Bo/ man0 offers /ere re)eivedW
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". ?n this paragraph, in)&'de 0o'r p&anned negotiation s)hed'&e, and identifi)ation of the =ranteeKs negotiating team mem$ers $0 name and position. PART B SPECIAL FEATURES! RE@UIREMENTS AND PRENE<OTIATION COMPLIANCE
The fo&&o/ing items sho'&d $e addressed for a&& negotiated a)<'isitions( !. The 'se of sea&ed $id pro)ed'res is not appropriate for this a)<'isition $e)a'se JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJ 2. The prospe)tive )ontra)tor8s9 hasAhave $een determined to $e responsi$&e te)hni)a&&0 and are finan)ia&&0 sta$&e. 5esJJJJJJJ #oJJJJJJJ .a@or s'$)ontra)tors 8&ist their names9 have $een revie/ed and fo'nd to $e te)hni)a&&0 responsi$&e and are finan)ia&&0 sta$&e. ". The prospe)tive )ontra)tor8s9 isAare not on the &ist of >-arties :;)&'ded from -ro)'rement and #onpro)'rement -rograms.> 8The fo&&o/ing items sho'&d $e in)&'ded /hen app&i)a$&e(9 4. -re )ontra)t )ost in the amo'nt of SJJJJJJJJJJJ for the periodJJJJJJJJJJJJJJJJJJ /ere approved $0 8name of individ'a&9. 5. A'thorit0 to enter into a &etter )ontra)t /as approved $0 8name of individ'a&9. %. Are optiona& <'antities $eing proposed and are the0 $eing eva&'ated as part of the a/ard de)isionW 20H 1. The offeror has s'$mitted >Cost or -ri)ing Data.> 5esJJJJJJJJ #oJJJJJJJJJ
H. >Cost or -ri)ing Data> for ma@or s'$)ontra)t8s9 has $een s'$mitted. 5esJJJJJJJJJJ #oJJJJJJJJJJ 9. Written /aiver of the a'dit /as granted $0 8name of individ'a&9.
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*TA C4220.!: paragraph 9.i. 8!9.
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!0. The offeror8s9 hasAhave an ade<'ate a))o'nting s0stem as determined $0 8name of individ'a&9. 8Cost reim$'rsement )ontra)ts, fi;ed pri)e /ith pri)e redetermination, in)entive t0pes and )ontra)ts )ontaining progress pa0ment provisions.9 !!. ::O )omp&ian)e has $een re<'ested or o$tained. 5esJJJJJJJJJ #oJJJJJJJJJ
!2. ?n the event =rantee propert0 is to $e f'rnished to the offeror, has the Contra)ting Offi)er determined that the )ontra)tor has an a))epta$&e propert0 )ontro& s0stemW =rantee f'rnished e<'ipment estimated va&'e SJJJJJJJJJJJJJJJJ)onsisting main&0 of JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ. =rantee f'rnished materia& estimated va&'e SJJJJJJJJJJJJJJJ )onsisting main&0 of JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ. !". Address an0 deviations, spe)ia& )&a'ses or )onditions anti)ipated. !4. The offeror has JJJJJ has not JJJJJJ s'$mitted a s'$)ontra)ting p&an. ,rief&0 dis)'ss the s'$)ontra)ting p&an if app&i)a$&e. PART C COST AND PROFIT7FEE ANALDSIS
?n this -art C, )ompare, in s'mmar0, the offerorKs proposa&, the a'dit andAor other re)ommendations, and the =ranteeKs -renegotiation o$@e)tive. *or e;amp&e( Cost :&ement Dire)t 7a$or 7a$or Overhead Dire)t .ateria& .atK& Overhead Other Dire)t Costs S'$tota& =CA S'$tota& -rofitA*ee Tota& Offeror+s -roposa& S S S S S S S S S S A'ditATe)hni)a& Ie)ommendation \ S S S S S S S S S S -renegotiation O$@e)tive S S S S S S S S S S #'m$ered #otes \\ 8!9 829 8"9 829 849 829 859 8%9
The a$ove is an e;amp&e of the vario's )ost e&ements that sho'&d $e revie/ed /hen ana&0Ging a proposa&. These e&ements are not to $e interpreted as a&& en)ompassing $e)a'se the )ost e&ements of ea)h offeror ma0 $e different. UAudit7Tec/nical Recommended3
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?n genera&, an a'dit report /i&& not in)&'de re)ommendations on dire)t &a$or ho'rs or the va&idit0 of materia& and other dire)t )osts. The te)hni)a& eva&'ationAana&0sis genera&&0 /i&& not in)&'de rate re)ommendations. Therefore, this )o&'mn sho'&d $e a )om$ination of 0o'r t/o reports 8a'dit and te)hni)a&9. ?n )ases /here 0o' have not o$tained an a'dit, 0o' need on&0 ref&e)t the >OfferorKs -roposa&> and >-renegotiation O$@e)tive> )o&'mns. The te)hni)a& eva&'ation res'&ts )an $e addressed in 0o'r dis)'ssions, and /o'&d norma&&0 $e 'sed in the esta$&ishment of 0o'r o$@e)tive. *or 0o'r information, >Te)hni)a& Ana&0sis> is defined as the e;amination and eva&'ation $0 personne& having spe)ia&iGed 2no/&edge, s2i&&s, e;perien)e, or )apa$i&it0 in engineering, s)ien)e, or management of proposed <'antities and 2inds of materia&s, &a$or, pro)esses, spe)ia& too&ing, fa)i&ities, and asso)iated fa)tors /hi)h have $een set forth in a proposa&. ?n order to determine and report on the need for the reasona$&eness of the proposed reso'r)es ass'ming reasona$&e e)onom0 and effi)ien)0, spe)ia& 2no/&edge is re<'ired. Therefore, a te)hni)a& eva&'ation that doesnKt address individ'a& e&ements of )ost 8i.e., &a$or )ategories, &a$or ho'rs, materia&, other dire)t )osts, et).9, $'t mere&0 states that the proposa& is a))epta$&e, is not )onsidered ade<'ate. \\Num&ered Notes3 6(9 Direct La&or Compare, in detai&ed dis)'ssion, the proposa&, the a'dit andAor te)hni)a& re)ommendations, and the prenegotiation o$@e)tive dire)t &a$or )ategories, ho'rs and rates. *or e;amp&e( OfferorKs -roposa& Bo'rs Iate ;; S ;; S ;; S A'ditATe)hni)a& Ie)ommendation Amt. Bo'rs Iate Amt. S ;; S S S ;; S S S ;; S S S S -renegotiation O$@e)tive Bo'rs Iate Amt. ;; S S ;; S S ;; S S S
7a$or Categor0 :ngineer -rogrammer C&eri)a& Total OfferorKs -roposa&
*irst s'$paragraph. S'mmariGe the offerorKs rationa&e for the proposed &a$or )ategories, ho'rs and rates. N'estions 0o' )an )onsider are( Are the proposed &a$or rates the res'&t of a negotiated for/ard pri)ing rate agreement 8*-IA9W Are the0 'na'dited $idding rates that have $een approved at a )orporate &eve&W Are the0 )'rrent a)t'a& rates for spe)ifi) emp&o0ees or a )omposite rate for personne& 'nder ea)h &a$or )ategor0W ?f the &a$or rates are deve&oped on a spe)ifi) $ase rate, /hat es)a&ation fa)tor 8if an09, has the offeror app&ied to the $ase rateW ?s that a reasona$&e fa)torW Are the proposed &a$or )ategories and ho'rs $ased 'pon the offerorKs
-age !1
previo's e;perien)eW What eviden)e of histori)a&&0 in)'rred ho'rs has the offeror providedW Or, is the proposa& an engineering estimate of the pro@e)ted &a$or and e;pertise to a))omp&ish the re<'irements of the a)<'isitionW Do the proposed ho'rs )orrespond to the performan)e periodW A'ditATe)hni)a& Ie)ommendation Se)ond s'$paragraph. S'mmariGe the $asis of the a'dit or other re)ommendations. Bo/ have the re)ommended &a$or rates $een deve&opedW *or instan)e, a'dit reports genera&&0 'se the Data Ieso'r)es ?ndi)es in deve&oping &a$or rate re)ommendations. This has $een proven to $e a re&ia$&e escalation %redictor for &a$or rates and materia& items. ?f 0o' have an a'dit report, the information for this s'$paragraph /i&& $e /ithin the a'dit report. ?n the event 0o' have not o$tained an a'dit, it is advisa$&e to )onta)t 0o'r state a'dit offi)e and re<'est )'rrent rateAes)a&ation re)ommendations. The re)ommendations of the te)hni)a& eva&'ation sho'&d a&so $e addressed 'nder this s'$paragraph. ?t is important that the eva&'ation in)&'des )omp&ete and fa)t'a& s'pport for an0 e;)eptions ta2en to proposed dire)t &a$or )ategories and ho'rs. -renegotiation O$@e)tive Third s'$paragraph. Dis)'ss the =ranteeKs negotiation o$@e)tive. What is it $ased 'ponW Did 0o' re&0 on the a'dit re)ommendationsW Did 0o' re&0 on the te)hni)a& eva&'ation in deve&opment of 0o'r o$@e)tive &a$or )ategories and ho'rsW An e;)e&&ent reso'r)e for additiona& )onsiderations d'ring ana&0sis of a proposa& is the Armed Servi)es -ri)ing .an'a&, AS-.. Additiona&&0, the eva&'ation )onsiderations in eva&'ating man'fa)t'ring &a$or vers's engineering &a$or differ great&0. ?n a man'fa)t'ring environment, other )onsiderations ma0 in)&'de app&i)ation of &earning )'rve theor0, effi)ien)0 fa)tors, re)'rring vers's non re)'rring &a$or, et). ?t is 0o'r responsi$i&it0 to esta$&ish a reasona$&e o$@e)tive after )onsidering and ana&0Ging a&& of the avai&a$&e data. Statements to the effe)t, > TB: O**:IOI BAS -IO-OS:D TB: SA.: IAT:S O# OTB:I CO#TIACTS,> are not ade<'ate /itho't dis)'ssion of ho/ pri)e reasona$&eness /as determined 'nder the other )ontra)ts. 6*9 La&or O%er/ead! Material O%er/ead! and <+A
Compare, in detai&ed dis)'ssion, the offerorKs proposa&, the a'dit andAor other re)ommendations, and the =ranteeKs o$@e)tive for &a$or overhead, materia& overhead, and =CA. *or e;amp&e( Categor0 7a$or Overhead .ateria& Overhead =CA OfferorKs -roposa& Iate ;P ;P ;P A'ditATe)hni)a& Ie)ommendation Iate Amt. ;P S ;P S ;P S -renegotiation O$@e)tive Iate Amt. ;P S ;P S ;P S
Amt. S S S
-age !H
OfferorKs -roposa& *irst s'$paragraph. Des)ri$e ho/ the offeror deve&oped the proposed indire)t rates. Does a for/ard pri)ing rate agreement e;istW ?f so, /hat is the period )overed $0 the agreementW This information sho'&d $e provided $0 the offeror. A'ditAOther Ie)ommendation Se)ond s'$paragraph. :;p&ain /hat the a'ditKs re)ommendations are $ased 'pon. This ma0 in)&'de e;)eption ta2en to some )ost e&ements /ithin the overhead poo&, s')h as fringe $enefits, 'nemp&o0ment ta;es, rent, depre)iation, et). This information sho'&d $e ref&e)ted in the a'dit report. ?f 0o' do not o$tain an a'dit report, 0o' )an re<'est )'rrent rate re)ommendations andAor histori)a& a)t'a& rates from 0o'r state a'dit offi)e. Comparing the offerorKs proposed rates to the a)t'a& rates )an provide a good meas're on ho/ a))'rate the offerorKs proposed rates have $een. -renegotiation O$@e)tive Third paragraph. Address ho/ 0o' deve&oped the =ranteeKs prenegotiation o$@e)tive, and 'pon /hat information 0o' re&ied. Are 0o'r o$@e)tive rates $ased 'pon re)ommendationsW O))asiona&&0, 0o' ma0 e;perien)e a sit'ation /here 0o' havenKt o$tained an a'dit report, and 0o'r state a'dit offi)e has no information on a spe)ifi) offeror. ?n s')h )ases, it ma0 $e to 0o'r advantage to re<'est an a'dit of the offerorKs rates. A$sent this information, 0o' /i&& need to eva&'ate the offerorKs proposed rates in detai& 8i.e., )ost e&ements in)&'ded in the indire)t poo&s9 for a&&o/a$i&it0 and a&&o)a$i&it0. Comparing one offerorKs rates /ith those of another offerorKs is not an a))epta$&e method in an0 )ase. A&so, )omparing this 0earKs proposed rates to &ast 0earKs rates is not a $asis for esta$&ishing reasona$&eness of the )'rrent&0 proposed rate. 6-9 Direct Material
-rovide a detai&ed $rea2do/n and )ompare, in detai&ed dis)'ssions, the offerorKs materia& <'antities and 'nit pri)es. .ateria& -/r S'p C. Chips Wire Other Total OfferorKs -roposa& Nt0 U;; S ;; S ;; S ;; S Te)hni)a&AA'dit Ie)ommendation Nt0 U- Amt ;; S S ;; S S ;; S S ;; S S S -renegotiation O$@e)tive Nt0 U- Amt ;; S S ;; S S ;; S S ;; S S S
Amt S S S S S
-age !9
OfferorKs -roposa& *irst s'$paragraph. Address the $asis of the offerorKs proposed dire)t materia& 8engineering estimateW $ased 'pon histor0W et).9 and )osts asso)iated /ith the materia& 8)ata&og pri)esW ora& <'otesW /ritten <'otesW histori)a& pri)es es)a&ated $0 SW )ompetitiveW, et).9 Wi&& there $e an0 s)rap, attrition or varian)e fa)tors to )onsiderW ?f app&i)a$&e, has the offeror in)&'ded an ana&0sis for &arge do&&ar itemsW ?s the ana&0sis meaningf'&W A'ditATe)hni)a& Ie)ommendation Se)ond s'$paragraph. Address the a'ditAte)hni)a& re)ommendations. Bas the a'ditorAoriginator ta2en e;)eption to an0 of the proposed materia& items, <'antities or asso)iated pri)esW Bave e;)eptions $een ade<'ate&0 s'pportedW -renegotiation O$@e)tive Third s'$paragraph. S'pport the =ranteeKs prenegotiation o$@e)tive. ?f 0o' have ta2en e;)eption to an0 materia& items andAor <'antities, /hat information have 0o' re&ied 'pon to rea)h 0o'r )on)&'sionsW ?f 0o' have ta2en e;)eption to an0 pri)ing aspe)ts of the offerorKs proposa&, e;p&ain f'&&0 ho/ 0o' arrived at 0o'r o$@e)tive. ?n )ases /here 0o' have no a'dit report, the importan)e of a thoro'gh te)hni)a& eva&'ation is in)reased. 5o' m'st ma2e a determination of pri)e reasona$&eness for the dire)t materia& items. When )ha&&enging a )ost, e;p&ain the $asis for 0o'r position. >Appears too high,> /itho't rationa&e, is not s'ffi)ient. 6.9 Ot/er Direct Costs 6ODC9 Compare, in detai& dis)'ssions, the offerorKs proposa&, the a'dit andAor te)hni)a& re)ommendation, and the prenegotiation o$@e)tive for other dire)t )osts. *or e;amp&e( Cost :&ement Comp'ter S'pport *reight Air Trave& -er Diem Cons'&tant Total ODC OfferorKs -roposa& *irst s'$paragraph. S'mmariGe the offerorKs rationa&e for proposing the vario's e;penses. The e&ements a$ove are e;amp&es of the t0pes of )osts genera&&0 in)&'ded as other dire)t )osts 8ODC9. OfferorKs -roposa& S S S S S S A'ditATe)hni)a& Ie)ommendation S S S S S S -renegotiation O$@e)tive S S S S S S
-age 20
Te)hni)a&AA'dit Ie)ommendation Se)ond s'$paragraph. S'mmariGe the a'dit andAor te)hni)a& re)ommendations. Address a&& the items in)&'ded 'nder this e&ement. An0 e;)eptions ta2en m'st $e f'&&0 e;p&ained. -renegotiation O$@e)tive Third paragraph. -rovide an ana&0sis of the items in)&'ded 'nder this )ost e&ement. *or instan)e, are the n'm$er of trips s)hed'&ed )onsidered reasona$&e $0 a'dit or 0o'r te)hni)a& eva&'ationW Are the )osts per trip reasona$&eW 5o' )an )he)2 air trave& rates /ith )ommer)ia& air&ines. Bo/ do the offerorKs proposed )osts )ompare /ith previo's histor0W Did the )ontra)tor app&0 an es)a&ation fa)torW ?s it reasona$&eW ?n 0o'r ana&0sis, 0o' ma0 need to sho/ a &o/er &eve& $rea2do/n 8i.e., a $rea2do/n of the n'm$er and &o)ation of proposed trips9. 609 Profit7Fee Anal#sis -rovide a s'mmar0 that )ompares the offerorKs proposa& and the =ranteeKs prenegotiation o$@e)tive. *or e;amp&e( OfferorKs -roposa& Iate Amt ;;P S OfferorKs -roposa& *irst s'$paragraph. State the offerorKs proposed profitAfee rate, that amo'nt, and an0 other information provided $0 the offeror to s'pport the proposed rate. -renegotiation O$@e)tive Se)ond s'$paragraph. Address the =ranteeKs prenegotiation o$@e)tive profitAfee rate, /hi)h sho'&d $e $ased 'pon app&i)ation of 0o'r str')t'red approa)h.
-renegotiation O$@e)tive Iate Amt ;;P S
Str')t'red approa)hes for determining profit or fee prenegotiation o$@e)tives provide a dis)ip&ine for ens'ring that a&& re&evant fa)tors are )onsidered. =rantees sho'&d 'se a str')t'red approa)h for determining the profit or fee o$@e)tive in those a)<'isitions that re<'ire )ost ana&0sisQ and
-age 2!
.a0 pres)ri$e spe)ifi) e;emptions for sit'ations in /hi)h mandator0 'se of a str')t'red approa)h /o'&d $e )&ear&0 inappropriate. -rofit or fee prenegotiation o$@e)tives do not ne)essari&0 represent net in)ome to )ontra)tors. Iather, the0 represent that e&ement of the potentia& tota& rem'neration that )ontra)tors ma0 re)eive for )ontra)t performan)e over and a$ove a&&o/a$&e )osts. This potentia& rem'neration e&ement and the =ranteeKs estimate of a&&o/a$&e )osts to $e in)'rred in )ontra)t performan)e together e<'a& the =ranteeKs tota& prenegotiation o$@e)tive. 6'st as a)t'a& )osts ma0 var0 from estimated )osts, the )ontra)torKs a)t'a& rea&iGed profit or fee ma0 var0 from negotiated profit or fee, $e)a'se of s')h fa)tors as effi)ien)0 of performan)e, in)'rren)e of )osts the =rantee does not re)ogniGe as a&&o/a$&e and )ontra)t t0pe. ?t is in the =ranteeKs interest to offer )ontra)tors opport'nities for finan)ia& re/ards s'ffi)ient to 8!9 stim'&ate effi)ient )ontra)t performan)e, and 829 attra)t the $est )apa$i&ities of <'a&ified &arge and sma&& $'siness )on)erns to =rantee )ontra)ts. ,oth the =rantee and )ontra)tor sho'&d $e )on)erned /ith profit as a motivator of effi)ient and effe)tive )ontra)t performan)e. #egotiations aimed mere&0 at red')ing pri)es $0 red')ing profit, /itho't proper re)ognition of the f'n)tion of the profit, are not in the =ranteeKs interest. PART D TDPE OF CONTRACT CONTEMPLATED
:;p&ain the t0pe of )ontra)t )ontemp&ated and the rationa&e for se&e)tion.*:8 ?f this prenegotiation memorand'm is $eing /ritten for a modifi)ation to an e;isting )ontra)t, 0o' m'st a&so address the )ontra)t t0pe. PART E MALOR DIFFERENCES
?dentif0 an0 anti)ipated pro$&em areas, e;)eptions ta2en $0 the offeror8s9 to the so&i)itation terms and )onditions, or ma@or differen)es /hi)h ma0 interfere /ith negotiations, and 0o'r intended negotiation strateg0. PART F NE<OTIATION APPROPAL SOU<CT
=ive 0o'r spe)ifi) re)ommendation simi&ar to the fo&&o/ing( >Approva& of this -re #egotiation .emorand'm is re)ommended $ased 'pon the information set forth herein and a'thorit0 to negotiate and enter into a )ontra)t is re<'ested. ?t is )onsidered the opinion of the negotiator that the =ranteeKs prenegotiation o$@e)tives are rea&isti) and )an $e a)hieved.>
*:8
*TA C4220.!: paragraph 1.i.829.
-age 22
-repared $0( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 8Signat're and Tit&e9 Ievie/ed $0( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 8Signat're and Tit&e9 Approved $0( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 8#ame and Tit&e9 .0 Approva& is( 8)he)2 one9 0$- ABARD PROCEDURES DISCUSSION JJJJ a. JJJJ $.
Date(JJJJJJJJJJJJJJJJJ
Un)onditiona& Conditiona& 8See atta)hed e;)eptions.9
Contract a1ards "enerall# follo1 one of t1o rocedures3 Offer and Acce tance ) B/en #ou are full# in a"reement 1it/ all of t/e terms and conditions of t/e offer and #ou desire to maEe an immediate contract a1ard! #ou ma# 1is/ to use a sim le o**er and acce#tance form as t/e a1ardin" document$ All t/at is reAuired is t/at #ou si"n t/e Facce tanceF &locE on t/e form and issue it to t/e contractor$ T/e form ma# reference documents suc/ as t/e ReAuest For Pro osal 6RFP9! 1/ic/ contain t/e terms and conditions u on 1/ic/ t/e offer is &ased$ For an e;am le of an o**er and acce#tance format see A endi; B$4$ *(: T/is a roac/ ma# 1orE 1ell if t/ere /a%e &een no c/an"es to t/e terms ori"inall# esta&lis/ed in t/e RFP! &ut 1/ere t/ere /a%e &een c/an"es! eit/er in t/e offerorKs ro osed terms or resultin" from ne"otiations! #ou ma# a%oid confusion &# draftin" a $ilateral contract document 1/ic/ defines t/e final terms a"reed u on$ Bilateral Contract ) In man# cases t/ere 1ill /a%e &een c/an"es to t/e RFP terms or t/e ro osal terms durin" t/e course of discussions and ne"otiations 1it/ t/e offerors$ In suc/ cases #ou ma# 1ant to issue a reliminar# notice o* a/ard notif#in" t/e successful offeror t/at it /as &een selected for a1ard and t/at an inte"rated $ilateral contract document 1ill &e fort/comin"$ T/is inte"rated contract 1ould incor orate t/e final ne"otiated terms and conditions! includin" rice! s ecifications! 1arrant# ro%isions! etc$ Ca%in" t/e offeror si"n t/e contract 1it/ t/e final terms and conditions a%oids t/e ro&lem of confusion as to 1/at t/e final a"reement actuall# 1as! 1/ic/ could /a en if t/e o**er and acce#tance format 1ere used after re%isions 1ere discussed$ Offerors s/ould &e ad%ised not to start
*(:
A-TA, Standard ,'s -ro)'rement ='ide&ines, 6an'ar0 !991, p. "0.
-age 2"
1orE until a contract /as &een si"ned &# &ot/ arties$ A contract a1ard form$ 0$-$( Pu&lic Announcements of Contract A1ards RE@UIREMENT
endi; B$5 contains t/e Federal
-aragraph !4 of *TA Cir)'&ar 4220.!:, Contract Award Announcement/ states( ?f a grantee anno'n)es )ontra)t a/ards /ith respe)t to an0 pro)'rement for goods and servi)es 8in)&'ding )onstr')tion servi)es9 having an aggregate va&'e of S500,000 or more, the grantee sha&&( a. Spe)if0 the amo'nt of *edera& f'nds that /i&& $e 'sed to finan)e the a)<'isition in an0 anno'n)ement of the )ontra)t a/ard for s')h goods and servi)esQ and $. :;press the said amo'nt as a per)entage of the tota& )osts of the p&anned a)<'isition. DISCUSSION Pu&lic Announcements ) If #our a"enc# maEes u&lic announcements of its contract a1ards! and t/e a1ard /as an a""re"ate %alue of R0::!::: or more! #ou are reAuired to com l# 1it/ t/e contract a1ard announcement ro%ision noted a&o%e$ Pu&lic announcements ma# include ress releases! announcements in u&lic meetin"s! Internet ostin"s and u&licl# released documents$ 0$-$* De&riefin" of Offerors DISCUSSION De&riefin" of unsuccessful offerors can &e %alua&le to &ot/ t/e offerors and t/e rocurin" a"enc#$ A de&riefin" can &e /el ful for a num&er of reasons3 It communicates a sense of fairness and a reciation to offerors 1/o /a%e made si,ea&le in%estments of time and resources in re arin" &ids or ro osals for #our ro"ram$ It ma# a%oid a rotest &# con%incin" a disa ointed offeror t/at #our a"enc#Ks decision 1as carefull# made! factuall# 1ell su orted! and t/e &est one for #our a"enc#$
-age 24
Of most im ortance! it can /el offerors im ro%e t/eir future ro osals! 1/ic/ is a definite ad%anta"e to t/em and to #our a"enc#$
Best Practices Time of De$riefing .ost agen)ies )ond')t their de$riefings after )ontra)t a/ard $e)a'se the0 fee& that eva&'ation information )omm'ni)ated to an offeror prior to a/ard )o'&d en)o'rage a protest or that it might res'&t in an attempt $0 the 'ns'))essf'& offeror to res'$mit an improved proposa& and de&a0 the se&e)tion pro)ess. T0pi)a&&0, one of the items addressed in a de$riefing is the proposa&+s strengths and /ea2nesses in the )onte;t of /hat the transit agen)0 /as &oo2ing forQ this information )o'&d $e va&'a$&e to a )ompetitor in negotiations. On the other hand, some *edera& agen)ies, s')h as #ASA, have had )onsidera$&e s'))ess in avoiding protests $0 'sing pre a/ard de$riefings. #ASA fee&s that an in depth, pre a/ard de$riefing /i&& /or2 to )onvin)e an 'ns'))essf'& offeror that the Agen)0 )hose the $est proposa&, th's dis)o'raging a protest. ?n addition, #ASA /o'&d prefer to dea& /ith a protest, if the0 are going to get one, $efore a/ard and not after a/ard, /hen the0 /o'&d fa)e the ris2 of having to terminate the )ontra)t. Whatever po&i)0 0o'r agen)0 )hooses to 'se needs to $e )aref'&&0 )oordinated /ith 0o'r /ritten protest pro)ed'res, /hi)h are dis)'ssed in Se)tion !!.!, &rotests/ of the ,--.. 2!! -re a/ard De$riefing L The timing of the de$riefing re&ative to )ontra)t a/ard /i&& affe)t the nat're of the information 0o' )an provide to the offeror. ?f an offeror has $een notified that it has $een e;)&'ded from the )ompetitive range or other/ise e;)&'ded from the )ompetition, and the offeror re<'ests a de$riefing prior to a/ard, 0o' /i&& have to de)ide /hether to grant the re<'est or de&a0 the de$riefing 'nti& after )ontra)t a/ard. ?f 0o' de)ide to grant the re<'est for a pre a/ard de$riefing, 0o' m'st &imit the information dis)&osed to that offeror+s proposa& and not dis)&ose an0 information a$o't the other offerors. To revea& information a$o't other offerors /o'&d )ompromise the integrit0 of the pro)'rement. ?nformation revea&ed to an offeror prior to a/ard m'st $e &imited to the fo&&o/ing( The agen)0+s eva&'ation of the signifi)ant strengths and /ea2nesses of the offeror+s proposa& in a))ordan)e /ith the eva&'ation )riteriaQ A s'mmar0 of the reasons for e&iminating the offeror from the )ompetitionQ Ieasona$&e responses to re&evant <'estions a$o't /hether the eva&'ation pro)ed'res )ontained in the so&i)itation and other reg'&ations /ere fo&&o/ed in e&iminating the offeror from the )ompetition.
-re a/ard de$riefings m'st not dis)&ose the fo&&o/ing( The n'm$er of offerorsQ
*((
The *edera& de$riefing pro)ed'res ma0 $e fo'nd in the *AI at s'$part !5.505 and !5.50%.
-age 25
The identit0 of other offerorsQ The )ontent or eva&'ation of other offerors+ proposa&s. The ran2ing of other offerorsQ Confidentia& $'siness information of other offerors. See $e&o/ L "isclosure of Confidential 3nformation.
-ost a/ard De$riefing L Iemem$er that the primar0 o$@e)tive of the de$riefing is to he&p the offeror improve its )han)es of s'))ess on f't're proposa&s, and not to defend the agen)0Ks se&e)tion de)ision. ?n &ight of this p'rpose, post a/ard de$riefings ma0 in)&'de, at t)e a!encyPs discretion, the fo&&o/ing information( The agen)0+s eva&'ation of the signifi)ant strengths and /ea2nesses or defi)ien)ies in the offeror+s proposa& in a))ordan)e /ith the eva&'ation )riteriaQ -ast performan)e information on the de$riefed offeror $'t not t)e names of individuals %rovidin! reference information a$out an offerorPs %ast %erformance6 212 The overa&& eva&'ated )ost or pri)e and te)hni)a& ran2ing, if app&i)a$&e, of the s'))essf'& offeror and the de$riefed offeror. :va&'ated )ost or pri)e /o'&d in)&'de the agen)0+s estimated )ost of )orre)ting defe)ts or /ea2nesses in the items or servi)es offeredQ A s'mmar0 of the rationa&e for the se&e)tion de)isionQ Ieasona$&e responses to re&evant <'estions a$o't /hether the eva&'ation pro)ed'res )ontained in the so&i)itation and other reg'&ations /ere fo&&o/ed.
-ost a/ard de$riefings sho'&d not in)&'de( -oint $0 point )omparisons of the de$riefed offeror+s proposa& /ith those of other offerorsQ S%ecific numerical evaluation scores. This inevita$&0 &eads to having to e;p&ain the $asis for, and defend, the n'm$ers. ?t /i&& p't the mem$ers of the agen)0+s
*(*
As a r'&e, proposa&s sho'&d not $e re@e)ted on the $asis of past performan)e information /itho't a&&o/ing the proposer an opport'nit0 to respond to 'nfavora$&e referen)es 8from inside or o'tside the agen)09. To do so /o'&d a&most )ertain&0 $e gro'nds for protest.
-age 2%
eva&'ation team 3on tria&4 for their s)ores, and /i&& ma2e no positive )ontri$'tion to the o$@e)tives of the de$riefing. ?t ma0 /e&& )ontri$'te to a protestQ Confidentia& $'siness information. See $e&o/ L "isclosure of Confidential 3nformation.
.ethod of De$riefing De$riefings ma0 $e done ora&&0 or in /riting. ?f the de$riefing is done ora&&0, the )ontra)ting offi)er sho'&d )ond')t the de$riefing and )ontro& /hat is $eing div'&ged. 2!" ?f the reasons for re@e)tion are high&0 te)hni)a&, a s'$@e)t matter e;pert ma0 parti)ipate on a &imited and )ontro&&ed $asis. The more peop&e present, the more diffi)'&t to )ontro& the f&o/ of information. Dis)&os're of the identit0 of eva&'ators )an &ead to persona& fri)tion and a&&egations of $ias. Dis)&os're of Confidentia& ?nformation =rantees sho'&d )ons'&t their individ'a& state &a/s regarding the dis)&os're of proprietar0 information from )ompetitorsK proposa&s. S')h information /o'&d in)&'de( Trade se)retsQ Confidentia& man'fa)t'ring pro)esses and te)hni<'esQ *inan)ia& or $'siness information that is )onfidentia&, s')h as )ost information, profit, overhead rates, et).
?t is s'ggested that a dis)&aimer $e 'sed in the so&i)itation to state that information /i&& not $e dis)&osed /itho't prior noti)e to the offeror and an opport'nit0 8e.g., !0 da0s9 to o$tain )o'rt prote)tion from dis)&os're. ?n )on)&'sion, the information )omm'ni)ated to the offeror m'st $e of value to the offeror. The information m'st ena$&e the offeror to 'nderstand /h0 its proposa& /as not se&e)ted. This t0pe of dis)'ssion ma0 re<'ire some !eneral com%arison of the offerorKs proposa& /ith the /inning proposa& in order to )omm'ni)ate the $asis on /hi)h the se&e)tion de)ision /as made, and to meaningf'&&0 )omm'ni)ate the /ea2nesses in the offerorKs proposa&. 0$. DOCUMENTATION OF PROCUREMENT ACTIONS RE@UIREMENT -aragraph 1.i. of *TA Cir)'&ar 4220.!: re<'ires a /ritten re)ord of the pro)'rement histor0(
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?f an ora& de$riefing is )ond')ted, it might $e advisa$&e to )reate a trans)ript to memoria&iGe /hat /as dis)'ssed in the de$riefing in the event there is a protest.
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=rantees sha&& maintain re)ords detai&ing the histor0 of a pro)'rement. At a minim'm, these re)ords sha&& in)&'de( 8!9 the rationa&e for the method of pro)'rement, 829 se&e)tion of )ontra)t t0pe, 8"9 reasons for )ontra)tor se&e)tion or re@e)tion, and 849 the $asis for the )ontra)t pri)e. DISCUSSION Section *$.$(! File :ocumentation, contains a listin" of t/e %arious t# es of contract file documentation 1/ic/ are t# icall# reAuired to document t/e /istor# of a rocurement$ Section 8$(! :ocumentation o* Contract Administration! contains "uidance for documentin" contract administration acti%it#$ T/e ur ose of t/is section is to discuss t/e documentation reAuirements 1/ic/ are closest to and relate most directl# to t/e a1ard of t/e contract$ It mi"/t &e /el ful to note t/at documentation of contract decisions and actions is a erennial ro&lem re orted 1it/ re"ularit# &# re%ie1 teams doin" Procurement S#stem Re%ie1s for FTAKs "rantee communit#$ T/ese documentation ro&lems are in t/e %er# areas of FTAKs /i"/est riorit# concerns! as e; ressed in Circular .**:$(E! and some are concerned 1it/ documentation related to contract a1ards$ T/e most commonl# noticed ro&lems include3 No inde endent cost anal#sis rior to solicitation! No cost or rice anal#sis of contractorsK ro osals! No documented rationale for t/e selected contract t# e! No documentation for t/e contractor selection decision! No documentation descri&in" /o1 t/e rice 1as determined7ne"otiated .
0$.$( Sealed Bid Procurements 0$.$($( A&stract of Bids Best Practices At the time of $id opening there sho'&d $e a p'$&i) reading of the $ids and a re)ording of them, 's'a&&0 referred to as an A$stract of ?ids. An e;amp&e of an a$stra)t is in Appendi; ,.4 /hi)h )ontains the =SA *orms !409A!4!0, A$stract of ,ffers/ 'sed in *edera& pro)'rements for the re)ording of $ids. A$stra)ts of $ids sho'&d $e avai&a$&e for p'$&i) inspe)tion.
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0$.$($* Documentation of A1ard Decision Best Practices A /ritten re)ord of the a/ard de)ision needs to $e made. The e&ements of the a/ard de)ision /hi)h need to $e do)'mented are( A ta$'&ation and eva&'ation of $ids. This /i&& in)&'de a determination that the &o/ $id is f'&&0 responsive to the ?*,. Iesponsiveness is dis)'ssed in Se)tion 4.4.4, Res%onsive ?idder. When there are &o/er $ids than the $id $eing a))epted for a/ard, the a/ard de)ision do)'ment m'st give the reasons for re@e)ting the &o/er $ids. When there are e<'a& &o/ $ids, the do)'mentation m'st des)ri$e ho/ the tie /as $ro2en. A determination that the &o/ $idder is responsi$&e. Iesponsi$i&it0 is dis)'ssed in Se)tion 5.!, Res%onsi$ility of Contractor. A determination of the reasona$&eness of the pri)e. Se)tion 5.2, Cost and &rice Analysis, dis)'sses the *TA Cir)'&ar re<'irement that ever0 pro)'rement a)tion m'st in)&'de a )ost or pri)e ana&0sis to determine the reasona$&eness of the proposed )ontra)t pri)e. The starting point for this )ost or pri)e ana&0sis sho'&d $e the independent )ost estimate. Signifi)ant differen)es $et/een the independent )ost estimate and the &o/ $id need to $e dis)'ssed.
0$.$* Ne"otiated Procurements 0$.$*$( File Documentation of Selection Decision Best Practices Baving )onsidered a&& of the avai&a$&e proposa& eva&'ation data, the se&e)tion offi)ia& m'st do)'ment the $asis for the de)ision to se&e)t that offeror >/hose proposa& is most advantageo's to the granteeKs program /ith pri)e and other fa)tors )onsidered.> 2!4 The )ontra)t fi&e do)'mentation sho'&d in)&'de the fo&&o/ing( "etermination of Com%etitive Ran!e 8See Se)tion 4.5.", Com%etitive Ran!e9. The Competitive Iange Determination identifies those proposa&s that had a reasona$&e )han)e of $eing se&e)ted for a/ard, given their re&ative te)hni)a& strengths and /ea2nesses, and their re&ative pri)es.
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*TA Cir)'&ar 4220.!: -aragraph 9.d.849.
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The Tec)nical 8valuation 8See Se)tion 4.5.2, 8valuation of &ro%osals and A%%endi7 ?.19. The te)hni)a& eva&'ation information indi)ates the re&ative strengths and /ea2nesses of the proposa&s, together /ith the te)hni)a& ris2s 8if an09 of the vario's approa)hes. A Cost*&rice Analysis 8See Se)tion 5.2, Cost and &rice Analysis9. ?n a&& instan)es, the )ontra)t fi&e m'st ref&e)t eviden)e of a )ost or pri)e ana&0sis. 5o' ma0 /ish to prepare a separate CostA-ri)e Ana&0sis memorand'm ana&0Ging the )osts or pri)es proposed against( 8a9 the independent )ost estimate prepared prior to so&i)itation, 8$9 spe)ifi) )ompan0 information in the proposa&s, s')h as the parti)'&ar te)hni)a& approa)h $eing offered, and 8)9 an0 other pertinent information s')h as a te)hni)a& eva&'ation of the )ost proposa&, an advisor0 a'dit of the offerorKs )ost proposa&, or a )omparison of pri)es offered /ith prior pro)'rements. ?f the )ontra)t $eing a/arded is a )ost reim$'rsement t0pe, the CostA-ri)e Ana&0sis needs to address the realism of the vario's )ost e&ements proposed, and /here the )osts are 'nrea&isti)a&&0 &o/, an ad@'stment sho'&d $e made to ref&e)t /hat the agen)0 $e&ieves the effort /i&& a)t'a&&0 )ost given that offerorKs spe)ifi) te)hni)a& approa)h as /e&& as its dire)t and indire)t )ost rates. This )ost rea&ism assessment m'st $e )aref'&&0 )onsidered /hen determining /hi)h offerorKs proposa& represents the $est va&'e for the pro)'ring agen)0. A&& too often )ontra)tors are 'nrea&isti)a&&0 optimisti) in estimating )osts in )ompetitive )ost t0pe sit'ations 82no/n as >$'0ing in>9. The res'&t is that the &o/est proposedAestimated )ost is not ne)essari&0 the most advantageo's )hoi)e for the pro)'ring agen)0. Determination of Se&e)ted Contra)torKs Iesponsi$i&it0 8See Se)tion 5.!, Res%onsi$ility of Contractor). Do)'mentation regarding the se&e)ted )ontra)torKs responsi$i&it0 sho'&d $e in)&'ded in the fi&e.
0$.$*$* Pre)Ne"otiation Plan Best Practices .an0 pro)'ring agen)ies have adopted a re<'irement for /ritten &re1Ne!otiation &lans prior to )ond')ting negotiations /ith offerors in negotiated pro)'rement sit'ations. The advantages of 'sing this 2ind of do)'ment are n'mero's. *irst, it re<'ires a reasoned ana&0sis of the offerorKs pri)e, &eading to the esta$&ishment of a negotiation o$@e)tive /hi)h is a))epta$&e to a&& organiGationa& e&ements of the agen)0. Se)ond, it a&&o/s 0o' to deve&op a ran!e of %rice o$5ectives /hi)h is a))epta$&e to 0o'r agen)0 management, so that negotiations )an $e )on)&'ded if the pri)e )an $e negotiated /ithin the range esta$&ished in the -re #egotiation -&an. A -&an a&so $rings together the vario's interested parties of the agen)0 in the deve&opment and approva& of a 'nified negotiation position, so that interna& agen)0 differen)es of opinion )an $e reso&ved $efore negotiations $egin, prod')ing negotiation o$@e)tives that ever0one )an s'pport.
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An e;amp&e of a grantee -re #egotiation -&an )an $e fo'nd in Appendi; ,.%. 2!5 Severa& feat'res of this -&an are /orth noting( The independent grantee )ost estimate /as 'sed in the pri)e ana&0sis of the )ontra)torKs proposa&. An advisor0 a'dit of the )ontra)torKs )ost proposa& /as performed and the res'&ts /ere 'sed to deve&op the prenegotiation position. .a@or s'$)ontra)tors /ere a&so eva&'ated. The te)hni)a& program offi)e and the )ontra)ts offi)e met to @oint&0 deve&op a negotiation position that /as a))epta$&e to $oth. 8#ote( some organiGations find it he&pf'& to deve&op their negotiation o$@e)tives as a range of pri)es, to in)&'de $oth a target pri)e o$@e)tive and a ma;im'm pri)e /hi)h /i&& not $e e;)eeded in negotiations /itho't f'rther approva&s $0 agen)0 management. This approa)h a&&o/s the negotiation team a degree of f&e;i$i&it0 /hi)h is 's'a&&0 needed $e)a'se )ontra)tors often $ring information to negotiations /hi)h agen)0 personne& did not have /hen the0 prepared their negotiation p&an.9 2!% Agen)0 management offi)ia&s revie/ed the pre negotiation strateg0 and approved the position adopted, th's pre)&'ding an0 after the fa)t >se)ond g'essing> d'ring the )ontra)t revie/ pro)ess.
0$.$*$- Memorandum of Ne"otiations Best Practices ?t is essentia& that ever0 )ontra)t a/ard $e do)'mented /ith a emorandum of Ne!otiations. An e;amp&e of a .emorand'm of #egotiations is in Appendi; ,.9. 2!1 This memorand'm m'st des)ri$e the most important aspe)ts of the pro)'rement histor0, /hi)h at minim'm /o'&d in)&'de the fo&&o/ing information( A statement of the p'rpose of the pro)'rement. A histor0 of the pro)'rement, in)&'ding referen)es to important do)'ments /ith their dates and identif0ing n'm$ers. These /o'&d in)&'de( advertisements of the pro)'rement, I*-, te)hni)a& eva&'ation of proposa&s, et). The names and positions of ea)h person /ho parti)ipated in the negotiations.
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.etropo&itan Transit A'thorit0, Bo'ston, TR. -ro)'rement .an'a&, :;hi$it 9, dated A'g'st !, !994. ,AIT -ro)'rement .an'a&, Iev. 4, dated 6'&0 20, !994, p. 291, >-ri)e -ositions.> .TA, Bo'ston, TR, -ro)'rement .an'a&, :;hi$it !0, dated A'g'st !, !994.
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An e;p&anation of ho/ the fina& pri)e /as negotiated. This e;p&anation needs to referen)e the -re #egotiation -&an pri)e o$@e)tive 8if a -&an /as deve&oped9, the independent )ost estimate 8/hi)h sho'&d a&/a0s $e deve&oped9, and an0 advisor0 a'dits that ma0 have $een )ond')ted. See Appendi; , !2 8#egotiation .emorand'm Samp&e *ormat9 for an i&&'stration. A dis)'ssion of important )ontra)t terms and )onditions, s')h as ins'ran)e re<'irements, D,: parti)ipation, ,'0 Ameri)a provisions, et).
,est -ra)ti)es -ro)'rement .an'a& L Chapter % L -ro)'rement O$@e)t T0pes( Spe)ia& Consideration
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C/a ter 2 2 ) Procurement O&'ect T# es3 S ecial Considerations %.! Constr')tion 8!0A9H9 %.!.! The Traditiona& Constr')tion -ro)ess DesignA,idA,'i&d 8!0A9H9 %.!.2 Constr')tion .anagement 8>C.>9 8!0A9H9 %.!." >*ast Tra)2ing> -hased Design, A/ard and Constr')tion 8!0A9H9 %.!.4 >T'rn2e0> DesignA,'i&d Contra)ting 8!0A9H9 %.!.5 Oa&'e :ngineering 8%A0"9 %.!.% *a)i&ities .aintenan)e 6o$ Order Contra)ts 8!0A9H9 %.!.1 -artnering 84A059 %.! H Competitive -roposa&s vs. Sea&ed ,ids 8!0A9H9 %.!.9 ?n)entives to Ied')e -ro@e)t Comp&etion Time 8!0A9H9 %.!.!0 Spe)ia& Contra)t -rovisions 8!0A9H9 %.2 :<'ipment and S'pp&ies 82A009 %.2.! 7easeA.aintain 82A009 %.2.!.! 7easeA.aintenan)e of Oehi)&es 82A009 %.2.!.2 7ease of Beav0 :<'ipment /ith Operators 82A009 %." Io&&ing Sto)2 8!0A9H9 %.".! ,'ses 8!0A9H9 %.".!.! Competitive -roposa&s vs. Sea&ed ,ids 8!0A9H9 %.".!.2 A-TA Standard ,'s -ro)'rement ='ide&ines 8!0A9H9 %.".2 Iai& Cars 8!0A9H9 %."." 6oint -ro)'rements of Io&&ing Sto)2 and 3-igg0$a)2ing4 8%A0"9 %.".4 -re A/ard and -ost De&iver0 Ievie/s for ,'0 Ameri)a A)t Comp&ian)e 8!0A009 %.".5 Warranties 8%A0"9 %.4 -rofessiona& Servi)es 85A9%9 %.5 Ar)hite)t :ngineering Servi)es 8"A049 %.% ?ns'ran)e 8!!A0"9 %.1 Art/or2 8%A0"9
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2$($( T/e Traditional Construction Process ) Desi"n7Bid7Build ?t has $een traditiona& in the )onstr')tion ind'str0 to emp&o0 an arc)itect*en!ineer (A*8) to )omp&ete a detai&ed design of the entire pro@e)t $efore so&i)iting $ids from )onstr')tion )ontra)tors. This traditiona& approa)h is 2no/n as sequential desi!n and construction. This se<'entia& designA)onstr')tion approa)h re<'ires that a detai&ed design pa)2age of the entire pro@e)t $e )omp&ete $efore $ids are so&i)ited from )onstr')tion )ontra)tors. *o&&o/ing a/ard of the )onstr')tion )ontra)t, the AA: is often retained $0 the o/ner for the )onstr')tion phase, and a)ts as the o/nerKs agent, to inspe)t the )onstr')tion /or2 to ens're that the str')t'res are $'i&t a))ording to the designs and spe)ifi)ations. Advantages A ma@or advantage of the se<'entia& design and )onstr')tion approa)h is that )omp&e; or one of a 2ind pro@e)ts )an $e thoro'gh&0 p&anned and tho'ght thro'gh $efore )onstr')tion $egins. The traditiona& approa)h th's prod')es, in the design phase of the pro@e)t, the most a))'rate estimate of fina& pro@e)t )osts, and this is an advantage of the traditiona& te)hni<'e. ?f pro$&ems are en)o'ntered /ith design aspe)ts for the &atter stages of the pro@e)t, the ear&ier design feat'res or phases )an $e modified $efore an0 )onstr')tion /or2 has $een done, th's avoiding )onstr')tion )ontra)tor )&aims and de&a0s. Another advantage is that the Agen)0 is given a fi;ed pri)e for )omp&etion of the entire pro@e)t $efore )onstr')tion $egins. There ma0 a&so $e advantages in o$taining the ne)essar0 finan)ing and pro@e)t approva&s. Overa&& management of the pro@e)t sho'&d a&so $e simp&ified $0 this approa)h. Disadvantages Sequential desi!n and construction re<'ires a &onger time to )omp&ete the pro@e)t than %)ased desi!n and construction (Gfast trac(in!G). And sin)e time press'res are often the most intense iss'es )onfronting the Agen)0, the se<'entia& method ma0 not $e feasi$&e. A&ternative )ontra)ting approa)hes have arisen to shorten the pro@e)t )omp&etion time. These in)&'de %)ased desi!n and construction (Gfast trac(in!G), /hi)h often invo&ves the 'se of a construction mana!er, and turn(ey (desi!n1$uild) )ontra)ting. 2$($* Construction Mana"ement ?n re)ent 0ears a )onstr')tion te)hni<'e 2no/n as construction mana!ement has )ome into pra)ti)e. ?n this s)heme the o/ner emp&o0s a construction mana!er /ho a)ts as the o/nerKs agent d'ring the design phase and as overseer d'ring the )onstr')tion phase. D'ring the design phase the construction mana!er /or2s )&ose&0 /ith the A*8, monitoring the A*84s efforts to ens're that the design /i&& $e /ithin the o/nerKs $'dget, /i&& a))omp&ish the o/nerKs p'rposes, et). One of the )riti)a& tas2s a C. )an perform d'ring the design phase is a constructa$ility review, ens'ring that the design )an a)t'a&&0 $e $'i&t. 2!9 The spe)ifi) ro&e of )onstr')tion managers in this phase /i&& var0 great&0 from pro@e)t to pro@e)t. Their d'ties ma0 in)&'de )ost
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See &ro5ect and Construction Constr')ta$i&it0 Ievie/s.
ana!ement .uidelines 1::J 2%date, Se)tion ".2.2 Confi!uration,
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estimating, )ost eva&'ating, pro@e)t s)hed'&ing, revie/ or preparation of )ontra)t do)'ments, re)eiving $ids, and advising the o/ner of $idder <'a&ifi)ations and the a))epta$i&it0 of $ids. .'&tip&e prime )ontra)tors D'ring the )onstr')tion phase, the )onstr')tion management ro&e )an a&so ta2e a variet0 of forms. Under one s)heme the construction mana!er /i&& )oordinate the /or2 of the vario's s%ecialty contractors/ /ho )ontra)t dire)t&0 /ith the o/ner as multi%le %rime contractors. The s%ecialty contractors, /ho /o'&d norma&&0 have $een s'$)ontra)tors to a !eneral contractor in the traditiona& )onstr')tion arrangement, no/ )ontra)t dire)t&0 /ith the o/ner, and the )oordination norma&&0 done $0 the !eneral contractor is performed $0 the construction mana!er. The construction mana!er ma0 a&so assist the AA: /ith inspe)tions of the /or2. ?n this s)heme the construction mana!er has no finan)ia& &ia$i&it0 for s'))essf'& )omp&etion of the /or2 there is no )ontra)t /ith the o/ner to )omp&ete the pro@e)t for a )ontra)t pri)e. Advantages The construction mana!er /i&& $ring )onstr')tion e;pertise to the pro@e)t team at an ear&0 design stage of the pro@e)t, ena$&ing design de)isions to $e made /ith an appre)iation of their impa)t on )onstr')tion. A construction mana!er ma0 $e indispensa$&e if the Agen)0 &a)2s the personne& reso'r)es to ade<'ate&0 and aggressive&0 manage the pro@e)t. &)ased desi!n and construction ma0 $e 'sed m')h more easi&0 $e)a'se the construction mana!er )an perform the vita& f'n)tions of )oordinating the /or2 of the A*8 )ontra)tor and the s%ecialty construction contractors. Disadvantages The )onstr')tion managerKs fee /i&& add to the overa&& )ost of the pro@e)t, and the )ost of emp&o0ing an independent )onstr')tion manager ma0 not $e feasi$&e on sma&&er )onstr')tion pro@e)ts. Contra)t provisions ?t is )riti)a& that the )onstr')tion managerKs )ontra)t )&ear&0 define the a'thorit0 and the d'ties of the )onstr')tion manager /ith respe)t to the other )ontra)tors on the pro@e)tQ e.g., ho/ m')h a'thorit0 does the )onstr')tion manager have over the /or2 of the AA: and the spe)ia&t0 )onstr')tion )ontra)torsW ?f the )onstr')tion manager fai&s to proper&0 )oordinate the /or2 of the spe)ia&t0 )onstr')tion )ontra)tors, /i&& the )onstr')tion )ontra)tor or the Agen)0 $e &ia$&eW ?t /i&& a&so $e ne)essar0 to define the C.Ks a'thorit0 in the design and )onstr')tion )ontra)ts, so that these )ontra)tors /i&& 2no/ the degree to /hi)h the0 are to a))ept dire)tion from the C.. 2$($- FFast TracEin"F )) P/ased Desi"n! A1ard and Construction Fast trac(in! is a pro)ed're designed to shorten the overa&& time for pro@e)t )omp&etion $0 phasing the design and )onstr')tion a)tivities so that the0 )an $e performed together. ?n this s)heme ea)h phase of the pro@e)t is p&a)ed 'nder )ontra)t on)e the design for that phase is )omp&eted. Un&i2e the traditiona& approa)h, /here the entire pro@e)t is first designed and then )ontra)ted for /ith one )onstr')tion )ontra)t, the fast tra)2 s)heme /i&& )omp&ete the design /or2 in phases, and then a/ard )onstr')tion )ontra)ts for the vario's s'$s0stems or phases on)e the design for that phase is finished. Th's there /i&& $e a n'm$er of spe)ia&t0 )onstr')tion
-age 5
)ontra)ts a/arded $0 the o/ner, and a construction mana!er /i&& norma&&0, tho'gh not ne)essari&0, $e retained to assist in pa)2aging the vario's spe)ia&t0 )ontra)ts and to manage the /or2 of these spe)ia&t0 )ontra)tors. This /or2 of defining and managing the spe)ia&t0 )ontra)ts )an a&so $e done $0 in ho'se pro@e)t management or $0 the A*8. Advantages -hased design and )onstr')tion )an red')e the overa&& )omp&etion time of the pro@e)t. ?t )an a&so a&&o/ the Agen)0 to red')e the s)ope of the &ater phases if the )ost of the ear&ier phases e;)eed the $'dget. ?t a&so a&&o/s the Agen)0 greater f&e;i$i&it0 in the timing of the )onstr')tion )ontra)t a/ards, th's ta2ing advantage of mar2et )onditions, or managing the avai&a$&e f'nding. Disadvantages There is a ris2 inherent in phased design and )onstr')tion $e)a'se portions of the pro@e)t are $eg'n $efore the &ater portions are designed. ?f ma@or )hanges o))'r in the &ater phases, the0 ma0 )a'se )ost&0 )hanges in the ear&ier /or2 and de&a0s to the spe)ia&t0 )ontra)tors. These are ris2s /hi)h /i&& $e $orne $0 the Agen)0. 2$($. TurnEe# or Desi"n7Build Contractin" This )ontra)ting te)hni<'e has seen in)reasing 'se in re)ent 0ears. ,et/een !9H1 and !992 there /as a "00 per)ent in)rease in design $'i&d pro@e)ts, /hi)h indi)ates a gro/ing importan)e of t'rn2e0 pro@e)ts in the )onstr')tion ind'str0. A))ording to statisti)s provided $0 the :ngineering #e/s Ie)ord, $0 !995, "0 per)ent of a&& non residentia& )onstr')tion /as 'sing the t'rn2e0 method. The gro/ing importan)e of t'rn2e0 methods /as attri$'ted to its $enefits in saving time and )osts /ith no red')tion of <'a&it0 re&ative to )onventiona& pro@e)t approa)hes. ?t m'st $e noted, ho/ever, that not a&& States permit design $'i&d )ontra)ting $0 State agen)ies. ?n this s)heme, a transit agen)0 )ontra)ts /ith a sing&e private entit0, the t'rn2e0 )ontra)tor, for the design, )onstr')tion and de&iver0 of a )omp&ete and operationa& pro@e)t. ?n some instan)es, the )ontra)tor is re<'ired to operate and maintain the s0stem for a defined period of time. The private )ontra)tor is t0pi)a&&0 a )onsorti'm of private )ompanies offering engineering and design, )onstr')tion, man'fa)t're of vehi)&es, finan)e and re&ated s'pport servi)es. The deve&oper )ontra)tor /i&& $e se&e)ted )ompetitive&0 $ased on >performan)e t0pe> 8non detai&ed9 spe)ifi)ations /hi)h des)ri$e the o/nerKs o$@e)tives and re<'irements$ Deve&opers /i&& s'$mit proposed designs /ith their )ompetitive proposa&s, and o/ners m'st se&e)t $et/een )ompeting design approa)hes and pri)es. ?t sho'&d $e noted that one of the dra/$a)2s of design $'i&d is that the o/ner does not have an independent so'r)e 8the A*8 in traditiona& )onstr')tion9 overseeing design imp&ementation and verif0ing )onforman)e /ith the dra/ings and spe)ifi)ations. BorEs/o on International Transit TurnEe# and Loint De%elo ment The Transportation Iesear)h ,oard has p'$&ished a ver0 informative Iesear)h Cir)'&ar entit&ed &roceedin!s of t)e
-age %
'or(s)o% on 3nternational Transit Turn(ey and 9oint "evelo%ment. 220 This Wor2shop /as he&d on O)to$er !5 !9, !99% and its p'rpose /as > to e;p&ore )'rrent internationa& e;perien)e in the deve&opment of t'rn2e0 transit pro@e)ts, to dis)'ss effe)tive t'rn2e0 pra)ti)es, and to identif0 those aspe)ts that /arrant f'rther )onsideration.> The Iesear)h Cir)'&ar s'mmariGes ea)h of the presentations made at the /or2shop, and presents the >&essons &earned> $0 those organiGations 'sing vario's t'rn2e0 approa)hes. The names of the presenters and their organiGations are a&so given, /hi)h provides a referen)e too& for )onta)ting others /ho are invo&ved /ith t'rn2e0 pro@e)ts. =rantees are en)o'raged to o$tain this Transportation Iesear)h Cir)'&ar it is a va&'a$&e so'r)e of information. Some of the more important o$servations made at the Wor2shop in)&'de the fo&&o/ing( The *edera& government and most States, $'t not a&&, a&&o/ t'rn2e0 for some agen)ies andAor pro@e)ts. ?n fa)t, the re)ent&0 ena)ted *edera& stat'te Transportation :<'it0 A)t *or The 2!st Cent'r0 8T:A 2!9 permits grantees to 'se t'rn2e0 )ontra)ting to design and $'i&d a mass transportation s0stem or an opera$&e segment of a mass transportation s0stem. Some States have re)ent&0 e;panded their reg'&ations to permit design $'i&d )ontra)ts, and this trend is &i2e&0 to )ontin'e. .an0 of the )'rrent transit t'rn2e0 pro@e)ts had to ena)t &egis&ation or re)eive /aivers to permit the t'rn2e0 pro)ess. A ne!otiated %rocurement %rocess is stron!ly recommended for selection of a turn(ey contractor. Dis)'ssions $et/een the o/ner and offerors fa)i&itates a tr'e >meeting of the minds>Q a&&o/s )rafting of tai&ored so&'tions for )ontra)tor )on)ernsQ and a)hieves the optim'm $a&an)e of ris2 and pri)e. #egotiations )an &ead to optim'm de)isions. ?f a negotiated pro)'rement )annot $e done, then a t/o step $idding pro)ess is re)ommended as the ne;t $est approa)h. Some States /hi)h a&&o/ design $'i&d )ontra)ting re<'ire a $id pro)ess rather than a negotiated pro)'rement. ?nd'str0 inp't on do)'ments sho'&d $e so'ght prior to so&i)itation. Agen)ies sho'&d deve&op and fo&&o/ a detai&ed se&e)tion pro)ed're that in)&'des a m'&ti dis)ip&ined and 2no/&edgea$&e eva&'ation )ommittee. Design $'i&d re<'ires a ne/ generation of )ontra)t do)'ments that in)orporate the needs of three distin)t e&ements( design, )onstr')tion and operation. .e&ding the re<'ired pri)ing and pro)ed'res into one )ontra)t is a )omp&e; endeavor.
**:"
Transportation Iesear)h Cir)'&ar #'m$er 4H", .ar)h !99H. Transportation Iesear)h ,oard, #ationa& Iesear)h Co'n)i&, #ationa& A)adem0 of S)ien)es, 2!0! Constit'tion Aven'e, #.W., Washington, D.C. 204!H.
-age 1
T0pi)a& post a/ard )on)erns /ith design $'i&d )ontra)ts in)&'de the interpretation of )ommer)ia& terms and the pri)ing of )hanges 8in)&'ding the o$taining of ade<'ate )ost data to s'pport )hange orders9. Spe)ifi) re)ommendations in)&'de( re<'irements for )ontra)tor @o$ )ost s0stemsQ pri)ing )hange orders $ased on the @o$ )ost s0stemQ and detai&ed a'dit provisions. The t'rn2e0 approa)h ma0 res'&t in &o/er )apita& )osts and fe/er )hange orders and )ontra)t diffi)'&ties. The t'rn2e0 approa)h ma0 have an adverse impa)t on sma&& and medi'm siGed firms, in)&'ding D,: firms. Agen)ies ma0 /ant to )onsider 'sing in)entive )&a'ses in their so&i)itations to en)o'rage D,: parti)ipation, as /e&& as re<'iring offerors to identif0 sma&& and minorit0 o/ned $'sinesses in their proposa&s d'ring the pre<'a&ifi)ationAI*- stages of the pro)'rement. ?t /as reported that ,AIT had $een ver0 s'))essf'& /ith this pre<'a&ifi)ation re<'irement in the San *ran)is)o Airport :;tension t'rn2e0 demonstration pro@e)t.22! :nvironmenta& approva&s, intergovernmenta& )oordination, and finan)e sho'&d $e in p&a)e prior to the t'rn2e0 pro)'rement. ?t is )riti)a&&0 important that pro@e)t parti)ipants deve&op a teaming perspe)tive. A forma& %artnerin! agreement /ith the )ontra)tor team and tangentia& agen)ies has $een 'sed /ith s'))ess. See Se)tion %.!.1 &artnerin!.
2$($0 Palue En"ineerin" RE@UIREMENT *TA Cir)'&ar 4220.!:, Se)tion 18g9 en)o'rages the 'se of va&'e engineering )&a'ses in )onstr')tion )ontra)ts( g. Use of Oa&'e :ngineering in Constr')tion Contra)ts. =rantees are en)o'raged to 'se va&'e engineering )&a'ses in )ontra)ts for )onstr')tion pro@e)ts. *TA )annot approve a #e/ Starts grant app&i)ation for fina& design f'nding or a f'&& f'nding grant agreement 'nti& va&'e engineering is )omp&ete 8see Cir)'&ar 50!09. DISCUSSION FTA Circular .**:$(E does not reAuire %alue en"ineerin" clauses &ut it does encoura"e t/em in construction contracts$ Palue en"ineerin" is a rocedure desi"ned to incenti%i,e contractors to su&mit c/an"e ro osals 1/ic/ reduce t/e cost of contract erformance
**(4
Conta)t Department .anager -ro)'rement, ,AIT at 85!09 4%4 %"H0.
-age H
&# romisin" t/e contractor a s/are of t/e sa%in"s$ Contractors can often find less e; ensi%e 1a#s to erform t/eir contracts t/an t/e met/ods rescri&ed in t/eir contract s ecifications$ T/e# 1ill &e reluctant! /o1e%er! to ro ose c/an"es 1/ic/ 1ill reduce t/eir contract rice and /a%e t/e effect of reducin" t/eir rofit on t/e contract$ Palue en"ineerin" is a tec/niAue desi"ned to o%ercome t/is disincenti%e &# offerin" t/em a s/are of t/e sa%in"s resultin" from t/eir c/an"e ro osals$ It is im ortant to note t/at some contractual arran"ements 6e$"$! desi"n)&uild contracts9 ma# in/erentl# include %alue en"ineerin" conce ts and rinci les$ B/ere t/is is t/e case! FTA does not reAuire se arate %alue en"ineerin" ro osals! c/an"e orders! or ot/er rocesses$ From a rocurement %ie1! t/e conce t of %alue en"ineerin" is more im ortant t/an t/e form it taEes$ T/e Federal <o%ernment uses %alue en"ineerin" clauses in contracts for su lies! ser%ices! construction and arc/itect7en"ineer ser%ices$ Part .5 of t/e FAR is dedicated to t/e su&'ect of %alue en"ineerin"$ T/e rescri&ed clause for Federal construction contracts ma# &e found at FAR 0*$*.5)- Calue "ngineering1Construction$ B/ile t/is clause is not reAuired for "rantee t/ird) art# contracts! it ma# ro%e useful as a "uide as to /o1 to structure a %alue en"ineerin" clause$ FTAMs Pro'ect and Construction Mana"ement <uidelines (882 U date! Section .$*$- Calue "ngineering and Peer Re-ie/! resents a discussion of t/e %alue en"ineerin" rocess durin" t/e desi"n /ase of t/e ro'ect$*** Best Practices Oa&'e engineering )&a'ses in 'se $0 Transit Agen)ies tend to &imit the t0pe of savings /hi)h the Agen)0 /i&& share /ith the Contra)tor to those e;pe)ted on the )ontra)t $eing performed. These are )ommon&0 2no/n as >instant savings.> The Contra)tor /o'&d not share in >)o&&atera& savings> or >f't're savings> res'&ting from his )hange proposa&. >Co&&atera& savings> are those savings anti)ipated $0 the Agen)0 o'tside the )ontra)t, s')h as operations, maintenan)e, &ogisti)a& s'pport, et). >*'t're savings> /o'&d $e those res'&ting from the Contra)torKs va&'e engineering proposa&s on f't're )ontra)ts for the same de&ivera$&e items. The t0pi)a& share ratio is 50 per)ent for the Agen)0 and 50 per)ent for the Contra)tor of an0 >net savings> res'&ting from the Contra)torKs )hange proposa&. >#et savings> are defined as >gross savings> &ess the Contra)torKs )osts for deve&oping and imp&ementing the proposa& as /e&& as an0 Agen)0 )osts res'&ting from the )hange, s')h as revie/, imp&ementation, inspe)tion, et). :stimated >gross savings> /o'&d in)&'de the Contra)torKs &a$or, materia&, e<'ipment, overhead, profit and $ond. At the )on)&'sion of negotiations for the )hange proposa&, a )ontra)t modifi)ation is iss'ed red')ing the )ontra)t pri)e $0 the Agen)0Ks share.
***5
See note !.
-age 9
An important feat're of a&& va&'e engineering )&a'ses is that the Agen)0Ks de)ision to a))ept or re@e)t the )ontra)torKs proposa& is fina& and )on)&'sive, and not s'$@e)t to appea&. Another important feat're of the 's'a& Agen)0 )&a'ses is that the Contra)torKs va&'e engineering )hange proposa& 8O:C-9 m'st not >impair an0 essentia& f'n)tion or )hara)teristi) of the Wor2, s')h as safet0, servi)e &ife, re&ia$i&it0, e)onom0 of operation, ease of maintenan)e, and ne)essar0 standardiGation of feat'res.> 22" Another Agen)0Ks )&a'se reads that the Contra)torKs O:C- >sha&& not a&ter an0 itemKs )hara)teristi)s s')h as f'n)tiona&it0, servi)e &ife, re&ia$i&it0, e)onom0 of operation, ease of maintenan)e, and ne)essar0 standardiGed feat'res and appearan)e.> 224 2$($2 Facilities Maintenance )) Lo& Order Contracts The .etropo&itan At&anta Iapid Transit A'thorit0 8.AITA9 has made 'se of a ver0 )ost effe)tive pro)'rement approa)h 2no/n as 6o$ Order Contra)ting 86OC9 for its fa)i&ities maintenan)e re<'irements. These re<'irements /o'&d in)&'de the repair, a&teration, moderniGation, maintenan)e and reha$i&itation of $'i&dings, str')t'res, or other rea& propert0. The 6OC is a )ompetitive&0 $id, firm fi;ed pri)e indefinite <'antit0 )ontra)t, against /hi)h .AITA iss'es Wor2 Orders as spe)ifi) needs arise. The 'n's'a& feat're of the 6OC is that the ?nvitation *or ,id 8?*,9 in)&'des a&& of the )on)eiva$&e &ine items of /or2, /ith spe)ifi)ationsAdefinitions for ea)h &ine item, and 'nit pri)es for ea)h item. These spe)ifi)ations and &ine item pri)es /ere deve&oped $0 .AITA /ith the assistan)e of a )ons'&ting engineering firm. The &ine item 'nit pri)es /ere f'rnished to prospe)tive $idders in a >Unit -ri)e ,oo2,> /hi)h /as deve&oped $0 the )ons'&tant. The Unit -ri)e ,oo2 has over 90,000 items /hi)h detai& spe)ifi) repair and )onstr')tion tas2s and spe)ifi)ations. The ,oo2 )overs a /ide range of areas s')h as )on)rete, air distri$'tion, p&'m$ing, e&e)tri)a&, and haGardo's and to;i) /aste. The Unit -ri)e ,oo2 is /or2 segment $ased. :a)h @o$ is detai&ed and $ro2en do/n $0 tas2. The pri)es are $ased on the 'se of e;perien)ed &a$or and high <'a&it0 materia&s. The ,oo2 a&so in)orporates prevai&ing mar2et area )ost data and /ages. When $ids are so&i)ited, the o$@e)tive is to o$tain $ids on >ad@'stment fa)tors.> No s%ecific %ro5ects are $id. Award is $ased on t)e lowest %ro%osed ad5ustment factor. The t/o pri)e ad@'stment fa)tors are for norma& and overtime /or2. These t/o ad@'stment fa)tors are app&ied to all items in t)e 2nit &rice ?oo(. Ad@'stment fa)tors are re<'ired to $e $id to fo'r de)ima& p&a)es. The $est /a0 for a $idder to deve&op its ad@'stment fa)tor is to pri)e o't severa& t0pes of
**-%
.etropo&itan At&anta Iapid Transit A'thorit0 8.AITA9, =enera& Conditions !9HH, C&a'se 49 Nalue 8n!ineerin! &ro%osals. To dis)'ss .AITAKs approa)h, )onta)t .r. Wa0ner Cro/der, Dire)tor of Contra)ts and -ro)'rement, at 84049 H4H 55H1.
**.1
San *ran)is)o ,a0 Area Iapid Transit Distri)t 8,AIT9, =enera& Conditions for Constr')tion Contra)ts, *e$r'ar0 !, !99H, C&a'se =C4.H.! A%%lication of N8C&. To dis)'ss ,AIT+s approa)h, )onta)t Department .anager -ro)'rement, at 85!09 4%4 %"H0.
-age !0
pro@e)ts and ta2e an average. *or e;amp&e, if the pri)e $oo2 states that the )ost to rep&a)e a /indo/ is S!00, and a prospe)tive $idder deve&ops an estimate of S15, then the $idderKs ad@'stment fa)tor is .1500. 7i2e/ise, if the $idder estimates a pri)e of S!!0 to rep&a)e the /indo/, then the $idderKs ad@'stment fa)tor /o'&d $e !.!000. On the most re)ent a/ard, the /inning &o/ $id offered an >ad@'stment fa)tor> of 0.1100. *o&&o/ing a/ard of the 6OC, the pro)ess for iss'ing Wor2 Orders /o'&d $e as fo&&o/s( A meeting is he&d /ith the )ontra)tor to dis)'ss the s)ope of the /or2 to $e done. A Wor2 Order -roposa& is then re<'ested from the Contra)tor. The Contra)torKs pri)e is )omp'ted $0( Se&e)ting vario's pre pri)ed )onstr')tion tas2s from the Unit -ri)e ,oo2. .'&tip&0ing the pre esta$&ished pri)es from the Unit -ri)e ,oo2 $0 <'antities and then $0 the Contra)torKs ad@'stment fa)tor.
The Contra)torKs proposa& is )ompared to an independent A'thorit0 estimate. ?f the pri)e is reasona$&e, a Wor2 Order is iss'ed. ?f the pri)e is not reasona$&e, the @o$ is so&i)ited 'nder norma& pro)'rement pro)ed'res.
The 6OC pro)ess offers the opport'nit0 to save signifi)ant time and administrative effort $e)a'se there is on&0 one )ompetitive $id pro)ess, and that is /hen the ad@'stment fa)tors are so&i)ited. Thereafter, individ'a& @o$s do not have to $e )ompeted, so there is no &ength0 advertising or so&i)itation time, or )omp&e; so&i)itation do)'ments to prepare, approve and iss'e. The 6OC )an $e a m'&ti 0ear )ontra)t, there$0 red')ing the n'm$er of times the program m'st $e )ompeted. .AITAKs )ontra)t is for one $ase 0ear p&'s t/o one 0ear options, and its va&'e is appro;imate&0 S9 mi&&ion. 2$($4 Partnerin" &artnerin! is a )on)eptAte)hni<'e designed to foster a team $'i&ding, or >partnering> frame of mind to/ard the a))omp&ishment of the )onstr')tion pro@e)t. -artnering /as origina&&0 deve&oped $0 the Arm0 Corp of :ngineers for 'se on ma@or )onstr')tion pro@e)ts /ith &arge pro@e)t staffs on the /or2 site and /here effe)tive )omm'ni)ations are essentia&. The parties invo&ved in the performan)e of the pro@e)t, in)&'ding the Agen)0, the A : firm, the prime Contra)tor, and a&& s'$)ontra)tors /o'&d meet together on a reg'&ar $asis 8at &east month&09 to esta$&ish and maintain open &ines of )omm'ni)ation, /ith the goa& of ens'ring re&ationships of tr'st and )ooperation. The partnering pro)ess 's'a&&0 emp&o0s a professiona& *a)i&itator /ho )ond')ts the sessions so as to promote tr'st and rea)h m't'a& agreements on ho/ the pro@e)t is to pro)eed. The
-age !!
*a)i&itator+s fee and asso)iated )osts are paid for $0 the Contra)tor /ho is in t'rn reim$'rsed $0 the o/ner 850P9 from a &ine item in the )ontra)t -ri)e S)hed'&e. The partnering pro)ess does not )hange or a&ter the )ontra)t agreement. ?t is not @'st a one time meeting at the start of the pro@e)t, $'t is an on going pro)ess. ?t is 's'a&&0 a))omp&ished in five distin)t phases( -hase ? is a @oint session of top e;e)'tives designed to arrive at a )&ear agreement on the pro@e)t+s $'siness goa&s and esta$&ish a )&ear iss'e reso&'tion pro)ess. ?ss'es genera&&0 fo)'s on safet0, $'dget, )omm'ni)ations, <'a&it0, s)hed'&e, team/or2, impa)t on the )omm'nit0 and a )ommitment to /or2 together for a s'))essf'& pro@e)t. .AITA deve&oped a &artnerin! C)arter for its #orth Springs Station -ro@e)t, signed $0 a&& the team mem$ers, /hi)h reads as fo&&o/s( 'e/ t)e team mem$ers of t)e Nort) S%rin!s Station (CF15<D) &ro5ect Team/ are committed to continuin! t)e tradition of effective %artnerin! amon! our or!ani@ations and to deliverin! a facility in w)ic) all team mem$ers ta(e %ride. 'e will measure our collective success t)rou!) t)e followin! %ro5ect o$5ectives=

Com%lete t)e %ro5ect on sc)edule and meet all milestones &rovide a safe wor(site to minimi@e lost time accidents Com%lete t)e %ro5ect wit)in $ud!et Fair %rofit earned $y contractor 0uic(ly resolve claims wit)out liti!ation "eliver a quality %roduct wit)in s%ecified standards Serve as res%onsi$le nei!)$ors and %rovide a %ositive im%act to t)e surroundin! community
'e will %romote teamwor( $ased on t)e followin! %rinci%les and attitudes=

Timely in%uts/ res%onses and decisions ,%en/ effective communications +onesty and trust Solvin! %ro$lems at t)e lowest %ossi$le level 'or(in! to!et)er a!ainst t)e 5o$ 1 not eac) ot)er Full team commitment and %artici%ation in %artnerin!
#ote that the &artnerin! C)arter identifies its goa&s as the $est interests of all t)e %arties. These interests in)&'de the earning of a fair profit $0 the Contra)tor. ?t is )riti)a& for the Agen)0Ks personne& to see the Contra)tor as a team mem$er /hose interest in earning a fair profit is e<'a&&0 important to the interests of the Agen)0. -hase ?? )onsists of a /or2shop /here a&& sta2eho&ders parti)ipate in deve&oping a pro@e)t )harter defining team goa&s, )ond')t and ris2s. Washington .etropo&itan Area Transit
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A'thorit0 8W.ATA9 pro@e)t mem$ers deve&oped the fo&&o/ing &ro5ect C)arter for the .etro =eorgia Aven'e -et/orth Station( &ro5ect &riorities= o o o o o o o o o o o o Successful &artnerin! 8arly identification and resolution of %ro$lems Reali@in! onePs own res%onsi$ilities and o$li!ations Community relations ,%enness Timeliness (es%ecially early su$mittals/ early %ermits) ?ein! a$le to live wit) c)an!es Safety 0uality a(in! a %rofit 88,/ disadvanta!ed $usiness %ro!ram/ em%loyee salaries aintainin! %rofessionalism
C)allen!es 'e Face= o o o o o o o o o o o o o o .ettin! a%%rovals quic(ly Resolvin! issues $y !ive and ta(e inimi@in! c)an!es H"esi!nin! t)rou!) c)an!esI Slurry wall Arc)itectural dome ?ein! %aid on time Closeout wit)in JD days No claimsRif unavoida$le/ finali@e %rom%tly City construction &u$lic safety +a@ardous material Avoidin! interference wit) ot)er contractors Stayin! in )armony
W.ATA has 'sed -artnering in its ma@or )onstr')tion )ontra)ts for over ten 0ears and in its &ast t/o Iai&)ar )ontra)ts. W.ATA $e&ieves that partnering ma0 a&so $e 'sef'& in $'s )ontra)ts /here there is a need to enhan)e )omm'ni)ations and /or2ing re&ationships $et/een the o/ner and the $'s man'fa)t'rer. *or e;amp&e, iss'es of de&iver0, pa0ment and potentia& performan)e matters re&ative to testing, /arrant0, et). )o'&d a&so $e addressed.
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-hase ??? provides for month&0 eva&'ations $0 those managing the @o$ for $oth parties. The o$@e)tive is to so&ve pro$&ems at the &o/est &eve&, and a&& mem$ers sho'&d $e eva&'ating the team+s progress, or &a)2 thereof, in meeting the esta$&ished goa&s. .onth&0 meetings are he&d at the e;e)'tive &eve& to revie/ and dis)'ss areas of )on)ern or interest. -ro$&ems are identified and so&'tions are agreed to. OrganiGationa& impediments to so&'tions are reso&ved. ?f ne)essar0, 'nreso&ved iss'es are es)a&ated to higher managers. .an0 iss'es are reso&ved $efore the0 $e)ome ma@or pro$&ems and these s'))esses are a&so dis)'ssed at the month&0 meeting.
-hase ?O is an e;e)'tive session, s'pp&emented $0 2e0 pro@e)t personne& from $oth parties. This is norma&&0 a <'arter&0 meeting. The p'rpose is to address the main iss'es that re<'ire reso&'tion, and to ens're that the -artnering pro)ess remains on tra)2. -hase O is a )&os're session to provide feed$a)2 on the va&'e of the -artnering pro)ess. This session is not a&/a0s he&d.
Additiona& information on &artnerin! is avai&a$&e from the Constr')tion ?nd'str0 ?nstit'te. 225 2$($5 Com etiti%e Pro osals %s$ Sealed Bids Pro'ects In%ol%in" Tec/nolo"# =enera&&0 s')h pro@e)ts are either part of a &arger )onstr')tion pro@e)t, in /hi)h )ase the0 ma0 fa&& 'nder )ompetitive $idding re<'irements, or te)hno&og0 a)<'isition pro@e)ts invo&ving professiona& servi)es and possi$&0 an insta&&ation )omponent, /hi)h ta2es them o'tside the )onstr')tion fie&d /ith its sea&ed $id re<'irements. Where the /or2 to $e performed 'nder )ontra)t is to a dominant e;tent other than )onstr')tion, some Transit Agen)ies have e;perien)ed sit'ations /here a )ompetitive proposa& has proven to $e a $etter method of )ontra)ting for the pro@e)t than the t0pi)a& sea&ed $id approa)h. This has $een tr'e for pro@e)ts /hi)h entai&ed te)hno&og0, s')h as soft/are and s0stems integration /or2. ?n these sit'ations 0o' ma0 /ant to eva&'ate a&ternative te)hni)a& approa)hes or a&ternative /a0s of )onstr')tion. These )onditions &end themse&ves to an I*- t0pe of so&i)itation, /here 0o' /i&& have the f&e;i$i&it0 to ho&d dis)'ssions /ith the offerors and se&e)t the >$est va&'e> for 0o'r Agen)0, )onsidering not on&0 pri)e $'t the va&'e of the prod')ts $eing offered, in)&'ding their e;pe)ted re&ia$i&it0 and maintaina$i&it0. One s')h pro@e)t invo&ving te)hno&og0 /as a )ontra)t for a -'$&i) AddressAC'stomer ?nformation S)reen. This pro@e)t is $eing )onstr')ted over a n'm$er of phases. The first phase )ontra)t /as hand&ed as a sea&ed $id. The pro$&em /ith this approa)h /as that the &o/est responsi$&e $idder /as a )onstr')tion )ontra)tor and not a s0stems integrator. There /as a )onsidera$&e amo'nt of soft/are invo&ved and the so&i)itation do)'ments did not mention /ho retained soft/are rights. A pro@e)t s')h as this sho'&d $e so&i)ited as an I*- so that negotiations )an ta2e p&a)e and prospe)tive )ontra)tors )an $e eva&'ated on the $asis of their s'ita$i&it0 for the /or2. 22%
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http(AA)onstr')tion instit'te.org.
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Critical Pro'ects In%ol%in" Sc/edule Incenti%es ?f state &a/ permits, it ma0 $e advantageo's to )onsider a negotiated method of pro)'rement instead of sea&ed $ids /hen the pro@e)t invo&ves a )riti)a& )omp&etion s)hed'&e and /here 0o' have )hosen to 'se in)entive provisions in the )ontra)t or a $idAproposa& eva&'ation method s')h as those des)ri$ed in se)tion %.!.9 3ncentives to Reduce &ro5ect Com%letion Times. Where the methodo&og0 $eing 'sed to eva&'ate $ids is 'n)onventiona&, and /here it ma0 $e advantageo's to have the f&e;i$i&it0 to ho&d dis)'ssions /ith the prospe)tive )ontra)tors, an I*- approa)h ma0 $e prefera$&e to a sea&ed $id method $e)a'se it /i&& give 0o' the a$i&it0 to dis)'ss the )ontra)torsK proposed approa)hes to s)hed'&e improvement and the rea&ism of those proposa&s. ?t m'st $e re)ogniGed, ho/ever, that a negotiated pro)'rement /i&& re<'ire more time to a/ard, and this ma0 $e )o'nter prod')tive /hen the pro@e)t is a time )riti)a& one. 2$($8 Incenti%es to Reduce Pro'ect Com letion Times Transit agen)ies have had s'))ess in red')ing pro@e)t )omp&etion times $0 'sing a te)hni<'e /herein $ids are so&i)ited and eva&'ated in terms of the pri)es offered and the $est a)hieva$&e )omp&etion s)hed'&e. 221 The )ontra)t a/ard is determined $0 the lowest evaluated $id, 'sing $oth the $id pri)e and the proposed )omp&etion s)hed'&e. ?n this pro)'rement s)enario( The Agen)0 spe)ifies the ma;im'm d'ration of the pro@e)t in the $id do)'ments. The Agen)0 determines the va&'e of a >da0> d'ring the )ontra)t period and spe)ifies this va&'e in the $id do)'ments. ,idders m'st propose the pro@e)t d'ration 8$est a)hieva$&e s)hed'&e9 in their $ids. The $id do)'ments /o'&d define the damages for fai&'re to a)hieve the proposed )omp&etion s)hed'&e, and the $on'ses for ear&0 )omp&etion, if the Agen)0 sho'&d )hoose to 'se them /ith the damages provisions. The 'se of damages for fai&'re to meet the proposed )omp&etion s)hed'&e is important in order to 2eep the $idders >honest> in their proposed )omp&etion s)hed'&es. The 'se of $on'ses /i&& provide an even stronger in)entive for the $idders to s'))essf'&&0 ma2e their proposed s)hed'&es after )ontra)t a/ard.
E;am le3
-ri)e ] D'ration 8M of Da0s9 [ :va&'ated ,id Bid Com an# V S5,000,000 120 Da0s Da#s Com an# D S5,500,000 ))))))))))))) %00 Da0s Da#s
Oa&'e of a da0 is S5,000
A 8,id -ri)e9 , 8Contra)t D'ration9
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#e/ 5or2 Cit0 Transit. Conta)t .s. 6'di =i$son, Assistant Chief -ro)'rement Offi)er Constr')tion C Capita& Division of .aterie& at 81!H9 %94 4!!".
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:ngineering,
See note !!.
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Oa&'e of D'ration 8Da0s ; S5,0009 E%aluated Total
S",%00,000 R5!2::!:::
S",000,000 R5!0::!:::
The )ontra)t /o'&d $e a/arded to Compan0 5 sin)e its eva&'ated $id is &o/er than that of Compan0 R $0 S!00,000. Oa&'e of a/ard /o'&d $e S5.5 mi&&ion. Advantages to -ri)e -&'s S)hed'&e ,idding ) This te)hni<'e is &i2e&0 to en)o'rage effi)ient )ontra)tors to $id, and it offers the &i2e&ihood of shorter )onstr')tion pro@e)t d'rations $e)a'se of the strong finan)ia& in)entives for a)hieving the $est )omp&etion s)hed'&e. Con)erns /ith -ri)e -&'s S)hed'&e ,idding 3t is e7tremely im%ortant t)at t)e construction contractor )ave control over t)e wor( site/ and that the Agen)0Ks responsi$i&ities at the /or2 site $e minima& or, prefera$&0, none;istent. ?f the )ontra)tor is dependent 'pon the Agen)0 to f'rnish s'pport at the /or2 site, or if the )ontra)torKs /or2 is dependent 'pon the a)tivities of other )ontra)tors, the Agen)0 )an e;pe)t )&aims regarding the iss'e of de&a0s, /hi)h in t'rn affe)t the in)entive provisions of the )onstr')tion )ontra)t. ?n vie/ of the pro$a$i&ities of )&aims and &itigation, Agen)ies sho'&d avoid in)entive )ontra)ts s')h as this 'n&ess the0 )an t'rn a /or2 site over to a )onstr')tion )ontra)tor and a&&o/ the )ontra)tor to )ontro& that site and the s)hed'&ing of a&& /or2 re<'ired to )omp&ete the pro@e)t. Where )ontra)tors &a)2 the ne)essar0 )ontro& over the /or2 site, Agen)ies ma0 /e&& have to pa0 higher pri)es, $ased on the )ontra)t $on'ses and the )ontra)torKs s'))essf'& )&aims for de&a0s, and sti&& have a pro@e)t that is &ate in )omp&etion. Comp&etion in)entives ma0 /or2 to dis)o'rage prime )ontra)tors from s'$)ontra)ting /ith sma&& or disadvantaged $'siness firms. -rimes /i&& pro$a$&0 see2 partners /ho are &arge $'sinesses /ith proven tra)2 re)ords, and /hi)h have s'$stantia& reso'r)es avai&a$&e to perform the /or2 as e;peditio's&0 as possi$&e. The <'a&it0 of )onstr')tion /or2 ma0 s'ffer d'e to the s)hed'&e press'res, and Agen)ies /i&& need to e;ert )&ose s'rvei&&an)e over the )ontra)tor. 2$($(: S ecial Contract Pro%isions Constr')tion )ontra)ts re<'ire )ertain provisions /hi)h are 'ni<'e to that a)tivit0. These provisions are dis)'ssed in detai& in other se)tions of the ,--.. *o&&o/ing is a s'mmar0 of the spe)ia& provisions and the ,--. se)tions /here the0 are dis)'ssed. La&or The three /age and ho'r &a/s governing )onstr')tion in the *edera& rea&m are the Davis ,a)on A)t, the Contra)t Wor2 Bo'rs and Safet0 Standards A)t, and the Cope&and Anti Yi)2$a)2 A)t. The app&i)a$&e )ontra)t )&a'ses are dis)'ssed in Appendi; A.!, )&a'ses !%, !1 and !H. Se)tion H.!.2 "avis ?acon Act )ontains more detai&ed g'idan)e /ith respe)t to administering the re<'irements of this A)t.
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Bondin" Constr')tion )ontra)ts re<'ire )ontra)tors to f'rnish three t0pes of $onds $id $onds, pa0ment $onds and performan)e $onds /hi)h are dis)'ssed in Appendi; A.!, )&a'se !", /ith more detai&ed g'idan)e on ea)h t0pe of $ond in Se)tion H.2.! &erformance ?onds. LiAuidated dama"es 1 Se)tion H.2." #iquidated "ama!es )ontains g'idan)e on the 'se of &i<'idated damages )&a'ses. Differin" Site Conditions L Se)tion 9.2.".! )ontains g'idan)e on administering the "ifferin! Site Conditions )&a'se. S ecifications for Construction Se)tion ".4 S%ecifications for Construction dis)'sses re<'irements /ithin *TA Cir)'&ar 4220.!: and the .aster Agreement 8.A9 /hi)h ma0 affe)t 0o'r )onstr')tion spe)ifi)ations. Insurance Se)tion %.% 3nsurance dis)'sses an approa)h to ins'ring )onstr')tion pro@e)t )ontra)tors 2no/n as ,wner Controlled 3nsurance &ro!rams (,C3&)/ /hi)h has proven to $e an effe)tive method of ins'ring the )ontra)tor teams invo&ved in )onstr')tion pro@e)ts. Barranties 1 O$taining a))epta$&e /arrant0 do)'ments in a time&0 manner from )ontra)tors has $een histori)a&&0 diffi)'&t. #o )ontra)t'a& in)entive has e;isted to motivate )ontra)tors to s'pp&0 the re<'ired /arranties. =rantees ma0 /ish to )onsider ma2ing the s'$mission of an a))epta$&e /arrant0 form a )ondition of prod')t or s0stem a))eptan)e in order to motivate )ontra)tors to f'rnish the re<'ired form. =rantees might a&so in)&'de the /arrant0 forms as a fi;ed pri)e &ine item in the )ontra)t for pa0ment p'rposes, th's giving the )ontra)tors a strong motivation to s'pp&0 the re<'ired forms. Contract Close)out C&ose o't of )onstr')tion )ontra)ts /i&& re<'ire )ertain do)'mentation 'ni<'e to these )ontra)ts, s')h as &ien /aivers, as $'i&t dra/ings, et). These re<'irements are dis)'ssed in Chapter !0, Close ,ut. 2$* E@UIPMENT AND SUPPLIES 2$*$( Lease7Maintain RE@UIREMENT Ie<'irements re&ated to the &ease of e<'ipment and fa)i&ities ma0 $e fo'nd in the fo&&o/ing reg'&ations( 8a9 FTA Circular .**:$(E "enerall#! and ara"ra / 4d 1/ic/ reAuires! 1/ere a ro riate! an anal#sis of lease %ersus urc/ase alternati%es to determine t/e most economical a roac/$ 8$9 *TA .aster Agreement .A8!29, Se)tion !%, #eases. 8)9 Ca%ital #eases 849 C*I, -art %"9.9
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DISCUSSION Since eAui ment leases are considered Ht/ird art# contractsM 1it/in t/e meanin" of FTA Circular .**:$(E! t/e reAuirements of t/at Circular a l# to suc/ rocurements$ T/e Circular reAuires a lease %ersus urc/ase anal#sis to determine t/e most economical a roac/ to an# "i%en rocurement$ T/e Master A"reement! Section (2! concerns ca ital leases! in accordance 1it/ .8 CFR! art 2-8$ Lease %s$ urc/ase alternati%es = B/ene%er an a"enc# is considerin" t/e leasin" of eAui ment! a lease %s$ urc/ase anal#sis s/ould &e made$ T/e anal#sis s/ould &e a ro riate to t/e si,e and com le;it# of t/e rocurement$ It is usuall# more economical to urc/ase eAui ment t/an to lease it$ T/is is not al1a#s true! /o1e%er! es eciall# 1/en /i"/l# com le; eAui ment is in%ol%ed and t/ere are issues of maintainin" t/e eAui ment or /a%in" trained ersonnel 1/o are com etent to o erate t/e eAui ment$ In determinin" 1/et/er t/e lease of eAui ment is feasi&le! t/e follo1in" factors must &e considered3 Estimated len"t/ of t/e eriod t/e eAui ment is to &e used and t/e amount of time of actual eAui ment usa"eJ B/en circumstances reAuire t/e immediate use of eAui ment to meet ro"ram or s#stem "oals and t/e leasin" 1ould ser%e as an interim measure to meet t/ese immediate needs$ Financial and o eratin" ad%anta"es of alternati%e t# es and maEes of eAui mentJ Total rental cost for t/e estimated eriod of useJ Net urc/ase rice if acAuired &# urc/aseJ Trans ortation and installation costsJ Maintenance and ot/er ser%ice costs 6e$"$! t/e cost of ermanent /ousin" facilities for /ea%# cranes mi"/t reclude t/eir urc/ase! and t/e lacE of trained o erators of /ea%# eAui ment ma# dictate t/at t/e a"enc# lease t/e eAui ment 1it/ trained o erators9J Difference in 1arrant# co%era"es &et1een lease and urc/aseJ e$"$! some office eAui ment leases do not ro%ide for 1arrant# re airs 1/ereas ne1 urc/ases 1ould &e co%ered &# 1arrantiesJ A%aila&ilit# of a ser%icin" ca a&ilit#! es eciall# for /i"/l# com le; eAui ment 6can t/e A"enc# ser%ice t/e eAui ment if it is urc/asedS9J Potential o&solescence of t/e eAui ment &ecause of imminent tec/nolo"ical im ro%ementsJ
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Best Practices
Trade)in or sal%a"e %alueJ Im uted interest costs 6net resent %alue of lease a#ments9J and Insurance costs$
7eases /ith options to p'r)hase L When a &ease is @'stified, a &ease /ith option to p'r)hase ma0 $e appropriate. 7ong term &eases L =enera&&0, a &ong term &ease sho'&d $e avoided, $'t ma0 $e appropriate if an option to p'r)hase or other favora$&e terms are in)&'ded. 2$*$($( Lease and Maintenance of Pe/icles 7ease vs. ,'0 Ana&0sis = When )omparing the )osts of &easing vs. o/nership, maintenan)e )osts /i&& 's'a&&0 $e a ma@or e)onomi) fa)tor. ?ndeed the primar0 advantage of &easing is the avoidan)e of maintenan)e )osts for items s')h as $ra2es, $atteries, et). =rantees m'st )aref'&&0 estimate the maintenan)e )osts over the anti)ipated &ife of the vehi)&e. The )osts of o/nership /i&& $e in)reased $0 these maintenan)e )osts and de)reased $0 the anti)ipated resa&e va&'e 8sa&vage va&'e9 of the vehi)&e /hen it is so&d. Using a Ie<'est for -roposa& vs. ?nvitation for ,id L -AC: S'$'r$an ,'s Servi)e+s e;perien)e /ith )ompetitive pro)'rements 'sing an I*- has $een positive$ ! There is m')h more f&e;i$i&it0 for the grantee /hen an I*- is 'sed instead of an ?*,. The I*- approa)h gives the grantee an opport'nit0 to esta$&ish eva&'ation )riteria for important fa)tors of performan)e, in)&'ding s')h items as preventative maintenan)e, emergen)0 roadside assistan)e, repairs, f'e& )ard management servi)es, and a))ident servi)es. -roposa&s )an $e eva&'ated /ith the o$@e)tive of se&e)ting the $est overa&& )om$ination of servi)e <'a&it0 and pri)e. #egotiations )an $e he&d /ith the offerors in order to se)'re the $est possi$&e proposa& and )ontra)t terms. The -AC: S'$'r$an ,'s I*- iss'ed for &easing and maintaining their f&eet vehi)&es ma0 $e fo'nd in Appendi; ,.!5. 6oint -ro)'rements /ith State DOT+s L =rantees sho'&d in<'ire /ith their State Departments of Transportation as to /hether it /o'&d $e feasi$&e to &ease vehi)&es from )ontra)ts a/arded $0 the State. These State )ontra)ts fre<'ent&0 represent the $est possi$&e terms avai&a$&e for vehi)&e &easing. When p'rs'ing this 3pigg0$a)2ing4 approa)h, grantee personne& m'st determine if the State )ontra)t )ontains a&& the re<'ired *edera& )&a'ses and )ertifi)ations re<'ired $0 *edera& reg'&ations. =rantees ma0 /ish to ta2e the initiative /ith their State DOT+s to p&an ahead for
*or information, )onta)t the -'r)hasing Se)tion .anager at 8H419 22H "51".
-age !9
@oint pro)'rements of vehi)&es in order to ass're that their needs are addressed and that the *edera& re<'irements are in)&'ded /hen the pro)'rements are initiated. *or additiona& g'idan)e, see Se)tion %."." 9oint &rocurements of Rollin! Stoc( and H&i!!y$ac(in!.I 2$*$($* Lease of Cea%# EAui ment 1it/ O erators Some agen)ies have fo'nd it $enefi)ia& to &ease, rather than p'r)hase, heav0 e<'ipment, s')h as )ranes, /ith operators. 2 The more important )onsiderations here tend to $e operationa& rather than e)onomi). Advantages to &easing /o'&d in)&'de s')h fa)tors as( the avai&a$i&it0 of f'&&0 trained and &i)ensed e<'ipment operatorsQ the )onvenien)e of having the &essor provide the ver0 spe)ia&iGed maintenan)e servi)es and ho'sing str')t'res for the e<'ipmentQ and the &essor+s ass'mption of &ia$i&it0 in )ase of a))idents.
6oint Agen)0 -ro)'rements Beav0 e<'ipment ma0 $e ver0 diffi)'&t to o$tain on short noti)e, and &onger term &eases, s')h as three 0ears, ma0 $e advisa$&e. ?n addition, )ompetition ma0 $e virt'a&&0 non e;istent. Under these )ir)'mstan)es, agen)ies might $e advised to see2 o't other agen)ies in their geographi)a& region in order to )ond')t a @oint pro)'rement for their )ommon needs so as to o$tain a more favora$&e )ontra)t than either )o'&d pro)'re $0 themse&ves. 7a$or 7a/s L Agen)ies /i&& need to $e a/are of &o)a& or State &a$or &a/s, as /e&& as *edera& &a/s if )onstr')tion is invo&ved 8e.g., Davis ,a)on A)t9, /hen deve&oping their so&i)itation do)'ment and )ontra)t. ?ns'ran)e L ?ns'ran)e re<'irements /i&& $e an important part of the )ontra)t terms. Agen)0 pro)'rement personne& sho'&d )aref'&&0 )oordinate the ins'ran)e provisions /ith their ins'ran)e department or &ega& spe)ia&ists. Ie<'irements might in)&'de )overage for )ommer)ia& genera& &ia$i&it0, a'to vehi)&e ins'ran)e, /or2ers )ompensation, and perhaps, a spe)ia& rai&/a0 prote)tive po&i)0. The agen)0+s ins'ran)e spe)ia&ists sho'&d determine spe)ifi) )overage re<'irements and amo'nts. 2$- ROLLIN< STOCQ RE@UIREMENT The *TA .aster Agreement, .A8!29, Se)tion!5 8&9 defines severa& re<'irements for the a)<'isition of ro&&ing sto)2(
&. Io&&ing Sto)2. ?n a)<'iring ro&&ing sto)2, the Ie)ipient agrees as fo&&o/s(
*
*or information a$o't #e/ 5or2 Cit0+s &easing of )ranes /ith operators )onta)t Stan =ri&& at 81!H9 %94 4"50.
-age 20
8!9 .ethod of A)<'isition. The Ie)ipient ma0 a/ard a third part0 )ontra)t for ro&&ing sto)2 $ased on initia& )osts, performan)e, standardiGation, &ife )0)&e )osts, and other fa)tors, or $ased on a )ompetitive pro)'rement pro)ess in a))ordan)e /ith 49 U.S.C. Se)tion 5"2%8)9. 829 .'&ti 0ear Options. ?n a))ordan)e /ith 49 U.S.C. Se)tion 5"2%8$98!9, a Ie)ipient ma0 pro)'re ro&&ing sto)2 'sing finan)ia& assistan)e appropriated for 49 U.S.C. Chapter 5" 'sing a )ontra)t /ith an option, not to e;)eed 5 0ears after the date of the origina& )ontra)t, to p'r)hase additiona& ro&&ing sto)2 or rep&a)ement. 8"9 -re A/ard and -ost De&iver0 Ie<'irements. The Ie)ipient agrees to )omp&0 /ith the re<'irements of 49 U.S.C. Se)tion 5"2" 8m9 and *TA reg'&ations, >-re A/ard and -ost De&iver0 A'dits of Io&&ing Sto)2 -'r)hases,> 49 C.*.I. -art %%", and an0 revision thereto. 849 ,'s Testing. To the e;tent app&i)a$&e, the Ie)ipient agrees to )omp&0 /ith the re<'irements of 49 U.S.C. Se)tion 5"2" 8)9 and *TA reg'&ations, >,'s Testing,> 49 C.*.I. -art %%5, and an0 revision thereto. 2$-$( Buses 2$-$($( Com etiti%e Pro osals %s$ Sealed Bids =rantee e;perien)es /ith )ompetitive Requests for &ro%osals 8I*-Ks9 for $'s pro)'rements indi)ates that this method ma0 $e prefera$&e to the 'se of sea&ed $ids. When I*-Ks are 'sed, the grantee has the f&e;i$i&it0 to ho&d dis)'ssions /ith the offerors and to eva&'ate the proposa&s and )ond')t negotiations for the $est de&iver0 s)hed'&es, /arranties, <'a&it0Are&ia$i&it0, after mar2et s'pport in terms of parts avai&a$i&it0, and the $est pri)es. ?n other /ords, grantees )an a/ard their )ontra)ts on the $asis of the $est va&'e, /ith a&& important fa)tors )onsidered. Some State &a/s, ho/ever, re<'ire the 'se of sea&ed $idding pro)ed'res for $'ses, in /hi)h )ase grantees /o'&d not $e a$&e to 'se )ompetitive I*-Ks. -re<'a&ifi)ation of s0stemsA)omponents The .etropo&itan Transit A'thorit0 8.TA9 of Barris Co'nt0, Bo'ston, TR, )omp&eted a &arge 24" $'s pro)'rement /hi)h 'sed a t/o step sea&ed $id pro)ess. This entai&ed a pre<'a&ifi)ation pro)ed're >Ie<'est for Approved :<'a&s> for ma@or s0stems and )omponents. ?n Step one, .TA iss'ed a performan)e t0pe spe)ifi)ation identif0ing a&& the s0stems or )omponents /hi)h had to $e s'$mitted for approva& prior to $ids. :;amp&es /o'&d in)&'de( engines, transmissions, door s0stems, et). .TA revie/ed the s'$missions in terms of their )hara)teristi)s, spe)ifi)ations, et). and determined /hat s0stems and )omponents the0 /o'&d a))ept. .TA then iss'ed a noti)e to a&& $idders identif0ing /hat )omponents /ere a))epta$&e, so that a&& $idders 2ne/ $eforehand /hat items /ere a))epta$&e to $id on. Sea&ed
-age 2!
$ids /ere then re)eived, and /hen the &o/ $idder /as identified, .TA performed an a'dit for spe)ifi)ation )omp&ian)e and )omp&ian)e /ith ,'0 Ameri)a. " 2$-$($* APTA Standard Bus Procurement <uidelines The Ameri)an -'$&i) Transit Asso)iation 8A-TA9 p'$&ished the Standard ?us &rocurement .uidelines (S?&.) in 6an'ar0 !991 as >a mode& for so&i)itation of offers and )ontra)ts for the s'pp&0 of transit $'ses.> 4 The S,-= )ontains s'ggested terms and )onditions regarding the so&i)itation, the )ontra)t do)'ment, <'a&it0 ass'ran)e and )ontra)tor /arranties. A se)ond vo&'me )ontaining te)hni)a& spe)ifi)ations is 'nder deve&opment. =rantees are )a'tioned, ho/ever, that the A-TA .uidelines ma0 )ontain terms and )onditions /hi)h are not )onsistent /ith *TAKs po&i)ies as set forth in *TA Cir)'&ar 4220.!:. *or e;amp&e, the provisions regarding advance %ayments and warranties in the A-TA .uidelines )annot $e adopted /itho't prior *TA /aivers. 2$-$* Rail Cars There are )ertain rea&ities in the rai& )ar ind'str0 /hi)h impa)t the manner in /hi)h rai& )ars are pro)'red. Transit Agen)ies $'0ing rai& )ars tend to do so infre<'ent&0, /ith a n'm$er of 0ears $et/een pro)'rements. The te)hno&og0 )an $e e;pe)ted to )hange )onsidera$&0 d'ring the intervening 0ears $et/een these pro)'rements. This fa)t ma2es it )riti)a& that Agen)ies do )onsidera$&e advan)e p&anning in order to determine the )'rrent state of the art $efore the0 form'&ate their spe)ifi)ations to pro)'re rai& )ars. ,e)a'se there is virt'a&&0 no standardiGation in the United States in the area of tra)2 ga'ges, station p&atform heights, t'nne& designs, et)., and $e)a'se ne/ rai& )ars m'st $e )ompati$&e /ith e;isting )ars, it is not feasi$&e for Transit Agen)ies to )onso&idate pro)'rements of rai& )ars and 'se )ommon $'0s or >pigg0$a)2ing.> Whi&e @oint p'r)hasing of rai& )ars is diffi)'&t, an agen)0 designing a spe)ifi)ation sho'&d )ons'&t /ith others /ho have either re)ent&0 p'r)hased )ars or /ho are in the pro)ess of doing so, and attempt to a)hieve /hatever )ommona&it0 of )omponents is possi$&e. This /i&& fa)i&itate $oth @oint p'r)hases of parts in s'$se<'ent 0ears and the a$i&it0 to se)ond so'r)e. Another aspe)t of this pro$&em /ith non standardiGed rai& )ars is that it res'&ts in high one time design )osts for ea)h Agen)0Ks pro)'rement. This in t'rn provides an in)entive to $'0 as man0 )ars as feasi$&e 'nder ea)h so&i)itation so that the design )osts )an $e amortiGed over a greater n'm$er of vehi)&es, /ith a )orresponding red')tion in 'nit pri)es. On a re)ent .AITA pro)'rement, for e;amp&e, the 'nit pri)e /as red')ed $0 S400,000 $0 in)reasing the <'antit0 of )ars to $e pro)'red from "0 8the initia&&0 p&anned n'm$er9 to !00. This savings /as d'e to amortiGing the non re)'rring design )osts over a &arger n'm$er of 'nits. Agen)ies sho'&d
.TA, Bo'ston, TR. Conta)t Don .'rph0 at 81!"9 1"9 4H4" or -a'& Como at 81!"9 1"9 4H0".
Ameri)an -'$&i) Transit Asso)iation, !20! #e/ 5or2 Aven'e, #.W., S'ite 400, Washington, D.C. 20005 %!4!. Copies ma0 $e ordered $0 phone at 82029 H9H 40H9. Te)hni)a& <'estions ma0 $e ans/ered at 82029 H9H 40H1.
-age 22
)aref'&&0 )onsider the m'&ti 0ear )ontra)ting strategies dis)'ssed in Se)tion 2.2 #on! Term &lannin!. Best Practices .AITAKs e;perien)e /ith a re)ent ma@or rai& )ar pro)'rement offers a n'm$er of he&pf'& insights. 5 Com etiti%e ro osals The pro)'rement spe)ifi)ations /ere s'$@e)ted to a %eer review $0 other Transit Agen)ies and independent )ons'&tants prior to re&ease in the I*-. This gave .AITA the $enefit of other Transit Agen)iesK e;perien)es /ith more re)ent rai& )ar pro)'rements. .AITA e&e)ted to 'se a )ompetitive Request for &ro%osal 8I*-9 approa)h instead of a sea&ed $id method, /hi)h had $een their ear&ier pra)ti)e. The0 /ere p&eased /ith this de)ision $e)a'se it gave them the needed f&e;i$i&it0 to dis)'ss vario's te)hni)a& approa)hes for )omp&e; items /ith ea)h of the offerors, and to a)hieve the >$est va&'e,> given the different te)hni)a& approa)hes offered and the pri)es proposed for these approa)hes. >,est va&'e> in)&'ded e;pe)ted re&ia$i&it0 and maintaina$i&it0 feat'res, s')h as on $oard diagnosti)s. .AITAKs I*- in)&'ded a &ro%osal "ata Requirements #ist 8-DI79 /hi)h defined the format and )ontent of the re<'ired proposa& information, there$0 )reating proposa& 'niformit0, /hi)h in t'rn in)reased the <'a&it0 and effi)ien)0 of proposa& eva&'ation. The proposa& eva&'ation p&an, in)&'ding the s)oring me)hanism, /as )aref'&&0 deve&oped and tested 'sing severa& mo)2 proposa&s $efore the I*- /as iss'ed. On)e proposa&s /ere re)eived, the proposa& eva&'ation p&an and s)oring me)hanism /ere adhered to meti)'&o's&0 in order to avoid an0 appearan)e of $ias. T)is (ind of ri!id ad)erence to t)e %ro%osal evaluation %lan is a critical requirement for A!encies to o$serve if t)ey use t)e RF& met)odolo!y. .AITAKs 'se of individ'a&s o'tside the Agen)0 to parti)ipate on the proposa& eva&'ation )ommittee added an e&ement of o$@e)tivit0 and independen)e to the pro)ess, as /e&& as enhan)ing the overa&& e;perien)e $ase of the eva&'ation team. .AITA 2ept the te)hni)a& and pri)e proposa& eva&'ations separate, so as not to inf&'en)e the te)hni)a& eva&'ators. The0 a&so esta$&ished a >)ompetitive range> fo&&o/ing initia& proposa& eva&'ations, and he&d dis)'ssions /ith those )ompanies in the )ompetitive range 8those that had a reasona$&e )han)e for )ontra)t a/ard9. Offerors e&iminated from the )ompetitive range /ere to $e notified <'i)2&0 after .AITAKs de)ision so that the0 )o'&d re&ease their teams to other opport'nities. The time re<'ired to )omp&ete the pro)'rement pro)ess /as &onger 'sing the I*- method than it /o'&d have $een /ith sea&ed $ids 8?*,9. Using an ?*, /as estimated to ta2e $et/een fo'r and
.AITA Iai& Car pro)'rement, )onta)t .r. Io$ert 6'ne, A)ting Dire)tor of S0stems :ngineering, at 84049 H10 "20".
-age 2"
si; months from advertising to a/ard, /hereas the I*- method too2 a$o't !" months from re&ease of the I*- to )ontra)t a/ard. Agen)ies p&anning to 'se the I*- method /i&& have to a&&o/ for more time than if sea&ed $ids are 'sed, $'t the fina& res'&ts ma0 $e /orth the added pro)'rement time. Future urc/ases of ro rietar# arts :fforts sho'&d $e made in the origina& a)<'isition of rai& )ars 8and $'ses9 to in)&'de an >advan)e agreement> /ith the s'pp&ier )on)erning the f't're a)<'isition of proprietar0 parts. This )o'&d $e done as a per)entage dis)o'nt of the &ist pri)e. The $est approa)h might $e to have a one 0ear )ontra)t for the proprietar0 parts, /ith a series of fo'r one 0ear options 8to $e e;tended s'$@e)t to *TA approva&9. This /o'&d ena$&e the agen)0, at the end of ea)h 0ear, to determine /hether the mar2etp&a)e has )hanged in terms of the )ompetitive avai&a$i&it0 of parts former&0 on&0 avai&a$&e from the vehi)&e man'fa)t'rer. 2$-$- Loint Procurements of Rollin" StocE and HPi""#&acEin"I RE@UIREMENT *TA Cir)'&ar 4220.!: app&ies to a&& third part0 )ontra)t a)tions 'nderta2en $0 grantees /ith *edera& f'nds, in)&'ding a)tions ta2en p'rs'ant to the )ontra)ts of other entities, s')h as 8!9 the e;er)ise of options /hi)h have $een assigned to the grantee $0 another entit0 /hi)h a/arded the )ontra)t initia&&0, 829 the assignment of )ontra)ts themse&ves to a grantee $0 another entit0 8'nder /hi)h the grantee /i&& spend *edera& f'nds9, and 8"9 @oint pro)'rements /ith other entities 8'nder /hi)h the grantee /i&& spend *edera& f'nds9. Of parti)'&ar signifi)an)e are the fo&&o/ing provisions of *TA Cir)'&ar 4220.!:( 1.e. ?ntergovernmenta& -ro)'rement Agreements. !. =rantees are en)o'raged to 'ti&iGe avai&a$&e state and &o)a& intergovernmenta& agreements for pro)'rement or 'se of )ommon goods and servi)es. When o$taining goods or servi)es in this manner, grantees m'st ens're a&& federa& re<'irements, re<'ired )&a'ses, and )ertifi)ations 8in)&'ding ,'0 Ameri)a9 are proper&0 fo&&o/ed and in)&'ded, /hether in the master intergovernmenta& )ontra)t or in the grantee+s p'r)hase do)'ment. %
S'$ paragraph 8!9 &oo2s primari&0 to State government )ontra)ts that a&&o/ s'$ordinate government agen)ies to $'0 from esta$&ished s)hed'&es a2in to the =SA S)hed'&es in *edera& pra)ti)e. *TA $e&ieves grantees ma0 $'0 thro'gh these )ontra)ts provided a&& parties agree to append the re<'ired *edera& )&a'ses in the p'r)hase order or other do)'ment that effe)ts the grantee+s pro)'rement. When $'0ing from these s)hed'&e )ontra)ts, grantees sho'&d o$tain ,'0 Ameri)a )ertifi)ation $efore entering into the p'r)hase order. Where the prod')t to $e p'r)hased is ,'0 Ameri)a )omp&iant, there is no pro$&em. Where the prod')t is not ,'0 Ameri)a )omp&iant, the grantee /i&& sti&& have to o$tain a /aiver from *TA $efore pro)eeding.
-age 24
2.
=rantees are a&so en)o'raged to @oint&0 pro)'re goods and servi)es /ith other grantees. When o$taining goods or servi)es in this manner, grantees m'st ens're a&& federa& re<'irements, re<'ired )&a'ses, and )ertifi)ations are proper&0 fo&&o/ed and in)&'ded in the res'&ting @oint so&i)itation and )ontra)t do)'ments. 1 =rantees ma0 assign )ontra)t'a& rights to p'r)hase goods and servi)es to other grantees if the origina& )ontra)t )ontains appropriate assigna$i&it0 provisions. =rantees /ho o$tain these )ontra)t'a& rights 8)ommon&0 2no/n as Upigg0$a)2ing+9 ma0 e;er)ise them after first determining the )ontra)t pri)e remains fair and reasona$&e. H
".
H.a. *'&& and Open Competition. A&& pro)'rement transa)tions /i&& $e )ond')ted in a manner providing f'&& and open )ompetition. 9.i.8!9 :va&'ation of Options. The option <'antities or periods )ontained in the )ontra)torKs $id or offer m'st $e eva&'ated in order to determine )ontra)t a/ard. When options have not $een eva&'ated as part of the a/ard, the e;er)ise of s')h options /i&& $e )onsidered a so&e so'r)e pro)'rement. DISCUSSION Recentl#! t/ere /as &een a "ro1in" trend amon"st transit s#stems to &ecome creati%e in t/e acAuisition of rollin" stocE$ T/e most constructi%e of t/ese tec/niAues in%ol%e ad%ance lannin" and 'oint rocurement &# se%eral s#stems$ FTA encoura"es t/is tec/niAue$ In t/ese 'oint rocurements! t/e needs of t/e %arious transit s#stems are defined in t/e solicitation and t/e manufacturers are asEed to &id u on t/e total Eno1n needs of t/e a"encies in%ol%ed$ In ot/er situations! transit a"encies 1ill identif# an e;istin" contract of anot/er a"enc# and F i""#&acEF t/at contract &# means of an assi"nment of contract ri"/ts suc/ as an assi"nment of o tions$ Additionall#! t/ere is t/e occasion 1/ere an a"enc# a1ards an Indefinite Deli%er#7Indefinite @uantit# 6ID7I@9 contract and allo1s ot/er
S'$ paragraph 829 ref&e)ts *TA+s $e&ief that grantees sho'&d )onsider )om$ining efforts in their pro)'rements to o$tain $etter pri)ing thro'gh &arger p'r)hases. 6oint pro)'rements offer the additiona& advantage of $eing a$&e to o$tain goods and servi)es that e;a)t&0 mat)h ea)h )ooperating grantee+s re<'irements. 6oint pro)'rements are )onsidered s'perior to the pra)ti)e of 3pigg0$a)2ing4 sin)e 3pigg0$a)2ing4 does not )om$ine $'0ing po/er at the pri)ing stage and ma0 &imit a grantee+s )hoi)es to those prod')ts e;)ess to another grantee+s needs.
5
S'$ paragraph 8"9 ref&e)ts grantees+ )ontin'ing a$i&it0 to assign )ontra)t'a& rights to others L 3pigg0$a)2ing.4 *TA $e&ieves it is e;treme&0 important that grantees ens're the0 )ontra)t on&0 for their reasona$&0 anti)ipated needs and do not add <'antities or options to )ontra)ts so&e&0 to a&&o/ them to assign these <'antities or options at a &ater date.
-age 25
a"encies to urc/ase from it$ Re"ardless of t/e a roac/ used! it is im ortant t/at "rantees &e a1are of t/e reAuirements of FTA Circular .**:$(E 1it/ res ect to com etition! e%aluation of o tions in maEin" t/e &asic contract a1ard! and t/e e;istence of a sole)source condition 1/en o tional Auantities are ordered 1/ic/ 1ere not riced and e%aluated as art of t/e &asic contract a1ard rocess$ <t is FTAIs #olicy that the estimated quantities must re*lect the immediate or reasona$ly *oreseea$le needs o* the #arties to the solicitation and, in the case o* inde*inite deli-eryBinde*inite quantity contracts, a minimum and ma+imum quantity must $e stated! Best Practices The stream&ining of $'s p'r)hases )an o))'r /hen t/o or more s0stems @oin for)es 'sing the same spe)ifi)ation, so&i)itation pro)ess, terms and )onditions, et). &eading to the p'r)hase of vehi)&es from the same vendor. This )an $e a))omp&ished 'sing 8!9 the servi)es of one &ead governmenta& agen)0, 829 a )onsorti'm, or 8"9 >pigg0 $a)2ing.> ')ile all of t)ese mec)anisms require advance %lannin!/ t)e first two occur H%re1award/I w)ile t)e latter occurs H%ost1 award.I The advantages of 'sing a )onso&idated pro)'rement approa)h in)&'de the fo&&o/ing( Sma&&er transit s0stems &a)2 the personne& and the e;pertise to )ond')t $'s pro)'rements e;peditio's&0, espe)ia&&0 in &ight of *edera& re<'irements. -ro)'rement &ead times sho'&d $e great&0 red')ed thro'gh a )onso&idated pro)'rement pro)ed're. Staff time at the vario's transit s0stems and the vehi)&e man'fa)t'rers /i&& $e saved $0 e&iminating the red'ndan)0 in )ond')ting m'&tip&e $idding pro)esses for the same vehi)&es. N'a&it0 improvements )o'&d res'&t from the $'ses $eing man'fa)t'red in a more standardiGed fashion. Savings in transit s0stemsK operating )osts /i&& $e rea&iGed from ear&ier de&iver0 of ne/ $'ses, as o&der vehi)&es /ith higher operating )osts are retired ear&ier. ?t is to $e hoped that &arger <'antit0 $'0ing /o'&d res'&t in $etter pri)es than a n'm$er of sma&&er individ'a& so&i)itations. When )ommon vehi)&es are p'r)hased, it ma0 res'&t in $etter overa&& )oordinationA&earning among transit s0stems in that the0 /i&& $e 'sing the same vehi)&es.
Ad%ance Plannin"))Loint Procurements Consolidated Procurements Oario's governmenta& agen)ies ma0 a)t as a fa)i&itator for the a/ard of multi%le contracts. This approa)h is parti)'&ar&0 $enefi)ia& /hen dea&ing /ith a &arge
-age 2%
n'm$er of grantees. As an e;amp&e, the #e/ 5or2 State Department of Transportation 8#5SDOT9 has $een 'sing the servi)es of its Offi)e of =enera& Servi)es 8O=S9 for man0 0ears to p'r)hase vehi)&es 'nder *TAKs Se)tion 5"!0 -rogram. Bere, si; different t0pes of &ight d't0 $'ses are p'r)hased ever0 0ear for the 5"!0 grantees 'sing an O=S $id pro)ess $ased 'pon spe)ifi)ations deve&oped, in part, $0 the grantees fa)i&itated $0 #5SDOT. D'ring the O=S $id pro)ess, #5SDOT estimates the n'm$er of vehi)&es to $e p'r)hased not on&0 for the 5"!0 grantees, $'t a&so for other p'$&i) transportation providers in the State. *or the 5"!0 -rogram, #e/ 5or2 State )ontra)ts dire)t&0 /ith the s'))essf'& man'fa)t'rer. The $'ses are $'i&t and de&ivered dire)t&0 to the 5"!0 grantee a&ong /ith the tit&e. Other p'$&i) transportation s0stems /ithin the state 8e.g. 5"!! and 5"01 grantees9 ma0 a))ess these same )ontra)ts, )ontra)ting dire)t&0 /ith the s'))essf'& man'fa)t'rer. ,0 'sing this )ontra)ting pro)ess, the effi)ien)ies des)ri$ed previo's&0 are ma;imiGed. Consortiums Consorti'ms have $een 'sed /here a n'm$er of s0stems )ome together to 5ointly issue a solicitation and immediately award individual contracts /ith the s'))essf'& $idder. =iven the different t0pes of $'s )onfig'rations 8e.g. diese&AC#=Q &o/ f&oorA high f&oor9, it ma0 $e 'sef'& to identif0 a &ead agen)0 for deve&oping a spe)ifi)ation for ea)h t0pe of $'s )onfig'ration. The spe)ifi)ations deve&oped /o'&d then $e revie/ed $0 the other mem$ers of the pro)'ring gro'p, /ho /o'&d provide their )omments on the spe)ifi)ation to the &ead s0stem. The &ead s0stem might modif0 the spe)ifi)ation $ased on the )omments re)eived, $'t if the )hanges /ere not in the $est interest of the &ead s0stem, the )hanges /o'&d $e in)&'ded as options in the $id pa)2age. *or e;amp&e, if the &ead s0stem /anted ro&& )'rtain destination signs, and other s0stems /anted e&e)troni) destination signs, the spe)ifi)ation /o'&d )a&& for ro&& )'rtain destination signs, and e&e)troni) destination signs /o'&d $e in)&'ded 'nder the options to $e pri)ed $0 $idders as part of the $id pa)2age. The $id advertisement /o'&d spe)ifi)a&&0 identif0 ho/ man0 $'ses /ere $eing p'r)hased for /hi)h transit s0stems. Differen)es or options in the spe)ifi)ation for ea)h 'ni<'e s0stem /o'&d $e identified and pri)es o$tained from the man'fa)t'rers for the vario's options o'tside of the $ase spe)ifi)ation. As an e;amp&e, #e/ 5or2 State has a s'))essf'& histor0 /ith a C#= )onsorti'm invo&ving *TA grants. Si; ma@or s0stems formed a )onsorti'm, aided $0 #5SDOT as a fa)i&itator, to p'r)hase the first C#= $'ses p&a)ed into servi)e in the State. A sing&e so&i)itation /as 'sed, after /hi)h ea)h transit s0stem a/arded its o/n )ontra)t in a))ordan)e /ith the terms of the so&i)itation and the /inning $id. 9
#5 State DOT 85!H9 451 H"4".
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Pi""#&acEin" Pi""#&acEin" and Ta")ons) *TA Cir)'&ar 4220.!: sets forth *TA po&i)0 and g'idan)e re&ated to pro)'rements )ommon&0 referred to as 3pigg0$a)2ing4 and 3tag ons.4 These terms are defined in the Cir)'&ar as fo&&o/s( H&i!!y$ac(in!I is an assi!nment of e7istin! contract ri!)ts %urc)ase su%%lies/ equi%ment or services. !0 HTa!1onI is defined as t)e addition of wor( (su%%lies/ equi%ment or services) t)at is $eyond t)e sco%e of t)e ori!inal contract t)at amounts to a cardinal c)an!e as !enerally inter%reted in Federal %ractice $y t)e various ?oards of Contract A%%eals. H3n sco%eI c)an!es are not ta!1ons. 8See 3Tag on4 paragraph $e&o/ for f'rther dis)'ssion9. !! Circumstances B/en Pi""#&acEin" Is Permissi&le = There are a n'm$er of iss'es that sho'&d $e addressed $0 a grantee $efore de)iding to pigg0$a)2 another agen)0+s )ontra)t. =rantees m'st $e a$&e to affirmative&0 determine that the )ontra)t to $e pigg0$a)2ed meets *edera& re<'irements. These *edera& re<'irements in)&'de )omp&ian)e /ith *TA Cir)'&ar 4220.!: and the "ear Collea!ue 7etter C 9H 25. =rantees are advised to pa0 parti)'&ar attention to the spe)ifi) iss'es identified in the -igg0$a)2ing Wor2sheet paragraph $e&o/.
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*TA has introd')ed a &imited definition of 3pigg0$a)2ing4 and, to differentiate vast&0 different po&i)ies, has separated this pra)ti)e of assigning )ontra)t'a& rights among grantees from @oint pro)'rements or other intergovernmenta& agreements. See Cir)'&ar, paragraph 1.e.
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*TA has simi&ar&0 attempted to &imit the definition of 3tag on4 and a&ign it /ith the )on)ept of a 3)ardina& )hange4 or 3o't of s)ope )hange.4 *TA $e&ieves that ear&ier attempts to )ategoriGe virt'a&&0 an0 )hange in <'antit0, for e;amp&e, as a for$idden 3tag on,4 fai&ed to a))o'nt for the rea&ities of the mar2etp&a)e and 'nne)essari&0 &imited grantees from e;er)ising reasona$&e freedom to ma2e those minor ad@'stments 3fair&0 and reasona$&0 /ithin the )ontemp&ation of the parties /hen the )ontra)t /as entered into.4 Freund v. 2nited States, 2%0 U.S. %0 8!9229. ?n app&0ing the )on)ept of 3)ardina& )hange4 to third part0 )ontra)ts, *TA re)ogniGes that this is a diffi)'&t )on)ept, not easi&0 red')ed to a per)entage, do&&ar va&'e, n'm$er of )hanges, or other o$@e)tive meas're that /o'&d app&0 to a&& )ases. *TA a&so re)ogniGes that the vario's ,oards of Contra)t Appea&s, *edera& )o'rts, and Comptro&&er =enera& have /rest&ed /ith these iss'es over man0 0ears and $'i&t an e;tensive arra0 of )ase &a/ differentiating in s)ope from o't of s)ope or )ardina& )hanges. *TA does not imp&0 that the ,oard of Contra)t Appea&s )ases are )ontro&&ing, on&0 that the0 /i&& &oo2 to their )o&&e)tive /isdom in @'dging /here )hanges in grantee )ontra)ts fa&& a&ong the $road spe)tr'm $et/een )&ear&0 in s)ope and )&ear&0 o't of s)ope )hanges. ?t is *TA+s intent to monitor its grantees and oversight )ontra)tors to ens're this )on)ept is /e&& 'nderstood and 'niform&0 app&ied, and to iss'e additiona& g'idan)e as ne)essar0 to assist grantees in e;er)ising this a'thorit0. ,efore attempting an0 )hange in <'antit0 or ma@or items 8e.g., $'ses, rai& )ars9, grantees sho'&d revie/ their )ontra)t )&a'ses to ens're the0 a&&o/ for s')h )hanges. *or instan)e, in *edera& pra)ti)e, the 3)hanges4 )&a'se from the *edera& a)<'isition Ieg'&ation has $een interpreted not to a&&o/ )hanges in <'antit0 of ma@or items. *edera& )ontra)ting offi)ers 'se additiona& )&a'ses spe)ifi) to this desired f&e;i$i&it0 /hen the0 anti)ipate that there ma0 $e a need to add <'antities of these ma@or items.
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Pi""#&acEin" BorEs/eet L A -igg0$a)2ing Wor2sheet ma0 $e fo'nd in Appendi; ,.!%. The iss'es referred to in the /or2sheet that m'st $e eva&'ated prior to a de)ision to pigg0$a)2 another )ontra)t are as fo&&o/s( !. Bave 0o' o$tained a )op0 of the )ontra)t and the so&i)itation do)'ment, in)&'ding the spe)ifi)ations and an0 ,'0 Ameri)a -re A/ard or -ost De&iver0 a'ditsW 2. Does the )ontra)t )ontain an e;press assi!na$ility clause that provides for the assignment of a&& or part of the spe)ified de&ivera$&esW *TA+s po&i)0 is that the origina& so&i)itation m'st )ontain an e7%ress notification to a&& $idders that an assignment /o'&d $e possi$&e 'nder the terms of the )ontra)t. S')h a notifi)ation /o'&d p't the $idders on noti)e that the0 /o'&d &i2e&0 $e )a&&ed 'pon to de&iver a&& of the de&ivera$&e items, $oth the $ase as /e&& as the option <'antities. The assignment )&a'se /o'&d th's $e an important fa)tor in the origina& )ompetitive $idding. ?f the )ontra)t does not )ontain an e;press assigna$i&it0 )&a'se, pigg0$a)2ing is not permitted. ". Did the Contra)tor s'$mit the 3)ertifi)ations4 re<'ired $0 *edera& reg'&ations in a))ordan)e /ith the re<'irements of this so&i)itationW See the ,--. Se)tion 4.".".2. Federally Required Su$missions wit) ,ffers. -igg0$a)2ing is not permitted /hen the Contra)tor has fai&ed to s'$mit the re<'ired *edera& )ertifi)ations /ith its $id. 4. Does the )ontra)t )ontain the )&a'ses re<'ired $0 *edera& reg'&ationsW See the ,--. Appendi; A Federally Required and ,t)er odel Contract Clauses. #ote that not a&& )&a'ses in Appendi; A /i&& app&0 to a&& )ontra)ts L revie/ ea)h )&a'se for app&i)a$i&it0 to the spe)ifi) )ontra)t to $e pigg0$a)2ed. ?f a re<'ired *edera& )&a'se is not in)&'ded in the )ontra)t, pigg0$a)2ing is not permitted. 5. Were the pigg0$a)2ing <'antities in)&'ded in the origina& so&i)itationQ i.e., /ere the0 in the origina& $id and /ere the0 eva&'ated as part of the )ontra)t a/ard de)isionW ?f not, a Ta!1on is not %ermitted. %. ?f the )ontra)t is an indefinite quantity contract, did the origina& so&i)itation and res'&tant )ontra)t )ontain $oth a minim'm and a ma;im'm <'antit0, /hi)h represent the reasona$&0 foreseea$&e needs of the parties to the so&i)itationW See ,--. Se)tion 2.2.5." L 3ndefinite1quantity Contracts, and the paragraph $e&o/ 3ndefinite 0uantity Contracts/ 2nlimited ,%tions and &i!!y$ac(in!. 1. ?f the pigg0$a)2ing a)tion represents the e;er)ise of an option provision in the )ontra)t, is the option sti&& va&idW Options that have e;pired ma0 not $e e;er)ised. H. Does 0o'r State &a/ a&&o/ for the pro)ed'res 'sed $0 the origina& )ontra)ting agen)0Q e.g., negotiations vs. sea&ed $idsW 9. Was a )ost or pri)e ana&0sis performed $0 the origina& pro)'ring agen)0 do)'menting the reasona$&eness of the )ontra)t pri)eW ?n)&'de a )op0 in 0o'r fi&es.
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!0. Does the )ontra)t term )omp&0 /ith the five 0ear term &imit esta$&ished $0 *TA 4220.!:, paragraph 1.mW !!. Was there a proper eva&'ation of the $ids or proposa&sW ?n)&'de a )op0 of the ana&0sis in 0o'r fi&es. !2. What t0pes of )hanges /i&& 0o' re<'ire to $e made to the vehi)&esW *or an assignment, on&0 3/ithin s)ope4 8non )ardina&9 )hanges are a&&o/ed 8e.g., seating fa$ri)s and )o&ors, paint s)hemes, signage, f&oor )o&oring, et).9. *or f'rther g'idan)e see ,--. Se)tion 9.2.! Contract Sco%e and Cardinal C)an!es. Indefinite @uantit# Contracts! Unlimited O tions and Pi""#&acEin" L Serio's pro$&ems arise /hen agen)ies iss'e so&i)itations /ith 'n&imited <'antities, /hi)h res'&t in open ended )ontra)ts /hi)h other agen)ies then pigg0$a)2. This pra)ti)e )reates a n'm$er of serio's pro$&emsQ therefore, unlimited quantities are not %ermitted. Sin)e the ro&&ing sto)2 man'fa)t'rers do not 2no/ /hat the potentia& orders ma0 $e 'nder the )ontra)t, the0 )annot p&an their operations nor )an the0 <'ote pri)es /hi)h ref&e)t the <'antities that ma0 $e prod')ed. Unspe)ified <'antities res'&t in higher 'nit pri)es for the pro)'ring agen)0 $e)a'se man'fa)t'rers m'st 'se the minim'm <'antit0 spe)ified to )a&)'&ate pri)es for materia&, engineering, et). *or these reasons, o%en1ended/ indefinite quantity*indefinite delivery contracts/ or contracts wit) unlimited o%tions are not %ermitted. The0 are not on&0 disr'ptive to $'s man'fa)t'rers and their s'pp&iers, /ho )annot p&an their prod')tion s)hed'&es given the degree of 'n)ertaint0 that these )ontra)ts entai&, $'t the0 are a&so )o'nter prod')tive to the grantee )omm'nit0, /hi)h /i&& invaria$&e pa0 higher pri)es for items /hi)h /ere not rea&&0 )ompeted in a 3f'&& and open )ompetition.4
2$-$. Pre)A1ard and Post)Deli%er# Re%ie1s for Bu# America Act Com liance RE@UIREMENT The *TA .aster Agreement, .A8!29, Se)tion !5 8&9 8"9 defines the fo&&o/ing re<'irements( 8"9 -re A/ard and -ost De&iver0 Ie<'irements. The Ie)ipient agrees to )omp&0 /ith the re<'irements of 49 U.S.C. Se)tion 5"2" 8m9 and *TA reg'&ations, >-re A/ard and -ost De&iver0 A'dits of Io&&ing Sto)2 -'r)hases,> 49 C*I -art %%", and an0 revision thereto. The *TA "ear Collea!ue #etter C 91 0", dated .ar)h !H, !991 provides f'rther g'idan)e to grantees on ho/ to )omp&0 /ith the ,'0 Ameri)a re<'irements of the -re A/ard and -ost
-age "0
De&iver0 revie/s for ro&&ing sto)2 pro)'rements set forth in 49 C*I -art %%". The *TA Administrator+s "ear Collea!ue 7etter C 91 !", dated A'g'st 5, !991, that amended the .ar)h !H, !991 g'idan)e $0 removing a;&es from the re<'ired fina& assem$&0 a)tivities, /as s'$se<'ent&0 /ithdra/n $0 the "ear Collea!ue 7etter, C 91 !H, dated Septem$er 25, !991, /hi)h res)inded the A'g'st 5, !991 g'idan)e $0 redire)ting grantees and man'fa)t'rers to fo&&o/ the .ar)h !H, !991 g'idan)e on fina& assem$&0 re<'irements for $'s pro)'rements. DISCUSSION T/e FTA AdministratorKs :ear Colleague Letter C)84):-! dated Marc/ (5! (884! outlines t/e ste s t/at a "rantee must taEe in erformin" re)a1ard and ost)deli%er# re%ie1s of rollin" stocE rocurements to ensure t/eir com liance 1it/ Bu# America Act reAuirements$ T/is :ear Colleague Letter ma# &e found in A endi; A$* of t/e BPPM$ T/is letter ro%ides "uidance to "rantees concernin" t/ese re%ie1s$ It must &e stressed t/at "rantees are to document t/eir re%ie1s and include t/is documentation in t/eir contract files as e%idence t/at t/e# /a%e erformed t/e reAuired re%ie1s$ T/e file documentation must descri&e t/e data and information re%ie1ed &# t/e "ranteeKs ersonnel and t/e &asis for concludin" t/at t/e manufacturer /as com lied 1it/ t/e Bu# America Act reAuirements! includin" domestic content! final assem&l# location and final assem&l# acti%ities$ Also! 1/ere a ro riate! co ies of certifications of com liance 1it/ or ina lica&ilit# of Federal Motor Pe/icle Safet# Standards s/ould &e included in t/e file$ FTA /as also u&lis/ed t1o manuals t/at ro%ide detailed "uidance to "rantees concernin" 1/ic/ Bu# America certifications and documents are needed to su ort t/e rocurement rocess )) from issuance of t/e solicitation to title transfer! as 1ell as t/e rocedures t/at t/e "rantee ma# follo1 1/en conductin" t/e re)a1ard and ost deli%er# re%ie1s$ T/ere are also e;am les of Bu# America calculations and res onses to freAuentl# asEed Auestions$ (* 2$-$0 Barranties RE@UIREMENT *TA Cir)'&ar 90"0.!C, 2r$ani@ed Area Formula &ro!ram= .rant A%%lication 3nstructions states the fo&&o/ing(
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Conductin! &re1Award and &ost1"elivery Reviews for ?us &rocurements . Do)'ment #o( *TA DC 90 11!" 9" !, Iev. ,, dated .a0 !, !995. Conductin! &re1Award and &ost1"elivery Reviews for Rail Ne)icle &rocurements. Do)'ment #o( *TA DC 90 11!" 94 !, Iev. ,, dated .a0 !, !995. These do)'ments ma0 $e o$tained from *TA, Offi)e of -rogram .anagement at 202 "%% 4020 or $0 e mai& at $'0ameri)aEfta.dot.gov. The *TA Offi)e of Chief Co'nse& /e$site address http(AA///.fta.dot.govA&ega&A$'0Jameri)aA!4"2HJ:#=JBT.7.htm . for ,'0 Ameri)a matters is(
-age "!
-reventive .aintenan)e. -reventive maintenan)e, an e;pense that $e)ame e&igi$&e for *TA )apita& assistan)e for one 0ear /ith the DOT !99H Appropriations A)t, /as esta$&ished as e&igi$&e for *TA )apita& assistan)e 'nder T:A 2!, so *5 !99H f'nds and s'$se<'ent fis)a& 0ear appropriations ma0 $e 'sed for preventive maintenan)e. -reventive maintenan)e )osts are defined as a&& maintenan)e )ostsZ. ! Warrant0. A /arrant0 that is an ind'str0 standard is an e&igi$&e )apita& )ost as part of the a)<'isition of a $'s or an0 )apita& asset. ! *TA Cir)'&ar 50!0.!C, =rant ana!ement .uidelines states the fo&&o/ing(
Warrant0 standards, /hen part of e<'ipment )ontra)ts, sho'&d provide for )orre)tion of defe)tive or 'na))epta$&e materia&s or /or2manship. These sho'&d spe)if0 )overage and d'ration and meet )'rrent&0 avai&a$&e ind'str0 standards. 2 DISCUSSION FBarrant#F means a romise or affirmation "i%en &# a contractor to t/e urc/aser re"ardin" t/e nature! usefulness! or condition of t/e su lies! eAui ment or erformance of ser%ices furnis/ed under t/e contract$ T/e rinci al ur oses of a 1arrant# are to delineate t/e ri"/ts and o&li"ations of t/e contractor and t/e urc/aser for defecti%e items and ser%ices! and to foster Aualit# erformance$ T/e &enefits to &e deri%ed from a 1arrant# must &e commensurate 1it/ t/e cost of t/e 1arrant# to t/e urc/aser$ ( Man# transit a"encies urc/ase or rocure eAui ment 1it/ 1arranties$ De endin" u on t/e item and t/e contract lan"ua"e! a manufacturer 1ill t/en re air or re lace an# iece of eAui ment t/at fails or is ot/er1ise defecti%e durin" t/e 1arrant# eriod! t/e commitment to re air or re lace &ein" t/e F1arrant#$F FTAMs "rantees t/at s ecif# and urc/ase 1arranties s/ould a ro riatel# tailor t/e 1arranties! includin" &ut not limited to remedies! e;clusions! limitations and durations$ In man# instances an item is customaril# 1arranted in t/e trade! and! as a result of t/at ractice! t/e cost of an item to t/e urc/aser 1ill &e t/e same 1/et/er or not a 1arrant# is included$ In t/ose instances! it 1ould &e in t/e urc/aserKs interest to include suc/ a
*TA C 90"0.!C, Chapter ???, paragraph 4.). *TA C 90"0.!C, Chapter O, paragraph 9.$.". C50!0.!C in Chapter ?? .anagement of Iea& -ropert0, :<'ipment and S'pp&ies, S'$se)tion ".e8%9. See genera&&0 *edera& A)<'isition reg'&ations at 4H C*I S'$part 4%.1 Warranties.
-age "2
1arrant#$ * In some instances! industr# associations suc/ as t/e American Pu&lic Transit Association or t/e American Societ# for Testin" and Materials /a%e de%elo ed s ecifications includin" 1arranties t/at are reco"ni,ed as HIndustr# Standard$I <rantees are encoura"ed to e;ercise sound &usiness decisions in structurin" &roader and more com re/ensi%e 1arranties t/an t/at offered as a matter of trade ractice or as an industr# standard 6i$e$! an He;tended 1arrant#I9 1/ere suc/ 1arranties are ad%anta"eous and cost effecti%e$ Suc/ &usiness decisions must &e &ased u on marEet researc/ and rice7cost anal#sis$ For "rant eli"i&ilit# ur oses! FTA /ad /istoricall# treated t/e customar# 1arrant# offered as a matter of trade ractice as a normal 1arrant# and e+tended 1arranties differentl#$ T/is in turn affected t/eir cost eli"i&ilit# differentl#$ Prior to (885! normal 1arranties 1ere eli"i&le ca#ital e; enses and t/erefore Aualified for 5:O Federal artici ation under ca ital assistance "rants$ T/e Office of Ins ector <eneral sa1 t/e He;tended 1arrant#I as a form of o eratin" e; ense! im ermissi&le at t/e time as a ca ital e; ense$ Cence! e+tended 1arranties 1ere classified as maintenance 6o#erating9 e; ense and as suc/ 1ere ineli"i&le for fundin" under ca#ital assistance grants and /ere only eli"i&le for 0:O Federal artici ation under o#erating assistance grants$ Bit/ t/e assa"e of TEA)*( in (885! FTA re%ised its olicies to reflect t/e ro%isions of t/e ne1 statute$ FTAMs ne1 olicies are stated in FTA Circular 8:-:$(C! Ur$ani5ed Area Formula ProgramD 0rant A##lication <nstructions, dated Octo&er (! (885$ - Under t/e ne1 cost eli"i&ilit# "uidelines! maintenance is no1 an eli"i&le ca#ital e+#ense! and t/ere is no lon"er a distinction &et1een normal 1arranties and e+tended 1arranties! as &ot/ are eli"i&le costs$ T/ere are! /o1e%er! rocurement considerations and t/ose are discussed &elo1$ Bit/ res ect to t/e rocurement of 1arranties! rior to (885 FTA "rant a lication "uidance identified s ecific 1arrant# time frames as &ein" HnormalI for eac/ of t/e ma'or com onents of %e/icles$ In (885! FTA c/an"ed t/is to allo1 t/e "rantee))on t/e &asis of its marEet researc/))to determine 1/at is customar# or Hnormal$I Normal 1arrant# costs are eli"i&le for reim&ursement under FTA "rants to t/e e;tent t/at t/e "rantee determines t/at t/e# are customar# or an industr# standard and FTAMs ot/er "rant reAuirements are met suc/ as t/at contained in FTAMs C.**:$(E$
4H C*I S'$part 4%.1 Warranties. .a0 $e a))essed at( http(AA///.fta.dot.govA&ega&Ag'idan)eA)ir)'&arsA9000A4""J!!52J:#=JBT.7.htm.
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Similarl#! e;tended 1arranties are eli"i&le costs to t/e e;tent t/at 6(9 t/e "rantee determines 1/at form of 1arrant# 1ould &e ad%anta"eous and cost effecti%e as art of t/e "ranteeMs rocurement lannin" effort! and 6*9 e;tended 1arrant# costs are e%aluated se aratel# and determined to &e Hfair and reasona&le$I Best Practices An e;amp&e of /arrant0 terms is the &ist deve&oped $0 A-TA in its Standard ?us &rocurement .uidelines L Commercial Terms and Conditions 8O)to$er !0, !9919. ! Among the iss'es addressed in A-TA+s s'ggested /arrant0 provisions are( Comp&ete ,'s L S'ggested Terms ,od0 and Chassis Str')t're L S'ggested Terms -rop'&sion S0stem L S'ggested Terms .a@or S'$s0stems L S'ggested Terms for ,ra2es, Destination Signs, BOAC, Door S0stems, Air Compressor and Dr0er, Whee&)hair 7ift and Iamp S0stem, et). :;)eptions to Warrant0 L *or e;amp&e, /hen -ro)'ring Agen)0 has not a&&o/ed an 3e<'a&4 re<'ested $0 the Contra)tor, and s'pp&ier /on+t offer the /arrant0 re<'ired $0 the -ro)'ring Agen)0Q Dete)tion of Defe)ts L S)hed'&e for notif0ing Contra)tor and Contra)tor+s responseQ *&eet Defe)ts L Contra)tor+s d't0 to imp&ement )orre)tive /or2 programQ Iepair -ro)ed'res L When repairs ma0 $e made $0 -ro)'ring Agen)0 and reim$'rsed $0 Contra)torQ Warrant0 after Iepairs L Iepair parts to have the 'ne;pired /arrant0 period of the origina& part.
2$. PROFESSIONAL SERPICES RE@UIREMENT -rofessiona& servi)es other than ar)hite)t'ra& and engineering servi)es ma0 $e o$tained thro'gh sea&ed $ids, )ompetitive proposa&s, or 8as the )ontra)t va&'e /arrants9 sma&& p'r)hase or mi)rop'r)hase pro)ed'res.
To order this $oo2, )a&& A-TA at 82029 49% 4H00. http(AA///.apta.)omAinfoAon&ineAinde;.htm.
Do)'ment is a&so avai&a$&e via ?nternet at(
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&rocurement of Arc)itectural and 8n!ineerin! Services (A-8) . =rantees sha&& 'se )ompetitive proposa& pro)ed'res $ased on the ,roo2s A)t /hen )ontra)ting for AC: servi)es as defined in 40 U.S.C. Se)tion 54!. Other t0pes of servi)es )onsidered AC: servi)es in)&'de program management, )onstr')tion management, feasi$i&it0 st'dies, pre&iminar0 engineering, design, s'rve0ing, mapping and servi)es /hi)h re<'ire performan)e $0 a registered or &i)ensed ar)hite)t or engineer. . . . This ><'a&ifi)ations $ased pro)'rement method> )an on&0 $e 'sed for the pro)'rement of AC: servi)es. ?t )annot $e 'sed to o$tain other t0pes of servi)es even tho'gh a firm that provides AC: servi)es is a&so avai&a$&e to perform other t0pes of servi)es. These re<'irements app&0 e;)ept to the e;tent an0 state adopts or has adopted $0 stat'te a forma& pro)ed're for the pro)'rement of ar)hite)t'ra& and engineering servi)es. 8*TA Cir)'&ar 4220.!:, Se)tion 9e9. DISCUSSION Alt/ou"/ #ou ma# use an# of t/e a lica&le selection met/ods descri&ed in C/a ter . and ermitted &# state la1 for rofessional ser%ices! t/e com etiti%e ro osal met/od is t/e most common for rocurin" rofessional ser%ices$ S ecial Federal reAuirements a l# to arc/itectural and en"ineerin" ser%ices$ E%en t/ou"/ rofessional ser%ices suc/ as le"al ad%ice! in%estment ad%ice! auditin" or en"ineerin" ad%ice ma# /a%e &een rendered to #our a"enc# on a lon")standin" &asis! or 1it/out a 1ritten contract! or &# formal a ro%al at t/e /i"/est le%el! suc/ ractices do not e;em t t/ose ser%ices from t/e reAuirements for free and o en com etition! ma;imum fi%e #ear terms! and 1ritten selection rocedures$ Pur ose 5o' have a re<'irement to )ontra)t for a &a$orator0 to provide testing for 0o'r agen)0Ks dr'g and a&)oho& testing program. 5o' )annot afford to ta2e a )han)e on getting a )ontra)tor /ho has &itt&e e;perien)e, a poor histor0 of <'a&it0 )ontro&, and an 'nre&ia$&e performan)e histor0 in terms of )hain of )'stod0. ?f 0o' have to $id this )ontra)t, /ith &o/ pri)e $eing the de)iding e&ement, that is apt to $e /hat 0o' get. Unfort'nate&0, in a fe/ @'risdi)tions, that is /hat 0o' ma0 $e fa)ed /ith. Bo/ever, in most @'risdi)tions, the state &egis&at'res have /ise&0 ena)ted a pro)'rement po&i)0 that e;empts professiona& and persona& servi)e )ontra)ts from the stri)t re<'irements of the )ompetitive pro)'rement &a/s. ?n those states, )ompetitive sea&ed proposa& stat'tes, mini >,roo2s A)t> stat'tes for ar)hite)tAengineering and re&ated servi)es, or e;emptions from )ompetitive re<'irements a&together 8or a )om$ination of a&& of the a$ove9 have $een ena)ted. The )riti)a& point is that 0o'r state, either &egis&ative&0 or thro'gh stat'tor0 interpretations $0 the state attorne0 genera& or the )o'rts, /i&& a&&o/ 0o' some f&e;i$i&it0 in $'0ing professiona& servi)es $e)a'se it does not ma2e sense >to $'0 the servi)es of $rain s'rgeon thro'gh a &o/ $idder pro)'rement pro)ess.> ?t is important to disting'ish $et/een t/o t0pes of professiona& servi)es(
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Stat'tor0 -rofessiona& Servi)es These are servi)es that are )&ear&0 spe&&ed o't in a stat'te and pro)'rement pro)ess is defined for o$taining these servi)es. These are the mini >,roo2s A)t> stat'tes and in)&'de ar)hite)t'ra& and engineering servi)es. The stat'te ma0 a&so in)&'de some re&ated servi)es or other servi)es the &egis&at're has determined sho'&d $e $o'ght in a m'&ti step pro)'rement pro)ess.
?n Te;as, for instan)e, the Te;as -rofessiona& Servi)es A)t defines >professiona& servi)es> as servi)es /ithin the s)ope of the pra)ti)e of a))o'nting, ar)hite)t're, &and s'rve0ing, medi)ine, optometr0 or professiona& engineering, or are provided in )onne)tion /ith the professiona& emp&o0ment or pra)ti)e of a person /ho is &i)ensed as a )ertified p'$&i) a))o'ntant, an ar)hite)t, a &and s'rve0or, a ph0si)ian 8in)&'ding a s'rgeon9, an optometrist or a professiona& engineer. 2 Te;as has said, as to these )ontra)ts or servi)es, that )ompetitive $idding sha&& not $e 'sed and that the se&e)tion and a/ard sha&& $e made on the $asis of >demonstrated )ompeten)e and <'a&ifi)ations to perform the servi)e> and for a fair and reasona$&e pri)e. " *or ar)hite)t'ra& or engineering servi)es, Te;as mandates a >,roo2s A)t> pro)ess 4 and )on)&'des this A)t /ith the p'$&i) po&i)0 statement that )ontra)ts entered into in vio&ation of these provisions are void. 5 ?n a&& &i2e&ihood, 0o'r state /i&& have adopted a p'$&i) po&i)0 on the pro)'rement of stat'tori&0 defined professiona& servi)es that ma0 $e simi&ar to the Te;as stat'te and 0o' sho'&d $e ver0 2no/&edgea$&e of that stat'te. Other -rofessiona& Servi)es .ost states offer 0o' other /a0s to avoid stri)t )omp&ian)e /ith )ompetitive $idding &a/s 8and, in some states, )ompetitive proposa& &a/s as /e&&9 $0 e;empting the pro)'rement of professiona& or persona& servi)es from fo&&o/ing )ompetitive re<'irements. Th's, it is important to 2no/ /hat is )onsidered a professiona& servi)e for the p'rposes of this e;emption 'nder 0o'r stateKs &a/. This ma0 var0 from state to state. The servi)e 's'a&&0 /i&& invo&ve &a$or and s2i&&s that are predominate&0 menta& or inte&&e)t'a& rather than ph0si)a& or man'a& and the providers of the servi)e are mem$ers of dis)ip&ines re<'iring spe)ia& 2no/&edge or the attainment of a high &eve& of &earning, s2i&& and inte&&igen)e.
The e;emptions are designed to permit the servi)es of the most <'a&ified, )ompetent and e;perien)ed individ'a&s to $e o$tained and a re)ognition that these servi)es )an se&dom $e meas'red /ith o$@e)tive )riteria. ?n the a$sen)e of a stat'tor0 definition, these servi)es ma0 in)&'de s')h professions as attorne0s, )onstr')tion management )ons'&tants, ins'ran)e $ro2ers,
Te;as =overnment Code, Se)tion 2254.002. Te;as =overnment Code, Se)tion 2254.00"8a9. Te;as =overnment Code, Se)tion 2254.004. Te;as =overnment Code, Se)tion 2254.005.
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ph0si)ians, a')tioneers, medi)a& &a$orator0 testing, theo&ogians, et). 5o' m'st )ons'&t 0o'r state &a/ on these iss'es 'n&i2e the stat'tor0 professiona& servi)es dis)'ssed a$ove, most states do not prohi$it 0o' from 'sing a )ompetitive pro)ess to o$tain the servi)es of these other >professiona&s,> the0 @'st provide an e;emption if 0o' )hoose to 'se it. Best Practices AC: Servi)es *or the pro)'rement of ar)hite)t'ra& and engineering servi)es, the *TA and most state &a/s mandate a <'a&ifi)ations $ased pro)'rement pro)ess. Other -rofessiona& Servi)es *or the pro)'rement of professiona& servi)es other than AC: servi)es, 0o' genera&&0 have a great dea& of f&e;i$i&it0 in ho/ 0o' o$tain those servi)es. ?n some )ases, 0o' ma0 $e a$&e to ade<'ate&0 and o$@e)tive&0 define the servi)es re<'ired and o$tain those servi)es thro'gh a )ompetitive $idding pro)ess on the $asis of &o/ pri)ed $ids. ?n other )ases, either $e)a'se of an ina$i&it0 to ade<'ate&0 andAor o$@e)tive&0 define 0o'r re<'irement or $e)a'se of a &imitation of 0o'r stateKs &a/, the )ompetitive $idding method of pro)'rement ma0 not $e possi$&e to $e 'sed. ?n that )ase, a )ompetitive proposa& pro)ess ma0 $e the $est method to 'se /here more s'$@e)tive re<'irements )an $e eva&'ated and /eighed /ith the pri)e offered to arrive at a proper&0 $a&an)ed a/ard de)ision. Depending 'pon the statement of /or2 and the estimated do&&ar va&'e of the pro)'rement, 0o' ma0 $e a$&e to effe)tive&0 and effi)ient&0 'se the mi)ro p'r)hase method of pro)'rement 8detai&ed in Se)tion 4.!9 or the sma&& p'r)hase method of pro)'rement. As the ste/ards of p'$&i) f'nds, it is a&/a0s important to remem$er that 0o' are spending ta; do&&ars and to proper&0 /eigh the servi)es 0o' are o$taining against /hat 0o' are pa0ing for those servi)es. *ina&&0, it is possi$&e that the professiona& servi)es 0o' desire ma0 $e o$tained from on&0 one so'r)e and, th's, 0o' /i&& se&e)t 0o'r professiona& servi)e provider on the $asis of a so&e so'r)e 8non)ompetitive9 method of pro)'rement. ?n this )ase, 0o' m'st )omp&0 /ith the provisions of Se)tion 9.e of *TA Cir)'&ar 4220.!: as /e&& as 0o'r state &a/. Again, even tho'gh 0o' are negotiating /ith on&0 one so'r)e for these servi)es, 0o'r goa& sho'&d $e to o$tain a pri)e that is fair and reasona$&e. 2$0 ARCCITECT ) EN<INEER SERPICES RE@UIREMENT *TA Cir)'&ar 4220.!: states( H.$. -rohi$ition Against =eographi) -referen)es . . . Bo/ever, geographi) &o)ation ma0 $e a se&e)tion )riterion in pro)'rements for ar)hite)t'ra& and engineering 8A :9 servi)es provided its app&i)ation &eaves an appropriate n'm$er of <'a&ified firms, given the nat're and siGe of the pro@e)t, to )ompete for the )ontra)t. 9.e. -ro)'rement of Ar)hite)t'ra& and :ngineering Servi)es 8AC:9. =rantees sha&& 'se <'a&ifi)ations $ased )ompetitive proposa& pro)ed'res 8i.e., ,roo2s A)t pro)ed'res9
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/hen )ontra)ting for AC: servi)es as defined in 40 U.S.C. T !!02 and 49 U.S.C. T 5"258$9. Servi)es s'$@e)t to this re<'irement are program management, )onstr')tion management, feasi$i&it0 st'dies, pre&iminar0 engineering, design, ar)hite)t'ra&, engineering, s'rve0ing, mapping, and re&ated servi)es. % N'a&ifi)ations $ased )ompetitive proposa& pro)ed'res re<'ire that( 8!9 An offerorKs <'a&ifi)ations $e eva&'atedQ 829 -ri)e $e e;)&'ded as an eva&'ation fa)torQ 8"9 #egotiations $e )ond')ted /ith on&0 the most <'a&ified offerorQ and 849 *ai&ing agreement on pri)e, negotiations /ith the ne;t most <'a&ified offeror $e )ond')ted 'nti& a )ontra)t a/ard )an $e made to the most <'a&ified offeror /hose pri)e is fair and reasona$&e to the grantee. These <'a&ifi)ations $ased )ompetitive proposa& pro)ed'res )an on&0 $e 'sed for the pro)'rement of the servi)es &isted a$ove. This method of pro)'rement )annot $e 'sed to o$tain other t0pes of servi)es even tho'gh a firm that provides AC: servi)es is a&so a potentia& so'r)e to perform other t0pes of servi)es. These re<'irements app&0 e;)ept to the e;tent the grantee+s State adopts or has adopted $0 stat'te a forma& pro)ed're for the pro)'rement of these servi)es. 1 9.g -ro)'rement of Design ,'i&d( =rantees m'st pro)'re design $'i&d servi)es thro'gh means of <'a&ifi)ations $ased )ompetitive proposa& pro)ed'res $ased on the ,roo2s A)t as set forth in Se)tion 9.e /hen the preponderan)e of the /or2 to $e performed is )onsidered to $e for ar)hite)t'ra& and engineering 8AC:9 servi)es as defined in Se)tion 9.e.
*TA has e;panded this se)tion to $etter e;p&ain the $readth of this stat'tori&0 pres)ri$ed pro)'rement method. *TA re)ogniGes that most of the servi)es &isted 8e.g., s'rve0ing9 are not performed $0 ar)hite)t'ra& or engineering servi)es )ompanies. N'a&ifi)ations $ased )ompetitive proposa&s 8i.e., ,roo2s A)t pro)ed'res9 sti&& m'st $e app&ied to these pro)'rements $e)a'se of the stat'tor0 dire)tive in 49 U.S.C. T 5"258$9.
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?f a pro@e)t is @oint&0 f'nded /ith *TA and *BWA grant f'nds, grantees sho'&d see2 the advi)e of )o'nse& sin)e the *BWA and *TA stat'tes differ in /hen and ho/ the *edera& re<'irements defer to state &a/s.
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N'a&ifi)ations $ased )ompetitive proposa& pro)ed'res sho'&d not $e 'sed to pro)'re design $'i&d servi)es /hen the preponderan)e of the /or2 to $e performed is not of an AC: nat're as defined in Se)tion 9.e, 'n&ess re<'ired $0 State &a/. H The *TA .aster Agreement, *TA .A8!29, Se)tion !5i L Arc)itectural/ 8n!ineerin!/ "esi!n or Related Services, re<'ires grantees, /hen a/arding )ontra)ts for ar)hite)t'ra&, engineering, or re&ated servi)es, to a))ept 'ndisp'ted a'dits )ond')ted $0 other governmenta& agen)ies for the p'rpose of esta$&ishing indire)t )ost rates if s')h rates are not )'rrent&0 'nder disp'te. This re<'irement to a))ept 'ndisp'ted a'dits )ond')ted $0 other governmenta& agen)ies originates in 49 U.S.C. T 5"258$9. ?t sho'&d a&so $e noted that this &ang'age has $een interpreted $0 *TA+s Chief Co'nse&+s Offi)e as pre)&'ding grantees from imposing 8re<'iring9 )ei&ings 8or 3)aps49 on overhead rates in )ontra)ts for ar)hite)t engineer servi)es. 8 DISCUSSION Selection of Contractor ) FTA Circular .**:$(E reAuires t/e rocurement of A)E ser%ices in accordance 1it/ t/e FAualifications &ased rocurement met/odsF of t/e BrooEs Act$ T/e HA+E ser%icesI t/at must &e rocured accordin" to t/e BrooEs Act rocedures are defined in t1o statutes3 .: U$S$C$ G ((:* and .8 U$S$C$ G 0-*06&9$ Bot/ of t/ese statutes must &e taEen into consideration 1/en decidin" 1/at constitutes HA+E ser%ices$I T/e easiest 1a# to conce tuali,e t/e reAuirements of t/ese t1o statutes is to first a l# t/e definition in .8 U$S$C$ G 0-*06&9 and determine if t/e ser%ices are 3 ro"ram mana"ement! construction mana"ement! feasi&ilit# studies! reliminar# en"ineerin"! desi"n! arc/itectural! en"ineerin"! sur%e#in"! ma in"! and related ser%ices$I If t/e ser%ices fall into one of t/ese cate"ories! t/e# are ser%ices t/at must &e rocured ursuant to t/e BrooEs Act$ (: If t/e ser%ices do not fall into one of t/ese cate"ories! t/en t/e t/ree) art test from .: USC ((:* must &e a lied$ T/e t/ree) art test from t/at statute states3
*TA added this paragraph to e;p&ain the re<'irements that app&0 to design $'i&d pro)'rements $e)a'se the0 invo&ve signifi)ant ar)hite)t'ra&, engineering, or other servi)es that norma&&0 re<'ire <'a&ifi)ations $ased )ompetitive proposa&s $'t a&so in)&'de signifi)ant /or2 that does not re<'ire this e;traordinar0 pro)'rement method. =rantees sho'&d determine /hi)h portion of the /or2 is predominant and fo&&o/ the method for that t0pe of pro)'rement. ?t /o'&d norma&&0 $e e;pe)ted that the )onstr')tion portion of a design $'i&d pro)'rement /o'&d $e predominant and, in that )ase, norma& pro)'rement methods )an $e 'sed in &ie' of <'a&ifi)ations $ased )ompetitive proposa&s 8the ,roo2s A)t method9.
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7etter from =. ,. .),ride to #e/ 5or2 .TA, dated *e$ 2, 200!. The iss'es addressed in this &etter ma0 $e fo'nd on the *TA Be&p7ine 8http(AA///.fta.dot.govAftahe&p&ine9 'nder the *re<'ent&0 As2ed N'estions ta$ 8see Ar)hite)t C :ngineering Contra)ts9.
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49 USC 5"258$9 demands that ,roo2s a)t pro)ed'res $e 'sed for these servi)es even tho'gh the0 are not ro'tine&0 done $0 AC: firms 8e.g., s'rve0ing9 and do not re<'ire &i)ensed ar)hite)ts or engineers.
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HT/e term Harc/itectural and en"ineerin" ser%icesI means) 6A9 rofessional ser%ices of an arc/itectural or en"ineerin" nature! as defined &# State la1! if a lica&le! 1/ic/ are reAuired to &e erformed or a ro%ed &# a erson licensed! re"istered! or certified to ro%ide suc/ ser%ices as descri&ed in t/is ara"ra /J rofessional ser%ices of an arc/itectural or en"ineerin" nature erformed &# contract t/at are associated 1it/ researc/! lannin"! de%elo ment! desi"n! construction! alteration! or re air of real ro ert#J and
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6C9 ot/er rofessional ser%ices of an arc/itectural or en"ineerin" nature! or incidental ser%ices! 1/ic/ mem&ers of t/e arc/itectural and en"ineerin" rofessions 6and indi%iduals in t/eir em lo#9 ma# lo"icall# or 'ustifia&l# erform! includin" studies! in%esti"ations! sur%e#in" and ma in"! tests! e%aluations! consultations! com re/ensi%e lannin"! ro"ram mana"ement! conce tual desi"ns! lans and s ecifications! %alue en"ineerin"! construction /ase ser%ices! soils en"ineerin"! dra1in" re%ie1s! re aration of o eration and maintenance manuals! and ot/er related ser%ices$I T/is is t/e ortion of A+E ser%ices t/at relies on indicators suc/ as licensin" and 1/et/er A+E firms normall# do t/e s ecific sort of tasE under consideration$ If t/e function fits 1it/in t/is definition of A+E ser%ices! WBrooEs Act roceduresM a l#$ T/e BrooEs Act 6.: USC ((:*9 defines t/e com etiti%e rocedures to &e used in t/e selection of A)E firms! and t/ese rocedures 1ill a l# to "rantee rocurements of A)E ser%ices unless t/e "ranteeKs State /as ado ted formal rocurement rocedures for A)E ser%ices! in 1/ic/ case t/e State rocedures 1ill "o%ern$ A Aualifications)&ased selection rocess must &e follo1ed for all A)E rocurements re"ardless of dollar %alue$ T/e BrooEs Act reAuires a quali*ications $ased #rocurement method for t/e selection of A)E firms$ Price is e;cluded as an e%aluation factor! and ne"otiations are conducted 1it/ t/e most Aualified firm onl#$ If an a"reement cannot &e reac/ed on rice 1it/ t/e most Aualified firm! negotiations are *ormally terminated /ith that *irm, there$y re?ecting that *irmIs #ro#osal, and the grantee cannot return to this *irm at a later date to resume negotiations! Ne"otiations are t/en conducted 1it/ t/e ne;t most Aualified firm$ T/is rocess continues until a ne"otiated a"reement is reac/ed 1/ic/ t/e "rantee considers to &e fair and reasona&le$
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Ne"otiatin" Indirect Costs (( A9 <rantees must 6as a "eneral rule9 acce t undis uted audits t/at /a%e &een conducted &# an# Federal or State a"enc# of t/e consultantMs indirect cost rate if t/e audit re ort /as &een de%elo ed in accordance 1it/ t/e cost rinci les contained in t/e FAR Part -($ Co1e%er! if t/e audit is conducted &# anot/er State a"enc#! and t/e "rantee can full# document and 'ustif# to FTA 1/# t/e ot/er State a"enc#Ms audit s/ould not &e acce ted! t/en FTA ma# ermit t/e "rantee to conduct its o1n audit$ B9 Undis uted audited rates must &e used for t/e ur ose of contract estimation! ne"otiation! administration! re ortin" and contract a#ment$ T/is reAuirement a lies to t/e undis uted audited rates of A+E su&contractors t/at are erformin" under cost)reim&ursement su&contracts as 1ell as rime contractors$ C9 If t/ere is more t/an one audit! t/e "rantee ma# use 1/ic/e%er audit it 1is/es$ Co1e%er! as a ractical matter! t/e audits s/ould /a%e %irtuall# identical results if t/e# are conducted in accordance 1it/ FAR Part -($ Also! if t/e audits resulted in different findin"s! it is liEel# t/at someone 1ould &e dis utin" one or more of t/e audit findin"s$ D9 If a consultant /as not &een audited &# an# Federal or State "o%ernment a"enc#! t/e "rantee or State "o%ernment a"enc# s/ould conduct an audit and &ecome t/e co"ni,ant a"enc#$ Co1e%er! in t/e case of a consultant contract in%ol%in" a %er# small dollar amount! t/e "rantee s/ould &e a&le to rel# on its o1n cost and rice anal#sis in order to ne"otiate t/e contract rice$
((
The Transportation :<'it0 A)t for the 2!st Cent'r0 8T:A 2!9 imposed reg'&ations affe)ting the administration of )ontra)ts a/arded $0 grantees for ar)hite)t'ra& and engineering servi)es. The reg'&ations affe)ting the *edera& Bigh/a0 Administration 8*BWA9 ma0 $e fo'nd in 2" U.S.C. T !!2 and the )orresponding reg'&ations for *TA grantees ma0 $e fo'nd in 49 U.S.C. T 5"258$9. *BWA imp&emented the T:A 2! re<'irements its fina& r'&e, >Administration of :ngineering and Design Ie&ated Servi)es Contra)ts,> dated 6'ne !2, 2002 8http(AAfr/e$gate.a))ess.gpo.govA)gi $inAgetdo).)giWd$name[2002JregisterCdo)id[02 !415! fi&ed9. This fina& r'&e had $een pre)eded $0 a #oti)e of -roposed I'&ema2ing, >Administration of :ngineering and Design Ie&ated Servi)es Contra)ts> p'$&ished in %5 *I 444H%, 6'&0 !H, 2000 8http(AAfr/e$gate.a))ess.gpo.govA)gi $inAgetdo).)giW d$name[2000JregisterCdo)id[00 !1114 fi&ed9. ,e)a'se the &ang'age in *TAKs se)tion of the Code /as s'$stantia&&0 simi&ar to that of *BWA, *TAKs Offi)e of Chief Co'nse& has interpreted the &ang'age of 49 U.S.C. T 5"258$9 in a manner that is )onsistent /ith the provisions adopted $0 *BWA in its #oti)e of -roposed I'&ema2ing and its fina& r'&e. There are severa& important aspe)ts of these )ontra)ting re<'irements that affe)t the granteeKs administration of AC: )ontra)ts(
-age 4!
E9 Man# consultant firms /a%e multi le indirect cost rates suc/ as a national or cor orate)1ide rate! a re"ional or State rate! and a &usiness se"ment rate$ If a consultant ro oses a articular rate suc/ as a re"ional rate or a rate for a articular ser%ice 6e$"$! desi"n ser%ices or construction mana"ement9! t/at rate must /a%e &een audited &# a co"ni,ant Federal or State "o%ernmental a"enc# &efore t/e "rantee 1ould &e reAuired to acce t it$ If anot/er "o%ernmental a"enc#Ms audited rate is not a lica&le to t/e contract in Auestion! t/e "rantee ma# erform its o1n audit a lica&le to t/e unaudited rate$ For e;am le! if t/e consultant /as an audited rate for desi"n ser%ices &ut not for construction mana"ement ser%ices! t/e "rantee does not /a%e to acce t t/e rate ro osed for construction mana"ement ser%ices$ F9 <rantees ma# not reAuire or im ose a ca or ceilin" on an A+E consultantMs o%er/ead rates e%en if t/e consultant a"rees to suc/ a ca &# contract$ T/e Ee# 1ords /ere are require or im#ose$ In its final rule! Section (4*$46&9 = Audits *or <ndirect Cost Rate! FCBA made t/e follo1in" concession in res onse to a Bisconsin DOT e; ressed concern t/at a State ma# not &e a&le to acce t a lo1er o%er/ead rate freel# offered &# a consultant firm3 The F2WA agrees there are many reasons /hy an o-erhead rate *or a *irm may $e unusually high *or a short #eriod o* time! <n such cases, a *irm may $elie-e that it /ould $e in its $est interest to o**er a lo/er rate! The F2WA agrees that a consultant should $e *ree to o**er a lo/er o-erhead rate than the one determined $y a cogni5ant Federal or %tate go-ernment agency, and that the contracting agency should $e *ree to acce#t it #ro-ided such rate is o**ered -oluntarily $y the consultant! Under no circumstances, ho/e-er, shall a contracting agency require a lo/ering o* the o-erhead rate! <9 <rantees ma# not ne"otiate an o%er/ead rate t/at is fi;ed for t/e entire contract! or for an# articular fiscal #ear! and not su&'ect to ad'ustment &ased on an audit of actual costs incurred$ <rantees ma#! /o1e%er! use #ro-isional $illing rates 1/ere a &illin" rate is esta&lis/ed for a articular contract eriod and is su&'ect to ad'ustment &ased on an audit of actual costs incurred for t/at eriod$ C9 If t/e co"ni,ant Federal or State a"enc# for a consultant is &e/ind sc/edule in finali,in" audits and t/e latest acce ted audit of indirect cost rates la"s &# t/ree or four #ears! t/e "rantee ma# use anot/er a"enc#Ms audit if it 1as conducted in accordance 1it/ t/e FAR and its findin"s 1ere undis uted$ If an audit /as &een erformed &# a ri%ate firm in accordance 1it/ FAR Part -( and is undis uted! t/at audit could also &e used$ If t/ere are no audits a%aila&le under t/ese assumed arameters 1/ere t/e co"ni,ant a"enc# is t/ree or four #ears &e/ind! t/e "rantee ma# conduct its o1n audit in accordance 1it/ FAR rinci les to determine t/e actual o%er/ead rates$ Ot/er1ise! t/e last audit erformed &# t/e Hco"ni,ant Federal or StateI a"enc# 1ould &e used$
-age 42
I9 <rantees ma# not use a ne"otiated o%er/ead rate rocedure in lieu of usin" t/e actual undis uted and acce ted audit &# a co"ni,ant Federal or State "o%ernmental a"enc#$ T/e reason is t/at rice ne"otiations on t/e indirect cost rate or an# com onent t/ereof can &e %ie1ed as an administrati%e or de facto ceilin" ro/i&ited &# .8 U$S$C$ G 0-*06&9$ Ne%ert/eless! t/e State /as t/e ri"/t and o&li"ation to ne"otiate a fair and reasona&le total rice for t/e contract$ An# com onent of t/e rice! e;ce t t/e indirect cost rate! ma# &e ne"otiated$ L9 FTA /as elected to follo1 t/e ro%isions of FCBA in its im lementation of TEA)*( contractin" reAuirements for arc/itect)en"ineer ser%ices$ FTA is not &ound &# t/e FCBA rule! /o1e%er! and ma# ermit e;ce tions in com ellin" and unusual circumstances$ Best Practices The $asi) approa)h 'sed to se&e)t A : )ontra)tors 'sing ,roo2s A)t pro)ed'res ma2es 'se of Statements of 0ualifications. This $asi) approa)h is o't&ined $e&o/. Statements of N'a&ifi)ations -ro)ess Consultant Resource File =rantees ma0 /ish to maintain a consultant resource file /ith the names of A : firms and their respe)tive dis)ip&ines, personne& reso'r)es, )orporate e;perien)e, et). This fi&e /o'&d provide an initia& mai&ing &ist for iss'an)e of a re<'est for Contract1S%ecific Statements of 0ualifications. The initia& &ist of potentia& offerors that a grantee might maintain /o'&d $e s'pp&emented $0 a p'$&i) anno'n)ement of the pro@e)t, )a&&ing for interested A : firms to respond to a <'estionnaire from the grantee identif0ing the firm+s $asi) e;perien)e and personne& reso'r)es. *or an e;amp&e of a <'estionnaire 'sed $0 the *edera& =overnment to identif0 potentia& A : firms /ho /o'&d then $e so&i)ited to s'$mit their )ontra)t spe)ifi) <'a&ifi)ations, see the *edera& Standard *orm ""0 8S* ""09, Arc)itect18n!ineer 0ualifications. ! The S* ""0, -art 2, is the *edera& e<'iva&ent of a consultant resource file. This <'estionnaire /i&& provide the fo&&o/ing t0pes of information a$o't ea)h of the firm+s $ran)h offi)es( The &o)ation of the )ompan0+s offi)es and a point of )onta)t /ithin ea)h offi)e. The n'm$er of personne& $0 dis)ip&ine 8e.g., ar)hite)ts, )ivi& engineers, geo&ogists, s'rve0ors, soi&s engineers, et).9. S'mmar0 of professiona& servi)es fees re)eived for ea)h of the &ast five 0ears.
*AI 5"."0! ""0.
-age 4"
-rofi&e of firm+s pro@e)t e;perien)e for &ast five 0ears. The <'estionnaire &ists over !00 different t0pes of pro@e)t )odes 8airports, t'nne&s, to/ers, gas s0stems, et).9 S'mmar0 of ann'a& average professiona& servi)es reven'es for &ast three 0ears sho/ing tota&s for *edera& and #on *edera& /or2.
#ote that the S* ""0, -art 2, does not as2 the A : firm to identif0 spe)ifi) personne& or approa)hes that it /o'&d propose to 'se for the spe)ifi) pro@e)t that the grantee is advertising. -ro@e)t spe)ifi) information /o'&d )ome &ater in a statement of 3Contra)t Spe)ifi) N'a&ifi)ations4 8S* ""0, -art!9 dis)'ssed $e&o/. Pu&lic Announcements ) Agen)ies m'st p'$&i)iGe re<'irements for AC: servi)es in a))ordan)e /ith State &a/. These noti)es )o'&d $e p&a)ed in local news%a%ers and in p'$&i)ations s')h as &assen!er Trans%ort/ 8n!ineerin! News Record/ "od!e Re%ort/ et). These noti)es sho'&d des)ri$e the Agen)0Ks re<'irements and the )riteria to $e 'sed in the eva&'ation of A : <'a&ifi)ation statements. The p'$&i) anno'n)ements /o'&d advise interested A : firms to s'$mit e;pressions of interest to the pro)'rement offi)e. These e;pressions of interest ma0 ta2e the form of a <'estionnaire regarding the A : firm+s $asi) reso'r)es and )orporate e;perien)e, a&ong the &ines of the S* ""0, -art 2, 'sed $0 the *edera& =overnment. *rom these e;pressions of interest, and the &ist of firms identified in the )ons'&tant reso'r)e fi&e, the grantee )an then so&i)it &ro5ect S%ecific 0ualification Statements from prospe)tive A : firms that the grantee @'dges to have the $asi) )apa$i&ities to perform the pro@e)t. Pre) ro osal Conference L -re proposa& )onferen)es are genera&&0 'sed in more )omp&e; a)<'isitions as a means of $riefing prospe)tive offerors as to the pro@e)t re<'irements as /e&& as the agen)ies se&e)tion )riteria. This a&&o/s the firms to $etter 'nderstand the agen)0+s o$@e)tives and as2 pertinent <'estions that /i&& he&p them in preparing their proposa&s or pro@e)t spe)ifi) <'a&ifi)ation statements 8see $e&o/9. *or f'rther g'idan)e on pre proposa& )onferen)es, see Se)tion 4.".2.4 &re1?id and &re1&ro%osal Conferences. ReAuest for Contract7Pro'ect S ecific @ualification Statements ?nterested A : firms /o'&d $e re<'ired to s'$mit their &ro5ect S%ecific 0ualification Statements to the pro)'rement offi)e. *or an e;amp&e of a <'estionnaire 'sed to so&i)it pro@e)t spe)ifi) <'a&ifi)ations, see the *edera& Standard *orm ""0 8S* ""09, -art !, Contract1S%ecific 0ualifications. 2 The S* ""0, -art!, goes $e0ond the genera& information re<'ested in the S* ""0, -art 2. -art ! as2s the firm to identif0 8!9 the proposed pro@e)t team, sho/ing a&& firms and their ro&es in the pro@e)t, 829 an organiGationa& )hart of the proposed team, sho/ing the names and ro&es of a&& 2e0 personne& and the firm the0 are asso)iated /ith, 8"9 res'mes of a&& 2e0 personne& $eing proposed for the pro@e)t, and 849 re&evant pro@e)t e;perien)e of ea)h of the proposed team+s firms. *rom these N'a&ifi)ation Statements, the grantee+s A : eva&'ation )ommittee /o'&d s)ore and ran2 the firms on the $asis of their te)hni)a& <'a&ifi)ations. ?t /o'&d $e advisa$&e not to have a
*
*AI 5"."0! ""0.
-age 44
predetermined )'t off s)ore to determine those firms that are the most <'a&ified. S)oring sho'&d $e a too& for the individ'a& )ommittee mem$er to determine the re&ative strengths and /ea2nesses of the firms $eing eva&'ated. A&so, it /o'&d $e $est not to determine the most <'a&ified firms $0 averaging the individ'a& )ommittee mem$er s)ores. The n'meri)a& s)ores sho'&d he&p ea)h mem$er ran2 the vario's firms in order to a&&o/ the pro)'rement offi)er to determine a 3short &ist4 for )ond')ting ora& presentations and dis)'ssions. On)e ea)h )ommittee mem$er has ran2ed the firms 8'sing the p'$&ished eva&'ation )riteria, the re&ative /eights and s)oring s0stem9, the )ommittee sho'&d meet to dis)'ss the findings of the individ'a& mem$ers and rea)h a )onsens's on a ran2ing of the vario's firms. Some agen)ies have fo'nd a <'a&itative 8ad@e)tive9 rating s0stem to $e more effe)tive than a n'meri)a& s)oring s0stem. *or e;amp&e, firms are eva&'ated /ith respe)t to their <'a&ifi)ations statements in ea)h of the eva&'ation )riteria e&ements as $eing 3e;)e&&ent,4 3satisfa)tor0,4 or 3'nsatisfa)tor0.4 After rating ea)h firm+s <'a&ifi)ations for ea)h )riterion, the )ommittee mem$ers then give ea)h firm an overa&& eva&'ation rating. The overa&& ratings for the firms are then )ompared and the firms /ith the most 3e;)e&&ent4 ratings are short &isted. Whether 0o' 'se a n'meri)a& or <'a&itative 8ad@e)tive9 rating s0stem, a /ritten narrative $0 ea)h eva&'ator @'stif0ing their de)ision sho'&d $e prepared. ReAuest for Tec/nical Pro osals L ?f 0o' determine to re<'ire detai&ed te)hni)a& proposa&s after the short &ist has $een determined, 0o' /i&& need to esta$&ish the eva&'ation )riteria to $e 'sed in se&e)ting the s'))essf'& )ontra)tor and to advise the firms of the )riteria in 0o'r I*-. Criteria /i&& norma&&0 invo&ve s')h matters as the fo&&o/ing( !. -ast -erforman)e L The so&i)itation sho'&d advise offerors of 0o'r approa)h in eva&'ating past performan)e, in)&'ding eva&'ating offerors that have no re&evant performan)e histor0, and sho'&d a&so advise offerors to identif0 past re&evant )ontra)ts for efforts simi&ar to 0o'r re<'irement. The so&i)itation sho'&d a&so a&&o/ offerors to provide information on pro$&ems en)o'ntered on the identified )ontra)ts and )orre)tive meas'res ta2en. This eva&'ation sho'&d a&so )onsider the past performan)e of 2e0 personne& and s'$)ontra)tors that /i&& perform ma@or or )riti)a& aspe)ts of the /or2. This eva&'ation of past performan)e, as one indi)ator of an offeror+s a$i&it0 to perform the )ontra)t s'))essf'&&0, is separate from the responsi$i&it0 determination dis)'ssed in Se)tion 5.!. 2. Te)hni)a& Criteria L Te)hni)a& fa)tors regarding the spe)ifi) methods, designs, and s0stems proposed to $e 'sed $0 the offeror /i&& $e )onsidered and the0 m'st $e tai&ored to the spe)ifi) re<'irements of 0o'r so&i)itation. These fa)tors m'st represent the 2e0 te)hni)a& areas of importan)e that 0o' intend to )onsider in the so'r)e se&e)tion de)ision. Tec)nical factors s)ould $e c)osen to su%%ort meanin!ful com%arison and discrimination $etween com%etin! %ro%osals. ?f the agen)0 has esta$&ished minim'm standards for determining te)hni)a& a))epta$i&it0 of proposa&s, these standards m'st $e )&ear&0 set forth in the so&i)itation.
-age 45
". Ye0 -ersonne& L An eva&'ation of 2e0 personne& is often s'ggested /hen the pro)'rement invo&ves servi)es or re<'irements /here management of the /or2 is a )riti)a& fa)tor in determining its s'))ess. N'a&ifi)ations and e;perien)e of 2e0 personne& ma0 $e an important eva&'ation fa)tor. Some agen)ies have re<'ired ora& presentations $0 2e0 personne& d'ring /hi)h the agen)0 offi)ia&s ma0 as2 these 2e0 personne& re&evant <'estions to determine the depth of their 2no/&edge in )riti)a& areas. 4. Spe)ia&iGed Criteria =rantees ma0 a&so /ant to in)&'de spe)ia&iGed )riteria s')h as e;perien)e in )omp&0ing /ith the Ameri)ans /ith Disa$i&it0 A)t re<'irements and previo's /or2 on &andmar2 or histori) str')t'res. Desi"n Com etition L The <'estion is sometimes raised as to /hether the AC: )ontra)tor )an $e se&e)ted on the $asis of a )on)ept'a& design )ompetition rather than <'a&ifi)ations statements. The ,roo2s A)t /o'&d permit grantees to se&e)t an AC: firm on this $asis. The *AI dis)'sses this approa)h in S'$part "%.%02 ! L Selection Criteria/ paragraph 8$9. Of )o'rse the *AI is not $inding on grantees $'t the *edera& parameters for 'sing design )ompetitions ma0 prove 'sef'& to grantees. =rantees /i&& have to )onsider the pa0ment of proposa& stipends to those firms that are re<'ested to s'$mit design proposa&s. " The amo'nt of the proposa& stipend /o'&d $e 'niform for a&& )ompetitors. ?t /o'&d a&most ass'red&0 attra)t greater )ompetitive interest and sho'&d give the grantee tit&e to the proposa& design )on)epts sin)e the proposa& is $eing paid for $0 the grantee. Against the advantages is the )ost to the grantee of pa0ing for the proposa&s. Arc/itect)En"ineer Selection Committee = When esta$&ishing their A : Se&e)tion Committees, agen)ies /i&& need to appoint mem$ers /ho have spe)ifi) e;pertise in the dis)ip&ines needed for performing the )ontra)t. ?t /o'&d a&so $e /e&& to have a D,: advisor. ?t ma0 $e he&pf'& to appoint some mem$ers to this Committee /ho are organiGationa&&0 o'tside the engineering offi)e that /i&& $e managing the A : )ontra)t. The pro$&em to $e avoided /hen esta$&ishing this Se&e)tion Committee is one of 3)ontro&Q4 i.e., )are m'st $e ta2en that one offi)e does not )ontro& the se&e)tion pro)ess to the point /here on&0 a se&e)t gro'p of 3favorite4 )ontra)tors are /inning )ontra)t a/ards. This )ommittee performs the initia& revie/ of A : )ontra)tor <'a&ifi)ations and determines the ran2ings. De%elo in" t/e S/ort List L Determination of the s)ort list or )ompetitive range of <'a&ified firms /ith /hom ora& dis)'ssionsApresentations /i&& ta2e p&a)e sho'&d $e the prerogative of the pro)'rement offi)er. The short &ist sho'&d $e a n'm$er appropriate for ade<'ate )ompetition and
=rantees sho'&d )onsider 'sing a t/o step pro)ed're in order to narro/ the n'm$er of firms a&&o/ed to s'$mit design proposa&s 8to those /ith a rea&isti) )han)e of s'))ess9 and th's to )ontro& the )ost to the grantee. Step one might $e $ased on <'a&ifi)ations statements s')h as are norma&&0 'sed to se&e)t AC: firms, from /hi)h a &imited n'm$er of firms /o'&d $e se&e)ted and re<'ested to s'$mit design proposa&s in step t/o.
-age 4%
sho'&d )onsist of those firms that have a reasona$&e )han)e of getting the a/ard. These firms /o'&d then $e invited to ma2e presentations to the eva&'ation )ommittee. =rantees sho'&d )he)2 their state &a/s to see if a minim'm n'm$er of firms is re<'ired to $e short &isted. Oral resentations &# A)E firms L Baving eva&'ated the <'a&ifi)ations of the A : firms /ho s'$mitted detai&ed <'a&ifi)ation statements 8or te)hni)a& proposa&s9, and deve&oped the short &ist of <'a&ified firms, the A : Se&e)tion Committee /o'&d esta$&ish a s)hed'&e for ea)h firm to ma2e ora& presentations, a&tho'gh presentations are not a&/a0s ne)essar0 or appropriate. ?f dis)'ssions are ne)essar0, the0 )an $e /ritten or $0 phone or video)onferen)e. The Committee /o'&d advise the firms in advan)e of an0 <'estions the Committee had regarding the firm and its )apa$i&ities. These <'estions /o'&d $e addressed $0 the A : firm at the ora& presentation. The Committee ma0 a&so /ish to spe)if0 those 2e0 personne& of the A : firm that sho'&d present in order to ans/er the Committee+s <'estions. ?t is important that the 'ser organiGation $e )omforta$&e /ith the a)t'a& pro@e)t managers $eing assigned to the pro@e)t, and for this reason the presentations sho'&d $e made $0 the firm+s proposed 2e0 staff, not $0 a sa&es e;e)'tive. Final ranEin" of A)E firms At the )on)&'sion of the ora& presentations, ea)h of the Se&e)tion Committee mem$ers /o'&d perform a fina& s)oring and ran2ing of the short &isted firms. These fina& s)ores /o'&d then $e dis)'ssed, and the pro)'rement offi)er )hairing the pane& sho'&d strive for )onsens's L finding a firm that is va&'ed $0 most mem$ers and a))epta$&e to the rest. This pro)ess sho'&d not $e a me)hani)a& 3ma@orit0 r'&es4 vote. *ai&'re to o$tain a )onsens's )an res'&t in interna& fighting if the pro@e)t gets into diffi)'&t0, and )an even )reate these diffi)'&ties. On)e an agreement is rea)hed on the highest <'a&ified firm, that firm is then re<'ested to s'$mit a )ost proposa& for negotiation of a )ontra)t. Contract Ne"otiations The ,roo2s A)t re<'ires a qualifications $ased %rocurement met)od for the se&e)tion of A : firms. -ri)e is e;)&'ded as an eva&'ation fa)tor, and negotiations are )ond')ted /ith the most <'a&ified firm on&0. ?f an agreement )annot $e rea)hed on pri)e /ith the most <'a&ified firm, ne!otiations are formally terminated wit) t)at firm. On)e negotiations are terminated, that firm is irrevo)a$&0 o't of )ontention for the )ontra)t and )annot $e $ro'ght $a)2 in. #egotiations are then )ond')ted /ith the ne;t most <'a&ified firm. This pro)ess )ontin'es 'nti& a negotiated agreement is rea)hed /hi)h the grantee )onsiders to $e fair and reasona$&e. In)/ouse Cost Estimate One of the $iggest pro$&ems noted in *TA -ro)'rement S0stems Ievie/s is the fai&'re of agen)ies to prepare detai&ed in ho'se )ost estimates prior to re)eiving )ost proposa&s. This is espe)ia&&0 )riti)a& in A : pro)'rements /here there are no )ompeting proposa&s to provide a )omparison. 3n order to meanin!fully evaluate and ne!otiate t)e A18 firmPs cost %ro%osal/ it is critical t)at t)e !ranteePs tec)nical staff %re%are a detailed in1)ouse cost estimate (wor( estimate) of t)e wor( required $y t)e A18 firm $efore t)e solicitation is issue. ?n order to $e 'sef'& as a too& in eva&'ating the )ost proposa&, this in ho'se estimate needs to $e prepared in the same &eve& of detai& that the grantee is re<'iring the A : firm to s'$mit its proposa&. ?n other /ords, t)e !ranteePs tec)nical staff %re%ares its in1)ouse estimate as if t)e !rantee were t)e contractor %ro%osin! on t)e contract. ?t is a&so important that grantees re<'ire A : firms to s'$mit their )ost proposa&s in the same format in /hi)h the in ho'se estimate /as
-age 41
prepared. =rantees sho'&d )onsider iss'ing their Ie<'est for -roposa& /ith a samp&e )ost proposa& format and a &ist of position des)riptions for ea)h of the dire)t &a$or )ategories 'sed $0 grantee+s in ho'se )ost estimating team. This sho'&d a&&o/ for a one for one )omparison of the )ost proposa& and the in ho'se estimate, th's fa)i&itating the eva&'ation and negotiation pro)ess. Terms and Conditions The I*- sho'&d )ontain a&& of the agen)0+s re<'ired terms and conditions 8)&a'ses, et).9. This /i&& a&&o/ the )ontra)tor to address these terms and )onditions in its proposa&, /hi)h )an then $e dis)'ssed at negotiations. The A : )ontra)tor sho'&d $e advised $efore it s'$mits its proposa& /hat )ontra)t )&a'ses are negotia$&e and /hat are not. This /i&& save $oth the )ontra)tor and the grantee a &ot of need&ess effort in dis)'ssing non negotia$&e terms and )onditions. *or e;amp&e, *edera&&0 re<'ired )&a'ses /o'&d not $e s'$@e)t to negotiation and )ontra)tors sho'&d $e so advised $efore the0 p't their proposa&s together. An0 e;)eptions ta2en $0 the )ontra)tor to terms and )onditions sho'&d $e in)&'ded in the pri)e proposa& on&0. This /i&& avoid inf&'en)ing the te)hni)a& eva&'ation, and it re)ogniGes that )ontra)t terms invo&ve ris2 a&&o)ation and therefore )ost. Controllin" t/e Ne"otiations An e;perien)ed )ontra)t spe)ia&ist /ho )an )ontro& the meeting sho'&d &ead the negotiation team. Ieso'r)e personne& 8engineers, ar)hite)ts, &a/0ers, )ost ana&0sts, et).9 are a va&'a$&e reso'r)e to the )ontra)t spe)ia&ist for advi)e, $'t these personne& sho'&d not $e the ones ma2ing $'siness de)isions and )ommitting the agen)0 d'ring the negotiations. Care m'st $e ta2en that the )ontra)tor does not )reate a sit'ation /here the agen)0+s )ontra)t spe)ia&ist and reso'r)e personne& $e)ome divided in their positions. When the agen)0+s team needs to dis)'ss a&ternatives or possi$&e )on)essions d'ring negotiations, the0 sho'&d do so in private )a')'ses and not in the presen)e of the )ontra)tor. There sho'&d $e one spo2esperson for the agen)0cthe )ontra)t spe)ia&istc/ho )ontro&s the meeting. Contract T# e L =rantees /i&& need to )hoose the t0pe of )ontra)t that is most appropriate for the s)ope of /or2 anti)ipated. ,--. Se)tion 2.4." )ontains a dis)'ssion of )ontra)t t0pes, in)&'ding fi;ed pri)e, )ost reim$'rsement, time and materia&s, and &a$or ho'r )ontra)ts. This se)tion sho'&d $e revie/ed for genera& g'idan)e as to the )ir)'mstan)es /hen ea)h t0pe of )ontra)t ma0 $e appropriate. Indirect Cost Rates The *TA .aster Agreement re<'ires grantees to a))ept 'ndisp'ted a'dits of other *edera& or State government agen)ies for p'rposes of esta$&ishing indire)t )ost rates that are 'sed for pri)ing, negotiation, reporting and )ontra)t pa0ments. See the paragraph a$ove entit&ed 3#egotiating ?ndire)t Costs4 in the D?SCUSS?O# se)tion. Profit Anal#sis Factors >S'ggested profit ana&0sis fa)tors in)&'de( S2i&& and e;pertise of the A : personne& re<'ired for the /or2, Contra)t )ost ris2 $ased on )ontra)t t0pe and the degree of ris2 in )omp&eting the /or2 /ithin the negotiated pri)e,
-age 4H
-otentia& &ia$i&it0 8e.g., third part0 &ia$i&it09 of the A : firm $ased on the nat're of the pro@e)t, -rior performan)e re)ord of the firm, Degree of )ontra)tor investment, as it ma0 )ontri$'te to more effi)ient and e)onomi)a& )ontra)t performan)e.
-rofit on Change Orders L ?t is )ommon pra)ti)e in the )onstr')tion ind'str0 for A : firms to re<'est in)reases in their )ontra)t feesAprofit $ased on the per)entage in)rease in the )ost of the )onstr')tion )ontra)t. =rantees sho'&d avoid this pra)ti)e even tho'gh it is )ommonp&a)e in the )onstr')tion ind'str0. A : )ontra)tors+ profits sho'&d $e $ased on their /or2 effort and sho'&d never $e negotiated on a predetermined per)entage $asis of a )ost in)rease in the )ontra)t /hose )ost the A : firm is affe)ting $0 its designs. =rantees are prohi$ited from an0 t0pe of )ost p&'s per)ent of )ost )ontra)ting. 8See ,--. Se)tion 2.4.".5 Cost &lus &ercenta!e of Cost Contracts (C&&C). A)E Role in Construction C/an"e Orders! Claims and Liti"ation L The A : firm )an provide assistan)e to the agen)0 in the eva&'ation of c)an!es to the )onstr')tion )ontra)t, /hether the )hanges originate /ith the agen)0 or /ith the )onstr')tion )ontra)tor. When )hanges are s'ggested $0 the )onstr')tion )ontra)tor, the0 m'st $e eva&'ated, $efore the0 are adopted, as to their tota& s0stem impa)t on the pro@e)t, and the A : is in the $est position to do this. The A : )an a&so prepare a )ost estimate of the )hanged /or2 that the grantee )an 'se to eva&'ate the )onstr')tion )ontra)tor+s pri)e proposa& for the )hange, and the A : )an assist the grantee in negotiations as a te)hni)a& reso'r)e if the grantee so desires. The A : a&so has a ro&e to p&a0 in the eva&'ation of claims s'$mitted $0 the )onstr')tion )ontra)tor, a&tho'gh in this )ase the A :+s parti)ipation is some/hat defensive. *or e;amp&e, the A : ma0 $e )a&&ed in to defend its designs or spe)ifi)ations, or the time the A : too2 to revie/ and approve the )onstr')tion )ontra)tor+s do)'mentation, and in this )ase the A :+s efforts ma0 not $e reim$'rsa$&e 'nder the terms of the A :+s )ontra)t /ith the agen)0. The same /o'&d ho&d tr'e for iss'es that go to liti!ationcthe A : sho'&d $e re<'ired to defend its designs and spe)ifi)ations /itho't additiona& )harge to the agen)0. =rantees /o'&d do /e&& to ma2e this a s'$@e)t for an 3advan)e 'nderstanding4 in their A : )ontra)ts, so that /hen )&aims and &itigation o))'r, the parties /i&& 'nderstand their respe)tive o$&igations. ?f the )&aims or &itigation are )a'sed $0 the agen)0+s a)tions, ho/ever, and are not d'e to the A :+s /or2 prod')ts or a)tions, then the A : )an e;pe)t to $e reim$'rsed $0 the agen)0 for its efforts in defending the )&aim and assisting the agen)0 in the &itigation. ABA Model Procurement Code 6MPC9 ) The Ameri)an ,ar Asso)iationKs odel &rocurement Code Se)tion 5 50!, Arc)itect18n!ineer and #and Surveyin! Services! )ontains a )omprehensive and ver0 /orth/hi&e presentation of pro)'rement pro)ed'res 'sing Statements of 0ualifications for the a/ard of A : )ontra)ts. The &C )overs the entire spe)tr'm of events &eading to a )ontra)t a/ard, /ith detai&ed re)ommendations for the pro)'ring Agen)0 to fo&&o/.
-age 49
Federal Procedures The *edera& =overnment pro)ed'res for pro)'ring Ar)hite)t :ngineer servi)es ma0 $e fo'nd in *AI "%.%, Arc)itect18n!ineer Services. A)E Contract Pro%isions Desi"n 1it/in fundin" limitations 5o' ma0 /ish to in)&'de a )&a'se re<'iring the A : firm to design the pro@e)t so that the )onstr')tion )osts do not e;)eed 0o'r $'dget, an amo'nt that /o'&d $e stated in the A : )ontra)t as a 3design to )ost4 re<'irement. ?f the pri)e offered $0 the &o/ $idder in 0o'r )onstr')tion ?*, e;)eeds the stated &imit in the A : )ontra)t, the A : firm sho'&d $e responsi$&e to redesign the pro@e)t at no in)rease in the pri)e of the A : )ontra)t. ?f the higher than anti)ipated )onstr')tion )ost is d'e to reasons $e0ond the )ontro& of the A : firm, s')h as an 'ne;pe)ted in)rease in the )ost of )ertain materia&s, then the A : firm sho'&d not $e o$&igated to redesign the pro@e)t at its o/n e;pense. 7i2e/ise, if the grantee has re<'ired feat'res in the fa)i&it0 that )ontri$'te to the $ids $eing in e;)ess of the $'dget, then a )hange order to these re<'irements ma0 $e in order, and this too /o'&d $e something $e0ond the A : firm+s a$i&it0 to )ontro&, th's re&ieving the A : from redesign responsi$i&it0. =rantees /i&& need, therefore, to e;amine the e&ements of the )onstr')tion )ontra)tor+s $id to see /h0 the $id pri)e e;)eeds the 3design to )ost4 amo'nt that the A : /as attempting to a)hieve. An e;amp&e of a )ontra)t )&a'se 'sed $0 one transit agen)0 fo&&o/s( Desi"n Bit/in Fundin" Limitations . A. The )ontra)tor sha&& a))omp&ish the design servi)es re<'ired 'nder this )ontra)t so as to permit the a/ard for the )onstr')tion of the proposed fa)i&it0 at a pri)e that does not e;)eed the estimated )onstr')tion )ontra)t pri)e as set forth in paragraph 8C9 $e&o/. When $ids or proposa&s for the )onstr')tion )ontra)t are re)eived that e;)eed the estimated pri)e, the Agen)0 sha&& ana&0Ge the reasons for the e;)essive pri)es and, if appropriate, the Contra)tor sha&& perform s')h redesign and other servi)es as are ne)essar0 to permit )ontra)t a/ard /ithin the f'nding &imitation. These additiona& servi)es sha&& $e performed at no in)rease in the pri)e of this )ontra)t. Bo/ever, the Contra)tor sha&& not $e re<'ired to perform s')h additiona& servi)es at no )ost to the Agen)0 if the 'nfavora$&e $ids, or proposa&s are the res'&t of )onditions $e0ond the its reasona$&e )ontro&. ,. The Contra)tor /i&& prompt&0 advise the Dire)tor of -'r)hasing if it finds that the pro@e)t $eing designed /i&& e;)eed or is &i2e&0 to e;)eed the f'nding &imitations and it is 'na$&e to design a 'sa$&e fa)i&it0 /ithin these &imitations. Upon re)eipt of s')h information the Dire)tor of -'r)hasing /i&& revie/ the Contra)torKs revised estimate of )onstr')tion )ost. The Agen)0 ma0, if it determines that the estimated
*or additiona& information, )onta)t .s. Ann =eter, Centra& Ohio Transit A'thorit0, at %!4 215 590".
-age 50
)onstr')tion )ost )ontra)t pri)e set forth in this )ontra)t is so &o/ that a/ard of a )onstr')tion )ontra)t not in e;)ess of s')h estimate is impro$a$&e, a'thoriGe a )hange in s)ope or materia&s as re<'ired to red')e the estimated )onstr')tion )ost to an amo'nt /ithin the estimated )onstr')tion )ontra)t pri)e set forth in paragraph 8C9 $e&o/. C. The estimated )onstr')tion )ontra)t pri)e for the pro@e)t des)ri$ed in this )ontra)t is SJJJJJJJJJJJJJ. Desi"n errors or deficiencies ?f the A : firmKs designs, dra/ings or spe)ifi)ations )ontain errors or defi)ien)ies, the A : firm sho'&d $e re<'ired to )orre)t them at no in)rease in pri)e to the grantee. When errors are dis)overed d'ring )onstr')tion, A :+s are genera&&0 &ia$&e for )orre)tion of the dra/ings at their o/n )ost, and for the differen)e $et/een /hat the 3)orre)t4 )onstr')tion /i&& )ost 8as a )hange order iss'ed to the )onstr')tion )ontra)tor9 and /hat it /o'&d have )ost in the origina& )ontra)t had the dra/ings $een )orre)t. This in)&'des an0 tear o't that needs to $e done, et). State &i)ensing &a/s a&so res'&t in man0 m'&ti state A :+s that are set 'p as she&& )ompanies to ho&d &i)enses in different states. Agen)ies sho'&d o$tain a performan)e g'arantee from the parent )ompan0 in these sit'ations. A)E Insurance L Agen)ies sho'&d re<'ire A :+s to have .eneral #ia$ility as /e&& as 8rrors and ,missions ins'ran)e. When A :+s propose to $e se&f ins'red, agen)ies m'st &oo2 )aref'&&0 at the ade<'a)0 of the firm+s assets $efore a))epting this se&f ins'ran)e approa)h. See a&so ,--. Se)tion %.% L 3nsurance. 2$2 INSURANCE RE@UIREMENT 49 C*I -art !9."! pres)ri$es ins'ran)e re<'irements for !rantees w)o are institutions of )i!)er education/ )os%itals/ and ot)er non1%rofit or!ani@ations= Se)tion !9."! ?ns'ran)e Coverage. Ie)ipients sha&&, at a minim'm, provide the e<'iva&ent ins'ran)e )overage for rea& propert0 and e<'ipment a)<'ired /ith *edera& f'nds as provided to propert0 o/ned $0 the re)ipient. *edera&&0 o/ned propert0 need not $e ins'red 'n&ess re<'ired $0 the terms and )onditions of the a/ard. The .aster Agreement, *TA .A8!29, Se)tion 20 pres)ri$es ins'ran)e re<'irements for all !rantees= a. .inim'm Ie<'irements. At a minim'm, the Ie)ipient agrees to )omp&0 /ith the ins'ran)e re<'irements norma&&0 imposed $0 its State and &o)a& governments.
-age 5!
$. *&ood BaGards. To the e;tent app&i)a$&e, the Ie)ipient agrees to )omp&0 /ith the f&ood ins'ran)e p'r)hase re<'irements of se)tion !028a9 of the *&ood Disaster -rote)tion A)t of !91", 42 U.S.C. Se)tion 40!2a8a9, /ith respe)t to an0 -ro@e)t a)tivit0 invo&ving )onstr')tion or a)<'isition having an ins'ra$&e )ost of S!0,000 or more. DISCUSSION T/e Master A"reement rescri&es a reAuirement t/at "rantees determine 1/at t/eir indi%idual States reAuire in terms of insurance for construction ro'ects! and t/at "rantees ensure t/at t/eir State insurance reAuirements! if an#! are reflected in third #arty contracts$ T/e customar# a roac/ for insurin" a"ainst risEs associated 1it/ 1orE under t/ird) art# contracts is to reAuire contractors to urc/ase and maintain insurance co%era"es t/at t/e "rantee s ecifies 1it/in t/e terms and conditions of t/e t/ird) art# contract$ T/ese terms and conditions 1ould s ecif# t/e t# e of insurance reAuired! suc/ as /or(ers com#ensation! $uilder@s ris(! general lia$ility! railroad #rotecti-e insurance! automo$ile! errors and omissions! etc$! as 1ell as t/e amount of t/e %arious co%era"es reAuired$ 0 Under .8 CFR (8$-(! institutions of /i"/er education! /os itals! and ot/er non) rofit or"ani,ations are reAuired to insure real ro ert# and eAui ment! 1/ic/ /as &een acAuired 1it/ Federal funds! to t/e same de"ree! if an#! t/e# insure t/eir o1n ro ert# and eAui ment$ T/is CFR reAuirement ertains to ro ert# t/at /as &een rocured and acce ted &# t/e "rantee! and for 1/ic/ title /as %ested in t/e "rantee$ T/is t# e of insurance 1ould &e desi"ned to insure a"ainst dama"e or loss to t/e ro ert# itself! and t/e "rantee 1ould rocure t/is insurance directl# from an insurance com an# or t/rou"/ an insurance &roEer! as art of its annual insurance ro"ram for t/e "ranteeKs ro ert# and o erations$ Best Practices Bra U Policies Constr')tion pro@e)ts The traditiona& method of ins'ring the parti)ipants on &arge )onstr')tion pro@e)ts has $een for ea)h part0 8pro@e)t o/ner, )ontra)tors and s'$)ontra)tors9 to p'r)hase ins'ran)e independent&0 to prote)t themse&ves from finan)ia& &osses. ?n )ontrast /ith the traditiona& method, pro@e)t o/ners )an e&e)t to p'r)hase a wra%1u% ins'ran)e po&i)0 that /i&& )over a&& the parties invo&ved in the pro@e)t. Over the past de)ade, /rap 'p ins'ran)e has $e)ome in)reasing&0 pop'&ar $e)a'se of the potentia& for )ost savings. ?n !99H, for e;amp&e, /rap 'p ins'ran)e )overed a$o't "00 )onstr')tion pro@e)ts nation/ide.
*or an e;amp&e of a granteeKs third part0 )ontra)t 3nsurance S%ecifications, )onta)t .r. Barr0 Bo/er, .anager of ?ns'ran)e, .AITA, at 84049 H4H 4504.
-age 52
=rantees ma0 /ant to )onsider some t0pe of wra% u% program for their &arger )onstr')tion pro@e)ts 8those over S!0.9. These programs are a&so 2no/n as owner controlled insurance %ro!rams 8OC?-9. A wra% u% or owner1controlled insurance %ro!ram is one in /hi)h the Transit Agen)0 pro)'res an ins'ran)e program )overing a&& )ontra)tors and s'$)ontra)tors /ho /i&& $e /or2ing on a &arge )onstr')tion pro@e)t or a fami&0 of re&ated )onstr')tion pro@e)ts. T0pi)a& ins'ran)e )overage /o'&d provide for( wor(ers com%ensation, !eneral lia$ility, and Gall ris(s course of construction> 8sometimes referred to as $uilder4s ris(9. This po&i)0 is 's'a&&0 p'r)hased thro'gh the servi)es of an insurance $ro(er/ /ho ma0 have $een se&e)ted thro'gh a )ompetitive I*-. As )onstr')tion )ontra)ts are a/arded over the term of the po&i)0 period, the names of the )ontra)tors and a&& s'$)ontra)tors are added to the po&i)0 as named ins'reds. This approa)h has $een 'sed /ith e;)e&&ent res'&ts. % Among the advantages noted are( The Agen)0 2no/s for s're that its )ontra)torsAs'$)ontra)tors have ade<'ate ins'ran)e )overage. *or 'or(ers Com%ensation ins'ran)e there /i&& $e premi'm dis)o'nts $e)a'se of the siGe of the po&i)0. When the ins'ran)e is $o'ght as one, )oordinated po&i)0, rather than pro)'red pie)emea& thro'gh the individ'a& )ontra)tors and s'$)ontra)tors, there /i&& $e premi'm dis)o'nts. The $igger the po&i)0, the $igger the dis)o'nt. Other premi'm saving p&ans ma0 $e avai&a$&e thro'gh a /rap 'p program. #ote that the )onstr')tion )ontra)tors are informed in the ?nvitation *or ,id 8?*,9 provisions /hat ins'ran)e the Agen)0 is providing, th's permitting the )ontra)tors to re<'est )redits from their ins'ran)e )ompanies for that pro@e)t. The )redits to their premi'ms )an then $e passed a&ong to the agen)0 in terms of &o/er $id pri)es. #e/er and sma&&er )onstr')tion )ontra)tors ma0 have a diffi)'&t time getting ins'ran)e. This is espe)ia&&0 tr'e for sma&& )ontra)tors and some Disadvantaged ,'siness :nterprises 8D,:Ks9. A wra% u% %ro!ram )an enhan)e the Agen)0Ks D,: parti)ipation, as /e&& as the overa&& )ompetitive environment for its )onstr')tion pro@e)ts, $0 ena$&ing more )ontra)tors to )ompete for the /or2. ?n )ases /here there is a &oss and it is not )&ear /hi)h )onstr')tion )ontra)tor or s'$)ontra)tor is at fa'&t, the in@'red part0 does not have to prove /hi)h )ompan0 )a'sed the &oss, on&0 that a &oss has o))'rred, and someone in the gro'p /as responsi$&e. This great&0 red')es the )ost of sett&ement of )&aims, /ith o$vio's $enefits to the in@'red parties. ,0 having one ins'ran)e )ompan0, there /i&& $e one ins'rerKs safet0 engineer /ith )omp&ete a'thorit0 over the entire @o$, th's providing $etter )oordination of safet0 iss'es.
See footnote a$ove.
-age 5"
=AO St'd0 of Wrap Up ?n !999 the U.S. =enera& A))o'nting Offi)e 8=AO9 )omp&eted a st'd0 of si; ma@or transit and high/a0 pro@e)ts 'sing /rap 'p ins'ran)e. 1 These pro@e)ts in)&'ded severa& design $'i&d pro@e)ts finan)ed $0 *TA and *BWA. The p'rpose of the report /as to identif0 the advantages and disadvantages of /rap 'p ins'ran)e over traditiona& ins'ran)e and the fa)tors that )an affe)t the $roader 'se of /rap 'p ins'ran)e. =AO fo'nd a n'm$er of advantages and disadvantages in 'sing /rap 'p ins'ran)e. Their resear)h findings in)&'ded the fo&&o/ing( a5or advanta!es include savin!s from $uyin! insurance Hin $ul(/I eliminatin! du%lication in covera!e/ )andlin! claims more efficiently/ reducin! %otential liti!ation/ and en)ancin! wor(%lace safety. Accordin! to insurance industry officials/ wra%1u% insurance can save %ro5ect owners u% to 5D %ercent on t)e cost of traditional insurance/ or from 1 to C %ercent of a %ro5ectPs construction cost/ de%endin! on its si@e. T)e %otential disadvanta!es of wra%1u% insurance include requirin! %ro5ect owners to invest more time and resources in administration. &ro5ect owners must )ire additional %ersonnel or %ay to contract out t)e mana!ement of wra%1u% insurance. 3n addition/ &ro5ect owners could also )ave to %ay lar!e %remiums at t)e $e!innin! of t)e %ro5ect. +owever/ trans%ortation officials said t)ese costs were reasona$le. A num$er of factors can affect t)e $roader use of wra%1u% insurance. &er)a%s t)e most si!nificant $arriers are state systems for wor(ersP com%ensation t)at/ in some states/ effectively %revent wra%1u% insurance $y !reatly reducin! its %otential cost savin!s. Anot)er limitation is t)at a %ro5ect must $e sufficiently lar!e/ or contain at least a sufficient amount of la$or costs/ to ma(e wra%1u% insurance financially via$le. Finally/ some contractors disli(e wra%1u% insurance $ecause it reduces a contractorPs %rofits from insurance re$ates. T0pes of Wrap Up ?ns'ran)e -&ans T/o t0pes of p&ans are avai&a$&e to pro@e)t o/ners. One is to pa0 a f&at premi'm 8a&so 2no/n as a !uaranteed cost %lan9. With this p&an, premi'ms remain fi;ed for the term of the po&i)0 even if a high amo'nt of )&aims is paid o't. This t0pe of p&an is )ommon for sma&& and medi'm siGed $'sinesses. The se)ond t0pe of p&an is 2no/n as a loss1 sensitive %lan. Bere the premi'ms depend on the po&i)0ho&der+s )&aims that are a)t'a&&0 paid 8)a&&ed 3&osses49. A &oss sensitive p&an ret'rns a ref'nd for &o/ &osses and )harges additiona& premi'ms for high &osses, th's giving the o/ner an in)entive to ma;imiGe safe operations. *ive of the si; ma@or pro@e)ts st'died $0 =AO 'sed &oss sensitive p&ans, and a&& 'sed ded')ti$&e &imits to &o/er their ins'ran)e )osts. H
Trans%ortation 3nfrastructure= Advanta!es and "isadvanta!es of 'ra%12% 3nsurance for #ar!e Construction &ro5ects/ , 2H!4H0, 6'ne !, !999. The =AO report ma0 $e a))essed at http(AA///.gao.govAar)hiveA!999Ar)99!55.pdf. Orders ma0 a&so $e p&a)ed $0 )a&&ing 82029 5!2 %000.
5
Some pro@e)t o/ners share the ins'ran)e re$ates /ith their )ontra)tors. *or e;amp&e, the ,oston Arter0 pro@e)t /i&& share 20 per)ent of an0 savings /ith )ontra)tors in the form of safet0 in)entive a/ards.
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Cost Savings The si; pro@e)ts st'died $0 =AO a&& )&aimed )ost savings as a res'&t of 'sing /rap 'p ins'ran)e. Savings )&aimed ranged from S2.9 mi&&ion to S2%5 mi&&ion. 9 Contri$'ting to these savings /ere fe/er in@'ries res'&ting from )entra&iGed safet0 programs, as /e&& as 'sing $'&2 $'0ing po/er, avoiding d'p&i)ate ins'ran)e )overage, 'sing more effi)ient /a0s to pro)ess )&aims, and red')ing &itigation. !0 Centra&iGed Safet0 -rograms Under traditiona& ins'ran)e, ea)h )ontra)tor and its ins'ran)e )ompan0 ma0 $e invo&ved /ith safet0 $'t t0pi)a&&0 there is no )oordinated safet0 program. :a)h )ontra)tor and s'$)ontra)tor is )on)erned on&0 for their segment of the /or2, and the degree of emphasis p&a)ed on safet0 /i&& var0 from )ontra)tor to )ontra)tor. Additiona&&0, some of these )ontra)tors ma0 $e poor&0 monitored $0 their ins'ran)e )ompanies at the @o$ site. ?n )ontrast, on pro@e)ts ins'red 'nder /rap 'p po&i)ies, the responsi$i&it0 for safet0 /i&& $e )entra&iGed in one safet0 team 8in)&'ding one ins'ran)e )ompan09 that oversees a&& aspe)ts of safet0 at a @o$ site, /ith @'risdi)tion over a&& )ontra)tors and s'$)ontra)tors. 3t is im%roved safety/ resultin! in fewer in5uries/ t)at %roduces muc) of t)e %otential savin!s from wra%1u% insurance. When &oss1 sensitive %lans are 'sed, the parti)ipants have a )ompe&&ing finan)ia& interest to 2eep in@'ries to a minim'm so as to rea&iGe ins'ran)e re$ates. A&& si; pro@e)ts st'died $0 =AO )&aimed red')ed in@'ries as the main $asis for their ins'ran)e )ost savings. !! State ?ns'ran)e Ieg'&ations L ,e)a'se three fo'rths of the tota& ins'ran)e )ost on a )onstr')tion pro@e)t )an $e for wor(ersP com%ensation, removing it from the pro@e)t o/ner+s )ontro& effe)tive&0 e&iminates most of the )ost savings derived from /rap 'p ins'ran)e. !2 And this is /hat happens in some states that re<'ire )ontra)tors to 'se the state f'nd for /or2ers+ )ompensation as the primar0 ins'ran)e vehi)&e for )onstr')tion pro@e)ts. !" Some states, s')h as .i)higan and Ohio, re<'ire o/ners to o$tain prior approva& for /rap 'p ins'ran)e from the state ins'ran)e reg'&ator. .i)higan a&so esta$&ishes a minim'm pro@e)t )ost of S%5 mi&&ion to $e
=AO a&so notes that in !99H an *TA Transit Construction Roundta$le st'd0 of !H mem$ers indi)ated that savings of 2H per)ent /ere rea&iGed $0 p'r)hasing /rap 'p ins'ran)e for ma@or pro@e)ts.
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=AO noted that &arge &a$or intensive pro@e)ts /ith )onstr')tion )osts $et/een S50 mi&&ion and S!00 mi&&ion /o'&d $e in a $etter position 8i.e., $'0ing po/er9 to o$tain /rap 'p ins'ran)e.
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The ?oston Artery pro@e)t )ited a &oss ratio of 2" per)ent )ompared to a histori) nationa& average of a$o't %5 per)ent for that t0pe of pro@e)t. The ic)i!an ?lue 'ater ?rid!e pro@e)t )ited a &oss ratio of !0 per)ent )ompared to a nationa& average of 50 per)ent for that t0pe of pro@e)t.
(*
Wor2ers+ )ompensation ins'ran)e pa0s )&aimants in )ase of in@'r0, disa$i&it0, or death of emp&o0ees res'&ting from /or2 on the @o$.
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A))ording to a !991 =SA st'd0 of /rap 'p ins'ran)e, #orth Da2ota, Ohio, Washington, West Oirginia, and W0oming have a state f'nd into /hi)h a&& )ontra)tors m'st pa0 and a pro@e)t o/ner )annot o$tain separate /or2ers+ )ompensation ins'ran)e )overage.
-age 55
e&igi$&e for /rap 'p ins'ran)e. Oregon &imits /rap 'p to pro@e)ts of S!00 mi&&ion and /i&& not a&&o/ 3ro&&ing4 different pro@e)ts 8)om$ining severa& pro@e)ts9 'nder one ins'ran)e program. Deve&oping ?ns'ran)e Cost ?nformation L ?n the si; pro@e)ts st'died $0 =AO, o/ners deve&oped )ost information for traditiona& vs. /rap 'p ins'ran)e $0 one of three methods( 8!9 o$taining t/o $ids L one /ith ins'ran)e in)&'ded 8traditiona& method9 and one /ith ins'ran)e e;)&'ded 8/rap 'p method9, 829 removing ins'ran)e )osts from e;isting )ontra)ts, or 8"9 re&0ing on $ro2ers+ estimates of traditiona& ins'ran)e. Be&ping Sma&& and Disadvantaged ,'sinesses L ,0 providing ins'ran)e )overage to a&& )ontra)tors, in)&'ding sma&& and disadvantaged $'sinesses, o/ners )an often improve the degree of parti)ipation $0 these $'sinesses /hen the0 'se /rap 'p ins'ran)e. *or e;amp&e, a))ording to =AO, the Chi)ago Transit A'thorit0 8CTA9 a)hieved a$o't "0 per)ent parti)ipation $0 D,:s in their !994 =reen 7ine Ieha$i&itation -ro@e)t. -otentia& -ro$&ems With Wrap Up =rantees m'st $e )a'tio's a$o't )ontra)tors /ith poor safet0 re)ords and high ins'ran)e )osts. The0 )an present a pro$&em /hen the grantee is 'sing an o/ner )ontro&&ed ins'ran)e program. =rantees 'sing an OC?- sho'&d spe)if0 in their so&i)itation do)'ments 8?*,+s, I*-+s9 that the $idder+s past performan)e /ith respe)t to safet0 matters /i&& $e )onsidered as part of the grantee+s determination of )ontra)tor 3responsi$i&it0.4 See Se)tion 5.! Res%onsi$ility of Contractor. .ega pro@e)ts On mega pro@e)ts, grantees sho'&d )ons'&t /ith individ'a&s /ho have had /or2ing e;perien)e /ith s')h pro@e)ts $e)a'se there ma0 $e opport'nities for innovative te)hni<'es. S')h pro@e)ts &end themse&ves to )reative negotiations /ith the ins'ran)e )ompanies. *TA regiona& personne& /ith s')h e;perien)e ma0 $e )ons'&ted. !4 :<'ipment and S'pp&ies :<'ipment )ontra)tors /o'&d t0pi)a&&0 f'rnish their o/n ins'ran)e )overage for the prod')ts the0 f'rnish, e;)ept that for installation of heav0 e<'ipment, the wra% u% po&i)0 )o'&d app&0 to the insta&&ation /or2. ?t /o'&d $e pr'dent to do some mar2et resear)h $efore esta$&ishing the ins'ran)e &imits that 0o' re<'ire the s'pp&iers to have in order to $id on 0o'r re<'irement. ?f the &imits are too &arge, it ma0 restri)t )ompetition. ,0 )a&&ing the potentia& $idders in advan)e, 0o' )an determine /hat ins'ran)e &imits are reasona$&e to stip'&ate in 0o'r ?*, or I*-. BaGardo's materia&s When 0o'r pro@e)t re<'ires the )ontra)tor to /or2 /ith po&&'tants or an0 t0pe of haGardo's materia&s 8s')h as as$estos, /aste oi& prod')ts, parts )&eaners, et).,9 $e sure to )ave your insurance s%ecialist and your environmental safety officer review all of t)e contractor4s %olicies very carefully to determine if t)ere are any e7clusions in any of t)e %olicies
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*or *TA Iegion ! e;perien)e /ith the Centra& Arter0 -ro@e)t in ,oston 8S!!,9, )onta)t .r. Ii)hard Co&e at 8%!19 494 2"95.
-age 5%
for t)e ty%e of material involved. ?f there is an0 <'estion in an0 of the po&i)ies, $e s're to have the )ontra)tor o$tain a rider from his ins'ran)e )ompan0 removing the e;)&'sion. Arc/itect )En"ineer Ser%ices ?t is the )'stomar0 pra)ti)e of Ar)hite)t :ngineer firms to $'0 errors and omissions ins'ran)e to prote)t against design errors /hi)h the0 ma0 ma2e in the )o'rse of their design /or2. Bo/ever, there ma0 $e sit'ations /here the )ost of ins'ran)e for a parti)'&ar pro@e)t is ver0 high. This )o'&d o))'r, for e;amp&e, /hen the A : firm is designing e&ements of a s0stem, s')h as a rapid rai& s0stem, /hi)h /i&& )arr0 &arge n'm$ers of passengers. This sit'ation )arries /ith it the potentia& for ver0 high &ia$i&it0 in the event of an a))ident )a'sed $0 a fa'&t0 design of a s0stem e&ement. ?n some )ases, &i2e these, Agen)ies have de)ided to indemnif0 their A : firm against &ia$i&it0 arising from design errors or omissions. When this approa)h is fo&&o/ed, the A : firm does not in)'r the ver0 high )ost of errors and omissions ins'ran)e, /hi)h /o'&d have $een passed a&ong to the Agen)0 as a dire)t )ost on their )ontra)t. The mone0 th's saved $0 the Agen)0 in not having to pa0 for ins'ran)e )o'&d then $e deposited in a spe)ia& se&f ins'ran)e f'nd from /hi)h f't're )&aims, if an0, /o'&d $e paid. ?f there are no a))idents and )&aims, the Agen)0 /i&& rea&iGe some e;traordinar0 savings. .AITA e&e)ted to 'se this indemnifi)ation approa)h /ith its primar0 engineering )ons'&ting )ontra)tor, and the res'&ting savings /ere a$o't S"00,000 ann'a&&0. An0 de)ision to adopt this approa)h is a ma@or one, and o$vio's&0 entai&s an e&ement of ris2 to the Agen)0. ?t sho'&d $e pointed o't that in man0 states it is against p'$&i) po&i)0 for one part0 to indemnif0 another against that part0+s o/n neg&igen)e. Under these )ir)'mstan)es, the t0pe of indemnit0 des)ri$ed /o'&d $e i&&ega&. 2$4 ARTBORQ RE@UIREMENT Ie<'irements re&ated to the pro)'rement of art/or2 in transit pro@e)ts ma0 $e fo'nd in the fo&&o/ing do)'ments( a. *TA Cir)'&ar 9400.!A L "esi!n and Art in Transit &ro5ects, dated 6'ne !995. $. 49 C*I Se)tion !H."4 3Cop0rights.4 DISCUSSION FTA Circular 8.::$(A ro%ides FTA olic# and "uidance for t/e incor oration of desi"n and art into transit ro'ects funded &# FTA$ (0 Some of t/e more im ortant issues in t/is Circular concern3 ($ T/e eli"i&ilit# of desi"n and art as eli"i&le costs and "uidance for t/e incor oration of Aualit# desi"n and art into transit ro'ects funded &# t/e FTA$
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=rantees ma0 a))ess this Cir)'&ar at( http(AA///.fta.dot.govA&ega&Ag'idan)eA)ir)'&arsA9000A4""J!"!"J:#=JBT.7.htm
-age 51
*$ Fle;i&le "uidelines for t/e amount to &e s ent on art1orEJ e$"$! costs s/ould &e at least one /alf of (O of construction costs! &ut s/ould not e;ceed 0O of construction costs! de endin" on t/e scale of t/e ro'ect$ Funds s ent on t/e art1orE s/ould &e adeAuate to /a%e an im act$ -$ T/e encoura"ement of artists to interact 1it/ t/e communit# 6residents and &usinesses9 on a ro'ect$ .$ T/e Circular /as certain s ecific recommendations for t/e rocurement of art3 a$ T/e selection rocess s/ould consider use of a %ariet# of artists t/at are ca a&le of 1orEin" on t/e ro'ect! &$ Selection of artists s/ould &e &# a anel of art and desi"n rofessionals! suc/ as art administrators! artists! curators! and arc/itects! c$ T/e communit# surroundin" t/e future facilit# s/ould artici ate in t/e selection rocess = t/is ma# include all le%els of artici ation! includin" "eneratin" ideas for t/e ro'ect! su l#in" information! attendin" anel meetin"s! and &ein" %otin" mem&ers of t/e anel$ 0$ Criteria for e%aluatin" s ecific 1orEs of art for commissionin"$ T/ese 1ould include3 a$ Aualit# of art or desi"n! &$ im act on mass)transit customers! c$ connection to site and7or ad'acent communit#J art t/at relates! in form or su&stance to t/e cultures! eo le! natural or &uilt surroundin"s! or /istor# of t/e area in 1/ic/ t/e ro'ect is located! d$ a ro riateness for site! includin" safet# and scale!
e$ dura&ilit# of materials! f$ resistance to %andalism! and "$ minimum maintenance$ Best Practices The siGe and nat're of the pro@e)t ma0 affe)t the )hoi)e of pro)ed'res to $e fo&&o/ed. The g'idan)e here ma0 $e most re&evant for the pro)'rement of ma@or art in transit pro@e)ts, and is in
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fa)t ta2en from the e;perien)es of severa& transit agen)ies that have pro)'red or are in the pro)ess of pro)'ring signifi)ant art/or2 for their transit pro@e)ts. =rantees sho'&d a&so $e fami&iar /ith the ten )ase st'dies that *TA has p'$&ished on its /e$site detai&ing the 3&essons &earned4 from agen)ies that fa)ed a diversit0 of pro$&ems and )ha&&enges in $ringing their art in transit pro@e)ts to a s'))essf'& )on)&'sion. !% A$ Maintainin" an Artists Re"istr# .an0 States and the U.S. =enera& Servi)es Administration 8=SA9 maintain an Artists Iegistr0. The =SA has deve&oped the 3=SA #ationa& Artists Iegistr0,4 /hi)h is a data$ase of severa& tho'sand )ontemporar0 Ameri)an artists of a&& )areer &eve&s, media, and st0&es. This registr0 is 'sed to so&i)it e;pressions of interest from artists /hose prior /or2 is of the t0pe that =SA is interested in )onsidering for their )'rrent pro@e)t. The 7os Ange&es Co'nt0 .etropo&itan Transportation A'thorit0 8.TA9 maintains a mai&ing &ist data$ase of professiona& artists /ho are interested in /or2ing on .TA programs. ?n)&'sion on the mai&ing &ist is open to a&& professiona& artists on an on going $asis. Artists are so&i)ited from this mai&ing data$ase for e;pressions of interest via open UCa&& for Artists.+ ?t m'st $e pointed o't that some Artists Iegistries re<'ire the s'$mission of s&ides and statements of <'a&ifi)ations $0 artists. The0 re<'ire )onsidera$&e time and reso'r)es to maintain, and 'n&ess a))eptan)e into the registr0 is @'ried, the n'm$er of 'n<'a&ified or inappropriate artists ma0 e;pand to the point of rendering the registr0 of &itt&e or no va&'e. Artists /i&& /ant to 'pdate their s&ides periodi)a&&0, and the hand&ing, storage, data$ase entr0 and ret'rn mai&ing ma0 $e prohi$itive for a&& $'t the &argest programs. A more pra)ti)a& approa)h for most grantee organiGations /i&& $e to )onta)t their State+s Arts Co'n)i& and other organiGations that maintain mai&ing &ists of p'$&i) artists. :;amp&es of these other organiGations /o'&d in)&'de other transit agen)ies that have $een a)tive in p'$&i) art/or2 programs !1 and organiGations s')h as *ore)ast -'$&i) Art/or2s at ///.fore)astart.org and -'$&i) Art #et/or2 8-A#9 at ///.ameri)ansforthearts.org. This approa)h /i&& provide the grantee /ith an e;tensive &ist of artists at minima& e;pense to the grantee, and is a m')h more pra)ti)a& approa)h for those grantees that have 3one time4 art/or2 pro@e)ts and &imited staffing to maintain an e;pensive Artists Iegistr0 or mai&ing data$ase.
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These )ase st'dies ma0 $e fo'nd at( http(AA///.fta.dot.govAtransitJdataJinfoAreportsJp'$&i)ationsAreportsAartJinJtransitA22%0J:#=JBT.7.htm.

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7A.TA, #5.TA, S:-TA, .etropo&itan Co'n)i& of .inneapo&is, .#.
-age 59
B$ T/e HCall For ArtistsI The 3)a&& for artists4 )an $e p'$&ished for nationa& )overage in p'$&i)ations s')h as &u$lic Art Review/ Scul%ture a!a@ine/ Art 3n America/ ArtNews/ and ArtForum, and regiona& periodi)a&s s')h as, New Art 87aminer/ Art&a%ers/ and Art'ee( as /e&& as &o)a& ne/spapers. Bo/ever, the e;perien)es of severa& agen)ies in advertising have not $een )omp&ete&0 satisfa)tor0 as far as rea)hing prospe)tive artists. A far more s'))essf'& approa)h has $een to deve&op the names and addresses of the artists to $e so&i)ited and send them a noti)e of the )ommission opport'nities and 3Ie<'est for :;pression of ?nterest4 8I*?9 &etter. *or e;amp&e, So'theastern -enns0&vania Transportation A'thorit0 8S:-TA9 hired an art )ons'&tant /ho )'&&ed a &ist of )andidate artists from vario's art fo'ndations. Other agen)ies have 'sed their State Arts Co'n)i& as a reso'r)e for &istings of artists+ names and addresses. As a&read0 dis)'ssed, some have gone to the e;pense of maintaining Artists Iegistries and mai&ing data$ases to identif0 )andidates /ho are )onta)ted dire)t&0 $0 mai&. App&i)ants are norma&&0 as2ed to provide res'mes, s&ides of past /or2, )opies of p'$&ished revie/sAarti)&es a$o't their /or2, and perhaps a videotape of severa& min'tes &ength. Artists ma0 a&so $e re<'ired to state in their )over &etters /h0 the0 are interested in )reating art/or2 for the pro@e)t $eing advertised and /h0 their /or2 is app&i)a$&e to an o'tdoor transit environment. C$ Pu&lici,in" t/e Pro'ectMs Art Bud"et ?t has $een the pra)ti)e of a&most a&& agen)ies, in)&'ding the U.S. =SA, to p'$&ish the agen)0+s $'dget for the art pro@e)t at the time the 3)a&& for artists4 is re&eased andAor the noti)es are sent to )andidate artists so&i)iting their interest in the pro@e)t. The reasoning $ehind the pra)ti)e is to inform the artists of the re&ative magnit'de of the pro@e)t and to esta$&ish an eva&'ation and se&e)tion pro)ess that /i&& $e $ased on a 3$est va&'e for the mone04 t0pe of de)ision, instead of the more traditiona& pro)'rement approa)h of determining the &o/est pri)e proposa& that /i&& prod')e an art/or2 that meets a predetermined spe)ifi)ation. ?n other /ords, agen)ies /ant the ver0 $est prod')t that )an $e o$tained /ith the f'nds avai&a$&e for art, and there is genera&&0 no motivation to red')e the art/or2 monetar0 investment $0 se&e)ting art )on)epts that are &ess )ost&0 $'t a&so ma0 $e artisti)a&&0 and aestheti)a&&0 &ess re/arding to the agen)0 and the )omm'nit0. An e;amp&e of a $'dget that /as p'$&ished /ith a 3Ca&& to Artists4 $0 the .etropo&itan Co'n)i&, .inneapo&is, .# is sho/n in Appendi; ,.!H L +iawat)a #ine &u$lic Art - "esi!n ?ud!et. The Ca&& to Artists &isted si;teen )ommission opport'nities, fo'r of /hi)h /ere 3Design On&04 )ommissions, /hi&e t/e&ve others /ere &isted as 3Design, *a$ri)ation, and ?nsta&&ation4 )ommissions. The /or2 invo&ved in the vario's phases of these )ommissions /as des)ri$ed in the Ca&& to Artists, and the amo'nt of the )ommission a&&o)ated for ea)h phase /as as sho/n in Appendi; ,.!H. #ote that ever0 )ommission in)&'ded the )omp&etion of designs and the preparation of )onstr')tion dra/ings /ithin the s)ope of the initia& )ontra)t a/ard. The initia& )ontra)ts did not, ho/ever, in)&'de the *a$ri)ation and ?nsta&&ation -hases. The agen)0+s de)ision to invo&ve an0 parti)'&ar artist in the *a$ri)ation andAor ?nsta&&ation -hase /as to $e
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made at the )omp&etion of the Design -hase, and /as to $e re&ated to s')h )onsiderations as the art/or2 design, the artist+s interest in invo&vement in the *a$ri)ation and ?nsta&&ation -hase, and the agen)0+s interest in retaining the artist+s invo&vement in those fo&&o/ on phases. The invo&vement of an0 parti)'&ar artist in the *a$ri)ation and ?nsta&&ation phase )o'&d var0 from the )omp&ete fa$ri)ation and insta&&ation of the art/or2, fa$ri)ation and insta&&ation of )ertain e&ements of the art/or2 )oordinated /ith the insta&&ation of other e&ements $0 the pro@e)t+s DesignA,'i&der, oversight of fa$ri)ation and insta&&ation $0 the pro@e)t+s DesignA,'i&der, or in an 'n's'a& sit'ation, no invo&vement at a&&. ,e)a'se the invo&vement of the artist might var0 in the *a$ri)ation and ?nsta&&ation -hase, the )ommission amo'nt asso)iated /ith this *a$ri)ation and ?nsta&&ation -hase /as estimated as a ma;im'm amo'nt in the p'$&ished $'dget. The a)t'a& amo'nt of an0 fa$ri)ation and insta&&ation )ommission /as to $e determined $0 negotiations $et/een the agen)0 and the artist at the )on)&'sion of the Design -hase depending on the artist+s degree of invo&vement. !H D$ T/e Selection Process Timing One of the most important &essons &earned from those /ho pro)'re art/or2 is that the artist sho'&d $e se&e)ted and on $oard at a ver0 ear&0 date in the design pro)ess, prefera$&0 at the in)eption of the design pro)ess as mem$ers of the design team. Starting the artist ear&0 /ith the Ar)hite)t :ngineer firm that /i&& do the design /or2 ena$&es the artist to have ma;im'm opport'nities for the art/or2. ?f 0o' /ait 'nti& the fa)i&it0 is designed a&read0, or virt'a&&0 designed, 0o' &imit /hat the artist )an do. This is a ma@or )onsideration. ?n order to afford the artist the opport'nit0 to )o&&a$orate /ith the AA: firm d'ring the design )on)ept phase, the artist se&e)tion pro)ess sho'&d $egin /e&& $efore the AA: )ontra)t is a/arded. .ethods of Se&e)ting Artists There are t/o $asi) approa)hes that have $een 'sed to se&e)t artists. One invo&ves the se&e)tion of a 3short &ist4 of )andidates from /hom )ompetitive proposa&s are so&i)ited and eva&'ated. These proposa&s /o'&d t0pi)a&&0 )a&& for the s'$mission of design )on)epts, mode&s andAor renderings, )ost proposa&s, et). The other approa)h is one in /hi)h the eva&'ation is designed to se&e)t the artist instead of se&e)ting the $est art/or2 )on)ept as in the )ompetitive proposa& method. This method /o'&d prod')e a 3short &ist4 of the most <'a&ified )andidates $ased on artists+ res'mes, s&ides of previo's art/or2 prod')ts, videotapes, the artist+s e;pe)ted ho'r&0 rem'neration, et). ?ntervie/s are )ond')ted /ith the short &ist )andidates. Se&e)tion then fo&&o/s the intervie/s. The &atter approa)h does not invo&ve the s'$mission of design )on)epts for the pro@e)t $eing advertised L the preparation of designs )omes after artist se&e)tion. #or does this approa)h )a&& for artists to s'$mit the estimated pri)es of their art/or2 $e)a'se the art has not 0et $een designed. ?t does, ho/ever, )a&& for the artists to s'$mit their proposed ho'r&0 rates of rem'neration, /hi)h f'&fi&&s the re<'irement of *TA Cir)'&ar 4220.!: that )ost $e a fa)tor in the se&e)tion pro)ess. #ote that )ost ma0 in fa)t $e the
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*or f'rther information a$o't this p'$&i) art program )onta)t .r. David A&&en, .etropo&itan Co'n)i& Bia/atha -'$&i) Art and Design .anager at 8%!29 2!5 H22!.
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&east important fa)tor if the grantee so )hooses, $'t it m'st $e )onsidered in the se&e)tion pro)ess. A dis)'ssion of these t/o approa)hes fo&&o/s. Ievie/ of N'a&ifi)ations to Determine a 3Short 7ist4 of Candidates L Baving iss'ed the 3)a&& for artists4 and re)eived &etters of interest from )andidate artists, most agen)ies 8/ith parti)ipation of an artist se&e)tion pane&9 'se a <'a&ifi)ations $ased pro)ess to narro/ do/n the )andidates to a 3short &ist4 of fo'r to seven )andidates. This pro)ess of deve&oping the short &ist /o'&d t0pi)a&&0 $e $ased on the artist+s past /or2. Ies'mes and s&ides of the artist+s previo's /or2 /o'&d norma&&0 $e revie/ed 8$0 a se&e)tion pane&9 at this stage of the eva&'ation pro)ess. Artists /o'&d not norma&&0 $e re<'ired to s'$mit a 3te)hni)a& proposa&4 of their )on)ept'a& designs for the pro@e)t at this stage. Se&e)tion after ?ntervie/s L Baving determined a 3short &ist4 of )andidate artists, agen)ies+ approa)hes to determine the a)t'a& /inning artist ma0 var0. When the pro@e)t is @'st $eginning and the artists /i&& $e /or2ing /ith the AA: firm to deve&op design )on)epts, the t0pi)a& approa)h has $een to f'rnish the short &isted artists /ith the )omm'nit0 profi&e and invite them to $e intervie/ed $0 the se&e)tion pane&. The /inning artist is then se&e)ted on the $asis of their past /or2 and the intervie/ pro)ess. An e;amp&e of the artist se&e)tion )riteria /hi)h might $e 'sed in this t0pe of s)enario /o'&d $e as fo&&o/s( Aestheti) <'a&it0 of previo's&0 )omp&eted art pro@e)ts and )ommissions. App&i)a$i&it0 and s'ita$i&it0 of past /or2 to the spe)ifi) )ommission opport'nities $eing advertised $0 the grantee. Appropriateness of previo's&0 )omp&eted art/or2s to their sites, in)&'ding safet0 and s)a&e. D'ra$i&it0 and s'ita$i&it0 of materia&s, resistan)e to vanda&ism and a minim'm of maintenan)e re<'irements. :;perien)e /or2ing /ith the p'$&i) and neigh$orhood )omm'nities.
So&i)iting Competitive -roposa&s L When the pro@e)t for /hi)h the art is $eing pro)'red has a&read0 $een designed andAor $'i&t, some agen)ies invite a&& of the short &isted artists to s'$mit proposa&s for the pro@e)t. Bo/ever, some agen)ies have re<'ired proposa&s even /hen the artist se&e)tion pro)ess is o))'rring ear&0 in the program, $efore the AA: firm has done an0 design. When proposa&s are so&i)ited, and fo&&o/ing the s'$mission and eva&'ation of these proposa&s, intervie/s are then s)hed'&ed /ith a&& of the )andidates /here the artists ma0 present their proposa&s and the agen)0+s se&e)tion pane& ma0 as2 <'estions of the artists. Artists ma0 $e )a&&ed 'pon to present a rendering of their proposed art/or2 8a mode& or dra/ings or /ritten des)riptions9, a )ost proposa&, and samp&es of the a)t'a& proposed materia& to $e 'sed. The )ost proposa& 8$'dget9 /o'&d in)&'de )osts for design, fa$ri)ation, site preparation and insta&&ation, ins'ran)e, et). Sin)e the )on)ept'a& designs are pro$a$&0 the most va&'a$&e )ontri$'tion that the
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artists /i&& ma2e, agen)ies have often fe&t it e<'ita$&e to )ompensate the artists for this )on)ept'a& design /or2, and the0 /i&& esta$&ish a 'niform amo'nt of mone0 to $e paid to ea)h artist for hisAher /or2 in deve&oping the proposa&. *or e;amp&e, S:-TA+s pro)'rement of art/or2 for the *ran2ford Transportation Center in)&'ded a 3design stipend4 of S2,500 to ea)h of the semi fina&ist artists that /ere as2ed to provide detai&ed proposa&s as part of the fina& )ompetition. This design stipend of S2,500 for the semi fina&ists /as ade<'ate to generate signifi)ant interest from nationa&&0 a))&aimed artists. !9 This approa)h of re<'iring )ompetitive proposa&s is not /itho't its pro$&ems. The first signifi)ant pro$&em /i&& $e ho/ to invo&ve the )omm'nit0 d'ring the pro)ess of proposa& 8)on)ept'a& design9 deve&opment. Comm'nit0 invo&vement is one of the most important aspe)ts of the design pro)ess and *TA Cir)'&ar 9400.!A notes it as s')h. ?t ma0 $e diffi)'&t for )omm'nit0 representatives to dea& o$@e)tive&0 and intera)t /ith the )ompeting artists+ designs if )ompetitive proposa&s are re<'ired. :;perien)e has sho/n that invo&vement of )omm'nit0 representatives at this stage prod')es pro$&ems in having to dea& /ith a n'm$er of )ompeting artists and designs, and to re)on)i&e differen)es of preferen)e /ith grantee personne& responsi$&e for artist se&e)tion. ?t ma0 $e easier and perhaps more )onstr')tive for )omm'nit0 representatives to /or2 /ith one artist /ho has $een se&e)ted $0 the grantee prior to )on)ept'a& design deve&opment, and then serve as a ma@or )ontri$'tor to the pro)ess of design deve&opment. This affords the )omm'nit0 a design deve&opment ro&e d'ring )on)ept'a& design /or2 rather an after the fa)t ro&e /ith severa& artists /hose design )on)epts have a&read0 $een form'&ated. Another )onsideration is the ade<'a)0 of the design stipend. Wi&& the stipend 0o'r agen)0 )an afford to pa0 a n'm$er of artists $e ade<'ate to )ompensate them for resear)h, trave&, )omm'nit0 dis)'ssions, )on)ept'a& design /or2, mode&s, renderings, et).W Consider a&so /hether the rather sma&& stipend and &imited time given to the )ompeting artists /i&& prod')e the $est possi$&e design )on)epts for 0o'r pro@e)t, or /hether 0o'r agen)0 /o'&d $e $etter served /ith se&e)ting an artist $ased on the <'a&it0 and s'ita$i&it0 of hisAher past /or2 for 0o'r app&i)ation, and giving this artist more reso'r)es and time to prod')e the $est design )on)ept after )o&&a$oration /ith )omm'nit0 representatives. E$ Contractin" 1it/ t/e Selected Artist for Desi"n and Fa&rication of t/e Art Dire)t Contra)t vs. S'$)ontra)t /ith the AA: *irm L .ost agen)ies /i&& norma&&0 a/ard a prime )ontra)t to the artist, a&tho'gh some have assigned the responsi$i&it0 of )ontra)ting /ith the artist to the AA: firm that is doing the fa)i&it0 design. T0pe of Contra)t L ,e)a'se of potentia& pro$&ems /ith 'ns'ita$&e a))o'nting s0stems for )ost reim$'rsement )ontra)ts, grantees /o'&d $e advised to )onsider )ontra)t t0pes for art/or2 that
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*or f'rther information, )onta)t :&iGa$eth .intG, .anager of S:-TA+s Art ?n Transit program, at 82!59 5H0 "%"".
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do not re<'ire the a'diting of in)'rred )osts. Using a fi;ed pri)e )ontra)t /ith the artist /o'&d 's'a&&0 $e prefera$&e to a )ost t0pe )ontra)t. Determining a *air and Ieasona$&e Contra)t -ri)e L When negotiating a )ontra)t pri)e /ith the se&e)ted artist, a )ost proposa& sho'&d $e so&i)ited, eva&'ated and negotiated as /ith an0 pro)'rement for professiona& servi)esQ e.g., a )ontra)t /ith an ar)hite)t to design a fa)i&it0. ?t is re)ommended that the grantee )onsider /hether it is advisa$&e to )ontra)t initia&&0 for the design phase of the /or2 and postpone negotiations of the )ostApri)e for fa$ri)ation and insta&&ation 'nti& the design is )omp&eted and approved. This phased approa)h /o'&d then a&&o/ the artist to so&i)it $ids or proposa&s from fa$ri)ators and insta&&ers $ased on a fina& design and spe)ifi)ations for fa$ri)ation and insta&&ation. The phased approa)h /i&& avoid the pro$&em of tr0ing to premat're&0 g'ess /hat the fa$ri)ation and insta&&ation )osts /i&& $e prior to )omp&etion of the design. A phased approa)h /i&& a&so a&&o/ the grantee and artist to negotiate fi;ed pri)e )ontra)ts for the design phase and then for the fa$ri)ationAinsta&&ation phase. This in t'rn /i&& avoid the pitfa&&s inherent in )ost reim$'rsement )ontra)ting /ith an artist that pro$a$&0 does not have a )ost a))o'nting s0stem in p&a)e that is s'ita$&e for a )ost t0pe )ontra)t. See the paragraph, *a$ri)ation Costs, $e&o/. :;perien)e /ith art/or2 pro@e)ts /o'&d indi)ate that the design phase of the pro@e)t )o'&d $e an0/here $et/een !0P and 20P of the tota& pro@e)t $'dget. *or &arger pro@e)ts the design phase )osts sho'&d represent the &o/er end of the range 8a$o't !0P of the pro@e)t $'dget9. Sma&&er pro@e)ts ma0 have a &arger per)entage 8'p to 20P9 of the pro@e)t )ost devoted to design a)tivities. The primar0 reason for this is that the )osts of doing )omm'nit0 resear)h, in)&'ding the trave& e;penses asso)iated /ith this resear)h and dis)'ssions /ith )omm'nit0 representatives, /i&& represent a &arger fra)tion of the tota& $'dget for sma&&er pro@e)ts than &arger ones. This is not to s'ggest that the design phase )ontra)t $e negotiated as a per)ent of the tota& pro@e)t $'dget, on&0 that grantees ma0 /ish to app&0 these histori)a& per)ents as a 3sanit0 )he)24 /hen eva&'ating the artist+s )ost proposa& for the design phase. Design $'dget per)entages ma0 a&so $e impa)ted $0 the artist+s nationa&Ainternationa& prominen)e and re)ognition. Bistori)a& e;perien)e /ith ar)hite)t'ra& fees for a variet0 of )onstr')tion pro@e)ts ma0 prove to i&&'strate the point $eing made here. T0pi)a& fees for the most artisti) t0pe of $'i&ding pro@e)ts have $een ta$'&ated $0 the I.S. .eans Compan0, and the fee per)entages range from a high of !%P of tota& pro@e)t )osts for the sma&&er pro@e)ts 8S!00Y9 to a &o/ of H."P for the highest do&&ar va&'e pro@e)ts 8over S50.9$20 Determining an Bo'r&0 Iate of Compensation The ho'r&0 rate of )ompensation for the artist sho'&d $e proposed $0 the artist in hisAher )ost proposa& 8a&ong /ith the other ne)essar0 )ost e&ements9, and eva&'ated $0 the grantee for reasona$&eness. The grantee /o'&d $e advised to
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I.S. .eans Compan0, Square Foot Costs, 2"rd :dition, p. 4"H. Bo/ever, artists ma0 not ne)essari&0 $ase their )ompensation rates on providing the same t0pes of professiona& design servi)es as pra)ti)ed in an ar)hite)t'ra& offi)e, $'t $0 the tra)2 re)ord of 'ni<'e, one of a 2ind )ommissions that respond to )'ratoria& for)es operating in the )'ratoria& /or&d of the ga&&er0, the m'se'm and the $roader art mar2et.
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eva&'ate the artist+s )ompensation on other pro@e)ts, as /e&& as /hat artists /or2ing on simi&ar siGe p'$&i) art pro@e)ts have re)ent&0 and histori)a&&0 $een paid $0 other o/ners. The o$@e)tive is to determine a fair and reasona$&e rate of )ompensation for the e;pertise offered $0 that parti)'&ar artist, /hi)h /i&& $e an important part of the overa&& )ontra)t pri)e for the design phase. Determining a fair and reasona$&e ho'r&0 rate of )ompensation for the artist ma0 a&so $e e;treme&0 he&pf'& if for an0 reason the grantee de)ides to terminate the artist+s )ontra)t for the )onvenien)e of the grantee. ?n the event of a termination, the grantee and the artist /i&& have to negotiate the amo'nt to $e paid the artist for hisAher efforts 'p to the point of termination. Baving a&read0 negotiated an ho'r&0 rate of )ompensation as part of the )ontra)t negotiations to determine a pri)e for the design phase )ontra)t, the parties /i&& then have an e<'ita$&e $asis to determine the amo'nt to $e paid for the artist+s efforts prior to the termination. -a0ment -rovisions L Design -hase L :;perien)e has sho/n that there ma0 $e pro$&ems /ith 'sing standard 3progress pa0ment4 )&a'ses /here pa0ments are made at reg'&ar interva&s $ased 'pon the artist+s 3progress4 to/ards )omp&etion of the art/or2 design. .eas'ring progress on an art/or2 )ontra)t ma0 prove to $e a ver0 s'$@e)tive e;er)ise and one that )a'ses pro$&ems for the agen)0 and the artist. A prefera$&e approa)h /o'&d $e to 'se a 3mi&estone4 pa0ments approa)h /here )ontra)t'a&&0 spe)ified do&&ar pa0ments are to $e made for a)hievement of spe)ified mi&estones. *a$ri)ation Costs When the artist is to $e )ontra)t'a&&0 responsi$&e for fa$ri)ating the art/or2, the t0pi)a& s)enario /i&& invo&ve a s'$)ontra)tor that /i&& do the a)t'a& fa$ri)ation /or2. ?t is ver0 important that the artist $e re<'ired to f'rnish )redi$&e )ost and pri)e information regarding fa$ri)ation of the art/or2 so that a rea&isti) )ontra)t pri)e )an $e negotiated /ith the artist. =rantees sho'&d not re&0 on 3g'estimates4 from the artist /hen the )ontra)t pri)e is $eing negotiated. There has $een a tenden)0 to 'se the artist+s o/n )ost estimates for fa$ri)ation instead of re<'iring the artist to o$tain rea&isti) )ostApri)e proposa&s from fa$ri)ators. This in t'rn has &ed to some signifi)ant )ost overr'ns /hen the rea& fa$ri)ation )ost $e)omes 2no/n as a res'&t of $ids o$tained &ater $0 the artist. This tends to happen /hen the agen)0+s )ontra)t /ith the artist is a )ost reim$'rsement or Time and .ateria& t0pe of )ontra)t. O/ing to the 'n)ertainties in fa$ri)ation )osts, agen)ies ma0 /ant to )ontra)t in 3phases4 for the art/or2 pro@e)t, /here the first phase is for /or2 'p to s'$mission and agen)0 approva& of the artist+s design, and a se)ond phase for fa$ri)ation and insta&&ation s'pport $0 the artist. This se)ond phase /o'&d $e pri)ed 'sing )ompetitive $ids from fa$ri)ators fo&&o/ing agen)0 approva& of the artist+s detai&ed designs. ?nte&&e)t'a& -ropert0 Iights L O/nership of data and )op0rights ma0 $e negotiated $0 the grantee and the artist 'nder an arts in transit pro)'rement provided that the *edera& interests are prote)ted. 49 C*I !H."4 L Cop0rights, re<'ires the grantee to in)&'de a )&a'se in the art/or2 )ontra)t that provides *TA a ro0a&t0 free, non e;)&'sive, and irrevo)a$&e &i)ense to reprod')e, p'$&ish or other/ise 'se, and to a'thoriGe others to 'se, for *edera& =overnment p'rposes, the )op0right deve&oped 'nder the grant.
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=rantees /i&& /ant to invo&ve their 7ega& Co'nse& in drafting and negotiating the spe)ifi) provisions re&ated to rights in the Art/or2 and art/or2 design )on)ept deve&oped 'nder the )ontra)t d'e to stip'&ations fo'nd in *edera& and State &a/s governing artists+ rights. Some of the more important iss'es that have $een addressed 8$'t not ne)essari&0 reso&ved as stated9 $0 those pro)'ring art/or2 have in)&'ded the fo&&o/ing( I?=BTS ?# AITWOIY D:S?=# A#D AIT?ST+S SU,.?TTA7S !. Cop0right( Artist+s rights in a&& dra/ings, do)'ments, st'dies deve&oped $0 artist as /e&& as the art/or2 itse&f. 2. 7i)ense for *TA( To reprod')e, p'$&ish or a'thoriGe others to 'se for *edera& =overnment p'rposes, in a))ordan)e /ith 49 C*I Se)tion !H."4 L Cop0rights. ". Iight of grantee to reprod')e 8s')h as photographs and prints9( *or non)ommer)ia& p'rposes 8ed')ationa&, p'$&i) re&ations, arts promotiona&, et).9 the Art/or2 s'$mitta&s and Art/or2 Design. 4. Iight of grantee to distri$'te reprod')tions( To the p'$&i) $0 gift, sa&e or other transfer of o/nership. 5. Iight of grantee to in)orporate the Art/or2 Design into an0 trademar2s or servi)e mar2s. %. =rantee rights for )ommer)ia& 'ses( To $e negotiated /ith the artist and the terms to $e esta$&ished in a separate /ritten agreement. 1. Art/or2 Design not to $e d'p&i)ated $0 artist /itho't grantee+s /ritten )onsent. H. Termination of Artist+s Iights( Artist+s rights terminate /ith death of Artist and do not e;tend to Artist+s heirs, s'))essors or assigns. I?=BTS ?# TB: AITWOIY !. O/nership( Tit&e to pass to the grantee 'pon insta&&ation and fina& a))eptan)e of Art/or2. =rantee to have right to donate, transfer, or se&& the Art/or2, or an0 portion thereof. 2. Disp&a0( =rantee to have e;)&'sive right to p'$&i)&0 disp&a0 the Art/or2 and to &oan the Art/or2 to others for p'rpose of p'$&i) disp&a0. ". Ieprod')tions and Adaptations( =rantee to have &i)ense to reprod')e 8e.g., photographs and prints9 and three dimensiona& reprod')tions for non)ommer)ia& p'rposes 8ed')ationa&, p'$&i) re&ations, arts promotiona&, et).9 :;amp&es of s')h
-age %%
reprod')tions for non)ommer)ia& p'rposes might in)&'de( $oo2s, s&ides, post)ards, posters, tee shirts, m'gs and )a&endarsQ reprod')tions in art magaGines, art $oo2s, ne/spapers, videos, fi&m and other vis'a& media of /hatever 2indQ reprod')tions in or on /or&d /ide /e$ sites, internet sites and other e&e)troni) mediaQ and reprod')tions for advertising p'rposes. Ieprod')tions to )ontain a )redit to the Artist and a )op0right noti)e. 4. Commer)ia& Uses $0 =rantee( Ieprod')tions for )ommer)ia& 'ses are on&0 to $e made /ith the m't'a& )onsent of the partiesQ e.g., 'se of the Art/or2 as $a)2gro'nd for advertisements, p'$&i)ations, movies, te&evision, video and other t0pes of prod')tions or entertainment media. 5. Artist Credit( A&& referen)es and a&& reprod')tions or adaptations of the Art/or2 /i&& )redit the Art/or2 to the Artist 'n&ess Artists re<'ests to the )ontrar0. %. Artist+s Commitments( Art/or2 Design not to $e d'p&i)ated $0 artist /itho't grantee+s /ritten )onsent. 1. *'t're Iemova&, Ie&o)ation or .odifi)ation( =rantee to have right to remove the Art/or2 from the site and re&o)ate to another site. H. Iepairs and Iestoration( =rantee, after )ons'&tation /ith Artist, sha&& have the right to determine /hen and if repairs and restorations are needed. ?f grantee ma2es repairs or restoration not approved $0 Artist, Artist sha&& have the right to sever its asso)iation /ith the Art/or2. 9. Termination of Artist+s Iights( Artist+s rights terminate /ith death of Artist and do not e;tend to Artist+s heirs, s'))essors or assigns. !0. #oti)e of C&aims( Artist to give grantee /ritten noti)e prior to asserting an0 )&aim pertaining to the Art/or2, and the grantee sha&& have not &ess than 90 da0s from the date of re)eipt of )&aim to )'re an0 s')h )&aim. !!. The right of grantee to in)orporate the Art/or2 into an0 trademar2 or servi)e mar2s to $e 'ti&iGed $0 the grantee and to register the same in a))ordan)e /ith state or &o)a& &a/. F$ Contractin" for Installation of t/e Art1orE .an0 times the insta&&ation /or2 /i&& $e o'tside the artist+s rea&m of e;pertise, espe)ia&&0 for /or2 invo&ving )onstr')tion servi)es. .')h art/or2 insta&&ation /i&& $e reg'&ated $0 the Davis ,a)on A)t /age re<'irements. *or e;amp&e, modifi)ations to rea& propert0, s')h as the insta&&ation of m'ra&s on $'i&ding /a&&s, /i&& re<'ire Davis ,a)on /age determinations. Agen)ies ma0 /ish to )onta)t their regiona& Department of 7a$or 8DO79 offi)e for assistan)e in
-age %1
determining the app&i)a$i&it0 of the Davis ,a)on A)t to their art/or2 pro@e)ts. ?t has $een the 's'a& pra)ti)e to insta&& the art/or2 'nder a )onstr')tion )ontra)t )ompetitive&0 $id. *or e;amp&e, the art/or2 insta&&ation ma0 $e part of the main )onstr')tion )ontra)t for the pro@e)t. When this is done, the artist+s servi)es are 's'a&&0 o$tained to serve in the ro&e of a )ons'&tant to the agen)0 or the AA: firm that has responsi$i&it0 for )onstr')tion oversight.
,est -ra)ti)es -ro)'rement .an'a& L Chapter 1 L Disadvantaged ,'siness :nterprise
-age !
C/a ter 4 4 ) Disad%anta"ed Business Enter rise 1.! Comparison of O&d vs. #e/ D,: I'&es 8%A999 1.!.! App&i)a$i&it0 of D,: I'&es to =rantee -rograms 82A009 1.!.2 Definition of Terms 82A009 1.2 Administrative Ie<'irements 8%A999 1.2.! Who .'st Bave a D,: -rogramW 8%A999 1.2.2 D,: 7iaison Offi)er 8%A999 1.2." Ie<'ired :fforts on ,eha&f of D,: *inan)ia& ?nstit'tions 8%A999 1.2.4 -rompt -a0ment .e)hanisms 8%A999 1.2.5 D,: Dire)tor0 8%A999 1.2.% ,idders 7ist 8%A999 1.2.1 .onitoring Contra)tors+ -erforman)e 82A009 1." =oa&s for D,: -arti)ipation 8%A999 1.".! DOT #ationa& =oa& of !0P 8%A999 1.".2 Use of N'otas and Set Asides 8%A999 1."." :sta$&ishing Overa&& =oa&s 82A009 1.".4 :sta$&ishing Overa&& =oa&s for Transit Oehi)&e .an'fa)t'rers 8%A999 1.".5 .eans of .eeting Overa&& =oa&s 8%A999 1.".5.! Ia)e #e'tra& .eans 8%A999 1.".5.2 Using Contra)t =oa&s 8%A999 1.".5." :va&'ation of Contra)tor -roposa&s for D,: -arti)ipation 82A009 1.".5.4 =ood *aith :fforts to .eet Contra)t =oa&s 8%A999 1.".5.5 Co'nting D,: -arti)ipation to/ard the =oa& 8%A999 1.4 Certifi)ation( Standards and -ro)ed'res 82A009 1.5 :;emptions and Waivers 8%A999
-age "
<rantees are encoura"ed to %isit t/e Be& sites of t/e De artment of Trans ortation! Office of Small and Disad%anta"ed Business Utili,ation 6OSDBU9 ** and t/e FTA Office of Ci%il Ri"/ts*- for current information and "uidance on DBE re"ulations and issues$ Follo1in" is a summar# of t/e old %s$ t/e ne1 DBE rules as found at t/e Be& site of t/e Office of Small and Disad%anta"ed Business Utili,ation 6OSDBU9$ Settin" and Meetin" DBE <oals Old Rule = Part *($ Did not use! &ut also did not ro/i&it! Auotas$ It e; licitl# aut/ori,ed set)asides under some circumstances$ DOT ne%er enali,ed reci ients for failin" to meet "oals under t/e old rule! &ut t/e te;t of t/e rule did not maEe t/e oint e; licitl#$ *$ Under t/e old rule! reci ients 1/o /ad less t/an a ten ercent "oal /ad to maEe a s ecial 'ustification to t/e De artment$ Ne1 Rule = Part *2 ($ T/e ne1 rule e; licitl# ro/i&its t/e use of Auotas$ T/e rule also e; licitl# ro/i&its t/e use of set)asides! e;ce t in e;treme cases to remed# e"re"ious ro&lems$ T/e rule e; licitl# ro%ides t/at reci ients 1ill not &e enali,ed for failin" to meet t/eir DBE "oals$ *$ T/e ne1 rule %ie1s t/e statutor# (: ercent "oal as a nation1ide as irational "oal! 1/ic/ does not reAuire t/at reci ients set t/eir "oals at (: ercent or an# ot/er articular le%el$
-$ Under t/e old rule! o%erall "oals 1ere set to ac/ie%e t/e o&'ect of Hma;imum ractica&leI use of DBEs$ T/e reci ientMs "oal could &e &ased directl# on t/e (: ercent national "oal or on t/e reci ientMs ast ac/ie%ements$
-$ Reci ients must set o%erall "oals to re resent a Hle%el la#in" fieldI) t/e amount of DBE artici ation t/e# could realisticall# e; ect in t/e a&sence of discrimination$ T/is "oal must &e &ased on demonstra&le e%idence of t/e a%aila&ilit# of read#! 1illin" and a&le DBEs to artici ate on #our DOT) assisted contracts$ T/e rule "i%es reci ients su&stantial fle;i&ilit# in t/e met/ods t/e# c/oose to set o%erall "oals$ .$ Reci ients must o&tain as muc/ as ossi&le of t/e DBE artici ation needed to
.$ T/e old rule did not mandate t/e use of race)neutral measures or "i%e t/em riorit#$
**
http(AAosd$'.dot.govA http(AA///.fta.dot.govAoffi)eA)ivi&
*-
-age 4
T/ere 1as no rom t a#ment reAuirement$ meet t/eir o%erall "oals t/rou"/ race) neutral measures$ Race)neutral measures include suc/ acti%ities as trainin"! tec/nical assistance! &ondin" assistance! &usiness de%elo ment or mentor) rotX"X ro"rams! &reaEin" contracts u into ieces t/at small &usinesses can readil# erform! and a1ards of rime contracts to DBEs t/rou"/ t/e re"ular com etiti%e rocess$ One t# e of race)neutral measure! a rom t a#ment ro%ision! 1ill &e reAuired for all su&contractors! DBEs and non)DBEs aliEe$ 0$ Under t/e old rule! contract "oals 1ere reAuired on all contracts 1it/ su&contractin" ossi&ilities! re"ardless of 1/et/er t/e contract "oals 1ere needed to meet o%erall "oals$ 0$ Contract "oals! or ot/er race)conscious measures! must &e used onl# to o&tain DBE artici ation needed to meet o%erall "oals t/at cannot &e o&tained t/rou"/ use of race) neutral measures$ Contract "oals are not reAuired on e%er# contract$ If reci ients are o%er)ac/ie%in" or under)ac/ie%in" t/eir o%erall "oals! t/e# /a%e to ad'ust t/eir use of contract "oals$
2$ T/e old rule em lo#ed t/e same "ood fait/ efforts mec/anism! &ut did not em /asi,e as stron"l# t/e mandate t/at reci ients seriousl# consider "ood fait/ efforts s/o1in"s$ T/ere 1as no reconsideration ro%ision$
2$ B/en t/ere is a contract "oal! a &idder must maEe "ood fait/ efforts to meet it$ T/e &idder can do so eit/er t/rou"/ o&tainin" enou"/ DBE artici ation to meet t/e "oal or documentin" t/e "ood fait/ efforts it made to do so$ T/e rule e; licitl# ro%ides t/at reci ients must not disre"ard s/o1in"s of "ood fait/ efforts! and it "i%es &idders t/e ri"/t to /a%e t/e reci ient reconsider a decision t/at t/eir "ood fait/ efforts 1ere insufficient$ 4$ If a reci ient determines t/at DBE firms
4$ T/e old rule did not /a%e an o%er)
-age 5
concentration ro%ision$
are so o%er)concentrated in a certain t# e of 1orE as to undul# &urden t/e o ortunit# of non)DBE firms to artici ate in t/is t# e of 1orE! it must de%ise a ro riate measures to address t/is o%er)concentration$ Certification and Eli"i&ilit#
Old Rule = Part *($ T/e old rule did not state a s ecific standard of roof$
Ne1 Rule = Part *2 ($ A licants must s/o1 t/at t/e# meet si,e! "rou mem&ers/i ! o1ners/i and control standards &# a re onderance of t/e e%idence$ *$ Eac/ disad%anta"ed indi%idual seeEin" certification for /is or /er firm must su&mit a notari,ed certification of disad%anta"e and a statement of ersonal net 1ort/$ If an indi%idualMs ersonal net 1ort/ 6e;cludin" /is or /er rinci al residence and /is of /er interest in t/e a licant firm9 e;ceeds R40:!:::! t/e erson is not an eli"i&le DBE o1ner$
*$ T/e old rule did not /a%e eit/er a ersonal net 1ort/ ca for artici ation or a reAuirement to su&mit information concernin" ersonal net 1ort/$
-$ T/e less s ecific standards of t/e old -$ O1ners/i and control reAuirements re"ulation 1ere inter reted in man# %ar#in" ro%ide detailed! s ecific! clarified 1a#s &# reci ients and DOT offices! leadin" standards for determinin" 1/et/er to certif# to inconsistent and confusin" results$ firms$ T/e standards are intended to resol%e man# difficult issues t/at /a%e arisen in t/e im lementation of t/e ro"ram$ .$ Formerl#! a firm t/at 1anted to 1orE for t/e State /i"/1a# a"enc#! t1o air orts! and t/ree transit a"encies in t/e same State /ad to fill out si; a lication forms and endure .$ B# Fe&ruar# *::*! all t/e transit! air ort! and /i"/1a# reci ients in eac/ State are reAuired to a"ree on a unified certification ro"ram 6UCP9$ T/is ro"ram must &e full# o erational no later t/an Au"ust *::-$
-age %
si; certification rocesses$ T/is created si"nificant &urdens on a licants and used reci ient resources inefficientl#$
T/e UCP must ro%ide for Hone)sto s/o in"I for DBE firms a l#in" for certification in eac/ State$ T/e a licant fills out one form! "oes t/rou"/ one a lication rocess and! if certified! can 1orE as a DBE for an# DOT reci ient in t/e State$ T/ere 1ill &e a sin"le DBE director# for t/e State$ T/e rule allo1s reci ients su&stantial discretion a&out t/e form t/e UCP 1ill taEe in eac/ State$ 0$ In certif#in" or decertif#in" firms! reci ients must ro%ide administrati%e due rocess to ensure t/at rocedures are fair$ B/en a firm is certified! it normall# sta#s certified for t/ree #ears! &ut must inform t/e reci ient in 1ritin" of an# c/an"es t/at 1ould affect its eli"i&ilit# and must su&mit an annual affida%it t/at suc/ c/an"es /a%e not taEen lace$
0$ T/e old rule su""ested! &ut did not reAuire! administrati%e due rocess$ Reci ientsM ractices %aried! and some reci ientsM rocesses 1ere so lacEin" in due rocess t/at su&stanti%el# %alid decisions 1ere o%erturned &# t/e courts on rocedural "rounds$ Man# reci ients erroneousl# &elie%ed t/at t/e De artment reAuired annual recertifications! 1/ic/ &urdened DBEs and used reci ient resources inefficientl#$
2$ T/e old rule lacEed s ecific standards and rocedures for certification a eals! resultin" in informal and sometimes inconsistent /andlin" of certification issues$
2$ All certification actions &e"in 1it/ a roceedin" &# a reci ient$ A art# dissatisfied 1it/ t/e result can a eal to t/e DOT Office of Ci%il Ri"/ts$ T/is a eal roceedin" is an administrati%e re%ie1 of t/e record of t/e reci ientMs action! and does not in%ol%e a ne1 /earin" &efore DOT$ Reci ients must rom tl# im lement t/e De artmentMs decision$
Pro"ram Administration
-age 1
Old Rule = Part *($ T/ere 1as no ro"ram 1ai%er ro%ision in t/e old rule$
Ne1 Rule = Part *2 ($ A reci ient can a l# to t/e De artment for a ro"ram 1ai%er if it 1ants to im lement t/e ro"ram in a 1a# not ro%ided for in t/e rule$ If t/e Secretar# &elie%es t/at t/e reci ientMs idea 1ill meet t/e ro"ramMs o&'ecti%es! /e or s/e 1ill a ro%e t/e a lication$ Bai%ers can a l# to suc/ matters as o%erall and contract "oals! &ut ro"ram 1ai%ers do not a l# to DBE eli"i&ilit# standards and rocedures! 1/ic/ must remain uniform nation1ide$ *$ Reci ients must su&mit re%ised DBE ro"ram documents to DOT! reflectin" t/e ne1 ruleMs c/an"ed reAuirements! &# Se tem&er (888$
-$ T/e inconsistenc# of DOT "uidance concernin" t/e old rule led to su&stantial confusion and 1as critici,ed &# a <eneral Accountin" Office re ort$ <reater coordination is a ro riate in an era of HOne DOT$I
-$ To a%oid confusion and romote consistenc# and certaint#! 1ritten "uidance a&out t/e ne1 rule is %alid and &indin" = and re resents t/e official osition of t/e De artment = onl# if it /as &een a ro%ed &# t/e DOT <eneral Counsel$ <uidance issued under t/e old rule is no lon"er &indin"$
.$ Reci ients must &e"in to collect data a&out t/e &idders on t/eir contracts and su&contracts! for later use in calculatin" o%erall "oals$ 0$ T/e old rule did not /a%e similar ro%isions$ 0$ In t/e near future! DOT 1ill de%elo ne1! uniform ro"ram data re ortin" and certification a lication forms$
*$($(
lica&ilit# of DBE Rules to <rantee Pro"rams
-age H
RE@UIREMENT 49 C*I T 2%.", To ')om "oes T)is &art A%%ly/ defines the app&i)a$i&it0 of the ne/ D,: reg'&ations in terms of the t0pes of f'nds $eing e;pended $0 the re)ipient. The t0pes of Federal transit funds to /hi)h the D,: reg'&ations app&0 are defined as those a'thoriGed $0( a9 Tit&es ?, ???, O and O? of ?ST:A, -'$. 7. !02 240, or $9 *edera& transit &a/s in Tit&e 49, U.S. Code, or )9 *edera& transit &a/s in Tit&es ?, ???, and O of the Transportation :<'it0 A)t for the 2!st Cent'r0 8T:A 2!9, -'$. 7. !05 !1H. Stated sim%ly/ any t)ird %arty contract w)ic) is awarded $y a FTA !rantee and w)ic) is funded in w)ole or in %art wit) Federal ",T funds/ is su$5ect to t)e "?8 re!ulations in A: CFR &art <J. 3t does not matter w)et)er t)e Federal funds are for %lannin!/ ca%ital or o%eratin! assistance/ t)e "?8 rules a%%ly. A contract t)at is funded entirely wit) local funds > wit)out any Federal funds > is not su$5ect to t)e "?8 requirements under t)is rule. DISCUSSION T/e DBE rules set fort/ in .8 CFR Part *2 a l# to all t/ird art# contracts funded in 1/ole or in art 1it/ Federal DOT funds$ T/is does not mean! /o1e%er! t/at e%er# rocurement or contract must &e re%ie1ed for DBE artici ation$ T/e rules "i%e "rantees fle;i&ilit# in 1/en and /o1 t/e# esta&lis/ indi%idual contract "oals$ Certain t# es of rocurements 6e$"$! off)t/e)s/elf commodities9 ma# not /a%e su&contractin" o ortunities or &e a ro riate for DBE "oal settin"$ In ot/er 1ords! t/e DBE rules t/at a l# to all contracts also include "uidance and fle;i&ilit# t/rou"/out Part *2 as to /o1 "rantees can com l# 1it/ t/is art 1it/out su&'ectin" e%er# rocurement to an indi%idual re%ie1 for DBE artici ation$ If! for e;am le! t/e "rantee can meet its o%erall "oal t/rou"/ race) neutral means! t/en contract "oal settin" 1ill not &e necessar#$ And 1/ere "oal settin" is necessar#! t/e rules do not reAuire "oals for e%er# contract nor t/at e%er# rocurement &e re%ie1ed for "oal settin" ur oses$ *$($* Definition of Terms
-age 9
RE@UIREMENT 49 C*I T2%.5, ')at "o T)e Terms 2sed 3n T)is &art ean/ )ontains definitions of the terms 'sed in the ne/ D,: reg'&ation. The definitions of the designated gro'ps in)&'ded in the definition of 3so)ia&&0 and e)onomi)a&&0 disadvantaged individ'a&4 are derived from the Sma&& ,'siness Administration+s 8S,A9 ne/ sma&& disadvantaged $'siness program reg'&ation 8!" C*I T !24."9. DEFINITIONS a9 "isadvanta!ed $usiness enter%rise or "?8 means a for profit sma&& $'siness )on)ern( 8!9 That is at &east 5! per)ent o/ned $0 one or more individ'a&s /ho are $oth so)ia&&0 and e)onomi)a&&0 disadvantaged, or, in the )ase of a )orporation, 5! per)ent of the sto)2 of /hi)h is o/ned $0 one or more s')h individ'a&sQ and 829 Whose management and dai&0 $'siness operations are )ontro&&ed $0 one or more of the so)ia&&0 and e)onomi)a&&0 disadvantaged individ'a&s /ho o/n it. Small $usiness concern means, /ith respe)t to firms see2ing to parti)ipate as D,:s in DOT assisted )ontra)ts, a sma&& $'siness )on)ern as defined p'rs'ant to se)tion " of the Sma&& ,'siness A)t and Sma&& ,'siness Administration reg'&ations imp&ementing it 8!" C*I part !2!9 that a&so does not e;)eed the )ap on average ann'a& gross re)eipts spe)ified in 49 C*I T2%.%58$9. The )ap is )'rrent&0 set at S!%.% mi&&ion in average ann'a& gross re)eipts over the firm+s previo's three fis)a& 0ears. ( This amo'nt is ad@'sted for inf&ation $0 the Se)retar0 of DOT from time to time. ?t sho'&d $e noted that a not for profit firm ma0 not $e )ertified as a D,:. Bo/ever, a firm o/ned $0 an ?ndian tri$e or A&as2a #ative Corporation as an entit0 ma0 $e )ertified as a D,:. Race1conscious meas're or program is one that is fo)'sed spe)ifi)a&&0 on assisting on&0 D,:s, in)&'ding /omen o/ned D,:s. The 'se of )ontra)t goa&s is the primar0 e;amp&e of a race1conscious meas're in the D,: program, $'t set asides and pri)e )redits for D,:s /o'&d a&so $e )onsidered race1conscious meas'res. Race1neutral meas're or program is one that is, or )an $e, 'sed to assist a&& sma&& $'sinesses. Whi&e $enefiting D,:s, s')h programs are not so&e&0 fo)'sed on D,: firms. :;amp&es of race1neutral meas'res /o'&d in)&'de o'trea)h programs, te)hni)a& assistan)e programs, and prompt pa0ment )&a'ses, a&& of /hi)h )an assist a /ide variet0 of sma&& $'sinesses, not @'st D,:s. As 'sed in this reg'&ation, race1neutral includes !ender neutrality.
$9
)9
d9
As of Apri& !, !999.
-age !0
e9 f9
Set1aside means a )ontra)ting pra)ti)e restri)ting e&igi$i&it0 for the )ompetitive a/ard of a )ontra)t so&e&0 to D,: firms. &ersonal net wort) means the net va&'e of the assets of an individ'a& remaining after tota& &ia$i&ities are ded')ted. An individ'a&+s %ersonal net wort) does not in)&'de( The individ'a&+s o/nership interest in an app&i)ant or parti)ipating D,: firm or the individ'a&+s e<'it0 in his or her primar0 p&a)e of residen)e. An individ'a&+s %ersonal net wort) in)&'des on&0 his or her o/n share of assets he&d @oint&0 or as )omm'nit0 propert0 /ith the individ'a&+s spo'se. Socially and economically disadvanta!ed individuals means an0 individ'a& /ho is a )itiGen 8or &a/f'&&0 admitted permanent resident9 of the United States and /ho is L 8!9 829 An0 individ'a& /ho a re)ipient finds to $e a so)ia&&0 and e)onomi)a&&0 disadvantaged individ'a& on a )ase $0 )ase $asis. An0 individ'a& in the fo&&o/ing gro'ps, mem$ers of /hi)h are re$'tta$&0 pres'med to $e so)ia&&0 and e)onomi)a&&0 disadvantaged( 8i9 8ii9 3,&a)2 Ameri)ans,4 /hi)h in)&'des persons having origins in an0 of the ,&a)2 ra)ia& gro'ps of Afri)aQ 3Bispani) Ameri)ans,4 /hi)h in)&'des persons of .e;i)an, -'erto Ii)an, C'$an, Domini)an, Centra& or So'th Ameri)an, or other Spanish or -ort'g'ese )'&t're or origin, regard&ess of ra)eQ 3#ative Ameri)ans,4 /hi)h in)&'des persons /ho are Ameri)an ?ndians, :s2imos, A&e'ts, or #ative Ba/aiiansQ 3Asian -a)ifi) Ameri)ans,4 /hi)h in)&'des persons /hose origins are from 6apan, China, Tai/an, Yorea, ,'rma 8.0anmar9, Oietnam, 7aos, Cam$odia 8Yamp')hea9, Thai&and, .a&a0sia, ?ndonesia, the -hi&ippines, ,r'nei, Samoa, ='am, the U.S. Tr'st Territories of the -a)ifi) ?s&ands, .a)ao, *i@i, Tonga, Yir$ati, 6'va&', #a'r', *ederated States of .i)ronesia, or Bong YongQ 3S'$)ontinent Asian Ameri)ans,4 /hi)h in)&'des persons /hose origins are from ?ndia, -a2istan, ,ang&adesh, ,h'tan, the .a&dives ?s&ands, #epa& or Sri 7an2aQ WomenQ
g9
8iii9 8iv9
8v9
8vi9
-age !!
8vii9
An0 individ'a& gro'ps /hose mem$ers are designated as so)ia&&0 and e)onomi)a&&0 disadvantaged $0 the S,A, at s')h time as the S,A designation $e)omes effe)tive.
h9
Contract means a &ega&&0 $inding re&ationship o$&igating a se&&er to f'rnish s'pp&ies or servi)es 8in)&'ding, $'t not &imited to, )onstr')tion and professiona& servi)es9 and the $'0er to pa0 for them. *or p'rposes of this part, a lease is )onsidered to $e a contract. ?idders #ist L *or the meaning of this term, see Se)tion 1.2.% L ?idders #ist.
i9 4$*$*
ADMINISTRATIPE RE@UIREMENTS
4$*$( B/o Must Ca%e a DBE Pro"ramS RE@UIREMENT 49 C*I T 2%.2! ')o ust +ave a "?8 &ro!ramF re<'ires a&& *TA re)ipients /ho re)eive S250,000 or more in *TA p&anning, )apita&, andAor operating assistan)e in a Federal fiscal year, e;)&'sive of transit vehi)&e p'r)hases, and transit vehi)&e man'fa)t'rers /ho m'st s'$mit an overa&& goa& 'nder Se). 2%.49, to have a D,: program meeting the re<'irements of 49 C*I part 2%. 4$*$* DBE Liaison Officer RE@UIREMENT 49 C*I T2%.25 ')at 3s t)e Requirement for a #iaison ,fficerF re<'ires grantees to have a D,: 7iaison Offi)er /ho has dire)t, independent a))ess to the Chief :;e)'tive Offi)er )on)erning D,: program matters. The 7iaison Offi)er m'st $e responsi$&e for imp&ementing a&& aspe)ts of the grantee+s D,: program. =rantees m'st a&so have ade<'ate staff to administer the D,: program. DISCUSSION T/e DBE Liaison Officer 1ill &e res onsi&le for o%erseein" all as ects of t/e "ranteeMs DBE ro"ram$ One area of t/e Liaison OfficerMs res onsi&ilit# 1ould include actin" as an ad%ocate for DBE contractors! su&contractors and su liers of an# tier on t/e "ranteeMs contracts$ T/e DBE Liaison Officer 1ould &e a%aila&le to an# DBE 1/o is e; eriencin" difficulties in t/e a#ment rocess or in an# ot/er as ect of t/e contract 1orE$ T/e Liaison Officer 1ould &e a%aila&le to in%esti"ate com laints! mediate dis utes and recommend remedies to t/e a ro riate "rantee mana"ement officials$
-age !2
Some "rantees reAuire t/eir contractors to ost notices on t/e 'o& site! 6t/ese notices are ro%ided &# t/e "rantee9! identif#in" t/e DBE Liaison Officer! and t/e contractors must reAuire all su&contractors of an# tier to include an a ro riate notification in t/eir su&contracts 1it/ DBE firms$2 4$*$- ReAuired Efforts On Be/alf of DBE Financial Institutions RE@UIREMENT 49 C*I T2%.21 ')at 8fforts ust Reci%ients a(e Concernin! "?8 Financial 3nstitutionsF11 re<'ires grantees to thoro'gh&0 investigate the f'&& e;tent of servi)es offered $0 D,: finan)ia& instit'tions in the )omm'nit0, and to ma2e reasona$&e efforts to 'se these instit'tions. =rantees m'st a&so en)o'rage prime )ontra)tors to 'se s')h instit'tions. 4$*$. Prom t Pa#ment Mec/anisms RE@UIREMENT 49 C*I T2%.29 ')at &rom%t &ayment ec)anisms ust Reci%ients +aveF11 re<'ires grantees to esta$&ish a )ontra)t )&a'se /hi)h re<'ires prime )ontra)tors to pa0 s'$)ontra)tors for satisfa)tor0 performan)e of their )ontra)ts no &ater than "0 da0s from re)eipt of ea)h pa0ment that the grantee ma2es to the prime )ontra)tor. This )&a'se m'st a&so re<'ire the prompt ret'rn of retainage pa0ments from the prime )ontra)tor to the s'$)ontra)tor /ithin "0 da0s after the s'$)ontra)tor+s /or2 is satisfa)tori&0 )omp&eted. This part a&so dis)'sses other aspe)ts of a prompt pa0ment program that grantees ma0 /ish to )onsider, in)&'ding( 8!9 Appropriate pena&ties for fai&'re to )omp&0, 829 -rior /ritten )onsent of grantee for de&a0s in pa0ment of s'$)ontra)tors, 8"9 849 Ie<'irement for primes and s'$)ontra)tors to 'se a&ternative disp'te reso&'tion me)hanisms to reso&ve pa0ment disp'tes, and Ie<'irement that primes /i&& not $e paid for /or2 performed $0 a s'$)ontra)tor 'nti& the prime ens'res that the s'$)ontra)tor is paid.
*or an e;amp&e of a )&a'se, see ,AIT C&a'se SC1.!.!0 3Om$'dsperson.4 Conta)t ,AIT at 85!09 4%4 %"H0.
-age !"
DISCUSSION Prom t a#ment ro%isions are an im ortant race)neutral mec/anism t/at can &enefit DBEs and all ot/er small &usinesses$ Under art *2! all "rantees must include a ro%ision in t/eir DOT)assisted contracts reAuirin" rime contractors to maEe rom t a#ments to t/eir su&contractors! DBE and non)DBE aliEe$ DBE contractors are si"nificantl# affected &# late a#ments from rime contractors! and lacE of rom t a#ment constitutes a %er# real &arrier to t/e a&ilit# of DBEs to com ete in t/e marEet lace$ Non)DBE contractors are also affected &# late a#ment ro&lems$ A rom t a#ment reAuirement a l#in" to all su&contractors is an e;cellent e;am le of a race)neutral measure t/at 1ill assist all su&contractors$ T/e reAuired contract clause 1ould o&li"ate t/e rime contractor to a# su&contractors no later t/an -: da#s from t/e recei t of eac/ a#ment t/e "rantee maEes to t/e rime contractor$ Pa#ment is reAuired onl# for satisfactor# com letion of t/e su&contractorMs 1orE$ Retaina"e 1ould /a%e to &e returned 1it/in -: da#s from t/e time t/e su&contractorMs 1orE /ad &een satisfactoril# com leted! e%en if t/e rime contractorMs 1orE /ad not #et &een com leted$ T/e num&er of da#s s ecified in t/e rom t a#ment clause for t/e a#ment of su&contractors ma# &e less t/an -: da#s! at t/e "ranteeMs discretion$ <rantees 1/o alread# o erate under rom t a#ment statutes ma# use t/eir e;istin" aut/orit# in im lementin" t/is reAuirement$ It ma# &e necessar#! /o1e%er! to add to e;istin" contract clauses in some cases 6e$"$! if e;istin" rom t a#ment reAuirements do not co%er retaina"e9$ Para"ra / 6e9 of G *2$*8 lists a series of additional measures t/at t/e re"ulation aut/ori,es! &ut does not reAuire! "rantees to use$ In addition to t/e mec/anisms su""ested &# G*2$*8! anot/er ossi&le mec/anism t/at "rantees s/ould consider 1ould &e declarin" a rime contractor to &e not res onsi&le for future a1ards 1/ere t/e contractor /as e;/i&ited a attern of 1it//oldin" or maEin" late a#ments to su&contractors. Best Practices *o&&o/ing are e;amp&es of %rom%t %ayment and re%ortin! requirements 8of pa0ments to s'$)ontra)tors) )ontra)t )&a'ses 'sed $0 the Chi)ago Transit A'thorit0 8CTA9. - We /o'&d note that the time periods spe)ified in the CTA )&a'se for pa0ment of s'$)ontra)tors ma0 $e too aggressive and ma0 not $e feasi$&e for a&& grantees. ?n an0 event, *TA gives grantees dis)retion in stip'&ating the pa0ment time&ines in their prompt pa0ment )ontra)t )&a'ses.
*or f'rther information )onta)t .r. Dona&d .a0es, .anager, D,: Contra)t Comp&ian)e at "!2 %%4 1200, e;t. "5!9.
-age !4
PROMPT PADMENT TO SUBCONTRACTORS A. The Contra)tor is re<'ired to pa0 a&& S'$)ontra)tors for a&& /or2 that the S'$)ontra)tor has satisfa)tori&0 )omp&eted, no &ater than five 859 $'siness da0s after the Contra)tor has re)eived pa0ment from the A'thorit0. . ,. ?n addition, a&& Ietainage amo'nts m'st $e paid $0 the Contra)tor to the S'$)ontra)tor no &ater than fo'rteen 8!49 $'siness da0s after the S'$)ontra)tor has, in the opinion of the O- Constr')tion, satisfa)tori&0 )omp&eted its portion of the Wor2. 0 C. A de&a0 in or postponement of pa0ment to the S'$)ontra)tor re<'ires good )a'se and prior /ritten approva& of the =enera& .anager, -'r)hasing. D. The Contra)tor is re<'ired to in)&'de, in ea)h s'$)ontra)t, a )&a'se re<'iring the 'se of appropriate ar$itration me)hanisms to reso&ve a&& pa0ment disp'tes. :. The A'thorit0 /i&& not pa0 the Contra)tor for /or2 performed 'n&ess and 'nti& the Contra)tor ens'res that the S'$)ontra)tors have $een prompt&0 paid for the /or2 the0 have performed 'nder a&& previo's pa0ment re<'ests, as eviden)ed $0 the fi&ing /ith the A'thorit0 of &ien /aivers, )an)e&ed )he)2s 8if re<'ested9, and the Contra)tor+s s/orn statement that it has )omp&ied /ith the prompt pa0ment re<'irements. -rime Contra)tors m'st s'$mit a prompt pa0ment affidavit, 8form to $e provided $0 the A'thorit09 /hi)h identifies ea)h s'$)ontra)tor 8$oth D,: and non D,:9 and the date and amo'nt of the &ast pa0ment to s')h s'$)ontra)tor, /ith ever0 pa0ment re<'est fi&ed /ith the A'thorit0, e;)ept for the first pa0ment re<'est, on ever0 )ontra)t /ith the A'thorit0. 8See $e&o/ for &rom%t &ayment Affidavit deve&oped $0 CTA9. *. *ai&'re to )omp&0 /ith these prompt pa0ment re<'irements is a $rea)h of the Contra)t, /hi)h ma0 &ead to an0 remedies permitted 'nder &a/, in)&'ding, $'t not &imited to, Contra)tor de$arment. ?n addition, Contra)tor+s fai&'re to prompt&0 pa0 its S'$)ontra)tors is s'$@e)t to the provisions of 50 ?7CS 505A9. REPORTIN< RE@UIREMENTS DURIN< TCE TERM OF TCE CONTRACT A. The $idder sha&&, /ithin five 859 $'siness da0s of )ontra)t a/ard, or prior to an0 /or2 $eing performed, e;e)'te forma& s'$)ontra)ts or p'r)hase orders /ith the D,: firms in)&'ded in the $id. % These /ritten agreements sha&& $e made avai&a$&e to the =enera&
.
We /o'&d note that five $'siness da0s to pa0 s'$)ontra)tors ma0 not $e rea&isti) in a&& )ases and )o'&d &ead to )omp&aints from s'$)ontra)tors that the grantee enfor)e this timeframe.
0
Other transit agen)ies have imposed a "0 da0 re<'irement for pa0ment of retainage.
The five da0 re<'irement ma0 not $e rea&isti). Some agen)ies re<'ire s'$)ontra)ts /ith D,:s /ithin %0 da0s of )ontra)t a/ard if the )ontra)t term is &ess than one 0ear, or /ithin "0 da0s of )ommen)ement of /or2 for a )ontra)t that is for one 0ear or more. The )ommen)ement of /or2 rather than initia& )ontra)t a/ard is more rea&isti) in the )ase of m'&ti0ear )ontra)ts /here /or2 ma0 not start for another 0ear or so.
-age !5
.anager, D,: -rogram, 'pon re<'est. A&& )ontra)ts $et/een the $idder and its s'$)ontra)tors m'st )ontain a prompt pa0ment )&a'se as set forth in Se)tion O??? herein. ,. D'ring the term of ann'a& )ontra)ts, the $idder sha&& s'$mit reg'&ar >Stat's Ieports of D,: S'$)ontra)t -a0ments> in a form a))epta$&e to the A'thorit0. The fre<'en)0 /ith /hi)h these reports are to $e s'$mitted /i&& $e determined $0 the =enera& .anager, D,: -rogram, $'t in no event /i&& reports $e re<'ired &ess fre<'ent&0 than <'arter&0. In t/e a&sence of 1ritten notice from t/e <eneral Mana"er! DBE Pro"ram! t/e &idderMs first HStatus Re ort of DBE Su&contract Pa#mentsI 1ill &e due ninet# 68:9 da#s after t/e date of contract a1ard! 1it/ additional re orts due Auarterl# t/ereafter$ C. ?n the )ase of a one time pro)'rement /ith either a sing&e or m'&tip&e de&iveries, a 3Stat's Ieport of D,: S'$)ontra)t -a0ments,4 in a form a))epta$&e to the A'thorit0, indi)ating fina& D,: pa0ments sha&& $e s'$mitted dire)t&0 to the =enera& .anager, D,: -rogram. The information m'st $e s'$mitted prior to or at the same time as the $idder+s fina& invoi)e to the A'thorit0 'ser department identified in the so&i)itation. 8#OT?C:( The origina& invoi)es m'st $e s'$mitted dire)t&0 to the A'thorit0+s department identified in the )ontra)t do)'ments and the Stat's Ieport of D,: S'$)ontra)t -a0ments m'st $e s'$mitted dire)t&0 to the =enera& .anager, D,: -rogram.9 Failure to follo1 t/ese directions ma# dela# final a#ment$ D. The address for the =enera& .anager, D,: -rogram, is( CTA =enera& .anager, Chi)ago Transit A'thorit0, D,:A::O -rogramsAContra)t Comp&ian)e Department, 5%1 West 7a2e Street, Chi)ago, ?7 %0%%! !49H9. PROMPT PADMENT AFFIDAPIT Contra)tor /i&& p&a)e a )he)2 in the appropriate $o; $e&o/ that app&ies to this pa0ment re<'est. Ie( -a0ment Ie<'est #o. JJJJJJJ ?, JJJJJJJJJJJJJJJJJJJJJJJJJJJ, the JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ #ame Tit&e 8e.g., -resident, Oi)e -resident, et).9 of JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 8>Compan0>9, do state the fo&&o/ing /ith regard to pa0ments made 'nder Contra)t #o. JJJJJJJJJJJJJJJJJJJJJJ 8>Contra)t>9( !. S'$)ontra)tors, at the first tier, $oth D,: and non D,:, /ho )omp&eted /or2 and /ere &isted for pa0ment on the prior -a0ment Ie<'est #o. JJJJJJJ, /ere paid no &ater than five 859 $'siness da0s after Compan0 re)eived pa0ment from CTA. 2. Copies of invoi)es and )an)e&&ed )he)2s for s'$)ontra)tors at the first tier /ho /ere paid 'nder the prior pa0ment re<'est have $een de&ivered or mai&ed to the D,: Department. ?n addition, Compan0 has atta)hed to the )'rrent -a0ment Ie<'est a&& &ien /aivers for prior s'$)ontra)tor pa0ments and an0 other do)'mentation re<'ired $0 CTA.
-age !%
8*ai&'re to atta)h a&& re<'ired do)'mentation to the -a0ment Ie<'est or for/ard )an)e&&ed )he)2s and invoi)es to the CTA D,: Department ma0 )a'se the -a0ment Ie<'est to $e re@e)ted $0 CTA.9 ". A&& retainage amo'nts /ithhe&d from an0 s'$)ontra)tor /ho satisfa)tori&0 )omp&eted its portion of the )ontra)t /or2, in)&'ding p'n)h &ist items, /ere paid to the s'$)ontra)tor8s9 no &ater than fo'rteen 8!49 $'siness da0s after it satisfa)tori&0 )omp&eted its /or2, /hether or not CTA has paid said retainage amo'nts to Compan0. Atta)h a )op0 of the )an)e&&ed )he)2 eviden)ing pa0ment of ea)h retainage amo'nt. 4. There /as no de&a0 in or postponement of an0 pa0ment o/ed to a s'$)ontra)tor, /hether periodi) pa0ment or retainage amo'nt, e;)ept for good )a'se and after re)eipt of prior /ritten approva& from the CTA -'r)hasing Agent. Atta)h a )op0 of the /ritten approva& from the CTA -'r)hasing Agent. S'$s)ri$ed and s/orn to $efore me this JJJJJJJJ da0 of JJJJJJJJ 20JJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Compan0 #ame JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Signat're JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ -rint #ame #otar0 -'$&i) Date( JJJJJJJJJJJJJJJJJJJJJJJ 4$*$0 DBE Director# RE@UIREMENT 49 C*I T2%."! ')at Requirements &ertain to t)e "?8 "irectoryF re<'ires grantees to )ompi&e and 'pdate at &east ann'a&&0 a dire)tor0 or so'r)e &ist of a&& firms e&igi$&e to parti)ipate as D,:s in the grantee+s programs. The &isting for ea)h firm m'st in)&'de its address, phone n'm$er, and the t0pes of /or2 the firm has $een )ertified to perform as a D,:. This dire)tor0 is to $e made avai&a$&e to interested persons, in)&'ding )ontra)tors and the p'$&i) on re<'est. DISCUSSION <rantees must maintain directories of DBE firms t/at /a%e &een certified to do 1orE as DBEs$ T/e information reAuired for t/e Director# includes t/e name! address! /one num&er! and t/e t# es of 1orE t/e firm /as &een certified to erform as DBE$ T/e rimar# ur ose of t/e Director# is to s/o1 t/e results of t/e certification rocess$ Since certification under t/e DBE rule ertains to t/e %arious Einds of 1orE a firmMs disad%anta"ed o1ners can control! it is im ortant to list t/ose Einds of 1orE in t/e
-age !1
Director#$ For e;am le! if a firm seeEs to 1orE in fields A! B! and C! &ut t/e "rantee /as determined t/at its disad%anta"ed o1ners can control its o erations onl# 1it/ res ect to A and B! t/en t/e Director# 1ould recite t/at t/e firm is certified to erform 1orE as a DBE in fields A and B$ T/e focus of t/e Director# is intended to &e eli"i&ilit#$ A Director# is intended to ermit interested firms to contact t/e DBEs$ T/e Director# is not intended to &e a com re/ensi%e &usiness resource manual$ For e;am le! information a&out firmsM Aualifications! "eo"ra /ical references for 1orE! erformance tracE record! ca itali,ation! etc$ are not reAuired to &e art of t/e Director#$ 4$*$2 Bidders List RE@UIREMENT 49 C*I T2%.!! ')at Records "o Reci%ients Mee% and Re%ortF re<'ires grantees to )reate and maintain a $idders list, )onsisting of a&& firms $idding on prime )ontra)ts and $idding or <'oting s'$)ontra)ts on DOT assisted pro@e)ts. *or ever0 firm, the fo&&o/ing information m'st $e in)&'ded( 8!9 829 8"9 849 859 *irm name, *irm address, *irm+s stat's as a D,: or non D,:, The age of the firm, The ann'a& gross re)eipts of the firm.
DISCUSSION T/e $idders list is intended to &e a count of all firms t/at are artici atin"! or attem tin" to artici ate! on DOT)assisted contracts$ T/e list must include all firms t/at &id on rime contracts or &id or Auote su&contracts on DOT)assisted ro'ects! includin" &ot/ DBEs and non)DBEs$ DOT &elie%es t/at $idders lists are a romisin" met/od for accuratel# determinin" t/e a%aila&ilit# of DBE and non)DBE firms! and DOT &elie%es t/at de%elo in" &idders data 1ill &e useful for "rantees$ Creatin" and maintainin" a &idders list 1ill "i%e "rantees anot/er %alua&le 1a# to measure t/e relati%e a%aila&ilit# of read#! 1illin" and a&le DBEs 1/en settin" t/eir o%erall "oals$ 6See section 4$-$-))"sta$lishing 3-erall 0oals$9 T/e DOT re"ulations do not im ose an# rocedural reAuirement as to /o1 t/e data is collected$ <rantees are free to c/oose /o1 t/e# collect t/e reAuired data$ DOT su""ests t/at "rantees consider usin" a 1idel# u&lici,ed u&lic notice or a 1idel# disseminated sur%e# to encoura"e all firms t/at /a%e &id on t/e "ranteesM contracts to maEe t/emsel%es Eno1n to t/e "rantee$ Once t/e list of &idders /as &een created! "rantees 1ill need to su lement t/is information 1it/ t/e a"e of eac/ firm 6since esta&lis/ment9 and t/e annual "ross recei ts of t/e firm 6or an a%era"e of its annual "ross recei ts9$ <rantees can "at/er t/is additional information &# sendin" a Auestionnaire to t/e firms on t/e list! or &# an#
-age !H
ot/er means t/at t/e "rantee &elie%es 1ill roduce relia&le information$ T/e "ranteeMs lan for /o1 to create and maintain t/e list and "at/er t/e reAuired information must &e included in its DBE ro"ram$ 4$*$4 Monitorin" ContractorsM Performance
RE@UIREMENT 49 C*I T2%."1 ')at Are a Reci%ientPs Res%onsi$ilities for onitorin! t)e &erformance of ,t)er &ro!ram &artici%antsF re<'ires grantees to esta$&ish a monitoring and enfor)ement me)hanism to verif0 that the /or2 )ommitted to D,:s at )ontra)t a/ard is a)t'a&&0 performed $0 the D,:s. DISCUSSION DOT /as a%oided rescri&in" monitorin" and enforcement mec/anisms for "rantees$ T/e De artment is looEin" for "rantees t/emsel%es to define a stron" and effecti%e set of monitorin" and com liance ro%isions in t/eir DBE ro"rams$ T/ese mec/anisms could &e almost an#t/in" a%aila&le to t/e "rantee under Federal! State or local la1 6e$"$! liAuidated dama"es ro%isions! res onsi&ilit# determinations! sus ension and de&arment rules! etc$9$ T/e results t/at "rantees must measure consist of a#ments actuall# made to DBEs! not 'ust romises at t/e a1ard sta"e$ Credit to1ard "oals can &e a1arded onl# 1/en a#ments 6includin"! for e;am le! t/e return of retaina"e a#ments9 are actuall# made to DBEs$ <rantees must Eee a runnin" tall# of t/e e;tent to 1/ic/! on eac/ contract! erformance /ad matc/ed romises$ Prime contractors 1/ose erformance fell s/ort of ori"inal commitments 1ould &e su&'ect to t/e com liance mec/anisms t/e "rantee /ad made a%aila&le$ Best Practices S'ggestions for monitoring )ontra)tor+s performan)e /o'&d in)&'de( a9 Ie<'iring ade<'ate @'stifi)ation /hen a prime )ontra)tor proposes to s'$stit'te a non D,: s'$)ontra)tor. $9 Cond')ting stat's revie/s of )ontra)tor+s )omp&ian)e at reg'&ar&0 s)hed'&ed pro@e)t meetings. )9 Ie<'iring /ritten month&0 or <'arter&0 revie/s of the )ontra)tor+s performan)e in meeting goa&s. d9 Ie<'iring the )ontra)tor to propose p&ans to )'re and then imp&ement those p&ans /hen the )ontra)tor is fai&ing to meet the )ontra)t goa&s.
-age !9
4$- <OALS FOR DBE PARTICIPATION 4$-$( DOT National <oal of (:O DISCUSSION T/ere is a statutor# "oal t/at not less t/an (: ercent of t/e transit funds aut/ori,ed are to &e e; ended 1it/ DBEs$ Under t/e former art *-! t/e (: ercent "oal deri%ed from t/e statute la#ed a role in t/e settin" of o%erall "oals &# "rantees$ For e;am le! if "rantees /ad a "oal of less t/an (: ercent! t/e rule reAuired t/em to maEe a s ecial 'ustification to FTA$ The ne/ rule ma(es clear that the 1 #ercent goal is an as#irational goal that a##lies to the :e#artment o* Trans#ortation on a national le-el, not to indi-idual grantees or their contractors! T/e national "oal of (: ercent is not tied to "ranteesM "oal)settin" decisions$ <rantees set "oals &ased on 1/at 1ill ac/ie%e a le%el la#in" field for DBEs in t/eir o1n ro"rams! 1it/out re"ard to t/e national DOT "oal$ <rantees are not reAuired to set t/eir o%erall or contract "oals at (: ercent or an# ot/er articular le%el$ Nor are "rantees reAuired to maEe a s ecial 'ustification if t/eir o%erall "oals are less t/en (: ercent$ 4$-$* Use of @uotas and Set)Asides RE@UIREMENT 49 C*I T 2%.4" Can Reci%ients 2se 0uotas or Set1Asides as &art of T)is &ro!ramF11 prohi$its the 'se of <'otas for D,:s on DOT assisted )ontra)ts 'nder an0 )ir)'mstan)es. Set asides are not permitted e;)ept in &imited and e;treme )ir)'mstan)es to redress egregio's instan)es of dis)rimination. DISCUSSION T/e DBE ro"ram does not set aside a certain ercenta"e of contracts or dollars for a s ecific set of contractors$ T/e DBE ro"ram is a "oals ro"ram! 1/ic/ encoura"es artici ation 1it/out im osin" ri"id reAuirements of an# t# e$ 9uotas are not ermitted under an# circumstances$ A quota is a sim le numerical reAuirement t/at a contractor must meet! 1it/out consideration of ot/er factors$ For e;am le! if a "rantee sets a (* ercent "oal on a articular contract and refuses to a1ard t/e contract to an# &idder 1/o does not /a%e a (* ercent DBE artici ation! eit/er refusin" to looE at s/o1in"s of "ood fait/ efforts or ar&itraril# disre"ardin" t/em! t/en t/e "rantee /as used a Auota$ Bidders must maEe "ood fait/ efforts to meet contract "oals 1/ere suc/ "oals are stated! &ut "rantees ma# not den# a contract to a &idder sim l# &ecause it did not o&tain enou"/ DBE artici ation to meet t/e "oal$ <rantees must seriousl# consider &iddersM documentation of "ood fait/ efforts$ If &idders maEe "ood fait/
-age 20
efforts to meet contract "oals! t/e# /a%e com lied 1it/ t/e intent of t/e DBE re"ulations! e%en if t/eir "ood fait/ efforts fail to meet t/e actual contract "oal$ %et1asides are not ermitted e;ce t in e;treme circumstances to redress e;treme instances of discrimination$ A contractin" a"enc# sets a contract aside for DBEs if it ermits no one &ut DBEs to com ete for t/e contract$ Firms ot/er t/an DBEs are not eli"i&le to &id$ A "rantee ma# use a set)aside under art *2 if ot/er met/ods of meetin" o%erall "oals are demonstrated to &e una%ailin" and t/e "rantee /as le"al aut/orit# inde endent of art *2$ DOT &elie%es t/at set)asides s/ould not &e used in t/e DBE ro"ram unless t/e# are a&solutel# necessar# to address a s ecific ro&lem 1/en no ot/er means 1ould suffice! %et1asides are a last resort! 4$-$- Esta&lis/in" O%erall <oals RE@UIREMENT 49 C*I T2%.45 +ow "o Reci%ients Set ,verall .oalsF11 re<'ires grantees to set an overa&& goa& for D,: parti)ipation in their DOT assisted )ontra)ts. The overa&& goa& m'st $e $ased 'pon demonstra$&e eviden)e of the re&ative avai&a$i&it0 of D,:s in the grantee+s o/n mar2et. Se)tion 2%.45 a&so f'rnishes e;amp&es of methods that grantees ma0 'se to deve&op a $ase fig're for the relative availa$ility of "?8s in their parti)'&ar mar2et. The methods s'ggested in)&'de the 'se of D,: Dire)tories, Cens's ,'rea' Data, ,idders 7ists, et). =oa&s m'st $e s'$mitted to *TA $0 A'g'st ! of ea)h 0ear. -'$&i) parti)ipation is a&so re<'ired in esta$&ishing an overa&& goa&Q i.e., )ons'&tation /ith minorit0, /omen+s and genera& )ontra)tor gro'ps, and other organiGations that )o'&d have information )on)erning the avai&a$i&it0 of D,:s, as /e&& as p'$&i) noti)es anno'n)ing the proposed overa&& goa& and its rationa&e. DISCUSSION HEsta&lis/in" O%erall <oalsI is not normall# a rocurement office function DBE$ Pro"ram administrators s/ould seeE "uidance from t/e US DOT Office of Small and Disad%anta"ed Business Utili,ation 6/tt 377osd&u$dot$"o%79$ 4$-$. Esta&lis/in" O%erall <oals for Transit Pe/icle Manufacturers RE@UIREMENT 49 C*I T2%.49 +ow Are ,verall .oals 8sta$lis)ed for Transit Ne)icle anufacturersF11 re<'ires grantees to o$tain a )ertifi)ation from ea)h transit vehi)&e man'fa)t're that desires to $id or propose 'pon a DOT assisted transit vehi)&e pro)'rement that it has )omp&ied /ith the re<'irements of 49 C*I T2%.49. =rantees ma0, ho/ever, /ith *TA approva&, esta$&ish pro@e)t spe)ifi) goa&s for D,: parti)ipation in the pro)'rement of transit vehi)&es in &ie' of )omp&0ing thro'gh the overa&& goa& setting pro)ed'res.
-age 2!
-age 22
DISCUSSION .8 CFR G*2$.8 reAuires transit %e/icle manufacturers 6TPMs9 to esta&lis/ and su&mit for FTA a ro%al an annual o%erall ercenta"e "oal for DBEs$ Part *2 continues t/e older rule t/at 1as in art *- for TPMs$ TPMs must set t/eir "oals &ased on t/e rinci les in G*2$.0$ <rantees are reAuired to o&tain a certification from TPMs t/at 1is/ to &id or ro ose on DOT)assisted transit %e/icle rocurements! or alternatel#! "rantees ma#! 1it/ FTA a ro%al! esta&lis/ a ro'ect)s ecific "oal for DBE artici ation$ ! T/e APTA %tandard Aus Procurement 0uidelines ro%ide a sam le solicitation #ro-ision and a certi*ication to &e si"ned &# t/e TPMMs aut/ori,ed official$* 4$-$0 Means of Meetin" O%erall <oals
4$-$0$( Race)Neutral Means RE@UIREMENT 49 C*I T2%.5! ')at eans "o Reci%ients 2se to eet ,verall .oalsF11re<'ires grantees to meet the ma;im'm feasi$&e portion of their overa&& goa& $0 'sing race1neutral means of fa)i&itating D,: parti)ipation. This Se)tion in)&'des e;amp&es of race1neutral steps that grantees )an ta2e to fa)i&itate D,: parti)ipation. ?n an0 0ear in /hi)h the grantee e;pe)ts to meet part of its goa& thro'gh ra)e ne'tra& means and the remainder thro'gh )ontra)t goa&s, the grantee m'st maintain data separate&0 on D,: a)hievements in those )ontra)ts /ith and /itho't )ontra)t goa&s, respe)tive&0. This data m'st $e reported to *TA. DISCUSSION One of t/e Ee# oints of t/e ne1 DBE rule is t/at! in meetin" o%erall "oals! "rantees /a%e to "i%e riorit# to race1neutral means$ B# race1neutral means 6a term t/at includes "ender neutralit# for ur oses of t/is rule9! DOT means outreac/! tec/nical assistance! rocurement rocess modification! etc$Ymeasures t/at can &e used to increase o ortunities for all small &usinesses! not 'ust DBEs! and do not in-ol-e setting s#eci*ic goals *or the use o* :A"s on indi-idual contracts! B/ene%er a DBE recei%es a rime contract &ecause it is t/e lo1est res onsi&le &idder! t/e resultin" DBE artici ation 1as ac/ie%ed t/rou"/ race)neutral measures$ Similarl#! 1/en a DBE recei%es a su&contract on a ro'ect t/at does not /a%e a contract "oal! its artici ation 1as also ac/ie%ed t/rou"/ race)neutral measures$
The TO. m'st )ertif0 that it has )omp&ied /ith the D,: goa& re<'irements of T 2%.49. See the A-TA .uidelines se)tions !.!.".5 for the solicitation %rovision and !.!.5.1 for the D,: certification.
-age 2"
Race1neutral means include! &ut are not limited to! t/e follo1in"3 6(9 Arran"in" solicitations! times for t/e su&mission of &ids or ro osals! Auantities! s ecifications! and deli%er# sc/edules in 1a#s t/at facilitate artici ation &# DBEs! and ot/er small &usinesses$ E;am les mi"/t include t/e un&undlin" of lar"e contracts to maEe t/em more accessi&le to small &usinesses! reAuirin" or encoura"in" rime contractors to su&contract ortions of 1orE t/at t/e# mi"/t ot/er1ise erform 1it/ t/eir o1n forces! etc$J 6*9 Pro%idin" assistance in o%ercomin" limitations suc/ as ina&ilit# to o&tain &ondin" or financin" 6e$"$! &# suc/ means as sim lif#in" t/e &ondin" rocess! reducin" t/e &ondin" reAuirements! eliminatin" t/e im act of suret# costs from &ids! and ro%idin" ser%ices to /el DBEs! and ot/er small &usinesses! o&tain &ondin" and financin"J 6-9 Pro%idin" tec/nical assistance and ot/er ser%icesJ 6.9 Carr#in" out information and communications ro"rams on contractin" rocedures and s ecific contract o ortunities 6e$"$! ensurin" t/e inclusion of DBEs and ot/er small &usinesses on "rantee mailin" lists for &iddersJ ensurin" t/at rime contractors recei%e lists of otential su&contractorsJ ro%ision of information in lan"ua"es ot/er t/an En"lis/! 1/ere a ro riate9J 609 Im lementin" a su orti%e ser%ices ro"ram to de%elo and im ro%e immediate and lon")term &usiness mana"ement! record Eee in"! and financial and accountin" ca a&ilit# for DBEs and ot/er small &usinessesJ 629 Pro%idin" ser%ices to /el DBEs! and ot/er small &usinesses! im ro%e lon")term de%elo ment! increase o ortunities to artici ate in a %ariet# of Einds of 1orE! /andle increasin"l# si"nificant ro'ects! and ac/ie%e e%entual self) sufficienc#J 649 Esta&lis/in" a ro"ram to assist ne1! start)u firms! articularl# in fields in 1/ic/ DBE artici ation /as /istoricall# &een lo1J 659 Ensurin" distri&ution of t/e DBE Director#! t/rou"/ rint and electronic means! to t/e 1idest feasi&le uni%erse of otential rime contractorsJ and 689 Assistin" DBEs and ot/er small &usinesses to de%elo t/eir ca a&ilit# to utili,e emer"in" tec/nolo"# and conduct &usiness t/rou"/ electronic media$
-age 24
4$-$0$* Usin" Contract <oals RE@UIREMENT 49 C*I T2%.5!8d9 ')at eans "o Reci%ients 2se to eet ,verall .oalsF11re<'ires grantees to esta$&ish )ontra)t goa&s to meet an0 portion of their overa&& goa& that the0 do not pro@e)t $eing a$&e to meet 'sing race1neutral means. =rantees ma0 'se )ontra)t goa&s on&0 on those DOT assisted )ontra)ts that have s'$)ontra)ting possi$i&ities. *'rther, grantees are not re<'ired to set goa&s on ever0 DOT assisted )ontra)t, nor m'st the0 set a parti)'&ar )ontra)t goa& at the &eve& of the overa&& goa&. The parti)'&ar )ontra)t goa& /i&& depend on the t0pe of /or2 invo&ved, the &o)ation of the /or2, and the avai&a$i&it0 of D,:s for the /or2 of the parti)'&ar )ontra)t. Bo/ever, over the period )overed $0 the overa&& goa&, grantees m'st set )ontra)t goa&s so that the0 /i&& )'m'&ative&0 res'&t in meeting an0 portion of the overa&& goa& that the0 do not pro@e)t $eing a$&e to meet thro'gh the 'se of ra)e ne'tra& means. ?f the grantee+s approved pro@e)tion indi)ates that it )an meet its entire overa&& goa& thro'gh ra)e ne'tra& meas'res, the grantee m'st imp&ement its program /itho't setting )ontra)t goa&s d'ring that 0ear. DISCUSSION T/e e; ressed riorit# for race)neutral means does not reclude t/e use of race)conscious measures! suc/ as contract "oals! &# "rantees$ T/e rule sim l# reAuires "rantees to "et t/e ma;imum feasi&le DBE artici ation t/rou"/ race)neutral measures$ T/e first ste is to esta&lis/ an o%erall "oal and estimate! in ad%ance! 1/at art of t/e "oal can &e met t/rou"/ t/e use of race)neutral measures$ T/is ro'ection is furnis/ed to FTA at t/e time t/e o%erall "oal is su&mitted! and is su&'ect to FTA a ro%al$ T/e "rantee uses race)conscious measures 6e$"$! sets contract "oals9 to "et t/e remainder of t/e DBE artici ation it needs to meet t/e o%erall "oal$ If t/e "rantee e; ects to meet its entire o%erall "oal t/rou"/ race) neutral means! it could! 1it/ FTA a ro%al! im lement its ro"ram 1it/out an# use of contract "oals$ <rantees 1ill most liEel# use a com&ination of race)neutral and race)conscious measures$ It is im ortant t/at "rantees Eee accurate records of contract a1ards to DBEs t/rou"/ race)neutral %s$ race)conscious met/ods$ T/e "ranteeMs actual e; erience 1it/ t/e met/ods 1ill ena&le t/e "rantee to ad'ust t/e met/odolo"# it uses to ac/ie%e its future o%erall "oal$ For e;am le! a "rantee t/at 1as consistentl# a&le to meet its o%erall "oal usin" onl# race) neutral measures 1ould ne%er need to use contract "oals$ T/e ne1 DBE rule maEes clear t/at contract "oals are not reAuired on all contracts$ T/e rule also states t/at t/e contract "oal need not &e set at t/e same le%el as t/e o%erall "oal$ For e;am le! if a "rantee /as an o%erall "oal of (( ercent! it does not /a%e to set a contract "oal on eac/ contract$ Nor does it /a%e to esta&lis/ an (( ercent "oal on eac/ contract 1/ere it does set a contract "oal$ T/e idea is for t/e "rantee to set contract "oals t/at! cumulati%el# for t/e #ear! &rin" in enou"/ DBE artici ation! 1/ic/ 1/en added to t/e artici ation e; ected from race)neutral measures! 1ill result in ac/ie%in" t/e o%erall "oal$
-age 25
Best Practices When grantees m'st 'se )ontra)t goa&s to meet their overa&& goa&, grantees need to revie/ )andidate pro)'rements to determine if the0 afford s'$)ontra)ting opport'nities for D,: parti)ipation. D,: s'$)ontra)ting goa&s are to $e esta$&ished $ased on the 2no/n avai&a$i&it0 of <'a&ified D,:s$ =rantees )an o$tain information a$o't )ertified D,: firms from their State or &o)a& government offi)es as /e&& as the *edera& Small ?usiness Administration, /hi)h p'$&ishes a &isting of )ertified sma&& $'sinesses and sma&& disadvantaged $'sinesses on their &ro1Net ?nternet site. &ro1Net is an ?nternet $ased data$ase of information on more than !1!,000 sma&&, disadvantaged, H8a9 and /omen o/ned $'sinesses. This data is free to the genera& p'$&i) as a reso'r)e for those see2ing )ontra)tors and s'$)ontra)tors andAor partnership opport'nities. ,'sinesses profi&ed on the &ro1Net )an $e sear)hed $0 S?C )odesQ 2e0 /ordsQ &o)ationQ <'a&it0 )ertifi)ationsQ $'siness t0pe, o/nership ra)e and genderQ :.?. )apa$i&it0, et)." Of )o'rse, grantees are re<'ired to maintain a )'rrent "irectory of D,: so'r)es in order to fa)i&itate the esta$&ishment of spe)ifi) )ontra)t goa&s and to assist prime )ontra)tors in identif0ing potentia& D,: s'$)ontra)tors. See Se)tion 1.2.5, "?8 "irectory, a$ove. =rantee initiatives to promote D,: parti)ipation in their third part0 )ontra)ts /o'&d in)&'de s')h steps as( Ievie/ing a&& p'r)hase re<'isitions a$ove a )ertain do&&ar thresho&d or for )ertain t0pes of /or2 8e.g. )onstr')tion and professiona& servi)es9, to determine if D,: goa&s sho'&d $e re<'ired. :n)o'raging $idders to divide their tota& re<'isitions, /here appropriate, into e)onomi)a&&0 feasi$&e 'nits, tas2s or <'antities so as to permit ma;im'm D,: parti)ipation. Stressing the importan)e of D,: parti)ipation at pre $idAproposa& )onferen)es, /ith g'idan)e to $idders and proposers as to the reso'r)es avai&a$&e to them in &o)ating potentia& D,: s'$)ontra)tors and s'pp&iers 8s')h as the Sma&& ,'siness Administration+s &ro1Net data$ase9. Targeting advertisement noti)es in minorit0 o/ned ne/spapers in addition to other ne/spapers of genera& )ir)'&ation. :;tending the $idding time to a&&o/ )ontra)tors to identif0 D,: firms and permit their )ertifi)ation /here ne)essar0. This te)hni<'e /as 'sed $0 the .etro Dade Transit Agen)0 on a pro)'rement for te)hni)a&, )omp'ter re&ated end items /here D,: firms /ith the te)hni)a& e;pertise to perform the /or2 /ere not )ertified.
The ?nternet address for -ro #et is( http(AApro net.s$a.govA.
-age 2%
A&&o/ing an e;tended proposa& period permitted the prime )ontra)tors to &o)ate D,: s'$)ontra)tors and have them )ertified.4 ?n)&'ding a prominent notifi)ation in a&& 3#oti)e of A/ard 7etters4 simi&ar to that 'sed $0 #5C Transit( Oour contract contains a "isadvanta!ed ?usiness .oal of SSSSSST. T)e Contract requires t)at you su$mit wor( sc)edules and co%ies of e7ecuted su$contract a!reements for your %ro%osed "?8 su$contractors wit)in CD days of t)e date of t)is award letter. Oou are furt)er required to su$mit mont)ly re%orts of your %ro!ress toward meetin! t)ese !oals/ on t)e forms %rovided in t)e contract documents.5 ?nviting 0o'r D,: program offi)e to parti)ipate on a&& se&e)tion )ommittees for pro)'rements that re<'ire D,: s'$)ontra)ting goa&s.
4$-$0$- E%aluation of Contractor Pro osals For DBE Partici ation DISCUSSION T/ere are t1o ractices for su&mission of DBE information &# offerors Offerors ma# &e reAuired to com lete t/eir DBE su&missions! includin" eit/er t/e list of ro osed DBE su&contractors and amounts! or t/e roof of "ood fait/ efforts! 1it/ t/eir offers$ T/is a roac/ is t# ical of rofessional ser%ice contractsJ or Offerors ma# &e reAuired onl# to romise com liance 1it/ t/e ro"ram in t/eir offers! ost onin" su&mission of t/e list of su&contractors 6or roof of "ood fait/ efforts9 until determination of t/e a arent lo1 &idder$
B/en determinin" com liance 1it/ DBE reAuirements! t1o scenarios are ossi&le3 T/e ro oser7&idder su&mits information indicatin" t/at t/e DBE "oals 1ill &e metJ or T/e ro oser7&idder su&mits information indicatin" t/at t/e DBE "oals 1ill not &e met$
T/e follo1in" are &est ractices to follo1 for t/e t1o scenarios3
Conta)t Ying :&&iott, .etro Dade Transit Agen)0, !!! #.W. *irst St., S'ite 9!0, .iami, *7 ""!2H at 8"059 "15 "%"4.
#e/ 5or2 Cit0 Transit. Conta)t Stan =ri&& at 81!H9 %94 4"50.
-age 21
Scenario (3 Pro oser7&idder su&mits information t/at t/e DBE "oals 1ill &e met ReAuired Information ) T/e information su&mitted &# t/e offeror must include
Names of DBE su&contractors7su liers artici atin" in t/e contract$ DBEs must &e eli"i&le 6t/ose t/at are currentl# certified or t/at can &e certified rior to a1ard9J A descri tion of t/e 1orE eac/ DBE is to erform or t/e roducts to &e ro%ided &# t/e DBE! 1it/ an indication of t/e ercenta"e of t/e 1orE to &e done &# t/e DBEMs o1n 1orE forces! as com ared 1it/ t/at 1/ic/ 1ill &e su&contracted &# t/e DBE to ot/er DBEs or non)DBEsJ and T/e dollar %alue of eac/ ro osed DBE su&contract! includin" t/e dollar %alues of su&contracts to &e a1arded &# t/e DBE su&contractor$
Countin" DBE Partici ation ) Ca%in" recei%ed t/e a&o%e information! %erif# t/e countin" of DBE artici ation to1ards t/e "oal usin" t/e criteria set fort/ a&o%e in section 4$-$0$0! Counting :A" Partici#ation To/ard the 0oal$ If t/e "oal /as &een met satisfactoril#! t/e a1ard rocess can continue$ If t/e "oal /as not &een met e%en t/ou"/ t/e offeror stated t/at it 1ill! #ou s/ould assess t/e cause for differin" conclusionsJ notif# t/e offeror and seeE additional information! or consider documentation of "ood fait/ efforts as ro%ided &# #our DBE ro"ram and rocedures$ If #ou /a%e reAuired e%idence of com liance from all offerors 1it/ t/eir offers! "i%in" t/e offeror an additional o ortunit# ma#! de endin" on #our ro"ram and rocedures! a ear to "i%e t/e offeror an unfair c/ance to re)e%aluate its offer after su&mission$ Dou a arentl# /a%e eit/er a mistaEe or an offer t/at does not com l# 1it/ t/e terms of #our solicitation$ In t/e former case! #ou s/ould follo1 t/e "uidance on mistaEes in Section .$.$0! FBid MistaEes$F In t/e latter case! #ou ma# 1orE 1it/ t/e offeror to reconcile t/e difference if #our DBE ro"ram ro%ides for t/at o ortunit#J if #our ro"ram ro%ides it! all offerors could /a%e e; ected t/e o ortunit# and it 1ould not "i%e t/e offeror a "ratuitous or unfair second c/ance to e%aluate its offer$ Co1e%er! if #ou reAuested e%idence &e su&mitted onl# after selectin" t/e a arent a1ardee! #ou ma# 1orE freel# 1it/ t/e offeror to reconcile t/e discre anc#! as all offerors s/ould e; ect t/e o ortunit# to ro%ide information re"ardin" res onsi&ilit# and similar determinations made rior to a1ard$
If t/ese ste s conclude 1it/ t/e offeror meetin" t/e "oal or demonstratin" "ood fait/ efforts to meet t/e "oal! #ou can roceed 1it/ t/e a1ard$ If t/ese ste s conclude 1it/out t/e
-age 2H
offeror meetin" t/e "oal or demonstratin" "ood fait/ efforts to meet t/e "oal! #ou can eliminate t/e offer and roceed to t/e ne;t ranEed offer$ Scenario *3 Offeror su&mits information t/at t/e DBE "oals 1ill not &e met$ ReAuired Information ) Documentation of "ood fait/ efforts &# t/e ro oser7&idder is reAuired in all cases 1/ere t/e ro oser7&idder fails to meet t/e stated "oal for DBEs$ As discussed a&o%e! t/e solicitation ma# reAuire t/at "ood fait/ efforts &e accom lis/ed rior to &id o enin" or t/at "ood fait/ efforts &e accom lis/ed rior to t/e recei t of &est and final offers$ B/ere t/e s/o in" eriod is ermitted after final su&mission of offers! "ood fait/ effort reAuirements are esta&lis/ed accordin"l#$ Dour a"enc#Ks DBE ro"ram s/ould include "uidelines for determinin" and e%aluatin" "ood fait/ efforts &# ro osers7&idders$ Criteria for determinin" 1/et/er a "ood fait/ effort 1as made can include t/ose factors discussed in section 4$-$0$.))0ood Faith "**orts to 4eet Contract 0oals$ If t/e ro oser7&idder /as satisfactoril# demonstrated "ood fait/ efforts! t/e a1ard rocess must continue$ If not! t/e offer s/ould not &e acce ted! and #ou ma# roceed to t/e ne;t &est offer 6ne;t lo1est &id! or ne;t /i"/est score ro osal! de endin" on #our a"enc#Ks DBE ro"ram com onents9$ In eit/er case! t/e ro oser7&idderKs "ood fait/ effort documentation! as 1ell as #our 1ritten e%aluation of t/at material! are im ortant entries in t/e contract file$ T/is is a otential rotest area and s/ould &e 1ell)documented$ 4$-$0$. <ood Fait/ Efforts to Meet Contract <oals RE@UIREMENT 49 C*I T2%.5" ')at Are t)e .ood Fait) 8fforts &rocedures Reci%ients FollowF11 re<'ires grantees to a/ard a )ontra)t that re<'ires a D,: goa& to a $idderAofferor /ho has made !ood fait) efforts to meet the goa&. A !ood fait) effort is defined as one /here the $idder( 8!9 Do)'ments that it has o$tained eno'gh D,: parti)ipation to meet the goa&Q or 829 Do)'ments that it made ade<'ate good faith efforts to meet the goa&, even tho'gh it did not s'))eed in o$taining eno'gh D,: parti)ipation to do so. Appendi; A to -art 2% L .uidance Concernin! .ood Fait) 8fforts/ provides grantees /ith s'ggested t0pes of a)tions that the0 sho'&d )onsider /hen ma2ing @'dgments as to /hether $iddersAofferors have 'sed good faith efforts. =rantees are spe)ifi)a&&0 prohi$ited from ignoring $ona fide good faith efforts. ?t fo&&o/s from the a$ove that grantees, in a negotiated pro)'rement, ma0 not give e;tra )redit 8higher eva&'ation s)ores9 to an offeror+s proposa& if it e;)eeds the grantee+s s'$)ontra)ting goa&, nor &ess )redit 8&o/er s)ores9 to a proposa& that )annot a)hieve the f'&& D,: goa&. The DOT re<'irement is that the offeror ma2e good faith efforts to meet the goa&, and if this is
-age 29
demonstrated $0 the offeror the grantee )annot pena&iGe the offeror in the proposa& eva&'ation and )ontra)t a/ard pro)ess. ?f a grantee determines that an other/ise s'))essf'& $idderAproposer has fai&ed to meet the good faith efforts re<'irement of this -art, the grantee m'st provide the $idderAproposer an opport'nit0 for administrative reconsideration. The re<'irements that grantees m'st fo&&o/ in the administrative re)onsideration pro)ess are o't&ined in 49 C*I T 2%.5"8d9. DISCUSSION T/e t# es of actions t/at "rantees s/ould consider as art of t/e &idderMs "ood fait/ efforts 1ould include! &ut not &e limited to! t/e follo1in"3 6(9 AdeAuate solicitation of DBEs 6t/rou"/ all reasona&le and a%aila&le means9! 1it/ sufficient time for DBEs to res ond to t/e solicitationJ 6*9 Selectin" ortions of t/e 1orE to &e erformed &# DBEs in order to increase t/e liEeli/ood t/at t/e DBE "oals 1ill &e ac/ie%edJ 6-9 Pro%idin" interested DBEs 1it/ adeAuate information a&out t/e lans! s ecifications and reAuirements of t/e contract in a timel# mannerJ 6.9 Ne"otiatin" in "ood fait/ 1it/ interested DBEs$ T/e fact t/at t/ere ma# &e some additional costs in%ol%ed in findin" and usin" DBEs is not in itself sufficient reason for a &idderMs failure to meet t/e contract "oal! as lon" as t/e costs are reasona&le$ Prime contractors are not! /o1e%er! reAuired to acce t /i"/er Auotes from DBEs if t/e rice difference is e;cessi%e or unreasona&le$ 609 Not re'ectin" DBEs as &ein" unAualified 1it/out sound reasons &ased on a t/orou"/ in%esti"ation of t/eir ca a&ilities$ 629 MaEin" efforts to assist interested DBEs in o&tainin" &ondin"! lines of credit! or insurance as reAuired &# t/e "rantee or contractor$ 649 MaEin" efforts to assist interested DBEs in o&tainin" necessar# eAui ment! su lies! materials! or related assistance or ser%ices$ 659 Effecti%el# usin" t/e ser%ices of a%aila&le minorit#71omen communit# or"ani,ations and ot/er or"ani,ations to ro%ide assistance in t/e recruitment and lacement of DBEs$ In determinin" 1/et/er a &idder /as made "ood fait/ efforts! "rantees ma# taEe into account t/e erformance of ot/er &idders in meetin" t/e contract "oal$ For e;am le! if t/e a arent successful &idder failed to meet t/e "oal! &ut meets or e;ceeds t/e a%era"e DBE
-age "0
artici ation o&tained &# ot/er &idders! "rantees ma# %ie1 t/is as e%idence of t/e &idder /a%in" made "ood fait/ efforts$
-age "!
T/e CFR allo1s discretion to "rantees in 1/en t/e# reAuire &idders7 ro osers to su&mit t/eir "ood fait/ efforts documentation$ T/is ma# &e reAuired3 6a9 as a matter of res onsi%eness 1it/ initial &ids under sealed &id roceduresJ 6&9 as a matter of res onsi%eness 1it/ initial ro osals under contract ne"otiation roceduresJ or 6c9 as a matter of res onsi&ilit# at an# time &efore t/e "rantee commits itself to t/e erformance of t/e contract &# t/e &idder7 ro oser$ % In t/ose rocurements 1/ere &idders7 ro osers are reAuired to su&mit t/eir DBE artici ation information and "ood fait/ efforts 1it/ t/e initial &id7 ro osal as a matter of res onsi%eness! t/e# are to &e e%aluated on t/e &asis of t/at information! and ma# &e re'ected if t/e information resented is not satisfactor#$ 6See /o1e%er! t/e reAuirement for administrati%e reconsideration noted a&o%e in t/e ReAuirements &locE$9 Durin" t/e course of t/e ne"otiation rocess! c/an"es ma# &e made to t/e contract sco e t/at affect eit/er t/e need for some DBE su&contractors or t/e le%el of t/eir artici ation$ In t/at e%ent! t/e a"enc# s/ould reAuest t/at t/e ro oser ad'ust its su&contract lan to maintain or en/ance t/e DBE artici ation! and s/ould reAuire eac/ ro oser to su&mit a final DBE artici ation lan as art of its Final Pro osal Re%ision 6Best and Final Offer9$ Best Practices *o&&o/ing is a so&i)itation provision 'sed $0 the Chi)ago Transit A'thorit0 8CTA9 des)ri$ing the t0pes of a)tions that CTA /o'&d )onsider as demonstrating !ood fait) efforts on the part of a $idder. ! <OOD FAITC EFFORTS ?n order to $e responsive, a $idder m'st ma2e good faith efforts to meet the D,: parti)ipation goa& set forth in the )ontra)t. The $idder m'st do)'ment the good faith efforts it made in that regard. Th's, the ,id s'$mitted to the A'thorit0 m'st $e a))ompanied $0 /ritten do)'mentation prepared $0 the $idder eviden)ing a&& of its s'ffi)ient and reasona$&e good faith efforts to/ard f'&fi&&ing the goa&. These efforts m'st $e a)tive steps, and ones, /hi)h )o'&d reasona$&0 $e e;pe)ted to &ead to s'ffi)ient D,: parti)ipation to meet the )ontra)t D,: parti)ipation goa&. .ere %ro forma efforts are not a))epta$&e and /i&& $e re@e)ted $0 the =enera& .anager, D,: -rogram. =ood *aith :fforts re<'ire that the $idder )onsider a&& <'a&ified D,:s, /ho e;press an interest in performing /or2 'nder the )ontra)t. This means that the $idder )annot re@e)t a D,: as 'n<'a&ified 'n&ess the $idder has so'nd reasons $ased on a thoro'gh investigation of the D,:+s )apa$i&ities. *'rther, the D,:+s standing /ithin its ind'str0, mem$ership in spe)ifi) gro'ps, organiGations or asso)iations and po&iti)a& or so)ia& affi&iation 8for e;amp&e, 'nion vs. non 'nion emp&o0ee stat's9 are not &egitimate )a'ses
2
49 C*I T 2%.5"8$98"9.
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for the re@e)tion or non so&i)itation of $ids in the Contra)tor+s efforts to meet the )ontra)t D,: parti)ipation goa&. The fo&&o/ing &ist, /hi)h is not e;)&'sive or e;ha'stive, sets forth the t0pes of a)tions, /hi)h indi)ate good faith efforts on the part of a $idder to meet the D,: goa&. The e;tent and t0pe of a)tions re<'ired /i&& var0 depending on s')h things as ind'str0 pra)ti)eQ the time avai&a$&e for s'$mitting a $id and the t0pe of )ontra)t invo&ved. A. Attendan)e at a pre $id meeting, if an0, s)hed'&ed $0 the A'thorit0 to inform D,:s of s'$)ontra)ting opport'nities 'nder a given so&i)itation. ,. Advertisement in genera& )ir)'&ation media, trade asso)iation p'$&i)ations, and minorit0 fo)'s media for at &east t/ent0 8209 da0s $efore $ids are d'e. ?f 20 da0s are not avai&a$&e, p'$&i)ation for a shorter reasona$&e time is a))epta$&e. C. Written notifi)ation to )apa$&e D,:s that their interest in the )ontra)t is so&i)ited. D. Do)'mentation of efforts to negotiate /ith D,:s for spe)ifi) s'$ )ontra)ts in)&'ding at a minim'm( !. The names, addresses, and te&ephone n'm$ers of D,:s that /ere )onta)ted and the date8s9 of )onta)t. 2. A des)ription of the information provided to D,:s regarding the p&ans and spe)ifi)ations for portions of the /or2 to $e performed. ". A statement e;p&aining /h0 additiona& agreements /ith D,:s /ere not rea)hed. :. *or ea)h D,: the $idder )onta)ted $'t re@e)ted as 'n<'a&ified, the reason for the $idder+s )on)&'sion. *. Do)'mentation of efforts made to assist the D,:s )onta)ted that needed assistan)e in o$taining $onding or ins'ran)e re<'ired $0 the $idder or the A'thorit0. =. Do)'mentation of efforts to 'ti&iGe the servi)es of sma&& $'siness organiGations, )omm'nit0 and )ontra)tor gro'ps to &o)ate <'a&ified D,:s. B. Do)'mentation that the $idder has $ro2en o't )ontra)t /or2 items into e)onomi)a&&0 feasi$&e 'nits in fie&ds /here there are avai&a$&e D,: firms to perform the /or2. ?. :viden)e that ade<'ate information /as provided to interested D,:s a$o't the
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p&ans, spe)ifi)ations and re<'irements of the )ontra)t, and that s')h information /as )omm'ni)ated in a time&0 manner. 6. Do)'mentation of an0 efforts made to assist interested D,:s in o$taining ne)essar0 e<'ipment, s'pp&ies, materia&s or re&ated assistan)e or servi)es. <OOD FAITC EFFORTS RECONSIDERATION ?f it is determined that the apparent s'))essf'& &o/ $idders have fai&ed to meet the re<'irements of the )ontra)t goa&Agood faith efforts, the A'thorit0 /i&& provide them /ith O#: opport'nit0 for administrative re)onsideration, $efore the A'thorit0 a/ards the )ontra)t. This re)onsideration /i&& in)&'de the fo&&o/ing( A. The $idder /i&& $e permitted to either provide /ritten eviden)e or to present ora& arg'ment at a pre s)hed'&ed time that the do)'mentation it s'$mitted /ith its $id met the D,: goa& andAor sho/ed good faith efforts to do so. #o ne/ eviden)e of good faith efforts ma0 $e presented after the $id s'$mission dead&ine. ,. The A'thorit0+s Ie)onsideration Offi)er /i&& revie/ the eviden)e presented $0 the $idder and iss'e a /ritten determination that the $idder has( !9 met the D,: goa&Q 29 not met the D,: goa& $'t has made ade<'ate good faith efforts to do soQ or "9 has not met the D,: goa& and the good faith efforts made /ere not ade<'ate. C. The de)ision of the A'thorit0+s Ie)onsideration Offi)er is fina& and ma0 not $e appea&ed to the A'thorit0, its f'nding agen)ies or the USDOT. D. The A'thorit0 /i&& not a/ard a )ontra)t to an0 $idder /ho does not meet the )ontra)t D,: parti)ipation goa& or sho/ good faith efforts to meet that goa&. Th's, it is essentia& that a&& $idders s'$mit A77 re&evant do)'mentation )on)erning the D,: goa& andAor good faith efforts in the enve&ope or pa)2age )ontaining their sea&ed $id. 4$-$0$0 Countin" DBE Partici ation to1ard <oals RE@UIREMENT 49 C*I T 2%.55 +ow is "?8 &artici%ation Counted Toward .oalsF11 sets forth the )riteria to $e 'sed in )o'nting D,: parti)ipation to/ard D,: )ontra)t goa&s. =rantees sho'&d refer to this se)tion and not re&0 so&e&0 on the dis)'ssion $e&o/ sin)e the se)tion ma0 )ontain re&evant additiona& detai&s not in)&'ded here.
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DISCUSSION .8 CFR G *2$00 defines t/e met/odolo"# for countin" DBE artici ation to1ard contract "oals$ 0rantees must $e *amiliar /ith the details o* this section, not all o* /hich are discussed here! T/e &asic rinci les of t/is section are summari,ed &elo13 ($ B/en a DBE artici ates in a contract! #ou count onl# t/e %alue of t/e 1orE actuall# erformed &# t/e DBE to1ard DBE "oals$ 6a9 For construction contracts! count t/e entire amount of t/at ortion of t/e contract t/at is erformed &# t/e DBEs o1n forces! includin" t/e cost of su lies urc/ased and eAui ment leased &# t/e DBE for t/e 1orE$ 6&9 For rofessional! tec/nical! consultant or mana"erial ser%ices contracts! count t/e entire amount of fees or commissions c/ar"ed &# a DBE firm for ro%idin" a &ona fide ser%ice! or for ro%idin" &onds or insurance s ecificall# reAuired for t/e erformance of a DOT)assisted contract! ro%ided #ou determine t/e fee to &e reasona&le and not e;cessi%e as com ared 1it/ fees customaril# allo1ed for similar ser%ices$ 6c9 B/en a DBE su&contracts art of t/e 1orE of its contract to anot/er firm! t/e %alue of t/e su&contracted 1orE ma# &e counted to1ard DBE "oals onl# if t/e DBEMs su&contractor is itself a DBE$ BorE t/at a DBE su&contracts to a non)DBE firm does not count to1ard DBE "oals$ *$ B/en a DBE erforms as a artici ant in a 'oint %enture! count a ortion of t/e total dollar %alue of t/e contract eAual to t/e distinct! clearl# defined ortion of t/e 1orE t/at t/e DBE erforms 1it/ its o1n forces to1ard DBE "oals$ -$ Count e; enditures to a DBE contractor onl# if t/e DBE is erformin" a commercially use*ul *unction on t/at contract$ T/is section sets fort/ a num&er of criteria for determinin" 1/en a DBE is erformin" a commercially use*ul *unction$ Included amon" t/ese criteria for determinin" 1/en a DBE is erformin" a commerciall# useful function is a reAuirement t/at t/e DBE erform or e;ercise res onsi&ilit# for at least -: ercent of t/e total cost of its contract 1it/ its o1n 1orE force! or t/at t/e DBE does not su&contract a "reater ortion of t/e 1orE of a contract t/an 1ould &e e; ected on t/e &asis of normal industr# ractice for t/e t# e of 1orE in%ol%ed$ <rantee decisions on commerciall# useful functions matters are su&'ect to re%ie1 &# FTA! &ut are not administrati%el# a eala&le to DOT$ T/is section also contains detailed "uidance for3 6i9 determinin" 1/et/er a DBE truc(ing com#any is erformin" a commercially use*ul *unction! and 6ii9 /o1 to count DBE artici ation under
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se%eral scenarios! includin" DBE o1ners/i of t/e trucEs and circumstances 1/en t/e trucEs are leased from a non)DBE o1ner$ ( .$ For e; enditures 1it/ DBEs 1/o su l# materials or su lies! t/is section esta&lis/es rules for countin" DBE artici ation &ased u on 1/et/er t/e DBE is a manufacturer or a re"ular dealer$ For e; enditures 1it/ DBE manufacturers! count (:: ercent of t/e cost of t/e materials or su lies$ For e; enditures 1it/ DBEs 1/o are re"ular dealers! count 2: of t/e cost of t/e materials or su lies$ 0$ For urc/ases of materials and su lies from a DBE! 1/ic/ is neit/er a manufacturer nor a re"ular dealer! do not count an# ortion of t/e cost of t/e materials and su lies to1ard DBE "oals$ Co1e%er! fees or commissions c/ar"ed &# a DBE for assistance in t/e rocurement of t/e materials and su lies! or fees or trans ortation c/ar"es for t/e deli%er# of materials or su lies reAuired on a 'o& site! ma# &e counted to1ard DBE "oals! ro%ided t/e# are reasona&le and not e;cessi%e as com ared 1it/ industr# ractices$ 2$ Do not count t/e artici ation of a DBE su&contractor to1ard t/e rime contractorMs DBE ac/ie%ements or #our o%erall "oal until t/e amount &ein" counted to1ard t/e "oal /as &een aid to t/e DBE$ Best Practices *o&&o/ing is a so&i)itation provision deve&oped $0 the Chi)ago Transit A'thorit0 8CTA9 that defines ho/ the A'thorit0 /i&& eva&'ate and )o'nt D,: parti)ipation. 2 COUNTIN< DBE PARTICIPATION TOBARD TCE CONTRACT <OAL The in)&'sion of an0 D,: $0 the $idder in its $id do)'ments sha&& not )on)&'sive&0 esta$&ish the $idder+s e&igi$i&it0 for f'&& D,: )redit for the firm+s parti)ipation in the )ontra)t. The amo'nt of D,: parti)ipation )redit sha&& $e $ased 'pon an ana&0sis $0 the =enera& .anager, D,: -rogram, of the spe)ifi) d'ties /hi)h /i&& $e performed $0 the D,:. T/e &idder ma# count to1ard its DBE "oal onl# e; enditures to firms 1/ic/ are currentl# certified &# t/e IL UCP 6or 1it/ t/e Aut/orit# rior to t/e im lementation of t/e IL UCP9 and 1/ic/ erform a commerciall# useful function. A firm is )onsidered to perform a )ommer)ia&&0 'sef'& f'n)tion /hen it is responsi$&e for the performan)e of a distin)t e&ement of the /or2 and )arries o't its responsi$i&ities $0 a)t'a&&0 performing, managing and s'pervising the /or2 invo&ved.
-aragraph 8d9.
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To determine /hether a firm is performing a )ommer)ia&&0 'sef'& f'n)tion, the =enera& .anager, D,: -rogram, /i&& eva&'ate the amo'nt of /or2 s'$)ontra)ted, ind'str0 pra)ti)es and other re&evant fa)tors. The =enera& .anager, D,: -rogram, reserves the right to den0 or &imit D,: )redit to the $idder /here an0 D,: is fo'nd to $e engaged in s'$stantia& pass thro'gh a)tivities /ith others. D,: parti)ipation sha&& $e )o'nted to/ard the D,: goa& in the )ontra)t as fo&&o/s( A. On)e a D,: is determined to $e e&igi$&e in a))ordan)e /ith these r'&es, the tota& do&&ar va&'e of the )ontra)t a/arded to the D,: ma0 $e )o'nted to/ard the D,: goa& e;)ept as indi)ated $e&o/. ,. A $idder ma0 )o'nt to/ard its D,: goa& that portion of the tota& do&&ar va&'e of a )ontra)t /ith an e&igi$&e @oint vent're e<'a& to the distin)t, )&ear&0 defined portion of the /or2 of the )ontra)t that the D,: performs /ith its o/n for)es. C. Consistent /ith norma& ind'str0 pra)ti)es, a D,: ma0 enter into s'$)ontra)ts. ?f a D,: s'$)ontra)ts more than thirt0 per)ent 8"0P9 or a signifi)ant&0 greater portion of the /or2 of the )ontra)t than /o'&d $e e;pe)ted on the $asis of norma& ind'str0 pra)ti)es, the D,: sha&& $e pres'med not to $e performing a )ommer)ia&&0 'sef'& f'n)tion. :viden)e ma0 $e presented $0 the $idder invo&ved to re$'t this pres'mption.D. When a D,: s'$)ontra)ts a part of the /or2 'nder the )ontra)t to another firm, the va&'e of the s'$)ontra)ted /or2 ma0 on&0 $e )o'nted to/ards the D,: goa& if the D,:+s s'$)ontra)tor is itse&f a D,:. Wor2 that a D,: s'$)ontra)ts to a non D,: firm does not )o'nt to/ards the D,: goa&. :. The $idder ma0 )o'nt one h'ndred per)ent 8!00P9 of its e;pendit'res for materia&s and s'pp&ies re<'ired 'nder the )ontra)t and /hi)h are o$tained from a D,: man'fa)t'rer to/ards the D,: goa&. The $idder ma0 )o'nt si;t0 per)ent 8%0P9 of its e;pendit'res for materia& and s'pp&ies 'nder the )ontra)t o$tained from a D,: reg'&ar dea&er to/ards its D,: goa&. The terms 3man'fa)t'rer4 and 3reg'&ar dea&er4 are defined in 49 C.*.I. -art 2%.558e98!98ii9 and 8298ii9. *. The $idder ma0 )o'nt to/ards its D,: goa& e;pendit'res to D,:s /hi)h are not man'fa)t'rers or reg'&ar dea&ers, s')h as fees or )ommissions )harged for servi)es and assistan)e in the pro)'rement of essentia& personne&, fa)i&ities, e<'ipment, materia&s or s'pp&ies and transportation )harges as set forth in 49 C.*.I. -art 2%. Bo/ever, the =enera& .anager, D,: -rogram, m'st determine the fee or )harge to $e reasona$&e and not e;)essive as )ompared /ith fees or )harges )'stomari&0 a&&o/ed for simi&ar servi)es.
The CTA re<'irement is more restri)tive than the C*I.
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=. The $idder m'st 'se good $'siness @'dgment /hen negotiating /ith s'$)ontra)tors and ta2e a D,:+s pri)e and )apa$i&ities into )onsideration. The fa)t that there ma0 $e some additiona& )osts invo&ved in finding and 'sing D,: firms is not s'ffi)ient reason to fai& to meet the D,: goa& set forth in the )ontra)t, as &ong as s')h )osts are reasona$&e. 4$. CERTIFICATION3 STANDARDS AND PROCEDURES RE@UIREMENT 49 C*I -art 2%, S'$parts D and :, pres)ri$e standards to $e app&ied and pro)ed'res to $e fo&&o/ed /hen )ertif0ing $'sinesses as D,:s. .rantees must use t)e new certification standards for all decisions issued after arc) A/ 1:::. =rantees m'st a&so determine /hether a&& disadvantaged owners of current certified firms meet t)e %ersonal net wort) standard $y Se%tem$er 1/ 1:::. A--:#D?R : to -art 2% )ontains g'idan)e as to ho/ grantees are to ma2e individ'a& determinations of social and economic disadvanta!e. DISCUSSION HCertification3 Standards and ProceduresI is not normall# a rocurement office function! and detailed "uidance ma# &e found at t/e Be& site of FTAMs Office of Ci%il Ri"/ts 6/tt 377111$fta$dot$"o%7office7ci%il9 = See HFinal RuleI u&lis/ed in t/e Federal Re"ister$ 4$0 EVEMPTIONS AND BAIPERS RE@UIREMENT 49 C*I T2%.!5 +ow Can Reci%ients A%%ly for 87em%tions or 'aiversF des)ri$es the provisions made $0 DOT for the granting of e;emptions and /aivers to the re<'irements of the D,: reg'&ations. DISCUSSION T/ere is a distinction made in t/is section &et1een e+em#tions and /ai-ers! T/e rocedures to &e follo1ed 1/en a l#in" for e+em#tions and /ai-ers are descri&ed in G*2$(0$ "+em#tions are for uniAue situations t/at are most liEel# not to &e eit/er "enerall# a lica&le to all reci ients or to /a%e &een contem lated in t/e rulemaEin" rocess$ If suc/ a situation occurs and it maEes it im ractical for a articular "rantee to com l# 1it/ a ro%ision of art *2! t/e "rantee s/ould a l# for an e;em tion from t/at ro%ision$ T/e Secretar# 1ill "rant t/e reAuest onl# if it documents s ecial or e;ce tional circumstances! not liEel# to &e "enerall# a lica&le! and not contem lated in connection 1it/ t/e rulemaEin" t/at esta&lis/ed t/is art! t/at maEe t/e "ranteeMs com liance 1it/ a s ecific ro%ision of t/is art im ractical$
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Wai-ers! &# contrast! are not desi"ned for e;traordinar# circumstances 1/ere a "rantee ma# not &e a&le to com l# 1it/ art *2$ Wai-ers are for situations 1/ere a "rantee &elie%es t/at it can &etter accom lis/ t/e o&'ecti%es of t/e DBE ro"ram t/rou"/ means ot/er t/an t/e s ecific ro%isions of art *2$ T/e 1ai%er ro%ision is desi"ned to ensure t/at DOT and a "rantee can 1orE to"et/er to res ond to an# uniAue local circumstances$ <rantees are encoura"ed to carefull# re%ie1 t/e circumstances in t/eir o1n 'urisdictions to determine 1/at mec/anisms are &est suited to ac/ie%in" com liance 1it/ t/e o%erall o&'ecti%es of t/e DBE ro"ram$ If a "rantee &elie%es it is a ro riate to o erate its ro"ram differentl# from t/e 1a# t/at a ro%ision of Su& art B or C ro%ides! includin"! &ut not limited to! an# ro%isions re"ardin" administrati%e reAuirements! o%erall or contract "oals! "ood fait/ efforts or countin" ro%isions! it can a l# for a 1ai%er$ For e;am le! 1ai%er reAuests could ertain to suc/ su&'ects as t/e use of a race)conscious measure ot/er t/an a contract "oal! different 1a#s of countin" DBE artici ation in certain industries! use of se arate o%erall or contract "oals to address demonstrated discrimination a"ainst s ecific cate"ories of sociall# and economicall# disad%anta"ed indi%iduals! t/e use or 1ordin" of assurances! differences in information collection reAuirements and met/ods! etc$
,est -ra)ti)es -ro)'rement .an'a& L Chapter H L Contra)t C&a'ses
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C/a ter 5 5 ) Contract Clauses H.! *edera& Ie<'irements 8!A9H9 H.!.! So'r)es of .ode& *edera& C&a'ses and App&i)a$i&it0 8!A9H9 H.!.2 Davis ,a)on A)t 8!A9H9 H.!." Cargo -referen)es 8!A9H9 H.!.4 ,'0 Ameri)a 8%A0"9 H.!.5 *&0 Ameri)a 8!A9H9 H.2 S'ret0 ,onds 84A059 H.2.! -erforman)e ,onds 84A059 H.2.2 Options 8!A9H9 H.2." 7i<'idated Damages 8!A9H9 H.2.".! Ie&ationship /ith Defa'&t Termination 8!A9H9 H.2.4 ?nte&&e)t'a& -ropert0 Iights 8!A9H9 H.2.4.! Dis)&os're of Trade Se)rets 8!A9H9 H.2.4.2 Contra)t Wor2 -rod')ts, -atents and Cop0rights 8!A9H9 H.2.5 Termination 8!A9H9 H.2.5.! Termination for Convenien)e 8!A9H9 H.2.5.2 -artia& Terminations 8!A9H9 H.2.5." Termination for Defa'&t 8!A9H9 5$( FEDERAL RE@UIREMENTS 5$($( Sources of Model Federal Clauses and A RE@UIREMENT T !% of *TA Cir)'&ar 4220.!: re<'ires that grantees eva&'ate *edera& stat'tor0 and reg'&ator0 re<'irements for re&evan)e and app&i)a$i&it0 to a parti)'&ar pro)'rement. Appendi; A.! of this .an'a& )ontains a dis)'ssion of ea)h of the most genera&&0 app&i)a$&e re<'irements, in)&'ding the t0pes of )ontra)ts to /hi)h ea)h app&ies, an0 spe)ifi) /ording that m'st $e in)orporated in 0o'r )ontra)ts, s'ggested /ording /here spe)ifi) /ording is not mandator0, and the app&i)a$i&it0 to s'$)ontra)ts. lica&ilit#
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DISCUSSION FTA "rantees reco"ni,e t/at t/e most si"nificant of t/e strin"s attac/ed to t/e recei t of federal funds is t/e reAuirement to com l# 1it/ federal statutes and re"ulations a lica&le to t/eir ro'ect or articular contract$ Dou 1ill 1ant to &e a&le to determine e;actl# 1/ic/ clauses are reAuired for a s ecific rocurement &ecause t/e incor oration of unnecessar# or loosel# drafted clauses can3 discoura"e com etitors! cause confusion for an#one in%ol%ed 1it/ t/e contract! and ultimatel# result in additional costs for #our a"enc#$
A endi; A$( of t/is manual discusses eac/ of t/e most "enerall# a lica&le clauses$ Qno1in" t/at a articular la1 must &e com lied 1it/ and t/at a ro riate lan"ua"e must &e included in a t/ird art# contract! still lea%es t/e <rantee tr#in" to draft or incor orate a clause t/at meets t/ose reAuirements$ T/e clause)&#)clause discussions in A endi; A$( /a%e &een de%elo ed &# FTA to assist #ou$ Best Practices Appendi; A.! of this .an'a& )ontains thirt0 mode& )ontra)t )&a'ses that are either federa&&0 re<'ired or are s'ggested mode& )&a'ses that 0o' ma0 in)&'de in )ontra)ts. The )&a'ses )ontained in this Appendi; in)&'de the fo&&o/ing )ommon e&ements /hi)h /i&& $e he&pf'& to grantees in de)iding if a spe)ifi) )&a'se is re<'ired in a parti)'&ar pro)'rement( App&i)a$i&it0 to Contra)ts dis)'sses the t0pes of )ontra)ts for /hi)h the )&a'se is app&i)a$&e. *&o/ Do/n dis)'sses to /hi)h prime )ontra)tors and /hi)h &eve& of s'$)ontra)tors the )&a'ses app&0. .andator0 C&a'seA7ang'age in)&'des the mode& )&a'se, identified $0 *TA as either a re<'ired 8spe)ified9 )&a'se or a s'ggested &ang'age )&a'se. The narratives provided /ith the individ'a& )&a'ses in the Appendi; indi)ate the so'r)e of the )&a'se, if re<'ired. .an0 of the re<'ired )&a'ses )ome dire)t&0 from re<'irements in vario's se)tions of the Code of *edera& Ieg'&ations 8C*I9 /hi)h is p'$&ished $0 vario's e;e)'tive departments of the federa& government. The most )ommon re<'irements for *TA grantees )ome from vario's parts of Tit&e 49 of the C*I, p'$&ished $0 the Department of Transportation. Ie<'irements of the Department of 7a$or 8s')h as Davis ,a)on A)t )&a'ses9 originate as spe)ifi) &ang'age in Tit&e 29 of the C*I. Where )&a'ses are not mandated $0 an e;e)'tive department, the0 are fre<'ent&0 mode&ed after )&a'ses in the *edera& A)<'isition Ieg'&ations 8*AI9 /hi)h are app&i)a$&e to those e;e)'tive departments.
-age "
:ven tho'gh the *AI does not app&0 to grantee pro)'rements, one advantage of 'sing *AI )&a'ses in the a$sen)e of a spe)ifi) re<'irement imposed 'pon 0o'r Agen)0 is that a $od0 of federa& &a/ has $een deve&oped /hi)h interprets those )&a'ses. ! 5o'r State, &o)a& @'risdi)tion, or transit Agen)0 ma0 have ena)ted a pro)'rement )ode or $od0 of reg'&ations that a)t'a&&0 esta$&ishes spe)ifi) )&a'ses /hi)h 0o' m'st 'se. ?n that )ase, 0o' /i&& $e o$&igated to 'se /hat has $een esta$&ished for 0o'. .an0 of the re)ent ena)tments of those )odes or reg'&ations are adaptations of the Ameri)an ,ar Asso)iationKs odel &rocurement Code for State and #ocal .overnments. 2 5o' ma0 have the a$i&it0 to in)orporate )&a'ses $0 referen)e 8s')h as, tit&e, date and /here it )an $e fo'nd9 in 0o'r )ontra)ts. To the e;tent )&a'ses 0o' /ant to in)orporate are p'$&ished in a *edera&, State, or &o)a& stat'te, )ode, or ordinan)e, or in an offi)ia& reg'&ation s')h as the C*I, 0o' sho'&d $e a$&e to in)orporate those provisions dire)t&0 into 0o'r )ontra)t'a& do)'ment $0 referen)e on&0. 5o' )an )he)2 /ith 0o'r s'pporting &ega& )o'nse& on /hat )&a'ses 0o' )an and )annot in)orporate $0 referen)e and the manner in /hi)h the0 ma0 $e in)orporated. ?t is do'$tf'& 0o' /o'&d ever $e a$&e to in)orporate $0 referen)e a )&a'se that /as on&0 p'$&ished in an *TA Cir)'&ar, $e)a'se of the /a0 *TA Cir)'&ars are p'$&ished 8i.e. the0 are not offi)ia&&0 p'$&ished in the Federal Re!ister9. 5$($* Da%is)Bacon Act RE@UIREMENT T 24 of the .aster Agreement de&ineates the =ranteeKs o$&igations to )omp&0 /ith the emp&o0ee prote)tion re<'irements of the Davis ,a)on A)t. *or )onstr')tion a)tivities e;)eeding S2,000 performed in )onne)tion /ith an *TA f'nded -ro@e)t, the Ie)ipient of those f'nds agrees to )omp&0 /ith, and ass're )omp&ian)e /ith, the re<'irements of 49 U.S.C. T 5"""8a9, the Davis ,a)on A)t, " and the imp&ementing reg'&ations of the Department of 7a$or at 29 C*I -art 5. ?n addition to the re<'irements of the stat'te and reg'&ations, the Ie)ipient a&so agrees to report to the *TA ever0 s'spe)ted or reported vio&ation of the Davis ,a)on A)t or its *edera& imp&ementing Ieg'&ations.
A&tho'gh the re&evan)e of that &a/ /i&& var0 from state to state, most individ'a& states /i&& not have interpreted federa& stat'tes and )&a'ses and /i&& fre<'ent&0 &oo2 to the federa& )ommon &a/, as interpreted $0 the Comptro&&er =enera& of the United States and the vario's $oards and )o'rts, for g'idan)e in interpreting that &a/ and those )&a'ses.
*
The .ode& -ro)'rement Code and re)ommended Ieg'&ations ma0 $e avai&a$&e in 0o'r &o)a& p'$&i) &i$rar0 or ma0 $e p'r)hased from the Ameri)an ,ar Asso)iation. ?t is re)ommended that 0o' )onta)t the fo&&o/ing for f'rther information( .em$er Servi)es, -.O. ,o; !0H92, Chi)ago, ?&&inois %0%!2 0H92.
-
A)t of .ar)h ", !9"!, 4% Stat. !49!, as amendedQ )odified at 40 U.S.C. T 21%a et se<.
-age 4
DISCUSSION T/e Da%is)Bacon Act 6t/e Act9 ro%ides t/at contracts in e;cess of R*!::: to 1/ic/ t/e United States is a art# 6i$e$! federal funds are in%ol%ed9 for construction! alteration! or re air 6includin" aintin" and decoratin"9 of u&lic &uildin"s or u&lic 1orEs 1it/in t/e United States s/all contain a clause t/at no la&orer or mec/anic em lo#ed directl# u on t/e site of t/e 1orE s/all recei%e less t/an t/e re%ailin" 1a"e rates as determined &# t/e Secretar# of La&or$ . T/e clause mandated &# t/e Act and its im lementin" federal re"ulations is found in A endi; A$( of t/e Manual$ T/e ur ose of t/is section in t/e Manual is to discuss t/e ractical issues surroundin" t/e reAuirements of t/e Act and t/e re"ulations im lementin" it$ Best Practices *edera& Wage Determinations When a )onstr')tion pro@e)t is $eing performed /ith federa& f'nds, &a$orers and me)hani)s emp&o0ed dire)t&0 'pon the site of the /or2 sha&& $e paid a minim'm /age /hi)h is determined $0 the Se)retar0 of 7a$or. That rate of pa0 is referred to as the >Davis ,a)on /age rate> and is spe)ifi)a&&0 identified in the )ontra)t $et/een the Ie)ipient and the Contra)tor. T0pes of Wage Determinations *edera& /age determinations are of t/o t0pes( 8a9 =enera& Wage Determinations and 8$9 -ro@e)t Wage Determinations. .eneral wa!e determinations )ontain prevai&ing /age rates for the t0pes of )onstr')tion designated in the determination, and the0 are 'sed in )ontra)ts performed /ithin a spe)ified geographi)a& area. The0 )ontain no e;piration date and remain va&id 'nti& modified, s'perseded, or )an)e&ed $0 a noti)e in the *edera& Iegister $0 the Department of 7a$or. These determinations sho'&d $e 'sed /henever possi$&e. &ro5ect wa!e determinations are iss'ed at the spe)ifi) re<'est of the grantee. The0 are 'sed on&0 /hen no genera& /age determination app&ies and the0 are effe)tive for !H0 da0s from the date of the determination. ?t is the o$&igation of the )ontra)ting offi)er to ens're that a )op0 of the most )'rrent /age determination of the Department of 7a$or 8DO79 is a)t'a&&0 in)&'ded in the so&i)itation and ens'ing )ontra)t. The Wage and Bo'r Division of the DO7 is responsi$&e for the p'$&i)ation of /age determinations. S')h determinations are n'm$ered, dated, and iss'ed as different rate s)hed'&es, depending 'pon the t0pe of )onstr')tion invo&ved 8$'i&ding, residentia&, high/a0, or heav0 )onstr')tion9. 5
*or a thoro'gh dis)'ssion of the &a$or standards for )ontra)ts invo&ving )onstr')tion, see *AI S'$part 22.4. See genera&&0, *AI T 22.404 28)9 for dis)'ssion of the different t0pes of )onstr')tion.
-age 5
State Wage Determinations on *edera&&0 *'nded -ro@e)ts 5o'r state ma0 a&so pres)ri$e minim'm /ages and $enefits for p'$&i) /or2s pro@e)ts. 3f your state )as esta$lis)ed %revailin! wa!es t)at are )i!)er t)an "avis1?acon Act rates/ you s)ould !et advice of counsel to determine w)et)er or not t)e state law or "avis1?acon Act rate %revails/ )owever in no event can rates $e lower t)an "avis1?acon Act rates. Where to O$tain Wage Determinations =enera& /age determinations ma0 $e fo'nd in the =overnment -rinting Offi)e do)'ment entit&ed .eneral 'a!e "eterminations 3ssued 2nder T)e "avis1 ?acon and Related Acts. S'$s)riptions to this information are avai&a$&e e&e)troni)a&&0 % and $0 hard )op0. 1 The de)isions are in)&'ded in si; different vo&'mes, arranged $0 state. ?f ordering a hard )op0 s'$s)ription, on&0 get the vo&'me that in)&'des 0o'r state. An ann'a& edition is p'$&ished in 6an'ar0 or *e$r'ar0 of ea)h 0ear and then 'pdated /ee2&0 thro'gho't the 0ear as part of the &oose &eaf servi)e. This p'$&i)ation is avai&a$&e at ea)h of the 50 Iegiona& =overnment Depositor0 7i$raries and man0 of the =overnment Depositor0 7i$raries a)ross the )o'ntr0. ?n &arge metropo&itan areas, this do)'ment ma0 a&so $e avai&a$&e in a )entra& p'$&i) &i$rar0 as /e&& as thro'gh &o)a& offi)es of 0o'r stateKs department of transportation. ?n addition, The Davis ,a)on A)t /age rates )an $e a))essed on the ?nternet at http(AA!59.!H5.2(H0A/agerate. This site is maintained $0 the =enera& Servi)es Administration 8=SA9. ?f 0o' are invo&ved in a pro@e)t that /i&& invo&ve the iss'an)e of m'&tip&e )onstr')tion re&ated so&i)itations over an e;tended period of time, 0o' ma0 /ant 0o'r o/n )op0 of this do)'ment. This is not on&0 for )onvenien)e $'t a&so ens'res that 0o'r so&i)itations and )ontra)ts )ontain the most 'p to date determinations. H Ie<'esting a Wage Determination As 0o' start a pro@e)t invo&ving )onstr')tion, one of the $est persona& )onta)ts 0o' )an ma2e is /ith the &o)a& DO7 representative /ho /i&& $e monitoring 0o'r )ontra)t for )omp&ian)e /ith the Davis ,a)on minim'm /age re<'irements. ?f a genera& /age determination is avai&a$&e for 0o'r area, 0o' ma0 'se it /itho't notif0ing the Department of 7a$or. ?f a genera& determination is not avai&a$&e for 0o'r area, 0o' )an /or2 /ith 0o'r &o)a&
?n a Federal Re!ister #oti)e of 6'ne !4, !99%, the Chief, ,ran)h of Constr')tion Wage Determinations advised that /age determinations iss'ed 'nder the Davis ,a)on and re&ated A)ts are avai&a$&e e&e)troni)a&&0 $0 s'$s)ription to the *edWor&d ,'&&etin ,oard S0stem of the #ationa& Te)hni)a& ?nformation Servi)e 8#T?S9 of the U.S. Department of Commer)e. A te&ephone )onta)t is 810"9 4H1 4%"0.
4
The same #oti)e advised that hard )op0 s'$s)riptions ma0 $e p'r)hased from the S'perintendent of Do)'ments, U.S. =overnment -rinting Offi)e, Washington, DC 20402 /ith a te&ephone )onta)t at 82029 5!2 !H00.
5
The )ost of the hard )op0 s'$s)ription 8$et/een S440 and SH"0 per vo&'me9 is a min's)'&e investment for 0o'r pro@e)t &i$rar0 /hen )onsidering the )ontra)t'a& impa)ts of the /age determinations /hi)h /i&& $e dis)'ssed $e&o/.
-age %
DO7 representative in re<'esting either a genera& /age determination or a pro@e)t determination.9 Do not hesitate to 'ti&iGe the servi)es of a pro@e)tKs design servi)es professiona& to assist in o$taining information a$o't the &atest /age determinations. ?n a&& &i2e&ihood, that firm /i&& 2no/ pre)ise&0 /hat the re<'irements are and /ho to )onta)t at the DO7. ,e)a'se the pro)ess to ma2e a determination ta2es at &east 45 da0s, it is important to 2no/ ear&0 in the pro@e)t /hether or not a determination is avai&a$&e for 0o'r area. The re<'est to have a determination made needs to $e s'$mitted to the DO7 45 to %0 da0s $efore the so&i)itation is to $e iss'ed. Wage Determinations and 5o'r So&i)itationAContra)t The )&a'se and reg'&ations re<'ire that the /age determination $e ph0si)a&&0 atta)hed to the so&i)itation. The /age determination )annot $e in)orporated $0 referen)e. ?f the so&i)itation is iss'ed /itho't a /age determination in)&'ded, $ids ma0 not $e opened 'nti& a reasona$&e time after the /age determination has $een f'rnished to a&& $idders and in)orporated into the so&i)itation $0 amendment. B/at if t/e 1a"e determination e; ires &efore a1ardS ?t sho'&d $e noted that !eneral wa!e determinations never e;pire and remain va&id 'nti& modified, s'perseded or )an)e&ed $0 DO7. ,'t %ro5ect wa!e determinations do e;pire. ?n the event that 0o'r pro@e)t /age determination e;pires or 0o'r genera& /age determination is s'perseded $0 a ne/ determination $efore $ids are received, 0o' m'st re<'est a ne/ pro@e)t determination 8if 'sing a pro@e)t /age determination9 and in)orporate the ne/ rates in a so&i)itation amendment in s'ffi)ient time for $idders to amend their $ids. ?f the ne/ determination does not )hange the /age rates and /o'&d not )a'se $idders to )hange their $id pri)es, 0o' sho'&d amend the so&i)itation to in)&'de the n'm$er and date of the ne/ determination. 3f t)e wa!e determination e7%ires after $id recei%t $ut %rior to award, 0o' sho'&d re<'est an e;tension of the determination from DO7Ks Wage and Bo'r Division. ?f ne)essar0, a/ard of the )ontra)t sho'&d $e de&a0ed 'nti& the re<'est for e;tension has $een granted or a ne/ /age determination has $een iss'ed. ?f the re<'est for e;tension is denied and a ne/ /age determination iss'ed that )hanges the /age rates for )&assifi)ations to $e 'sed in the )ontra)t, the )ontra)ting offi)er ma0 either )an)e& the so&i)itation and re advertise /ith the appropriate determination or a/ard the )ontra)t and in)orporate the ne/ determination effe)tive on the date of )ontra)t a/ard. !0 ?f the ne/ /age determination did not )hange an0 /age rate, the
The pro)ed'res to $e fo&&o/ed in re<'esting these determinations are fo'nd in 29 C*I -art ! and in *AI T 22.404 ".
(:
?n this )ase, the grantee has the dis)retion, depending 'pon the terms of their so&i)itation do)'ments, to either a/ard to the &o/ $idder at the pri)e $id, or to e<'ita$&0 ad@'st the )ontra)t pri)e for an0 in)reased or de)reased )ost of performan)e res'&ting from an0 )hanged /age rates.
-age 1
)ontra)ting offi)er sho'&d a/ard the )ontra)t and modif0 it to in)&'de the n'm$er and date of the ne/ determination. !! B/at if t/e 1a"e determination is modified &efore a1ardS 3f t)e wa!e determination is modified (as o%%osed to e7%ires) $efore $ids are received, /hether or not it m'st $e in)&'ded in the so&i)itation is determined $0 the time of re)eipt of the modifi)ation $0 the )ontra)ting agen)0 or the time of its p'$&i)ation in the Federal Re!ister. The modifi)ation is effe)tive and m'st $e in)&'ded in the so&i)itation if 8a9 it is re)eived $0 the )ontra)ting agen)0, or noti)e of the modifi)ation is p'$&ished in the Federal Re!ister, !0 or more )a&endar da0s $efore the date of $id opening or 8$9 it is re)eived $0 the )ontra)ting agen)0 or noti)e of the modifi)ation is p'$&ished in the Federal Re!ister, &ess than !0 da0s $efore $ids are d'e to $e opened 'n&ess the )ontra)ting offi)er finds that there is not reasona$&e time to notif0 $idders of the modifi)ation. 3f t)e modification is received (or notification of t)e modification %u$lis)ed in t)e Federal Re!ister) after $id o%enin!/ it is not effe)tive and sha&& not $e in)&'ded in the so&i)itation.(* 5o' ma0 have a sit'ation /here an >effe)tive modifi)ation> 8i.e., re)eived $0 the )ontra)ting agen)0 or p'$&ished in the Federal Re!ister !0 da0s prior to the $id opening date9 is re)eived $0 the )ontra)ting offi)er at some time &ater than it /as re)eived $0 the )ontra)ting agen)0. ?n this )ase, if the >effe)tive modifi)ation> is re)eived $0 the )ontra)ting offi)er prior to $id opening, the $id opening date sha&& $e postponed to a&&o/ a reasona$&e time to amend the so&i)itation to in)orporate the modifi)ation and permit $idders to )onsider the impa)t of the modifi)ation on their $ids. ?f the modifi)ation is re)eived after $id opening, $'t prior to a/ard, the same pro)ed'res app&0 as in o'r ear&ier dis)'ssion a$o't ne/ /age determinations re)eived after $id opening, $'t prior to a/ard. ?f the effe)tive modifi)ation is not re)eived $0 the )ontra)ting offi)er 'nti& after a/ard, the )ontra)ting offi)er m'st modif0 the )ontra)t to in)orporate the /age modifi)ation retroa)tive&0 to the date of )ontra)t a/ard and e<'ita$&0 ad@'st the )ontra)t for an0 in)reased or de)reased )ost of performan)e res'&ting from an0 )hanged /age modifi)ations.(B/at if t/e Ba"e Determination is modified after a1ardS ?t is re)ommended that grantees in)orporate &ang'age s')h that )ontra)tors are o$&igated to pa0 prevai&ing /ages thro'gho't the &ife of the pro@e)t and are not entit&ed to )hange orders for in)reased )osts asso)iated /ith an0 )hange in the prevai&ing /age made after a/ard.
((
I'&es re&ating to e;piration of /age determinations are dis)'ssed in detai& at *AI T 22.404 5.
(*
?f a/ard of the )ontra)t is not made /ithin 90 da0s after $id opening, the modifi)ation $e)omes effe)tive 'n&ess the Wage and Bo'r Division Administrator e;tends the 90 da0 period. ?f an e;tension is not granted, the modifi)ation is treated the same as a ne/ /age determination and the same pro)ed'res as dis)'ssed a$ove app&0.
(-
I'&es re&ating to a)tions to $e ta2en $0 the )ontra)ting offi)er in the event /age determinations are modified ma0 $e fo'nd in *AI T 22.404 %.
-age H
As 0o' )an see from this dis)'ssion, 0o' sho'&d not /ait 'nti& 0o' are read0 to iss'e the so&i)itation to start )he)2ing on the Davis ,a)on /age rates for 0o'r area and it sho'&d $e e<'a&&0 o$vio's that a good /or2ing re&ationship /ith 0o'r &o)a& Department of 7a$or offi)ia&s is ver0 important. The0 genera&&0 are ver0 )ooperative and he&pf'& in ans/ering an0 <'estions 0o' ma0 have and notif0ing 0o' of impending )hanges or revisions to e;isting /age determinations that /o'&d impa)t 0o'r )ontra)t $e)a'se it is in their $est interests that 0o'r pro@e)t r'n smooth&0 from a minim'm /age standpoint. Contra)t Administration and the Davis ,a)on A)t On)e the )ontra)t is a/arded, it is initia&&0 the responsi$i&it0 of the )ontra)ting offi)er to ens're that the )ontra)tor )omp&0 /ith the provisions of the )ontra)t )&a'se. This means ens'ring that the appropriate signs are avai&a$&e and posted, as /e&& as ens'ring that the appropriate pa0ro&&s and )ertifi)ates are s'$mitted not &ess fre<'ent&0 than /ee2&0. ?f 0o' have a )onstr')tion management )ontra)tor, 0o' ma0 /ant to assign that firm the tas2 of )he)2ing pa0ro&&s on a reg'&ar $asis and spot )he)2 the pa0 of individ'a&s against the a)t'a& /or2 that the0 are performing. The fai&'re of the )ontra)ting offi)er to proper&0 monitor the )ontra)tors )omp&ian)e /ith Davis ,a)on ma0 res'&t in a determination $0 DO7 that 0o'r agen)0 is responsi$&e for pa0ment of the $a)2 /ages. ?f 0o' do not have s')h a )ontra)t'a& re&ationship and 0o'r )onstr')tion management is done >in ho'se,> the )ontra)ting offi)er /i&& have responsi$i&it0 for )omp&ian)e )he)2s. On)e 0o' have revie/ed the pa0ro&&s, the0 sho'&d $e retained 'n&ess re<'ested $0 an appropriate *TA offi)ia&. ?n 0o'r initia& meeting /ith the *TA regiona& offi)ia&s for 0o'r pro@e)t 8or this parti)'&ar )ontra)t9 ma2e s're it is )&ear to /hom the pa0ro&&s sho'&d $e transmitted. *TA ma0 re<'est that 0o' ho&d them on site or at the agen)0 for them to revie/ and not a)t'a&&0 transmit them. *TA ma0 a&so de&egate the revie/ f'n)tion to its -ro@e)t .anagement Oversight )ontra)tor. Comp&aint -ro)ess ?f DO7 )omes to the site to investigate a )omp&aint 8often the /a0 minim'm /age dis)repan)ies are 'n)overed9, 0o' 8and the )ontra)tor9 /i&& /ant to )ooperate in that investigation. ?f a determination is made that the )ontra)tor is not in )omp&ian)e /ith the Davis ,a)on A)t )ontra)t'a& provisions, it is the )ontra)ting offi)erKs responsi$i&it0 to ens're that DO7 and the *TA are informed of the dis)repan)0. ?f it is determined that $a)2 /ages are o/ed, 0o' /i&& re)eive /ritten )omm'ni)ation to that effe)t from the DO7 and the *TA and 0o' sho'&d )omp&0 ver0 stri)t&0 /ith that dire)tion at this point in time, it is an iss'e $et/een the )ontra)tor and the DO7, and the DO7 reg'&ations govern the revie/s and appea&s from determinations of that t0pe. 5$($- Car"o Preference RE@UIREMENT T !4.$ of the .aster Agreement sets forth the =ranteeKs o$&igations to )omp&0 /ith the re<'irements of the United States .aritime Administration reg'&ations entit&ed >Cargo -referen)e U.S. *&ag Oesse&,> fo'nd at 4% C*I -art "H!. Spe)ifi)a&&0, the grantee is o$&igated to in)orporate the )&a'se fo'nd at 4% C*I Se)tion "H!.18$9 into )ontra)ts in /hi)h e<'ipment, materia&s, or )ommodities ma0 $e transported $0 an o)ean vesse&.
-age 9
Best Practices The fo'rth mode& )&a'se in Appendi; A.! to this .an'a& )ontains a s'ggested )&a'se that )omp&ies /ith the re<'irements of the United States .aritime Administration at 4% C*I Se)tion "H!.18$9, /hi)h provides a s'ggested )&a'se for 'se as /e&&. ?f 0o'r )ontra)t )ontemp&ates the shipment of an0 e<'ipment, materia&s, or )ommodities $0 o)ean vesse&, a )&a'se that meets the re<'irements of 4% C*I -art "H! m'st $e in)&'ded in the )ontra)t. Additiona&&0, if a s'$)ontra)tor at an0 tier /o'&d $e responsi$&e for the o)ean vesse& shipment, the )&a'se /o'&d f&o/ do/n to that s'$)ontra)tor. The )&a'se in Appendi; A.! or as fo'nd at Se)tion "H!.18$9 meets that re<'irement and it is re)ommended that either of these )&a'ses $e 'ti&iGed. ?f it appears 0o' have a )ontra)t in /hi)h o)ean vesse& transport /o'&d $e re<'ired, it is re)ommended 0o' )he)2 /ith 0o'r &ega& )o'nse& and as)ertain if there are an0 )hanges to the &a/ or the )&a'se. N'estions a$o't this )&a'se fre<'ent&0 )ome 'p in the )onte;t of rai& )ar pro)'rements /hi)h, 'nti& re)ent&0, invaria$&0 re<'ired the shipment of rai& )ars from overseas &o)ations. ?t is re)ommended that 0o' either $e prepared to address this re<'irement, or $e prepared to respond to an0 <'estions offerors ma0 have at an0 pre $id or pre proposa& )onferen)es he&d in )on@'n)tion /ith those pro)'rements. 5$($. Bu# America RE@UIREMENT T !4.a of the .aster Agreement re<'ires )omp&ian)e /ith 49 U.S.C. T 5"2"8@9 and *TAKs ,'0 Ameri)a reg'&ations fo'nd at 49 C*I -art %%!, as /e&& as imp&ementing g'idan)e iss'ed $0 the *TA. DISCUSSION Please see! Section .$-$-$*$* of t/is Manual for a t/orou"/ discussion of t/e Bu# America reAuirements$ Please see t/e A endi; for t/e reAuired clauses$ 5$($0 Fl# America RE@UIREMENT T !4.) of the .aster Agreement states that if the )ontra)t or s'$)ontra)ts ma0 invo&ve the internationa& transportation of goods, e<'ipment, or personne& $0 air, the )ontra)t m'st re<'ire )ontra)tors and s'$)ontra)tors at ever0 tier to 'se U.S. f&ag air )arriers, to the e;tent servi)e $0 these )arriers is avai&a$&e. 49 U.S.C. 40!!H and 4 C*I -art 52.
-age !0
DISCUSSION A contract for "oods or eAui ment must contain a Fl# America ro%ision as discussed in A endi; A$(! 'ust as it contains a Car"o Preference ro%ision! if t/ere is reason to e; ect t/at international air tra%el 1ould &e in%ol%ed$ Alt/ou"/ t/ere is no Federall# rescri&ed lan"ua"e for t/is ro%ision! model lan"ua"e is contained in A endi; A$($ If t/ere is no ossi&ilit# of international s/i ments or tra%el under t/e contract! t/ese ro%isions are not reAuired$ 5$* SURETD BONDS Cistor# The idea $ehind s'ret0 $onding is straightfor/ard. One person g'arantees to another that a third person /i&& perform. The first )orporate s'ret0 $onding )ompan0 in the United States, the *ide&it0 ?ns'ran)e Compan0, /as formed in !H%5. ?n !H94, Congress passed the Beard A)t, /hi)h re<'ired s'ret0 $onds on a&& federa&&0 f'nded pro@e)ts as a res'&t of the &arge n'm$er of )ontra)tors /or2ing on p'$&i) pro@e)ts /ho had defa'&ted and in response to )omp&ains from 'npaid s'pp&iers and s'$)ontra)tors. The .i&&er A)t 840 U.S.C. T210a et se<.9 /as passed in !9"5 to rep&a)e the Beard A)t. The .i&&er A)t re<'ires performan)e and pa0ment $onds for a&& p'$&i) /or2 )ontra)ts in e;)ess of S!00,000 and pa0ment prote)tion, /ith pa0ment $onds the preferred method for )ontra)ts in e;)ess of S25,000. !4 A&most a&& states and most &o)a& @'risdi)tions have ena)ted simi&ar &egis&ation re<'iring s'ret0 $onds on p'$&i) /or2s. These genera&&0 are referred to as 37itt&e .i&&er A)ts. Toda0, s'ret0 $onds prote)t virt'a&&0 ever0 p'$&i) )onstr')tion pro@e)t in the U.S. ?n !911, near&0 S!%0 $i&&ion in p'$&i) /or2s pro@e)ts /ere so prote)ted /ith s'ret0 $onds. *rom !990 !991, more than H0,000 )ontra)tors fai&ed, /ith &osses of S2!.H $i&&ion, a))ording to D'n and ,radstreet+s ?usiness Failure Record. *rom 200! 200", s'ret0 )ompanies in)'rred more than S!.H $i&&ion in &osses from s'ret0 $onds, a))ording to The S'ret0 Asso)iation of Ameri)a. T0pes of S'ret0 ,onds S'ret0 ,ond A /ritten agreement /here$0 one part0, )a&&ed the surety, o$&igates itse&f to a se)ond part0, )a&&ed the o$li!ee 8the o/ner, grantee9, to ans/er for the defa'&t of a third part0, )a&&ed the %rinci%al or o$li!or. S'ret0 $onds 'sed in )onstr')tion are )a&&ed contract surety $onds. There are three primar0 t0pes of )ontra)t s'ret0 $onds( $id $onds, %erformance $onds/ and %ayment $onds.
(.
The .i&&er A)t does not app&0 to grantees. ,onding re<'irements for grantees are pres)ri$ed in the )ommon grant r'&e, 49 C*I T!H."%8h9.
-age !!
,id ,ond 8or ,id ='arantee9 > A promise from a s'ret0 8or a )ertified or )ashier+s )he)2 given $0 a $idder9 for a s'pp&0 or )onstr')tion )ontra)t to g'arantee that the $idder, if a/arded the )ontra)t /ithin the time stip'&ated, /i&& enter into the )ontra)t at the pri)e $id and f'rnish the pres)ri$ed performan)e andAor pa0ment $ond. Defa'&t ordinari&0 /i&& res'&t in &ia$i&it0 to the o$&igee for the differen)e $et/een the amo'nt of the prin)ipa&+s $id and the $id of the ne;t &o/ $idder /ho )an <'a&if0 for the )ontra)t. The &ia$i&it0 of the s'ret0 is &imited to the $id $ond pena&t0. Contra)tors that have a re&ationship /ith a s'ret0 )an norma&&0 o$tain $id $onds at no )ost. ,id $onds are not 's'a&&0 appropriate for negotiated pro)'rements d'e to the nat're of the pro)ess. -erforman)e ,ond A promise from a $onding )ompan0 8>the s'ret0>9 to perform 8or )a'se to $e performed9 those o$&igations of the )ontra)tor 8>the prin)ipa&>9, /hen the )ontra)tor fai&s to perform its o$&igations, in an amo'nt 'p to $'t not e;)eeding the amo'nt of the $ond 8>pena& s'm>9. -erforman)e $onds )an in)orporate pa0ment $ond 8&a$or and materia&s9 and maintenan)e $ond &ia$i&it0 8see $e&o/9. A performan)e $ond prote)ts the o/ner 8grantee9 from finan)ia& &oss sho'&d the )ontra)tor fai& to perform the )ontra)t in a))ordan)e /ith its terms and )onditions. On)e a s'ret0 $ond is iss'ed, it )annot $e /ithdra/n or )an)e&&ed. =enera& )ontra)tors ma0 a&so a)t as the o$&igee /hen $onding s'$)ontra)tors. =enera& )ontra)tors ma0 re<'ire s'$)ontra)tor $onds if the s'$)ontra)tor is a signifi)ant part of the @o$ or a spe)ia&iGed )ontra)tor that is diffi)'&t to rep&a)e. -a0ment ,ond A promise from a s'ret0 that g'arantees pa0ment to )ertain s'$)ontra)tors, &a$orers and s'pp&iers for the &a$or and materia&s 'sed in the /or2 performed 'nder the )ontra)t. -a0ment $onds are a&so )a&&ed la$or and material $onds. These $onds prote)t &a$orers and s'pp&iers in the event the )ontra)tor fai&s to pa0 them. The s'ret0+s o$&igation is &imited $0 the amo'nt of the $ond. .aintenan)e ,ond A maintenan)e $ond norma&&0 g'arantees against defe)tive /or2manship or materia&s. Bo/ever, maintenan)e $onds o))asiona&&0 ma0 in)orporate an o$&igation g'aranteeing 3effi)ient or s'))essf'& operation4 or other o$&igations of &i2e intent and p'rpose. ?t is important to note that s'ret0 $onds are not intended to prote)t the )ontra)tors that post them. These $onds are for the prote)tion of the o/ner of the )onstr')tion pro@e)t and for the prote)tion of &a$orers, materia& s'pp&iers and s'$)ontra)tors. Sin)e me)hani)+s &iens )annot $e p&a)ed against p'$&i) propert0, the pa0ment $ond ma0 $e the on&0 prote)tion these )&aimants have if the0 are not paid for the goods and servi)es the0 provide to the pro@e)t. Under norma& )ir)'mstan)es, s'reties do not )harge a separate premi'm for -a0ment ,onds. <eneral Indemnit# A"reement When a s'ret0 g'arantees the performan)e of a firm 8the prin)ipa&9, the prin)ipa& remains &ia$&e for this o$&igation to the s'ret0 in the event of a )ontra)t defa'&t $0 the prin)ipa&. The prin)ipa& is o$&igated to reim$'rse the s'ret0 for /hatever s'ms the s'ret0 is re<'ired to pa0 o't to
-age !2
)omp&ete the prin)ipa&+s )ontra)t. .an0 )ontra)ting firms do not have the )apita& to ass're this repa0ment, and so most s'ret0 )ompanies re<'ire a genera& agreement of indemnit0 8=A?9 to $e signed not on&0 $0 the firm, $'t $0 individ'a&s /i&&ing to s'pport the firm. This might $e the o/ner of the firm, the spo'se of the o/ner, a parent )orporation or other individ'a&s /i&&ing to ris2 their assets for the firm. Pu&lic %s$ Pri%ate Sectors -erforman)e $onding is not t0pi)a& in &arge private se)tor )ontra)ts $'t is re<'ired in the p'$&i) se)tor. -'$&i) )onstr')tion )ontra)t performan)e $onding is more )ommon $e)a'se( The p'$&i) interest is served $0 the s'ret0 ind'str0+s prote)tion of ta;pa0er do&&ars e;pended for p'$&i) se)tor pro@e)tsQ the p'$&i) se)tor 'nderta2es &arge, fi;ed pri)e p'$&i) /or2s pro@e)tsQ 'nforeseen )osts )o'&d easi&0 $an2r'pt a )onstr')tion )ontra)tor that is a p're servi)e organiGation /ith fe/ assetsQ p'$&i) agen)ies a))ept the &o/est responsive $id from a responsi$&e $idder /itho't an opport'nit0 to f'&&0 )onsider and ad@'st the )ontra)ting strateg0 and terms to the apparent &o/ $idderQ and if a )ontra)tor is 'na$&e to perform, 8e.g. $e)a'se it is having diffi)'&t0 o$taining f'nds to pa0 s'pp&iers and emp&o0ees9 and if the /or2 is s&o/ed do/n and '&timate&0 t'rned over to other for)es to )omp&ete, the )ost to the p'$&i) agen)0 of mo$i&iGing the s'$stit'te for)es and pi)2ing 'p ea)h of the /or2 tas2s /here the fai&ed )ontra)tor &eft them is higher than in a t0pi)a& s'pp&0 )ontra)t /here there are 's'a&&0 a n'm$er of s'pp&iers offering the prod')t at )ompetitive&0 esta$&ished mar2et pri)es.
-a0ment ,onds have a re&ated $'t se)ondar0 p'rpose. Us'a&&0 in the p'$&i) se)tor, a )ontra)torKs s'pp&iers )annot p&a)e &iens on the materia& and /or2 s'pp&ied /hen pa0ment to the s'$)ontra)tor is overd'e. States often prote)t p'$&i) propert0 and servi)es $0 e;empting p'$&i) /or2s from materia&menKs &iens. Therefore, a&tho'gh performan)e $onds a&one /o'&d often g'arantee pa0ment to s'$)ontra)tors, additiona& pa0ment $onds are often re<'ired in )onstr')tion )ontra)ts to ass're there are no disp'tes over potentia& performan)e $ond &ia$i&it0 to satisf0 se)ond and third tier s'$)ontra)tor )&aims. -re<'a&ifi)ation of Contra)tors .ost s'ret0 )ompanies are s'$sidiaries or divisions of ins'ran)e )ompanies, and $oth s'ret0 $onds and traditiona& ins'ran)e po&i)ies are ris2 transfer me)hanisms reg'&ated $0 state ins'ran)e departments. Bo/ever, traditiona& ins'ran)e is designed to )ompensate the ins'red against 'nforeseen adverse events. The po&i)0 premi'm is a)t'aria&&0 determined $ased on aggregate premi'ms earned vers's e;pe)ted &osses. S'ret0 )ompanies operate on a different $'siness
-age !"
mode&. T)e surety %requalifies t)e contractor $ased on financial stren!t) and construction e7%ertise. Sin)e the $ond is 'nder/ritten /ith &itt&e e;pe)tation of &oss, the premi'm is primari&0 a fee for pre<'a&ifi)ation servi)es and the a&&o)ation of the s'ret0+s )apita& to prote)t the o$&igee against the possi$i&it0 of &oss. A&tho'gh the $onding )ompanies perform this pre<'a&ifi)ation for their o/n p'rposes and their interests are simi&ar to those of the transit agen)0, the transit agen)0 is sti&& re<'ired to revie/ potentia& )ontra)tors+ responsi$i&it0 $efore a/ard. Whi&e s'ret0 $onds are a ne)essar0 )ondition in the determination of responsi$i&it0, the0 a&one are not s'ffi)ient. -re<'a&ifi)ation of )ontra)tors is the primar0 fo)'s of s'ret0 'nder/riters. S'ret0 $ond 'nder/riters m'st ana&0Ge app&i)ants )&ose&0 sin)e the0 are )ommitting the assets of their )ompanies to g'arantee the )ontra)tor+s performan)e and pa0ment of its s'pp&iers. Under/riters m'st $e )ertain that on&0 those )ontra)tors /ho )an )omp&ete a pro@e)t re)eive a $ond, and the0 m'st $e f'&&0 satisfied that the )ontra)tor+s $'siness is /e&& managed and profita$&e. -re<'a&ifi)ation is one of the most va&'a$&e servi)es of the s'ret0 $ond pro)ess. The pro)ess invo&ves 'nder/riters satisf0ing themse&ves that the )ontra)tor has( =ood referen)es and rep'tationQ A tra)2 re)ord of s'))essf'& operations in the past and the a$i&it0 to meet )'rrent and f't're o$&igationsQ :;perien)e mat)hing the )ontra)t re<'irementsQ The ne)essar0 e<'ipment to do the /or2 or the a$i&it0 to o$tain itQ The finan)ia& strength to s'pport the desired /or2 programQ An e;)e&&ent )redit histor0, and an esta$&ished $an2 re&ationship and &ine of )redit.
S'ret0 $onds are o$tained thro'gh ins'ran)e agents and $ro2ers, )a&&ed %roducers. These prod')ers he&p their )ontra)tor )&ients d'ring the pre<'a&ifi)ation pro)ess and assist them in deve&oping a $'siness re&ationship /ith the s'ret0 $ond )ompan0. ! S'ret0 ,onds vs. ,an2 7etters of Credit ,an2 &etters of )redit are dis)'ssed $e&o/ for )onsideration 'nder 3,est -ra)ti)es4 in the )onte;t of non )onstr')tion )ontra)ts. At first g&an)e it ma0 appear that &etters of )redit and s'ret0 $onds offer the same degree of finan)ia& prote)tion. Bo/ever, a more thoro'gh revie/ revea&s that s'ret0 $onds provide greater $enefits to $oth the grantee 8o$&igee9 and the )ontra)tor 8prin)ipa&9.!
The #ationa& Asso)iation of S'ret0 ,ond -rod')ers 8#AS,-9 /e$ site address is( ///.nas$p.org.
An 'nforeseen $an2r'pt)0 $0 the )ontra)tor is espe)ia&&0 tro'$&esome, in that the $an2r'pt)0 )o'rt )o'&d freeGe the f'nds )ommitted $0 the 7OC, rendering the 7OC of no va&'e to the grantee. T)e !rantee must $e dili!ent to monitor t)e contractorPs condition/ and call t)e funds under t)e #,C if financial trou$le is e7%ected. T)ere is no suc) dan!er wit) surety $onds.
-age !4
BanE Letters of Credit &requalification Services=
A Com arison Suret# Bonds The essen)e of s'ret0 'nder/riting is pre<'a&ifi)ation. The s'ret0 e;amines the )ontra)tor+s entire $'siness operation, )he)2ing for ade<'ate finan)es, ne)essar0 e;perien)e, organiGation, e;isting /or2 &oad and its profita$i&it0, and management s2i&&s to s'))essf'&&0 )omp&ete the pro@e)t for /hi)h the $ond is re<'ired. ?n most )ases, a $ond )overs &ia$i&ities that /ere in)'rred d'ring the $ond term. A )&aim ma0 $e made on the $ond after the termination of the $ond for &ia$i&ities in)'rred prior to )an)e&&ation or nonrene/a&. The s'ret0 has o$&igations to $oth the o/ner and the )ontra)tor. ?f the )ontra)tor and o/ner disagree on )ontra)t performan)e iss'es and the o/ner de)&ares the )ontra)tor in defa'&t, the s'ret0 m'st investigate the )&aim. The s'ret0 has severa& a&ternatives if the Contra)tor defa'&ts( !. *inan)e the origina& )ontra)tor or provide s'pport ne)essar0 to a&&o/ the )ontra)tor to finish the pro@e)tQ 2. Arrange for a ne/ )ontra)tor to )omp&ete the )ontra)tQ ". Ass'me the ro&e of the )ontra)tor an s'$)ontra)t the remaining /or2Q 4. -a0 the pena& s'm of the $ond. With pa0ment $onds, the s'ret0 pa0s the rightf'& )&aims of )ertain s'$)ontra)tors, &a$orers and s'pp&iers.
The 'nder/riting $an2 fo)'ses primari&0 on the <'a&it0 and &i<'idit0 of the 'nder&0ing )o&&atera&Q i.e., on the a$i&it0 of the )ontra)tor to repa0 an0 dra/s on the 7OC.
Claims 1 Access to Funds= The $enefi)iar0 m'st ma2e a demand prior to e;piration date. #o f'nds are avai&a$&e after e;piration date, even for &ia$i&ities in)'rred prior to e;piration. The $an2 has no o$&igation to )omp&ete the pro@e)t. There is no )omp&etion )&a'se in a 7OC. The tas2 of administering )omp&etion of the )ontra)t is &eft to the o/ner. The o/ner m'st eva&'ate /or2 done, deve&op detai&ed spe)ifi)ations for )omp&etion of the /or2 and so&i)it $ids or negotiate 8depending on state &a/9 for a ne/ )ontra)tor to )omp&ete the /or2. Under a performan)e $ond, these tas2s are the responsi$i&it0 of the s'ret0. The o/ner m'st determine the va&idit0 of )&aims $0 s'$)ontra)tors, &a$orers, and materia& s'pp&iers. ?f there is not eno'gh mone0 from the &etter of )redit to pa0 a&& of the )&aims, then the o/ner has to de)ide /hi)h )&aims /i&& $e paid and /hi)h /i&& $e re@e)ted.
-age !5
?orrowin! Ca%acity= Spe)ifi) assets are p&edged to se)'re $an2 &etters of )redit. 7OCs diminish an e;isting &ine of )redit, and are ref&e)ted on the )ontra)tor+s finan)ia& statement as a )ontingent &ia$i&it0. The t0ing 'p of assets, or the red')tion of an avai&a$&e &ine of )redit, is )o'nter prod')tive to $oth the o/ner and the )ontra)tor. This )an adverse&0 affe)t the )ontra)tor+s )ash f&o/ d'ring )ontra)t performan)e. S'$)ontra)tors and materia& s'pp&iers ma0 $e re&')tant to provide &a$or and s'pp&ies to the )ontra)tor sin)e the0 have no a))ess or rights to f'nds avai&a$&e from the 7OC. Cost= Cost is genera&&0 !P of the )ontra)t amo'nt )overed $0 the 7OC e.g., if the 7OC )overs !0P of )ontra)t, Cost [ !P ; 8!0P ; Contra)t Amo'nt9. Cost of Bonds The pri)e or premi'm for a $ond /i&& var0 depending on the t0pe of )onstr')tion, the )ontra)t amo'nt, the d'ration of the pro@e)t, the s'ret0 )ompan0, and the e;perien)e and finan)ia& strength of the )ontra)tor. -remi'ms range, on average, from d P to 2 P 8or perhaps higher, and not ne)essari&0 tied to $'siness strength9 of the )ontra)t pri)e for )ontra)tors /ith esta$&ished $onding )redit. ?f the )ontra)t amo'nt )hanges, the $ond premi'm /i&& $e ad@'sted for the )hange in )ontra)t pri)e. There is 's'a&&0 no additiona& )ost for $id $onds or pa0ment $onds /hen p'r)hased /ith a performan)e $ond. ,ond premi'ms )annot $e red')ed $0 &o/ering the per)entage of the $ond from, sa0, !00P to 50P. Th's, it 's'a&&0 ma2es sense to re<'ire !00 per)ent performan)e and pa0ment $onds so the o/ner re)eives ma;im'm prote)tion. ! T)e advanta!e/ )owever/ in considerin! a lower With fe/ e;)eptions, performan)e and pa0ment $onds are iss'ed on an 'nse)'red $asis. The0 are 's'a&&0 provided on the strength of the )orporate and persona& signat'res of the )ompan0 o/ners. The iss'an)e of $onds has no effe)t on the )ontra)tor+s $an2 &ine of )redit. S'$)ontra)tors and materia& s'pp&iers ma0 $e more /i&&ing to provide &a$or and materia&s to the )ontra)tor /hen the0 are prote)ted $0 a pa0ment $ond.
=enera&&0 d 2P of )ontra)t pri)e. The premi'm in)&'des !00P performan)e $ond, a !00P pa0ment $ond, and norma&&0 a one 0ear maintenan)e period.
?t is not 'nti& one goes to the 20P &eve& that premi'm rates ma0 )hange.
-age !%
%ercenta!e is t)at more contractors may $e allowed to com%ete $ecause some may not )ave t)e $ondin! ca%acity to !et a 1DDT $ond/ $ut may qualify for a lesser amount. 2 S'ret0 $onds iss'ed thro'gh the S,A Surety ?ond .uarantee &ro!ram 8see $e&o/9 )arr0 an additiona& 0.% per)ent fee. <o%ernment O%ersi"/t S'ret0 $ond )ompanies are reg'&ated $0 state ins'ran)e departments. S'ret0 $onds on state p'$&i) /or2s m'st $e iss'ed $0 a s'ret0 $ond )ompan0 &i)ensed $0 the ins'ran)e department in that state. ! On the federa& &eve&, the U.S. Treas'r0 Department maintains a &ist of s'ret0 $ond )ompanies that it has <'a&ified to /rite s'ret0 $onds re<'ired for federa& )onstr')tion pro@e)ts. To $e on this &ist, a s'ret0 $ond )ompan0 m'st fi&e finan)ia& and other information /ith the Treas'r0 Department and 'ndergo the Department+s finan)ia& ana&0sis. 2 Bondin" Assistance Pro"rams Sin)e the ear&0 !910s, the Sma&& ,'siness Administration 8S,A9 has operated its Surety ?ond .uarantee &ro!ram, /hi)h provides some repa0ment of &osses to s'ret0 $ond )ompanies from $onds the0 /o'&d other/ise not provide. Sma&& )ontra)tors have performed more than S! $i&&ion of )ontra)ts per 0ear /ith the he&p of this S,A program. The U.S. Department of Transportation 8DOT9 has esta$&ished a ?ondin! Assistance &ro!ram that is administered $0 the Offi)e of Sma&& and Disadvantaged ,'siness Uti&iGation 8OSD,U9 /ithin the Offi)e of the Se)retar0. The ,onding Assistan)e -rogram offers )ertified minorit0, /omen o/ned and disadvantaged $'siness enterprises 8D,:s9 an opport'nit0 to o$tain $id, pa0ment and performan)e $onds for transportation re&ated pro@e)ts. The -rogram provides s'ret0 )ompanies an H0P g'arantee against &osses on )ontra)ts 'p to S!,000,000. ,ond approva& and iss'an)e are performed $0 the DOT approved s'ret0 )ompanies. A n'm$er of states have a&so esta$&ished $ond g'arantee programs for )ontra)tors, as /e&& as other spe)ia& $onding assistan)e programs.
This appears to $e tr'e for $'s man'fa)t'rers in the )'rrent $'siness environment.
To &o)ate a state ins'ran)e department )onta)t the #ationa& Asso)iation of ?ns'ran)e Commissioners at ///.nai).org. See a&so the U.S. Treas'r0 7ist at ///.fms.treas.govA)510Ainde;.htm&
*
The Treas'r0 7ist ma0 $e do/n&oaded on the ?nternet at ///.fms.treas.govA)510Ainde;.htm&. The Treas'r0 7ist identifies the vario's states /here the &isted $onding )ompanies are &i)ensed and the state ins'ran)e departments /ith their phone n'm$ers.
-age !1
The S'ret0 Asso)iation of Ameri)a 8SAA9 is a nonprofit trade asso)iation that represents more than %50 U.S. and eight foreign s'ret0 $ond )ompanies. SAA has deve&oped a odel Contractor "evelo%ment &ro!ram 8.CD-9 to in)rease and promote the avai&a$i&it0 of s'ret0 $onds to sma&&, minorit0 and /omen )ontra)tors. The o$@e)tives of this program in)&'de( :d')ating emerging )ontra)tors a$o't s'ret0 $onds and he&ping them $e)ome $onda$&e, ?dentif0ing reso'r)es avai&a$&e to emerging )ontra)tors in o$taining their first $ond, s')h as the S,A S'ret0 ,ond ='arantee -rogram and simi&ar state and &o)a& programs, -roviding assistan)e and referra&s to emerging )ontra)tors in o$taining appropriate a))o'nting, pro@e)t management and finan)ing e;pertise, Assisting these )ontra)tors /ith in)reasing their $onding )apa)it0. !
SAA a&so offers an ed')ationa& too& for )ontra)tors and s'$)ontra)tors, Oour First ?ond, a videotape and $ro)h're of /hat )ontra)tors need to do to app&0 for $onds, and other ed')ationa& materia&s. 2 Ratin"s Or"ani,ations A... ,est Compan0 8,est+s9 is a private )ompan0 that ana&0Ges and rates ins'ran)e )ompanies. :a)h 0ear it p'$&ishes ?estPs 3nsurance Re%orts/ &ro%erty1Casualty/ /hi)h in)&'des detai&ed profi&es and finan)ia& information on a&most ever0 ins'ran)e )ompan0 operating in the United States. ,est+s gives ea)h )ompan0 a rating 8designated $0 an a&pha$eti) )hara)ter9 and a finan)ia& siGe )ategor0 8designated $0 a Ioman n'mera& s)a&e9. ,est a&so p'$&ishes an a$$reviated version of its ?estPs Mey Ratin! .uide/ &ro%erty1Casualty, /hi)h )ontains on&0 the a&pha$eti) ratings and finan)ia& siGe )ategories of ea)h ins'ran)e )ompan0. These $oo2s are avai&a$&e in man0 p'$&i) and finan)ia& &i$raries or ma0 $e p'r)hased from A... ,est. "
*or more information a$o't the SAA+s .ode& Contra)tor Deve&opment -rogram, )onta)t the S'ret0 Asso)iation of Ameri)a at 202 4%" 0%00 or their We$ site( ///.s'ret0.org.
*
*or this and other materia&s, )onta)t the S'ret0 ?nformation Offi)e at 202 %H% 14%" or their We$ site( ///.sio.org.
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?nformation and pri)es are avai&a$&e at ///.am$est.)om.
-age !H
Other ratings organiGations in)&'de D'n C ,radstreet, 4 *it)h Iatings, 5 .ood0+s ?nvestors Servi)e, % Standard C -oor+s 1 and Weiss Iatings ?n). H *TA does not endorse an0 parti)'&ar )ompan0 or program. 5$*$( Performance Bonds RE@UIREMENT FOR CONSTRUCTION ACTIPITIES3 T !5.m. 8!9 of the .aster Agreement states that( Constr')tion A)tivities. The Ie)ipient agrees to provide $id g'arantee, )ontra)t performan)e, and pa0ment $onding to the e;tent deemed ade<'ate $0 *TA and app&i)a$&e *edera& reg'&ations, and )omp&0 /ith an0 other $onding re<'irements *TA ma0 iss'e. *TA Cir)'&ar 4220.!: states the spe)ifi) minim'm $onding re<'irements for )onstr')tion or fa)i&it0 improvement )ontra)ts /ith a va&'e e;)eeding S!00,000( !!. ,O#D?#= I:NU?I:.:#TS. *or those )onstr')tion or fa)i&it0 improvement )ontra)ts or s'$)ontra)ts e;)eeding S!00,000, *TA ma0 a))ept the $onding po&i)0 and re<'irements of the grantee, provided *TA determined that the po&i)0 and re<'irements ade<'ate&0 prote)t the *edera& interest. *TA has determined that grantee po&i)ies and re<'irements that meet the fo&&o/ing minim'm )riteria ade<'ate&0 prote)t the *edera& interest. 9 a. A $id g'arantee from ea)h $idder e<'iva&ent to five 85P9 per)ent of the $id pri)e. The >$id g'arantee> sha&& )onsist of a firm )ommitment s')h as a $id $ond, )ertified
///.d'nand$radstreet.)omA's. ///.fit)hratings.)om. ///.mood0s.)om. http(AA///2.standardandpoors.)omAserv&etASate&&iteWpagename[spA-ageABome-g. ///./eissratings.)om.
The &ang'age in this se)tion has $een amended from prior versions of the )ir)'&ar to $etter e;p&ain that *TA /i&& a))ept a &o)a& $onding po&i)0 that meets the minim'ms of paragraphs a, $, and ) $'t that a po&i)0 that does not meet these minim'ms sti&& ma0 $e a))epted /here the &o)a& po&i)0 ade<'ate&0 prote)ts the *edera& interest. =rantees /ho /ish to adopt &ess stringent $onding re<'irements genera&&0, for a spe)ifi) )&ass of pro@e)ts, or for a parti)'&ar pro@e)t ma0 s'$mit the po&i)0 and rationa&e to their regiona& offi)e for approva&.
-age !9
)he)2, or other negotia$&e instr'ment a))ompan0ing a $id as ass'ran)e that the $idder /i&&, 'pon a))eptan)e of his $id, e;e)'te s')h )ontra)t'a& do)'ments as ma0 $e re<'ired /ithin the time spe)ifiedQ $. A performan)e $ond on the part of the )ontra)tor for !00 per)ent of the )ontra)t pri)e. A >performan)e $ond> is one e;e)'ted in )onne)tion /ith a )ontra)t to se)'re f'&fi&&ment of a&& the )ontra)torKs o$&igations 'nder s')h a )ontra)tQ and ). A pa0ment $ond on the part of the )ontra)tor. A pa0ment $ond is one e;e)'ted in )onne)tion /ith a )ontra)t to ass're pa0ment, as re<'ired $0 &a/, of a&& persons s'pp&0ing &a$or and materia& in the e;e)'tion of the /or2 provided for in the )ontra)t. -a0ment $ond amo'nts determined to ade<'ate&0 prote)t the federa& interest are as fo&&o/s( 8!9 50P of the )ontra)t pri)e if the )ontra)t pri)e is not more than S! mi&&ionQ 829 40P of the )ontra)t pri)e if the )ontra)t pri)e is more than S! mi&&ion $'t not more than S5 mi&&ionQ or 8"9 S2.5 mi&&ion if the )ontra)t pri)e is more than S5 mi&&ion. d. A grantee ma0 see2 *TA approva& of its $onding po&i)0 and re<'irements if the0 do not )omp&0 /ith these )riteria. State laws are sometimes s%ecific in requirin! or %ro)i$itin! security and !uaranties in %u$lic %rocurements6 %erformance $ond requirements may a%%ly even w)en t)e Federal requirements do not/ and t)e state requirement may also affect $id !uaranties. FOR NON)CONSTRUCTION ACTIPITIES3 FTA does not require $ondin! in any amount for non1construction contracts/ includin! rollin! stoc(. *TA &eaves the de)ision to re<'ire $onds for non )onstr')tion )ontra)ts to the dis)retion of its grantees. !0 DISCUSSION Construction3 For construction contracts 1it/ a %alue e;ceedin" R(::!:::! #our solicitation documents must include t/e erformance &ond! a#ment &ond! and &id securit# reAuirements s ecified a&o%e$ Bids t/at do not include t/e reAuired &id securit# are to &e re'ected$ Dour state la1 ma# reAuire additional &ond rotection 6e$"$! for e%en smaller construction contracts9$
(:
See *TA Dear Co&&eag'e 7etter C 0! 04, dated 6an. 20, 2004 L &erformance and &ayment ?ondin! Requirements.
-age 20
Non)Construction3 Dou ma# decide to include &ond reAuirements in ot/er rocurements 1/ere #our a"enc# /as a material risE of loss &ecause of a failure of t/e ros ecti%e contractor$ T/is is articularl# so if t/e risE arises from t/e otential for contractor &anEru tc# or financial failure at t/e time of artiall# com leted 1orE$ If #ou reAuire a erformance &ond! #ou ma# also reAuire &id securit# t/at assures t/e e;ecution of t/e erformance &ond as descri&ed in Section .$-$-$-$*! FBid <uarantee$F Pa#ment &onds are most t# icall# used in construction contracts or contracts 1/ere t/e risE of failure of t/e rime contractor 1it/ de&ts to su&contractors is material$ Since t/e contract is incor orated into t/e &ond! it is essential t/at t/e "rantee com lies 1it/ t/e terms of t/e contract or t/e &ond ma# not &e enforcea&le$ In recent #ears sureties /a%e &een a#in" muc/ more attention to t/e terms of t/eir customersM contracts$ One area of "reat concern to sureties in t/e current en%ironment is t/e length o* contracts$ Cere t/e issues tend to &e #arts /arranties and o#tion ro%isions$ Sureties are tendin" to limit t/eir e; osure to fi%e #ears! includin" 1arranties$ (( Anot/er ma'or suret# issue affectin" t/e transit industr#! es eciall# &us manufacturers! is t/e #oor *inancial condition o* many su##liers$ T/e financial stren"t/ of t/e contractor affects t/e cost of t/e &ond! as 1ell as t/e a&ilit# of t/e contractor to secure a &ond$ If a "rantee asEs for a (::O erformance &ond on a &us rocurement in t/e current en%ironment! it ma# %er# 1ell reclude otential su liers from &iddin"$ Anot/er ractice causin" suret# ro&lems concerns liAuidated dama"esJ i$e$! some a"encies /a%e contractual ro%isions t/at roduce unlimited liquidated damages! Alternati%e forms of acce ta&le securit# include letters o* credit from financiall# secure institutions! suc/ as &anEs! and cas/ de osits$ Letters of credit are freAuentl# used in a field or for a rinci al 1it/ 1/ic/ &ondin" com anies /a%e little e; erience$ Letter of credit terms differ from &onds in t/at t/e# do not ro%ide for com letion of t/e contract! in t/e e%ent t/e rinci al is una&le to erform$ Procedures s/ould &e esta&lis/ed to maEe certain t/e letter is issued &# a &anE or ot/er financial institution t/at offers financial securit# similar to a &ondin" com an#$ Cas/ de osits are not t# icall# used e;ce t as &id securit#$ T/e FTA reAuirement discoura"es unnecessar# &ondin" &ecause it increases t/e cost of t/e contract and restricts com etition! articularl# &# disad%anta"ed &usiness enter rises$ Bondin" com anies e;ercise t/eir discretion and assure t/eir rofits rimaril# &# declinin" to undertaEe e;cessi%e risEs$ ConseAuentl# man# &idders /a%e limited F&ondin" ca acit#$F Unnecessar# erformance &onds reduce t/eir a&ilit# to &id on &onded 1orE$ Small &usinesses 1it/ s/ort /istories ma# /a%e articular difficult# o&tainin" a &ond$
((
Transit agen)ies pro)'ring ro&&ing sto)2 tend to as2 for ten 0ear /arranties on parts.
-age 2!
Best Practices ,ond A'thenti)it0 ?t is essentia& that $onds $e verified as $eing a'thenti) /hen the0 are presented to o/ners. ?t is a fa)t that 'ns)r'p'&o's )ontra)tors have on o))asion presented fra'd'&ent $onds. ,wners (o$li!ees) s)ould always contact t)e surety com%any to confirm t)e aut)enticity of t)e $ond t)at )as $een %resented. The S'ret0 Asso)iation of Ameri)a 8SAA9 maintains a &ist of s'ret0 )ompanies that /i&& assist in verif0ing the a'thenti)it0 of a s'ret0 $ond. The a'thenti)it0 program is avai&a$&e via the ?nternet. !2 :;)&'de Warranties from ,ond L ?t has $e)ome in)reasing&0 diffi)'&t to o$tain $onds of &onger d'ration than t/o 0ears. Sin)e the /arrant0 periods /i&& great&0 e;tend the d'ration of the $ond, it /o'&d $e $est to remove an0 /arrant0 re<'irement from the performan)e $ond and )over the /arrant0 ris2 thro'gh other te)hni<'es. S'ggestions in)&'de /ithho&ding a reasona$&e portion of the )ontra)t pri)e for /arrant0 repairs and re&easing the /ithho&ding in in)rements as the /arrant0 time period dissipates, or re<'iring a separate .aintenan)e or Warrant0 ,ond in a red')ed amo'nt s'ffi)ient to )over the potentia& o$&igations of the Contra)tor for repairs or maintenan)e. This /i&& remove a $onding o$sta)&e and 2eep the $onding )osts more reasona$&e. The 2e0 message here is to (ee% lon!1term o$li!ations wit) t)e manufacturers and not attem%t to !ive t)em to sureties. Consider 7etters of Credit L On non )onstr')tion )ontra)ts, /here 0o' are not re<'ired $0 *TA to have $onds, $'t /here 0o' ma0 $e re<'ired to prote)t 0o'r progress pa0ments to the )ontra)tor prior to de&iver0 of fina& prod')ts, )onsider the 'se of a $an2 letter of credit 87OC9 from the )ontra)tor instead of a $ond. A $an2 &etter of )redit 87OC9 is a )ash g'arantee to the o/ner. The o/ner )an )a&& on the &etter of )redit on demand /itho't )a'se. !" On)e )a&&ed 'pon, the &etter of )redit )onverts to a pa0ment to the o/ner and an interest $earing &oan for the )ontra)tor. ,onds ma0 $e an e;pense that 0o' don+t need to in)'r, and $onds ma0 not even $e avai&a$&e in the amo'nts 0o' /o'&d need at reasona$&e pri)es. !4 Cap the 7i<'idated Damages L The Contra)tor+s ma;im'm ris2 m'st $e )&ear&0 e;pressed in the )ontra)t so that the s'ret0 /i&& 2no/ ho/ to pri)e the ris2. Damages sho'&d not $e open ended. Additiona&&0, if damages are e;pressed 3per da0,4 ma2e the dai&0 damages a))r'e for $usiness days on&0. Do not in)&'de Sat'rda0s or S'nda0s sin)e 0o' )annot ta2e de&iver0 on those da0s.
(*
At ///.s'ret0.org, )&i)2 on 3A$o't the ?nd'str0,4 then 3,ond A'thenti)it0 -rogram.4
(-
A conditional letter of credit ma0 re<'ire some $'rden of proof $0 the o/ner that the )ontra)tor has fai&ed to perform $efore the $an2 /i&& pa0 on the &etter of )redit. .ost &etters of )redit are irrevoca$le, /hi)h means that $oth parties m'st agree to an0 )hanges to the &etter of )redit. Changes m'st $e do)'mented $0 an amendment signed $0 $oth parties.
(.
See ,--. Se)tions 2.4.4.2 L Advance &ayments and 2.4.4." L &ro!ress &ayments /here ade<'ate se)'rit0 for these pa0ments is dis)'ssed.
-age 22
Design ,'i&d -ro@e)ts L *or design $'i&d pro@e)ts and &arge transit )apita& pro@e)ts 8those over S200.9 it /o'&d $e advisa$&e to tal( to %ros%ective sureties $efore t)e solicitation is issued to see if t)e "esi!n1?uild contractors will )ave %ro$lems securin! $onds $ecause of t)e si@e of t)e %ro5ect. There are t/o pro$&ems to $e a/are of( 8!9 The &a)2 of $onding )apa)it0 in the ind'str0 at the )'rrent time, and 829 The fa)t that s'ret0 pra)ti)e has histori)a&&0 $een $ased on the )onventiona& "esi!n1?id1?uild method, /here design and )onstr')tion are performed $0 separate )ompanies and /here s'reties have detai&ed designs )omp&eted for /hi)h the0 )an assess the performan)e ris2s. On a Design ,'i&d pro@e)t, the &a)2 of detai&ed designs desired $0 s'reties to eva&'ate pro@e)t ris2 ma0 ma2e it diffi)'&t to o$tain performan)e $onds for the f'&& va&'e of the )ontra)t. When this is the )ase, the grantee /i&& /ant to invo&ve their *TA regiona& offi)e and re<'est a /aiver from the standard $onding re<'irements. ?t sho'&d a&so $e noted that )ons'&tation /ith *TA /o'&d $e advisa$&e in an0 design $'i&d pro@e)t to )reate a reasona$&e $onding strateg0. ?n an0 )ase, if a !00P $ond /ere re<'ired $0 0o'r agen)0, it /o'&d app&0 on&0 to the va&'e of the )onstr')tion /or2 /ithin the design $'i&d )ontra)t. Te)hno&og0 S'ret0 )ompanies &i2e 3$ri)2 and mortar4 $'siness $e)a'se the0 'nderstand it. The0 are adverse to tec)nolo!y (e.!./ %ro5ects requirin! software develo%ment), and do not &i2e to $ond the ,%eration and aintenance phase of )ontra)ts /here rai& )ars are $eing $o'ght /ith OC. responsi$i&ities. ?f 0o' are )onsidering a $ond in these sit'ations, 0o' sho'&d )onta)t prospe)tive s'reties to determine if $onds /i&& $e avai&a$&e $efore 0o' iss'e 0o'r so&i)itation. #otif0 S'ret0 of -ro$&ems :ar&0 L ?t is ver0 important to notify t)e surety of %ro$lems as soon as t)ey occur. When the s'ret0 is notified, and $e)omes invo&ved, )ontra)tors are strong&0 motivated to perform $e)a'se the t)reat of losin! t)e a$ility to o$tain $onds is a very serious concern to contractors. ?f the Contra)tor is e;perien)ing finan)ia& diffi)'&ties, the s'ret0 /i&& often provide /or2ing )apita& to 2eep the )ontra)tor going. This financial assistance ma0 o))'r /itho't a forma& de)&aration of defa'&t $0 the o/ner. Another form of finan)ia& assistan)e often provided $0 s'reties is to g'arantee a &ine of $an2 )redit. This /i&& ass're a stead0 f&o/ of materia&s to the @o$ site and pa0ments to s'$)ontra)tors. S'reties fre<'ent&0 /i&& provide tec)nical assistance in order to minimiGe pro$&ems and &osses on a pro@e)t. .an0 s'reties emp&o0 professiona& engineers, a))o'ntants, and other te)hni)a& staff or advisors /ho )an he&p a )ontra)tor /ho is e;perien)ing pro$&ems. S'reties )an provide mediation $etween an owner and Contractor. When pro$&ems o))'r on a )onstr')tion pro@e)t, it+s &i2e&0 that the re&ationship $et/een the o/ner and Contra)tor is strained. The s'ret0, as a third part0 parti)ipant, )an investigate the iss'es that are dividing the parties and offer /or2a$&e so&'tions $efore the o/ner de)&ares a defa'&t. S'$)ontra)tor fai&'re is a fre<'ent )a'se of a prime+s pro$&ems. S'reties )an $e)ome invo&ved in assistin! a su$contractor /ith finan)ing and te)hni)a& he&p, @'st as the0 do /ith the prime
-age 2"
)ontra)tors the0 are $onding. The0 /i&& do this to prote)t their $onded )ontra)tor from defa'&t. On)e again, it is important that the s'ret0 $e informed ear&0 of performan)e pro$&ems on a&& &eve&s of the pro@e)t so the0 )an assist /hen )ir)'mstan)es re<'ire it. S'$)ontra)tor ,onds L =rantees )an he&p their prime )onta)tors manage ris2 $0 requirin! %erformance $onds from ma5or su$contractors. ?f a s'$)ontra)tor is a signifi)ant part of the @o$ or so spe)ia&iGed that it /i&& $e diffi)'&t to find a rep&a)ement, $onding is a )ost effe)tive /a0 to &imit the e;pos're of $oth the grantee and the prime )ontra)tor. Iemem$er the important )ontri$'tion of the s'ret0 in %requalifyin! t)e su$contractor. This is an important step in ens'ring that a responsi$&e s'$)ontra)tor is se&e)ted $0 the prime for a )riti)a& ro&e on the pro@e)t. Whi&e the )ost of the s'$)ontra)tor+s $ond /i&& have to $e paid $0 the prime and /i&& $e passed on to the grantee, it is neverthe&ess an ins'ran)e po&i)0 that )an he&p avoid signifi)ant pro$&ems for the prime and th's for the grantee. ?t is a&so /e&& to 2eep in mind that a s'$)ontra)tor that is e;perien)ing finan)ia& diffi)'&ties is more &i2e&0 to )omp&ete a $onded pro@e)t $e)a'se )orporate assets, and possi$&0 persona& assets, are at ris2. This ma0 $e a sing'&ar&0 important fa)tor in 2eeping the s'$)ontra)tor performing on the @o$. ,e s're to investigate the <'a&it0 of the s'$)ontra)tor+s s'ret0, 'sing one of the ind'str0 rating )ompanies mentioned a$ove, and a&/a0s )onfirm the a'thenti)it0 of an0 $ond presented. S'$)ontra)tor $onding ma0 a&so $e $enefi)ia& /hen the prime )ontra)tor is not finan)ia&&0 strong. *or e;amp&e, #e/ 5or2 Cit0 Transit 8#5CT9 re)ent&0 had a sit'ation /here the )ost of a /arrant0 $ond /as ver0 e;pensive to a vehi)&e man'fa)t'rer $e)a'se of their finan)ia& )ondition. ?n order to over)ome this, the man'fa)t'rer had its ma@or parts s'pp&ier provide the $ond, and as a res'&t the man'fa)t'rer saved S2,000 per vehi)&e. The s'pp&ier+s )ost for the $onding /as signifi)ant&0 &ess sin)e the0 /ere in e;)e&&ent finan)ia& )ondition. Consider .ore Stringent -re<'a&ifi)ationAIesponsi$i&it0 Criteria ?f performan)e $onding is a pro$&em $e)a'se the pro@e)t is so &arge that fe/ $idders )an $e f'&&0 $onded, or $e)a'se of its effe)t on )ompetition, 0o' )an )onsider other /a0s of red')ing 0o'r agen)0Ks ris2. 5o' ma0 8thro'gh pre<'a&if0ing on&0 strong $idders, or re<'iring a high standard of responsi$i&it09 $e a$&e to red')e 0o'r ris2 in a /a0 that a&&o/s more )ompetition than /o'&d res'&t from a f'&& performan)e $ond re<'irement. ,a&an)e the Costs of ,onding against Iis2s -resent in a Iange of Contra)tors ?n addition to )onstr')tion )ontra)ts, spe)ia&t0 s'pp&0 )ontra)ts that invo&ve )'stom man'fa)t'ring, e.g., for rai& )ars or $'ses, invo&ve some ris2 of fai&'re and )onse<'en)es simi&ar to )onstr')tion sit'ations. Bo/ever, performan)e $onds are far &ess )ommon in these sit'ations than in )onstr')tion )ontra)ts. ?nformation te)hno&og0 deve&opment )ontra)ts a&so ho&d the potentia& for &oss in the event of )ontra)tor fai&'re, $'t performan)e $onding is &ess )ommon in deve&opmenta& /or2 $e)a'se the ris2s of fai&ing are too e;pensive to ins're and $e)a'se the s'ret0A)ontra)tor re&ationships have not deve&oped as the0 have in the )onstr')tion ind'str0.
-age 24
?f 0o' are serio's&0 )on)erned a$o't one or more of the fo&&o/ing, )onsidering 0o'r possi$&e s'))essf'& offerors, 0o' )an eva&'ate the need for a performan)e $ond, in &ight of its )ost, its effe)t on )ompetition, and effe)t on D,:s( finan)ia& strength and &i<'idit0 of the offerors, inade<'a)0 of &ega& remedies for )ontra)tor fai&'re and the effe)t that fai&'re of the )ontra)tor )o'&d have on 0o'r agen)0, diffi)'&t0 and high )ost of )omp&eting the )ontra)torKs /or2 if it is interr'pted, e;perien)e of the )ontra)tor on other )ontra)ts L /hether there is a histor0 of )ontra)t fai&'re in a parti)'&ar a)tivit0, degree of te)hni)a& diffi)'&t0Q e.g., /here ne/ /or2ing methods are re<'ired.
Consider Corporate ='arant0 Where 0o'r )on)ern is part&0 that the proposers have &imited finan)ia& reso'r)es, $'t the0 have re&ationships /ith finan)ia&&0 stronger )orporate entities, 0o' )o'&d )onsider re<'iring a )orporate g'arant0 of the )ontra)t rather than a performan)e $ond. ?n this )ase, the parent )orporation of 0o'r )ontra)tor, /hose &i<'idit0 might riva& the $onding )ompan0Ks, /o'&d promise to perform the )ontra)t sho'&d the )ontra)ting )orporation fai& to do so. This arrangement ma0 not on&0 $e &ess e;pensive than a performan)e $ond, $'t ma0 a&so res'&t in more inf&'en)e on the )ontra)tor /here )ontra)t disp'tes are invo&ved. Iet'rn Unne)essar0 ,id ='arant0 ,e)a'se g'arantees have a finan)ia& impa)t on proposers as &ong as the0 are in effe)t, 'n'sed $id g'arantees sho'&d $e ret'rned to proposers as soon as it is determined that the0 have no reasona$&e )han)e of /inning the )ontra)t. This is dis)'ssed in Se)tion 4.".".".2, >,id ='arant0.> S'ret0 ,ond C&aims and Co'nse& L ,efore a s'ret0 /i&& ass'me responsi$i&it0 for a )ontra)tor that 0o' have defa'&ted, t)e surety must $e satisfied t)at its contractor owes a de$t. T)e surety will conduct an investi!ation as a result of receivin! your notice of claim. Yeep in mind that the iss'es of defa'&t and )&aims 'nder the $ond are predi)ated on the &ega& interpretation of a )ontra)t'a& re&ationship, as deve&oped thro'gh stat'tes and &ega& pre)edents. This means it is )riti)a& that 0o' see2 &ega& assistan)e from )o'nse& /ho is fami&iar /ith s'ret0 $onds and )onstr')tion, /hi)h is a spe)ia&iGed fie&d of &a/. #ever re&0 on a &a0person+s interpretation of the )ontra)t. 87%erienced counsel can save time/ money/ and frequently/ unnecessary liti!ation. The Ameri)an ,ar Asso)iation 8A,A9 Tria& Tort and ?ns'ran)e -ra)ti)e Se)tion+s *ide&it0 and S'ret0 7a/ Committee in)&'des &a/0ers /ho spe)ia&iGe in s'ret0 &a/. .an0 state $ar asso)iations a&so have s'ret0 )ommittees or )onstr')tion &a/ )ommittees. *or names of &a/0ers in 0o'r area, )a&& the A,A 8"!29 9HH 5%01 and as2 for the *7SC mem$ership dire)tor0 or the pages for a parti)'&ar state, or )a&& the state $ar asso)iation for a referen)e. ?t is a&so of the 'tmost importan)e that 0o' do)'ment the progress of 0o'r pro@e)t. Iemem$er that the s'ret0 promises to )omp&ete the )ontra)t /hen the 3prin)ipa& is in defa'&t of the )ontra)t
-age 25
and has $een de)&ared to $e in defa'&t $0 the o$&igee.4 We&& do)'mented pro@e)t fi&es /i&& $e a great asset to fa)i&itate the s'ret0+s initia& investigation and espe)ia&&0 if the matter goes to )o'rt. See ,--. Se)tion !!.2 L Claims/ .rievances and ,t)er "is%utes 'it) Contractors/ paragraph tit&ed 3Avoiding Disp'tes Thro'gh -roper Do)'mentation.4 ?ndemnifi)ation C&a'sesL One of s'reties+ )on)erns in an0 )onstr')tion )ontra)t toda0 is the in)reasing&0 $road and 'n&imited indemnit0 that )ontra)tors are )ontra)t'a&&0 re<'ired to provide. ?f this indemnifi)ation is needed to satisf0 po&iti)a& )onstit'en)ies or d'e to other fa)tors, )&ear&0 stating that the &ia$i&it0 is to $e )overed thro'gh ins'ran)e and not the performan)e andAor pa0ment $ond /o'&d e&iminate one potentia& o$sta)&e that s'reties sometimes raise as an 'nder/riting road $&o)2. =rantees sho'&d not ass'me that )ontra)t'a& indemnifi)ation, /here$0 the )ontra)tor agrees to indemnif0 and ho&d the grantee harm&ess from and against vario's ris2s, is an ade<'ate s'$stit'te for $onds or ins'ran)e. These )ontra)t'a& promises are on&0 as good as the )ontra)tor+s finan)ia& reso'r)es $a)2ing them. ?f the )ontra)tor fai&s to perform the )ontra)t, it is &i2e&0 that the )ontra)t'a& indemnifi)ation provisions /i&& $e of &itt&e va&'e. ?t is important, therefore, to ens're the )ontra)tor is $onded or has ade<'ate ins'ran)e to s'pport the indemnifi)ation )&a'ses in the )ontra)t. Ieso'r)es L *o&&o/ing is a &ist of organiGations offering information and reso'r)es re&ated to s'ret0 $onds and ins'ran)e( !. S'ret0 ?nformation Offi)e 8S?O9 5225 Wis)onsin Aven'e #W, S'ite %00 Washington, DC 200!5 20!4 82029 %H% 14%" ///.sio.org S?O is the information so'r)e on )ontra)t s'ret0 $onds in p'$&i) and private )onstr')tion. S?O is s'pported $0 The S'ret0 Asso)iation of Ameri)a and the #ationa& Asso)iation of s'ret0 ,ond -rod')ers. 2. #ationa& Asso)iation of S'ret0 ,ond -rod')ers 8#AS,-9 5225 Wis)onsin Aven'e #W, S'ite %00 Washington, DC 200!5 20!4 82029 %H% "100 ///.nas$p.org #AS,- is the internationa& organiGation of professiona& s'ret0 $ond prod')ers and $ro2ers. #AS,- represents more than 5,000 personne& /ho spe)ia&iGe in s'ret0 $onds for the )onstr')tion ind'str0 and other t0pes of $onds s')h as &i)ense and permit $onds.
-age 2%
". The S'ret0 Asso)iation of Ameri)a 8SAA9 !!0! Conne)ti)'t Aven'e #W, S'ite H00 Washington, DC 200"% 82029 4%" 0%00 ///.s'ret0.org SAA is a vo&'ntar0, non profit, in)orporated asso)iation of )ompanies engaged in the $'siness of s'ret0ship. SAA represents more than 500 )ompanies that )o&&e)tive&0 'nder/rite the ma@orit0 of s'ret0ship and fide&it0 $onds in the United States. 4. U.S. Department of the Treas'r0 ///.fms.treas.govA)510 This /e$site offers a free do/n&oad of the *edera& Treas'r0 7ist 8Cir)'&ar 5109, /hi)h &ists a&& s'ret0 )ompanies <'a&ified to 'nder/rite s'ret0 $onds on federa& )onstr')tion. 5. The ?nternationa& Iis2 .anagement ?nstit'te 8?I.?9 ///.irmi.)om The ?I.? site offers arti)&es and information on s'ret0 $onds and other ris2 management too&s, a&ong /ith )onta)t information for ris2 management professiona&s and advisors. The :;pert Commentar0 se)tion in)&'des more than 500 arti)&es on a variet0 of ris2 management iss'es. %. The #ationa& Asso)iation of ?ns'ran)e Commissioners ///.nai).)om The #ationa& Asso)iation of ?ns'ran)e Commissioners site verifies that a s'ret0 )ompan0 is &i)ensed to )ond')t $'siness in a parti)'&ar state, and provides a))ess to state ins'ran)e department /e$sites. 1. The Iis2 C ?ns'ran)e .anagement So)iet0 ///.rims.org The Iis2 C ?ns'ran)e .anagement So)iet0 /e$site offers a n'm$er of he&pf'& too&s to assess and manage ris2. H. U.S. Sma&& ,'siness Administration 8S,A9 ///.s$a.govAosg The S,A /e$site offers information on the S'ret0 ,ond ='arantee -rogram, in)&'ding free )opies of forms re<'ired to $e s'$mitted for approva& into the program and )onta)ts for &o)a& S,A offi)es.
-age 21
5$*$* O tions RE@UIREMENT T 9.i. of *TA Cir)'&ar 4220.!: re<'ires grantees to eva&'ate options( 8!9 :va&'ation of Options. The option <'antities or periods )ontained in the )ontra)torKs $id or offer m'st $e eva&'ated in order to determine )ontra)t a/ard. When options have not $een eva&'ated as part of the a/ard, the e;er)ise of the options /i&& $e )onsidered a so&e so'r)e pro)'rement. 829 :;er)ise of Options. 8a9 A grantee m'st ens're that the e;er)ise of an option is in a))ordan)e /ith the terms and )onditions of the option stated in the initia& )ontra)t a/ard. 8$9 An option ma0 not $e e;er)ised 'n&ess the grantee has determined that the option pri)e is $etter than the pri)es avai&a$&e in the mar2et or that the option is the more advantageo's offer at the time the option is e;er)ised. T 1.m. of *TA Cir)'&ar 4220.!: states that( =rantees sha&& not enter into an0 )ontra)t for ro&&ing sto)2 or rep&a)ement parts /ith a period of performan)e e;)eeding five 859 0ears in)&'sive of options. DEFINITIONS Option A 'ni&atera& right in a )ontra)t $0 /hi)h, for a spe)ified time, a grantee ma0 e&e)t to p'r)hase additiona& e<'ipment, s'pp&ies, or servi)es )a&&ed for $0 the )ontra)t, or ma0 e&e)t to e;tend the term of the )ontra)t. DISCUSSION If #ou include terms in a contract t/at ermit #ou to c/oose! at t/e time of a1ard or later! Auantities and items in addition to t/e &ase amount 6o tions9! #ou must include t/e rice of t/ose Auantities or items in t/e rice e%aluation of t/e offer &efore selectin" an a arent lo1 &idder or determinin" t/e com etiti%e ran"e for ne"otiations$ Ot/er1ise #ou ma# not use Federal funds for t/e additional Auantit# 1it/out a se arate! non)com etiti%e rocurement rocess 6i$e$! rocessin" as a sole)source rocurement9$ If #ou include t/e rice in t/e e%aluation and later c/oose to order t/e additional Auantities or items! #ou must a"ain re%ie1 t/e rices to ensure t/at t/e# are ad%anta"eous$
-age 2H
Pur ose Options are most often 'sed /here there is 'n)ertaint0 as to the <'antit0 of goods and servi)es 0o' /i&& re<'ire 'nder a )ontra)t. Iather than p&anning a separate, &ater pro)'rement /hen the re<'irement $e)omes )ertain, and in)'rring potentia& de&a0s in de&iver0 of the items $e)a'se of the pro)'rement &ead time to $'0 additiona& items, 0o' ma0 /ant to spe)if0 the option to $'0 more in 0o'r present )ontra)t. Options ma0 a&so $e appropriate /hen there is a need for standardiGation of parts or inter)hangea$i&it0 and it is $est to get proposers to $id )ompetitive&0 on the entire potentia& need at the time of the first pro)'rement, rather than pro)essing a so&e so'r)e add on at a &ater date /hen the s'pp&ier /i&& $e 'nder no )ompetitive press'res. Another )ommon 'se of options is to fit a )onstr')tion pro@e)t to a $'dget. *or e;amp&e, a n'm$er of e&e)tive items s')h as additiona& &ands)aping, signage that )o'&d $e p'r)hased separate&0, and a higher <'a&it0, &o/er maintenan)e finish are spe)ified as options in a )onstr')tion so&i)itation. When the $ids are eva&'ated, 0o' )an e&e)t the $ase )onstr')tion p&'s those options that )an $e pro)'red /ith the avai&a$&e f'nds. Those options that are not p'r)hased 'nder the $asi) )ontra)t /o'&d $e esta$&ished as options and ordered /hen f't're f'nding $e)omes avai&a$&e. When this approa)h is 'sed, the optiona& items are often )a&&ed >ded')ti$&e options>. ?n this )ase, the stated $id amo'nt a&read0 in)&'des the options, and ea)h option is asso)iated /ith a ded')tion from the stated $id. This method genera&&0 )aries the )&ear imp&i)ation to the offerors that the )ost of optiona& items /i&& $e eva&'ated in determining the s'))essf'& $id. ?f 0o' a/ard the )ontra)t min's )ertain options, and then /ish &ater to add those optiona& items $a)2, 0o' m'st )omp&0 /ith the re<'irement to ma2e a ne/ determination that the option pri)es are advantageo's. Best Practices Whenever the option <'antities are a signifi)ant portion of the tota& potentia& re<'irement, 0o' sho'&d )aref'&&0 )onsider /hether a requirements or indefinite delivery t0pe of )ontra)t /o'&d $etter s'it 0o'r )ir)'mstan)es and needs. A requirements )ontra)t /o'&d provide for fi&&ing a&& of 0o'r re<'irements for )ertain s'pp&ies or servi)es d'ring a spe)ified time period $0 p&a)ing orders /ith the )ontra)tor /ho /ins the )ompetition. 5o'r so&i)itation and )ontra)t /o'&d state /hat 0o' $e&ieve to $e a rea&isti) estimated tota& <'antit0 $'t 0o' /o'&d not $e &ega&&0 re<'ired to order that <'antit0. The )ontra)t /o'&d a&so state the ma;im'm &imit of the )ontra)torKs o$&igation to de&iver as /e&& as the minim'm <'antities that 0o' ma0 order 'nder an individ'a& order. The )ontra)t /o'&d )ontain )ompetitive&0 $id, fi;ed 'nit pri)es for the items $eing pro)'red. An indefinite quantity )ontra)t /or2s &i2e the requirements )ontra)t a$ove e;)ept that 0o' do not o$&igate 0o'r agen)0 to fi&& a&& of 0o'r re<'irements for a parti)'&ar s'pp&0 or servi)e from an0 given )ontra)tor.
-age 29
Orders p&a)ed 'nder a re<'irements or indefinite de&iver0 )ontra)t are not treated as so&e so'r)e pro)'rements and do not have to $e eva&'ated &i2e option orders and fo'nd to $e advantageo's from a pri)e standpoint $efore $eing p&a)ed. When options are @'stified $0 the degree of 'n)ertaint0, the diffi)'&t0 of )ond')ting a separate pro)'rement in a time&0 manner, or the importan)e of a sing&e so'r)e, then in)&'de in 0o'r so&i)itation a )&ear statement that the f'&& option pri)e /i&& $e in)&'ded in 0o'r eva&'ation of pri)es to determine the &o/est $id. When options ma0 $e e;er)ised at a time of 0o'r )hoosing over a &ong )ontra)t period, 0o' ma0 /ish to red')e the offerorKs ris2 $0 in)&'ding a pri)e es)a&ation provision. Cons'mer pri)e indi)es or other indi)es of pri)es germane to 0o'r s'pp&iers ma0 $e o$tained from the ,'rea' of 7a$or Statisti)s of the U.S. Department of 7a$or. ?n the )ase of ro&&ing sto)2 and simi&ar )'stom e<'ipment for /hi)h 0o' have an ongoing need, 0o' ma0 find that the advantage of having an option for identi)a& e<'ipment at a predetermined pri)e o't/eighs the pri)ing diffi)'&ties introd')ed $0 options. 5o' ma0 a&so $enefit from a )ompetitive pro)'rement )ond')ted $0 another transit agen)0 $0 as2ing that agen)0 to spe)if0 optiona& <'antities for ro&&ing sto)2 0o' e;pe)t 0o' ma0 need in the same time frame as the $ase pro)'rement. The advantage of spe)if0ing 0o'r options in the other agen)0Ks origina& so&i)itation, rather than pigg0 $a)2ing after the offers are s'$mitted, is that 0o' /i&& ta2e advantage of a )ompetitive environment instead of a so&e so'r)e add on at a &ater date. 5$*$- LiAuidated Dama"es RE@UIREMENT T !" of *TA Cir)'&ar 4220.!: states( A grantee ma0 'se &i<'idated damages if it ma0 reasona$&0 e;pe)t to s'ffer damages from &ate )omp&etion and the e;tent or amo'nt of s')h damages /o'&d $e diffi)'&t or impossi$&e to determine. The assessment for damages sha&& $e at a spe)ifi) rate per da0 for ea)h da0 of overr'n in )ontra)t timeQ and the rate m'st $e spe)ified in the third part0 )ontra)t. An0 &i<'idated damages re)overed sha&& $e )redited to the pro@e)t a))o'nt invo&ved 'n&ess the *TA permits other/ise. DEFINITION 7i<'idated Damages 7i<'idated damages are a spe)ifi) s'm 8or a s'm readi&0 determina$&e9 of mone0 stip'&ated $0 the )ontra)ting parties as the amo'nt to $e re)overed for ea)h da0 of de&a0 in de&iver0 of the prod')t or )omp&etion of the )ontra)t. The0 do not represent a)t'a& damages
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$'t are esta$&ished in the initia& )ontra)t as a s'$stit'te for a)t'a& damages. The0 sho'&d represent, ho/ever, the most rea&isti) fore)ast possi$&e of /hat the a)t'a& damages are &i2e&0 to $e. DISCUSSION LiAuidated dama"es are a 1idel# used met/od of ensurin" contractors erform timel#$ T/ese ro%isions are re"ularl# used in construction contracts and sometimes in su l# and ser%ice contracts$ LiAuidated dama"es clauses are most a ro riatel# used 1/en3
T/e time of deli%er# or erformance is of articular im ortance and #ou ma# reasona&l# e; ect to suffer dama"e if t/e deli%er# or erformance is delinAuentJ and T/e e;tent or amount of suc/ dama"e 1ould &e difficult to ro%e$
B/en determinin" 1/et/er to use a liAuidated dama"es clause! #ou 1ill 1is/ to consider suc/ factors as3 T/e ro&a&le effect on ricin" and com etitionJ and T/e costs and difficulties of contract administration$ lies! ser%ices and construction$
LiAuidated dama"es ma# &e used for su Best Practices
Iate Determination The rate of &i<'idated damages m'st $e a reasona$&e estimate to )ompensate for possi$&e damages and not $e so &arge as to $e )onstr'ed as a pena&t0. ?f it is )onstr'ed as a pena&t0 it /i&& $e he&d 'nenfor)ea$&e. The most pr'dent approa)h is to form'&ate the &i<'idated damages on a )ase $0 )ase $asis. 5o' /i&& find it 'sef'& to $rief&0 do)'ment the )a&)'&ation of the rate of damages ea)h time 0o' 'se &i<'idated damages in a )ontra)t and 2eep the do)'mentation on fi&e. Appendi; ,." is an e;amp&e of a #iquidated "ama!es C)ec(list $eing 'sed $0 a Transit A'thorit0. !5 On)e &i<'idated damages are in)&'ded in a )ontra)t, 0o' /i&& $e 'na$&e to re)over a)t'a& damages in man0 @'risdi)tions. App&i)ation When it is determined that a &i<'idated damages )&a'se /i&& $e in)&'ded in the )ontra)t, the app&i)a$&e )&a'se and appropriate rate8s9 m'st $e )ontained in the so&i)itation. *or )onstr')tion )ontra)ts, the rate to $e assessed )an $e for ea)h da0 of de&a0, and the rate t0pi)a&&0, at a minim'm, )overs the estimated )ost of inspe)tion and s'perintenden)e for ea)h da0 of de&a0 in )omp&etion. ?f 0o' /i&& s'ffer other spe)ifi) &osses d'e to fai&'re of time&0 )omp&etion, the
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,a0 Area Iapid Transit Distri)t 8,AIT9 -ro)'rement .an'a&, Iev 4, 6'&0 20, !994, Atta)hment 5.
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rate )an a&so in)&'de an amo'nt for these items 8for e;amp&e, the )ost of s'$stit'te fa)i&ities or the renta& of $'i&dings or e<'ipment9. The )ontra)t ma0 in)&'de an overa&& ma;im'm do&&ar amo'nt or period of time, or $oth, d'ring /hi)h &i<'idated damages ma0 $e assessed. This /i&& he&p ens're that there is not an 'nreasona$&e assessment of damages. 3t is im%ortant to note/ t)at in your esta$lis)ment of liquidated dama!es/ you may use w)atever consequential dama!es may result from a failure to deliver or %erform/ even dama!es for items w)ic) are not wit)in t)e sco%e of t)e !rant. +owever/ it must $e understood t)at all liquidated dama!es collected from t)e contractor must $e credited to t)e !rant and treated as a reduction to t)e allowa$le costs of t)e !rant/ in accordance wit) B 1C of FTA Circular A<<D.18. T)is will )ave t)e effect of ma(in! t)e funds collected (or t)e contract %rice reduction ta(en) availa$le to t)e !rantee for ot)er activities*costs w)ic) are wit)in t)e sco%e of t)e !rant. 3n ot)er words/ w)ile you may use t)e incurred cost of activities w)ic) are not wit)in t)e sco%e of t)e !rant to estimate and esta$lis) liquidated dama!es amounts/ you will not $e a$le to directly a%%ly t)e collected dama!es to t)ose im%acted activities unless t)ey are wit)in t)e sco%e of t)e !rant. T)e funds returnin! to t)e !rantee must $e credited to t)e !rant w)ere t)ey $ecome availa$le for ot)er activities w)ic) are wit)in t)e sco%e of t)e !rant. Co&&e)tion ?f 0o'r agen)0 has a finan)ia& o$&igation to the )ontra)tor 'nder the )ontra)t, 0o' ma0 simp&0 )redit the amo'nt of &i<'idated damages d'e from the )ontra)tor to 0o'r agen)0 as pa0ment $0 0o'r agen)0 of part of its remaining o$&igation to the )ontra)tor. Some )ontra)ts in /hi)h &i<'idated damages are parti)'&ar&0 )riti)a& )ontain retainage provisions /hi)h are a)tivated /hen &i<'idated damages are anti)ipated. ?n most @'risdi)tions 0o' ma0 a&so have a right of offset to )redit the &i<'idated damages as pa0ment to the )ontra)tor 'nder other )ontra)ts it ho&ds /ith 0o'r agen)0. ?f 0o' de)ide to p'rs'e this approa)h $e s're 0o' )omp&0 /ith the *TA approva& re<'irements in Cir)'&ar 4220.!: )on)erning the )rediting of the pro@e)t a))o'nt /ith the amo'nt of the &i<'idated damages. *ina&&0, &i2e an0 )&aim, 0o' ma0 sett&e 0o'r )&aim for &i<'idated damages in e;)hange for )redit on f't're p'r)hases s')h as spare parts or other items /ithin the s)ope of the )ontra)t. :;)'sa$&e De&a0 Contra)ts /ith &i<'idated damages )&a'ses sho'&d a&so )ontain e;)'sa$&e de&a0 )&a'ses. These t0pi)a&&0 provide that if the )ontra)tor is de&a0ed $0 )ertain spe)ified )a'ses that are $e0ond the )ontra)torKs )ontro& 8e.g., /eather, stri2es, nat'ra& disasters9 then the res'&ting de&a0 is e;)'sed and &i<'idated damages /i&& not $e assessed. Whenever a )ontra)tor in)'rs &i<'idated damages, the pre)ise )o'nting of ea)h da0Ks de&a0 $ased on these )onditions dire)t&0 affe)ts the s'm paidQ therefore, it is /orth ma2ing the )a&)'&ation of de&a0 in 0o'r )ontra)ts as )&ear as possi$&e. When e;)'sing )onstr')tion de&a0 )a'sed $0 rainfa&& $e0ond norma&, for e;amp&e, 0o' ma0 spe)if0 in the )ontra)t /hat norma& rainfa&& is and ho/ the n'm$er of da0s of greater than norma& rainfa&& /i&& $e )omp'ted. S'$stantia& Comp&etion 7i<'idated damages are not assessed after the date on /hi)h the /or2 is s'$stantia&&0 )omp&eted. S'$stantia& )omp&etion is 's'a&&0 defined as the time /hen the )onstr')tion site or the s'pp&ies de&ivered are )apa$&e of $eing 'sed for their intended p'rposes.!%
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Theon v. United States, 1%5 *.2d !!!0 8*ed. Cir. !9H59Q Centra& Ohio ,&dg. Co., -S,CA 2142, 92 ! ,CA ^ 24,"99.
-age "2
There is no predetermined per)entage that /i&& esta$&ish s'$stantia& )omp&etion and the de)isions p&a)e more emphasis on the avai&a$i&it0 of the /or2 for its intended 'se than on the 'se of form'&as as to the per)entage of )omp&etion of the /or2. !1 5$*$-$( Relations/i 1it/ Default Termination DISCUSSION B/en a contract containin" liAuidated dama"es is terminated for default t/e contractor 1ill &e lia&le for &ot/ liAuidated dama"es and t/e e;cess costs of re rocurement 6i$e$! t/e amount &# 1/ic/ t/e re lacement contractorKs rice e;ceeds t/e terminated contractorKs rice9$ Dou /a%e an o&li"ation to t/e defaultin" contractor to miti"ate &ot/ /is liAuidated dama"es and t/e e;cess re rocurement costs$ T/is means t/at #ou need to not undul# dela# #our termination for default action once t/e contractor is in default! and #ou 1ill need to taEe e; editious action to resolicit &ids7 ro osals for t/e su lies or 1orE not erformed$ T/e time eriod for t/e liAuidated dama"es 1ill &e t/e time &et1een t/e contractuall# reAuired date of com letion of t/e defaulted contract and t/e actual com letion date of t/e ne1 contract assumin" t/ere is no unreasona&le dela# in a1ardin" t/e ne1 contract$ Contractors 1ill not &e assessed liAuidated dama"es for an# eriod of dela# caused &# #our a"enc#$ T/is re rocurement must not onl# &e done e; editiousl# to miti"ate liAuidated dama"es &ut must also &e in accordance 1it/ sound rocurement rocedures! roducin" a fair and reasona&le rice! so as to miti"ate e;cess re rocurement cost dama"es$ T/e contract to re rocure s/ould &e a1arded com etiti%el#! 1it/ &ids7offers solicited from a sufficient num&er of com etent otential sources to ensure adeAuate com etition$ 5$*$. Intellectual Pro ert# Ri"/ts 5$*$.$( Disclosure of Trade Secrets DEFINITIONS Trade Se)ret A p&an, pro)ess, too& or other inte&&e)t'a& propert0 /hi)h is 'sed in some pro)ess of )ommer)ia& va&'e and /hi)h is 2no/n to a gro'p of individ'a&s /ho have $een intentiona&&0 restri)ted $0 the trade se)ret o/ner. The 2e0 attri$'te of a trade se)ret is that the o/ner has
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:&e)tri)a& :nters., ?n)., ?,CA 912 9 12, 14 ! ,CA ^ !0,400.
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di&igent&0 and effe)tive&0 restri)ted 2no/&edge so that its )ompetitors )annot o$tain the information. DISCUSSION If #ou "ain access to trade secrets eit/er to e%aluate t/e offer or to use and su ort use of t/e roduct or ser%ice! #ou ma# undertaEe an o&li"ation to rotect t/e trade secret$ More articularl#! t/ere ma# &e a direct conflict &et1een t/e su lierKs interest in t/e trade secret! and suns/ine la1s t/at reAuire #ou to disclose an# information u on reAuest$ B# not retainin" t/e ro rietar# documents or &# use of intermediaries! #ou ma# &e a&le to reduce t/e otential for a %iolation of trade secrets$ T/e la1s ermittin" u&lic access to "o%ernment data %ar# &# state$ It is /el ful to contractors to disclose #our o&li"ations under t/e la1s in an# solicitation document 1/ic/ calls for #ou to recei%e confidential information from a su lier$ Consideration for t/e su liersK le"itimate interests 1ill &e an im ortant factor in t/eir continuin" 1illin"ness to artici ate in #our ro"rams$ Best Practices Iet'rn Data One method of a))ommodating the s'pp&ierKs interest in the )onfidentia&it0 of the data is to ret'rn a&& the do)'ments to the s'pp&ier. This is parti)'&ar&0 feasi$&e at the )on)&'sion of a pro)'rement in /hi)h 0o' have $een eva&'ating 2no/n trade se)rets. ?nspe)t Data Off Site ?f )on)erns a$o't trade se)rets and )onfidentia& information are parti)'&ar&0 a)'te, 0o' ma0 find it advantageo's to visit the )ontra)torKs premises and inspe)t the information or materia&s there, ret'rning /ith on&0 the minim'm ne)essar0 data in re)orded form. Third -arties Another /a0 to reso&ve the )onf&i)t is to 'se a third part0 8e.g., one of 0o'r advisors9 to eva&'ate the data or retain the data. The possession of data $0 an agent of a p'$&i) agen)0 is sometimes a&so s'$@e)t to a)tion 'nder p'$&i) a))ess &a/s. Bo/ever, this method is )ommon in soft/are &i)ensing agreements, /here a tr'stee retains )onfidentia& so'r)e )ode data 'nti& spe)ified )onditions o))'r 'nder /hi)h the s'pp&ier has agreed that the data )an $e dis)&osed to the p'$&i) agen)0. Opport'nit0 to Defend A fina& strateg0 is to in)orporate into 0o'r )ontra)t )&a'ses a provision granting 8or re<'iring, depending on the )ir)'mstan)es9 the o/ner of the trade se)ret the a$i&it0 to defend 0o'r agen)0 in an0 a)tion against 0o'r agen)0 to for)e dis)&os're. Often, this ta2es the form of the )ontra)tor indemnif0ing 0o'r agen)0 for 0o'r )ost in defending against dis)&os're, or, at 0o'r agen)0Ks option, the )ontra)torKs o/n attorne0s 'nderta2ing the defense.
-age "4
5$*$.$* Contract BorE Products! Patents! and Co #ri"/ts RE@UIREMENT Appendi; A.! of this .an'a& )ontains the re<'irements for inte&&e)t'a& propert0 rights )reated 'nder resear)h and deve&opment )ontra)ts. These re<'irements app&0 on&0 /here a primar0 p'rpose of the )ontra)t is resear)h or deve&opment. DISCUSSION In researc/ and de%elo ment contracts! #ou are reAuired to o&tain certain ri"/ts in t/e intellectual ro ert# created for FTA! and also! incidentall#! to o&tain indemnification for FTA in case t/e contractor %iolates anot/erKs ri"/ts$ A clause satisf#in" t/ese reAuirements is contained in A endi; A$($ In contracts t/at are not rimaril# researc/ and de%elo ment contracts! #ou ma# also consider includin" ortions of t/ese ro%isions for #our a"enc#Ks o1n &enefit$ Dou ma# consider t/is 1/ere intellectual ro ert# 6e$"$! com uter soft1are9 1ill &e de%elo ed 1it/ #our funds as art of a lar"er effort 1/ic/ is not de%elo mental$ In contracts t/at in%ol%e t/e use &ut not t/e de%elo ment of intellectual ro ert# 6e$"$! t/e use of atented eAui ment9 indemnification a"ainst t/e contractorKs %iolation of anot/erKs ri"/ts ma# &e ad%anta"eous$ Best Practices ?ndemnifi)ation The indemnifi)ation provision, in )ase the )ontra)tor vio&ates the inte&&e)t'a& propert0 rights of a third part0, 8e.g., reprod')es )op0righted materia& or in)orporates a patented devi)e in 0o'r e<'ipment9 is a 'sef'& provision /herever inte&&e)t'a& propert0 is invo&ved. :ven tho'gh 0o' ma0 have &itt&e 2no/&edge of the inte&&e)t'a& propert0 the )ontra)tor is 'sing, the inte&&e)t'a& propert0 o/ner ma0 name 0o' in the s'it and 0o' ma0 have more f'nds to pa0 damages than does 0o'r )ontra)tor. Se)'re S'pport Iights When 0o' ta2e de&iver0 of inte&&e)t'a& propert0 /hi)h 0o' /i&& need for 0o'r program, 0o' /i&& a&so need to )aref'&&0 anti)ipate and define 0o'r agen)0Ks rights to 'se, modif0, or disseminate the materia& to others. ?f &i)enses )ontro& the soft/are or patents )ontro& the )omponents of 0o'r vehi)&es, 0o' ma0 /ish to o$tain the right to reprod')e the inte&&e)t'a& propert0 for 0o'r agen)0Ks o/n interna& 'se, /itho't the right to rese&& it or distri$'te it o'tside 0o'r agen)0. Whether the )ontra)tor is /i&&ing to grant that right depends on the pra)ti)es in the ind'str0, the )ompetitive va&'e of the inte&&e)t'a& propert0, and the )ontra)torKs po&i)ies. ?f a pra)ti)e is not /e&& esta$&ished, the matter ma0 have to $e addressed in pre $id dis)'ssions or in negotiations. Where the )ontra)tor is 'n/i&&ing to grant a))ess e;)ept thro'gh additiona& p'r)hases, the )ontra)tor ma0 $e /i&&ing to p&a)e the inte&&e)t'a& propert0 in a tr'st arrangement
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/here$0 the tr'stee /o'&d grant 0o' a))ess in )ase of the )ontra)torKs demise or ina$i&it0 to s'pport 0o'r ongoing 'se of the prod')t. :vo&ving 7a/ The &a/ of inte&&e)t'a& propert0, parti)'&ar&0 as it pertains to information te)hno&og0, is evo&ving rapid&0. ?f 0o' are invo&ved in pro)'ring soft/are or other inte&&e)t'a& propert0 /ith an0 s'$stantia& va&'e, 0o' ma0 /ish to have attorne0s /ho are )'rrent in this area revie/ 0o'r )ontra)t provisions. 5$*$0 Termination RE@UIREMENT T !5.$ of *TA Cir)'&ar 4220.!: re<'ires grantees to in)&'de provisions in their )ontra)ts and s'$)ontra)ts that a&&o/ for( $. Termination for )a'se and for )onvenien)e $0 the grantee or s'$grantee in)&'ding the manner $0 /hi)h it /i&& $e effe)ted and the $asis for sett&ement. 8A&& )ontra)ts in e;)ess of S!0,0000.9 DISCUSSION It is sometimes necessar# to end a contractual relations/i rior to t/e com letion of t/e 1orE called for in t/e contract$ In t/e u&lic sector! 1/en t/at relations/i is ended &ecause of a ro&lem 1it/ t/e contractorKs com liance 1it/ one or more terms of t/e contract! t/at termination is most commonl# referred to as a termination *or de*ault or a termination *or cause$ B/en t/e u&lic a"enc# decides to end t/e contract for a reason ot/er t/an t/e default of t/e contractor! t/at termination is most freAuentl# referred to as a termination *or the con-enience o* the #u$lic entity$ If #ou do not lan for t/e ossi&ilit# of one or t/e ot/er of t/ese e%ents occurrin" in #our contractual relations/i s! t/rou"/ t/e careful draftin" of clauses 1/ic/ define t/e ri"/ts and o&li"ations of t/e arties under a default and con%enience situation! t/e conseAuences can &e su&stantial from a monetar# and contract erformance stand oint$ Because of t/e nature of t/e different t# es of contracts! #ou ma# 1ant to consider /a%in" different termination clauses for fi;ed rice as o osed to cost reim&ursement contracts$ Because of t/e different nature of t/e roduct or ser%ices &ein" &ou"/t! #ou ma# 1ant to /a%e different termination clauses for construction! su l#! and ser%ices contracts! includin" rofessional ser%ices$
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Dou ma# 1ant to /a%e an a&&re%iated termination clause for contracts &elo1 a dollar t/res/old 6sa# R(::!:::9$ LiEe1ise for urc/ase orders! #ou 1ill need to decide /o1 so /isticated #ou 1ant t/ese to &e$ Dou need to address #artial as 1ell as com#lete terminations$ 5$*$0$( Termination For Con%enience DISCUSSION T/e de%elo ment of clauses allo1in" t/e "o%ernment to terminate contracts for its con%enience 1as a necessit# "ro1in" out of t/e ma'or 1ars and t/e need to end t/e lar"e num&er of rocurement contracts once t/e 1ars 1ere ended$ Bit/out suc/ clauses t/e "o%ernment could terminate its contracts &ut suc/ action constituted a &reac/$ T/is meant /a%in" to a# rofits to contractors on un erformed 1orE 6antici ator# rofits9$ T/us t/e need for and t/e de%elo ment of t/ese con%enience termination clauses! 1/ic/ "i%e t/e "o%ernment t/e ri"/t to terminate 1it/out cause and 1/ic/ limit t/e contractorKs reco%er# of rofit &ased u on t/e 1orE actuall# erformed u to t/e oint of termination$ Best Practices 5o' /i&& note that the *TA Cir)'&ar re<'ires a )&a'se /hi)h defines >the manner $0 /hi)h the termination /i&& $e effe)ted and the $asis for sett&ement>. Appendi; A.!, .ode& Contra)t C&a'ses, se)tion 2!, )ontains mode& )&a'ses /ith s'ggested &ang'age for $oth )onvenien)e and defa'&t terminations. These mode& )&a'ses are ver0 $road in their definition of the $asis for sett&ement. *or e;amp&e, /hi&e the )&a'ses )&ear&0 &imit the )ontra)torKs profit to /or2 a)t'a&&0 performed, and the0 )ommit to pa0 the )ontra)tor its )osts, the0 do not define ho/ those )osts /i&& $e determined, i. e., the cost %rinci%les /hi)h /i&& $e 'sed to determine a&&o/a$&e )osts. ?t is high&0 re)ommended that 0o' s'pp&ement these )&a'ses to stip'&ate the cost %rinci%les /hi)h /i&& $e operative in the event of a termination, and /hi)h /i&& determine /hi)h )osts are a&&o/a$&e and /hi)h are not. ,0 'sing an o$@e)tive and )&ear&0 defined method for determining a&&o/a$&e )osts 0o' /i&& avoid pro$&ems /hi)h ma0 other/ise arise in the negotiation of fina& )osts. The Ameri)an -'$&i) Transit Asso)iation has p'$&ished a pro)'rement man'a& /ith a Termination for Convenien)e C&a'se referen)ing -art 49, Termination of Contracts, of the *edera& A)<'isition Ieg'&ations 84H C*I 499 as the $asis for sett&ement of )&aims. !H Another approa)h is to referen)e the *AI, -art "!.205, /hi)h dea&s ver0 )omprehensive&0 /ith Selected Costs and their a&&o/a$i&it0. !9
(5
Ameri)an -'$&i) Transit Asso)iation, !20! #e/ 5or2 Aven'e, #. W., S'ite 400, Washington, D. C. Standard ?us &rocurement .uidelines T 2.2.%.!, 6an'ar0 !991. -hone( 82029 H9H 40H9 to order )opies.
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Washington .etropo&itan Area Transit A'thorit0 &rocurement &rocedures
anual T !"!!.2, De). !994.
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The A-TA approa)h of referen)ing *AI -art 49 as the $asis for sett&ement of terminations for )onvenien)e /o'&d seem to $e a ver0 effe)tive so&'tion to the pro$&em of defining the $asis for sett&ement. -art 49.!!" of the *AI in)orporates -art "!, Contract Cost &rinci%les and &rocedures/ th's )overing a&& the norma& )ost iss'es /hi)h arise on )ost t0pe )ontra)ts, $'t going $e0ond the norma& to define those )osts and iss'es pe)'&iar to terminations in the rest of *AI -art 49. The termination )&a'ses themse&ves ma0 $e fo'nd in *AI -art 52, and 0o' /i&& see that the0 refer to $oth -art "! and -art 49 of the *AI in order to define the )ost standards to $e 'sed for the sett&ement. S'ggested termination )&a'ses are a&so )ontained in the A,AKs odel &rocurement Code for State and #ocal .overnments and imp&ementing s'ggested reg'&ations. 20 5$*$0$* Partial Terminations DISCUSSION Dour Termination for Con%enience clause must include a ro%ision allo1in" for a artial termination of t/e 1orE! in 1/ic/ case t/e contractor must continue 1it/ t/e unterminated ortion$ T/e Federal "o%ernment clause at FAR 0*$*.8)*6E9 allo1s t/e contractor to file a ro osal for an eAuita&le ad'ustment of t/e rice6s9 for t/e continued ortion of t/e contract$ Note t/at t/e model clauses in A endi; A$( do not address t/is issue of an eAuita&le rice ad'ustment for t/e continued 1orE! and #ou s/ould consider t/is ro%ision as a matter of eAuit# to t/e contractor$ T/is rice ad'ustment 1ould allo1 t/e contractor to reco%er t/ose costs of a fi;ed nature 1/ic/ /e 1ould /a%e reco%ered in t/e rices of t/e terminated 1orE! /ad t/ere &een no termination$ T/is is not antici ator# rofit &ut reco%er# of fi;ed o%er/ead$ *( An e;am le mi"/t &e t/e rental of a facilit# 1/ose costs 1ould /a%e &een reco%ered o%er all t/e deli%era&le units of t/e ori"inal contract &ut 1/ic/ can onl# &e reco%ered o%er a smaller num&er of units on t/e artiall# terminated contract! assumin" #ou allo1 a rice ad'ustment for t/e unterminated ortion of t/e contract$ 5$*$0$- Termination for Default DISCUSSION Fi;ed Price Su l# Contracts ) If #ou are usin" a default termination clause similar to t/e federal clauses! t/e termination is liEel# to /a%e t/e follo1in" effects3
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See the dis)'ssion of ho/ this p'$&i)ation ma0 $e o$tained in #ote ". 'nder Se)tion H.!.!. Whee&er ,ros., AS,CA 204%5, 19 ! ,CA T !",%42.
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Dour a"enc# is not lia&le for t/e costs of unacce ted 1orE$ T/e contractor 1ill onl# &e aid for 1orE 1/ic/ #ou acce t$ Dou are entitled to a return of all ro"ress! artial! or ad%ance a#ments$ Dou /a%e t/e ri"/t to taEe custod# of t/e contractorKs material! in%entor#! construction lant and eAui ment at t/e site! and of t/e dra1in"s and lans! 1it/ t/e rice to &e ne"otiated$ T/e contractor 1ill &e lia&le for t/e e;cess costs of re rocurement or com letion$ T/e contractor 1ill &e lia&le for eit/er actual dama"es or liAuidated dama"es if #our contract ro%ides for t/em$
Ser%ices and Construction Contracts ) Some of t/e a&o%e conseAuences for su l# contracts are also a lica&le to ser%ices and construction contracts &ut a contractor furnis/in" ser%ices or construction 1ill &e entitled to a#ment for 1orE t/at 1as ro erl# erformed rior to t/e default termination$ Under su l# contracts t/e contractor 1ill not &e aid costs for roducin" su lies not acce ted! 1/ereas ser%ices and construction contractors can reco%er costs &ecause #our a"enc# 1ill &e seen as /a%in" &enefited from t/e contractorKs artial erformance in t/e ser%ices rendered or t/e im ro%ements made to #our ro ert#$ ** Best Practices Defining >Defa'&t> The )&a'se m'st define /hat >defa'&t> means i.e., fai&'re to de&iver the s'pp&ies or perform the servi)es /ithin the time spe)ified in the )ontra)t, fai&'re to ma2e progress so as to endanger performan)e of the )ontra)t, ref'sa& or fai&'re in a )onstr')tion )ontra)t to prose)'te the /or2 or an0 separa$&e part /ithin the time spe)ified in the )ontra)t. :;)ess Iepro)'rement Costs The mode& )ontra)t )&a'ses in se)tion 2! of Appendi; A.! in)&'de defa'&t termination )&a'ses for vario's t0pes of )ontra)ts. 5o' /i&& need to de)ide if 0o' /ish to ho&d the )ontra)tor responsi$&e for e;)ess repro)'rement )osts and in)&'de an appropriate provision in 0o'r )&a'se. On&0 the )onstr')tion )ontra)t termination )&a'se D2!.8h9F in Appendi; A.! in)&'des e;)ess repro)'rement )osts. The A-TA $'s pro)'rement .uidelines at T 2.2.%.2 8see note 20 in this )hapter9 in)&'de a provision for e;)ess repro)'rement )osts for >simi&ar s'pp&ies or servi)es.>
**
6ohn Ci$ini), 6r. and Ia&ph #ash, 6r. Administration of .overnment Contracts. Third :d. Washington, D.C.( =eorge Washington Universit0, !995.
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:;)'sa$&e Ieasons for #on performan)e The )&a'se t0pi)a&&0 defines a)ts or events that /i&& e;)'se the )ontra)torKs defa'&t i.e., )a'ses $e0ond the )ontro& and /itho't the fa'&t or neg&igen)e of the )ontra)tor, s')h as a)ts of =od, 'n's'a&&0 severe /eather, et). Conversion to Convenien)e Termination ?f 0o' terminate a )ontra)t for defa'&t, and it is &ater determined that the )ontra)tor /as not in defa'&t or that the defa'&t /as e;)'sa$&e, it /o'&d $e ver0 he&pf'& if 0o'r defa'&t termination )&a'se spe)ifi)a&&0 stated that the termination /i&& $e treated as if it had $een iss'ed for the )onvenien)e of the agen)0. This /i&& a)t to &imit 0o'r &ia$i&it0 for a /rongf'& termination $0 invo2ing the pro)ed'res of the )onvenien)e termination )&a'se, th's pre)&'ding the )ontra)tor from re)overing anti)ipator0 profits. The defa'&t termination )&a'ses in Appendi; A.! )ontain this stip'&ation. #oti)e -rovisions The )&a'se t0pi)a&&0 defines /hat 2ind of /ritten noti)es, if an0, m'st $e f'rnished to the )ontra)tor prior to the termination ta2ing p&a)e i.e., cure and s)ow cause &etters. Within a spe)ified time after 0o' notif0 the )ontra)tor in /riting to cure the defi)ien)0 in performan)e, the )ontra)tor has the opport'nit0 8/itho't @eopard0 of immediate termination9 to s)ow cause /h0 it sho'&d not $e terminatedQ it ma0 a))e&erate performan)e, present ne/ information, or offer additiona& promises. ?f the )ontra)tor does not s'))essf'&&0 sho/ that it sho'&d not $e terminated, 0o'r agen)0 ma0 then pro)eed /ith a termination for defa'&t. ?f 0o'r )&a'se grants the )ontra)tor a )'re period, 0o' ma0 /ish to spe)if0 e;)eptions s')h as /here defa'&t is ne)essar0 to ta2e over the /or2 in the interest of p'$&i) safet0. Acron#ms AS,CA Armed Servi)es ,oard of Contra)t Appea&s ,CA ,oard of Contra)t Appea&s ?,CA Department of ?nterior ,oard of Contra)t Appea&s -S,CA -osta& Servi)e ,oard of Contra)t Appea&s
,est -ra)ti)es -ro)'rement .an'a& L Chapter 9 L Contra)t Administration
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C/a ter 8 8 ) Contract Administration 9.! Do)'mentation of Contra)t Administration 85A9%9 9.2 Changes 82A999 9.2.! Contra)t S)ope and Cardina& Changes 8!0A999 9.2.2 CostA-ri)e Ana&0sis of Changes 82A999 9.2." Constr')tion Changes 82A999 9.2.".! Differing Site Conditions 82A999 9.2.".2 *ie&d Change Orders 82A999 9.2."." -ri)ing of Constr')tion Changes 82A999 9.2.".4 Oariations in :stimated N'antities 82A999 9.2.".5 De&a0s 82A999 9.2.".% A))e&eration 82A999 9." ?mproving Oendor De&iver0 -erforman)e 8!0A009 9.4 Approva& of S'$)ontra)tors 8!!A0"9 8$( DOCUMENTATION OF CONTRACT ADMINISTRATION RE@UIREMENT ?n &isting the >=enera& -ro)'rement Standards App&i)a$&e to Third -art0 -ro)'rements,> *TA has esta$&ished t/o standards that address )ontra)t administration do)'mentation as opposed to pro)'rement 2" administration do)'mentation( $. Contra)t Administration S0stem L =rantees sha&& maintain a )ontra)t administration s0stem that ens'res that )ontra)tors perform in a))ordan)e /ith the terms, )onditions, and spe)ifi)ations of their )ontra)ts or p'r)hase orders. . . . 2. Iesponsi$i&it0 for Sett&ement of Contra)t ?ss'esADisp'tes =rantees a&one /i&& $e responsi$&e in a))ordan)e /ith good administrative pra)ti)e and so'nd $'siness @'dgment for the sett&ement of a&& )ontra)t'a& and administrative iss'es arising o't of pro)'rements. These iss'es in)&'de, $'t are not &imited to so'r)e eva&'ation, protests, disp'tes, and )&aims. These standards do not re&ieve the grantee of an0 )ontra)t'a& responsi$i&it0 'nder its )ontra)ts.
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See T 1.i., *TA Cir)'&ar 4220.!:, and dis)'ssion in Se)tion 2.4.!, >*i&e Do)'mentation.>
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e&ement9 to demonstrate that the )ontra)ting offi)er and the )ontra)tor have )omp&ied /ith the terms of the )ontra)t 8i.e., $onds have $een s'$mitted, )ontra)t'a& iss'es re<'iring the approva& of the )ontra)ting offi)er have $een s'$mitted and approved, re<'ests for pa0ment have $een s'$mitted, revie/ed, approved, and pro)essed, et).9 and that )ontra)t'a& and administrative iss'es in disp'te have $een addressed and sett&ed in a))ordan)e /ith good administrative pra)ti)e and so'nd $'siness @'dgment. Best Practices *i&e Contents *or sea&ed $id pro)'rements and )ompetitive negotiations, )onsider in)&'ding as standard pra)ti)e in the )ontra)t administration fi&e the fo&&o/ing( e e e e e e e The e;e)'ted )ontra)t and noti)e of a/ardQ -erforman)e and pa0ment $onds, $ond re&ated do)'mentation, and )orresponden)e /ith an0 s'retiesQ Contra)t re<'ired ins'ran)e do)'mentationQ -ost a/ard 8pre performan)e9 )orresponden)e from or to the )ontra)tor or other =overnmenta& agen)iesQ #oti)e to pro)eedQ Approva&s or disapprova&s of )ontra)t s'$mitta&s re<'ired $0 the )ontra)t and re<'ests for /aivers or deviations from )ontra)t'a& re<'irementsQ .odifi)ationsA)hanges to the )ontra)ts in)&'ding the rationa&e for the )hange, )hange orders iss'ed, and do)'mentation ref&e)ting an0 time and or in)reases to or de)reases from the )ontra)t pri)e as a res'&t of those modifi)ationsQ Do)'mentation regarding sett&ement of )&aims and disp'tes in)&'ding, as appropriate, res'&ts of a'dit and &ega& revie/s of the )&aims and approva& $0 the proper a'thorit0 8i.e., )it0 )o'n)i&, $oard of dire)tors, e;e)'tive dire)tor9 of the sett&ement amo'ntQ Do)'mentation regarding stop /or2 and s'spension of /or2 orders and termination a)tions 8)onvenien)e as /e&& as defa'&t9Q and Do)'mentation re&ating to )ontra)t )&ose o't.
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*or sma&& p'r)hases and mi)ro p'r)hases, 0o' ma0 /ish to a'tomate the do)'mentation or 2eep some of the a$ove e&ements on a standard re)ord. Administration D'ties :ver0 t0pe of )ontra)t /i&& have different )ontra)t administration a)tions and the do)'mentation re<'ired to s'pport that administration /i&& differ as /e&&. S'pp&0
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)ontra)ts have different spe)ifi) administrative a)tions than )onstr')tion )ontra)ts do @'st as fi;ed pri)e )ontra)ts are administered different&0 than )ost reim$'rsement )ontra)ts. The *AI has an e;tensive &isting of )ontra)t administration f'n)tions that are )onsidered >norma&> and 0o' might /ant to revie/ them to see /hat might $e app&i)a$&e to 0o'r parti)'&ar )ontra)t. 25 *i&e 7o)ation On an0 given )ontra)t, there ma0 $e a n'm$er of different agen)0 personne& invo&ved in monitoring vario's aspe)ts of the administration of the )ontra)t s')h as the maintenan)e department <'a&it0 )ontro& offi)e, the engineering department, the )onstr')tion management offi)e, the safet0 offi)e, the disadvantaged $'siness department, and the finan)e department. ?n some agen)ies, these offi)es ma0 have offi)ia& )ontra)t ro&es for /hi)h the0 /i&& $e maintaining an >offi)ia&> fi&e as to their de&egated responsi$i&it0. *or instan)e, 0o'r )ontra)t ma0 have a >)ontra)ting offi)erKs representative> or >)ontra)ting offi)erKs te)hni)a& representative> that has de&egated a'thorit0 from the )ontra)ting offi)er to approve s'$mitta&s and pa0ments. 5o'r agen)0 ma0 have de&egated to 0o'r program offi)e the a'thorit0, 'p to a )ertain do&&ar amo'nt, to iss'e )hange orders and sett&e )&aims. ?n a&& sit'ations, /hether the )ontra)t'a& ro&e is performed $0 the )ontra)ting offi)er or another designee, the fi&es sho'&d $e do)'mented so that it /o'&d $e possi$&e to re)reate, from the fi&es a&one, /hat happened and ho/ iss'es /ere reso&ved. 2% 8$* CCAN<ES RE@UIREMENT 49 C*I T !H."0 C)an!es dis)'ses )ertain )&asses of )hanges /hi)h re<'ire grantees to o$tain the prior /ritten approva& of the *edera& a/arding agen)0. *TA Cir)'&ar 4220.!: paragraph 9.h. states( A )ontra)t amendment or )hange order that is not wit)in t)e sco%e of t)e ori!inal contract is )onsidered a so&e so'r)e pro)'rement . . . DEFINITIONS Contra)t .odifi)ation An0 /ritten )hange in the terms of the )ontra)t.
*0
*AI T 42."02.
*2
?t is important that the fi&es stand on their o/n $e)a'se at the time a matter )omes into )ontrovers0 or at the time of a post )ontra)t performan)e a'dit or revie/. The 2e0 )hara)ters ma0 not $e avai&a$&e 8dead, moved a/a0, terminated from emp&o0ment, et).9 to respond to those iss'es.
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,i&atera& Contra)t .odifi)ation A modifi)ation /hi)h is signed $0 the Contra)tor and the Contra)ting Offi)erJ a&so referred to as a su%%lemental a!reement. The0 are 'sed to 8!9 ma2e negotiated e<'ita$&e ad@'stments to the )ontra)t pri)e, de&iver0 s)hed'&e and other )ontra)t terms res'&ting from the iss'an)e of a )hange order, 829 definitiGe &etter )ontra)ts, and 8"9 ref&e)t other agreements of the parties modif0ing the terms of the )ontra)t. Uni&atera& Contra)t .odifi)ation A )ontra)t modifi)ation that is signed on&0 $0 the Contra)ting Offi)er. The0 are 'sed to ma2e administrative )hanges, iss'e )hange orders, ma2e )hanges a'thoriGed $0 )&a'ses other than a C)an!es clause 8e.g., ,%tions clause9, and iss'e termination noti)es. Administrative Change A 'ni&atera& )ontra)t )hange, in /riting, that does not affe)t the s'$stantive rights of the parties 8e.g., )hanges of address for s'$mitta&s of do)'ments, reports, et).9. Changes C&a'se A )&a'se /hi)h permits the grantee Contra)ting Offi)er to ma2e 'ni&atera& )hanges, in designated areas, wit)in t)e !eneral sco%e of t)e contract, to $e fo&&o/ed $0 s')h e<'ita$&e ad@'stments in the pri)e and de&iver0 s)hed'&e as the )hange ma2es ne)essar0. A&tho'gh the grantee has a 'ni&atera& right, t/o genera& prin)ip&es are important( T)e ri!)t e7ists only $ecause it is s%ecifically conferred $y t)e terms of t)e contractQ and When s')h 'ni&atera& rights are e;er)ised, the grantee has an o$&igation to ad@'st the pri)e andAor other provisions to )ompensate for the a&teration in the )ontra)torKs o$&igations. Change Order A /ritten order, signed $0 the Contra)ting Offi)er, dire)ting the Contra)tor to ma2e a )hange that the C)an!es clause a'thoriGes the Contra)ting Offi)er to order /itho't the Contra)torKs )onsent. Cardina& Change ) A )ontra)t )hange /hi)h is >o'tside the s)ope> of the origina& )ontra)t, and th's not /ithin the a'thorit0 of the Changes )&a'se to order. S')h )hanges are >so&e so'r)e pro)'rements, and m'st $e pro)essed a))ording to the re<'irements of *TA Cir)'&ar 4220.!:, paragraph 9.h. 8See Se)tion 9.2.! Contract Sco%e and Cardinal C)an!es.9 Constr')tive Contra)t Change ) A )hange to a )ontra)t res'&ting from the )ond')t of the granteeKs offi)ia&s that has the effe)t of re<'iring the Contra)tor to perform additiona& /or2. A constructive c)an!e res'&ts from the a)ts, /ritten or ora&, or from the omissions of the granteeKs offi)ia&s, /hi)h have the same effe)t as if the Contra)ting Offi)er had iss'ed a forma&, /ritten )hange order. A)tions giving rise to )onstr')tive )hanges sho'&d, of )o'rse, $e avoided. S')h )hanges represent a)tions /hi)h 's'a&&0 e;)eed the a'thorit0 of the individ'a& responsi$&e for them, e.g., improper te)hni)a& dire)tion $0 the Te)hni)a& Offi)er /hi)h is a)t'a&&0 a )hange to the )ontra)t. When these a)tions o))'r, )ontra)tors need to $e advised as part of the terms of their )ontra)ts to $ring an0 s')h a)tions to the immediate attention of the Contra)ting Offi)er so
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that an offi)ia& determination )an $e made $0 the appropriate grantee offi)ia&s and proper dire)tions given in /riting 'nder the Changes )&a'se. Some )ommon e;amp&es are( e e e e e e e Spe)ifi)ations or )ontra)t provisions that are >impossi$&e to perform.> Spe)ifi)ations that are am$ig'o's. Dra/ings that )ontain errors, omissions or in)onsisten)ies. =rantee provided information that is &ate, defe)tive, et). Te)hni)a& dire)tion $0 personne& that modifies the e;pressed terms of the )ontra)t. A))e&eration of /or2, /here the grantee insists that the )ontra)t de&iver0 s)hed'&e $e met despite the Contra)torKs va&id )&aims of e;)'sa$&e de&a0s. An inspe)torKs interpretations of test spe)ifi)ations, pro)ed'res, methods, )onditions and res'&ts that go $e0ond a reasona$&e interpretation of the spe)ifi)ation.
Ded')tive Change A )hange res'&ting in a red')tion in the )ontra)t pri)e $e)a'se of a net red')tion in the Contra)torKs /or2. :<'ita$&e Ad@'stment An ad@'stment in the )ontra)t pri)e, de&iver0 s)hed'&e or other terms of the )ontra)t arising o't of the iss'an)e of a c)an!e order. DISCUSSION .8 CFR G (5$-: Changes! reAuires "rantees to o&tain t/e a ro%al of t/e a1ardin" a"enc# 6FTA9 1/ene%er a c/an"e 1ould result in t/e need for additional fundin" from t/e a1ardin" a"enc#! and for ot/er s ecified situations 1/ic/ "rantees s/ould &e a1are of$ FTA Circular .**:$(E ara"ra / 8$/$ concerns t/e issue of contract c/an"es and 1/et/er t/e# are /ithin the sco#e o* the original contract$ T/is issue is discussed in Section 8$*$( Contract %co#e and Cardinal Changes! Pur ose The Changes )&a'se has severa& p'rposes( 8!9 To give the grantee f&e;i$i&it0 to order )hanges in the /or2, /hi)h ma0 $e ne)essar0 d'e to advan)es in te)hno&og0 or )hanges in the granteeKs re<'irements. 829 To give the Contra)tor a method of s'ggesting )hanges to the /or2, th's improving the <'a&it0 of the )ontra)t end items. The e<'ita$&e ad@'stment provisions of the
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Changes )&a'se /i&& en)o'rage the Contra)tor to s'ggest improvements /hen those s'ggestions /i&& in)rease the )ontra)t pri)e. When, ho/ever, the sit'ation )a&&s for s'ggestions regarding do&&ar savings, the Changes )&a'se ma0 not in)entives the Contra)tor if it stands to &ose the do&&ar savings $e)a'se of a pri)e red')tion in the )ontra)t. *or this reason, value en!ineerin! clauses are in)&'ded in )ontra)ts. 8"9 To give the grantee a'thorit0 to order additiona& /or2 /hi)h is >/ithin the genera& s)ope of the )ontra)t, and there$0 avoid having to pro)'re this /or2 as a >ne/ pro)'rement /ith a&& of the time and e;pense asso)iated /ith another so&i)itation. 849 To re<'ire the Contra)tor to pro)eed /ith the )hanged /or2 and reso&ve the iss'e of )ompensation &ater. This is important sin)e it gives the grantee a )ontra)t right to order )hanges /itho't having to agree $eforehand on the pri)e of the /or2. :mergen)0 sit'ations )an th's $e hand&ed e;peditio's&0 /itho't p&a)ing the Contra)tor in a position of demanding a )ertain amo'nt of )ompensation $efore the /or2 )an pro)eed. ?n the event of a fai&'re to agree on pri)e, the iss'e )an $e reso&ved $0 a third part0 in a))ordan)e /ith the disp'te pro)ed're in the Disp'tes )&a'se of the )ontra)t. ,'t disp'tes over )ompensation /i&& not impede the progress of the )ontra)t as )hanged. Best Practices #ationa& Transit ?nstit'te The #ationa& Transit ?nstit'te 8#T?9 offers severa& in depth )o'rses for *TA /hi)h /o'&d $e of great va&'e to grantees /ho have to manage )ontra)ts /ith signifi)ant )hange order a)tivit0. 21 =rantee third part0 )ontra)ts sho'&d )ontain a C)an!es )&a'se. The &ang'age of the )&a'se ma0 differ depending 'pon the nat're of the )ontra)t and the end item $eing pro)'red. The Ameri)an ,ar Asso)iation 8A,A9 re)ommends severa& different C)an!es )&a'ses in its odel &rocurement Code for State and #ocal .overnments. There is a s'ggested )&a'se for su%%ly )ontra)ts and another for construction )ontra)ts. 2H The Federal Acquisition Re!ulation )overs the s'$@e)t of )hanges /ithin -art 4" Contract odifications/ /ith a&ternative )ontra)t C)an!es )&a'ses in S'$part 52.24". The *edera& )&a'ses are tai&ored to the spe)ifi) )ontra)ting sit'ation, e.g., fi;ed pri)e s'pp&0, )onstr')tion, servi)es, )ost reim$'rsement, et). The *edera& )&a'ses dire)t the Contra)tor to pro)eed /ith the /or2 in a))ordan)e /ith the )hange order dire)tive and s'$mit a proposa& /ithin "0 da0s, fo&&o/ing
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#ationa& Transit ?nstit'te, !20 A&$an0 Street, S'ite 105, #e/ ,r'ns/i)2, #6 0H90! 2!%". -hone 81"29 9"2 !100. *AR 81"29 9"2 !101. Co'rses in)&'de( An 8ffective C)an!e ,rder &rocess, ana!ement of Transit Construction &ro5ects and Contract Administration.
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.-C T I% !0!.0" C)an!es Clause 8s'pp&ies9, and T I5 40!.0" C)an!es Clause 8)onstr')tion9.
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/hi)h the parties are to negotiate an e<'ita$&e ad@'stment to the pri)e, de&iver0 s)hed'&e and other affe)ted terms. ?n the event of a fai&'re to agree, the reso&'tion is to $e hand&ed as a disp'te in a))ordan)e /ith the "is%utes )&a'se of the )ontra)t. This provision is important $e)a'se disp'tes over )ompensation do not de&a0 the /or2. The Contra)tor is re<'ired to pro)eed /ith the /or2 as )hanged and sett&e the iss'e of )ompensation &ater. The Contra)tor )annot <'it /or2 $e)a'se of a disagreement over pri)e. #on emergen)0 )hanges When time permits, the $est pro)ed're for iss'ing )hanges is to so&i)it a )ost and te)hni)a& proposa& from the )ontra)tor $efore t)e c)an!e is issued, and to negotiate an e<'ita$&e ad@'stment to the )ontra)t pri)e, de&iver0 s)hed'&e, et). A $i&atera& s'pp&ementa& agreement )an then $e iss'ed setting forth the )hange in /or2 and the ad@'stment to the )ontra)t pri)e, et). :mergen)0 )hanges When time /i&& not permit the negotiation of the )hange prior to iss'an)e, it sho'&d $e possi$&e to o$tain a >not to e;)eed> pri)e from the Contra)tor prior to the $eginning of /or2. A $i&atera& )ontra)t Change Order )o'&d then $e iss'ed defining the )hanged /or2, /ith a ma;im'mA)ei&ing pri)e /hi)h is to $e negotiated at a &ater date, $'t downward only. This Change Order /o'&d have to $e iss'ed as a t/o part0 modifi)ation $e)a'se it )ontains a >not to e;)eed,> ma;im'mA)ei&ing pri)e for the )hange, and the grantee )o'&d not 'ni&atera&&0 impose a )ei&ing pri)e )ommitment on the Contra)tor. The Contra)tor /o'&d then s'$mit a forma& proposa& /ithin thirt0 da0s and negotiations /o'&d ta2e p&a)e. A $i&atera& )ontra)t modifi)ation 8s'pp&ementa& agreement9 /o'&d then $e iss'ed ref&e)ting the e<'ita$&e ad@'stment to the pri)e, et). 8$*$( Contract Sco e and Cardinal C/an"es RE@UIREMENT *TA Cir)'&ar 4220.!: paragraph 9.h. states( A )ontra)t amendment or )hange order that is not wit)in t)e sco%e of t)e ori!inal contract is )onsidered a so&e so'r)e pro)'rement . . . DISCUSSION C/an"es clauses limit t/e aut/orit# of t/e issuer in t1o 1a#s$ First! t/e# sti ulate t/at c/an"es must &e F1it/in t/e "eneral sco e of t/e contract$F Second! t/e# descri&e t/e t# es of c/an"es t/at ma# &e made$ In order for t/e c/an"e to &e &indin" on t/e Contractor! it must meet &ot/ tests$ It must &e 1it/in t/e "eneral sco e and &e one of t/e t# es of c/an"es descri&ed in t/e clause. Bit/ res ect to t/e FTA reAuirements "o%ernin" c/an"es! t/e c/an"e must &e /ithin the sco#e o* the original contract! If it is not /ithin the sco#e! it is considered a cardinal change$ Suc/ c/an"es are not ro erl# rocessed as c/an"es under t/e C/an"es clause! &ut are
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ro erl# rocessed as ne/ #rocurements accordin" to t/e rinci les of FTA Circular .**:$(E 8$/$ ))Procurement Ay =oncom#etiti-e Pro#osals! Within the general sco#e ) T/e meanin" of t/is /rase is some1/at %a"ue and /as &een t/e su&'ect of muc/ inter retation &# %arious 'udicial &odies rocessin" contractor rotests and claims$ T/e Federal Court of Claims coined t/e term Fcardinal c/an"eF to descri&e t/ose c/an"es t/at are &e#ond t/e sco e of t/e contract$ T/ere are %arious tests used to determine if a c/an"e is 1it/in sco e$ One test e;amines c/an"es in t/e nature o* /or( to &e erformed$ Anot/er looEs at t/e amount o* e**ort t/e Contractor is reAuired to erform$ Still anot/er test concerns 1/et/er t/e ro osed c/an"e is 1it/in t/e sco#e o* the original com#etition$ =ature o* /or( ) In one case t/e court /eld t/at t/e c/an"ed 1orE is considered to &e 1it/in t/e "eneral sco e if it Fs/ould &e re"arded as /a%in" &een fairl# and reasona&l# 1it/in t/e contem lation of t/e arties 1/en t/e contract 1as entered into$F *8 T/e Federal Court of Claims stated t/e test to &e 1/et/er t/e 1orE erformed 1as Fessentiall# t/e same 1orE as t/e arties &ar"ained for 1/en t/e contract 1as a1arded$F -: In anot/er case t/e court stated t/at a cardinal c/an"e occurs if t/e ordered de%iations alter t/e nature of t/e t/in" to &e constructed$ -( T/e "eneral rinci le a ears to &e t/at if t/e function or nature of t/e 1orE as c/an"ed is "enerall# t/e same as t/e 1orE ori"inall# called for! t/e c/an"es are considered to &e 1it/in t/e "eneral sco e$ For e;am le! in a contract to &uild a /os ital 1/ere t/ere 1ere man# c/an"es in t/e materials used! &ut 1/ere t/e si,e and la#out of t/e &uildin" remained t/e same! t/e c/an"es 1ere /eld to &e 1it/in t/e sco e$ -* Amount o* e**ort ) T/e second test for determinin" if a c/an"e is 1it/in sco e concerns t/e amount of effort in terms of /or( disru#tion and cost increases e; erienced &# t/e Contractor$ In one case reAuirin" a su&contractor to lace &acEfill simultaneousl# 1it/ t/e 1orE of ot/er su&contractors! t/e c/an"e 1as considered so disru ti%e as to &e a cardinal c/an"e &ecause it added o%er *::O to t/e cost of t/e &acEfill 1orE$ -- In anot/er case t/e court decided to /old a trial on t/e cardinal c/an"e issue 1/ere t/ere /ad &een (-: c/an"es! t/e time of erformance /ad dou&led! and costs of R.$2 million 1ere incurred
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*re'nd v. United States, 2%0 U.S. %0 8!9229. Aragona Constr. Co. v. United States, !%5 Ct. C&. "H2 8!9%49. Air A -&ane Corp. v. United States, !H1 Ct. C&. 2%9, 40H *.2d !0"0 8!9%99. See Aragona a$ove. -eter Yie/it Sons_ Co. v. S'mmit Constr. Co., 422 *.2d 242 8Hth Cir. !9%99.
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a&o%e t/e contract rice of R0$5 million$ -. But it s/ould &e noted t/at contractors /a%e rarel# &een successful in ar"uin" for cardinal c/an"es on t/e &asis of amount o* e**ort$ %co#e o* the original com#etition ) Com etitors sometimes rotest t/e issuance of c/an"es 1/en t/e# &elie%e t/at a ne1 com etiti%e rocurement rocess s/ould /a%e &een used for t/e c/an"ed 1orE$ In decidin" t/ese cases! t/e courts /a%e used t/e criterion of 1/et/er t/e c/an"e 1as 1it/in the sco#e o* the original com#etition! i$e$! 1/at t/e com etitors s/ould /a%e antici ated to &e 1it/in t/e sco e of t/e com etition$ An im ortant factor to &e considered is F1/et/er t/e ori"inal solicitation adeAuatel# ad%ised offerors of t/e otential for t/e t# e of c/an"es durin" t/e course of t/e contract t/at in fact occurred $ $ $ or 1/et/er t/e modification is of a nature 1/ic/ otential offerors 1ould reasona&l# /a%e antici ated under t/e c/an"es clause$F -0 T/is issue is an im ortant one &ecause t/e C/an"es clause lends itself to otential a&use in t/e matter of orderin" Auantities not ori"inall# com eted$ T/is ractice tends to &ecome an e; edient to a%oid t/e time and e; ense of a ne1 rocurement action! &ut it is im ro er 1/en t/e additional Auantities e;ceed t/e sco e of t/e ori"inal com etition$ Suc/ additional Auantities s/ould eit/er &e &ou"/t t/rou"/ a ne1 com etiti%e rocurement! or rocessed as a sole source action 1it/ t/e reAuisite or"ani,ational a ro%als$ =um$er o* changes ) T/e num$er o* changes issued /as not &een a determinin" factor as to 1/et/er t/e c/an"es cumulati%el# are 1it/in sco e$ T/e Board of Contract A eals /eld t/at a ro;imatel# (:: c/an"e orders 1as not &e#ond t/e "eneral sco e$ -2 Anot/er case /eld t/at *:: c/an"e orders 1as not &e#ond t/e "eneral sco e$ -4 Time o* issuance 1 T/e time o* issuance of t/e c/an"es /as not &een considered a factor$ In one case t/e Contractin" Officer issued si; c/an"es after com letion of t/e 1orE! 1/ic/ e;tended t/e contract eriod &# (*: da#s! and t/e court /eld t/at t/ese c/an"es 1ere 1it/in t/e "eneral sco e$ -5 Changes in quantity ) 4a?or changes in the quantity of t/e 1orE /a%e &een /eld to &e cardinal c/an"es$ T/is rinci le a lies to &ot/ additi%e and deducti%e c/an"es$ Ma'or additions in t/e Auantit# s/ould &e rocessed as ne1 com etiti%e rocurements$ Lar"e reductions in Auantit# s/ould &e rocessed as contract termination actions$ T/e Com troller <eneral /as /eld t/at a c/an"e addin" Auantities a$o-e the contractual ma+imums 1as outside t/e sco e and t/erefore a cardinal c/an"e$ -8
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At&anti) Dr0 Do)2 Corp. v. United States, 11" *. S'pp. ""5 8..D. *&a. !99!9. #ei& =ross C Co., %9 Comp. =en. 241 8, 2"14"49, 90 ! C-D f 2!2. Co&e0 -roperties Corp., -S,CA 29!, 15 2 ,CA f !!,5!4. Ie&ian)e ?ns. Co. v. United States, 20 C&. Ct. 1!5 8!9909. 6.D. Bedin Constr. Co. v. United States, !1! Ct. C&. 10, "41 *.2d 2"5 8!9%59. 7ie$ert Corp., 10 Comp. =en. 44H 8, 2"22"4.59, 9! ! C-D f 4!".
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Collateral im#acts o* change = T/is criteria in%ol%es looEin" at all t/e %arious factors! suc/ as c/an"es in sc/edule! Auantit#! Aualit#! and costs! no one of 1/ic/ ma# &e sufficient in itself to render a c/an"e outside t/e contractMs sco e! &ut t/e cumulati%e im act of t/e c/an"e &ein" suc/ as to alter t/e nature of t/e item &ein" rocured$ For e;am le! a c/an"e in s ecification from a "asoline to a diesel dri%en /eater 1as outside t/e sco e &ecause t/e c/an"e reAuired su&stantial alteration of ot/er com onents3 6(9 it su&stantiall# increased t/e /eaterMs 1ei"/t! 6*9 added an electrical startin" s#stem! 6-9 reAuired a redesi"ned fuel control! 6.9 reAuired a redesi"ned com&ustor no,,le! 609 altered t/e erformance c/aracteristics! 629 increased unit rice &# *8O! and 649 dou&led t/e deli%er# sc/edule$ .: Best Practices Bu#in" additional %e/icles L ?n order to avoid the pro$&em of having to )ond')t a ne/ )ompetitive pro)'rement for minor in)reases in <'antities, grantees sho'&d str')t're their initia& )ompetitive so&i)itation /ith option provisions for additiona& <'antities that )o'&d )on)eiva$&0 $e re<'ired. When there are no option provisions, ho/ever, and it $e)omes )&ear that in)reases in the <'antit0 of vehi)&es are ne)essar0, grantees sho'&d either )ond')t a ne/ )ompetition or pro)ess a @'stifi)ation for non)ompetitive pro)'rement 8so&e so'r)e9 thro'gh the re<'ired interna& approving offi)ia& or $oard. C/an"in" &us s ecifications L Certain t0pes of spe)ifi)ation )hanges are )&ear&0 /ithin the a'thorit0 of the Changes )&a'se. The0 satisf0 a&& of the 3/ithin s)ope4 )riteria noted a$ove. *or e;amp&e, )hanges to seating fa$ri)s and )o&ors, e;terior paint s)hemes, signage, and f&oor )o&oring. S')h )hanges are 3reasona$&0 /ithin the )ontemp&ation of the parties /hen the )ontra)t /as entered into,4 and the0 do not a&ter the nat're of the vehi)&e $eing pro)'red. Bus en"ine c/an"es There are other potentia& $'s design )hanges, ho/ever, /hi)h ma0 not $e proper 'nder the Changes )&a'se. One of these /o'&d $e a )hange in engine t0pe, /hi)h /as not wit)in t)e sco%e of t)e ori!inal com%etition. *or e;amp&e, severa& man'fa)t'rers do not $'i&d $'ses /ith )ertain engine t0pes 8C#= or Diese&9. S')h a )hange /o'&d $e one that /as not wit)in t)e sco%e of t)e ori!inal com%etition 8i.e., /hat the )ompetitors sho'&d have anti)ipated to $e /ithin the s)ope of the origina& )ompetition9. This t0pe of )hange is so )riti)a& that it /o'&d have affe)ted the origina& $idding serio's&0 eno'gh that another )ompan0 )o'&d have /on the )ontra)t.
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Ameri)an Air *i&ter Co., 1H ! C-D !"%.
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Ci"/ floor %s$ lo1 floor &uses Another design )hange that /o'&d not $e proper 'nder the Changes )&a'se /o'&d $e a )hange from a 3high f&oor4 to a 3&o/ f&oor4 )onfig'ration. The cumulative im%acts of t)e c)an!e /o'&d $e so serio's that it /o'&d in fa)t $e a 3)ardina& )hange.4 Construction contract c/an"es L *or a dis)'ssion of )hanges to )onstr')tion )ontra)ts and the iss'e of the t0pes of )hanges that /o'&d $e 3/ithin s)ope4 vs. 3)ardina& )hanges,4 see se)tion 9.2." Construction C)an!es. 8$*$* Cost7Price Anal#sis of C/an"es RE@UIREMENT -aragraph !0 of *TA Cir)'&ar 4220.!: re<'ires a )ost or pri)e ana&0sis for ever0 pro)'rement a)tion( =rantees m'st perform a )ost or pri)e ana&0sis in )onne)tion /ith ever0 pro)'rement a)tion, in)&'ding )ontra)t modifi)ations. The method and degree of ana&0sis is dependent on the fa)ts s'rro'nding the parti)'&ar pro)'rement sit'ation, $'t as a starting point, grantees m'st ma2e independent estimates $efore re)eiving $ids or proposa&s$ 8a9 Cost Ana&0sis A )ost ana&0sis m'st $e performed /hen the offeror is re<'ired to s'$mit the e&ements 8i.e., 7a$or Bo'rs, Overhead, .ateria&s, et).9 of the estimated )ostQ e.g., 'nder professiona& )ons'&ting and ar)hite)t'ra& and engineering servi)es )ontra)ts. A )ost ana&0sis /i&& $e ne)essar0 /henever ade<'ate pri)e )ompetition is &a)2ing and for so&e so'r)e pro)'rements, in)&'ding )ontra)t modifi)ations or )hange orders, 'n&ess pri)e reasona$&eness )an $e esta$&ished on the $asis of a )ata&og'e or mar2et pri)e of a )ommer)ia& prod')t so&d in s'$stantia& <'antities to the genera& p'$&i) or on the $asis of pri)es set $0 &a/ or reg'&ation. 8$9 -ri)e Ana&0sis A pri)e ana&0sis ma0 $e 'sed in a&& other instan)es to determine the reasona$&eness of the proposed )ontra)t pri)e. 8)9 -rofit L =rantees /i&& negotiate profit as a separate e&ement of the pri)e for ea)h )ontra)t in /hi)h there is no pri)e )ompetition and in a&& )ases /here )ost ana&0sis is performed. 8d9 *edera& Cost -rin)ip&es L Costs or pri)es $ased on estimated )osts for )ontra)ts 'nder grants /i&& $e a&&o/a$&e on&0 to the e;tent that )osts in)'rred or )ost estimates in)&'ded in negotiated pri)es are )onsistent /ith *edera& )ost prin)ip&es. =rantees ma0 referen)e their o/n )ost prin)ip&es that )omp&0 /ith app&i)a$&e *edera& )ost prin)ip&es.
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DISCUSSION FTA Circular .**:$(E ara"ra / (: reAuires t/at "rantees erform a cost or rice anal#sis! as a ro riate! for e%er# contract action! includin" c/an"e orders$ Para"ra / (:6d9 reAuires t/e use of Federal cost rinci les! 1/ic/ are found in t/e Federal AcAuisition Re"ulation Part -(! 1/ene%er "rantees are ne"otiatin" costs or rices &ased on estimated costs$ T/e nature of c/an"e orders is suc/ t/at contractors 1ill almost al1a#s &e reAuired to su&mit c/an"e order cost ro osals 1/ic/ are &ased on estimated costs 1/ic/ are e; ected to &e incurred as a result of t/e c/an"e order$ T/us! c/an"e order ro osals 1ill almost al1a#s &e su&'ect to t/e Federal cost rinci les found in FAR Part -( 6or eAui%alent "rantee cost rinci les9$ <rantees s/ould ensure t/at t/eir t/ird) art# contract ro%isions ro%ide for t/e Federal cost rinci les! or eAui%alent "rantee cost rinci les! in determinin" allo1a&le costs for eAuita&le ad'ustments arisin" out of c/an"es to t/e contract$ For a "eneral discussion of cost and rice anal#sis tec/niAues! see Section 0$* Cost And Price Analysis$ For a discussion of rice ad'ustment criteria for construction contracts! see Section 8$*$-$- Pricing o* Construction Changes$ 8$*$- Construction C/an"es RE@UIREMENT T 2" of the .aster Agreement .A8!29, Construction, re<'ires grantees to provide and maintain )ompetent and ade<'ate engineering su%ervision at t)e construction site to ens're that the )omp&ete /or2 )onforms to the approved p&ans and spe)ifi)ations. *TA Cir)'&ar 4220.!: paragraph !0a. re<'ires a cost analysis for ever0 pro)'rement a)tion, in)&'ding )ontra)t modifi)ations and c)an!e orders. -aragraph !0e. of the Cir)'&ar %ro)i$its cost1%lus1%ercenta!e1of1cost methods of )ontra)ting, in)&'ding per)entage of )onstr')tion )ost methods. With respe)t to pri)ing methods, *TA Cir)'&ar 4220.!: paragraph 1@ states that t)e Time and aterials t0pe of pri)ing re<'ires that a determination $e made that no other t0pe of agreement is s'ita$&e and that a )ei&ing pri)e $e spe)ified in the )ontra)t. DISCUSSION T/e issue of on)site su er%ision as it relates to t/e issuance of construction contract c/an"es 1ill &e discussed in Section 8$*$-$* Field Change 3rders$ T/e ricin" of construction contract c/an"es is discussed in Section 8$*$-$- Pricing o* Construction Changes$ E%er# construction contract s/ould include a C/an"es clause "i%in" t/e "rantee t/e unilateral ri"/t to order c/an"es in t/e contract 1orE durin" t/e course of erformance! and t/e Contractor t/e dut# to roceed 1it/ t/e 1orE as c/an"ed u on recei t of t/e c/an"e order! assumin" t/at t/e c/an"e is 1it/in t/e sco e of t/e contract$ T/e C/an"es
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clause must contain lan"ua"e deferrin" t/e ricin" of t/e c/an"ed 1orE until some later time! 1/ile o&li"atin" t/e Contractor to roceed 1it/ t/e 1orE and resol%e t/e issue of com ensation later$ Failure to reac/ an a"reement on com ensation 1ould &e a dis ute to &e rocessed accordin" to t/e rocedures of t/e :is#utes clause of t/e contract$ It is not a &est ractice to issue c/an"e orders 1/ere t/e rice and sc/edule for t/e c/an"ed 1orE is not ne"otiated and a"reed u on &efore/and$ Co1e%er! in construction ro'ects! roceedin" 1it/ 1orE rior to a"reement ma# &e necessar# to a%oid dela#$ In suc/ cases! time and material records must &e Ee t! and a rice a"reed u on as soon after t/e &e"innin" of 1orE as ractica&le$ <rantees must ensure t/at t/e# are aut/ori,ed to do t/is under t/eir o1n re"ulations$ T/e Federal clause for construction c/an"es is found at FAR 0*$*.-).$ It aut/ori,es c/an"es! 1it/in t/e "eneral sco e of t/e contract3 6(9 6*9 6-9 6.9 In t/e s ecifications 6includin" dra1in"s and desi"ns9J In t/e met/od or manner of erformance of t/e 1orEJ In t/e <o%ernment)furnis/ed facilities! eAui ment! materials! ser%ices! or siteJ or Directin" acceleration in t/e erformance of t/e 1orE$
T/e Federal clause also ro%ides "uidance on t/e rocessin" of claims 1/ic/ t/e Contractor re"ards as Jconstructi-e changes,J i$e$! <o%ernment actions! directions! inter retations or determinations 1/ic/ 1ere not identified as c/an"es! &ut 1/ic/ cause t/e cost of t/e 1orE or t/e time reAuired to do t/e 1orE to c/an"e$ T/e ABA Model Procurement Code 6MPC9 C/an"es clause for construction contracts is %er# &road in "i%in" o1ners t/e ri"/t to order3 6(9 C/an"es in t/e 1orE 1it/in t/e sco e of t/e contractJ and 6*9 C/an"es in t/e time for erformance$ T/e MPC clause "i%es t/e Contractor the duty to #roceed /ith the /or( /hile the issue o* com#ensation is $eing resol-ed! T/is clause also contains a notice to t/e Contractor not to erform 1orE a&o%e a certain dollar amount unless t/e c/an"e order /as &een si"ned &# an a ro riate fiscal officer or ot/er res onsi&le official certi*ying that the *unds are a-aila$le for t/e 1orE &ein" ordered$ ( Bit/in sco e %$ cardinal c/an"es ) Construction contracts are! of course! su&'ect to t/e same criteria as ot/er contracts 1it/ res ect to t/e reAuirement t/at c/an"es &e /ithin the general sco#e o* the contract! See Section 8$*$( Contract %co#e and Cardinal Changes$ A
.-C I5 40!.0" C)an!es Clause.
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fe1 o&ser%ations can &e made concernin" construction contracts as t/e# /a%e &een liti"ated in t/e Federal realm 1it/ res ect to t/e 1it/in sco e issue3 C/an"es in Auantit# ) Increases in t/e Auantit# of t/e ma'or items are not "enerall# re"arded as aut/ori,ed &# t/e Changes clause$ For e;am le! on a construction ro'ect! additional &uildin"s ma# not &e added &# t/e Changes clause$ * On unit rice contracts! t/is rule re"ardin" additional Auantities /as &een inter reted to allo1 increases in t/e Auantit# of su&sidiar# items unless t/e %ariation is so lar"e t/at it alters t/e entire &ar"ain$ For e;am le! on a contract reAuirin" t/e dou&lin" of t/e amount of material for an em&anEment to &uild a le%ee! t/e court /eld t/at t/e c/an"e 1as &e#ond t/e sco e of t/e contract$ - :eletions of ma'or items or ortions of t/e 1orE are liEe1ise not 1it/in t/e sco e of t/e Changes clause$ For e;am le! &uildin"s ma# not &e deleted from construction contracts$ . Co1e%er! deletions of ortions of t/e 1orE are ermissi&le unless t/e deletion &ecomes so lar"e as to alter t/e ori"inal &ar"ain$ B/en lar"e deletions are necessar#! t/e# s/ould &e made under t/e Termination *or Con-enience clause$ C/an"es in time of erformance ) T/e Federal clause lists acceleration o* #er*ormance as one of t/e t# es of c/an"es ermitted &# t/e C/an"es clause$ In contracts 1/ic/ do not contain t/e acceleration lan"ua"e! it is unclear 1/et/er suc/ c/an"es are ermitted &# t/e C/an"es clause or not$ Some Federal Contract A eals Boards /a%e /eld t/at t/e contract sc/edule 1as art of t/e s ecifications! and t/erefore a ermissi&le c/an"e$ <rantees ma# 1is/ to re%ie1 t/eir c/an"es clause and add t/e a&ilit# to accelerate or dela# erformance$ Anot/er a roac/ 1ould &e to state in t/e contract t/at t/e sc/edule 1as art of t/e s ecifications for ur oses of orderin" accelerated or decelerated erformance under t/e C/an"es clause$ Remem&er t/at /a%in" t/is a&ilit# under t/e C/an"es clause "i%es t/e "rantee t/e ri"/t to c/an"e t/e sc/edule of 1orE immediatel# and resol%e com ensation later! instead of /a%in" to a"ree on t/e rice of t/e c/an"e &efore t/e sc/edule can &e altered$ C/an"es in met/od or manner of erformance ) C/an"es in t/e met/od or manner of erformance /a%e traditionall# not &een a Fc/an"es issueF under t/e Federal clause &ecause suc/ c/an"es altered t/e 1orE itself and 1ere seen as c/an"es to t/e s ecifications$ It is not necessar# t/at t/e contract initiall# s ecif# a certain met/od or manner of 1orE in order to find a c/an"e if! in fact! t/e Contractor is ordered to erform in suc/ a manner or use a met/od ot/er t/an one t/at could /a%e ro erl# &een used$
A %%50!, !5 Comp. =en. 51" 8!9"59Q , 950%9, "0 Comp. =en. "4 8!9509. Sadd&er v. U.S., 2H1 *. 2d 4!! 8Ct. C&. !9%!9. =enera& Contra)ting C Constr. Co. v. U.S., H4 Ct. C&. 510 8!9"19Q .).asters v. State, !5 #.:. 4!1 8#.5. !HHH9.
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8$*$-$( Differin" Site Conditions Un&ess the )ontra)t provides other/ise, the )onstr')tion )ontra)tor /i&& 's'a&&0 $e he&d to $ear the ris2 of 'ne;pe)ted s'$s'rfa)e site )onditions. This )reates a serio's pro$&em for the )ompan0 /ishing to $id on a )onstr')tion pro@e)t. The )ontra)tor m'st either perform a )ost&0 site inspe)tion, even tho'gh there is no ass'ran)e that its $id /i&& $e s'))essf'&, or it m'st in)&'de a s'$stantia& )ontingen)0 in its $id pri)e to )over the ris2 of the 'n2no/n site )onditions. The &atter a&ternative res'&ts in m')h higher $id pri)es to the o/ner than /o'&d $e the )ase if the ris2 /ere not $eing ass'med $0 the $idders. ?t is on&0 /here the )ontra)t )ontains a )&a'se shifting the ris2 to the o/ner that the $idder )an safe&0 ass'me it /i&& $e )ompensated for >differing site )onditions> or >)hanged )onditions.> *or these reasons most )onstr')tion so&i)itations /i&& )ontain a >differing site )onditions> )&a'se des)ri$ing the t0pes of ris2 $eing ass'med $0 the o/ner, promising the )ontra)tor an equita$le ad5ustment if the defined )onditions materia&iGe. The 's'a& )&a'se /i&& refer to Gsu$surface or latent %)ysical conditions at t)e site differin! materially from t)ose indicated in t)e contract/ or un(nown %)ysical conditions at t)e site/ of an unusual nature/ differin! materially from t)ose ordinarily encountered and !enerally reco!ni@ed as in)erent in wor( of t)e c)aracter %rovided for in t)e contract.> 5 The )&a'se /i&& norma&&0 re<'ire the Contra)tor to notif0 the o/ner prior to dist'r$ing the site )onditions so that the o/nerKs representative )an investigate the site and )onfirm the )onditions a&&eged $0 the Contra)tor. :<'ita$&e ad@'stments The phrase equita$le ad5ustment a&&o/s for )onsidera$&e &atit'de in esta$&ishing the meas'rement of the )ompensation. The equita$le ad5ustment in)&'des added )osts for any )ontra)t /or2, /hether )hanged or 'n)hanged $0 the 'nforeseen )onditionsQ i.e., the Contra)tor is entit&ed to re)over an0 in)reased )osts for an0 portion of the )ontra)t /or2, pres'ming it )an demonstrate that it /i&& in)'r in)reased )osts, in)&'ding de&a0 and impa)t )osts, on a))o'nt of the differing site )ondition. % ?n the event that the parties )annot agree on the amo'nt of )ompensation, the )&a'se /i&& re<'ire the Contra)tor to pro)eed /ith the /or2 and reso&ve the iss'e at a &ater date, /hi)h is the same pro)ed're as the Changes )&a'se. This )&a'se enhan)es the )ompetitive $idding environment $0 a&&o/ing $idders to s'$mit their $est pri)es, /itho't having to in)&'de s'$stantia& )ontingen)ies. ?t provides a me)hanism to )ompensate the )ontra)tor thro'gh negotiation rather than &itigation. The )&a'se does not, ho/ever, a'tomati)a&&0 g'arantee the )ontra)tor an ad@'stmentQ the )ontra)tor m'st prove that
A,A .ode& -ro)'rement Code )&a'se I5 40!.0% "ifferin! Site Conditions Clause. *AI 52.2"% 2 "ifferin! Site Conditions.
2
Yenn0 Constr. Co. v. .etropo&itan Sanitar0 Dist., "09 #.:. 2d 22! 8?&&. !9149.
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the site )onditions en)o'ntered differ materia&&0 from the )onditions indi)ated $0 the o/nerKs )ontra)t or from )onditions ordinari&0 en)o'ntered. 8$*$-$* Field C/an"e Orders RE@UIREMENT T 2" of the .aster Agreement .A8!29, Construction, re<'ires grantees to provide and maintain com%etent and adequate en!ineerin! su%ervision at t)e construction site to ens're that the )omp&ete /or2 )onforms to the approved p&ans and spe)ifi)ations. Constr')tion pro@e)ts re<'ire on site engineering s'pervision $0 a resident engineerAprogram manager. At the same time it is not feasi$&e to have a )ontra)ting offi)er at ea)h )onstr')tion site. ?t is a&so inherent in the nat're of )onstr')tion pro@e)ts that emergen)ies /i&& o))'r /hi)h re<'ire immediate dire)tion to the )ontra)tor to do )hanged /or2. *or these reasons it has $e)ome genera&&0 a))epted pra)ti)e $0 most organiGations doing )onstr')tion )ontra)ting that some t0pe of de&egation of a'thorit0 from the )ontra)ting offi)er to the resident engineer to dire)t fie&d )hanges is essentia&. De&egations of a'thorit0 to iss'e andAor negotiate fie&d )hanges are the prerogative of the grantee. Where the grantee )hooses to de&egate a'thorit0 to resident engineers, severa& pro)ed'res sho'&d $e o$served( 8!9 The granteeKs pro)'rement po&i)ies and pro)ed'res m'st )&ear&0 esta$&ish organiGationa& responsi$i&it0 and provide a genera& pro)ed'ra& frame/or2 for the pro)ess of )ontra)t modifi)ations to )onstr')tion )ontra)ts. This po&i)0 /i&& )&ear&0 define /hi)h personne& are a'thoriGed to iss'e )hange orders, in)&'ding the &imits of their do&&ar a'thorit0. 829 The grantee sho'&d ens're that an0 person a'thoriGed to iss'e )hange orders has met )ertain ed')ationa&, training and e;perien)e re<'irements. S'ggested )o'rses for resident engineersApro@e)t managers /o'&d in)&'de( 1

,asi) Contra)t Administration 8! /ee29 Cost and -ri)e Ana&0sis 8! /ee29 Contra)ting Offi)erKs Iepresentative Co'rse 8! /ee29 Constr')tion Contra)ting ,asi)s 8! /ee29 Contra)ting $0 #egotiation 8! /ee29 Changes 'nder Contra)ts 8! /ee29 *edera& Contra)t 7a/ 8! /ee29 Constr')tion C&aims 8! /ee29 Contra)ting $0 Sea&ed ,idding 8! /ee29
Co'rses of this nat're are offered $0 .anagement Con)epts, ?n)., the U.S. Agri)'&t're Department, 8HHH9 144 =IAD, and the #ationa& Transit ?nstit'te at I'tgers Universit0, 81"29 9"2 !100.
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8"9 De&egations of a'thorit0 to iss'e fie&d )hanges sho'&d $e &imited to those sit'ations /here time is )riti)a&Q w)ere t)ere is insufficient time to %rocess t)e c)an!e t)rou!) t)e contractin! officer. Where time permits, the )hange sho'&d $e pro)essed thro'gh the )ontra)ting offi)er, /ho /o'&d o$tain a proposa& from the )ontra)tor and )ond')t negotiations $efore the )hange is iss'ed. The )hange )o'&d then $e iss'ed as a $i &atera& )ontra)t modifi)ation setting forth the )hanged /or2 and the e<'ita$&e pri)e ad@'stment and time e;tension for the )hange. Where time is )riti)a&, ho/ever, the resident engineer /o'&d iss'e the )hange, f'rnish the )ontra)ting offi)er /ith an in ho'se )ost estimate for the /or2, eva&'ate the )ontra)torKs proposa& /hen re)eived, and assist the )ontra)ting offi)er in the negotiation of the )hange. 8$*$-$- Pricin" of Construction C/an"es -ri)e ad@'stments 'nder )ontra)t )&a'ses When a )ontra)t )&a'se e;ists /hi)h addresses the a)tion )a'sing the )hange 8e.g., the )hanges )&a'se, differing site )onditions )&a'se, et).9, the )ontra)t )&a'se /i&& determine the manner of the pri)e ad@'stment. *or *edera& )ontra)ts and man0 State and &o)a& )ontra)ts, the term equita$le ad5ustment is 'sed to des)ri$e the method of ad@'sting the )ontra)t pri)e. H The term equita$le ad5ustment in)&'des an a&&o/an)e for profit, /hi&e the term ad5ustment, /hi)h is 'sed in the *edera& Sus%ension of 'or( )&a'se, 9 provides for an ad@'stment for in)reased performan)e costs/ d'e to dire)ted s'spensions of /or2 'nder this )&a'se, $'t not %rofit. The spe)ifi) &ang'age in the grantee )ontra)t )&a'se /i&& determine /hether the ad@'stment is to in)&'de profit or /i&& $e &imited to )osts on&0. There are )ertain r'&es governing e<'ita$&e ad@'stment methodo&og0 /hi)h have $een deve&oped in *edera& )ases, and these *edera& )ontra)t r'&es have genera&&0 $een adopted in )ases invo&ving non *edera& )ontra)ts as /e&&. The *edera& )ontra)t r'&es pertaining to equita$le ad5ustments arising o't of )hange orders on )onstr')tion )ontra)ts are s'mmariGed $e&o/. A$ Basic Pricin" Formula The $asi) pri)ing form'&a for an equita$le ad5ustment is >the differen)e $et/een /hat it /o'&d have reasona$&0 )ost to perform the /or2 as origina&&0 re<'ired and /hat it reasona$&0 )ost to perform the /or2 as )hanged.> !0 State )o'rts have adopted the same $asi) form'&a for e<'ita$&e ad@'stments. When repri)ing as a res'&t of the )hange order, )o'rts have &imited the repri)ing to the )hanged /or2, /itho't a&tering the origina& profit or &oss position of the )ontra)tor. This is 2no/n as the >&eave them /here 0o' find them approa)h.> This r'&e /o'&d pre)&'de a )ontra)tor from )onverting a &oss to a profit or vi)e versa.
*AI 52.2"% 2 "ifferin! Site Conditions Clause, and *AI 52.24" 4 C)an!es Clause. *AI 52.242 !4. .odern *oods, ?n)., AS,CA 2090, 51 ! ,CA T !229.
(:
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a9 -ri)ing the de&eted /or2 Under the $asi) pri)ing form'&a, the amo'nt of the ad@'stment for the de&eted /or2 is the )ost that the )ontra)tor /o'&d have in)'rred had the )hange not $een iss'edQ i.e., had the /or2 $een performed. Us'a&&0 one of the parties /i&& arg'e that the amo'nt sho'&d $e the amo'nt origina&&0 estimated $0 the )ontra)tor /hen the origina& $id /as prepared. Bo/ever, the )o'rts have 's'a&&0 re@e)ted this arg'ment if $etter information is avai&a$&e sho/ing /hat the )ontra)torKs a)t'a& )ost of performan)e /o'&d have $een had the )hange not $een iss'ed. The >/o'&d have )ost> r'&e is app&ied to )ases invo&ving ded')tive )hanges or )hanges /here /or2 is de&eted, and other /or2 is s'$stit'ted for the de&eted /or2. e ?n one *edera& )ase, the )ontra)tor had fai&ed to in)&'de )osts in its origina& $id pri)e for a )ertain spe)ifi)ation re<'irement, /hi)h /as &ater de&eted $0 the =overnment. The )ontra)tor arg'ed that the =overnment /as not entit&ed to a pri)e )redit $e)a'se there /as nothing in the )ontra)torKs origina& pri)e for the /or2, $'t the ,oard he&d that the =overnment /as entit&ed to a pri)e )redit $ased on the amo'nt that the )ontra)tor /o'&d have spent to )omp&0 /ith the de&eted spe)ifi)ation re<'irement. !! ?n another )ase invo&ving a )hange from 'ndergro'nd e&e)tri)a& d')ts and )a$&e to an overhead s0stem, it /as determined that the origina& e&e)tri)a& /or2 >/o'&d have )ost> a$o't S%!,000. The /or2 as )hanged on&0 )ost a$o't S!9,000. The =overnment arg'ed for a pri)e red')tion of S42,000, /hi)h /as the net differen)e. The )ontra)tor, ho/ever, had on&0 in)&'ded a$o't S"5,000 in its origina& $id for the 'ndergro'nd /or2. The )ontra)tor arg'ed that, if the =overnmentKs pri)e red')tion of S42,000 /ere a&&o/ed, the )ontra)tor /o'&d a)t'a&&0 $e pa0ing the =overnment S1,000 on a))o'nt of the )hanged /or2. The )o'rt, ho/ever, r'&ed for the =overnment, finding that the )ontra)torKs o/n neg&igent $id )a'sed the pro$&em, not the )hange order. !2 Bere again /e see the $asi) pri)ing form'&a app&ied the amo'nt of the ad@'stment for the de&eted /or2 is the )ost that the )ontra)tor /o'&d have in)'rred had the /or2 a)t'a&&0 $een performed. The )ost ad@'stment is not $ased 'pon the amo'nt in)&'ded in the )ontra)torKs origina& $id if that amo'nt is not indi)ative of the )ost to a)t'a&&0 perform the /or2.
$9 -ri)ing the added /or2 The $asi) pri)ing form'&a re<'ires that the )ontra)tor re)over the in)reased )ost of performing the /or2 as )hanged. This is tr'e even if the amo'nt in)&'ded in the origina& $idA)ontra)t /as more than /hat /as ne)essar0 for performan)e of the origina& /or2. e
((
?n one )ase /here the )ontra)t /as improper&0 )hanged to re<'ire the )ontra)tor to )omp&0 /ith the Davis ,a)on A)t, the )ontra)tor /as entit&ed to an in)rease in
#o$&e$roo2 Contra)tors, ?n)., AS,CA 91"%, !9%4 ,CA T 42H", !9%4 ,CA C 440H. S.#. #ie&sen Co., v. U.S., !4! Ct. C&. 19" 8!95H9.
(*
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the )ontra)t pri)e even tho'gh its $id a&read0 in)&'ded eno'gh )osts for Davis ,a)on /ages. !" B$ E;ce tions to t/e Basic Pricin" Formula a9 Comp&ete De&etion of a Severa$&e ?tem When the )ontra)t )ontains severa$le items, the com%lete deletion of s')h an item /i&& res'&t in an e<'ita$&e ad@'stment /hi)h ded')ts the ori!inal %rice of t)e deleted item as stated in t)e contract. This is an e;)eption to the >/o'&d have )ost r'&e.> Whether the )ontra)t items are severa$le or not depends on the provisions of the so&i)itation, the nat're of the /or2, and the intentions of the parties. .ere&0 $e)a'se an item has a separate 'nit pri)e in the )ontra)t does not ma2e the item severa$le. e ?n a )ase /here the =overnment a/arded a )ontra)t for /or2 to $e performed in fo'r phases and pri)ed ea)h phase separate&0 in the origina& )ontra)t, a )an)e&&ation of one phase in its entiret0 res'&ted in a pri)e red')tion e<'a& to the amo'nt of the pri)e for that phase in the origina& )ontra)t. This /as proper even tho'gh the )ontra)tor had serio's&0 overpri)ed that phase and had 'nderpri)ed another phase. !4
$9 Advan)e Agreements in the Contra)t The parties to the )ontra)t ma0 agree in advan)e 'pon the methodo&og0 to $e fo&&o/ed in ma2ing equita$le ad5ustments. *or e;amp&e, the )ontra)t ma0 state that e<'ita$&e ad@'stments for ded')tive )hanges /i&& $e the 'nit pri)es in)&'ded in the )ontra)t. Another approa)h to ded')tive )hanges is to state in a )ontra)t )&a'se that pri)e )redits for ded')tions /i&& $e $ased 'pon estimated )osts at the time the )ontra)t /as made. )9 De&etion of .inor ?tems ?t is )'stomar0 to 'se the )ontra)torKs $id pri)e to de&ete re&ative&0 minor items. To attempt to $ase the ad@'stment on a >/o'&d have )ost> approa)h ma0 $e )ost&0 /itho't prod')ing a $etter res'&t, so )o'rts 's'a&&0 fo&&o/ the e;pedien)0 of 'sing the origina& $id pri)e for de&etion of minor items or /or2.
(-
, : C Y Christensen Ia$er Yief C Asso)s., AS,CA !%4%1, 1" ! ,CA T 9HH4.
(.
=regor0 C Iei&&0 Asso)., ?n)., *AACA- %5 "0, %5 2 ,CA T 49!H. Bo&tGen Constr. Co., A=,CA 4!", 15 2 ,CA T !!,"1H.
-age 2!
C$ Cost Im act on Contractor The )ontra)torKs )ost m'st $e affe)ted in order for there to $e an e<'ita$&e ad@'stment. The 'se of mar(et value of the o&dAne/ /or2 is genera&&0 re@e)ted. !5 a9 ?n)'rren)e of Costs A )ontra)tor m'st ma2e pa0ments or in)'r o$&igations /hi)h are greater than it /o'&d have in)'rred to do the origina& /or2. When no pa0ment has 0et $een made, or /hen the &oss is re)overa$&e, )osts are not )onsidered in)'rred. *or e;amp&e, /here the )ontra)torKs >&oss> is )overed $0 ins'ran)e, no )osts are in)'rred and therefore no ad@'stment is d'e. ?n the )ase of a )redit for de)reased /or2, the amo'nt of )redit is the )ost savings to the )ontra)tor. ?f the )ontra)tor rea&iGes no savings from the )hange, then no )redit /i&& $e d'e. e ?n a )ase /here the =overnment /aived a requirement for an American %roduct, $'t the )ontra)tor had 'sed foreign )osts in its $id initia&&0, the /aiver did not res'&t in )ost savings to the )ontra)tor. The Co'rt fo'nd that the =overnment /as not entit&ed to a pri)e red')tion. !%
$9 A&&o/a$&e Costs Whenever a )ontra)t modifi)ation re<'ires the s'$mission of estimated )osts for negotiation, as is the )ase in virt'a&&0 a&& )onstr')tion )hange orders, the )ost prin)ip&es in *AI -art "! 8or e<'iva&ent grantee )ost prin)ip&es9 m'st $e 'sed to determine /hat is an allowa$le cost. This is tr'e for a&& )ontra)ts, /hether the0 $e )ost t0pe or fi;ed pri)e. *AI "! provides that a&&o/a$&e )osts m'st meet a&& of the fo&&o/ing tests( e e e e D$ Burden Of Proof The part0 see2ing the ad@'stment has the $'rden of proof in esta$&ishing the amo'nt of the pri)e ad@'stment. The grantee has the $'rden to prove, for e;amp&e, ho/ m')h pri)e red')tion is Ieasona$&enessQ A&&o)a$i&it0Q ?n a))ordan)e /ith genera&&0 a))epted a))o'nting prin)ip&es and )ost a))o'nting standards 8if app&i)a$&e9Q #ot e;)&'ded $0 spe)ifi) )ontra)t provisions s')h as advance a!reements.
(0
,r')e Constr. Corp. v. U.S., "24 *.2d 5!% 8Ct. C&. !9%"9. 7.=. 7ef&er, ?n). v. U.S., % C&. Ct. 5!4 8!9H49.
(2
-age 22
appropriate for de&eted /or2, /hi&e the )ontra)tor )arries the $'rden of proving ho/ m')h of a pri)e in)rease it ma0 $e entit&ed to re)eive. To meet this $'rden, the part0 m'st sho/ the reasona$leness of t)e claimed costs and demonstrate that these costs )ave a causal connection to t)e c)an!e or ot)er action on w)ic) t)e claim is $ased. !1 a9 Ca'sation The )ost in)rease or de)rease m'st $e )a'sed $0 the event for /hi)h an ad@'stment is $eing )&aimed. There m'st $e a relations)i% in time $et/een the )osts and the event on /hi)h the )&aim is $ased. This re&ationship is demonstrated /hen the )osts fo&&o/ the event in a predi)ta$&e se<'en)e. A&so, the )osts m'st $ear a &ogi)a& re&ationship to the event, res'&ting from its o))'rren)e. $9 Ieasona$&eness of Amo'nt *AI "!.20! "8a9 p&a)es the $'rden of proof of reasona$leness for $oth dire)t and indire)t )osts on the )ontra)tor. Bo/ever, the test of reasona$leness gives the )ontra)tor $road dis)retion in ho/ it performs the /or2. A >reasona$&e )ost> has $een defined as fo&&o/s( >A )ost is reasona$&e if, in its nat're or amo'nt, it does not e;)eed that /hi)h /o'&d $e in)'rred $0 an ordinar0 pr'dent person in the )ond')t of )ompetitive $'siness.> !H E$ Ma'or Cost Elements a9 7a$or The )ontra)tor $ears the $'rden of demonstrating that the )ost of its additiona& &a$or effort has $een )a'sed $0 the event on /hi)h the )&aim is $ased. ?n some )ases the )ontra)tor ma0 $e a$&e to segregate the )ost of the )hanged /or2 in its re)ords, and th's demonstrate the additiona& &a$or ho'rs d'e to the )hange. Bo/ever, /hen it is impossi$&e to segregate the additiona& &a$or ho'rs res'&ting from the )hange or other a)tion of the o/ner, )o'rts have a))epted an approa)h to pri)ing the )hange 2no/n as the total cost met)od. ,0 this is meant t)e total costs actually incurred com%ared to t)e ori!inal estimate. T)is met)od can only $e used if= e e The origina& &a$or estimates in the )ontra)torKs $id are reasona$&e, $ased on o$@e)tive, e;terna& eviden)e, and The o/ner /as so&e&0 responsi$&e for the overr'n there m'st $e no )on)'rrent de&a0s, et).
(4
#ager :&e). Co. v. U.S., 442 *.2d 9"% 8Ct. C&. !91!9. S.W. :&e)s. C .fg. Corp. AS,CA 20%9H, 11 2 ,CA T !2,%"! 8!9119, aff+d., %55 *.2d !01H 8Ct C&. !9H!9.
(5
,r')e Constr. Corp. v. U.S., "24 *.2d. 5!% 8Ct C&. !9%"9.
-age 2"
There is no other re&ia$&e method to esta$&ish the additiona& &a$or )osts. ?f there is another method, the total cost approa)h )annot $e 'sed. !9
?f the )hange disr'pts the &a$or effort on 'n)hanged /or2, having a >ripp&e effe)t or impa)t> on the effort re<'ired to do the 'n)hanged /or2, the additiona& )osts of performing the 'n)hanged /or2 are )ompensa$&e. 20 One )ase of this nat're invo&ved a >disr'ption of the /or2 $e)a'se of the 'ne;pe)ted and e;)essive n'm$er of )hange orders.> 2! ?n)reases in &a$or )osts are re)overa$&e /hen a )ontra)tor in)'rs higher /age rates $e)a'se of )ompensa$&e de&a0s in performing the /or2. Contra)tors are a&so entit&ed to )ompensation /hen there is a disr'ption to the /or2 se<'en)e, th's res'&ting in ineffi)ien)iesQ for e;amp&e, disr'ptions /hi)h pre)&'de p&anned sim'&taneo's /or2 a)tivities, or for)ed 'se of overtime /or2 paid at premi'm rates, or de&a0 of /or2 $e)a'se of 'nfavora$&e /eather )onditions. $9 *ie&d Overhead Field over)ead is the )ost of maintaining the )ontra)torKs fie&d operations staff, fa)i&ities and e<'ipment at the @o$ site. *ie&d overhead in)&'des the )ost of personne& )hargea$&e to the spe)ifi) pro@e)t, s')h as the sa&aries for offi)e )&er2s, pro@e)t s'pervisors, time2eepers and engineers. ?t ma0 a&so in)&'de renta& or o/nership )osts for on site trai&ers, offi)e e<'ipment, 'ti&ities, te&ephones, a'tomo$i&es, tr')2s, et). Field over)ead is different than +ome ,ffice ,ver)ead/ /hi)h are genera& )osts of )ond')ting the )ontra)torKs overa&& $'siness and )annot $e attri$'ted dire)t&0 to an0 one pro@e)t. Dire)t vs. indire)t )osts ?n an0 proposa& for a pri)e ad@'stment arising o't of a )hange order, it is a&/a0s important to determine if the )osts $eing proposed are dire)t or indire)t 8overhead9 )osts. ?f 0o'r )ontra)t in)&'des a )&a'se spe)if0ing the mar2'p for fie&d overhead the per)entage /hi)h /i&& $e a&&o/ed in the pri)ing of )hanges then it is )riti)a& to ens're that the )ontra)tor is $eing )onsistent in its treatment of dire)t vs. indire)t )osts, and that there is no d'p&i)ation of )osts. *or e;amp&e, if the )ontra)torKs norma& a))o'nting pra)ti)e is to in)&'de the )ost of its sa&aried genera& foreman in the fie&d overhead poo&, then a )hange order )&aim )annot propose this foremanKs sa&ar0 as a dire)t &a$or )ost $e)a'se the )ost is a&read0 in)&'ded in the fie&d overhead mar2'p /hi)h is app&ied to dire)t &a$or )osts. ?t is important, therefore, for the granteeKs )ontra)t administrator to have an in depth 2no/&edge of a&& of the e&ements in the )ontra)torKs fie&d overhead poo&Q that is, a good 'nderstanding of the vario's a))o'nts /hi)h ma2e 'p the poo&. The )ontra)t administrator /i&& then $e in a position to eva&'ate the )ontra)torKs
(8
W'nder&i)h Contra)ting Co. v. U.S., "5! *.2d 95% 8Ct. C&. !9%59. T'rn$'&&, ?n). v. U.S., "H9 *.2d !001 8Ct. C&. !9%19.
*:
-a'& Bardeman, ?n). v. U.S., 40% *.2d !"51 8Ct. C&. !9%99. C&ar2e ,aridon, ?n). v. .eritt Chapman C S)ott Corp., "!! *.2d "H9 84th Cir. !9%29.
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-age 24
)ost proposa&s and ens're that there is no d'p&i)ation of )osts $e)a'se of the improper )harging of overhead )osts as dire)t )osts. An a'dit of the Contra)torKs indire)t )ost poo&s ma0 $e ne)essar0 to o$tain the re<'ired degree of informationA2no/&edge )on)erning the )omposition of the indire)t )ost poo&s. :;tended performan)e When the )ontra)tor is de&a0ed or the )ontra)t performan)e period is e;tended $0 a )hange order or other a)tion of the o/ner, the )ontra)tor /i&& in)'r additiona& @o$ site overhead e;penses /hi)h are time re&ated. These /i&& )onsist of additiona& )osts for s'pervision, maintenan)e of trai&ers, te&ephones, ins'ran)e, et). There are t/o /a0s to pri)e these additiona& overhead e;penses. The first is to tota& a&& of the @o$ site overhead e;penses for the entire pro@e)t and divide this tota& $0 the n'm$er of da0s over /hi)h the )osts /ere in)'rred in order to )omp'te a dai&0 overhead )ost. This average dai&0 overhead )ost is then m'&tip&ied $0 the n'm$er of da0s of de&a0 in order to )omp'te the )ost of the de&a0. Bo/ever, this method of 'sing the average dai&0 )ost ma0 not prod')e an e<'ita$&e res'&t. *or e;amp&e, if the )ontra)tor is de&a0ed in the ear&ier stages of a pro@e)t /hen it has a f'&& )omp&ement of s'pervisor0 personne& and e<'ipment at the @o$ site, the fie&d overhead )ost of a da0Ks de&a0 /i&& $e m')h greater than if it o))'rs at the end of the pro@e)t /hen most of the s'pervisors have $een re&eased and the e<'ipment has $een removed. ,e)a'se dai&0 fie&d overhead )harges ma0 var0 materia&&0 depending on the stage of the pro@e)t /hen the de&a0 o))'rs, it ma0 $e more e<'ita$&e to 'se another method of )omp'ting the fie&d overhead de&a0 )osts. This method )omp'tes t)e daily field over)ead cost for t)e time %eriod w)en t)e delay occurs. ?n one *edera& )ase invo&ving this iss'e, the =overnment arg'ed that the de&a0 )osts sho'&d $e )omp'ted 'sing the tai& end of the pro@e)tQ i.e., the e;tended period of performan)e. The )o'rt, ho/ever, r'&ed that the de&a0 damages sho'&d $e )a&)'&ated 'sing t)e s%ecific time %eriods in w)ic) t)e delay occurred11t)e actual %eriod of t)e wor( disru%tion. The average dai&0 fie&d overhead )osts d'ring this period of a)t'a& /or2 disr'ption /ere )onsidera$&0 higher than the dai&0 )osts at the tai& end of the @o$, and the )o'rt )hose a more e<'ita$&e method of )ompensating the )ontra)tor for its a)t'a& )osts d'ring the period of /or2 disr'ption. 22 )9 Bome Offi)e Overhead ) Bome offi)e overhead is genera&&0 referred to as >=enera& and Administrative> 8=CA9 )osts, and these )osts in)&'de those a)tivities ne)essar0 for the overa&& $'siness of the )ontra)tor. The0 /o'&d in)&'de the sa&aries of the )ompan0Ks e;e)'tives, &ega& )o'nse&, )orporate &ia$i&it0 ins'ran)e, a))o'nting, depre)iation, proposa&A$idding )osts, $ad de$ts, et). These )osts are 's'a&&0 fi;ed )osts, not var0ing /ith the vo&'me of $'siness, and )ontin'ing to $e in)'rred /ith the passage of time. These )osts )annot $e assigned to an0 spe)ifi) pro@e)t. The0 are not of the t0pe that )an $e red')ed, or mitigated, d'ring periods of pro@e)t de&a0s asso)iated /ith /or2 stoppages, )hange orders, et). These )osts are a&&o/a$&e and re)overa$&e $0 the Contra)tor as part of its )ost proposa& for an e<'ita$&e ad@'stment
**
7a$'rn'm Contrs. Corp. v. U.S., "25 *.2d 45! 8Ct. C&. !9%"9.
-age 25
arising o't of de&a0s 8ass'ming the de&a0s are )ompensa$&e9. The method of )omp'ting the re)over0 is dis)'ssed $e&o/. *edera& )ost prin)ip&es Sin)e virt'a&&0 a&& )onstr')tion )hange order proposa&sA)&aims invo&ve the s'$mission of )ost dataAestimates $0 the )ontra)tor, the *edera& )ost prin)ip&es )ontained in *AI -art "! /o'&d app&0 to the determination of an allowa$le cost for t)e %ur%ose of ne!otiatin! t)ese c)an!e order %ro%osals or claims. 2" These )ost prin)ip&es stip'&ate that )ertain )osts, 's'a&&0 in)&'ded in home offi)e overhead )osts 8=CA9 are 'na&&o/a$&e, in)&'ding entertainment )osts, )ontri$'tions, interest, and $ad de$ts. 24 Th's, /hi&e the )ontra)tor ma0 have $ased its origina& sea&ed $id pri)e on the )ompan0Ks f'&& home offi)e overhead rate, it /i&& not $e a$&e to $ase its )hange order proposa&s or )&aims on this f'&& rate the rate m'st $e ad@'sted to remove 'na&&o/a$&e )osts $e)a'se the proposa& is $eing negotiated on the $asis of )ost data and not sea&ed $idding as /as the origina& )ontra)t. 25 ?n order to remove these )osts, the Contra)ting Offi)er ma0 /ish to o$tain an advisor0 a'dit of the indire)t rate )ost poo&s prior to negotiations, or simp&0 as2 the Contra)tor to s'$mit overhead information identif0ing the 'na&&o/a$&e portion of the rate and a))ept the Contra)torKs s'$mission as $eing fa)t'a&&0 a))'rate /itho't an a'dit. The do&&ar va&'e of the negotiations, 8as /e&& as the f't're potentia& for )hanges9 ma0 $e the determining fa)tor in de)iding /hether to a'dit the rates or not. :;tended performan)e The )ontra)torKs performan)e time ma0 $e e;tended $0 o/ner )a'sed disr'ptions of /or2, s'spensions or )hange orders. Some of these a)tions ma0 have a neg&igi$&e effe)t on the )ontra)torKs dire)t )osts, and th's entit&e the )ontra)tor to on&0 a sma&& amo'nt of mar2'p on the dire)t )osts for home offi)e overhead. This t0pe of sit'ation ma0 &eave the )ontra)tor /ith a signifi)ant 'nder re)over0 of its home offi)e overhead )osts. The )o'rts have re)ogniGed that the nat're of )onstr')tion pro@e)ts is s')h that )ontra)tors ma0 $e entit&ed to re)over0 of e;tended home offi)e e;penses /hen their )ontra)ts are de&a0ed, and this re)over0 is $e0ond the 's'a& per)entage mar2'p on the dire)t )osts. Where a)t'a& overhead )annot $e demonstrated or agreed 'pon, the 8ic)leay formula has $een /ide&0 'sed as a method of )a&)'&ation. 2% This form'&a, ho/ever, sho'&d $e 'sed /ith )a'tion, as it )an overstate a)t'a& )ontra)torKs overhead. The 'se of the form'&a varies from State to State and 0o' sho'&d )ons'&t /ith 0o'r &ega& )o'nse& for g'idan)e in the 'se of this form'&a. ?n the :i)h&ea0 )ase, the =overnment had arg'ed for a per)entage )omp'tation /hi)h app&ied the )ontra)torKs norma& home offi)e overhead rate to the e;)ess dire)t )osts
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C*I T !H.22 8$9. *AI "!.!05 and *AI "!.2. *TA Cir)'&ar 4220.!: paragraph !0.d.
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*0
*2
This method is named after the &andmar2 !9%0 de)ision in :i)h&ea0 Corp., AS,CA 5!H", %0 2 ,CA T 2%HH, aff+d., %! ! ,CA T 2H94.
-age 2%
in)'rred d'ring the de&a0 period. The =overnment arg'ed that there /as no in)rease in the overhead rate d'ring the de&a0. ,'t the ,oard fo'nd that the =overnmentKs method /as tota&&0 inade<'ate $e)a'se 8!9 the de&a0 added ver0 &itt&e dire)t )osts to the )ontra)t pri)eQ th's there /as ver0 &itt&e for the )ontra)tor to re)over for home offi)e overhead 'sing a re)over0 method of a per)entage of dire)t )osts for overhead, and 829 the )ontra)torKs home offi)e overhead )osts )ontin'ed thro'gho't the de&a0 period and )o'&d not $e red')ed 8the )osts /ere fi;ed, not varia$&e9. The fa)ts /ere that the de&a0s and s'spensions o))'rred thro'gh an e;tended series of interr'ptions, and it /o'&d not have $een pr'dent for the )ontra)tor to &a0 off its Bome Offi)e personne& or to ta2e on other ne/ $'siness )ommitments d'ring this de&a0 period. T)e 8ic)leay formula is %ro%er/ t)en/ if t)e contractor can demonstrate t)at it was not G%rudent or %racticalG to reduce its )ome office staff or to see( new $usiness commitments durin! t)e %eriod of t)e disru%tion. 21 The :i)h&ea0 form'&a is a))epted in *edera& and State )o'rts, $oards of )ontra)t appea&s and $0 ar$itrators as a fair and reasona$&e method for )ompensating )onstr')tion )ontra)tors for e;tended home offi)e e;penses res'&ting from o/ner )a'sed, )ompensa$&e performan)e de&a0s. The :i)h&ea0 form'&a The form'&a )onsists of three )a&)'&ations( 2H !. Contra)t ,i&&ings D'ring -erforman)e Tota& ,i&&ings D'ring -erforman)e ; Tota& Corporate [ Overhead D'ring -erforman)e Contra)t Corporate Overhead Dai&0 Cost Corporate Overhead [ Additiona& Dai&0 Cost Corporate Overhead :;pense D'ring Contra)t De&a0 Corporate Overhead A&&o)a$&e to Contra)t
2. Contra)t A&&o)a$&e Corporate Overhead [ Tota& Ca&endar Da0s of Contra)t -erforman)e ". Compensa$&e De&a0 Da0s ;
*4
Capita& :&e). Co. v. U.S., 129 *.2d 14" 8*ed. Cir. !9H49. The form'&a as stated in Construction Contractin!, The =eorge Washington Universit0, !99!.
*5
-age 21
The methodo&og0 o't&ined a$ove )onsists of ta2ing the tota& home offi)e overhead )osts for the )ontra)t performan)e period and m'&tip&0ing this tota& )ost $0 the ratio of )ontra)t $i&&ings to tota& )ompan0 $i&&ingsQ this )a&)'&ation prod')es the amo'nt of home offi)e overhead do&&ars a&&o)a$&e to the )ontra)t. That amo'nt is then divided $0 the n'm$er of da0s of )ontra)t performan)eQ the res'&t is the dai&0 home offi)e overhead rate in do&&ars per da0 a&&o)a$&e to the )ontra)t. That rate is then m'&tip&ied $0 the n'm$er of da0s of de&a0. The fina& res'&t is the do&&ar amo'nt of re)over0 for home offi)e overhead )osts. d9 -rofit -rofit is a&&o/ed as part of an0 o/ner a)tion /hi)h entit&es the )ontra)tor to an >e<'ita$&e ad@'stment> 'nder the terms of the )ontra)t. The profit /o'&d $e that /hi)h is reasona$&e and )'stomar0 for the t0pe of /or2 $eing performed. The )ontra)t ma0 in)&'de a re)overa$&e profit rate on )hange order /or2, $'t it is s'ggested that the rate $e stated as a ma;im'm per)entage, negotia$&e do/n/ard on&0. The reason for this approa)h is to avoid a )ost p&'s per)entage of )ost methodo&og0, /hi)h is prohi$ited. 29 ?n this /a0 the grantee )an negotiate a &o/er rate of profit on )hanges /here the nat're of the /or2 and the ris2s might /arrant a &o/er rate of profit than for the $asi) )ontra)t. 8$*$-$. Pariations in Estimated @uantities .an0 )onstr')tion )ontra)ts )ontain 'nit pri)es and estimated <'antities of the vario's pa0 items. This pro)ed're is 'sed /hen the <'antit0 of /or2 )annot $e estimated /ith s'ffi)ient a))'ra)0 so as to permit the /or2 to $e pri)ed on a &'mp s'm 8tota& pri)e9 $asis. When it is ne)essar0 to 'se 'nit pri)es /ith estimated <'antities, o/ners fre<'ent&0 in)&'de a )&a'se re<'iring ad@'stment of the 'nit pri)es on&0 /hen the a)t'a& <'antities var0 signifi)ant&0 from the estimates. *or e;amp&e, $oth the *edera& )&a'se and the .ode& -ro)'rement Code )&a'ses re<'ire that a)t'a& <'antities m'st var0 $0 more than !5P 8'p or do/n9 $efore an ad@'stment /i&& $e made in the 'nit pri)es. "0 The ad@'stment )an $e at the re<'est of either part0. Ie&ationship to Differing Site Conditions )&a'se The Nariation 3n 0uantity )&a'se /i&& not govern the Contra)torKs entit&ement to an e<'ita$&e ad@'stment /hen the Contra)tor en)o'nters )onditions of the t0pe des)ri$ed in the "ifferin! Site Conditions )&a'se. ?n s')h sit'ations, /here the Contra)tor en)o'nters materia&&0 differing ph0si)a& )onditions not anti)ipated $0 either part0, the "ifferin! Site Conditions )&a'se /i&& ta2e pre)eden)e and the Contra)tor /i&& $e entit&ed to an e<'ita$&e pri)e ad@'stment even if the fina& <'antities var0 $0 &ess than the P stated in the Nariation 3n 0uantity )&a'se. "! ?n one )ase the ,oard of Contra)t Appea&s fo'nd a
*8
*TA Cir)'&ar 4220.!: paragraph !0.e. *AI 52.2!! !H. .-C I5 40!.04. ,reGina Constr., ?n)., :#=,CA "2!5, 15 ! ,CA f !0,9H9.
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-age 2H
differing site )ondition /hen the Contra)tor en)o'ntered an 'nforeseen ro)2 &edge in a river $eing dredged. The )ontra)t )ontained a pa0 item for dredging &oose ro)2, and the remova& of the ro)2 &edge did not )a'se the Contra)tor to e;)eed the estimated <'antities of ro)2 a)t'a&&0 removed. Bo/ever, the ,oard r'&ed that the methods re<'ired to remove the ro)2 &edge /ere not those norma&&0 'sed for &oose ro)2, and th's the Contra)tor /as entit&ed to a pri)e ad@'stment 'nder the "ifferin! Site Conditions )&a'se even tho'gh the tota& <'antit0 of ro)2 removed /as not in e;)ess of the estimated <'antit0 in the )ontra)t. Unit pri)e ad@'stments ,oth the *edera& )&a'se and the .-C )&a'se )a&& for a 'nit pri)e ad@'stment /hen the Contra)torKs )osts in)rease or de)rease due solely to t)e variation a$ove !!5P or $e&o/ H5P of the estimated <'antit0. The phrase >d'e so&e&0 to variation> means that the amo'nt of the e<'ita$&e ad@'stment is determined so&e&0 from the differen)e in )osts /hi)h is d'e to the &arger or sma&&er <'antit0, rather than from a )omp&ete repri)ing of the /or2 $ased on a)t'a& in)'rred )osts for the e;)ess <'antit0. *'rthermore, the part0 demanding the ad@'stment has the $'rden of proving that )osts have varied $ecause of a difference in quantity. "2 The t0pi)a& Nariation 3n 0uantity )&a'se entit&es the Contra)tor to a pri)e ad@'stment for 'nder r'ns as /e&& as over r'ns in <'antities. This pres'mes the Contra)tor )an demonstrate that its 'nit )osts have risen $e)a'se of the 'nder r'ns. T0pi)a&&0 the Contra)torKs fi;ed )osts per 'nit /i&& $e higher $e)a'se of fe/er 'nits over /hi)h to amortiGe the fi;ed )osts. ?n the )ase of over r'ns to the estimated <'antit0, t)e re%ricin! would a%%ly to only t)ose quantities fallin! outside t)e ran!e s%ecified. ?n the )ase of 'nder r'ns, the repri)ing /o'&d app&0 to the entire a)t'a& <'antit0 prod')edAde&ivered. -a0ment on $asis of a)t'a& )osts Some transit agen)ies have adopted )ontra)t provisions pa0ing )ontra)torsK actual costs/ on a >for)e a))o'nt> $asis, for <'antities o'tside the range spe)ified in the estimated <'antities )&a'se. ?n s')h )ases the methodo&og0 is different than that des)ri$ed a$ove /here the )ontra)torKs starting point for esta$&ishing an e<'ita$&e pri)e ad@'stment is the 'nit pri)e in the origina& )ontra)t, ad@'sted for )ost in)reases or de)reases d'e so&e&0 to the variation in <'antities. ?n those )ases /here the pri)e ad@'stment is to $e $ased on a)t'a& )osts for the in)reasedAde)reased <'antities, the )ontra)t terms ma0 des)ri$e in detai& the methodo&og0 for determining pa0ments, in)&'ding the esta$&ishment of )ei&ing rates to )over s')h )osts as home offi)e overhead, fie&d offi)e overhead, e<'ipment renta&, et). Where )ei&ing rates are 'sed, the0 are s'$@e)t to a fina& a'dit, and ma0 $e ad@'sted do/n/ard after a'dit to ref&e)t the )ontra)torKs a)t'a& )osts for the vario's individ'a& )ost e&ements 8e.g., home offi)e overhead9. The rates are not fi;ed, predetermined per)entages app&ied to a)t'a& )osts of &a$or, materia&s, et). s')h an arrangement /o'&d $e an impermissi$&e )ost p&'s per)entage of )onstr')tion )ost method /hi)h is prohi$ited $0 *TA Cir)'&ar 4220.!: !0e. "" 8$*$-$0 Dela#s
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Oi)tor0 Constr. Co. v. U.S., 5!0 *.2d !"19 8Ct. C&. !9159.
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,a0 Area Iapid Transit Distri)t 8,AIT9, .eneral Conditions For Construction Contracts, Arti)&es =C4.5 3ncreased or "ecreased 0uantities, and =C9." Force Account.
-age 29
There are man0 events /hi)h )an o))'r to de&a0 a )ontra)torKs performan)e. De&a0s )an $e of three generi) t0pes( 8!9 Those /here the )ontra)tor $ears the ris2 of $oth time and )ost these are de&a0s /ithin its )ontro&. These de&a0s are non1e7cusa$le. 829 Those for /hi)h the o/ner is responsi$&e for $oth time and )ost impa)ts these are de&a0s for /hi)h the o/ner agrees to $e responsi$&e or /hi)h are )a'sed $0 it. These are com%ensa$le de&a0s. 8"9 Those for /hi)h neither part0 is responsi$&e to the other these are de&a0s, s')h as concurrent de&a0s, /here $oth parties have )a'sed de&a0s /hi)h have an e<'a& impa)t on )omp&etion, and it is impossi$&e to apportion or separate the de&a0s. ?n s')h )ases, the )ontra)tor ma0 not re)over its in)reased )osts and the o/ner ma0 not enfor)e &i<'idated damages. The fo&&o/ing provides t0pi)a& e;amp&es of these t0pes of de&a0s. Bo/ever, there are man0 variations 'sed in )ontra)ts and grantees m'st ma2e their o/n determination as to ho/ the ris2s asso)iated /ith de&a0s are a&&o)ated $et/een themse&ves and their )ontra)tors. :;)'sa$&e de&a0s The primar0 p'rpose of an e7cusa$le delay provision is to prote)t the )ontra)tor from san)tions for &ate performan)e 8e.g., defa'&t termination, &i<'idated damages, and a)t'a& de&a0 damages9. 87cusa$le de&a0s ma0 not $e com%ensa$le. Whether a de&a0 is )onsidered e7cusa$le depends on the &ang'age of the parti)'&ar )&a'se in the )ontra)t. The *edera& )&a'se for )onstr')tion )ontra)ts names a n'm$er of events /hi)h )an give rise to an e7cusa$le delay, $'t there are t)ree elements w)ic) are critical in determinin! w)et)er an e7cusa$le delay )as occurred. "4 The three e&ements are( 8!9 The de&a0 m'st arise from unforeseea$le causes. ?f )ir)'mstan)es /hi)h are 2no/n /hen the )ontra)t is entered into ma2e )ertain de&a0s foreseea$&e, then )o'rts have he&d the )ontra)tor responsi$&e and ref'sed to grant re&ief. "5 829 The event m'st $e $eyond t)e control of t)e contractor. ?f a )ontra)tor )annot prevent an event from o))'rring, that event is $e0ond the )ontra)torKs )ontro&. A&so, the standard app&ied is one of reasona$&e e)onomi) pra)ti)e. *or e;amp&e, /here there has $een 'n's'a&&0 severe /eather, the )ontra)tor is not o$&igated to instit'te a t/o shift operation to over)ome the de&a0s )a'sed $0 the /eather. "%
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*AI 52.249 !0, "efault (Fi7ed1&rice Construction). Di)on, ?n). v. .ar$en Corp., %!H *.2d 40 8Hth Cir. !9H09. So'thern *&ooring C ?ns'&ation Co., =S,CA !"%0, !9%4 ,CA f 44H0.
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-age "0
8"9 The de&a0 m'st $e wit)out t)e fault or ne!li!ence of t)e contractor. *a'&t or neg&igen)e dea&s /ith either a)ts or omissions of the )ontra)tor that )a'se de&a0s. A )ontra)tor /as not granted re&ief /hen its s'$)ontra)tor fai&ed to perform $e)a'se the )ontra)tor /as neg&igent for fai&ing to ass're itse&f of the s'$)ontra)torKs a$i&it0 to perform. "1 ?f the e;)'sa$&e de&a0 provision &ists a t0pe of event re&ieving the )ontra)tor from responsi$i&it0, then, 'nder the *edera& )&a'se, the three )riteria dis)'ssed a$ove are app&ied to the event to determine the iss'e of e;)'sa$i&it0. ?t sho'&d $e noted, ho/ever, that private )ontra)ts ma0 or ma0 not )ontain the same &ang'age as the *edera& )&a'se, and th's the proper interpretation of the )&a'se sho'&d $e so'ght from the granteeKs in ho'se &ega& )o'nse&. The t0pes of events 's'a&&0 in)&'ded in these provisions /o'&d in)&'de( e Stri2es To o$tain an e;)'sa$&e de&a0 for a stri2e under t)e Federal clause, a )ontra)tor m'st prove that it a)ted reasona$&0 and did not /rongf'&&0 pre)ipitate or pro&ong the stri2e, and it m'st ta2e steps to avoid its effe)t. ?n other /ords, the three fo&d )riteria of $eing 'nforeseea$&e, $e0ond the )ontra)torKs )ontro&, and /itho't the fa'&t or neg&igen)e of the )ontra)tor, m'st $e met. 3n %rivate contracts /hi)h do not )ontain this &ang'age, ho/ever, a )o'rt ma0 /e&& e;)'se a de&a0 even /here the stri2e is pre)ipitated $0 the )ontra)torKs a)tions, s')h as red')ing its /or2ersK /ages. "H Weather .ost )ontra)ts /i&& )ontain e;)'sa$&e de&a0 provisions )on)erning adverse /eather. =enera&&0, adverse /eather is a$normal in com%arison to t)e %revious weat)er %atterns at t)e same location for t)e same time of year. Some grantee )onstr')tion )ontra)ts )ontain provisions noting the anti)ipated non /or2 /eather da0s for ea)h month of the 0ear, and )ontra)tors are advised to $id /ith this information and to p&an their s)hed'&es a))ording&0. "9 The 's'a& method of proving that /eather is 'n's'a&&0 severe is to o$tain )omparative data from the U.S. /eather $'rea' for past periods in the area /ith those re)orded d'ring the period of performan)e.
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Ya'fman DeDe&& -rinting, ?n)., AS,CA !92%H, 15 ! ,CA f !!,042. -anGieri Bogan Co. v. ,ender, !4" #.:. 1"9 8#.5. !92"9. ,AIT, C&a'se =C.H.5.!.4 Antici%ated Non1'or( 'eat)er "ays.
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S'$)ontra)tor and s'pp&ier de&a0s Where the de&a0 is )a'sed $0 a s'$)ontra)tor or s'pp&ier, and the e;)'sa$&e de&a0 )&a'ses mention this as an e;)'sa$&e )a'se, there is 's'a&&0 the added re<'irement that the s'$)ontra)torKs or s'pp&ierKs de&a0 $e e;)'sa$&e $ased on the same three fo&d )riteria as dis)'ssed a$ove in )onne)tion /ith other )a'ses of de&a0Q i.e., it m'st have $een d'e to )ir)'mstan)es 'nforeseen $0 the s'$)ontra)tor, $e0ond the s'$)ontra)torKs )ontro&, and /itho't the s'$)ontra)torKs fa'&t or neg&igen)e. O/ner )ond')t To $e e;)'sed for o/ner )ond')t, )ontra)tors m'st sho/ that the )ontra)t'a& a)ts or omissions of the o/ner /ere /rongf'& 8e.g., an improper fai&'re to pa0 for servi)es performed, or improper interferen)e /ith the /or2 of the )ontra)tor8. ,'t /here de&a0s are d'e to o/ner a)ts proper&0 ta2en, there is no $asis for an e;)'sa$&e de&a0 8e.g., /here o/ner right&0 insists on )omp&ian)e /ith spe)ifi)ations, or proper&0 re@e)ts s'$)ontra)tors /ho do not meet <'a&ifi)ationA e;perien)e re<'irements9. Of )o'rse /hen the o/ner iss'es Change Orders 8/hi)h are not /rongf'& a)ts9, the )ontra)tor is entit&ed to $oth a pri)e and s)hed'&e ad@'stment in a))ordan)e /ith the terms of the Changes )&a'se.
Compensa$&e de&a0s These are de&a0s for /hi)h the contractor is entitled to com%ensation, not mere&0 an e;tension of time, as /ith man0 of the e7cusa$le delays. :ntit&ement to )ompensation ma0 $e e;press&0 stated in a spe)ifi) )ontra)t )&a'se, $'t if not, t)ere is an im%lied duty of eac) %arty not to )inder/ delay or ma(e more e7%ensive t)e %erformance of t)e ot)er %arty. Th's, even in the a$sen)e of a spe)ifi) )ontra)t )&a'se granting the )ontra)tor )ompensation for o/ner )a'sed de&a0s, man0 )o'rts find an imp&ied o/ner d't0 not to hinder or de&a0, and the0 /i&& grant )ompensation to )ontra)tors for s')h de&a0s. 40 This imp&ied d't0 has $een 'sed as @'stifi)ation for )ompensation in a /ide variet0 of )ir)'mstan)es. Compensa$&e de&a0s ma0 arise $e)a'se of e7%ress orders of t)e owner 8e.g., s'spensions of /or2 for o/nerKs )onvenien)e, /ritten Change Orders, et).9, or $e)a'se of so )a&&ed constructive c)an!esQ i.e., some a)t of the o/ner or fai&'re to a)t /hi)h )a'ses a )ompensa$&e s'spension of /or2 8e.g., de&a0 in the avai&a$i&it0 of the site, de&a0 in iss'ing approva&s /here prior approva& is re<'ired $efore starting /or2, de&a0s in the inspe)tion pro)ess, or o/nerKs interferen)e /ith the )ontra)torKs /or29. ?n order to $e )ompensated for de&a0s, a contractor must demonstrate t)at t)e delay is unreasona$le in duration. ?t is important to determine if the de&a0 is the res'&t of the o/nerKs fa'&t or /hether it res'&ts from an a)tion ta2en $0 the o/ner p'rs'ant to a )ontra)t'a& right. ?f the de&a0 res'&ts from an o/nerKs fa'&t, the )o'rts have genera&&0 he&d that the entire period of the de&a0 is 'nreasona$&e and therefore )ompensa$&e. ?f, on the other hand, the de&a0 arises o't of an
.:
-eter Yie/it Sons Co. v. S'mmit Constr. Co., 422 *2d 242 8Hth Cir. !9%99.
-age "2
a)tion ta2en p'rs'ant to an o/nerKs )ontra)t'a& right, the )ontra)tor /i&& $e )ompensated on&0 for the 'nreasona$&e portion of the de&a0. 4! De&a0s /here the tota& de&a0 period has $een fo'nd 'nreasona$&e in)&'de( e e e De&a0 in iss'ing noti)e to pro)eed $e0ond date needed $0 )ontra)tor to perform /or2 effi)ient&0. De&a0s $e)a'se of )onf&i)ting or defe)tive spe)ifi)ations. De&a0s in o$taining )it0 a'thoriGations /hi)h )o'&d on&0 $e o$tained $0 the o/ner.
De&a0s /hi)h have $een fo'nd to $e reasona$&e in)&'de( e e De&a0s in a/arding the )ontra)t arising o't of )omp&ian)e /ith $id protest pro)ed'res. De&a0s in iss'ing )hanges /hi)h /ere not attri$'ta$&e to defe)tive spe)ifi)ations.
Con)'rrent de&a0s When $oth parties )ontri$'te to a de&a0, the iss'e arises as to ho/ to reso&ve the <'estion of responsi$i&it0 for the de&a0. The )o'rts have reso&ved this iss'e $0 assessing the &osses attri$'ta$&e to ea)h part0Ks de&a0 and apportioning the damages a))ording&0. 42 The )ase &a/ in this area fo)'ses on apportioning the de&a0 to its appropriate )ategor0 of o/ner )a'sed, )ontra)tor )a'sed, and )a'sed $0 neither >e;)'sa$&e> per the )ontra)t terms. What this means is that if one part0 )ontri$'ted in part to the de&a0, it /i&& not $e $arred from re)overing damages from the other part0 8e.g., an o/ner /ho is %artly res%onsi$le for the de&a0 /i&& not $e pre)&'ded from re)overing &i<'idated damages9. 4" Where it is impossi$&e to a&&o)ate or separate the de&a0s, or /here the de&a0s are tr'&0 )on)'rrent 8/here ea)h part0 has had an e<'a& impa)t on )omp&etion, the fo&&o/ing r'&es /o'&d app&0( e e e Where )ontra)tor )a'sed de&a0 is )on)'rrent /ith o/ner )a'sed de&a0, the )ontra)tor ma0 not re)over its in)reased )osts res'&ting from the de&a0. Where noncom%ensa$le de&a0s are )on)'rrent /ith o/ner )a'sed de&a0s, a )ontra)tor ma0 not re)over its in)reased )osts res'&ting from the de&a0. Where the o/ner has )ontri$'ted to the pro@e)t de&a0, and s')h )ontri$'tion )annot $e separated from other )a'ses of de&a0, &i<'idated damages )annot $e enfor)ed $0 the o/ner.
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Davho Co., OACA, !005, 12 2 ,CA f 9%H" at 45,2!4. U.S. e;. Ie&. Be&&er :&e). Co. v. Wi&&iam *. Y&ingensmith, ?n)., %10 *2d !221, !2"! 8D.C. Cir. !9H29. Aetna Cas'a&t0 C S'r. Co. v. ,'tte .eade Sanitar0 Water Dist., 500 *. S'pp. !9", !91 8D.S.D. !9H09.
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-age ""
8$*$-$2 Acceleration A))e&eration is the speeding 'p of the rate of performan)e in order to )omp&ete the )ontra)t ear&ier than /o'&d $e the )ase if the )ontra)tor p'rs'ed the effort in a norma& manner. There are t/o sit'ations /here )ontra)tors are entit&ed to )ompensation for a))e&eration )osts. O/ner )a'sed de&a0 When an o/ner )a'ses a de&a0 /hi)h /o'&d entit&e a )ontra)tor to re)over its in)reased )osts 8see com%ensa$le delays in se)tion 9.2.".59, the )ontra)tor ma0 attempt to mitigate the )osts of the de&a0 $0 vo&'ntari&0 a))e&erating its efforts. ?n this )ase the )ontra)tor is entit&ed to re)over the )osts of a))e&erating the effort and these in)reased )osts are a)t'a&&0 re)overa$&e as part of the de&a0 )osts $e)a'se the0 /ere in)'rred in mitigation of those de&a0 )osts. 44 O/ner dire)ted a))e&eration When an o/ner orders the )ontra)tor to )omp&ete the /or2 ear&ier than the )ontra)t re<'ires, the )ontra)tor is entit&ed to re)over the )osts of a))e&eration. The o/ner ma0 e;press&0 order the )ontra)tor to a))e&erate performan)e, th's )reating a )ompensa$&e a))e&eration, $'t in the ma@orit0 of )ases the a))e&eration is constructive rather than e;pressedQ i.e., the o/ner orders the )ontra)tor to meet the )ontra)t )omp&etion date even tho'gh there has $een an e7cusa$le delay /hi)h /o'&d entit&e the )ontra)tor to an e;tension in the )omp&etion date. 8See e7cusa$le delays in se)tion 9.2.".59. The effe)t of this order $0 the o/ner is to re<'ire a rate of performan)e /hi)h is faster than the )ontra)t re<'ires, and this is e<'iva&ent to an e;press order to a))e&erate. 45 :&ements re<'ired for )onstr')tive a))e&eration( ?n order to re)over for )onstr')tive a))e&eration, it is genera&&0 he&d that the )ontra)tor m'st demonstrate three e&ements( 8!9 the de&a0s /hi)h o))asioned the order to a))e&erate /ere e;)'sa$&e. 829 the )ontra)tor /as ordered to a))e&erate. 8"9 the )ontra)tor in fa)t a))e&erated performan)e and in)'rred e;tra )osts. 4% Order to a))e&erate An order to a))e&erate does not have to $e a spe)ifi) )ommand. ?f the o/ner >re<'ests> the )ontra)tor to a))e&erate, it has the same effe)t as an >order.> *'rther, it ma2es no differen)e /hether the )ontra)tor )omp&ies /i&&ing&0 or 'n/i&&ing&0. ?f the initiative )omes from the o/ner and the /or2 is done in a manner different than the )ontra)t re<'ires, then the )ontra)tor /i&& $e entit&ed to )ompensation. Other )ir)'mstan)es giving rise to )onstr')tive
..
Canon Constr. Corp., AS,CA !%!42, 12 ! ,CA f H%22. Contra)ting C .ateria& Co. v. Cit0 of Chi)ago, "!4 #.:. 2d 59H 8?&& App. Ct. !9149. #orair :ng+g. Corp v. U.S., %%% *. 2d 54% 8Ct. C&. !9H!9.
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a))e&eration /o'&d $e( 8a9 a /rongf'& threat to terminate for defa'&t /here the de&a0s /ere e;)'sa$&e, 41 and 8$9 a threat to assess &i<'idated damages /here de&a0s /ere e;)'sa$&e. 4H A))e&eration orders /here $oth e;)'sa$&e and non e;)'sa$&e de&a0s e;ist The *edera& )ases have he&d that /hen the o/ner dire)ts the )ontra)tor to a))e&erate in order to re)over the non e;)'sa$&e de&a0, the a))e&eration )osts are not re)overa$&e. 49 ?t has a&so $een he&d that /here $oth e;)'sa$&e and non e;)'sa$&e de&a0s e;ist, and the )ontra)tor a))e&erates performan)e p'rs'ant to an order of the o/ner, the a))e&eration )osts are not )ompensa$&e /hen the time re)overed is &ess than the amo'nt of the non e;)'sa$&e de&a0. 50 Ie)over0 of a))e&eration )osts not dependent on re)over0 of &ost time When the o/ner orders )omp&etion ahead of s)hed'&e, and the )ontra)tor 'ses its >$est efforts> to a))e&erate )omp&etion of the pro@e)t $'t fai&s to re)over the &ost time, the )ontra)tor is permitted to re)over the in)reased )osts asso)iated /ith its efforts to a))e&erate. 5! 8$- IMPROPIN< PENDOR DELIPERD PERFORMANCE 7ate de&iveries from vendors )an $e, and often are, a serio's pro$&em for man0 agen)ies, espe)ia&&0 those that are a/arding and administering man0 tho'sands of p'r)hases ann'a&&0. #e/ 5or2 Cit0 Transit 8#5CT9 is an agen)0 that has fa)ed this pro$&em /ith respe)t to its maintenan)e materia&s and deve&oped some innovative so&'tions to dea& /ith it. This agen)0 has fa)ed a&& of the norma& diffi)'&ties in dea&ing /ith vendors, in)&'ding &ate de&iveries, <'a&it0 and <'antit0 pro$&ems as /e&& as diffi)'&ties in motivating its s'pp&iers to grasp the signifi)an)e of improved performan)e. The fo&&o/ing s'mmariGes some of the methods #5CT has 'sed to address vendor performan)e pro$&ems. Oendor -erforman)e .od'&e L The first step in addressing poor vendor de&iver0 performan)e /as to deve&op a )omp'ter soft/are program or mod'&e that /o'&d a))'rate&0 gather and report different meas'rements of vendor performan)e. This permits #5CT+s pro)'rement and re)eiving f'n)tions to $e e&e)troni)a&&0 &in2ed, there$0 ena$&ing re)eiving personne& to enter the data s'mmariGing the detai&s of ea)h inventor0 re)eipt transa)tion. *or e;amp&e, the data re)orded in)&'des the a)t'a& date of de&iver0 in )omparison to
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Wi&&iam 7agnion, :#=,CA "11H, 1H 2 ,CA f !",2%0. 7e/is Constr. Co., AS,CA 5509, %0 2 ,CA f 21"2. -athman Constr. Co., AS,CA !42H5, 1! ! ,CA f H905. :&e)tri)a& :nters., ?n)., ?,CA 91! H 12, 14 ! ,CA f !0,52H. -an -a)ifi) Corp., :#=,CA 2419, %5 2 ,CA f 49H4. Oaro, ?n)., AS,CA !5000, 12 2 ,CA f 91!1.
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0(
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the date promised $0 the vendor, p'r)hase order <'antit0 vs. a)t'a& <'antit0 re)eived and <'a&it0 ass'ran)e re@e)tions. The mod'&e a))'m'&ates this data on a vendor spe)ifi) $asis and provides performan)e information. Using this performan)e information, #5CT has imp&emented severa& programs to improve on time de&iver0 performan)e. 3!00 Worst4 -rogram L Uti&iGing the vendor performan)e data, #5CT )an identif0 the 3vita& fe/4 vendors /ho are genera&&0 responsi$&e for the greatest n'm$er of &ate de&iveries and are having the most signifi)ant impa)t on #5CT+s a$i&it0 to s'pport maintenan)e and prod')tion efforts. -resent&0 #5CT has dire)ted its fo)'s on the !00 firms having the highest n'm$er of &ate de&iveries thro'gh open, non adversaria& meetings $et/een agen)0 pro)'rement staff and the )hief e;e)'tives of the )ompanies in <'estion. Spe)ifi) emphasis is p&a)ed 'pon the e;pansion of the vendor+s 'nderstanding of the signifi)an)e of &ate de&iveries. ?ndivid'a&iGed a)tion p&ans are deve&oped /ith )&ear&0 defined remedia& steps and )orresponding mi&estone dates. *or the most part this approa)h has $een s'))essf'&Q ho/ever, in those rare instan)es /here a vendor is )omp&ete&0 'na$&e to improve, determinations of non responsi$i&it0, s'spensions, defa'&ts and de$arments are invo2ed. Top !00 S'pp&iers L This program &oo2s at the !00 $est s'pp&iers. #5CT ho&ds an ann'a& vendor )onferen)e and invites senior management offi)ia&s from these s'pp&iers. A/ards are presented to the ver0 $est )ompanies for e;)e&&ent on time performan)e, /ith spe)ia& emphasis on )ompanies sho/ing mar2ed improvement. These a/ards are per)eived as prestigio's /ithin the ind'str0 and are anti)ipated to have an e;treme&0 positive effe)t on a vendor+s a$i&it0 to attra)t f't're $'siness /ith other transit properties. =oa&s and strategies are dis)'ssed for )ontin'ed improvement and the attendees are given a )omp&ete 'nderstanding of the ma@or initiatives that #5CT has em$ar2ed 'pon /hi)h /i&& re<'ire the s'pport of the vendor )omm'nit0 thro'gh time&0 performan)e. 3STATUS4 -rogram L System To Automatically Trac( 2ntimely S)i%ments The STATUS program is a standard method of &ate de&iver0 notifi)ation to an0 vendor. At set time periods, &etters detai&ing a missed de&iver0 date are mai&ed to the vendor. The s0stem offi)ia&&0 notifies ea)h vendor+s sa&es representative and )hief offi)er of &ate de&iveries, advising them of potentia& a)tion and affording the )ompan0 an opport'nit0 to respond. -rogram Ies'&ts The programs adopted $0 #5CT 8Oendor -erforman)e .od'&e, 3!00 Worst4 -rogram, 3STATUS4 -rogram, and 3Top !00 S'pp&iers49 have proven to $e high&0 s'))essf'& in improving vendor performan)e. Another program that has proven s'))essf'& at .AITA invo&ves &in2ing emp&o0ee performan)e to on time vendor de&iveries.
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8$. APPROPAL OF SUBCONTRACTORS RE@UIREMENT *TA Cir)'&ar 4220.!: paragraph !% re<'ires grantees to eva&'ate *edera& stat'tor0 and reg'&ator0 re<'irements for re&evan)e and app&i)a$i&it0 to a parti)'&ar pro)'rement. Appendi; A.! L Federally Required and ,t)er odel Contract Clauses, and Chapter H L Contract Clauses, )ontain a dis)'ssion of man0 )ontra)t )&a'se re<'irements, in)&'ding the app&i)a$i&it0 to s'$)ontra)ts. 49 C*I -art 2% sets forth the re<'irements of the *edera& Department of Transportation )on)erning Disadvantaged ,'siness :nterprise 8D,:9 parti)ipation in *TA programs. A dis)'ssion of these re<'irements ma0 $e fo'nd in Chapter 1 of this .an'a&. DISCUSSION T/e mana"ement of su&contracts usuall# in%ol%es t/ree areas3 6(9 Assurance t/at t/e rime contractor /as included t/e reAuired Hflo1)do1nI ro%isions 6clauses9 from t/e rime contract in t/e su&contract$ A discussion of t/e reAuirements related to t/e flo1)do1n of Federal contract clauses ma# &e found in C/a ter 5 = Contract Clauses! and A endi; A$( = Federally Required and 3ther 4odel Contract Clauses! 6*9 T/e rime contractorMs com liance 1it/ t/e Disad%anta"ed Business Enter rise 6DBE9 reAuirements in its rime contract$ <uidance related to t/e DOT reAuirements concernin" DBE matters ma# &e found in C/a ter 4 ) :isad-antaged Ausiness "nter#rise! 6-9 Assurance t/at t/e rime contractor /as selected its critical su&contractors in a rudent fas/ion! so as to rotect t/e "ranteeMs ro"ram interests$ T/e ur ose of t/is section relates to t/e t/ird o&'ecti%e a&o%e = it is to furnis/ "uidance concernin" t/ose circumstances 1/en "rantees ma# 1is/ to reAuire t/eir rime contractors to su&mit certain su&contracts for t/e "ranteeMs consent rior to a1ard of t/e su&contract &# t/e rime$ ( B/en t/e rime contract is CPFF or T+M= Under a cost) lus)fi;ed)fee contract 6CFPP9 and a time)and)materials 6T+M9 contract! t/e "rantee &ears t/e &urden of allo1a&le costs
) The grantee ma0 find it he&pf'& to revie/ the *edera& po&i)ies and pro)ed'res )on)erning s'$)ontra)ting in the *AI -art 44. =rantees are not re<'ired to fo&&o/ these *edera& pro)ed'res.
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incurred &# t/e rime contractor! includin" amounts s ent for su lies and ser%ices on urc/ase orders or su&contracts$ It &e/oo%es t/e "rantee! t/erefore! to e;ercise dili"ence in t/e mana"ement and administration of t/ese t# es of rime contracts 1it/ res ect to t/e rimesM selection of its ma'or su&contractors or su liers$ If t/e cost incurred &# t/e rime is "reater t/an necessar# 6for e;am le! &ecause of inadeAuate com etition or a oorl# ne"otiated su&contract9! it is t/e "rantee t/at 1ill &ear t/e /i"/er t/an necessar# costs$ If t/e selected su&contractor erforms oorl#! it 1ill &e t/e "rantee t/at 1ill &ear t/e cost of correctin" t/e ro&lems or &e ut in a osition of /a%in" to acce t a roduct t/at is su&standard$ B/en t/e su&contract in%ol%es a critical com onent or su&s#stem = T/is situation is more liEel# to arise 1/en t/e contract in%ol%es t/e rocurement of a ma'or s#stem or in%ol%es ne1 tec/nolo"#$ Cere t/e issue is not so muc/ t/e cost risE t/at accrues to t/e "rantee under e%er# CPFF or T+M t# e of contract! &ut t/e risE of failure of t/e s#stem &ein" rocured due to ro&lems 1it/ su&contracted com onents or su&s#stems t/at are critical to t/e s#stemMs successful erformance$ For e;am le! on a lar"e contract for re/a&ilitatin" a su&1a# station! a rime contractor 1it/ ci%il en"ineerin" e; erience ma# /a%e to su&contract t/e electrical s#stem 1orE$ Dou ma# %er# 1ell reAuire t/e rime to su&mit its ro osed su&contractor for electrical 1orE for #our a ro%al! and #ou 1ill 1ant to do a Hres onsi&ilit#I t# e of re%ie1 of t/at articular su&contractor$ If #ou /a%e e%idence of oor rior 1orE &# t/at su&contractor! or e%idence of mar"inal financial resources! #ou ma# reAuire t/e rime to select a different com an# 1it/ a &etter tracE record of erformance or a stron"er &alance s/eet$ B/en t/e su&contract e;ceeds a certain dollar t/res/old = <rantees ma# reAuire t/eir rimes to su&mit all su&contracts o%er a certain stated %alue for consent$ Ne1 DorE Cit# Transit! for e;am le! reAuires its rior a ro%al of all su&contractors 1/ose su&contracts 1ill e;ceed R(!:::!::: or (:O of t/e total contract rice$ For Federal contracts! t/e t/res/old for su&contract consent is 0O of t/e rime contract %alue 1/en t/e rime contract is a CPFF or T+M t# e of contract$ * Best Practices Determinin" Su&contractor Res onsi&ilit# = Sealed Bids 5o' ma0 /ish to )onsider a standard provision in 0o'r so&i)itations that /o'&d re<'ire the $idders to s'$mit )ertain s'$)ontra)tor information for 0o'r revie/ prior to )ontra)t a/ard. This information /o'&d ena$&e 0o' to ma2e a determination that a proposed s'$)ontra)tor or s'pp&ier /as te)hni)a&&0 and finan)ia&&0 <'a&ified to perform the /or2. This determination /o'&d $e part of 0o'r 3responsi$i&it04 determination for a/arding the )ontra)t. #e/ 5or2 Cit0 Transit 'ses a standard provision in its ?nvitation for ,ids 8?*,+s9 entit&ed 3,idder+s N'a&ifi)ationsAIesponsi$i&it0.4
*AI 44.20! !.
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This )&a'se re<'ires the $idder to demonstrate to the satisfa)tion of #5CT that it has the integrit0, s2i&&, e;perien)e, fa)i&ities and finan)ia& reso'r)es ne)essar0 to perform the )ontra)t. The )&a'se )overs ma@or s'$)ontra)tors as /e&& as the prime )ontra)tor. The pertinent part of this )&a'se )on)erning s'$)ontra)tors reads as fo&&o/s( 8h9 87ce%t to t)e e7tent set fort) in su$%ara!ra%) (i) $elow/ Aut)ority a%%roval of all Su$contractors and Su%%liers is required. 3n order to assist t)e Aut)ority in its evaluation of ?idderPs qualifications/ t)e ?idder s)all su%%ly to t)e &rocurement Re%resentative wit)in t)ree (C) wor(in! days after t)e o%enin! of $ids/ or wit)in t)ree wor(in! days after notification/ in t)e case of a su$sequently identified a%%arent low $idder/ a detailed list of= (i) %ro%osed Su$contractors su%%lyin! la$or or la$or and materials/ wit) a value e7ceedin! t)e lesser of Q1/DDD/DDD or ten %ercent (1DT) of t)e Total Contract &rice as $id $y t)e a%%arent low ?idder6 and (ii) &ro%osed Su$contractors and Su%%liers of t)e followin! equi%ment/ materials or la$or= (See 3nformation for ?idders "ata S)eet) ?idderPs su$mission is to also include t)e com%leted form titled HStatement of 0ualification of Su$contractor/I a co%y of w)ic) is availa$le from t)e &rocurement Re%resentative. " T)ese requirements are in addition to/ and not in lieu of/ su$mission requirements %ertainin! to su$contractorPs %ro%osal to meet "?8 or ?8*'?8 or affirmative action requirements. T)e ?idder s)all state in writin! to t)e Aut)ority t)e name and %lace of $usiness of eac) %ro%osed Su$contractor or Su%%lier/ t)e %ortion of t)e wor( w)ic) suc) Su$contractor is to do or t)e equi%ment*materials w)ic) suc) su%%lier is to furnis) and suc) ot)er information as t)e Aut)ority may reasona$ly require tendin! to esta$lis) t)at t)e %ro%osed Su$contractor or Su%%lier )as t)e necessary s(ill/ facilities/ inte!rity/ e7%erience and financial resources to %erform t)e wor( or su%%ly t)e equi%ment in a satisfactory manner and in accordance wit) t)e Contract. To $e considered s(illed and e7%erienced/ t)e %ro%osed Su$contractor or Su%%lier must s)ow t)at )e )as satisfactorily %erformed wor(/ or su%%lied equi%ment/ of t)e same !eneral ty%e t)at )e is %ro%osin! to %erform for t)e ?idder under t)is Contract. T)e Aut)ority may require suc) %ro%osed Su$contractor or Su%%lier to su$mit %roof of financial or ot)er qualification to do t)e 'or(. 3n addition to su$mittin! for a%%roval t)e a$ove1mentioned cate!ories of Su$contractors and Su%%liers/ ?idder may su$mit any ot)er %ro%osed Su$contractor or Su%%lier for a%%roval %rior to contract award.
A )op0 of this N'a&ifi)ation Statement is in)&'ded in this .an'a& as Appendi; ,. !1 L Statement of 0ualification of Su$contractor.
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T)e Aut)ority will notify t)e ?idder wit)in a reasona$le time w)et)er use of t)e %ro%osed Su$contractor or Su%%lier )as $een a%%roved. ')ere use of a %ro%osed Su$contractor or Su%%lier )as not $een a%%roved/ t)e ?idder may %ro%ose anot)er Su$contractor or Su%%lier/ or %ro%ose to %erform t)e wor( )imself. (i) 'it) res%ect to any Su$contractor(s)*Su%%lier(s)/ t)e successful ?idder will $e required to o$tain a%%roval of suc) Su$contract(s)*Su%%lier(s) in accordance wit) t)e %rovisions of Article 1.D;. The )ontra)t Arti)&e #o. !.0H referen)ed a$ove in the so&i)itation provision re<'ires the ,idder to 'se the S'$)ontra)torsAS'pp&iers that /ere approved $0 #5CT. The )ontra)t )&a'se reads, in part( ART<C8" 1! 8 1 %UAC3=TRACT% (a) Any Su$contractor or Su%%lier w)ic) required and received %re1award a%%roval in accordance wit) %ara!ra%) 1J of t)e 3nformation for ?idders/ must $e utili@ed $y t)e Contractor for t)e %ortion of t)e 'or( for w)ic) t)ey were a%%roved. T)e Aut)ority will !enerally not entertain any %ost1award su$stitutes of any suc) Su$contractor or Su%%lier in t)e a$sence of com%ellin! circumstances to do so. 4 Severa& points )an $e noted )on)erning the a$ove so&i)itation provision and )ontra)t )&a'se( a. :ver0 s'$)ontra)t greater than !0P of the $id pri)e /i&& a'tomati)a&&0 $e )apt'red for revie/. $. The provision is tai&ored on a )ase $0 )ase $asis to )apt're an0 s'$)ontra)t deemed important or )riti)a& $0 the grantee regard&ess of do&&ar va&'e. 5o' /o'&d simp&0 insert the e<'ipment, materia&s or &a$or in 0o'r 3,idders Data Sheet4 8or /herever 0o' /ish to note the items9 so as to re<'ire 0o'r revie/ and approva& of those s'$)ontra)tors. ). The ,idder /i&& $e re<'ired $0 the )ontra)t Arti)&e !.0H L Su$contracts/ to 'se the S'$)ontra)torsAS'pp&iers that /ere proposed and approved 'n&ess there are 3)ompe&&ing )ir)'mstan)es4 that pre)&'de the ,idder from doing so. Consentin" to Su&contracts B/en t/e Prime Contract is Cost Plus Fi;ed Fee 6CPFF9 or Time + Materials 6T+M9 *or these t0pes of )ontra)ts, grantees ma0 /ish to re<'ire the prime )ontra)tor to s'$mit the proposed s'$)ontra)t for the grantee+s )onsent prior to a/ard $0 the prime, espe)ia&&0 if the s'$)ontra)t is signifi)ant in do&&ar terms, invo&ves a )riti)a& )omponent,
*or a )omp&ete )ontra)t )&a'se and f'rther information dea&ing /ith S'$)ontra)ts, )onta)t Stan =ri&& of #5CT at 81!H9 %94 4"50.
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or is itse&f a C-** or TC. s'$)ontra)t. ?f the grantee determines that an0 s'$)ontra)ts sho'&d $e s'$mitted for )onsent, the grantee /i&& /ant to identif0 the t0pes of information that the prime sho'&d s'$mit /ith its re<'est for )onsent. The t0pe of information that /i&& 's'a&&0 $e re&evant as part of an advan)e notifi)ation for )onsent pa)2age /o'&d )onsist of( !. A des)ription of the s'pp&ies or servi)es to $e s'$)ontra)ted. The $est des)ription /o'&d $e the a)t'a& s'$)ontra)t spe)ifi)ations andAor statement of /or2. 2. ?dentifi)ation of the t0pe of s'$)ontra)t to $e 'sed. The a)t'a& s'$)ontra)t do)'ment itse&f /o'&d $e $est sin)e it /o'&d give 0o' a&& the terms and )onditions, /hi)h 0o' )an then revie/ to ens're that a&& re<'ired f&o/ do/n )&a'ses are in)orporated in the s'$)ontra)t. The ,--. Appendi; A.! )ontains the re<'ired *edera& )&a'ses and identifies those that have f&o/ do/n re<'irements. ". An e;p&anation of ho/ and /h0 the proposed s'$)ontra)tor /as se&e)ted, in)&'ding an identifi)ation of the )ompetitive proposa&s o$tained, and their re&ative strengths and /ea2nesses. 4. The s'$)ontra)tor+s )ost or pri)e proposa&, together /ith the prime )ontra)tor+s )ost or pri)e ana&0sis of the s'$)ontra)tor+s proposa&. 5. :viden)e from a )ompetent a'ditor that the s'$)ontra)tor+s a))o'nting s0stem is ade<'ate for )ost t0pe s'$)ontra)ts 8if the s'$)ontra)t is )ost t0pe9 and that the proposed &a$or and indire)t e;pense rates are reasona$&e in &ight of re)ent a)t'a& rates in)'rred and the $est avai&a$&e $'siness pro@e)tions for the )ompan0. %. The -rime )ontra)tor+s e;p&anation of ho/ the s'$)ontra)t pri)e /as determined. 1. The -rime )ontra)tor+s assessment of the s'$)ontra)tor+s 3responsi$i&it0,4 in)&'ding the s'$)ontra)tor+s performan)e re)ord on prior @o$s of a simi&ar magnit'de. De"ree of BorE t/at is Su&contracted ) =rantees ma0 )onsider re<'iring the prime )ontra)tor to perform )ertain tas2s on a pro@e)t or a minim'm per)entage of the /or2, to ins're that the prime )ontra)tor maintains a )ertain degree of )ontro& over the pro@e)t. *or instan)e, /here a @o$ is primari&0 )ivi&Astr')t'ra& /or2, $idders ma0 $e a&&o/ed to s'$)ontra)t asso)iated e&e)tri)a& /or2, $'t ma0 $e re<'ired to perform the )ivi&Astr')t'ra& /or2 /ith their o/n for)es. ?n an0 event, /here a signifi)ant amo'nt of the /or2 is s'$)ontra)ted, the agen)0 ma0 /ish to ta2e a more a)tive ro&e in approving s'$)ontra)tors. 5
Some states or @'risdi)tions have esta$&ished minim'm re<'irements.
,est -ra)ti)es -ro)'rement .an'a& L Chapter !0 L C&oseo't
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C/a ter (: (: = Closeout !0.! C&oseo't -ro)ed'res 81A999 !0.2 A'dits 81A999 !0." Ie)ord Ietention 84A059 (:$( CLOSEOUT PROCEDURES RE@UIREMENT 49 C*I -art !H.50, Closeout, addresses the re<'irements that grantees m'st adhere to in the )&oseo't of their grants. ?n order to )omp&0 /ith these re<'irements, grantees /i&& have to o$tain the re<'ired information, reports, fina& invoi)es, and other do)'mentation as appropriate from their third part0 )ontra)tors as part of the )ontra)t )&oseo't pro)ess. The )&oseo't information re<'ired $0 *TA from grantees pertains to the fo&&o/ing( !. *ina& performan)e or progress report. 2. *inan)ia& Stat's Ieport. ". *ina& re<'est for pa0ment. 4. ?nvention dis)&os're 8if app&i)a$&e9. 5. *edera&&0 o/ned propert0 report 8does not in)&'de propert0 o$tained /ith grant f'nds9. DISCUSSION A com leted contract is one t/at is &ot/ /#sicall# and administrati%el# com lete$ A contract is #hysically com#lete onl# after all deli%era&le items and ser%ices called for under t/e contract /a%e &een deli%ered and acce ted &# t/e "rantee$ T/ese deli%era&le items include suc/ t/in"s as re orts! s are arts! 1arrant# documents! and roof of insurance 61/ere reAuired &# t/e contract terms9$ T/ese deli%era&le items ma# or ma# not /a%e &een riced as discrete a# items in t/e contract! &ut t/e# are reAuired deli%era&les! and t/e contract is not /#sicall# com lete until all deli%era&les are made$ A contract is administrati-ely com#lete 1/en all a#ments /a%e &een made and all administrati%e actions accom lis/ed$ T/e ste s t/at must &e com leted to close out a contract 1ill de end u on t/e t# e and7or nature of t/e contract$ Routine commodit# rocurements = T/e closeout of routine urc/ase orders and contracts for commodities and ot/er commercial roducts is usuall# a strai"/tfor1ard and uncom licated rocess$ T/e rocurement erson res onsi&le for closeout 1ill need to ensure t/at /is end item user /as ins ected and acce ted t/e deli%era&le items as &ein" in
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conformance 1it/ t/e urc/ase order7contract s ecifications$ An ins ection7acce tance form s/ould &e in t/e file attestin" to t/e contractorMs deli%er# of all contract end items! includin" an# descri ti%e literature or 1arrant# documentation$ T/ere must also &e documentation attestin" to final a#ment &# t/e accounts a#a&le de artment$ Non)routine contracts for ser%ices! construction! rollin" stocE! etc$ = Contracts for ersonal ser%ices! com le; eAui ment! construction! and ot/er one)of)Eind items 1ill reAuire a num&er of ste s to effect an administrati%e closeout$ Ma'or elements of t/e closeout rocess! and related documentation! mi"/t include3 a9 Resolution of all contract c/an"es! claims! and final Auantities deli%ered$ &9 Determination7reco%er# of liAuidated dama"es$ c9 Re%ie1 of t/e insurance claim file &# counsel7insurance s ecialist to determine if funds need to &e 1it//eld from final a#ment to co%er unsettled claims a"ainst t/e contractor$ d9 Settlement of all su&contracts &# rime contractor$ e9 Performance of all ins ections 6and acce tance tests if an#9 &# t/e "ranteeMs ro'ect mana"ement office! 1it/ a ro riate documentation$ f9 Conduct of a cost audit for cost)reim&ursement contracts and resol%e Auestioned costs! if an#$ "9 <eneration of a Contractor Performance Re ort$ See Aest Practice &elo1$ /9 T/e su&mittal of all reAuired documentation &# t/e Contractor! includin" suc/ items as3 Final re orts Final a#roll records and 1a"e rate certifications S are arts list ManufacturerMs Barranties and <uarantees Final corrected s/o dra1in"s O eration and maintenance manuals
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Catalo"ues and &roc/ures In%ention disclosure 6if a lica&le9
Federall#)o1ned ro ert# re ort 6if t/ere 1as <o%ernment)furnis/ed ro ert#9 Resolution of final Auantities 6construction contracts9 Final in%oice Consent of Suret# to release final a#ment to Contractor ContractorMs Affida%it of Release of Liens ContractorMs <eneral Release 6releasin" t/e "rantee from an# furt/er lia&ilities7claims under t/e contract9 Maintenance Bond 6if reAuired9
i9 Conduct a Post)deli%er# Audit for rollin" stocE contracts as reAuired &# .8 CFR Part 22- = Pre)a1ard and Post deli%er# Audits of Rollin" StocE Purc/ases$ Federal closeout rocedures = S/ould t/e "rantee 1is/ to re%ie1 t/e contract closeout rocedures used &# t/e Federal <o%ernment for its contracts! t/e# ma# &e found in FAR Part .$5:.! Closeout o* contract *iles$ FAR Part .*$(0! Contractor Per*ormance <n*ormation! discusses t/e re aration of Contractor Per*ormance Re#orts! T/ese rocedures are not &indin" on "rantees! and are included /ere for information ur oses onl#$ Best Practice :sta$&ishing That a Contra)t ?s Comp&eted L ?t is genera&&0 the responsi$i&it0 of the -ro@e)t .anager 8-.9 to esta$&ish that the /or2 'nder a )ontra)t has $een )omp&eted and the )ontra)t is read0 for )&oseo't. When the -. determines that the /or2 is )omp&ete, the -. sho'&d prepare a )he)2&ist sho/ing a&& the )ontra)t de&ivera$&es and s'$mitta&s, and indi)ating on the )he)2&ist that a&& s'$mitta&s and de&ivera$&es have $een revie/ed, inspe)ted and a))epted. The -. sho'&d notif0 the )ontra)t administrator $0 memorand'm that the )ontra)t is )omp&ete and a&& re<'ired de&ivera$&es have $een inspe)ted and a))epted. Contra)t C&oseo't Che)2&ist L The -. or )ontra)t administrator sho'&d have a contract closeout c)ec(list, &isting a&& the administrative steps re<'ired to )&ose o't a )ontra)t. The )he)2&ist is an e;treme&0 'sef'& too& for the )ontra)t administrator or pro@e)t manager /ho is responsi$&e for )ontra)t )&oseo't. =iven the different re<'irements for the vario's )ontra)ting sit'ations,
-age 4
grantees ma0 /ish to have different )he)2&ists for different t0pes of )ontra)tsQ e.g., )ommodities, servi)es, )onstr')tion, )ost t0pe )ontra)ts, et). An e;amp&e of a contract closeout c)ec(list 'sed $0 .AITA for )onstr')tion )ontra)ts is sho/n in Appendi; ,.!4. Contra)tor -erforman)e Ieport L Do)'mentation of a )ontra)tor+s performan)e for f't're so'r)e se&e)tion de)isions is an option that grantees sho'&d )onsider for )ertain t0pes of pro)'rements s')h as professiona& servi)es, )omp&e; e<'ipment, )onstr')tion, et). These performan)e reports )an $e an important referen)e point for f't're so'r)e se&e)tion de)isions. See ,--. Se)tion 5.!, Res%onsi$ility of Contractor. ?f the grantee )hooses to do)'ment a )ontra)tor+s performan)e, inp't to the report sho'&d $e re)eived from the te)hni)a& offi)e, )ontra)ting offi)e, disadvantaged $'siness offi)e 8if )ontra)t )ontained D,: re<'irements9 and end 'sers of the prod')t or servi)e 8if appropriate9. Contra)tors sho'&d $e f'rnished /ith the report and given an opport'nit0 to s'$mit )omments, re$'tting statements or additiona& information. The Contra)tor+s )omments sho'&d $e retained in the report fi&e. ?t /o'&d $e advisa$&e to have a revie/ &eve& a$ove the grantee -ro)'rement Offi)er to )onsider disagreements $et/een the parties regarding the eva&'ation. Bo/ever, fina& de)ision on the )ontent of the report m'st rest /ith the grantee. Copies of the fina& eva&'ation sho'&d $e f'rnished to the Contra)tor. =rantees sho'&d have a time &imit on the retention of these reports. ! Ievie/ $0 &ega& )o'nse& L *or pro)'rements invo&ving servi)es, )onstr')tion, and &arger do&&ar va&'e e<'ipment p'r)hases, grantees ma0 /ish to have their &ega& )o'nse& revie/ the )&oseo't fi&e to ens're the ade<'a)0 of the )ontra)tor+s &ega& do)'ments, in)&'ding the )ontra)tor+s genera& re&ease, ins'ran)e )ertifi)ates, s'ret0+s re&ease, maintenan)e $onds, et). -roof of ins'ran)e )overage L *or a&& )ontra)ts re<'iring the Contra)tor to maintain ins'ran)e for its prod')ts or servi)es 8e.g., professiona& &ia$i&it0 or prod')t &ia$i&it0 ins'ran)e9, the )ontra)t administrator sho'&d o$tain %roof of insurance from the Contra)tor as part of the )&oseo't pro)ess. This do)'mentation sho'&d $e s'$mitted to the grantee+s ?ns'ran)e Department for approva& prior to fina& pa0ment of the Contra)tor. The ?ns'ran)e Department /i&& $e re<'ired to maintain these do)'ments as 3a)tive4 fi&es 'nti& s')h time as the ins'ran)e re<'irement )eases 'nder the terms and )onditions of the )ontra)tQ i.e., these ins'ran)e terms /i&& )ontin'e past 8s'rvive9 the fina& )ontra)t pa0ment. *ina& pa0ment L The )ontra)t administrator 8CA9 m'st $e s're that a&& administrative steps have $een a))omp&ished prior to fina& pa0ment. Contra)t administrators sho'&d ma2e 'se of a contract closeout c)ec(list to the e;tent that the -rogram .anager+s )he)2&ist does not )over ever0thing in the )&oseo't pro)ess 8e.g., the )ontra)t administrator ma0 have )ertain areas of )on)ern not assigned to the -rogram .anager9. The CA m'st ens're that a&& re<'ired inspe)tions have $een performed $0 the te)hni)a& program offi)e, and a memorand'm has $een re)eived from the pro@e)t manager )ertif0ing to the satisfa)tor0 )omp&etion of the )ontra)t, /hi)h in)&'des
The *edera& po&i)0 is to retain these reports for not more than three 0ears D*AI -art 42.!50"8e9F.
-age 5
a&& re<'ired do)'mentation from the Contra)tor, $efore the0 a'thoriGe fina& pa0ment or the re&ease of an0 f'nds $eing retained 'nder the )ontra)t. Contra)t administrators need to pa0 )aref'& attention to those t0pes of do)'ments that are notorio's&0 pro$&emati), s')h as /arranties. ?n fa)t, grantees ma0 /ish to )onsider ma2ing these /arrant0 do)'ments a pa0 item in their )ontra)ts /hen the )ontra)t pa0 items are $eing esta$&ished, so that the Contra)tor /i&& $e motivated to de&iver the do)'ments in a time&0 manner, and there /i&& $e no disp'te as to the proper amo'nt that sho'&d $e paid for these items. Contra)tor+s =enera& Ie&ease L As part of the )ontra)t )&oseo't pro)ess, the )ontra)t administrator m'st send the Contra)tor a )&oseo't &etter that in)&'des the Contra)tor+s 3genera& re&ease.4 This do)'ment m'st $e a standard statement prepared $0 the grantee+s &ega& )o'nse& for 'se on a&& of the grantee+s )ontra)ts. The re&ease /i&& sa0 that for the pa0ment of a s'm )ertain, /hi)h is the fina& )ontra)t amo'nt agreed to $0 $oth parties, the Contra)tor re&eases the grantee from an0 and a&& )&aims of ever0 2ind arising dire)t&0 or indire)t&0 o't of the )ontra)t. The re&ease ma0 a&so )ontain a )ertifi)ation that the )ontra)tor has paid its s'$)ontra)tors and s'pp&iers for a&& their &a$or, materia&s, servi)es, et). f'rnished 'nder the )ontra)t. The re&ease is to $e signed $0 a )orporate offi)ia& a'thoriGed to $ind the Contra)tor. The !eneral release is important to o$tain prior to fina& pa0ment $e)a'se it ass'res the grantee that there /i&& $e no f'rther )&aims from the Contra)tor on)e the fina& pa0ment has $een made. The grantee sho'&d have the re&ease revie/ed $0 its &ega& )o'nse& if the Contra)tor ma2es an0 )hanges to the grantee+s standard re&ease &ang'age that /as sent to the Contra)tor for signat're. Of )o'rse it /i&& $e ne)essar0 for the grantee and the Contra)tor to have reso&ved a&& open iss'es of a finan)ia& nat're prior to the e;e)'tion of the re&ease 8)hange orders, )&aims, &i<'idated damages, et).9, and this reso&'tion of a&& o'tstanding )&aims is an important step in the )ontra)t )&oseo't pro)ess. Ietainage and the pro$&em of )ontra)tors /ho <'it /or2 L O))asiona&&0 a )onstr')tion )ontra)tor ma0 3/a&2 a/a04 from a pro@e)t that is a&most )omp&ete, ref'sing to sign a genera& re&ease and forgoing fina& pa0ment. This sit'ation ma0 o))'r /hen the )ontra)tor &a)2s s'ffi)ient finan)ia& in)entive to )omp&ete the )ontra)tQ e.g., if the 3p'n)h &ist4 is &arge and there is ver0 &itt&e mone0 &eft in retainage, the )ontra)tor ma0 profit $0 ref'sing to )orre)t the p'n)h &ist items and &eave the retainage /ith the grantee. Or the )ontra)tor ma0 have $een a/arded another )ontra)t /hi)h re<'ires the reassignment of his personne& to another @o$. Whatever the reason, t)e !rantee s)ould antici%ate t)is %ossi$ility $y carefully estimatin! t)e amount of retaina!e in suc) a way t)at it re%resents twice t)e amount of t)e %unc) list wor( and undelivered items (manuals/ drawin!s/ s%are %arts/ etc.). *or e;amp&e, .AITA+s pro)ed'res 8/hi)h are spe&&ed o't in the )ontra)t provisions9 )a&& for the retainage of at &east 5P of the tota& )ontra)t va&'e as the /or2 progresses 8!0P if there are pro$&ems o$served /ith the /or29. At the point of fina& inspe)tion and p'n)h &ist preparation, the resident engineer estimates the va&'e of the p'n)h &ist items and the 'nde&ivered items s')h as spares, man'a&s, /arranties, et)., and then .AITA pa0s o't the retainage min's t/i)e the va&'e of a&& the 'nfinished /or2. ,0 esta$&ishing the retainage in this /a0, the )ontra)tor is motivated to )omp&ete the )ontra)t, $e)a'se the )ontra)tor /i&& a)t'a&&0 re)eive t/i)e the amo'nt of mone0 that it ta2es to finish the /or2. ?n other /ords, the )ontra)tor is given a strong in)entive to )omp&ete the )ontra)t. When a&& e&se fai&s, the grantee sho'&d definite&0 invo&ve the s'ret0 in the iss'e of 'nfinished /or2
-age %
8even if the amo'nt of /or2 is re&ative&0 sma&&9 $e)a'se the )ontra)tor+s re&ationship /ith its s'ret0 is a vita& one for its f't're $'siness. ?f the )ontra)tor &oses the )onfiden)e of its s'ret0, it is effe)tive&0 fore)&osing on its a$i&it0 to $id on f't're /or2 re<'iring performan)e $onds. Warrant0 and ='arantee Iegister L The )ontra)t spe)ifi)ations ma0 re<'ire that individ'a& /arranties or g'arantees $e f'rnished for vario's insta&&ed e<'ipment or $'i&ding s0stems. *or ea)h )omp&eted )ontra)t re<'iring /arranties, the )ontra)t administrator sho'&d deve&op a 'arranty and .uarantee Re!ister, /hi)h is a stat's form &isting( ea)h individ'a& item of e<'ipment and s0stem for /hi)h a /arrant0 or g'arantee is spe)ified 8roofing, doors, sea&ants, et).9Q the pertinent se)tion in the )ontra)t spe)ifi)ationQ the name of the )ompan0 providing the /arrant0Q the e;piration date of the /arrant0Q and the address of the providing )ompan0
An e;amp&e of a 'arranty and .uarantee Re!ister, 'sed $0 .AITA, )an $e fo'nd in Appendi; ,.!". The 'arranty and .uarantee Re!ister /i&& ena$&e the grantee to monitor 'p)oming /arrant0 e;pirations so that the e<'ipment or $'i&ding s0stem )an $e inspe)ted $efore the e;piration date, and )orre)tive a)tions ta2en $0 the Contra)tor if re<'ired. (:$* AUDITS RE@UIREMENT *TA+s =rant .anagement ='ide&ines Cir)'&ar 50!0.!C, dated O)to$er !, !99H, Chapter ??? 1, T)ird &arty Contract Audits, provides g'idan)e to grantees )on)erning those third part0 )ontra)t a'dits. DISCUSSION FTAMs 0rant 4anagement 0uidelines do not esta&lis/ a contract %alue7dollar t/res/old reAuirement for conductin" contract audits$ <rantees must use t/eir o1n discretion as to t/e nature and e;tent of t/ird art# contract audits$ Co1e%er! t/e FTA 0uidelines mention certain t# es of contracts t/at usuall# include ro%isional o%er/ead 6&urden9 and <eneral Administrati%e 6<+A9 rates$ T/ese ro%isional! or interim! rates need to &e %erified &# audit for t/e a lica&le contract eriods$ T/e t# es of contracts t/at t# icall# ma# &e structured as cost)reim&ursement contracts reAuirin" final cost audits 1ould include consultant! en"ineerin" or ser%ice contracts$
-age 1
Contract audits ma# also &e reAuested &# FTA to %erif# t/at "rantee a#ments to t/e contractor are consistent 1it/ t/e terms of t/e contract$ In addition! audit of a t/ird art# contract ma# &e recommended &# t/e firm conductin" t/e "ranteeMs sin"le annual audit$ ( T/ird art# contract audits must &e conducted &# auditors 1/o are inde endent from t/e t/ird art# contractor$ Man# "rantees assi"n t/e contract audit function to t/eir o1n auditors or financial mana"ement ersonnel$ Co1e%er! some "rantees do not /a%e t/e ersonnel resources 1it/in t/eir o1n or"ani,ation to erform t/is function$ T/ere are t1o sources for audit ser%ices t/at are a%aila&le to "rantees3 inde endent accountin" firms and contract auditors from a"encies of t/e Federal <o%ernment$ Pri%ate accountin" firms can usuall# res ond more ra idl# to t/e "ranteeMs reAuest for audit! &ut in some cases t/e Federal <o%ernment maintains a continuin" audit function at contractor locations! and t/ese auditors can &e used for t/ird art# contract audits$ In contractin" for ri%ate firms to ro%ide audit ser%ices! "rantees s/ould follo1 standard contractin" rocedures for t/ird art# contracts$ ReAuests for Federal audit assistance s/ould &e directed to FTA$ B/en audits result in Auestioned costs! and t/e "rantee is t/us reAuired to resol%e t/e Auestioned costs t/rou"/ ne"otiation 1it/ t/e Contractor! t/e results of t/e ne"otiation s/ould &e documented in a %ummary o* =egotiations memorandum 1/ic/ must &e laced in t/e contract file$ T/is memorandum must e; lain /o1 t/e final contract costs 1ere arri%ed at$ T/e cost of erformin" an audit of a t/ird art# contract can &e c/ar"ed to t/e "rant$ (:$- RECORD RETENTION RE@UIREMENT !. The *TA .aster Agreement .A8!29 Se)tion H, Re%ortin!/ Record Retention/ and Access, )ontains the fo&&o/ing re<'irements )on)erning the retention of do)'ments( ). Ie)ord Ietention. The Ie)ipient agrees to maintain inta)t and readi&0 a))essi$&e a&& data, do)'ments, reports, re)ords, )ontra)ts, and s'pporting materia&s re&ating to the -ro@e)t as the *edera& =overnment ma0 re<'ire d'ring the )o'rse of the pro@e)t and for three 0ears thereafter. d. A))ess to Ie)ords of Ie)ipients and S'$re)ipients. Upon re<'est, the Ie)ipient agrees to permit and re<'ire its S'$re)ipients to permit the Se)retar0 of Transportation, the Comptro&&er =enera& of the United States, and, if appropriate,
(*
See *TA .aster Agreement .A8!29, !0 ! 05, Se)tion !0, for Sing&e Ann'a& A'dit re<'irements.
-age H
the State, or their a'thoriGed representatives, to inspe)t a&& -ro@e)t /or2, materia&s, pa0ro&&s, and other data, and to a'dit the $oo2s, re)ords, and a))o'nts of the Ie)ipient and its S'$re)ipient pertaining to the -ro@e)t. e. -ro@e)t C&oseo't. -ro@e)t )&oseo't does not a&ter these reporting and re)ord retention re<'irements. 2. 49 C*I -art !H."% 8i9, Contract %rovisions, re<'ires grantees to in)orporate )ertain provisions in their )ontra)ts dea&ing /ith a))ess and re)ords retention. Spe)ifi)a&&0, -art !H."%8i98!!9 re<'ires a three 0ear retention period for a&& do)'ments after the grantee ma2es fina& pa0ment. DISCUSSION T/e FTA Master A"reement 6MA9 deals 1it/ "rantee and su&"rantee record retention reAuirements in Section 5$ <rantees are Hreci ientsI and su&"rantees are Hsu&reci ients$I T/e MA reAuires reci ients and su&reci ients to maintain t/eir records for at least t/ree #ears follo1in" com letion of t/e ro'ect$ These rules do not #ertain to third1#arty contractors since the latter are not 'reci#ients) or 'su$reci#ients!) ! T/e reAuirements ertainin" to third1#arty contractors are set fort/ in t/e Common <rant Rule 6.8 CFR (5$-29$ <rantees are reAuired to include a clause in t/eir contracts 1/ere&# contractors a"ree to maintain records for ins ection &# t/e "rantee! FTA! Com troller <eneral! etc$ for t/ree #ears a*ter *inal #ayment is made $y the grantee and all other matters are closed! * T/is t/ree)#ear eriod &e"ins! not 1it/ com letion of t/e contract 1orE! &ut 1it/ final a#ment! 1/ic/ ma# &e considera&l# lon"er t/an t/ree #ears after 1orE com letion$ T/is 1ill es eciall# &e true 1it/ cost)t# e contracts t/at reAuire a final audit &efore final a#ment can &e made$ In t/ese cases t/e t/ree)#ear retention eriod does not &e"in until t/e audit is com leted and final a#ment is made$ T/e BPPM includes su""ested clause lan"ua"e for t/ird) art# contracts in A endi; A$(! Clause Z(( = Access to Records and Re#orts$ <rantees s/ould de%elo t/eir clause lan"ua"e so it com lies 1it/ t/e common "rant rule lan"ua"e t/at contractors must retain records for t/ree #ears Hafter final a#ment is made &# t/e "rantee and all ot/er matters are closed$I T/e "rantee ma# 1is/ to ensure t/at suc/ records are readil# accessi&le$
These terms are defined in the .A, Se)tion !.m and !.p. =rantees m'st ens're their )ontra)t terms and pro)'rement po&i)ies )&ear&0 re<'ire re)ord retention for three 0ears after the fina& )ontra)t pa0ment is made and not after )omp&etion of /or2. * 49 C*I !H."% 8i98!!9.
,est -ra)ti)es -ro)'rement .an'a& Chapter !! Disp'tes
-age !
! (( ) Dis utes
C/a ter ((
!!.! -rotests 8%A0"9 !!.2 C&aims, =rievan)es and Other Disp'tes /ith Contra)tors 8%A999 (($( PROTESTS RE@UIREMENT T 1.&. of *TA Cir)'&ar 4220.!: states( Written -rotest -ro)ed'res. =rantees sha&& have /ritten protest pro)ed'res to hand&e and reso&ve disp'tes re&ating to their pro)'rements and sha&& in a&& instan)es dis)&ose information regarding protests to *TA. " A&& protest de)isions m'st $e in /riting. A protester m'st e;ha'st a&& administrative remedies /ith the grantee $efore p'rs'ing a protest /ith *TA. Ievie/s of protests $0 *TA /i&& $e &imited to( 8!9 a granteeKs fai&'re to have or fo&&o/ its protest pro)ed'res, or its fai&'re to revie/ a )omp&aint or protestQ or 829 vio&ations of *edera& &a/ or reg'&ation. 4 An appea& to *TA m'st $e re)eived $0 the )ogniGant *TA regiona& or Bead<'arters Offi)e /ithin five 859 /or2ing da0s of the date the protester &earned or sho'&d have &earned of an adverse de)ision $0 the grantee or other $asis of appea& to *TA. 5
-rior versions of the Cir)'&ar )ontained the &ang'age in this paragraph re&ated to >dis)&osDingF information regarding protests to *TA.> *TA noted that this provision a&&o/ed for /ide&0 differing interpretations $'t fo'nd itse&f $o'nd $0 the Common =rant I'&e. *TA $e&ieves this provision re<'ires grantees to, at a minim'm, informa&&0 notif0 their *TA regiona& offi)es /hen the0 re)eive a protest re&ated to a )ontra)t re<'ired to )omp&0 /ith the Cir)'&ar and to simi&ar&0 2eep their regiona& offi)es apprised of the stat's of those protests. Iegiona& offi)es ma0 re<'ire grantees to for/ard )opies of parti)'&ar protests or a&& protests for information or revie/ p'rposes at an0 time.
.
This paragraph has $een a&igned /ith the Common =rant I'&e and pra)ti)e $0 adding >vio&ations of *edera& &a/ or reg'&ation> to the $asis of *TA protest @'risdi)tion. *TA /i&& )ontin'e to &imit its revie/ of grantee protest de)isions and /i&& read this Common =rant I'&e provision in )on@'n)tion /ith the provisions that e;press its intent to avoid s'$stit'ting *TAKs @'dgment for those of its grantees. *TA /i&& not )onsider ea)h and ever0 appea& of granteesK protest de)isions simp&0 $e)a'se a federa& &a/ or reg'&ation ma0 $e invo&ved. ?nstead, *TA /i&& e;er)ise dis)retionar0 @'risdi)tion over those )ases deemed to invo&ve iss'es important to the overa&& third part0 )ontra)ting program.
0
Additiona&&0, /e have noted that re<'iring an appea& to $e fi&ed /ithin five da0s of >the vio&ation> 0et a&so re<'iring protestors to e;ting'ish their &o)a& remedies $efore fi&ing /ith *TA &ed to some )onf'sion. *TA has attempted to )&arif0 this standard $0 starting the protestorKs )&o)2 /hen it re)eives a)t'a& or )onstr')tive noti)e of an adverse de)ision or that a grantee fai&ed to have or fo&&o/ its pro)ed'res or revie/ a )omp&aint.
-age 2
DISCUSSION 5o' )an adopt protest pro)ed'res that /i&& provide an o't&et for s'pp&ier )on)erns that )annot $e informa&&0 reso&ved. These pro)ed'res /i&& he&p 0o' reso&ve these )on)erns on a s)hed'&e that minimiGes the '&timate )ost to 0o'r agen)0. Consider in)&'ding the pro)ed'res or 2e0 re<'irements of the pro)ed'res in 0o'r so&i)itations. ?f 0o' adopt and adhere to these pro)ed'res, *TA+s invo&vement /i&& $e ver0 &imited. Pur ose A protest is a potentia& $idder+s or )ontra)tor+s remed0 for )orre)ting a per)eived /rong in the pro)'rement pro)ess. A protest m'st $e a))epted and revie/ed /ith the 'nderstanding that integrit0 of the pro)'rement pro)ess as /e&& as the pro)'rement offi)e ma0 $e at sta2e. ?f an offeror does not have a satisfa)tor0 means of reso&ving hisAher disagreement /ith 0o', hisAher efforts to o$tain satisfa)tion, in)&'ding the possi$i&it0 of &itigation, ma0 s'$stantia&&0 interfere /ith the pro)'rement pro)ess and $e )ost&0 to the agen)0. One aspe)t of the protest pro)ess is am a)2no/&edgment that p'$&i) pro)'rement offi)ia&s are ma2ing ma@or p'$&i) de)isions, )an )on)eiva$&0 err on o))asion, and that there sho'&d $e some pro)ess short of &itigation to remed0 s')h and error. The s'))ess of this pro)ess ena$&es *TA to dis)harge its responsi$i&it0 /hi&e se&dom $e)oming dire)t&0 invo&ved in a pro)'rement disp'te. Best Practices There are three $asi) t0pes of protests, $ased on the time in the pro)'rement )0)&e /hen the0 o))'r.
A pre $id or so&i)itation phase protest is re)eived prior to the $id opening or proposa& d'e date. A pre a/ard protest is a protest against ma2ing an a/ard and is re)eived after re)eipt of proposa&s or $ids, $'t $efore a/ard of a )ontra)t. A post a/ard protest is a protest re)eived after a/ard of a )ontra)t.
Content of -ro)ed'res To ens're that protests are re)eived and pro)essed effe)tive&0, a&& grantees m'st have ade<'ate /ritten $id protest pro)ed'res. ?t is re)ommended that these pro)ed'res $e in)&'ded or referen)ed in the so&i)itation do)'ment. ?f the0 are referen)ed, information m'st $e in)&'ded on ho/ a )op0 of the pro)ed'res ma0 $e a)<'ired $0 an0 interested part0. When the pro)ed'res are re<'ested, the0 sho'&d $e provided immediate&0. The /ritten pro)ed'res t0pi)a&&0 address the fo&&o/ing e&ements(
Differen)e in pro)ed'res for pre $id, pre a/ard and post a/ard protestsQ
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Spe)ifi) dead&ines 8in /or2ing da0s9 for fi&ing a protest, fi&ing a re<'est for re)onsideration and for the grantee+s response to a protestQ Spe)ifi) )ontents of a protest 8name of protester, so&i)itationA)ontra)t n'm$er or des)ription, statement of gro'nds for protest9Q 7o)ation /here protests are to $e fi&edQ Statement that the grantee /i&& respond, in detai&, to ea)h s'$stantive iss'e raised in the protest, ?dentifi)ation of the responsi$&e offi)ia& /ho has the a'thorit0 to ma2e the fina& determinationQ Statement that the grantee+s determination /i&& $e fina&Q Statement that *TA /i&& on&0 entertain a protest that a&&eges the grantee fai&ed to fo&&o/ their protest pro)ed'res and that s')h a protest m'st $e fi&ed in a))ordan)e /ith the Cir)'&arQ and A&&o/an)e for re<'est for re)onsideration 8if data $e)omes avai&a$&e that /as not previo's&0 2no/n, or there has $een an error of &a/ or reg'&ation9.
:ffe)t on -ending A)tions One of the )on)erns that ma0 arise in administering a protest is the effe)t on the a/ard or )ontra)t. The de)ision to open a $id or to a/ard a )ontra)t prior to reso&'tion of a protest rests /ith 0o'. Bo/ever, sho'&d the gro'nds for the protest $e fo'nd va&id $0 *TA, *TA ma0 )hoose not to parti)ipate in the )ontra)t. 5o' m'st /eigh this ris2 against the )ost to the agen)0 for terminating the )ontra)t or providing a&ternative f'nding. (($* CLAIMS! <RIEPANCES AND OTCER DISPUTES BITC CONTRACTORS RE@UIREMENT *TA Cir)'&ar 4220.!: paragraph 1.2 reads as fo&&o/s( 2. Iesponsi$i&it0 for Sett&ement of Contra)t ?ss'esADisp'tes. =rantees a&one /i&& $e responsi$&e in a))ordan)e /ith good administrative pra)ti)e and so'nd $'siness @'dgement for the sett&ement of a&& )ontra)t'a& and administrative iss'es arising o't of pro)'rements. These iss'es in)&'de, $'t are not &imited to, so'r)e eva&'ation, protests, disp'tes, and )&aims. These standards do not re&ieve the grantee of an0 )ontra)t'a& responsi$i&it0 'nder its )ontra)ts.
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*TA /i&& not s'$stit'te its @'dgement for that of the grantee or s'$grantee, 'n&ess the matter is primari&0 a *edera& )on)ern. Oio&ations of the &a/ /i&& $e referred to the &o)a&, State, or *edera& a'thorit0 having proper @'risdi)tion. *TA Cir)'&ar 50!0.!C, Chapter ?, Se)tion 1$ dea&s /ith iss'es of claims and c)an!e orders/ in)&'ding the sett&ement of dis%utes. The *TA .aster Agreement .A8!29, O)to$er !, 2005, Se)tion 4" "is%utes/ ?reac)es/ "efaults/ or ,t)er #iti!ation/ states that *TA has a vested interest in the sett&ement of an0 disp'te, $rea)h, defa'&t, or &itigation invo&ving the -ro@e)t. A))ording&0( a. #otifi)ation to *TA. The Ie)ipient agrees to notif0 *TA of an0 )'rrent or prospe)tive ma@or disp'te, $rea)h, defa'&t, or &itigation that ma0 affe)t the *edera& =overnment+s interests in the -ro@e)t of the *edera& =overnment+s administration or enfor)ement of *edera& &a/s or reg'&ations. ?f the Ie)ipient see2s to name the *edera& =overnment as part0 to &itigation for an0 reason, in an0 for'm, the Ie)ipient agrees to inform the *TA $efore doing so. $. *edera& ?nterest in Ie)over0. The *edera& =overnment retains the right to a proportionate share, $ased on the per)entage of the *edera& share a/arded for the -ro@e)t, of an0 pro)eeds derived form an0 third part0 re)over0, e;)ept that the Ie)ipient ma0 ret'rn an0 &i<'idated damages re)overed to the -ro@e)t A))o'nt in &ie' of ret'rning the *edera& share to the *edera& =overnment. ). :nfor)ement. The Ie)ipient agrees to p'rs'e a&& &ega& rights avai&a$&e 'nder an0 third part0 )ontra)t. d. *TA Con)'rren)e. *TA reserves the right to )on)'r in an0 )ompromise or sett&ement of an0 )&aim invo&ving the -ro@e)t and the Ie)ipient. e. A&ternative Disp'te Ieso&'tion. *TA en)o'rages the Ie)ipient to 'se a&& a&ternative disp'te reso&'tions pro)ed'res, as ma0 $e appropriate.
DISCUSSION FTA Circular .**:$(E ara"ra / 4E "i%es "rantees t/e aut/orit# to settle rotests! claims and dis utes 1it/ t/eir t/ird) art# contractors$ T/e Circular sti ulates HFTA 1ill not su&stitute its 'ud"ement for t/at of t/e "rantee or su&"rantee! unless the matter is #rimarily a Federal concern!I T/e t# es of situations t/at constitute a Federal concern are discussed &elo1 in t/e ara"ra / entitled FTA Re-ie/ and Concurrence!
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Notification of FTA)T/e Master A"reement MA6(*9! Section .-a! reAuires "rantees to notif# FTA of an# current or ros ecti%e ma'or dis ute! &reac/! default! or liti"ation ertainin" to t/e Pro'ect$ And if t/e Reci ient seeEs to name t/e Federal <o%ernment as a art# to t/e liti"ation for an# reason! t/e Reci ient must inform t/e FTA &efore doin" so$ FTA Circular 0:(:$(C! C/a ter I! Section 4&6(96d9 reAuires "rantees to notif# FTA of an# current or ros ecti%e liti"ation or ma'or dis uted claim in e;cess of R(::!:: relatin" to an# t/ird art# contract$ T/is Circular also reAuires "rantees to ro%ide a list of all outstandin" claims e;ceedin" R(::!::: and a list of all claims settled durin" t/e re ortin" eriod as art of eac/ Auarterl# ro"ress re ort$ A &rief descri tion and reasons for eac/ claim s/ould accom an# t/is list$ FTA Re%ie1 and Concurrence ) T/e FTA Master A"reement MA6(*9! Section .-d! states t/at FTA reser%es t/e ri"/t to concur in an# com romise of settlement of an# claim in%ol%in" t/e Pro'ect and t/e "rantee$ FTA Circular 0:(:$(C! C/a ter I! Section 4&6.9! FTA Re-ie/ and Concurrence, reAuires "rantees to secure t/e FTA re%ie1 and concurrence in a ro osed claim settlement &efore usin" Federal funds in t/e follo1in" instances3 ($ B/en t/e ne"otiated settlement e;ceeds R(::!::$ T/is 1ould include an# situation 1/en t/e "rantee is 1ai%in" liAuidated dama"es in an amount o%er R(::!:::$ T/e <o%ernment /as a %ested interest in t/e reco%er# of liAuidated dama"es! and t/e "eneral rule is t/at liAuidated dama"es ma# not &e 1ai%ed$ Co1e%er! "rantees ma# Hset)offI t/e liAuidated dama"es a"ainst some ot/er %alid claim of t/e contractor! &ut FTA concurrence is necessar# in an# Hset)offI action$ *$ B/en insufficient funds remain in t/e a ro%ed "rant to co%er t/e settlement$ T/e <o%ernment cannot &e o&li"ated to a# t/e "rantee an amount t/at 1ould e;ceed t/e funds o&li"ated on t/e "rant$ To do so 1ould &e a %iolation of t/e Anti)Deficienc# Act$ -$ B/ere a s ecial Federal interest is declared &ecause of ro"ram mana"ement concerns! ossi&le mismana"ement! im ro riet#! 1aste or fraud$ FTA could notif# t/e "rantee t/at it 1is/es to re%ie1 and concur in an# articular claim7dis ute settlement &ased on t/e criteria stated /ere in section 4&6.9$ E%en more &roadl#! FTA ma# initiate a re%ie1 of "rantee claims under a articular "rant 1/ene%er it deems a re%ie1 to &e necessar#)) 0:(:$(C! Section 4&609$ .$ T/e reAuirement for FTA concurrence also a lies to an# settlement arri%ed at &# ar&itration! mediation! etc$ <rantees must ad%ise t/eir contractors t/at an# decisions reac/ed t/rou"/ ar&itration must &e re%ie1ed and a ro%ed &# t/e FTA$ T/e reason for t/is is t/at an ar&itrator ma# reAuire t/e "rantee to a# for somet/in" t/at is ineli"i&le for fundin" 6unallo1a&le cost9 under t/e terms of t/e "rant$ T/e ar&itrator ma# also reAuire t/e "rantee to a# its contractor an amount t/at 1ould cause t/e fundin" limit of t/e "rant to &e e;ceeded! t/us %iolatin" t/e Anti)Deficienc# Act$
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0$ T/ere are certain situations t/at "rantees must seeE to a%oid &ecause t/e# ma# result in t/e "rantee &ein" lia&le to its contractor &ut una&le to reco%er from FTA$ T/ese circumstances ma# "i%e rise to a FTA re%ie1! t/rou"/ its Pro'ect Mana"ement Offices and ot/er o%ersi"/t re%ie1s! &efore FTA 1ill artici ate in t/e cost of settlin" t/e claim7dis ute$ If "rantees encounter an# of t/ese situations! and t/e# &elie%e t/e claim to &e le"itimate! t/e# s/ould &e re ared to su ort a c/allen"e &# FTA$ If t/e "ranteesMs claim records su&stantiate t/at reasona&le and rudent measures 1ere taEen to re%ent or offset t/e causes underl#in" t/e claim! FTA ma# artici ate in t/e ne"otiated cost >60:(:$(C! Section 4&6-9?$ T/e t# es of situations in Auestion are t/ose 1/ere t/e "rantee /as failed to3 a9 o&tain clear access to all needed ri"/t)of)1a# rior to a1ard of t/e construction contractJ &9 e;ecute all reAuired utilit# a"reements in time to assume uninterru ted construction ro"ressJ c9 undertaEe com re/ensi%e ro'ect lannin" and sc/edulin" to ac/ie%e ro er coordination amon" contractorsJ d9 inform otential contractors of all a%aila&le "eo)tec/nical information on su&surface conditionsJ e9 assure t/at all "rantee)furnis/ed materials are com ati&le 1it/ contractor ro'ect facilities and7or eAui ment! and a%aila&le 1/en neededJ f9 com lete all re)construction sur%e# and en"ineerin" rior to issuin" t/e contractor a Notice to ProceedJ "9 o&tain t/e necessar# a ro%als and a"reements from all ot/er u&lic aut/orities affected &# t/e ro'ect rior to contract a1ardJ /9 assure t/at all desi"n and s/o dra1in"s are rom tl# a a%aila&le to t/e contractor as needed$ ro%ed and made
Freedom of Information Act ) <rantees are cautioned t/at t/e 1ritten materials furnis/ed to FTA 1it/ notifications of dis uted claims or relatin" to ro osed statements of claims and dis utes! are su&'ect to release to t/e u&lic under t/e Freedom of Information Act 6FOIA9$ T/erefore! 1/en t/e dis ute is still in t/e e%aluation7ne"otiation sta"e! and a settlement /as not #et &een reac/ed! a rudent a roac/ 1ould &e for "rantees to include in t/eir Auarterl# 1ritten re orts to FTA onl# information t/at! if released! 1ould not re'udice t/e "ranteeMs ne"otiation or settlement strate"#$
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Best Practices Steps to $e Ta2en -rior to #egotiations When a )&aim andAor grievan)e is initiated $0 one of the parties, the grantee sho'&d ta2e the fo&&o/ing steps( a9 Ie<'est from the )ontra)tor a /ritten detai&ed position on ea)h separate )&aim setting forth the amo'nt and rationa&e for the )ontra)tor+s positions on ea)h item. $9 7ist a&& the )o'nter)&aims $0 the grantee, setting forth the amo'nt and rationa&e for the grantee+s position on ea)h item. )9 -erform a pri)e, )ost, te)hni)a& and &ega& ana&0sis, as re<'ired, for ea)h )&aim andAor grievan)e presented $0 the parties. See ,--. Se)tion 5.2 Cost and &rice Analysis. A tec)nical analysis is to determine the va&idit0 of the )&aims andAor grievan)es, and to determine the re$'tta&s to those )&aims and grievan)es. The le!al analysis is to )onsider a&& the fa)tors avai&a$&e after the pri)e, )ost, and te)hni)a& revie/s have $een )omp&eted to determine the )ontra)tor+s, the grantee+s and the =overnment+s 8*TA9 &ega& position. :a)h revie/ sho'&d $e performed $0 the persons <'a&ified to ma2e the parti)'&ar revie/Aana&0sis. d9 The grantee sho'&d then esta$&ish its $est position ass'ming it prevai&s on a&& of its )&aims and the other part0 &oses a&& of its )&aims $efore a )o'rt or ar$itration pane&. This is )onsidered the grantee+s 3$est4 position. e9 The grantee sho'&d then determine the )ontra)tor+s $est position, ass'ming the )ontra)tor prevai&s on a&& its )&aims $efore a )o'rt or ar$itration pane&. This is the grantee+s 3/orst4 position. f9 The grantee sho'&d then esta$&ish a 3rea&isti)4 position, $ased on the grantee+s $est @'dgement as to ea)h item in iss'e, $0 attempting to anti)ipate the o't)ome of a determination $0 a )o'rt or ar$itration pane&. The 3rea&isti)4 position sho'&d res'&t from )onsideration of a&& the arg'ments and fa)ts gathered thro'gh the ana&0sis a$ove. g9 :a)h )&aim or grievan)e item sho'&d $e )onsidered and hand&ed separate&0 in the grantee+s preparation for negotiations /ith the )ontra)tor. h9 ?f &i<'idated damages are invo&ved in the )&aimAgrievan)e sett&ement, the =overnment has a vested interest in the &i<'idated damages and /i&& need a )omp&ete ana&0sis of ho/ the &i<'idated damages amo'nt /as determined. On)e assessed, &i<'idated damages ma0 not $e /aived $0 the grantee, /itho't prior *TA )on)'rren)e. Bo/ever, a va&id setoff against some other )ontra)t )&aims or other tradeoff for other )ontra)t'a& de&ivera$&es ma0 $e appropriate /ith *TA approva&. 7i<'idated damages are )onsidered assessed /hen a /ritten notifi)ation is sent to the )ontra)tor. Se)tions 9.2.".5 "elays, and 9.2.".% Acceleration/ sho'&d $e )aref'&&0 revie/ed for
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g'idan)e /hen sett&ing )&aims invo&ving de&a0s, or )&aims /here the )ontra)tor a&&eges 3)onstr')tive a))e&eration4 on the part of the grantee. Where, for e;amp&e, there are concurrent delays 8those )a'sed $0 $oth parties9, and it is impossi$&e to apportion or separate the de&a0s as to ho/ m')h is d'e to the a)tions of the separate parties, then &i<'idated damages )annot $e enfor)ed. On the other hand, if the de&a0s )an $e apportioned as to )ontra)tor )a'sed, grantee )a'sed, and 3e;)'sa$&e4 per the )ontra)t terms, then the grantee )an enfor)e &i<'idated damages to the e;tent of the )ontra)tor )a'sed de&a0s 8$'t not for the grantee )a'sed de&a0s or for 3e;)'sa$&e4 de&a0s9. The end prod')t of 0o'r negotiations /ith the Contra)tor on the iss'e of de&a0s and &i<'idated damages /o'&d $e a )ontra)t modifi)ation e;tending the de&iver0 date for 3e;)'sa$&e de&a0s4 as defined $0 the )ontra)t terms, as /e&& as for de&a0s for /hi)h the grantee is responsi$&e 8)hanges, )onstr')tive )hanges, et).9. The de&iver0 date /o'&d not $e e;tended for de&a0s that /ere )a'sed $0 the Contra)tor. The ne/&0 esta$&ished de&iver0 date /o'&d then $e)ome the date 'sed to assess &i<'idated damages. i9 ?f there is an ar$itration )&a'se in the third part0 )ontra)t, *TA m'st $e notified $efore the matter is s'$mitted to ar$itration. *TA m'st )on)'r in an0 ar$itration a/ard $efore it $e)omes fina& and *edera& *'nds are re&eased. #egotiations #egotiations sho'&d $e on an item1$y1item $asis /ith /ritten arg'ments for ea)h side. The grantee sho'&d aggressive&0 p'rs'e a&& )&aims and )o'nter)&aims as /e&& as defend against a&& )&aims and )o'nter)&aims of the )ontra)tor. The fina& position arrived at thro'gh the negotiations sho'&d $e set forth and @'stified in /riting. ?f di&igent efforts to sett&e the )&aims andAor disp'tes on an item $0 item $asis have fai&ed to reso&ve a&& the items, then a determination )an $e made regarding the feasi$i&it0 of a total cost or other t0pe sett&ement. ?f the determination is made $0 the parties to go to a total cost or other t0pe sett&ement, the grantee sho'&d /rite a detai&ed e;p&anation of ho/ the parties arrived at the )on)&'sion that the tota& )ost or the other t0pe sett&ement /as the $est /a0 to pro)eed. ?n addition, the grantee sho'&d provide a )omp&ete e;p&anation of ho/ the fina& sett&ement fig're /as rea)hed, and ho/ ea)h item in the )&aimAdisp'te /as )onsidered. *ina&&0, the grantee sho'&d not a))ept a )ontra)tor+s )&aim for its )ost /itho't having )ond')ted an appropriate revie/Aana&0sis. ?f the grantee is 'na$&e to verif0 the )ost prior to a))epting it, the grantee sho'&d )onditiona&&0 a))ept it s'$@e)t to &ater a'dit verifi)ation. When *TA Con)'rren)e is Ie<'ired Sho'&d *TA re<'est to revie/ the proposed sett&ement $efore it is imp&emented $et/een the grantee and its )ontra)tor, the grantee sho'&d send to the *TA Iegiona& Offi)e a detai&ed s'mmar0 of the sett&ement, and in)&'de as $a)2'p the negotiation memorand'm and a&& the pre negotiation ana&0ses, des)ri$ed a$ove, that &ed to the negotiations. ?n addition, the grantee sho'&d provide a /ritten opinion of )o'nse& e;p&aining
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/h0 the proposed sett&ement is fair and reasona$&e, )onsistent /ith State &a/, and in the $est interests of the grantee and the =overnment. :ngaging O'tside Co'nse& ?f it $e)omes ne)essar0 for the grantee to engage o'tside )o'nse& to hand&e the sett&ement negotiations or, if ne)essar0, to &itigate or ar$itrate the )ase, the grantee m'st, if grant f'nds are re<'ested to )over the &ega& )osts, o$tain *TA+s )on)'rren)e in advan)e. =rantees m'st demonstrate to *TA that their o/n &ega& reso'r)es are inade<'ate to hand&e the iss'es at hand, /hether $e)a'se of the nat're of the )&aim, the training and e;perien)e of its personne&, or the potentia& strain on the grantee+s staff reso'r)es. O'tside )o'nse& m'st $e se&e)ted thro'gh a )ompetitive pro)ess that ma0 range from $eing ver0 informa& to ver0 forma&. #ote that a <'a&ifi)ations $ased se&e)tion pro)ed're, s')h as is permitted for A : pro)'rements, is not permitted for &ega& servi)esQ )ostApri)e proposa&s m'st $e re<'ested and eva&'ated as apart of the se&e)tion pro)ess. The fee arrangement /ith o'tside )o'nse& )annot $e $ased 'pon a )ontingen)0 or per)entage of re)over0 methodo&og0. Avoiding Disp'tes Thro'gh -roper Do)'mentation I"ocumentation of si!nificant events as t)ey occur in t)e form of corres%ondence/ daily diary entries/ ins%ectorPs daily re%orts/ %)oto!ra%)s/ memoranda of tele%)one conversations and meetin!s/ etc./ creates a %ro5ect record t)at is a$solutely essential in evaluatin! claims reac)in! liti!ation. A$solute attention to documentation is vital in $ot) discoura!in! su$mittals of invalid claims and %ro%erly analy@in! any claim filed.I 4 Dai&0 7ogs The dai&0 reportsA&ogs of the grantee+s inspe)tor ma0 $e the most important so'r)e for )&aim resear)h and defense. ?nspe)tors and fie&d engineers m'st $e trained to spot )hangeA)&aim sit'ations and the0 m'st $e instr')ted on /hat to in)&'de in their reports, $oth on a ro'tine $asis and /hen the0 sense a rea& or potentia& pro$&em. The dai&0 reports sho'&d tra)2 the )onstr')tion progress against the approved s)hed'&e 8C-. S)hed'&e9. The dai&0 reports sho'&d a&so tra)2 the e<'ipment on site as /e&& as the 'ti&iGation of e<'ipment. These inspe)tor reports m'st $e monitored )aref'&&0 $0 the inspe)tor+s s'pervisor to maintain high <'a&it0. Do)'mentation of meetings and te&ephone )onversations ?n order to avoid mis'nderstandings regarding agreements rea)hed d'ring meetings and te&ephone )onversations /ith the Contra)tor andAor $et/een grantee personne&, it is )riti)a& to prepare min'tes of the meetings and distri$'te them to a&& of the attendees. A&& important te&ephone )onversations sho'&d re)orded on a Te&ephone Ca&& Ie)ord, noting the pertinent iss'es dis)'ssed, ho/ the iss'es /ere reso&ved, /ho is responsi$&e for ta2ing the re<'ired a)tion, et). The other part0 to the )a&& sho'&d a&/a0s $e sent a )op0 of the )omp&eted Te&ephone Ca&& Ie)ord. -hotographs *re<'ent&0, photographs are a va&'a$&e form of do)'mentation in a )&aim sit'ation. The grantee+s resident engineer m'st ma2e an ade<'ate photographi) re)ord of the progress of the )ontra)t. The photographs m'st $e dated, proper&0 identified, annotated as to
.AITA resident :ngineer+s .an'a&, Se)tion 5.!1 Contractor Claims.
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/ho too2 the photograph and the /eather )onditions at the time, and fi&ed. -hotographs sho'&d )over the fo&&o/ing items(

-rogress of the /or2 Un's'a& )onstr')tion te)hni<'es A))idents or damages Unsafe or haGardo's /or2ing )onditions Ieinfor)ing stee& prior to )on)rete p&a)ement Wor2 )omp&eted prior to $eing )overed Areas or a)tivities /here )&aims andAor )hanges are anti)ipated
The )onstr')tion )ontra)t sho'&d itse&f )ontain provisions re<'iring the )ontra)tor to provide month&0 progress photographs. The grantee+s resident engineer m'st parti)ipate in the )hoosing of &o)ations, ang&es, and s'$@e)ts in order to ma;imiGe the 'sef'&ness of the photographs for progress re)ords. A&ternative Disp'te Ieso&'tion The *TA .aster Agreement .A8!29, Se)tion 4"e, en)o'rages grantees to 'se a&ternative disp'te reso&'tion pro)ed'res, as ma0 $e appropriate. The a&ternatives to &itigation that are most )ommon&0 'sed are ar$itration and mediation. =rantees are advised to $e )a'tio's in their de)isions to 'se ar$itration. ?n )ases that are )omp&e;, ar$itration ma0 not $e prefera$&e over &itigation $e)a'se ar$itrators fre<'ent&0 have &imitations on the amo'nt of time the0 )an devote to an0 individ'a& )ase. As a res'&t, if the )ase is )omp&e; and time )ons'ming, it ma0 $e ne)essar0 to )hange ar$itrators d'ring the pro)eedings, and this ma0 $e ver0 disr'ptive to the parties and their )ase. Ar$itration ma0 $e more advisa$&e for disp'tes that are not )omp&e; and do not invo&ve a great dea& of fa)ts that m'st $e determined in order to sett&e the )&aim. =rantees are advised to thin2 the )ase thro'gh )aref'&&0 $efore de)iding not to &itigate.
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*:D:IA7 TIA#S?T AD.?#?STIAT?O#

BEST PRACTICES PROCUREMENT MANUAL
TABLE OF CONTENTS 6A endi; A ) <o%ernin" Documents9 A$( ) Federall# ReAuired and Ot/er Model Contract Clauses !. *&0 Ameri)a Ie<'irements 2. ,'0 Ameri)a Ie<'irements ". Charter ,'s and S)hoo& ,'s Ie<'irements 4. Cargo -referen)e Ie<'irements 5. Seismi) Safet0 Ie<'irements %. :nerg0 Conservation Ie<'irements 1. C&ean Water Ie<'irements H. ,'s Testing 9. -re A/ard and -ost De&iver0 A'dit Ie<'irements !0. 7o$$0ing !!. A))ess to Ie)ords and Ieports !2. *edera& Changes !". ,onding Ie<'irements !4. C&ean Air !5. Ie)0)&ed -rod')ts !%. Davis ,a)on and Cope&and Anti Yi)2$a)2 A)ts !1. Contra)t Wor2 Bo'rs and Safet0 Standards A)t !H. DIeservedF !9. #o =overnment O$&igation to Third -arties 20. -rogram *ra'd and *a&se or *ra'd'&ent Statements and Ie&ated A)ts 2!. Termination 22. =overnment /ide De$arment and S'spension 8#onpro)'rement9 2". -riva)0 A)t 24. Civi& Iights Ie<'irements 25. ,rea)hes and Disp'te Ieso&'tion 2%. -atent and Iights in Data 21. Transit :mp&o0ee -rote)tive Agreements 2H. Disadvantaged ,'siness :nterprises 8D,:9 29. DIeservedF "0. ?n)orporation of *edera& Transit Administration 8*TA9 Terms "!. Dr'g and A&)oho& Testing
-age 2
($ FLD AMERICA RE@UIREMENTS .8 U$S$C$ G .:((5 .( CFR Part -:()(: A lica&ilit# to Contracts The *&0 Ameri)a re<'irements app&0 to the transportation of persons or propert0, $0 air, $et/een a p&a)e in the U.S. and a p&a)e o'tside the U.S., or $et/een p&a)es o'tside the U.S., /hen the *TA /i&& parti)ipate in the )osts of s')h air transportation. Transportation on a foreign air )arrier is permissi$&e /hen provided $0 a foreign air )arrier 'nder a )ode share agreement /hen the ti)2et identifies the U.S. air )arrier+s designator )ode and f&ight n'm$er. Transportation $0 a foreign air )arrier is a&so permissi$&e if there is a $i&atera& or m'&ti&atera& air transportation agreement to /hi)h the U.S. =overnment and a foreign government are parties and /hi)h the *edera& DOT has determined meets the re<'irements of the *&0 Ameri)a A)t. Flo1 Do1n ReAuirements The *&0 Ameri)a re<'irements f&o/ do/n from *TA re)ipients and s'$re)ipients to first tier )ontra)tors, /ho are responsi$&e for ens'ring that &o/er tier )ontra)tors and s'$)ontra)tors are in )omp&ian)e. Model Clause7Lan"ua"e The re&evant stat'tes and reg'&ations do not mandate an0 spe)ified )&a'se or &ang'age. *TA proposes the fo&&o/ing &ang'age. Fl# America ReAuirements The Contra)tor agrees to )omp&0 /ith 49 U.S.C. 40!!H 8the 3*&0 Ameri)a4 A)t9 in a))ordan)e /ith the =enera& Servi)es Administration+s reg'&ations at 4! C*I -art "0! !0, /hi)h provide that re)ipients and s'$re)ipients of *edera& f'nds and their )ontra)tors are re<'ired to 'se U.S. *&ag air )arriers for U.S =overnment finan)ed internationa& air trave& and transportation of their persona& effe)ts or propert0, to the e;tent s')h servi)e is avai&a$&e, 'n&ess trave& $0 foreign air )arrier is a matter of ne)essit0, as defined $0 the *&0 Ameri)a A)t. The Contra)tor sha&& s'$mit, if a foreign air )arrier /as 'sed, an appropriate )ertifi)ation or memorand'm ade<'ate&0 e;p&aining /h0 servi)e $0 a U.S. f&ag air )arrier /as not avai&a$&e or /h0 it /as ne)essar0 to 'se a foreign air )arrier and sha&&, in an0 event, provide a )ertifi)ate of )omp&ian)e /ith the *&0 Ameri)a re<'irements. The Contra)tor agrees to in)&'de the re<'irements of this se)tion in a&& s'$)ontra)ts that ma0 invo&ve internationa& air transportation.
-age "
*$ BUD AMERICA RE@UIREMENTS .8 U$S$C$ 0-*-6'9 .8 C$F$R$ Part 22( A lica&ilit# to Contracts The ,'0 Ameri)a re<'irements app&0 to the fo&&o/ing t0pes of )ontra)ts( Constr')tion Contra)ts and A)<'isition of =oods or Io&&ing Sto)2 8va&'ed at more than S!00,0009. Flo1 Do1n The ,'0 Ameri)a re<'irements f&o/ do/n from *TA re)ipients and s'$re)ipients to first tier )ontra)tors, /ho are responsi$&e for ens'ring that &o/er tier )ontra)tors and s'$)ontra)tors are in )omp&ian)e. The S!00,000 thresho&d app&ies on&0 to the grantee )ontra)t, s'$)ontra)ts 'nder that amo'nt are s'$@e)t to ,'0 Ameri)a. Mandator# Clause7Lan"ua"e The ,'0 Ameri)a reg'&ation, at 49 C*I %%!.!", re<'ires notifi)ation of the ,'0 Ameri)a re<'irements in *TA f'nded )ontra)ts, $'t does not spe)if0 the &ang'age to $e 'sed. The fo&&o/ing &ang'age has $een deve&oped $0 *TA. Bu# America ) The )ontra)tor agrees to )omp&0 /ith 49 U.S.C. 5"2"8@9 and 49 C.*.I. -art %%!, /hi)h provide that *edera& f'nds ma0 not $e o$&igated 'n&ess stee&, iron, and man'fa)t'red prod')ts 'sed in *TA f'nded pro@e)ts are prod')ed in the United States, 'n&ess a /aiver has $een granted $0 *TA or the prod')t is s'$@e)t to a genera& /aiver. =enera& /aivers are &isted in 49 C.*.I. %%!.1, and in)&'de fina& assem$&0 in the United States for !5 passenger vans and !5 passenger /agons prod')ed $0 Chr0s&er Corporation, and mi)ro)omp'ter e<'ipment and soft/are. Separate re<'irements for ro&&ing sto)2 are set o't at 49 U.S.C. 5"2"8@98298C9 and 49 C.*.I. %%!.!!. Io&&ing sto)2 m'st $e assem$&ed in the United States and have a %0 per)ent domesti) )ontent. A $idder or offeror m'st s'$mit to the *TA re)ipient the appropriate ,'0 Ameri)a )ertifi)ation 8$e&o/9 /ith a&& $ids or offers on *TA f'nded )ontra)ts, e;)ept those s'$@e)t to a genera& /aiver. ,ids or offers that are not a))ompanied $0 a )omp&eted ,'0 Ameri)a )ertifi)ation m'st $e re@e)ted as nonresponsive. This re<'irement does not app&0 to &o/er tier s'$)ontra)tors. Certification reAuirement for rocurement of steel! iron! or manufactured roducts$ Certificate of Com%liance wit) A: 2.S.C. 5C<C(5)(1) The $idder or offeror here$0 )ertifies that it /i&& meet the re<'irements of 49 U.S.C. 5"2"8@98!9 and the app&i)a$&e reg'&ations in 49 C.*.I. -art %%!.5. Date JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
-age 4
Signat'reJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Compan0 #ameJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Tit&e JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Certificate of Non1Com%liance wit) A: 2.S.C. 5C<C(5)(1) The $idder or offeror here$0 )ertifies that it )annot )omp&0 /ith the re<'irements of 49 U.S.C. 5"2"8@98!9 and 49 C.*.I. %%!.5, $'t it ma0 <'a&if0 for an e;)eption p'rs'ant to 49 U.S.C. 5"2"8@9 8298A9, 5"2"8@98298,9, or 5"2"8@98298D9, and 49 C.*.I. %%!.1. Date JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Signat're JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Compan0 #ame JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Tit&e JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Certification reAuirement for rocurement of &uses! ot/er rollin" stocE and associated eAui ment$ Certificate of Com%liance wit) A: 2.S.C. 5C<C(5)(<)(C). The $idder or offeror here$0 )ertifies that it /i&& )omp&0 /ith the re<'irements of 49 U.S.C. 5"2"8@98298C9 and the reg'&ations at 49 C.*.I. -art %%!.!!. Date JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Signat're JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Compan0 #ame JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Tit&e JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Certificate of Non1Com%liance wit) A: 2.S.C. 5C<C(5)(<)(C) The $idder or offeror here$0 )ertifies that it )annot )omp&0 /ith the re<'irements of 49 U.S.C. 5"2"8@98298C9 and 49 C.*.I. %%!.!!, $'t ma0 <'a&if0 for an e;)eption p'rs'ant to 49 U.S.C. 5"2"8@98298A9, 5"2"8@98298,9, or 5"2"8@98298D9, and 49 C*I %%!.1.
-age 5
Date JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Signat're JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Compan0 #ame JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Tit&e JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
-$ CCARTER BUS RE@UIREMENTS .8 U$S$C$ 0-*-6d9 .8 CFR Part 2:. A lica&ilit# to Contracts The Charter ,'s re<'irements app&0 to the fo&&o/ing t0pe of )ontra)t( Operationa& Servi)e Contra)ts. Flo1 Do1n ReAuirements The Charter ,'s re<'irements f&o/ do/n from *TA re)ipients and s'$re)ipients to first tier servi)e )ontra)tors. Model Clause7Lan"ua"e The re&evant stat'tes and reg'&ations do not mandate an0 spe)ifi) )&a'se or &ang'age. The fo&&o/ing )&a'se has $een deve&oped $0 *TA. C/arter Ser%ice O erations ) The )ontra)tor agrees to )omp&0 /ith 49 U.S.C. 5"2"8d9 and 49 C*I -art %04, /hi)h provides that re)ipients and s'$re)ipients of *TA assistan)e are prohi$ited from providing )harter servi)e 'sing federa&&0 f'nded e<'ipment or fa)i&ities if there is at &east one private )harter operator /i&&ing and a$&e to provide the servi)e, e;)ept 'nder one of the e;)eptions at 49 C*I %04.9. An0 )harter servi)e provided 'nder one of the e;)eptions m'st $e >in)identa&,> i.e., it m'st not interfere /ith or detra)t from the provision of mass transportation. -$ SCCOOL BUS RE@UIREMENTS .8 U$S$C$ 0-*-6F9 .8 CFR Part 2:0 A lica&ilit# to Contracts The S)hoo& ,'s re<'irements app&0 to the fo&&o/ing t0pe of )ontra)t( Operationa& Servi)e Contra)ts. Flo1 Do1n ReAuirements The S)hoo& ,'s re<'irements f&o/ do/n from *TA re)ipients and s'$re)ipients to first tier servi)e )ontra)tors.
-age %
Model Clause7Lan"ua"e The re&evant stat'tes and reg'&ations do not mandate an0 spe)ifi) )&a'se or &ang'age. The fo&&o/ing )&a'se has $een deve&oped $0 *TA. Sc/ool Bus O erations ) -'rs'ant to %9 U.S.C. 5"2"8f9 and 49 C*I -art %05, re)ipients and s'$re)ipients of *TA assistan)e ma0 not engage in s)hoo& $'s operations e;)&'sive&0 for the transportation of st'dents and s)hoo& personne& in )ompetition /ith private s)hoo& $'s operators 'n&ess <'a&ified 'nder spe)ified e;emptions. When operating e;)&'sive s)hoo& $'s servi)e 'nder an a&&o/a$&e e;emption, re)ipients and s'$re)ipients ma0 not 'se federa&&0 f'nded e<'ipment, vehi)&es, or fa)i&ities. .$ CAR<O PREFERENCE RE@UIREMENTS .2 U$S$C$ (*.( .2 CFR Part -5( A lica&ilit# to Contracts The Cargo -referen)e re<'irements app&0 to a&& )ontra)ts invo&ving e<'ipment, materia&s, or )ommodities /hi)h ma0 $e transported $0 o)ean vesse&s. Flo1 Do1n The Cargo -referen)e re<'irements app&0 to a&& s'$)ontra)ts /hen the s'$)ontra)t ma0 $e invo&ved /ith the transport of e<'ipment, materia&, or )ommodities $0 o)ean vesse&. Model Clause7Lan"ua"e The .AIAD reg'&ations at 4% C*I "H!.1 )ontain s'ggested )ontra)t )&a'ses. The fo&&o/ing &ang'age is proffered $0 *TA. Car"o Preference ) Use of United States)Fla" Pessels ) The )ontra)tor agrees( a. to 'se private&0 o/ned United States *&ag )ommer)ia& vesse&s to ship at &east 50 per)ent of the gross tonnage 8)omp'ted separate&0 for dr0 $'&2 )arriers, dr0 )argo &iners, and tan2ers9 invo&ved, /henever shipping an0 e<'ipment, materia&, or )ommodities p'rs'ant to the 'nder&0ing )ontra)t to the e;tent s')h vesse&s are avai&a$&e at fair and reasona$&e rates for United States *&ag )ommer)ia& vesse&sQ $. to f'rnish /ithin 20 /or2ing da0s fo&&o/ing the date of &oading for shipments originating /ithin the United States or /ithin "0 /or2ing da0s fo&&o/ing the date of &eading for shipments originating o'tside the United States, a &egi$&e )op0 of a rated, >on $oard> )ommer)ia& o)ean $i&& of &ading in :ng&ish for ea)h shipment of )argo des)ri$ed in the pre)eding paragraph to the Division of #ationa& Cargo, Offi)e of .ar2et Deve&opment, .aritime Administration, Washington, DC 20590 and to the *TA re)ipient 8thro'gh the )ontra)tor in the )ase of a s'$)ontra)torKs $i&& of &ading.9 ). to in)&'de these re<'irements in a&& s'$)ontra)ts iss'ed p'rs'ant to this )ontra)t /hen the s'$)ontra)t ma0 invo&ve the transport of e<'ipment, materia&, or )ommodities $0 o)ean vesse&.
-age 1
0$ SEISMIC SAFETD RE@UIREMENTS .* U$S$C$ 44:( et seA$ .8 CFR Part .( A lica&ilit# to Contracts The Seismi) Safet0 re<'irements app&0 on&0 to )ontra)ts for the )onstr')tion of ne/ $'i&dings or additions to e;isting $'i&dings. Flo1 Do1n The Seismi) Safet0 re<'irements f&o/ do/n from *TA re)ipients and s'$re)ipients to first tier )ontra)tors to ass're )omp&ian)e, /ith the app&i)a$&e $'i&ding standards for Seismi) Safet0, in)&'ding the /or2 performed $0 a&& s'$)ontra)tors. Model Clauses7Lan"ua"e The reg'&ations do not provide s'ggested &ang'age for third part0 )ontra)t )&a'ses. The fo&&o/ing &ang'age has $een deve&oped $0 *TA. Seismic Safet# The )ontra)tor agrees that an0 ne/ $'i&ding or addition to an e;isting $'i&ding /i&& $e designed and )onstr')ted in a))ordan)e /ith the standards for Seismi) Safet0 re<'ired in Department of Transportation Seismi) Safet0 Ieg'&ations 49 C*I -art 4! and /i&& )ertif0 to )omp&ian)e to the e;tent re<'ired $0 the reg'&ation. The )ontra)tor a&so agrees to ens're that a&& /or2 performed 'nder this )ontra)t in)&'ding /or2 performed $0 a s'$)ontra)tor is in )omp&ian)e /ith the standards re<'ired $0 the Seismi) Safet0 Ieg'&ations and the )ertifi)ation of )omp&ian)e iss'ed on the pro@e)t. 2$ ENER<D CONSERPATION RE@UIREMENTS .* U$S$C$ 2-*( et seA$ .8 CFR Part (5 A lica&ilit# to Contracts The :nerg0 Conservation re<'irements are app&i)a$&e to a&& )ontra)ts. Flo1 Do1n The :nerg0 Conservation re<'irements e;tend to a&& third part0 )ontra)tors and their )ontra)ts at ever0 tier and s'$re)ipients and their s'$agreements at ever0 tier. Model Clause7Lan"ua"e #o spe)ifi) )&a'se is re)ommended in the reg'&ations $e)a'se the :nerg0 Conservation re<'irements are so dependent on the state energ0 )onservation p&an. The fo&&o/ing &ang'age has $een deve&oped $0 *TA(
-age H
Ener"# Conser%ation The )ontra)tor agrees to )omp&0 /ith mandator0 standards and po&i)ies re&ating to energ0 effi)ien)0 /hi)h are )ontained in the state energ0 )onservation p&an iss'ed in )omp&ian)e /ith the :nerg0 -o&i)0 and Conservation A)t. 4$ CLEAN BATER RE@UIREMENTS -- U$S$C$ (*0( A lica&ilit# to Contracts The C&ean Water re<'irements app&0 to ea)h )ontra)t and s'$)ontra)t /hi)h e;)eeds S!00,000. Flo1 Do1n The C&ean Water re<'irements f&o/ do/n to *TA re)ipients and s'$re)ipients at ever0 tier. Model Clause7Lan"ua"e Whi&e no mandator0 )&a'se is )ontained in the *edera& Water -o&&'tion Contro& A)t, as amended, the fo&&o/ing &ang'age deve&oped $0 *TA )ontains a&& the mandator0 re<'irements( Clean Bater 8!9 The Contra)tor agrees to )omp&0 /ith a&& app&i)a$&e standards, orders or reg'&ations iss'ed p'rs'ant to the *edera& Water -o&&'tion Contro& A)t, as amended, "" U.S.C. !25! et se<. The Contra)tor agrees to report ea)h vio&ation to the -'r)haser and 'nderstands and agrees that the -'r)haser /i&&, in t'rn, report ea)h vio&ation as re<'ired to ass're notifi)ation to *TA and the appropriate :-A Iegiona& Offi)e. 829 The Contra)tor a&so agrees to in)&'de these re<'irements in ea)h s'$)ontra)t e;)eeding S!00,000 finan)ed in /ho&e or in part /ith *edera& assistan)e provided $0 *TA. 5$ BUS TESTIN< .8 U$S$C$ 0-*-6c9 .8 CFR Part 220 A lica&ilit# to Contracts The ,'s Testing re<'irements pertain on&0 to the a)<'isition of Io&&ing Sto)2AT'rn2e0. Flo1 Do1n The ,'s Testing re<'irements sho'&d not f&o/ do/n, e;)ept to the t'rn2e0 )ontra)tor as stated in .aster Agreement. Model Clause7Lan"ua"e C&a'se and &ang'age therein are mere&0 s'ggested. 49 C*I -art %%5 does not )ontain spe)ifi) &ang'age to $e in)&'ded in third part0 )ontra)ts $'t does )ontain re<'irements app&i)a$&e to
-age 9
s'$re)ipients and third part0 )ontra)tors. ,'s Testing Certifi)ation and &ang'age therein are mere&0 s'ggested. Bus Testin" The Contra)tor D.an'fa)t'rerF agrees to )omp&0 /ith 49 U.S.C. A 5"2"8)9 and *TAKs imp&ementing reg'&ation at 49 C*I -art %%5 and sha&& perform the fo&&o/ing( !9 A man'fa)t'rer of a ne/ $'s mode& or a $'s prod')ed /ith a ma@or )hange in )omponents or )onfig'ration sha&& provide a )op0 of the fina& test report to the re)ipient at a point in the pro)'rement pro)ess spe)ified $0 the re)ipient /hi)h /i&& $e prior to the re)ipientKs fina& a))eptan)e of the first vehi)&e. 29 A man'fa)t'rer /ho re&eases a report 'nder paragraph ! a$ove sha&& provide noti)e to the operator of the testing fa)i&it0 that the report is avai&a$&e to the p'$&i). "9 ?f the man'fa)t'rer represents that the vehi)&e /as previo's&0 tested, the vehi)&e $eing so&d sho'&d have the identi)a& )onfig'ration and ma@or )omponents as the vehi)&e in the test report, /hi)h m'st $e provided to the re)ipient prior to re)ipientKs fina& a))eptan)e of the first vehi)&e. ?f the )onfig'ration or )omponents are not identi)a&, the man'fa)t'rer sha&& provide a des)ription of the )hange and the man'fa)t'rerKs $asis for )on)&'ding that it is not a ma@or )hange re<'iring additiona& testing. 49 ?f the man'fa)t'rer represents that the vehi)&e is >grandfathered> 8has $een 'sed in mass transit servi)e in the United States $efore O)to$er !, !9HH, and is )'rrent&0 $eing prod')ed /itho't a ma@or )hange in )onfig'ration or )omponents9, the man'fa)t'rer sha&& provide the name and address of the re)ipient of s')h a vehi)&e and the detai&s of that vehi)&eKs )onfig'ration and ma@or )omponents. C:IT?*?CAT?O# O* CO.-7?A#C: W?TB *TAKS ,US T:ST?#= I:NU?I:.:#TS The 'ndersigned DContra)torA.an'fa)t'rerF )ertifies that the vehi)&e offered in this pro)'rement )omp&ies /ith 49 U.S.C. A 5"2"8)9 and *TAKs imp&ementing reg'&ation at 49 C*I -art %%5. The 'ndersigned 'nderstands that misrepresenting the testing stat's of a vehi)&e a)<'ired /ith *edera& finan)ia& assistan)e ma0 s'$@e)t the 'ndersigned to )ivi& pena&ties as o't&ined in the Department of TransportationKs reg'&ation on -rogram *ra'd Civi& Iemedies, 49 C*I -art "!. ?n addition, the 'ndersigned 'nderstands that *TA ma0 s'spend or de$ar a man'fa)t'rer 'nder the pro)ed'res in 49 C*I -art 29. Date( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Signat're( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Compan0 #ame( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
-age !0
Tit&e( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 8$ PRE)ABARD AND POST DELIPERD AUDITS RE@UIREMENTS .8 U$S$C$ 0-*.8 CFR Part 22A lica&ilit# to Contracts These re<'irements app&0 on&0 to the a)<'isition of Io&&ing Sto)2AT'rn2e0. Flo1 Do1n These re<'irements sho'&d not f&o/ do/n, e;)ept to the t'rn2e0 )ontra)tor as stated in .aster Agreement. Model Clause7Lan"ua"e C&a'se and &ang'age therein are mere&0 s'ggested. 49 C.*.I. -art %%" does not )ontain spe)ifi) &ang'age to $e in)&'ded in third part0 )ontra)ts $'t does )ontain re<'irements app&i)a$&e to s'$re)ipients and third part0 )ontra)tors. ,'0 Ameri)a )ertifi)ation is mandated 'nder *TA reg'&ation, >-re A/ard and -ost De&iver0 A'dits of Io&&ing Sto)2 -'r)hases,> 49 C.*.I. %%".!". Spe)ifi) &ang'age for the ,'0 Ameri)a )ertifi)ation is mandated $0 *TA reg'&ation, >,'0 Ameri)a Ie<'irements S'rfa)e Transportation Assistan)e A)t of !9H2, as amended,> 49 C.*.I. %%!.!2, $'t has $een modified to in)&'de *TAKs ,'0 Ameri)a re<'irements )odified at 49 U.S.C. A 5"2"8@9. Pre)A1ard and Post)Deli%er# Audit ReAuirements The Contra)tor agrees to )omp&0 /ith 49 U.S.C. T 5"2"8&9 and *TAKs imp&ementing reg'&ation at 49 C.*.I. -art %%" and to s'$mit the fo&&o/ing )ertifi)ations( 8!9 ,'0 Ameri)a Ie<'irements( The Contra)tor sha&& )omp&ete and s'$mit a de)&aration )ertif0ing either )omp&ian)e or non)omp&ian)e /ith ,'0 Ameri)a. ?f the ,idderAOfferor )ertifies )omp&ian)e /ith ,'0 Ameri)a, it sha&& s'$mit do)'mentation /hi)h &ists !9 )omponent and s'$)omponent parts of the ro&&ing sto)2 to $e p'r)hased identified $0 man'fa)t'rer of the parts, their )o'ntr0 of origin and )ostsQ and 29 the &o)ation of the fina& assem$&0 point for the ro&&ing sto)2, in)&'ding a des)ription of the a)tivities that /i&& ta2e p&a)e at the fina& assem$&0 point and the )ost of fina& assem$&0. 829 So&i)itation Spe)ifi)ation Ie<'irements( The Contra)tor sha&& s'$mit eviden)e that it /i&& $e )apa$&e of meeting the $id spe)ifi)ations.
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8"9 *edera& .otor Oehi)&e Safet0 Standards 8*.OSS9( The Contra)tor sha&& s'$mit !9 man'fa)t'rerKs *.OSS se&f )ertifi)ation sti)2er information that the vehi)&e )omp&ies /ith re&evant *.OSS or 29 man'fa)t'rerKs )ertified statement that the )ontra)ted $'ses /i&& not $e s'$@e)t to *.OSS reg'&ations. ,U5 A.:I?CA C:IT?*?CAT: O* CO.-7?A#C: W?TB *TA I:NU?I:.:#TS *OI ,US:S, OTB:I IO77?#= STOCY, OI ASSOC?AT:D :NU?-.:#T (To $e su$mitted wit) a $id or offer e7ceedin! t)e small %urc)ase t)res)old for Federal assistance %ro!rams/ currently set at Q1DD/DDD.) Certifi)ate of Comp&ian)e The $idder here$0 )ertifies that it /i&& )omp&0 /ith the re<'irements of 49 U.S.C. Se)tion 5"2"8@98298C9, Se)tion !%58$98"9 of the S'rfa)e Transportation Assistan)e A)t of !9H2, as amended, and the reg'&ations of 49 C.*.I. %%!.!!( Date( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Signat're( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Compan0 #ame( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Tit&e( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Certifi)ate of #on Comp&ian)e The $idder here$0 )ertifies that it )annot )omp&0 /ith the re<'irements of 49 U.S.C. Se)tion 5"2"8@98298C9 and Se)tion !%58$98"9 of the S'rfa)e Transportation Assistan)e A)t of !9H2, as amended, $'t ma0 <'a&if0 for an e;)eption to the re<'irements )onsistent /ith 49 U.S.C. Se)tions 5"2"8@98298,9 or 8@98298D9, Se)tions !%58$9829 or 8$9849 of the S'rfa)e Transportation Assistan)e A)t, as amended, and reg'&ations in 49 C.*.I. %%!.1. Date( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Signat're( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Compan0 #ame( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Tit&e( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
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(:$ LOBBDIN< -( U$S$C$ (-0* .8 CFR Part (8 .8 CFR Part *: A lica&ilit# to Contracts The 7o$$0ing re<'irements app&0 to Constr')tionAAr)hite)t'ra& and :ngineeringAA)<'isition of Io&&ing Sto)2A-rofessiona& Servi)e Contra)tAOperationa& Servi)e Contra)tAT'rn2e0 )ontra)ts. Flo1 Do1n The 7o$$0ing re<'irements mandate the ma;im'm f&o/ do/n, p'rs'ant to ,0rd Anti 7o$$0ing Amendment, "! U.S.C. T !"528$9859 and 49 C.*.I. -art !9, Appendi; A, Se)tion 1. Mandator# Clause7Lan"ua"e C&a'se and spe)ifi) &ang'age therein are mandated $0 49 C*I -art !9, Appendi; A. .odifi)ations have $een made to the C&a'se p'rs'ant to Se)tion !0 of the 7o$$0ing Dis)&os're A)t of !995, -.7. !04 %5 Dto $e )odified at 2 U.S.C. T !%0!, et seq.F 7o$$0ing Certifi)ation and Dis)&os're of 7o$$0ing A)tivities for third part0 )ontra)tors are mandated $0 "! U.S.C. !"528$9859, as amended $0 Se)tion !0 of the 7o$$0ing Dis)&os're A)t of !995, and DOT imp&ementing reg'&ation, >#e/ Iestri)tions on 7o$$0ing,> at 49 C*I T 20.!!08d9 7ang'age in 7o$$0ing Certifi)ation is mandated $0 49 C*I -art !9, Appendi; A, Se)tion 1, /hi)h provides that )ontra)tors fi&e the )ertifi)ation re<'ired $0 49 C*I -art 20, Appendi; A. .odifi)ations have $een made to the 7o$$0ing Certifi)ation p'rs'ant to Se)tion !0 of the 7o$$0ing Dis)&os're A)t of !995. Use of >Dis)&os're of 7o$$0ing A)tivities,> Standard *orm 777 set forth in Appendi; , of 49 C*I -art 20, as amended $0 >=overnment /ide ='idan)e *or #e/ Iestri)tions on 7o$$0ing,> %! *ed. Ieg. !4!" 8!A!9A9%9 is mandated $0 49 C*I -art 20, Appendi; A. B#rd Anti)Lo&&#in" Amendment! -( U$S$C$ (-0*! as amended &# t/e Lo&&#in" Disclosure Act of (880! P$L$ (:.)20 >to &e codified at * U$S$C$ G (2:(! et seA$? Contra)tors /ho app&0 or $id for an a/ard of S!00,000 or more sha&& fi&e the )ertifi)ation re<'ired $0 49 C*I part 20, >#e/ Iestri)tions on 7o$$0ing.> :a)h tier )ertifies to the tier a$ove that it /i&& not and has not 'sed *edera& appropriated f'nds to pa0 an0 person or organiGation for inf&'en)ing or attempting to inf&'en)e an offi)er or emp&o0ee of an0 agen)0, a mem$er of Congress, offi)er or emp&o0ee of Congress, or an emp&o0ee of a mem$er of Congress in )onne)tion /ith o$taining an0 *edera& )ontra)t, grant or an0 other a/ard )overed $0 "! U.S.C. !"52. :a)h tier sha&& a&so dis)&ose the
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name of an0 registrant 'nder the 7o$$0ing Dis)&os're A)t of !995 /ho has made &o$$0ing )onta)ts on its $eha&f /ith non *edera& f'nds /ith respe)t to that *edera& )ontra)t, grant or a/ard )overed $0 "! U.S.C. !"52. S')h dis)&os'res are for/arded from tier to tier 'p to the re)ipient. A--:#D?R A, 49 C*I -AIT 20 C:IT?*?CAT?O# I:=AID?#= 7O,,5?#= Certifi)ation for Contra)ts, =rants, 7oans, and Cooperative Agreements (To $e su$mitted wit) eac) $id or offer e7ceedin! Q1DD/DDD) The 'ndersigned DContra)torF )ertifies, to the $est of his or her 2no/&edge and $e&ief, that( 8!9 #o *edera& appropriated f'nds have $een paid or /i&& $e paid, $0 or on $eha&f of the 'ndersigned, to an0 person for inf&'en)ing or attempting to inf&'en)e an offi)er or emp&o0ee of an agen)0, a .em$er of Congress, an offi)er or emp&o0ee of Congress, or an emp&o0ee of a .em$er of Congress in )onne)tion /ith the a/arding of an0 *edera& )ontra)t, the ma2ing of an0 *edera& grant, the ma2ing of an0 *edera& &oan, the entering into of an0 )ooperative agreement, and the e;tension, )ontin'ation, rene/a&, amendment, or modifi)ation of an0 *edera& )ontra)t, grant, &oan, or )ooperative agreement. 829 ?f an0 f'nds other than *edera& appropriated f'nds have $een paid or /i&& $e paid to an0 person for ma2ing &o$$0ing )onta)ts to an offi)er or emp&o0ee of an0 agen)0, a .em$er of Congress, an offi)er or emp&o0ee of Congress, or an emp&o0ee of a .em$er of Congress in )onne)tion /ith this *edera& )ontra)t, grant, &oan, or )ooperative agreement, the 'ndersigned sha&& )omp&ete and s'$mit Standard *orm 777, >Dis)&os're *orm to Ieport 7o$$0ing,> in a))ordan)e /ith its instr')tions Das amended $0 >=overnment /ide ='idan)e for #e/ Iestri)tions on 7o$$0ing,> %! *ed. Ieg. !4!" 8!A!9A9%9. #ote( 7ang'age in paragraph 829 herein has $een modified in a))ordan)e /ith Se)tion !0 of the 7o$$0ing Dis)&os're A)t of !995 8-.7. !04 %5, to $e )odified at 2 U.S.C. !%0!, et seq.9F 8"9 The 'ndersigned sha&& re<'ire that the &ang'age of this )ertifi)ation $e in)&'ded in the a/ard do)'ments for a&& s'$a/ards at a&& tiers 8in)&'ding s'$)ontra)ts, s'$grants, and )ontra)ts 'nder grants, &oans, and )ooperative agreements9 and that a&& s'$re)ipients sha&& )ertif0 and dis)&ose a))ording&0. This )ertifi)ation is a materia& representation of fa)t 'pon /hi)h re&ian)e /as p&a)ed /hen this transa)tion /as made or entered into. S'$mission of this )ertifi)ation is a prere<'isite for ma2ing or entering into this transa)tion imposed $0 "!, U.S.C. T !"52 8as amended $0 the 7o$$0ing Dis)&os're A)t of !9959. An0 person /ho fai&s to fi&e the re<'ired )ertifi)ation sha&& $e s'$@e)t to a )ivi& pena&t0 of not &ess than S!0,000 and not more than S!00,000 for ea)h s')h fai&'re. D#ote( -'rs'ant to "! U.S.C. T !"528)98!9 8298A9, an0 person /ho ma2es a prohi$ited e;pendit're or fai&s to fi&e or amend a re<'ired )ertifi)ation or dis)&os're form sha&& $e s'$@e)t to
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a )ivi& pena&t0 of not &ess than S!0,000 and not more than S!00,000 for ea)h s')h e;pendit're or fai&'re.F The Contra)tor, JJJJJJJJJJJJJJJJJJJ, )ertifies or affirms the tr'thf'&ness and a))'ra)0 of ea)h statement of its )ertifi)ation and dis)&os're, if an0. ?n addition, the Contra)tor 'nderstands and agrees that the provisions of "! U.S.C. A "H0!, et seq./ a%%ly to this )ertifi)ation and dis)&os're, if an0. JJJJJJJJJJJJJJJJJJJJJJJJJJ Signat're of Contra)torKs A'thoriGed Offi)ia& JJJJJJJJJJJJJJJJJJJJJJJJJJ #ame and Tit&e of Contra)torKs A'thoriGed Offi)ia& JJJJJJJJJJJJJJJJJJJJJJJJJJJ Date (($ ACCESS TO RECORDS AND REPORTS .8 U$S$C$ 0-*0 (5 CFR (5$-2 6i9 .8 CFR 2--$(4 A lica&ilit# to Contracts Ieferen)e Chart >Ie<'irements for A))ess to Ie)ords and Ieports $0 T0pe of Contra)ts> Flo1 Do1n *TA does not re<'ire the in)&'sion of these re<'irements in s'$)ontra)ts. Model Clause7Lan"ua"e The spe)ified &ang'age is not mandated $0 the stat'tes or reg'&ations referen)ed, $'t the &ang'age provided paraphrases the stat'tor0 or reg'&ator0 &ang'age. Access to Records ) The fo&&o/ing a))ess to re)ords re<'irements app&0 to this Contra)t( !. Where the -'r)haser is not a State $'t a &o)a& government and is the *TA Ie)ipient or a s'$grantee of the *TA Ie)ipient in a))ordan)e /ith 49 C.*.I. !H."%8i9, the Contra)tor agrees to provide the -'r)haser, the *TA Administrator, the Comptro&&er =enera& of the United States or an0 of their a'thoriGed representatives a))ess to an0 $oo2s, do)'ments, papers and re)ords of the Contra)tor /hi)h are dire)t&0 pertinent to this )ontra)t for the p'rposes of ma2ing a'dits, e;aminations, e;)erpts and trans)riptions. Contra)tor a&so agrees, p'rs'ant to 49 C.*.I. %"".!1 to provide the *TA Administrator or his a'thoriGed representatives in)&'ding an0 -.O Contra)tor a))ess to Contra)torKs re)ords and )onstr')tion sites pertaining to a ma@or )apita& pro@e)t, defined at 49 U.S.C. 5"028a9!, /hi)h is re)eiving federa& finan)ia& assistan)e thro'gh the programs des)ri$ed at 49 U.S.C. 5"01, 5"09 or 5"!!.
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2. Where the -'r)haser is a State and is the *TA Ie)ipient or a s'$grantee of the *TA Ie)ipient in a))ordan)e /ith 49 C.*.I. %"".!1, Contra)tor agrees to provide the -'r)haser, the *TA Administrator or his a'thoriGed representatives, in)&'ding an0 -.O Contra)tor, a))ess to the Contra)torKs re)ords and )onstr')tion sites pertaining to a ma@or )apita& pro@e)t, defined at 49 U.S.C. 5"028a9!, /hi)h is re)eiving federa& finan)ia& assistan)e thro'gh the programs des)ri$ed at 49 U.S.C. 5"01, 5"09 or 5"!!. ,0 definition, a ma@or )apita& pro@e)t e;)&'des )ontra)ts of &ess than the simp&ified a)<'isition thresho&d )'rrent&0 set at S!00,000. ". Where the -'r)haser enters into a negotiated )ontra)t for other than a sma&& p'r)hase or 'nder the simp&ified a)<'isition thresho&d and is an instit'tion of higher ed')ation, a hospita& or other non profit organiGation and is the *TA Ie)ipient or a s'$grantee of the *TA Ie)ipient in a))ordan)e /ith 49 C.*.I. !9.4H, Contra)tor agrees to provide the -'r)haser, *TA Administrator, the Comptro&&er =enera& of the United States or an0 of their d'&0 a'thoriGed representatives /ith a))ess to an0 $oo2s, do)'ments, papers and re)ord of the Contra)tor /hi)h are dire)t&0 pertinent to this )ontra)t for the p'rposes of ma2ing a'dits, e;aminations, e;)erpts and trans)riptions. 4. Where an0 -'r)haser /hi)h is the *TA Ie)ipient or a s'$grantee of the *TA Ie)ipient in a))ordan)e /ith 49 U.S.C. 5"258a9 enters into a )ontra)t for a )apita& pro@e)t or improvement 8defined at 49 U.S.C. 5"028a9!9 thro'gh other than )ompetitive $idding, the Contra)tor sha&& ma2e avai&a$&e re)ords re&ated to the )ontra)t to the -'r)haser, the Se)retar0 of Transportation and the Comptro&&er =enera& or an0 a'thoriGed offi)er or emp&o0ee of an0 of them for the p'rposes of )ond')ting an a'dit and inspe)tion. 5. The Contra)tor agrees to permit an0 of the foregoing parties to reprod')e $0 an0 means /hatsoever or to )op0 e;)erpts and trans)riptions as reasona$&0 needed. %. The Contra)tor agrees to maintain a&& $oo2s, re)ords, a))o'nts and reports re<'ired 'nder this )ontra)t for a period of not &ess than three 0ears after the date of termination or e;piration of this )ontra)t, e;)ept in the event of &itigation or sett&ement of )&aims arising from the performan)e of this )ontra)t, in /hi)h )ase Contra)tor agrees to maintain same 'nti& the -'r)haser, the *TA Administrator, the Comptro&&er =enera&, or an0 of their d'&0 a'thoriGed representatives, have disposed of a&& s')h &itigation, appea&s, )&aims or e;)eptions re&ated thereto. Ieferen)e 49 C*I !H."98i98!!9. 1. *TA does not re<'ire the in)&'sion of these re<'irements in s'$)ontra)ts.
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ReAuirements for Access to Records and Re orts &# T# es of Contract

Contract C/aracteristics Operationa& Servi)e Contra)t T'rn2e0 Constr')tion Ar)hite)t'ra& :ngineering A)<'isition of Io&&ing Sto)2 -rofessiona& Servi)es
? State =rantees #one a. Contra)ts $e&o/ SAT 8S!00,0009 $. Contra)ts a$ove S!00,000ACapita& -ro@e)ts ?? #on State =rantees a. Contra)ts $e&o/ SAT 8S!00,0009 $. Contra)ts a$ove S!00,000ACapita& -ro@e)ts #one 'n&ess! non )ompetitive a/ard Those imposed on state pass thr' to Contra)tor #one 5es, if non )ompetitive a/ard or if f'nded thr'2 5"01A5"09A5" !! #one #one 'n&ess non )ompetitive a/ard #one #one 'n&ess non )ompetitive a/ard #one #one 'n&ess non )ompetitive a/ard
5es" 5es"
Those imposed on non state =rantee pass thr' to Contra)tor
5es 5es
5es 5es
5es 5es
5es 5es
So'r)es of A'thorit0( ! 49 USC 5"25 8a9 2 49 C*I %"".!1 " !H C*I !H."% 8i9 (*$ FEDERAL CCAN<ES .8 CFR Part (5 A lica&ilit# to Contracts The *edera& Changes re<'irement app&ies to a&& )ontra)ts. Flo1 Do1n The *edera& Changes re<'irement f&o/s do/n appropriate&0 to ea)h app&i)a$&e )hanged re<'irement. Model Clause7Lan"ua"e #o spe)ifi) &ang'age is mandated. The fo&&o/ing &ang'age has $een deve&oped $0 *TA. Federal C/an"es ) Contra)tor sha&& at a&& times )omp&0 /ith a&& app&i)a$&e *TA reg'&ations, po&i)ies, pro)ed'res and dire)tives, in)&'ding /itho't &imitation those &isted dire)t&0 or $0 referen)e in the .aster Agreement $et/een -'r)haser and *TA, as the0 ma0 $e amended or
-age !1
prom'&gated from time to time d'ring the term of this )ontra)t. Contra)torKs fai&'re to so )omp&0 sha&& )onstit'te a materia& $rea)h of this )ontra)t.
(-$ BONDIN< RE@UIREMENTS A lica&ilit# to Contracts *or those )onstr')tion or fa)i&it0 improvement )ontra)ts or s'$)ontra)ts e;)eeding S!00,000, *TA ma0 a))ept the $onding po&i)0 and re<'irements of the re)ipient, provided that the0 meet the minim'm re<'irements for )onstr')tion )ontra)ts as fo&&o/s( a. A $id g'arantee from ea)h $idder e<'iva&ent to five 859 per)ent of the $id pri)e. The >$id g'arantees> sha&& )onsist of a firm )ommitment s')h as a $id $ond, )ertifies )he)2, or other negotia$&e instr'ment a))ompan0ing a $id as ass'ran)e that the $idder /i&&, 'pon a))eptan)e of his $id, e;e)'te s')h )ontra)t'a& do)'ments as ma0 $e re<'ired /ithin the time spe)ified. $. A performan)e $ond on the part to the Contra)tor for !00 per)ent of the )ontra)t pri)e. A >performan)e $ond> is one e;e)'ted in )onne)tion /ith a )ontra)t to se)'re f'&fi&&ment of a&& the )ontra)torKs o$&igations 'nder s')h )ontra)t. ). A pa0ment $ond on the part of the )ontra)tor for !00 per)ent of the )ontra)t pri)e. A >pa0ment $ond> is one e;e)'ted in )onne)tion /ith a )ontra)t to ass're pa0ment, as re<'ired $0 &a/, of a&& persons s'pp&0ing &a$or and materia& in the e;e)'tion of the /or2 provided for in the )ontra)t. -a0ment $ond amo'nts re<'ired from Contra)tors are as fo&&o/s( 8!9 50P of the )ontra)t pri)e if the )ontra)t pri)e is not more than S! mi&&ionQ 829 40P of the )ontra)t pri)e if the )ontra)t pri)e is more than S! mi&&ion $'t not more than S5 mi&&ionQ or 8"9 S2.5 mi&&ion if the )ontra)t pri)e is more than S5 mi&&ion. d. A )ash deposit, )ertified )he)2 or other negotia$&e instr'ment ma0 $e a))epted $0 a grantee in &ie' of performan)e and pa0ment $onds, provided the grantee has esta$&ished a pro)ed're to ass're that the interest of *TA is ade<'ate&0 prote)ted. An irrevo)a$&e &etter of )redit /o'&d a&so satisf0 the re<'irement for a $ond. Flo1 Do1n ,onding re<'irements f&o/ do/n to the first tier )ontra)tors. Model Clauses7Lan"ua"e *TA does not pres)ri$e spe)ifi) /ording to $e in)&'ded in third part0 )ontra)ts. *TA has prepared samp&e )&a'ses as fo&&o/s(
-age !H
Bid Bond ReAuirements 6Construction9 8a9 ,id Se)'rit0 A ,id ,ond m'st $e iss'ed $0 a f'&&0 <'a&ified s'ret0 )ompan0 a))epta$&e to 8Ie)ipient9 and &isted as a )ompan0 )'rrent&0 a'thoriGed 'nder "! C*I, -art 22" as possessing a Certifi)ate of A'thorit0 as des)ri$ed there'nder. 8$9 Iights Ieserved ?n s'$mitting this ,id, it is 'nderstood and agreed $0 $idder that the right is reserved $0 8Ie)ipient9 to re@e)t an0 and a&& $ids, or part of an0 $id, and it is agreed that the ,id ma0 not $e /ithdra/n for a period of Dninet0 8909F da0s s'$se<'ent to the opening of $ids, /itho't the /ritten )onsent of 8Ie)ipient9. ?t is a&so 'nderstood and agreed that if the 'ndersigned $idder sho'&d /ithdra/ an0 part or a&& of his $id /ithin Dninet0 8909F da0s after the $id opening /itho't the /ritten )onsent of 8Ie)ipient9, sha&& ref'se or $e 'na$&e to enter into this Contra)t, as provided a$ove, or ref'se or $e 'na$&e to f'rnish ade<'ate and a))epta$&e -erforman)e ,onds and 7a$or and .ateria& -a0ments ,onds, as provided a$ove, or ref'se or $e 'na$&e to f'rnish ade<'ate and a))epta$&e ins'ran)e, as provided a$ove, he sha&& forfeit his $id se)'rit0 to the e;tent of 8Ie)ipientKs9 damages o))asioned $0 s')h /ithdra/a&, or ref'sa&, or ina$i&it0 to enter into an agreement, or provide ade<'ate se)'rit0 therefor. ?t is f'rther 'nderstood and agreed that to the e;tent the defa'&ting $idderKs ,id ,ond, Certified Che)2, CashierKs Che)2, Treas'rerKs Che)2, andAor Offi)ia& ,an2 Che)2 8e;)&'ding an0 in)ome generated there$0 /hi)h has $een retained $0 8Ie)ipient9 as provided in D?tem ; >,id Se)'rit0> of the ?nstr')tions to ,iddersF9 sha&& prove inade<'ate to f'&&0 re)ompense 8Ie)ipient9 for the damages o))asioned $0 defa'&t, then the 'ndersigned $idder agrees to indemnif0 8Ie)ipient9 and pa0 over to 8Ie)ipient9 the differen)e $et/een the $id se)'rit0 and 8Ie)ipientKs9 tota& damages, so as to ma2e 8Ie)ipient9 /ho&e. The 'ndersigned 'nderstands that an0 materia& a&teration of an0 of the a$ove or an0 of the materia& )ontained on this form, other than that re<'ested, /i&& render the $id 'nresponsive. Performance and Pa#ment Bondin" ReAuirements 6Construction9 The Contra)tor sha&& $e re<'ired to o$tain performan)e and pa0ment $onds as fo&&o/s( 8a9 -erforman)e $onds
-age !9
!. The pena& amo'nt of performan)e $onds sha&& $e !00 per)ent of the origina& )ontra)t pri)e, 'n&ess the 8Ie)ipient9 determines that a &esser amo'nt /o'&d $e ade<'ate for the prote)tion of the 8Ie)ipient9. 2. The 8Ie)ipient9 ma0 re<'ire additiona& performan)e $ond prote)tion /hen a )ontra)t pri)e is in)reased. The in)rease in prote)tion sha&& genera&&0 e<'a& !00 per)ent of the in)rease in )ontra)t pri)e. The 8Ie)ipient9 ma0 se)'re additiona& prote)tion $0 dire)ting the Contra)tor to in)rease the pena& amo'nt of the e;isting $ond or to o$tain an additiona& $ond. 8$9 -a0ment $onds !. The pena& amo'nt of the pa0ment $onds sha&& e<'a&( 8i9 *ift0 per)ent of the )ontra)t pri)e if the )ontra)t pri)e is not more than S! mi&&ion. 8ii9 *ort0 per)ent of the )ontra)t pri)e if the )ontra)t pri)e is more than S! mi&&ion $'t not more than S5 mi&&ionQ or 8iii9 T/o and one ha&f mi&&ion if the )ontra)t pri)e is more than S5 mi&&ion. 2. ?f the origina& )ontra)t pri)e is S5 mi&&ion or &ess, the 8Ie)ipient9 ma0 re<'ire additiona& prote)tion as re<'ired $0 s'$paragraph ! if the )ontra)t pri)e is in)reased. Performance and Pa#ment Bondin" ReAuirements 6Non)Construction9 The Contra)tor ma0 $e re<'ired to o$tain performan)e and pa0ment $onds /hen ne)essar0 to prote)t the 8Ie)ipientKs9 interest. 8a9 The fo&&o/ing sit'ations ma0 /arrant a performan)e $ond( !. 8Ie)ipient9 propert0 or f'nds are to $e provided to the )ontra)tor for 'se in performing the )ontra)t or as partia& )ompensation 8as in retention of sa&vaged materia&9. 2. A )ontra)tor se&&s assets to or merges /ith another )on)ern, and the 8Ie)ipient9, after re)ogniGing the &atter )on)ern as the s'))essor in interest, desires ass'ran)e that it is finan)ia&&0 )apa$&e. ". S'$stantia& progress pa0ments are made $efore de&iver0 of end items starts. 4. Contra)ts are for dismant&ing, demo&ition, or remova& of improvements. 8$9 When it is determined that a performan)e $ond is re<'ired, the Contra)tor sha&& $e re<'ired to o$tain performan)e $onds as fo&&o/s(
-age 20
!. The pena& amo'nt of performan)e $onds sha&& $e !00 per)ent of the origina& )ontra)t pri)e, 'n&ess the 8Ie)ipient9 determines that a &esser amo'nt /o'&d $e ade<'ate for the prote)tion of the 8Ie)ipient9. 2. The 8Ie)ipient9 ma0 re<'ire additiona& performan)e $ond prote)tion /hen a )ontra)t pri)e is in)reased. The in)rease in prote)tion sha&& genera&&0 e<'a& !00 per)ent of the in)rease in )ontra)t pri)e. The 8Ie)ipient9 ma0 se)'re additiona& prote)tion $0 dire)ting the Contra)tor to in)rease the pena& amo'nt of the e;isting $ond or to o$tain an additiona& $ond. 8)9 A pa0ment $ond is re<'ired on&0 /hen a performan)e $ond is re<'ired, and if the 'se of pa0ment $ond is in the 8Ie)ipientKs9 interest. 8d9 When it is determined that a pa0ment $ond is re<'ired, the Contra)tor sha&& $e re<'ired to o$tain pa0ment $onds as fo&&o/s( !. The pena& amo'nt of pa0ment $onds sha&& e<'a&( 8i9 *ift0 per)ent of the )ontra)t pri)e if the )ontra)t pri)e is not more than S! mi&&ionQ 8ii9 *ort0 per)ent of the )ontra)t pri)e if the )ontra)t pri)e is more than S! mi&&ion $'t not more than S5 mi&&ionQ or 8iii9 T/o and one ha&f mi&&ion if the )ontra)t pri)e is in)reased. Ad%ance Pa#ment Bondin" ReAuirements The Contra)tor ma0 $e re<'ired to o$tain an advan)e pa0ment $ond if the )ontra)t )ontains an advan)e pa0ment provision and a performan)e $ond is not f'rnished. The 8re)ipient9 sha&& determine the amo'nt of the advan)e pa0ment $ond ne)essar0 to prote)t the 8Ie)ipient9. Patent Infrin"ement Bondin" ReAuirements 6Patent Indemnit#9 The Contra)tor ma0 $e re<'ired to o$tain a patent indemnit0 $ond if a performan)e $ond is not f'rnished and the finan)ia& responsi$i&it0 of the Contra)tor is 'n2no/n or do'$tf'&. The 8re)ipient9 sha&& determine the amo'nt of the patent indemnit0 to prote)t the 8Ie)ipient9. Barrant# of t/e BorE and Maintenance Bonds !. The Contra)tor /arrants to 8Ie)ipient9, the Ar)hite)t andAor :ngineer that a&& materia&s and e<'ipment f'rnished 'nder this Contra)t /i&& $e of highest <'a&it0 and ne/ 'n&ess other/ise spe)ified $0 8Ie)ipient9, free from fa'&ts and defe)ts and in )onforman)e /ith the Contra)t Do)'ments. A&& /or2 not so )onforming to these standards sha&& $e )onsidered defe)tive. ?f
-age 2!
re<'ired $0 the D-ro@e)t .anagerF, the Contra)tor sha&& f'rnish satisfa)tor0 eviden)e as to the 2ind and <'a&it0 of materia&s and e<'ipment. 2. The Wor2 f'rnished m'st $e of first <'a&it0 and the /or2manship m'st $e the $est o$taina$&e in the vario's trades. The Wor2 m'st $e of safe, s'$stantia& and d'ra$&e )onstr')tion in a&& respe)ts. The Contra)tor here$0 g'arantees the Wor2 against defe)tive materia&s or fa'&t0 /or2manship for a minim'm period of one 8!9 0ear after *ina& -a0ment $0 8Ie)ipient9 and sha&& rep&a)e or repair an0 defe)tive materia&s or e<'ipment or fa'&t0 /or2manship d'ring the period of the g'arantee at no )ost to 8Ie)ipient9. As additiona& se)'rit0 for these g'arantees, the Contra)tor sha&&, prior to the re&ease of *ina& -a0ment Das provided in ?tem R $e&o/F, f'rnish separate .aintenan)e 8or ='arantee9 ,onds in form a))epta$&e to 8Ie)ipient9 /ritten $0 the same )orporate s'ret0 that provides the -erforman)e ,ond and 7a$or and .ateria& -a0ment ,ond for this Contra)t. These $onds sha&& se)'re the Contra)torKs o$&igation to rep&a)e or repair defe)tive materia&s and fa'&t0 /or2manship for a minim'm period of one 8!9 0ear after *ina& -a0ment and sha&& $e /ritten in an amo'nt e<'a& to O#: BU#DI:D -:IC:#T 8!00P9 of the CO#TIACT SU., as ad@'sted 8if at a&&9. (.$ CLEAN AIR .* U$S$C$ 4.:( et seA .: CFR (0$2( .8 CFR Part (5 A lica&ilit# to Contracts The C&ean Air re<'irements app&0 to a&& )ontra)ts e;)eeding S!00,000, in)&'ding indefinite <'antities /here the amo'nt is e;pe)ted to e;)eed S!00,000 in an0 0ear. Flo1 Do1n The C&ean Air re<'irements f&o/ do/n to a&& s'$)ontra)ts /hi)h e;)eed S!00,000. Model Clauses7Lan"ua"e #o spe)ifi) &ang'age is re<'ired. *TA has proposed the fo&&o/ing &ang'age. Clean Air 8!9 The Contra)tor agrees to )omp&0 /ith a&& app&i)a$&e standards, orders or reg'&ations iss'ed p'rs'ant to the C&ean Air A)t, as amended, 42 U.S.C. TT 140! et se<. The Contra)tor agrees to report ea)h vio&ation to the -'r)haser and 'nderstands and agrees that the -'r)haser /i&&, in t'rn, report ea)h vio&ation as re<'ired to ass're notifi)ation to *TA and the appropriate :-A Iegiona& Offi)e. 829 The Contra)tor a&so agrees to in)&'de these re<'irements in ea)h s'$)ontra)t e;)eeding S!00,000 finan)ed in /ho&e or in part /ith *edera& assistan)e provided $0 *TA.
-age 22
(0$ RECDCLED PRODUCTS .* U$S$C$ 282* .: CFR Part *.4 E;ecuti%e Order (*54A lica&ilit# to Contracts The Ie)0)&ed -rod')ts re<'irements app&0 to a&& )ontra)ts for items designated $0 the :-A, /hen the p'r)haser or )ontra)tor pro)'res S!0,000 or more of one of these items d'ring the fis)a& 0ear, or has pro)'red S!0,000 or more of s')h items in the previo's fis)a& 0ear, 'sing *edera& f'nds. #e/ re<'irements for >re)overed materia&s> /i&& $e)ome effe)tive .a0 !, !99%. These ne/ reg'&ations app&0 to a&& pro)'rement a)tions invo&ving items designated $0 the :-A, /here the pro)'ring agen)0 p'r)hases S!0,000 or more of one of these items in a fis)a& 0ear, or /hen the )ost of s')h items p'r)hased d'ring the previo's fis)a& 0ear /as S!0,000. Flo1 Do1n These re<'irements f&o/ do/n to a&& to a&& )ontra)tor and s'$)ontra)tor tiers. Model Clause7Lan"ua"e #o spe)ifi) )&a'se is mandated, $'t *TA has deve&oped the fo&&o/ing &ang'age. Reco%ered Materials ) The )ontra)tor agrees to )omp&0 /ith a&& the re<'irements of Se)tion %002 of the Ieso'r)e Conservation and Ie)over0 A)t 8ICIA9, as amended 842 U.S.C. %9%29, in)&'ding $'t not &imited to the reg'&ator0 provisions of 40 C*I -art 241, and :;e)'tive Order !2H1", as the0 app&0 to the pro)'rement of the items designated in S'$part , of 40 C*I -art 241. (2$ DAPIS)BACON AND COPELAND ANTI)QICQBACQ ACTS BacE"round and A lication The Davis ,a)on and Cope&and A)ts are )odified at 40 USC "!4!, et seq. and !H USC H14. The A)ts app&0 to grantee )onstr')tion )ontra)ts and s'$)ontra)ts that 3at &east part&0 are finan)ed $0 a &oan or grant from the *edera& =overnment.4 40 USC "!458a9, 29 C*I 5.28h9, 49 C*I !H."%8i9859. The A)ts app&0 to an0 )onstr')tion )ontra)t over S2,000. 40 USC "!428a9, 29 C*I 5.58a9. UConstr')tion,+ for p'rposes of the A)ts, in)&'des 3a)t'a& )onstr')tion, a&teration andAor repair, in)&'ding painting and de)orating.4 29 C*I 5.58a9. The re<'irements of $oth A)ts are in)orporated into a sing&e )&a'se 8see 29 C*I ".!!9 en'merated at 29 C*I 5.58a9 and reprod')ed $e&o/. The )&a'se &ang'age is dra/n dire)t&0 from 29 C*I 5.58a9 and an0 deviation from the mode& )&a'se $e&o/ sho'&d $e )oordinated /ith )o'nse& to ens're the A)ts+ re<'irements are satisfied.
-age 2"
Clause Lan"ua"e Da%is)Bacon and Co eland Anti)QicE&acE Acts 8!9 Minimum 1a"es 8i9 A&& &a$orers and me)hani)s emp&o0ed or /or2ing 'pon the site of the /or2 8or 'nder the United States Bo'sing A)t of !9"1 or 'nder the Bo'sing A)t of !949 in the )onstr')tion or deve&opment of the pro@e)t9, /i&& $e paid 'n)onditiona&&0 and not &ess often than on)e a /ee2, and /itho't s'$se<'ent ded')tion or re$ate on an0 a))o'nt 8e;)ept s')h pa0ro&& ded')tions as are permitted $0 reg'&ations iss'ed $0 the Se)retar0 of 7a$or 'nder the Cope&and A)t 829 C*I part "99, the f'&& amo'nt of /ages and $ona fide fringe $enefits 8or )ash e<'iva&ents thereof9 d'e at time of pa0ment )omp'ted at rates not &ess than those )ontained in the /age determination of the Se)retar0 of 7a$or /hi)h is atta)hed hereto and made a part hereof, regard&ess of an0 )ontra)t'a& re&ationship /hi)h ma0 $e a&&eged to e;ist $et/een the )ontra)tor and s')h &a$orers and me)hani)s. Contri$'tions made or )osts reasona$&0 anti)ipated for $ona fide fringe $enefits 'nder se)tion !8$9829 of the Davis ,a)on A)t on $eha&f of &a$orers or me)hani)s are )onsidered /ages paid to s')h &a$orers or me)hani)s, s'$@e)t to the provisions of paragraph 8!98iv9 of this se)tionQ a&so, reg'&ar )ontri$'tions made or )osts in)'rred for more than a /ee2&0 period 8$'t not &ess often than <'arter&09 'nder p&ans, f'nds, or programs /hi)h )over the parti)'&ar /ee2&0 period, are deemed to $e )onstr')tive&0 made or in)'rred d'ring s')h /ee2&0 period. S')h &a$orers and me)hani)s sha&& $e paid the appropriate /age rate and fringe $enefits on the /age determination for the )&assifi)ation of /or2 a)t'a&&0 performed, /itho't regard to s2i&&, e;)ept as provided in 29 C*I -art 5.58a9849. 7a$orers or me)hani)s performing /or2 in more than one )&assifi)ation ma0 $e )ompensated at the rate spe)ified for ea)h )&assifi)ation for the time a)t'a&&0 /or2ed therein( -rovided, That the emp&o0erKs pa0ro&& re)ords a))'rate&0 set forth the time spent in ea)h )&assifi)ation in /hi)h /or2 is performed. The /age determination 8in)&'ding an0 additiona& )&assifi)ations and /age rates )onformed 'nder paragraph 8!98ii9 of this se)tion9 and the Davis ,a)on poster 8WB !"2!9 sha&& $e posted at a&& times $0 the )ontra)tor and its s'$)ontra)tors at the site of the /or2 in a prominent and a))essi$&e p&a)e /here it )an $e easi&0 seen $0 the /or2ers. 8ii98A9 The )ontra)ting offi)er sha&& re<'ire that an0 )&ass of &a$orers or me)hani)s, in)&'ding he&pers, /hi)h is not &isted in the /age determination and /hi)h is to $e emp&o0ed 'nder the )ontra)t sha&& $e )&assified in )onforman)e /ith the /age determination. The )ontra)ting offi)er sha&& approve an additiona& )&assifi)ation and /age rate and fringe $enefits therefore on&0 /hen the fo&&o/ing )riteria have $een met( 8!9 :;)ept /ith respe)t to he&pers as defined as 29 C*I 5.28n9849, the /or2 to $e performed $0 the )&assifi)ation re<'ested is not performed $0 a )&assifi)ation in the /age determinationQ and 829 The )&assifi)ation is 'ti&iGed in the area $0 the )onstr')tion ind'str0Q and
-age 24
8"9 The proposed /age rate, in)&'ding an0 $ona fide fringe $enefits, $ears a reasona$&e re&ationship to the /age rates )ontained in the /age determinationQ and 849 With respe)t to he&pers as defined in 29 C*I 5.28n9849, s')h a )&assifi)ation prevai&s in the area in /hi)h the /or2 is performed. 8,9 ?f the )ontra)tor and the &a$orers and me)hani)s to $e emp&o0ed in the )&assifi)ation 8if 2no/n9, or their representatives, and the )ontra)ting offi)er agree on the )&assifi)ation and /age rate 8in)&'ding the amo'nt designated for fringe $enefits /here appropriate9, a report of the a)tion ta2en sha&& $e sent $0 the )ontra)ting offi)er to the Administrator of the Wage and Bo'r Division, :mp&o0ment Standards Administration, U.S. Department of 7a$or, Washington, DC 202!0. The Administrator, or an a'thoriGed representative, /i&& approve, modif0, or disapprove ever0 additiona& )&assifi)ation a)tion /ithin "0 da0s of re)eipt and so advise the )ontra)ting offi)er or /i&& notif0 the )ontra)ting offi)er /ithin the "0 da0 period that additiona& time is ne)essar0. 8C9 ?n the event the )ontra)tor, the &a$orers or me)hani)s to $e emp&o0ed in the )&assifi)ation or their representatives, and the )ontra)ting offi)er do not agree on the proposed )&assifi)ation and /age rate 8in)&'ding the amo'nt designated for fringe $enefits, /here appropriate9, the )ontra)ting offi)er sha&& refer the <'estions, in)&'ding the vie/s of a&& interested parties and the re)ommendation of the )ontra)ting offi)er, to the Administrator for determination. The Administrator, or an a'thoriGed representative, /i&& iss'e a determination /ithin "0 da0s of re)eipt and so advise the )ontra)ting offi)er or /i&& notif0 the )ontra)ting offi)er /ithin the "0 da0 period that additiona& time is ne)essar0. 8D9 The /age rate 8in)&'ding fringe $enefits /here appropriate9 determined p'rs'ant to paragraphs 8a98!98ii9 8,9 or 8C9 of this se)tion, sha&& $e paid to a&& /or2ers performing /or2 in the )&assifi)ation 'nder this )ontra)t from the first da0 on /hi)h /or2 is performed in the )&assifi)ation. 8iii9 Whenever the minim'm /age rate pres)ri$ed in the )ontra)t for a )&ass of &a$orers or me)hani)s in)&'des a fringe $enefit /hi)h is not e;pressed as an ho'r&0 rate, the )ontra)tor sha&& either pa0 the $enefit as stated in the /age determination or sha&& pa0 another $ona fide fringe $enefit or an ho'r&0 )ash e<'iva&ent thereof. 8iv9 ?f the )ontra)tor does not ma2e pa0ments to a tr'stee or other third person, the )ontra)tor ma0 )onsider as part of the /ages of an0 &a$orer or me)hani) the amo'nt of an0 )osts reasona$&0 anti)ipated in providing $ona fide fringe $enefits 'nder a p&an or program, -rovided, That the Se)retar0 of 7a$or has fo'nd, 'pon the /ritten re<'est of the )ontra)tor, that the app&i)a$&e standards of the Davis ,a)on A)t have $een met. The Se)retar0 of 7a$or ma0 re<'ire the )ontra)tor to set aside in a separate a))o'nt assets for the meeting of o$&igations 'nder the p&an or program.
-age 25
8v98A9 The )ontra)ting offi)er sha&& re<'ire that an0 )&ass of &a$orers or me)hani)s /hi)h is not &isted in the /age determination and /hi)h is to $e emp&o0ed 'nder the )ontra)t sha&& $e )&assified in )onforman)e /ith the /age determination. The )ontra)ting offi)er sha&& approve an additiona& )&assifi)ation and /age rate and fringe $enefits therefor on&0 /hen the fo&&o/ing )riteria have $een met( 8!9 The /or2 to $e performed $0 the )&assifi)ation re<'ested is not performed $0 a )&assifi)ation in the /age determinationQ and 829 The )&assifi)ation is 'ti&iGed in the area $0 the )onstr')tion ind'str0Q and 8"9 The proposed /age rate, in)&'ding an0 $ona fide fringe $enefits, $ears a reasona$&e re&ationship to the /age rates )ontained in the /age determination. 8,9 ?f the )ontra)tor and the &a$orers and me)hani)s to $e emp&o0ed in the )&assifi)ation 8if 2no/n9, or their representatives, and the )ontra)ting offi)er agree on the )&assifi)ation and /age rate 8in)&'ding the amo'nt designated for fringe $enefits /here appropriate9, a report of the a)tion ta2en sha&& $e sent $0 the )ontra)ting offi)er to the Administrator of the Wage and Bo'r Division, :mp&o0ment Standards Administration, Washington, DC 202!0. The Administrator, or an a'thoriGed representative, /i&& approve, modif0, or disapprove ever0 additiona& )&assifi)ation a)tion /ithin "0 da0s of re)eipt and so advise the )ontra)ting offi)er or /i&& notif0 the )ontra)ting offi)er /ithin the "0 da0 period that additiona& time is ne)essar0. 8C9 ?n the event the )ontra)tor, the &a$orers or me)hani)s to $e emp&o0ed in the )&assifi)ation or their representatives, and the )ontra)ting offi)er do not agree on the proposed )&assifi)ation and /age rate 8in)&'ding the amo'nt designated for fringe $enefits, /here appropriate9, the )ontra)ting offi)er sha&& refer the <'estions, in)&'ding the vie/s of a&& interested parties and the re)ommendation of the )ontra)ting offi)er, to the Administrator for determination. The Administrator, or an a'thoriGed representative, /i&& iss'e a determination /ith "0 da0s of re)eipt and so advise the )ontra)ting offi)er or /i&& notif0 the )ontra)ting offi)er /ithin the "0 da0 period that additiona& time is ne)essar0. 8D9 The /age rate 8in)&'ding fringe $enefits /here appropriate9 determined p'rs'ant to paragraphs 8a98!98v9 8,9 or 8C9 of this se)tion, sha&& $e paid to a&& /or2ers performing /or2 in the )&assifi)ation 'nder this )ontra)t from the first da0 on /hi)h /or2 is performed in the )&assifi)ation. 829 Bit//oldin" The D insert name o* grantee F sha&& 'pon its o/n a)tion or 'pon /ritten re<'est of an a'thoriGed representative of the Department of 7a$or /ithho&d or )a'se to $e /ithhe&d from the )ontra)tor 'nder this )ontra)t or an0 other *edera& )ontra)t /ith the same prime )ontra)tor, or an0 other federa&&0 assisted )ontra)t s'$@e)t to Davis ,a)on prevai&ing /age re<'irements, /hi)h is he&d $0 the same prime )ontra)tor, so m')h of the a))r'ed pa0ments or
-age 2%
advan)es as ma0 $e )onsidered ne)essar0 to pa0 &a$orers and me)hani)s, in)&'ding apprenti)es, trainees, and he&pers, emp&o0ed $0 the )ontra)tor or an0 s'$)ontra)tor the f'&& amo'nt of /ages re<'ired $0 the )ontra)t. ?n the event of fai&'re to pa0 an0 &a$orer or me)hani), in)&'ding an0 apprenti)e, trainee, or he&per, emp&o0ed or /or2ing on the site of the /or2 8or 'nder the United States Bo'sing A)t of !9"1 or 'nder the Bo'sing A)t of !949 in the )onstr')tion or deve&opment of the pro@e)t9, a&& or part of the /ages re<'ired $0 the )ontra)t, the D insert name o* grantee F ma0, after /ritten noti)e to the )ontra)tor, sponsor, app&i)ant, or o/ner, ta2e s')h a)tion as ma0 $e ne)essar0 to )a'se the s'spension of an0 f'rther pa0ment, advan)e, or g'arantee of f'nds 'nti& s')h vio&ations have )eased. 8"9 Pa#rolls and &asic records 8i9 -a0ro&&s and $asi) re)ords re&ating thereto sha&& $e maintained $0 the )ontra)tor d'ring the )o'rse of the /or2 and preserved for a period of three 0ears thereafter for a&& &a$orers and me)hani)s /or2ing at the site of the /or2 8or 'nder the United States Bo'sing A)t of !9"1, or 'nder the Bo'sing A)t of !949, in the )onstr')tion or deve&opment of the pro@e)t9. S')h re)ords sha&& )ontain the name, address, and so)ia& se)'rit0 n'm$er of ea)h s')h /or2er, his or her )orre)t )&assifi)ation, ho'r&0 rates of /ages paid 8in)&'ding rates of )ontri$'tions or )osts anti)ipated for $ona fide fringe $enefits or )ash e<'iva&ents thereof of the t0pes des)ri$ed in se)tion !8$98298,9 of the Davis ,a)on A)t9, dai&0 and /ee2&0 n'm$er of ho'rs /or2ed, ded')tions made and a)t'a& /ages paid. Whenever the Se)retar0 of 7a$or has fo'nd 'nder 29 C*I 5.58a98!98iv9 that the /ages of an0 &a$orer or me)hani) in)&'de the amo'nt of an0 )osts reasona$&0 anti)ipated in providing $enefits 'nder a p&an or program des)ri$ed in se)tion !8$98298,9 of the Davis ,a)on A)t, the )ontra)tor sha&& maintain re)ords /hi)h sho/ that the )ommitment to provide s')h $enefits is enfor)ea$&e, that the p&an or program is finan)ia&&0 responsi$&e, and that the p&an or program has $een )omm'ni)ated in /riting to the &a$orers or me)hani)s affe)ted, and re)ords /hi)h sho/ the )osts anti)ipated or the a)t'a& )ost in)'rred in providing s')h $enefits. Contra)tors emp&o0ing apprenti)es or trainees 'nder approved programs sha&& maintain /ritten eviden)e of the registration of apprenti)eship programs and )ertifi)ation of trainee programs, the registration of the apprenti)es and trainees, and the ratios and /age rates pres)ri$ed in the app&i)a$&e programs. 8ii98A9 The )ontra)tor sha&& s'$mit /ee2&0 for ea)h /ee2 in /hi)h an0 )ontra)t /or2 is performed a )op0 of a&& pa0ro&&s to the D insert name o* grantee F for transmission to the *edera& Transit Administration. The pa0ro&&s s'$mitted sha&& set o't a))'rate&0 and )omp&ete&0 a&& of the information re<'ired to $e maintained 'nder se)tion 5.58a98"98i9 of Ieg'&ations, 29 C*I part 5. This information ma0 $e s'$mitted in an0 form desired. Optiona& *orm WB "41 is avai&a$&e for this p'rpose and ma0 $e p'r)hased from the S'perintendent of Do)'ments 8*edera& Sto)2 #'m$er 029 005 000!4 !9, U.S. =overnment -rinting Offi)e, Washington, DC 20402. The prime )ontra)tor is responsi$&e for the s'$mission of )opies of pa0ro&&s $0 a&& s'$)ontra)tors. 8,9 :a)h pa0ro&& s'$mitted sha&& $e a))ompanied $0 a >Statement of Comp&ian)e,> signed $0 the )ontra)tor or s'$)ontra)tor or his or her agent /ho pa0s or s'pervises the pa0ment of the persons emp&o0ed 'nder the )ontra)t and sha&& )ertif0 the fo&&o/ing(
-age 21
8!9 That the pa0ro&& for the pa0ro&& period )ontains the information re<'ired to $e maintained 'nder se)tion 5.58a98"98i9 of Ieg'&ations, 29 C*I part 5 and that s')h information is )orre)t and )omp&eteQ 829 That ea)h &a$orer or me)hani) 8in)&'ding ea)h he&per, apprenti)e, and trainee9 emp&o0ed on the )ontra)t d'ring the pa0ro&& period has $een paid the f'&& /ee2&0 /ages earned, /itho't re$ate, either dire)t&0 or indire)t&0, and that no ded')tions have $een made either dire)t&0 or indire)t&0 from the f'&& /ages earned, other than permissi$&e ded')tions as set forth in Ieg'&ations, 29 C*I part "Q 8"9 That ea)h &a$orer or me)hani) has $een paid not &ess than the app&i)a$&e /age rates and fringe $enefits or )ash e<'iva&ents for the )&assifi)ation of /or2 performed, as spe)ified in the app&i)a$&e /age determination in)orporated into the )ontra)t. 8C9 The /ee2&0 s'$mission of a proper&0 e;e)'ted )ertifi)ation set forth on the reverse side of Optiona& *orm WB "41 sha&& satisf0 the re<'irement for s'$mission of the >Statement of Comp&ian)e> re<'ired $0 paragraph 8a98"98ii98,9 of this se)tion. 8D9 The fa&sifi)ation of an0 of the a$ove )ertifi)ations ma0 s'$@e)t the )ontra)tor or s'$)ontra)tor to )ivi& or )rimina& prose)'tion 'nder se)tion !00! of tit&e !H and se)tion 2"! of tit&e "! of the United States Code. 8iii9 The )ontra)tor or s'$)ontra)tor sha&& ma2e the re)ords re<'ired 'nder paragraph 8a98"98i9 of this se)tion avai&a$&e for inspe)tion, )op0ing, or trans)ription $0 a'thoriGed representatives of the *edera& Transit Administration or the Department of 7a$or, and sha&& permit s')h representatives to intervie/ emp&o0ees d'ring /or2ing ho'rs on the @o$. ?f the )ontra)tor or s'$)ontra)tor fai&s to s'$mit the re<'ired re)ords or to ma2e them avai&a$&e, the *edera& agen)0 ma0, after /ritten noti)e to the )ontra)tor, sponsor, app&i)ant, or o/ner, ta2e s')h a)tion as ma0 $e ne)essar0 to )a'se the s'spension of an0 f'rther pa0ment, advan)e, or g'arantee of f'nds. *'rthermore, fai&'re to s'$mit the re<'ired re)ords 'pon re<'est or to ma2e s')h re)ords avai&a$&e ma0 $e gro'nds for de$arment a)tion p'rs'ant to 29 C*I 5.!2. 849 A rentices and trainees 8i9 Apprenti)es Apprenti)es /i&& $e permitted to /or2 at &ess than the predetermined rate for the /or2 the0 performed /hen the0 are emp&o0ed p'rs'ant to and individ'a&&0 registered in a $ona fide apprenti)eship program registered /ith the U.S. Department of 7a$or, :mp&o0ment and Training Administration, ,'rea' of Apprenti)eship and Training, or /ith a State Apprenti)eship Agen)0 re)ogniGed $0 the ,'rea', or if a person is emp&o0ed in his or her first 90 da0s of pro$ationar0 emp&o0ment as an apprenti)e in s')h an apprenti)eship program, /ho is not individ'a&&0 registered in the program, $'t /ho has $een )ertified $0 the ,'rea' of Apprenti)eship and Training or a State Apprenti)eship Agen)0 8/here appropriate9 to $e e&igi$&e for pro$ationar0 emp&o0ment as an apprenti)e. The a&&o/a$&e ratio of apprenti)es to @o'rne0men on the @o$ site in an0 )raft )&assifi)ation sha&& not $e greater than the
-age 2H
ratio permitted to the )ontra)tor as to the entire /or2 for)e 'nder the registered program. An0 /or2er &isted on a pa0ro&& at an apprenti)e /age rate, /ho is not registered or other/ise emp&o0ed as stated a$ove, sha&& $e paid not &ess than the app&i)a$&e /age rate on the /age determination for the )&assifi)ation of /or2 a)t'a&&0 performed. ?n addition, an0 apprenti)e performing /or2 on the @o$ site in e;)ess of the ratio permitted 'nder the registered program sha&& $e paid not &ess than the app&i)a$&e /age rate on the /age determination for the /or2 a)t'a&&0 performed. Where a )ontra)tor is performing )onstr')tion on a pro@e)t in a &o)a&it0 other than that in /hi)h its program is registered, the ratios and /age rates 8e;pressed in per)entages of the @o'rne0manKs ho'r&0 rate9 spe)ified in the )ontra)torKs or s'$)ontra)torKs registered program sha&& $e o$served. :ver0 apprenti)e m'st $e paid at not &ess than the rate spe)ified in the registered program for the apprenti)eKs &eve& of progress, e;pressed as a per)entage of the @o'rne0men ho'r&0 rate spe)ified in the app&i)a$&e /age determination. Apprenti)es sha&& $e paid fringe $enefits in a))ordan)e /ith the provisions of the apprenti)eship program. ?f the apprenti)eship program does not spe)if0 fringe $enefits, apprenti)es m'st $e paid the f'&& amo'nt of fringe $enefits &isted on the /age determination for the app&i)a$&e )&assifi)ation. ?f the Administrator of the Wage and Bo'r Division of the U.S. Department of 7a$or determines that a different pra)ti)e prevai&s for the app&i)a$&e apprenti)e )&assifi)ation, fringes sha&& $e paid in a))ordan)e /ith that determination. ?n the event the ,'rea' of Apprenti)eship and Training, or a State Apprenti)eship Agen)0 re)ogniGed $0 the ,'rea', /ithdra/s approva& of an apprenti)eship program, the )ontra)tor /i&& no &onger $e permitted to 'ti&iGe apprenti)es at &ess than the app&i)a$&e predetermined rate for the /or2 performed 'nti& an a))epta$&e program is approved. 8ii9 Trainees :;)ept as provided in 29 C*I 5.!%, trainees /i&& not $e permitted to /or2 at &ess than the predetermined rate for the /or2 performed 'n&ess the0 are emp&o0ed p'rs'ant to and individ'a&&0 registered in a program /hi)h has re)eived prior approva&, eviden)ed $0 forma& )ertifi)ation $0 the U.S. Department of 7a$or, :mp&o0ment and Training Administration. The ratio of trainees to @o'rne0men on the @o$ site sha&& not $e greater than permitted 'nder the p&an approved $0 the :mp&o0ment and Training Administration. :ver0 trainee m'st $e paid at not &ess than the rate spe)ified in the approved program for the traineeKs &eve& of progress, e;pressed as a per)entage of the @o'rne0man ho'r&0 rate spe)ified in the app&i)a$&e /age determination. Trainees sha&& $e paid fringe $enefits in a))ordan)e /ith the provisions of the trainee program. ?f the trainee program does not mention fringe $enefits, trainees sha&& $e paid the f'&& amo'nt of fringe $enefits &isted on the /age determination 'n&ess the Administrator of the Wage and Bo'r Division determines that there is an apprenti)eship program asso)iated /ith the )orresponding @o'rne0man /age rate on the /age determination /hi)h provides for &ess than f'&& fringe $enefits for apprenti)es. An0 emp&o0ee &isted on the pa0ro&& at a trainee rate /ho is not registered and parti)ipating in a training p&an approved $0 the :mp&o0ment and Training Administration sha&& $e paid not &ess than the app&i)a$&e /age rate on the /age determination for the )&assifi)ation of /or2 a)t'a&&0 performed. ?n addition, an0 trainee performing /or2 on the @o$ site in e;)ess of the ratio permitted 'nder the registered program sha&& $e paid not &ess than the app&i)a$&e /age rate on the /age determination for the /or2 a)t'a&&0 performed. ?n the event the :mp&o0ment
-age 29
and Training Administration /ithdra/s approva& of a training program, the )ontra)tor /i&& no &onger $e permitted to 'ti&iGe trainees at &ess than the app&i)a$&e predetermined rate for the /or2 performed 'nti& an a))epta$&e program is approved. 8iii9 :<'a& emp&o0ment opport'nit0 The 'ti&iGation of apprenti)es, trainees and @o'rne0men 'nder this part sha&& $e in )onformit0 /ith the e<'a& emp&o0ment opport'nit0 re<'irements of :;e)'tive Order !!24%, as amended, and 29 C*I part "0. 859 Com liance 1it/ Co eland Act reAuirements The )ontra)tor sha&& )omp&0 /ith the re<'irements of 29 C*I part ", /hi)h are in)orporated $0 referen)e in this )ontra)t. 8%9 Su&contracts The )ontra)tor or s'$)ontra)tor sha&& insert in an0 s'$)ontra)ts the )&a'ses )ontained in 29 C*I 5.58a98!9 thro'gh 8!09 and s')h other )&a'ses as the *edera& Transit Administration ma0 $0 appropriate instr')tions re<'ire, and a&so a )&a'se re<'iring the s'$)ontra)tors to in)&'de these )&a'ses in an0 &o/er tier s'$)ontra)ts. The prime )ontra)tor sha&& $e responsi$&e for the )omp&ian)e $0 an0 s'$)ontra)tor or &o/er tier s'$)ontra)tor /ith a&& the )ontra)t )&a'ses in 29 C*I 5.5. 819 Contract termination3 de&arment A $rea)h of the )ontra)t )&a'ses in 29 C*I 5.5 ma0 $e gro'nds for termination of the )ontra)t, and for de$arment as a )ontra)tor and a s'$)ontra)tor as provided in 29 C*I 5.!2. 8H9 Com liance 1it/ Da%is)Bacon and Related Act reAuirements A&& r'&ings and interpretations of the Davis ,a)on and Ie&ated A)ts )ontained in 29 C*I parts !, ", and 5 are herein in)orporated $0 referen)e in this )ontra)t. 899 Dis utes concernin" la&or standards Disp'tes arising o't of the &a$or standards provisions of this )ontra)t sha&& not $e s'$@e)t to the genera& disp'tes )&a'se of this )ontra)t. S')h disp'tes sha&& $e reso&ved in a))ordan)e /ith the pro)ed'res of the Department of 7a$or set forth in 29 C*I parts 5, %, and 1. Disp'tes /ithin the meaning of this )&a'se in)&'de disp'tes $et/een the )ontra)tor 8or an0 of its s'$)ontra)tors9 and the )ontra)ting agen)0, the U.S. Department of 7a$or, or the emp&o0ees or their representatives. 8!09 Certification of eli"i&ilit# 8i9 ,0 entering into this )ontra)t, the )ontra)tor )ertifies that neither it 8nor he or she9 nor an0 person or firm /ho has an interest in the )ontra)torKs firm is a person or firm ine&igi$&e to $e a/arded =overnment )ontra)ts $0 virt'e of se)tion "8a9 of the Davis ,a)on A)t or 29 C*I 5.!28a98!9. 8ii9 #o part of this )ontra)t sha&& $e s'$)ontra)ted to an0 person or firm ine&igi$&e for a/ard of a =overnment )ontra)t $0 virt'e of se)tion "8a9 of the Davis ,a)on A)t or 29 C*I 5.!28a98!9. 8iii9 The pena&t0 for ma2ing fa&se statements is pres)ri$ed in the U.S. Crimina& Code, !H U.S.C. !00!.
-age "0
(4$ CONTRACT BORQ COURS AND SAFETD STANDARDS ACT BacE"round and A lication The Contra)t Wor2 Bo'rs and Safet0 Standards A)t is )odified at 40 USC "10!, et seq. The A)t app&ies to grantee )ontra)ts and s'$)ontra)ts 3finan)ed at &east in part $0 &oans or grants from Z the D*edera&F =overnment.4 40 USC "10!8$98!98,98iii9 and 8$9829, 29 C*I 5.28h9, 49 C*I !H."%8i98%9. A&tho'gh the origina& A)t re<'ired its app&i)ation in an0 )onstr')tion )ontra)t over S2,000 or non )onstr')tion )ontra)t to /hi)h the A)t app&ied over S2,500 8and &ang'age to that effe)t is sti&& fo'nd in 49 C*I !H."%8i98%99, the A)t no &onger app&ies to an0 3)ontra)t in an amo'nt that is not greater than S!00,000.4 40 USC "10!8$98"9 8A98iii9. The A)t app&ies to )onstr')tion )ontra)ts and, in ver0 &imited )ir)'mstan)es, non )onstr')tion pro@e)ts that emp&o0 3&a$orers or me)hani)s on a p'$&i) /or2.4 These non )onstr')tion app&i)ations do not genera&&0 app&0 to transit pro)'rements $e)a'se transit pro)'rements 8to in)&'de rai& )ars and $'ses9 are deemed 3)ommer)ia& items.4 40 USC "101, 4! USC 40" 8!29. A grantee that )ontemp&ates entering into a )ontra)t to pro)'re a deve&opmenta& or 'ni<'e item sho'&d )ons'&t )o'nse& to determine if the A)t app&ies to that pro)'rement and that additiona& &ang'age re<'ired $0 29 C*I 5.58)9 m'st $e added to the $asi) )&a'se $e&o/. The )&a'se &ang'age is dra/n dire)t&0 from 29 C*I 5.58$9 and an0 deviation from the mode& )&a'se $e&o/ sho'&d $e )oordinated /ith )o'nse& to ens're the A)t+s re<'irements are satisfied. Clause Lan"ua"e Contract BorE Cours and Safet# Standards 8!9 O%ertime reAuirements #o )ontra)tor or s'$)ontra)tor )ontra)ting for an0 part of the )ontra)t /or2 /hi)h ma0 re<'ire or invo&ve the emp&o0ment of &a$orers or me)hani)s sha&& re<'ire or permit an0 s')h &a$orer or me)hani) in an0 /or2/ee2 in /hi)h he or she is emp&o0ed on s')h /or2 to /or2 in e;)ess of fort0 ho'rs in s')h /or2/ee2 'n&ess s')h &a$orer or me)hani) re)eives )ompensation at a rate not &ess than one and one ha&f times the $asi) rate of pa0 for a&& ho'rs /or2ed in e;)ess of fort0 ho'rs in s')h /or2/ee2. 829 PiolationJ lia&ilit# for un aid 1a"esJ liAuidated dama"es ?n the event of an0 vio&ation of the )&a'se set forth in paragraph 8!9 of this se)tion the )ontra)tor and an0 s'$)ontra)tor responsi$&e therefor sha&& $e &ia$&e for the 'npaid /ages. ?n addition, s')h )ontra)tor and s'$)ontra)tor sha&& $e &ia$&e to the United States for &i<'idated damages. S')h &i<'idated damages sha&& $e )omp'ted /ith respe)t to ea)h individ'a& &a$orer or me)hani), in)&'ding /at)hmen and g'ards, emp&o0ed in vio&ation of the )&a'se set forth in paragraph 8!9 of this se)tion, in the s'm of S!0 for ea)h )a&endar da0 on /hi)h s')h individ'a& /as re<'ired or permitted to /or2 in e;)ess of the standard /or2/ee2 of fort0 ho'rs /itho't pa0ment of the overtime /ages re<'ired $0 the )&a'se set forth in paragraph 8!9 of this se)tion.
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8"9 Bit//oldin" for un aid 1a"es and liAuidated dama"es The 8/rite in the name o* the grantee9 sha&& 'pon its o/n a)tion or 'pon /ritten re<'est of an a'thoriGed representative of the Department of 7a$or /ithho&d or )a'se to $e /ithhe&d, from an0 mone0s pa0a$&e on a))o'nt of /or2 performed $0 the )ontra)tor or s'$)ontra)tor 'nder an0 s')h )ontra)t or an0 other *edera& )ontra)t /ith the same prime )ontra)tor, or an0 other federa&&0 assisted )ontra)t s'$@e)t to the Contra)t Wor2 Bo'rs and Safet0 Standards A)t, /hi)h is he&d $0 the same prime )ontra)tor, s')h s'ms as ma0 $e determined to $e ne)essar0 to satisf0 an0 &ia$i&ities of s')h )ontra)tor or s'$)ontra)tor for 'npaid /ages and &i<'idated damages as provided in the )&a'se set forth in paragraph 829 of this se)tion. 849 Su&contracts The )ontra)tor or s'$)ontra)tor sha&& insert in an0 s'$)ontra)ts the )&a'ses set forth in paragraphs 8!9 thro'gh 849 of this se)tion and a&so a )&a'se re<'iring the s'$)ontra)tors to in)&'de these )&a'ses in an0 &o/er tier s'$)ontra)ts. The prime )ontra)tor sha&& $e responsi$&e for )omp&ian)e $0 an0 s'$)ontra)tor or &o/er tier s'$)ontra)tor /ith the )&a'ses set forth in paragraphs 8!9 thro'gh 849 of this se)tion. (5$ > RESERPED ? (8$ NO <OPERNMENT OBLI<ATION TO TCIRD PARTIES A lica&ilit# to Contracts App&i)a$&e to a&& )ontra)ts. Flo1 Do1n #ot re<'ired $0 stat'te or reg'&ation for either primar0 )ontra)tors or s'$)ontra)tors, this )on)ept sho'&d f&o/ do/n to a&& &eve&s to )&arif0, to a&& parties to the )ontra)t, that the *edera& =overnment does not have )ontra)t'a& &ia$i&it0 to third parties, a$sent spe)ifi) /ritten )onsent. Model Clause7Lan"ua"e Whi&e no spe)ifi) &ang'age is re<'ired, *TA has deve&oped the fo&&o/ing &ang'age. No O&li"ation &# t/e Federal <o%ernment$ 8!9 The -'r)haser and Contra)tor a)2no/&edge and agree that, not/ithstanding an0 )on)'rren)e $0 the *edera& =overnment in or approva& of the so&i)itation or a/ard of the 'nder&0ing )ontra)t, a$sent the e;press /ritten )onsent $0 the *edera& =overnment, the *edera& =overnment is not a part0 to this )ontra)t and sha&& not $e s'$@e)t to an0 o$&igations or &ia$i&ities to the -'r)haser, Contra)tor, or an0 other part0 8/hether or not a part0 to that )ontra)t9 pertaining to an0 matter res'&ting from the 'nder&0ing )ontra)t.
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829 The Contra)tor agrees to in)&'de the a$ove )&a'se in ea)h s'$)ontra)t finan)ed in /ho&e or in part /ith *edera& assistan)e provided $0 *TA. ?t is f'rther agreed that the )&a'se sha&& not $e modified, e;)ept to identif0 the s'$)ontra)tor /ho /i&& $e s'$@e)t to its provisions. *:$ PRO<RAM FRAUD AND FALSE OR FRAUDULENT STATEMENTS AND RELATED ACTS -( U$S$C$ -5:( et seA$ .8 CFR Part -( (5 U$S$C$ (::( .8 U$S$C$ 0-:4 A lica&ilit# to Contracts These re<'irements are app&i)a$&e to a&& )ontra)ts. Flo1 Do1n These re<'irements f&o/ do/n to )ontra)tors and s'$)ontra)tors /ho ma2e, present, or s'$mit )overed )&aims and statements. Model Clause7Lan"ua"e These re<'irements have no spe)ified &ang'age, so *TA proffers the fo&&o/ing &ang'age. Pro"ram Fraud and False or Fraudulent Statements or Related Acts$ 8!9 The Contra)tor a)2no/&edges that the provisions of the -rogram *ra'd Civi& Iemedies A)t of !9H%, as amended, "! U.S.C. T "H0! et se<. and U.S. DOT reg'&ations, >-rogram *ra'd Civi& Iemedies,> 49 C.*.I. -art "!, app&0 to its a)tions pertaining to this -ro@e)t. Upon e;e)'tion of the 'nder&0ing )ontra)t, the Contra)tor )ertifies or affirms the tr'thf'&ness and a))'ra)0 of an0 statement it has made, it ma2es, it ma0 ma2e, or )a'ses to $e made, pertaining to the 'nder&0ing )ontra)t or the *TA assisted pro@e)t for /hi)h this )ontra)t /or2 is $eing performed. ?n addition to other pena&ties that ma0 $e app&i)a$&e, the Contra)tor f'rther a)2no/&edges that if it ma2es, or )a'ses to $e made, a fa&se, fi)titio's, or fra'd'&ent )&aim, statement, s'$mission, or )ertifi)ation, the *edera& =overnment reserves the right to impose the pena&ties of the -rogram *ra'd Civi& Iemedies A)t of !9H% on the Contra)tor to the e;tent the *edera& =overnment deems appropriate. 829 The Contra)tor a&so a)2no/&edges that if it ma2es, or )a'ses to $e made, a fa&se, fi)titio's, or fra'd'&ent )&aim, statement, s'$mission, or )ertifi)ation to the *edera& =overnment 'nder a )ontra)t )onne)ted /ith a pro@e)t that is finan)ed in /ho&e or in part /ith *edera& assistan)e origina&&0 a/arded $0 *TA 'nder the a'thorit0 of 49 U.S.C. T 5"01, the =overnment reserves the right to impose the pena&ties of !H U.S.C. T !00! and 49 U.S.C. T 5"018n98!9 on the Contra)tor, to the e;tent the *edera& =overnment deems appropriate.
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8"9 The Contra)tor agrees to in)&'de the a$ove t/o )&a'ses in ea)h s'$)ontra)t finan)ed in /ho&e or in part /ith *edera& assistan)e provided $0 *TA. ?t is f'rther agreed that the )&a'ses sha&& not $e modified, e;)ept to identif0 the s'$)ontra)tor /ho /i&& $e s'$@e)t to the provisions. *($ TERMINATION .8 U$S$C$ Part (5 FTA Circular .**:$(E A lica&ilit# to Contracts A&& )ontra)ts 8/ith the e;)eption of )ontra)ts /ith nonprofit organiGations and instit'tions of higher ed')ation,9 in e;)ess of S!0,000 sha&& )ontain s'ita$&e provisions for termination $0 the grantee in)&'ding the manner $0 /hi)h it /i&& $e effe)ted and the $asis for sett&ement. 8*or )ontra)ts /ith nonprofit organiGations and instit'tions of higher ed')ation the thresho&d is S!00,000.9 ?n addition, s')h )ontra)ts sha&& des)ri$e )onditions 'nder /hi)h the )ontra)t ma0 $e terminated for defa'&t as /e&& as )onditions /here the )ontra)t ma0 $e terminated $e)a'se of )ir)'mstan)es $e0ond the )ontro& of the )ontra)tor. Flo1 Do1n The termination re<'irements f&o/ do/n to a&& )ontra)ts in e;)ess of S!0,000, /ith the e;)eption of )ontra)ts /ith nonprofit organiGations and instit'tions of higher &earning. Model Clause7Lan"ua"e *TA does not pres)ri$e the form or )ontent of s')h )&a'ses. The fo&&o/ing are s'ggestions of )&a'ses to $e 'sed in different t0pes of )ontra)ts( a$ Termination for Con%enience 6<eneral Pro%ision9 The 8Ie)ipient9 ma0 terminate this )ontra)t, in /ho&e or in part, at an0 time $0 /ritten noti)e to the Contra)tor /hen it is in the =overnmentKs $est interest. The Contra)tor sha&& $e paid its )osts, in)&'ding )ontra)t )&ose o't )osts, and profit on /or2 performed 'p to the time of termination. The Contra)tor sha&& prompt&0 s'$mit its termination )&aim to 8Ie)ipient9 to $e paid the Contra)tor. ?f the Contra)tor has an0 propert0 in its possession $e&onging to the 8Ie)ipient9, the Contra)tor /i&& a))o'nt for the same, and dispose of it in the manner the 8Ie)ipient9 dire)ts. &$ Termination for Default >Breac/ or Cause? 6<eneral Pro%ision9 ?f the Contra)tor does not de&iver s'pp&ies in a))ordan)e /ith the )ontra)t de&iver0 s)hed'&e, or, if the )ontra)t is for servi)es, the Contra)tor fai&s to perform in the manner )a&&ed for in the )ontra)t, or if the Contra)tor fai&s to )omp&0 /ith an0 other provisions of the )ontra)t, the 8Ie)ipient9 ma0 terminate this )ontra)t for defa'&t. Termination sha&& $e effe)ted $0 serving a noti)e of termination on the )ontra)tor setting forth the manner in /hi)h the Contra)tor is in defa'&t. The )ontra)tor /i&& on&0 $e paid the )ontra)t pri)e for s'pp&ies de&ivered and a))epted, or servi)es performed in a))ordan)e /ith the manner of performan)e set forth in the )ontra)t.
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?f it is &ater determined $0 the 8Ie)ipient9 that the Contra)tor had an e;)'sa$&e reason for not performing, s')h as a stri2e, fire, or f&ood, events /hi)h are not the fa'&t of or are $e0ond the )ontro& of the Contra)tor, the 8Ie)ipient9, after setting 'p a ne/ de&iver0 of performan)e s)hed'&e, ma0 a&&o/ the Contra)tor to )ontin'e /or2, or treat the termination as a termination for )onvenien)e. c$ O ortunit# to Cure 6<eneral Pro%ision9 The 8Ie)ipient9 in its so&e dis)retion ma0, in the )ase of a termination for $rea)h or defa'&t, a&&o/ the Contra)tor Dan appropriate&0 short period of timeF in /hi)h to )'re the defe)t. ?n s')h )ase, the noti)e of termination /i&& state the time period in /hi)h )'re is permitted and other appropriate )onditions ?f Contra)tor fai&s to remed0 to 8Ie)ipient9Ks satisfa)tion the $rea)h or defa'&t of an0 of the terms, )ovenants, or )onditions of this Contra)t /ithin Dten 8!09 da0sF after re)eipt $0 Contra)tor of /ritten noti)e from 8Ie)ipient9 setting forth the nat're of said $rea)h or defa'&t, 8Ie)ipient9 sha&& have the right to terminate the Contra)t /itho't an0 f'rther o$&igation to Contra)tor. An0 s')h termination for defa'&t sha&& not in an0 /a0 operate to pre)&'de 8Ie)ipient9 from a&so p'rs'ing a&& avai&a$&e remedies against Contra)tor and its s'reties for said $rea)h or defa'&t. d$ Bai%er of Remedies for an# Breac/ ?n the event that 8Ie)ipient9 e&e)ts to /aive its remedies for an0 $rea)h $0 Contra)tor of an0 )ovenant, term or )ondition of this Contra)t, s')h /aiver $0 8Ie)ipient9 sha&& not &imit 8Ie)ipient9Ks remedies for an0 s'))eeding $rea)h of that or of an0 other term, )ovenant, or )ondition of this Contra)t. e$ Termination for Con%enience 6Professional or Transit Ser%ice Contracts9 The 8Ie)ipient9, $0 /ritten noti)e, ma0 terminate this )ontra)t, in /ho&e or in part, /hen it is in the =overnmentKs interest. ?f this )ontra)t is terminated, the Ie)ipient sha&& $e &ia$&e on&0 for pa0ment 'nder the pa0ment provisions of this )ontra)t for servi)es rendered $efore the effe)tive date of termination. f$ Termination for Default 6Su lies and Ser%ice9 ?f the Contra)tor fai&s to de&iver s'pp&ies or to perform the servi)es /ithin the time spe)ified in this )ontra)t or an0 e;tension or if the Contra)tor fai&s to )omp&0 /ith an0 other provisions of this )ontra)t, the 8Ie)ipient9 ma0 terminate this )ontra)t for defa'&t. The 8Ie)ipient9 sha&& terminate $0 de&ivering to the Contra)tor a #oti)e of Termination spe)if0ing the nat're of the defa'&t. The Contra)tor /i&& on&0 $e paid the )ontra)t pri)e for s'pp&ies de&ivered and a))epted, or servi)es performed in a))ordan)e /ith the manner or performan)e set forth in this )ontra)t. ?f, after termination for fai&'re to f'&fi&& )ontra)t o$&igations, it is determined that the Contra)tor /as not in defa'&t, the rights and o$&igations of the parties sha&& $e the same as if the termination had $een iss'ed for the )onvenien)e of the Ie)ipient. "$ Termination for Default 6Trans ortation Ser%ices9 ?f the Contra)tor fai&s to pi)2 'p the )ommodities or to perform the servi)es, in)&'ding de&iver0 servi)es, /ithin the time spe)ified in
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this )ontra)t or an0 e;tension or if the Contra)tor fai&s to )omp&0 /ith an0 other provisions of this )ontra)t, the 8Ie)ipient9 ma0 terminate this )ontra)t for defa'&t. The 8Ie)ipient9 sha&& terminate $0 de&ivering to the Contra)tor a #oti)e of Termination spe)if0ing the nat're of defa'&t. The Contra)tor /i&& on&0 $e paid the )ontra)t pri)e for servi)es performed in a))ordan)e /ith the manner of performan)e set forth in this )ontra)t. ?f this )ontra)t is terminated /hi&e the Contra)tor has possession of Ie)ipient goods, the Contra)tor sha&&, 'pon dire)tion of the 8Ie)ipient9, prote)t and preserve the goods 'nti& s'rrendered to the Ie)ipient or its agent. The Contra)tor and 8Ie)ipient9 sha&& agree on pa0ment for the preservation and prote)tion of goods. *ai&'re to agree on an amo'nt /i&& $e reso&ved 'nder the Disp'te )&a'se. ?f, after termination for fai&'re to f'&fi&& )ontra)t o$&igations, it is determined that the Contra)tor /as not in defa'&t, the rights and o$&igations of the parties sha&& $e the same as if the termination had $een iss'ed for the )onvenien)e of the 8Ie)ipient9. /$ Termination for Default 6Construction9 ?f the Contra)tor ref'ses or fai&s to prose)'te the /or2 or an0 separa$&e part, /ith the di&igen)e that /i&& ins're its )omp&etion /ithin the time spe)ified in this )ontra)t or an0 e;tension or fai&s to )omp&ete the /or2 /ithin this time, or if the Contra)tor fai&s to )omp&0 /ith an0 other provisions of this )ontra)t, the 8Ie)ipient9 ma0 terminate this )ontra)t for defa'&t. The 8Ie)ipient9 sha&& terminate $0 de&ivering to the Contra)tor a #oti)e of Termination spe)if0ing the nat're of the defa'&t. ?n this event, the Ie)ipient ma0 ta2e over the /or2 and )ompete it $0 )ontra)t or other/ise, and ma0 ta2e possession of and 'se an0 materia&s, app&ian)es, and p&ant on the /or2 site ne)essar0 for )omp&eting the /or2. The Contra)tor and its s'reties sha&& $e &ia$&e for an0 damage to the Ie)ipient res'&ting from the Contra)torKs ref'sa& or fai&'re to )omp&ete the /or2 /ithin spe)ified time, /hether or not the Contra)torKs right to pro)eed /ith the /or2 is terminated. This &ia$i&it0 in)&'des an0 in)reased )osts in)'rred $0 the Ie)ipient in )omp&eting the /or2. The Contra)torKs right to pro)eed sha&& not $e terminated nor the Contra)tor )harged /ith damages 'nder this )&a'se if !. the de&a0 in )omp&eting the /or2 arises from 'nforeseea$&e )a'ses $e0ond the )ontro& and /itho't the fa'&t or neg&igen)e of the Contra)tor. :;amp&es of s')h )a'ses in)&'de( a)ts of =od, a)ts of the Ie)ipient, a)ts of another Contra)tor in the performan)e of a )ontra)t /ith the Ie)ipient, epidemi)s, <'arantine restri)tions, stri2es, freight em$argoesQ and 2. the )ontra)tor, /ithin D!0F da0s from the $eginning of an0 de&a0, notifies the 8Ie)ipient9 in /riting of the )a'ses of de&a0. ?f in the @'dgment of the 8Ie)ipient9, the de&a0 is e;)'sa$&e, the time for )omp&eting the /or2 sha&& $e e;tended. The @'dgment of the 8Ie)ipient9 sha&& $e fina& and )on)&'sive on the parties, $'t s'$@e)t to appea& 'nder the Disp'tes )&a'ses.
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?f, after termination of the Contra)torKs right to pro)eed, it is determined that the Contra)tor /as not in defa'&t, or that the de&a0 /as e;)'sa$&e, the rights and o$&igations of the parties /i&& $e the same as if the termination had $een iss'ed for the )onvenien)e of the Ie)ipient. i$ Termination for Con%enience or Default 6Arc/itect and En"ineerin"9 The 8Ie)ipient9 ma0 terminate this )ontra)t in /ho&e or in part, for the Ie)ipientKs )onvenien)e or $e)a'se of the fai&'re of the Contra)tor to f'&fi&& the )ontra)t o$&igations. The 8Ie)ipient9 sha&& terminate $0 de&ivering to the Contra)tor a #oti)e of Termination spe)if0ing the nat're, e;tent, and effe)tive date of the termination. Upon re)eipt of the noti)e, the Contra)tor sha&& 8!9 immediate&0 dis)ontin'e a&& servi)es affe)ted 8'n&ess the noti)e dire)ts other/ise9, and 829 de&iver to the Contra)ting Offi)er a&& data, dra/ings, spe)ifi)ations, reports, estimates, s'mmaries, and other information and materia&s a))'m'&ated in performing this )ontra)t, /hether )omp&eted or in pro)ess. ?f the termination is for the )onvenien)e of the Ie)ipient, the Contra)ting Offi)er sha&& ma2e an e<'ita$&e ad@'stment in the )ontra)t pri)e $'t sha&& a&&o/ no anti)ipated profit on 'nperformed servi)es. ?f the termination is for fai&'re of the Contra)tor to f'&fi&& the )ontra)t o$&igations, the Ie)ipient ma0 )omp&ete the /or2 $0 )onta)t or other/ise and the Contra)tor sha&& $e &ia$&e for an0 additiona& )ost in)'rred $0 the Ie)ipient. ?f, after termination for fai&'re to f'&fi&& )ontra)t o$&igations, it is determined that the Contra)tor /as not in defa'&t, the rights and o$&igations of the parties sha&& $e the same as if the termination had $een iss'ed for the )onvenien)e of the Ie)ipient. '$ Termination for Con%enience of Default 6Cost)T# e Contracts9 The 8Ie)ipient9 ma0 terminate this )ontra)t, or an0 portion of it, $0 serving a noti)e or termination on the Contra)tor. The noti)e sha&& state /hether the termination is for )onvenien)e of the 8Ie)ipient9 or for the defa'&t of the Contra)tor. ?f the termination is for defa'&t, the noti)e sha&& state the manner in /hi)h the )ontra)tor has fai&ed to perform the re<'irements of the )ontra)t. The Contra)tor sha&& a))o'nt for an0 propert0 in its possession paid for from f'nds re)eived from the 8Ie)ipient9, or propert0 s'pp&ied to the Contra)tor $0 the 8Ie)ipient9. ?f the termination is for defa'&t, the 8Ie)ipient9 ma0 fi; the fee, if the )ontra)t provides for a fee, to $e paid the )ontra)tor in proportion to the va&'e, if an0, of /or2 performed 'p to the time of termination. The Contra)tor sha&& prompt&0 s'$mit its termination )&aim to the 8Ie)ipient9 and the parties sha&& negotiate the termination sett&ement to $e paid the Contra)tor. ?f the termination is for the )onvenien)e of the 8Ie)ipient9, the Contra)tor sha&& $e paid its )ontra)t )&ose o't )osts, and a fee, if the )ontra)t provided for pa0ment of a fee, in proportion to the /or2 performed 'p to the time of termination.
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?f, after serving a noti)e of termination for defa'&t, the 8Ie)ipient9 determines that the Contra)tor has an e;)'sa$&e reason for not performing, s')h as stri2e, fire, f&ood, events /hi)h are not the fa'&t of and are $e0ond the )ontro& of the )ontra)tor, the 8Ie)ipient9, after setting 'p a ne/ /or2 s)hed'&e, ma0 a&&o/ the Contra)tor to )ontin'e /or2, or treat the termination as a termination for )onvenien)e. **$ <OPERNMENT)BIDE DEBARMENT AND SUSPENSION 6NONPROCUREMENT9 BacE"round and A lica&ilit# ?n )on@'n)tion /ith the Offi)e of .anagement and ,'dget and other affe)ted *edera& agen)ies, DOT p'$&ished an 'pdate to 49 C*I -art 29 on #ovem$er 2%, 200". This government /ide reg'&ation imp&ements :;e)'tive Order !2549, Debarment and Suspension, Executive Order
12689, Debarment and Suspension, and 31 U.S.C. 6101 note (Section 2455, Pu !ic "a# 103$ 355, 108 Stat. 332%&.
The provisions of -art 29 app&0 to a&& grantee )ontra)ts and s'$)ontra)ts at an0 &eve& e;pe)ted to e<'a& or e;)eed S25,000 as /e&& as an0 )ontra)t or s'$)ontra)t 8at an0 &eve&9 for *edera&&0 re<'ired a'diting servi)es. 49 C*I 29.2208$9. This represents a )hange from prior pra)ti)e in that the do&&ar thresho&d for app&i)ation of these r'&es has $een &o/ered from S!00,000 to S25,000. These are )ontra)ts and s'$)ontra)ts referred to in the reg'&ation as 3)overed transa)tions.4 =rantees, )ontra)tors, and s'$)ontra)tors 8at an0 &eve&9 that enter into )overed transa)tions are re<'ired to verif0 that the entit0 8as /e&& as its prin)ipa&s and affi&iates9 the0 propose to )ontra)t or s'$)ontra)t /ith is not e;)&'ded or dis<'a&ified. The0 do this $0 8a& C'ec(in) t'e Exc!uded Partie* "i*t S+*te,, ( & Co!!ectin) a certi-ication -ro, t'at .er*on, or (c& /ddin) a c!au*e or condition to t'e contract or *u contract. 0'i* re.re*ent* a c'an)e -ro, .rior .ractice in t'at certi-ication i* *ti!! acce.ta !e ut i* no !on)er re1uired. 49 C23 29.300. 4rantee*, contractor*, and *u contractor* #'o enter into covered tran*action* a!*o ,u*t re1uire t'e entitie* t'e+ contract #it' to co,.!+ #it' 49 C23 29, *u .art C and inc!ude t'i* re1uire,ent in t'eir o#n *u *e1uent covered tran*action* (i.e., t'e re1uire,ent -!o#* do#n to *u contract* at a!! !eve!*&. Clause Lan"ua"e The fo&&o/ing )&a'se &ang'age is s'ggested, not mandator0. ?t in)orporates the optiona& method of verif0ing that )ontra)tors are not e;)&'ded or dis<'a&ified $0 )ertifi)ation. Sus ension and De&arment This )ontra)t is a )overed transa)tion for p'rposes of 49 C*I -art 29. As s')h, the )ontra)tor is re<'ired to verif0 that none of the )ontra)tor, its prin)ipa&s, as
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defined at 49 C*I 29.995, or affi&iates, as defined at 49 C*I 29.905, are e;)&'ded or dis<'a&ified as defined at 49 C*I 29.940 and 29.945. The )ontra)tor is re<'ired to )omp&0 /ith 49 C*I 29, S'$part C and m'st in)&'de the re<'irement to )omp&0 /ith 49 C*I 29, S'$part C in an0 &o/er tier )overed transa)tion it enters into. ,0 signing and s'$mitting its $id or proposa&, the $idder or proposer )ertifies as fo&&o/s( The )ertifi)ation in this )&a'se is a materia& representation of fa)t re&ied 'pon $0 [insert a"enc# name\. ?f it is &ater determined that the $idder or proposer 2no/ing&0 rendered an erroneo's )ertifi)ation, in addition to remedies avai&a$&e to [insert a"enc# name\, the *edera& =overnment ma0 p'rs'e avai&a$&e remedies, in)&'ding $'t not &imited to s'spension andAor de$arment. The $idder or proposer agrees to )omp&0 /ith the re<'irements of 49 C*I 29, S'$part C /hi&e this offer is va&id and thro'gho't the period of an0 )ontra)t that ma0 arise from this offer. The $idder or proposer f'rther agrees to in)&'de a provision re<'iring s')h )omp&ian)e in its &o/er tier )overed transa)tions. *-$ PRIPACD ACT 0 U$S$C$ 00* A lica&ilit# to Contracts When a grantee maintains fi&es on dr'g and a&)oho& enfor)ement a)tivities for *TA, and those fi&es are organiGed so that information )o'&d $e retrieved $0 persona& identifier, the -riva)0 A)t re<'irements app&0 to a&& )ontra)ts. Flo1 Do1n The *edera& -riva)0 A)t re<'irements f&o/ do/n to ea)h third part0 )ontra)tor and their )ontra)ts at ever0 tier. Model Clause7Lan"ua"e The te;t of the fo&&o/ing )&a'se has not $een mandated $0 stat'te or spe)ifi) reg'&ation, $'t has $een deve&oped $0 *TA. Contracts In%ol%in" Federal Pri%ac# Act ReAuirements The fo&&o/ing re<'irements app&0 to the Contra)tor and its emp&o0ees that administer an0 s0stem of re)ords on $eha&f of the *edera& =overnment 'nder an0 )ontra)t( 8!9 The Contra)tor agrees to )omp&0 /ith, and ass'res the )omp&ian)e of its emp&o0ees /ith, the information restri)tions and other app&i)a$&e re<'irements of the -riva)0 A)t of !914,
-age "9
5 U.S.C. T 552a. Among other things, the Contra)tor agrees to o$tain the e;press )onsent of the *edera& =overnment $efore the Contra)tor or its emp&o0ees operate a s0stem of re)ords on $eha&f of the *edera& =overnment. The Contra)tor 'nderstands that the re<'irements of the -riva)0 A)t, in)&'ding the )ivi& and )rimina& pena&ties for vio&ation of that A)t, app&0 to those individ'a&s invo&ved, and that fai&'re to )omp&0 /ith the terms of the -riva)0 A)t ma0 res'&t in termination of the 'nder&0ing )ontra)t. 829 The Contra)tor a&so agrees to in)&'de these re<'irements in ea)h s'$)ontra)t to administer an0 s0stem of re)ords on $eha&f of the *edera& =overnment finan)ed in /ho&e or in part /ith *edera& assistan)e provided $0 *TA. *.$ CIPIL RI<CTS RE@UIREMENTS *8 U$S$C$ G 2*-! .* U$S$C$ G *::: .* U$S$C$ G 2(:*! .* U$S$C$ G (*((* .* U$S$C$ G (*(-*! .8 U$S$C$ G 0--* *8 CFR Part (2-:! .( CFR Parts 2: et seA$ A lica&ilit# to Contracts The Civi& Iights Ie<'irements app&0 to a&& )ontra)ts. Flo1 Do1n The Civi& Iights re<'irements f&o/ do/n to a&& third part0 )ontra)tors and their )ontra)ts at ever0 tier. Model Clause7Lan"ua"e The fo&&o/ing )&a'se /as predi)ated on &ang'age )ontained at 49 C*I -art !9, Appendi; A, $'t *TA has shortened the &ength0 te;t. Ci%il Ri"/ts ) The fo&&o/ing re<'irements app&0 to the 'nder&0ing )ontra)t( 8!9 #ondis)rimination ?n a))ordan)e /ith Tit&e O? of the Civi& Iights A)t, as amended, 42 U.S.C. T 2000d, se)tion "0" of the Age Dis)rimination A)t of !915, as amended, 42 U.S.C. T %!02, se)tion 202 of the Ameri)ans /ith Disa$i&ities A)t of !990, 42 U.S.C. T !2!"2, and *edera& transit &a/ at 49 U.S.C. T 5""2, the Contra)tor agrees that it /i&& not dis)riminate against an0 emp&o0ee or app&i)ant for emp&o0ment $e)a'se of ra)e, )o&or, )reed, nationa& origin, se;, age, or disa$i&it0. ?n addition, the Contra)tor agrees to )omp&0 /ith app&i)a$&e *edera& imp&ementing reg'&ations and other imp&ementing re<'irements *TA ma0 iss'e. 829 :<'a& :mp&o0ment Opport'nit0 The fo&&o/ing e<'a& emp&o0ment opport'nit0 re<'irements app&0 to the 'nder&0ing )ontra)t(
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8a9 Ia)e, Co&or, Creed, #ationa& Origin, Se; ?n a))ordan)e /ith Tit&e O?? of the Civi& Iights A)t, as amended, 42 U.S.C. T 2000e, and *edera& transit &a/s at 49 U.S.C. T 5""2, the Contra)tor agrees to )omp&0 /ith a&& app&i)a$&e e<'a& emp&o0ment opport'nit0 re<'irements of U.S. Department of 7a$or 8U.S. DO79 reg'&ations, >Offi)e of *edera& Contra)t Comp&ian)e -rograms, :<'a& :mp&o0ment Opport'nit0, Department of 7a$or,> 4! C.*.I. -arts %0 et se<., 8/hi)h imp&ement :;e)'tive Order #o. !!24%, >:<'a& :mp&o0ment Opport'nit0,> as amended $0 :;e)'tive Order #o. !!"15, >Amending :;e)'tive Order !!24% Ie&ating to :<'a& :mp&o0ment Opport'nit0,> 42 U.S.C. T 2000e note9, and /ith an0 app&i)a$&e *edera& stat'tes, e;e)'tive orders, reg'&ations, and *edera& po&i)ies that ma0 in the f't're affe)t )onstr')tion a)tivities 'nderta2en in the )o'rse of the -ro@e)t. The Contra)tor agrees to ta2e affirmative a)tion to ens're that app&i)ants are emp&o0ed, and that emp&o0ees are treated d'ring emp&o0ment, /itho't regard to their ra)e, )o&or, )reed, nationa& origin, se;, or age. S')h a)tion sha&& in)&'de, $'t not $e &imited to, the fo&&o/ing( emp&o0ment, 'pgrading, demotion or transfer, re)r'itment or re)r'itment advertising, &a0off or terminationQ rates of pa0 or other forms of )ompensationQ and se&e)tion for training, in)&'ding apprenti)eship. ?n addition, the Contra)tor agrees to )omp&0 /ith an0 imp&ementing re<'irements *TA ma0 iss'e. 8$9 Age ?n a))ordan)e /ith se)tion 4 of the Age Dis)rimination in :mp&o0ment A)t of !9%1, as amended, 29 U.S.C. TT %2" and *edera& transit &a/ at 49 U.S.C. T 5""2, the Contra)tor agrees to refrain from dis)rimination against present and prospe)tive emp&o0ees for reason of age. ?n addition, the Contra)tor agrees to )omp&0 /ith an0 imp&ementing re<'irements *TA ma0 iss'e. 8)9 Disa$i&ities ?n a))ordan)e /ith se)tion !02 of the Ameri)ans /ith Disa$i&ities A)t, as amended, 42 U.S.C. T !2!!2, the Contra)tor agrees that it /i&& )omp&0 /ith the re<'irements of U.S. :<'a& :mp&o0ment Opport'nit0 Commission, >Ieg'&ations to ?mp&ement the :<'a& :mp&o0ment -rovisions of the Ameri)ans /ith Disa$i&ities A)t,> 29 C.*.I. -art !%"0, pertaining to emp&o0ment of persons /ith disa$i&ities. ?n addition, the Contra)tor agrees to )omp&0 /ith an0 imp&ementing re<'irements *TA ma0 iss'e. 8"9 The Contra)tor a&so agrees to in)&'de these re<'irements in ea)h s'$)ontra)t finan)ed in /ho&e or in part /ith *edera& assistan)e provided $0 *TA, modified on&0 if ne)essar0 to identif0 the affe)ted parties. *0$ BREACCES AND DISPUTE RESOLUTION .8 CFR Part (5 FTA Circular .**:$(E A lica&ilit# to Contracts A&& )ontra)ts in e;)ess of S!00,000 sha&& )ontain provisions or )onditions /hi)h /i&& a&&o/ for administrative, )ontra)t'a&, or &ega& remedies in instan)es /here )ontra)tors vio&ate or $rea)h )ontra)t terms, and provide for s')h san)tions and pena&ties as ma0 $e appropriate. This ma0
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in)&'de provisions for $onding, pena&ties for &ate or inade<'ate performan)e, retained earnings, &i<'idated damages or other appropriate meas'res. Flo1 Do1n The ,rea)hes and Disp'te Ieso&'tions re<'irements f&o/ do/n to a&& tiers. Model Clauses7Lan"ua"e *TA does not pres)ri$e the form or )ontent of s')h provisions. What provisions are deve&oped /i&& depend on the )ir)'mstan)es and the t0pe of )ontra)t. Ie)ipients sho'&d )ons'&t &ega& )o'nse& in deve&oping appropriate )&a'ses. The fo&&o/ing )&a'ses are e;amp&es of provisions from vario's *TA third part0 )ontra)ts. Dis utes Disp'tes arising in the performan)e of this Contra)t /hi)h are not reso&ved $0 agreement of the parties sha&& $e de)ided in /riting $0 the a'thoriGed representative of 8Ie)ipient9Ks Dtit&e of emp&o0eeF. This de)ision sha&& $e fina& and )on)&'sive 'n&ess /ithin Dten 8!09F da0s from the date of re)eipt of its )op0, the Contra)tor mai&s or other/ise f'rnishes a /ritten appea& to the Dtit&e of emp&o0eeF. ?n )onne)tion /ith an0 s')h appea&, the Contra)tor sha&& $e afforded an opport'nit0 to $e heard and to offer eviden)e in s'pport of its position. The de)ision of the Dtit&e of emp&o0eeF sha&& $e $inding 'pon the Contra)tor and the Contra)tor sha&& a$ide $e the de)ision. Performance Durin" Dis ute Un&ess other/ise dire)ted $0 8Ie)ipient9, Contra)tor sha&& )ontin'e performan)e 'nder this Contra)t /hi&e matters in disp'te are $eing reso&ved. Claims for Dama"es Sho'&d either part0 to the Contra)t s'ffer in@'r0 or damage to person or propert0 $e)a'se of an0 a)t or omission of the part0 or of an0 of his emp&o0ees, agents or others for /hose a)ts he is &ega&&0 &ia$&e, a )&aim for damages therefor sha&& $e made in /riting to s')h other part0 /ithin a reasona$&e time after the first o$servan)e of s')h in@'r0 of damage. Remedies Un&ess this )ontra)t provides other/ise, a&& )&aims, )o'nter)&aims, disp'tes and other matters in <'estion $et/een the 8Ie)ipient9 and the Contra)tor arising o't of or re&ating to this agreement or its $rea)h /i&& $e de)ided $0 ar$itration if the parties m't'a&&0 agree, or in a )o'rt of )ompetent @'risdi)tion /ithin the State in /hi)h the 8Ie)ipient9 is &o)ated. Ri"/ts and Remedies The d'ties and o$&igations imposed $0 the Contra)t Do)'ments and the rights and remedies avai&a$&e there'nder sha&& $e in addition to and not a &imitation of an0 d'ties, o$&igations, rights and remedies other/ise imposed or avai&a$&e $0 &a/. #o a)tion or fai&'re to a)t $0 the 8Ie)ipient9, 8Ar)hite)t9 or Contra)tor sha&& )onstit'te a /aiver of an0 right or d't0 afforded an0 of them 'nder the Contra)t, nor sha&& an0 s')h a)tion or fai&'re to a)t )onstit'te an approva& of or a)<'ies)en)e in an0 $rea)h there'nder, e;)ept as ma0 $e spe)ifi)a&&0 agreed in /riting.
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*2$ PATENT AND RI<CTS IN DATA -4 CFR Part .:( .8 CFR Parts (5 and (8 A lica&ilit# to Contracts -atent and rights in data re<'irements for federa&&0 assisted pro@e)ts O#75 app&0 to resear)h pro@e)ts in /hi)h *TA finan)es the p'rpose of the grant is to finan)e the deve&opment of a prod')t or information. These patent and data rights re<'irements do not app&0 to )apita& pro@e)ts or operating pro@e)ts, even tho'gh a sma&& portion of the sa&es pri)e ma0 )over the )ost of prod')t deve&opment or /riting the 'serKs man'a&. Flo1 Do1n The -atent and Iights in Data re<'irements app&0 to a&& )ontra)tors and their )ontra)ts at ever0 tier. Model Clause7Lan"ua"e The *TA patent )&a'se is s'$stantia&&0 simi&ar to the te;t of 49 C.*.I. -art !9, Appendi; A, Se)tion 5, $'t the rights in data )&a'se ref&e)ts *TA o$@e)tives. *or patent rights, *TA is governed $0 *edera& &a/ and reg'&ation. *or data rights, the te;t on )op0rights is ins'ffi)ient to meet *TAKs p'rposes for a/arding resear)h grants. This mode& )&a'se, /ith &arger rights as a standard, is proposed /ith the 'nderstanding that this standard )o'&d $e modified to *TAKs needs. CO#TIACTS ?#OO7O?#= :R-:I?.:#TA7, D:O:7O-.:#TA7, OI I:S:AICB WOIY. A. Ri"/ts in Data This fo&&o/ing re<'irements app&0 to ea)h )ontra)t invo&ving e;perimenta&, deve&opmenta& or resear)h /or2( 8!9 The term >s'$@e)t data> 'sed in this )&a'se means re)orded information, /hether or not )op0righted, that is de&ivered or spe)ified to $e de&ivered 'nder the )ontra)t. The term in)&'des graphi) or pi)toria& de&ineation in media s')h as dra/ings or photographsQ te;t in spe)ifi)ations or re&ated performan)e or design t0pe do)'mentsQ ma)hine forms s')h as p'n)hed )ards, magneti) tape, or )omp'ter memor0 printo'tsQ and information retained in )omp'ter memor0. :;amp&es in)&'de, $'t are not &imited to( )omp'ter soft/are, engineering dra/ings and asso)iated &ists, spe)ifi)ations, standards, pro)ess sheets, man'a&s, te)hni)a& reports, )ata&og item identifi)ations, and re&ated information. The term >s'$@e)t data> does not in)&'de finan)ia& reports, )ost ana&0ses, and simi&ar information in)identa& to )ontra)t administration. 829 The fo&&o/ing restri)tions app&0 to a&& s'$@e)t data first prod')ed in the performan)e of the )ontra)t to /hi)h this Atta)hment has $een added( 8a9 :;)ept for its o/n interna& 'se, the -'r)haser or Contra)tor ma0 not p'$&ish or reprod')e s'$@e)t data in /ho&e or in part, or in an0 manner or form, nor ma0 the -'r)haser or Contra)tor
-age 4"
a'thoriGe others to do so, /itho't the /ritten )onsent of the *edera& =overnment, 'nti& s')h time as the *edera& =overnment ma0 have either re&eased or approved the re&ease of s')h data to the p'$&i)Q this restri)tion on p'$&i)ation, ho/ever, does not app&0 to an0 )ontra)t /ith an a)ademi) instit'tion. 8$9 ?n a))ordan)e /ith 49 C.*.I. T !H."4 and 49 C.*.I. T !9."%, the *edera& =overnment reserves a ro0a&t0 free, non e;)&'sive and irrevo)a$&e &i)ense to reprod')e, p'$&ish, or other/ise 'se, and to a'thoriGe others to 'se, for >*edera& =overnment p'rposes,> an0 s'$@e)t data or )op0right des)ri$ed in s'$se)tions 8298$9! and 8298$92 of this )&a'se $e&o/. As 'sed in the previo's senten)e, >for *edera& =overnment p'rposes,> means 'se on&0 for the dire)t p'rposes of the *edera& =overnment. Witho't the )op0right o/nerKs )onsent, the *edera& =overnment ma0 not e;tend its *edera& &i)ense to an0 other part0. !. An0 s'$@e)t data deve&oped 'nder that )ontra)t, /hether or not a )op0right has $een o$tainedQ and 2. An0 rights of )op0right p'r)hased $0 the -'r)haser or Contra)tor 'sing *edera& assistan)e in /ho&e or in part provided $0 *TA. 8)9 When *TA a/ards *edera& assistan)e for e;perimenta&, deve&opmenta&, or resear)h /or2, it is *TAKs genera& intention to in)rease transportation 2no/&edge avai&a$&e to the p'$&i), rather than to restri)t the $enefits res'&ting from the /or2 to parti)ipants in that /or2. Therefore, 'n&ess *TA determines other/ise, the -'r)haser and the Contra)tor performing e;perimenta&, deve&opmenta&, or resear)h /or2 re<'ired $0 the 'nder&0ing )ontra)t to /hi)h this Atta)hment is added agrees to permit *TA to ma2e avai&a$&e to the p'$&i), either *TAKs &i)ense in the )op0right to an0 s'$@e)t data deve&oped in the )o'rse of that )ontra)t, or a )op0 of the s'$@e)t data first prod')ed 'nder the )ontra)t for /hi)h a )op0right has not $een o$tained. ?f the e;perimenta&, deve&opmenta&, or resear)h /or2, /hi)h is the s'$@e)t of the 'nder&0ing )ontra)t, is not )omp&eted for an0 reason /hatsoever, a&& data deve&oped 'nder that )ontra)t sha&& $e)ome s'$@e)t data as defined in s'$se)tion 8a9 of this )&a'se and sha&& $e de&ivered as the *edera& =overnment ma0 dire)t. This s'$se)tion 8)9 , ho/ever, does not app&0 to adaptations of a'tomati) data pro)essing e<'ipment or programs for the -'r)haser or Contra)torKs 'se /hose )osts are finan)ed in /ho&e or in part /ith *edera& assistan)e provided $0 *TA for transportation )apita& pro@e)ts. 8d9 Un&ess prohi$ited $0 state &a/, 'pon re<'est $0 the *edera& =overnment, the -'r)haser and the Contra)tor agree to indemnif0, save, and ho&d harm&ess the *edera& =overnment, its offi)ers, agents, and emp&o0ees a)ting /ithin the s)ope of their offi)ia& d'ties against an0 &ia$i&it0, in)&'ding )osts and e;penses, res'&ting from an0 /i&&f'& or intentiona& vio&ation $0 the -'r)haser or Contra)tor of proprietar0 rights, )op0rights, or right of priva)0, arising o't of the p'$&i)ation, trans&ation, reprod')tion, de&iver0, 'se, or disposition of an0 data f'rnished 'nder that )ontra)t. #either the -'r)haser nor the Contra)tor sha&& $e re<'ired to indemnif0 the *edera& =overnment for an0 s')h &ia$i&it0 arising o't of the /rongf'& a)t of an0 emp&o0ee, offi)ia&, or agents of the *edera& =overnment.
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8e9 #othing )ontained in this )&a'se on rights in data sha&& imp&0 a &i)ense to the *edera& =overnment 'nder an0 patent or $e )onstr'ed as affe)ting the s)ope of an0 &i)ense or other right other/ise granted to the *edera& =overnment 'nder an0 patent. 8f9 Data deve&oped $0 the -'r)haser or Contra)tor and finan)ed entire&0 /itho't 'sing *edera& assistan)e provided $0 the *edera& =overnment that has $een in)orporated into /or2 re<'ired $0 the 'nder&0ing )ontra)t to /hi)h this Atta)hment has $een added is e;empt from the re<'irements of s'$se)tions 8$9, 8)9, and 8d9 of this )&a'se, provided that the -'r)haser or Contra)tor identifies that data in /riting at the time of de&iver0 of the )ontra)t /or2. 8g9 Un&ess *TA determines other/ise, the Contra)tor agrees to in)&'de these re<'irements in ea)h s'$)ontra)t for e;perimenta&, deve&opmenta&, or resear)h /or2 finan)ed in /ho&e or in part /ith *edera& assistan)e provided $0 *TA. 8"9 Un&ess the *edera& =overnment &ater ma2es a )ontrar0 determination in /riting, irrespe)tive of the Contra)torKs stat's 8i.e., a &arge $'siness, sma&& $'siness, state government or state instr'menta&it0, &o)a& government, nonprofit organiGation, instit'tion of higher ed')ation, individ'a&, et).9, the -'r)haser and the Contra)tor agree to ta2e the ne)essar0 a)tions to provide, thro'gh *TA, those rights in that invention d'e the *edera& =overnment as des)ri$ed in U.S. Department of Commer)e reg'&ations, >Iights to ?nventions .ade $0 #onprofit OrganiGations and Sma&& ,'siness *irms Under =overnment =rants, Contra)ts and Cooperative Agreements,> "1 C.*.I. -art 40!. 849 The Contra)tor a&so agrees to in)&'de these re<'irements in ea)h s'$)ontra)t for e;perimenta&, deve&opmenta&, or resear)h /or2 finan)ed in /ho&e or in part /ith *edera& assistan)e provided $0 *TA. ,. Patent Ri"/ts The fo&&o/ing re<'irements app&0 to ea)h )ontra)t invo&ving e;perimenta&, deve&opmenta&, or resear)h /or2( 8!9 =enera& ?f an0 invention, improvement, or dis)over0 is )on)eived or first a)t'a&&0 red')ed to pra)ti)e in the )o'rse of or 'nder the )ontra)t to /hi)h this Atta)hment has $een added, and that invention, improvement, or dis)over0 is patenta$&e 'nder the &a/s of the United States of Ameri)a or an0 foreign )o'ntr0, the -'r)haser and Contra)tor agree to ta2e a)tions ne)essar0 to provide immediate noti)e and a detai&ed report to the part0 at a higher tier 'nti& *TA is '&timate&0 notified. 829 Un&ess the *edera& =overnment &ater ma2es a )ontrar0 determination in /riting, irrespe)tive of the Contra)torKs stat's 8a &arge $'siness, sma&& $'siness, state government or state instr'menta&it0, &o)a& government, nonprofit organiGation, instit'tion of higher ed')ation, individ'a&9, the -'r)haser and the Contra)tor agree to ta2e the ne)essar0 a)tions to provide,
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thro'gh *TA, those rights in that invention d'e the *edera& =overnment as des)ri$ed in U.S. Department of Commer)e reg'&ations, >Iights to ?nventions .ade $0 #onprofit OrganiGations and Sma&& ,'siness *irms Under =overnment =rants, Contra)ts and Cooperative Agreements,> "1 C.*.I. -art 40!. 8"9 The Contra)tor a&so agrees to in)&'de the re<'irements of this )&a'se in ea)h s'$)ontra)t for e;perimenta&, deve&opmenta&, or resear)h /or2 finan)ed in /ho&e or in part /ith *edera& assistan)e provided $0 *TA. *4$ TRANSIT EMPLODEE PROTECTIPE A<REEMENTS .8 U$S$C$ G 0-(:! G 0-((! and G 0--*8 CFR Part *(0 A lica&ilit# to Contracts The Transit :mp&o0ee -rote)tive -rovisions app&0 to ea)h )ontra)t for transit operations performed $0 emp&o0ees of a Contra)tor re)ogniGed $0 *TA to $e a transit operator. 8,e)a'se transit operations invo&ve man0 a)tivities apart from dire)t&0 driving or operating transit vehi)&es, *TA determines /hi)h a)tivities )onstit'te transit >operations> for p'rposes of this )&a'se.9 Flo1 Do1n These provisions are app&i)a$&e to a&& )ontra)ts and s'$)ontra)ts at ever0 tier. Model Clause7Lan"ua"e Sin)e no mandator0 &ang'age is spe)ified, *TA had deve&oped the fo&&o/ing &ang'age( Transit Em lo#ee Protecti%e Pro%isions$ 8!9 The Contra)tor agrees to the )omp&0 /ith app&i)a$&e transit emp&o0ee prote)tive re<'irements as fo&&o/s( 8a9 =enera& Transit :mp&o0ee -rote)tive Ie<'irements To the e;tent that *TA determines that transit operations are invo&ved, the Contra)tor agrees to )arr0 o't the transit operations /or2 on the 'nder&0ing )ontra)t in )omp&ian)e /ith terms and )onditions determined $0 the U.S. Se)retar0 of 7a$or to $e fair and e<'ita$&e to prote)t the interests of emp&o0ees emp&o0ed 'nder this )ontra)t and to meet the emp&o0ee prote)tive re<'irements of 49 U.S.C. A 5"""8$9, and U.S. DO7 g'ide&ines at 29 C.*.I. -art 2!5, and an0 amendments thereto. These terms and )onditions are identified in the &etter of )ertifi)ation from the U.S. DO7 to *TA app&i)a$&e to the *TA Ie)ipientKs pro@e)t from /hi)h *edera& assistan)e is provided to s'pport /or2 on the 'nder&0ing )ontra)t. The Contra)tor agrees to )arr0 o't that /or2 in )omp&ian)e /ith the )onditions stated in that U.S. DO7 &etter. The re<'irements of this s'$se)tion 8!9, ho/ever, do not app&0 to an0 )ontra)t finan)ed /ith *edera& assistan)e provided $0 *TA either for pro@e)ts for e&der&0 individ'a&s and individ'a&s /ith disa$i&ities a'thoriGed $0 49 U.S.C. T 5"!08a9829, or for pro@e)ts for non'r$aniGed areas a'thoriGed $0 49 U.S.C. T 5"!!. A&ternate provisions for those pro@e)ts are set forth in s'$se)tions 8$9 and 8)9 of this )&a'se.
-age 4%
8$9 Transit :mp&o0ee -rote)tive Ie<'irements for -ro@e)ts A'thoriGed $0 49 U.S.C. T 5"!08a9 829 for :&der&0 ?ndivid'a&s and ?ndivid'a&s /ith Disa$i&ities ?f the )ontra)t invo&ves transit operations finan)ed in /ho&e or in part /ith *edera& assistan)e a'thoriGed $0 49 U.S.C. T 5"!08a9829, and if the U.S. Se)retar0 of Transportation has determined or determines in the f't're that the emp&o0ee prote)tive re<'irements of 49 U.S.C. T 5"""8$9 are ne)essar0 or appropriate for the state and the p'$&i) $od0 s'$re)ipient for /hi)h /or2 is performed on the 'nder&0ing )ontra)t, the Contra)tor agrees to )arr0 o't the -ro@e)t in )omp&ian)e /ith the terms and )onditions determined $0 the U.S. Se)retar0 of 7a$or to meet the re<'irements of 49 U.S.C. T 5"""8$9, U.S. DO7 g'ide&ines at 29 C.*.I. -art 2!5, and an0 amendments thereto. These terms and )onditions are identified in the U.S. DO7Ks &etter of )ertifi)ation to *TA, the date of /hi)h is set forth =rant Agreement or Cooperative Agreement /ith the state. The Contra)tor agrees to perform transit operations in )onne)tion /ith the 'nder&0ing )ontra)t in )omp&ian)e /ith the )onditions stated in that U.S. DO7 &etter. 8)9 Transit :mp&o0ee -rote)tive Ie<'irements for -ro@e)ts A'thoriGed $0 49 U.S.C. T 5"!! in #on'r$aniGed Areas ?f the )ontra)t invo&ves transit operations finan)ed in /ho&e or in part /ith *edera& assistan)e a'thoriGed $0 49 U.S.C. T 5"!!, the Contra)tor agrees to )omp&0 /ith the terms and )onditions of the Spe)ia& Warrant0 for the #on'r$aniGed Area -rogram agreed to $0 the U.S. Se)retaries of Transportation and 7a$or, dated .a0 "!, !919, and the pro)ed'res imp&emented $0 U.S. DO7 or an0 revision thereto. 829 The Contra)tor a&so agrees to in)&'de the an0 app&i)a$&e re<'irements in ea)h s'$)ontra)t invo&ving transit operations finan)ed in /ho&e or in part /ith *edera& assistan)e provided $0 *TA. *5$ DISADPANTA<ED BUSINESS ENTERPRISE 6DBE9 .8 CFR Part *2 BacE"round and A lica&ilit# The ne/est version on the Department of Transportation+s Disadvantaged ,'siness :nterprise 8D,:9 program $e)ame effe)tive 6'&0 !%, 200". The r'&e provides g'idan)e to grantees on the 'se of overa&& and )ontra)t goa&s, re<'irement to in)&'de D,: provisions in s'$)ontra)ts, eva&'ating D,: parti)ipation /here spe)ifi) )ontra)t goa&s have $een set, reporting re<'irements, and rep&a)ement of D,: s'$)ontra)tors. Additiona&&0, the D,: program di)tates pa0ment terms and )onditions 8in)&'ding &imitations on retainage9 app&i)a$&e to a&& s'$)ontra)tors regard&ess of /hether the0 are D,: firms or not. The D,: program app&ies to a&& DOT assisted )ontra)ting a)tivities. A forma& )&a'se s')h as that $e&o/ m'st $e in)&'ded in a&& )ontra)ts a$ove the mi)ro p'r)hase &eve&. The re<'irements of )&a'se s'$se)tion $ f&o/ do/n to s'$)ontra)ts.
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A s'$stantia& )hange to the pa0ment provisions in this ne/est version of -art 2% )on)erns retainage 8see se)tion 2%.299. =rantee )hoi)es )on)erning retainage sho'&d $e ref&e)ted in the &ang'age )hoi)es in )&a'se s'$se)tion d. Clause Lan"ua"e The fo&&o/ing )&a'se &ang'age is s'ggested, not mandator0. ?t in)orporates the pa0ment terms and )onditions app&i)a$&e to a&& s'$)ontra)tors $ased in -art 2% as /e&& as those re&ated on&0 to D,: s'$)ontra)tors. The s'ggested &ang'age a&&o/s for the options avai&a$&e to grantees )on)erning retainage, spe)ifi) )ontra)t goa&s, and eva&'ation of D,: s'$)ontra)ting parti)ipation /hen spe)ifi) )ontra)t goa&s have $een esta$&ished. Disad%anta"ed Business Enter rises a. This )ontra)t is s'$@e)t to the re<'irements of Tit&e 49, Code of *edera& Ieg'&ations, -art 2%, &artici%ation $y "isadvanta!ed ?usiness 8nter%rises in "e%artment of Trans%ortation Financial Assistance &ro!rams. The nationa& goa& for parti)ipation of Disadvantaged ,'siness :nterprises 8D,:9 is !0P. The agen)0+s overa&& goa& for D,: parti)ipation is ]] O$ A separate )ontra)t goa& >of ]] O DBE artici ation /as? >/as not? $een esta$&ished for this pro)'rement. $. The )ontra)tor sha&& not dis)riminate on the $asis of ra)e, )o&or, nationa& origin, or se; in the performan)e of this )ontra)t. The )ontra)tor sha&& )arr0 o't app&i)a$&e re<'irements of 49 C*I -art 2% in the a/ard and administration of this DOT assisted )ontra)t. *ai&'re $0 the )ontra)tor to )arr0 o't these re<'irements is a materia& $rea)h of this )ontra)t, /hi)h ma0 res'&t in the termination of this )ontra)t or s')h other remed0 as [insert a"enc# name\ deems appropriate. :a)h s'$)ontra)t the )ontra)tor signs /ith a s'$)ontra)tor m'st in)&'de the ass'ran)e in this paragraph 8see 49 C*I 2%.!"8$99. ). [<* a se#arate contract goal has $een esta$lished, use the *ollo/ingK ,iddersAofferors are re<'ired to do)'ment s'ffi)ient D,: parti)ipation to meet these goa&s or, a&ternative&0, do)'ment ade<'ate good faith efforts to do so, as provided for in 49 C*I 2%.5". A/ard of this )ontra)t is )onditioned on s'$mission of the fo&&o/ing >concurrent 1it/ and accom an#in" sealed &id? >concurrent 1it/ and accom an#in" an initial ro osal? > rior to a1ard?( !. 2. ". The names and addresses of D,: firms that /i&& parti)ipate in this )ontra)tQ A des)ription of the /or2 ea)h D,: /i&& performQ The do&&ar amo'nt of the parti)ipation of ea)h D,: firm parti)ipatingQ
4. Written do)'mentation of the $idderAofferor+s )ommitment to 'se a D,: s'$)ontra)tor /hose parti)ipation it s'$mits to meet the )ontra)t goa&Q 5. Written )onfirmation from the D,: that it is parti)ipating in the )ontra)t as provided in the prime )ontra)tor+s )ommitmentQ and
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%.
?f the )ontra)t goa& is not met, eviden)e of good faith efforts to do so.
>Bidders?>Offerors? m'st present the information re<'ired a$ove >as a matter of res onsi%eness? >1it/ initial ro osals? > rior to contract a1ard? 8see 49 C*I 2%.5"8"99. [<* no se#arate contract goal has $een esta$lished, use the *ollo/ingK The s'))essf'& $idderAofferor /i&& $e re<'ired to report its D,: parti)ipation o$tained thro'gh ra)e ne'tra& means thro'gho't the period of performan)e. d. The )ontra)tor is re<'ired to pa0 its s'$)ontra)tors performing /or2 re&ated to this )ontra)t for satisfa)tor0 performan)e of that /or2 no &ater than "0 da0s after the )ontra)tor+s re)eipt of pa0ment for that /or2 from the [insert a"enc# name\. ?n addition, >t/e contractor ma# not /old retaina"e from its su&contractors$? >is reAuired to return an# retaina"e a#ments to t/ose su&contractors 1it/in -: da#s after t/e su&contractorKs 1orE related to t/is contract is satisfactoril# com leted$? >is reAuired to return an# retaina"e a#ments to t/ose su&contractors 1it/in -: da#s after incremental acce tance of t/e su&contractorMs 1orE &# t/e [insert a"enc# name\ and contractorMs recei t of t/e artial retaina"e a#ment related to t/e su&contractorMs 1orE$? e. The )ontra)tor m'st prompt&0 notif0 [insert a"enc# name\, /henever a D,: s'$)ontra)tor performing /or2 re&ated to this )ontra)t is terminated or fai&s to )omp&ete its /or2, and m'st ma2e good faith efforts to engage another D,: s'$)ontra)tor to perform at &east the same amo'nt of /or2. The )ontra)tor ma0 not terminate an0 D,: s'$)ontra)tor and perform that /or2 thro'gh its o/n for)es or those of an affi&iate /itho't prior /ritten )onsent of [insert a"enc# name\. *8$ > RESERPED ? -:$ INCORPORATION OF FEDERAL TRANSIT ADMINISTRATION 6FTA9 TERMS FTA Circular .**:$(E A lica&ilit# to Contracts The in)orporation of *TA terms app&ies to a&& )ontra)ts. Flo1 Do1n The in)orporation of *TA terms has 'n&imited f&o/ do/n. Model Clause7Lan"ua"e *TA has deve&oped the fo&&o/ing in)orporation of terms &ang'age3 Incor oration of Federal Transit Administration 6FTA9 Terms The pre)eding provisions in)&'de, in part, )ertain Standard Terms and Conditions re<'ired $0 DOT, /hether or not e;press&0 set forth in the pre)eding )ontra)t provisions. A&& )ontra)t'a& provisions re<'ired $0 DOT, as set forth in *TA Cir)'&ar 4220.!:, are here$0 in)orporated $0 referen)e. An0thing to the )ontrar0 herein not/ithstanding, a&& *TA mandated terms sha&& $e deemed to )ontro& in the
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event of a )onf&i)t /ith other provisions )ontained in this Agreement. The Contra)tor sha&& not perform an0 a)t, fai& to perform an0 a)t, or ref'se to )omp&0 /ith an0 8name of grantee9 re<'ests /hi)h /o'&d )a'se 8name of grantee9 to $e in vio&ation of the *TA terms and )onditions. -($ DRU< AND ALCOCOL TESTIN< .8 U$S$C$ G0--( .8 CFR Parts 20- and 20. A lica&ilit# to Contracts The Dr'g and A&)oho& testing provisions app&0 to Operationa& Servi)e Contra)ts. Flo1 Do1n ReAuirements An0one /ho performs a safet0 sensitive f'n)tion for the re)ipient or s'$re)ipient is re<'ired to )omp&0 /ith 49 C*I %5" and %54, /ith )ertain e;)eptions for )ontra)ts invo&ving maintenan)e servi)es. .aintenan)e )ontra)tors for non 'r$aniGed area form'&a program grantees are not s'$@e)t to the r'&es. A&so, the r'&es do not app&0 to maintenan)e s'$)ontra)tors. Model Clause7Lan"ua"e Introduction *TAKs dr'g and a&)oho& r'&es, 49 C*I %5" and %54, respe)tive&0, are 'ni<'e among the reg'&ations iss'ed $0 *TA. *irst, the0 re<'ire re)ipients to ens're that an0 entit0 performing a safet0 sensitive f'n)tion on the re)ipientKs $eha&f 8's'a&&0 s'$re)ipients andAor )ontra)tors9 imp&ement a )omp&e; dr'g and a&)oho& testing program that )omp&ies /ith -arts %5" and %54. Se)ond, the r'&es )ondition the re)eipt of )ertain 2inds of *TA f'nding on the re)ipientKs )omp&ian)e /ith the r'&esQ th's, the re)ipient is not in )omp&ian)e /ith the r'&es 'n&ess ever0 entit0 that performs a safet0 sensitive f'n)tion on the re)ipientKs $eha&f is in )omp&ian)e /ith the r'&es. Third, the r'&es do not spe)if0 ho/ a re)ipient ens'res that its s'$re)ipients andAor )ontra)tors )omp&0 /ith them. Bo/ a re)ipient does so depends on severa& fa)tors, in)&'ding /hether the )ontra)tor is )overed independent&0 $0 the dr'g and a&)oho& r'&es of another Department of Transportation operating administration, the nat're of the re&ationship that the re)ipient has /ith the )ontra)tor, and the finan)ia& reso'r)es avai&a$&e to the re)ipient to oversee the )ontra)torKs dr'g and a&)oho& testing program. ?n short, there are a variet0 of /a0s a re)ipient )an ens're that its s'$re)ipients and )ontra)tors )omp&0 /ith the r'&es. Therefore, *TA has deve&oped three mode& )ontra)t provisions for re)ipients to 'se >as is> or to modif0 to fit their parti)'&ar sit'ations. E; lanation of Model Contract Clauses Under Option !, the re)ipient ens'res the )ontra)torKs )omp&ian)e /ith the r'&es $0 re<'iring the )ontra)tor to parti)ipate in a dr'g and a&)oho& program administered $0 the re)ipient. The advantages of doing this are o$vio's( the re)ipient maintains tota& )ontro& over its )omp&ian)e /ith 49 C*I %5" and %54. The disadvantage is that the re)ipient, /hi)h ma0 not dire)t&0 emp&o0 an0 safet0 sensitive emp&o0ees, has to imp&ement a )omp&e; testing program. Therefore,
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this ma0 $e a pra)ti)a& option on&0 for those re)ipients /hi)h have a testing program for their emp&o0ees, and )an add the )ontra)torKs safet0 sensitive emp&o0ees to that program. Under Option 2, the re)ipient re&ies on the )ontra)tor to imp&ement a dr'g and a&)oho& testing program that )omp&ies /ith 49 C*I %5" and %54, $'t retains the a$i&it0 to monitor the )ontra)torKs testing programQ th's, the re)ipient has &ess )ontro& over its )omp&ian)e /ith the dr'g and a&)oho& testing r'&es than it does 'nder option !. The advantage of this approa)h is that it p&a)es the responsi$i&it0 for )omp&0ing /ith the r'&es on the entit0 that is a)t'a&&0 performing the safet0 sensitive f'n)tion. .oreover, it reserves to the re)ipient the po/er to ens're that the )ontra)tor )omp&ies /ith the program. The disadvantage of Option 2 is that /itho't ade<'ate monitoring of the )ontra)torKs program, the re)ipient ma0 find itse&f o't of )omp&ian)e /ith the r'&es. Under option ", the re)ipient spe)ifies some or a&& of the spe)ifi) feat'res of a )ontra)torKs dr'g and a&)oho& )omp&ian)e program. Th's, it re<'ires the re)ipient to de)ide /hat it /ants to do and ho/ it /ants to do it. The advantage of this option is that the re)ipient has more )ontro& over the )ontra)torKs dr'g and a&)oho& testing program, 0et it is not a)t'a&&0 administering the testing program. The disadvantage is that the re)ipient has to spe)if0 and 'nderstand )&ear&0 /hat it /ants to do and /h0. Dru" and Alco/ol Testin" O tion ( The )ontra)tor agrees to( (a) %artici%ate in (!rantee4s or reci%ient4s) dru! and alco)ol %ro!ram esta$lis)ed in com%liance wit) A: CFR J5C and J5A. Dru" and Alco/ol Testin" O tion * The )ontra)tor agrees to esta$&ish and imp&ement a dr'g and a&)oho& testing program that )omp&ies /ith 49 C*I -arts %5" and %54, prod')e an0 do)'mentation ne)essar0 to esta$&ish its )omp&ian)e /ith -arts %5" and %54, and permit an0 a'thoriGed representative of the United States Department of Transportation or its operating administrations, the State Oversight Agen)0 of 8name of State9, or the 8insert name of grantee9, to inspe)t the fa)i&ities and re)ords asso)iated /ith the imp&ementation of the dr'g and a&)oho& testing program as re<'ired 'nder 49 C*I -arts %5" and %54 and revie/ the testing pro)ess. The )ontra)tor agrees f'rther to )ertif0 ann'a&&0 its )omp&ian)e /ith -arts %5" and %54 $efore 8insert date9 and to s'$mit the .anagement ?nformation S0stem 8.?S9 reports $efore 8insert date $efore .ar)h !59 to 8insert tit&e and address of person responsi$&e for re)eiving information9. To )ertif0 )omp&ian)e the )ontra)tor sha&& 'se the >S'$stan)e A$'se Certifi)ations> in the >Ann'a& 7ist of Certifi)ations and Ass'ran)es for *edera& Transit Administration =rants and Cooperative Agreements,> /hi)h is p'$&ished ann'a&&0 in the *edera& Iegister.
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Dru" and Alco/ol Testin" O tion The )ontra)tor agrees to esta$&ish and imp&ement a dr'g and a&)oho& testing program that )omp&ies /ith 49 C*I -arts %5" and %54, prod')e an0 do)'mentation ne)essar0 to esta$&ish its )omp&ian)e /ith -arts %5" and %54, and permit an0 a'thoriGed representative of the United States Department of Transportation or its operating administrations, the State Oversight Agen)0 of 8name of State9, or the 8insert name of grantee9, to inspe)t the fa)i&ities and re)ords asso)iated /ith the imp&ementation of the dr'g and a&)oho& testing program as re<'ired 'nder 49 C*I -arts %5" and %54 and revie/ the testing pro)ess. The )ontra)tor agrees f'rther to )ertif0 ann'a&&0 its )omp&ian)e /ith -arts %5" and %54 $efore 8insert date9 and to s'$mit the .anagement ?nformation S0stem 8.?S9 reports $efore 8insert date $efore .ar)h !59 to 8insert tit&e and address of person responsi$&e for re)eiving information9. To )ertif0 )omp&ian)e the )ontra)tor sha&& 'se the >S'$stan)e A$'se Certifi)ations> in the >Ann'a& 7ist of Certifi)ations and Ass'ran)es for *edera& Transit Administration =rants and Cooperative Agreements,> /hi)h is p'$&ished ann'a&&0 in the *edera& Iegister. The Contra)tor agrees f'rther to DSe&e)t a, $, or )F 8a9 s'$mit $efore 8insert date or 'pon re<'est9 a )op0 of the -o&i)0 Statement deve&oped to imp&ement its dr'g and a&)oho& testing programQ OI 8$9 adopt 8insert tit&e of the -o&i)0 Statement the re)ipient /ishes the )ontra)tor to 'se9 as its po&i)0 statement as re<'ired 'nder 49 C*I %5" and %54Q OI 8)9 s'$mit for revie/ and approva& $efore 8insert date or 'pon re<'est9 a )op0 of its -o&i)0 Statement deve&oped to imp&ement its dr'g and a&)oho& testing program. ?n addition, the )ontra)tor agrees to( 8to $e determined $0 the re)ipient, $'t ma0 address areas s')h as( the se&e)tion of the )ertified &a$orator0, s'$stan)e a$'se professiona&, or .edi)a& Ievie/ Offi)er, or the 'se of a )onsorti'm9.
,est -ra)ti)es -ro)'rement .an'a& Chapter !! Disp'tes !
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*:D:IA7 TIA#S?T AD.?#?STIAT?O#

BEST PRACTICES PROCUREMENT MANUAL
TABLE OF CONTENTS 6A endi; A$* ) <o%ernin" Documents = Dear Collea"ue Letters9
A$* = Dear Collea"ue Letters !. 6an'ar0 20, 2004( -erforman)e and -a0ment ,onding Ie<'irements 2. .a0 29, 2002( -o&i)0 Changes and C&arifi)ations re( -ro)'rement Transa)tions ". 6'ne !5, 200!( *eed$a)2 on the :ffe)tiveness of *TA+s Third -art0 Contra)ting Ie<'irements and -ro)'rement Assistan)e -rogram 4. De)em$er 2!, !99H( 6oint -ro)'rements, 52Y Comp&ian)e Ie<'irements 5. O)to$er !, !99H( Ieven'e Contra)ts, -igg0$a)2ing, Tag ons %. Septem$er 4, !99H( A-TA+s Standard ,'s -ro)'rement ='ide&ines 1. .ar)h !H, !991( ,'0 Ameri)a Ie<'irements of -re A/ard and -ost De&iver0
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0o' are pr'dent&0 'ti&iGing this important too&. ? &oo2 for/ard to sharing the so'nd and innovative pra)ti)es that the transit ind'str0 a&/a0s generates. Sin)ere&0,
6ennifer 7. Dorn
-age 4
*$ Ma# *8! *::*3 Polic# C/an"es and Clarifications re3 Procurement Transactions
U.S. Department of Transportation
Administrator .a0 29, 2002
400 Seventh St. S.W. Washington, D.C. 20590
Federal Transit Administration
C 0H 02
Dear Co&&eag'e( ? am p&eased to anno'n)e a n'm$er of *edera& Transit Administration 8*TA9 po&i)0 )hanges and )&arifi)ations that /e $e&ieve /i&& simp&if0 0o'r pro)'rement transa)tions, as /e&& as severa& initiatives intended to identif0 and share s'))essf'& pro)'rement pra)ti)es. The )hanges and )&arifi)ations invo&ve( " " " " Ies)ission of five 0ear )ontra)t term &imitationsQ Use of : )ommer)e for pro)'rementsQ I'&es on advan)e pa0mentsQ and The effe)t of 'sing of vario's *TA f'nding so'r)es for operating and preventive maintenan)e )ontra)ts.
?n addition, 0o' /i&& find information on a ne/ ,est -ra)ti)es initiative, as /e&& as the introd')tion of the :;perimenta& -ro)'rement 7a$orator0 initiative. Thro'gh these initiatives, /e hope to pers'ade 0o' to share /hat /or2s /e&& and en)o'rage ne/ thin2ing a$o't ho/ pro)'rement pra)ti)es )an $e simp&ified and improved. This information /i&& a&so $e made avai&a$&e on the *TA p'$&i) /e$site, and ? en)o'rage 0o' to share it /ith 0o'r pro)'rement staff. ? a&so /ant to than2 the man0 transit agen)ies that have offered )omments on ho/ to improve pro)'rement pra)ti)es, and parti)'&ar&0 those /ho responded to o'r re)ent s'rve0. POLICD CCAN<ES AND CLARIFICATIONS A. *TA C 4220.!D, -aragraph 18m9 Contra)t Term 7imitation
The five 0ear )ontra)t term &imitation for *TA f'nded )ontra)ts, in)&'ding >reven'e )ontra)ts,> a/arded $0 grant re)ipients is here$0 res)inded. Ieven'e )ontra)ts are those that 'ti&iGe *TA
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f'nded rea& estate, e<'ipment and fa)i&ities to generate reven'e. With this res)ission, grant re)ipients no &onger need to o$tain *TA approva& for )ontra)t terms e;)eeding five 0ears. -&ease
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note, ho/ever, that )ontra)ts for ro&&ing sto)2 and rep&a)ement parts are sti&& &imited to not more than five 0ears, as re<'ired $0 stat'te. 849 United States Code Se)tion 5"2%8$99 =rantees are e;pe)ted to )ontin'e to $e @'di)io's in esta$&ishing and e;tending their )ontra)t terms. =ood pro)'rement pra)ti)e di)tates that grantees enter into )ontra)t terms no &onger than minima&&0 ne)essar0 to a))omp&ish the p'rpose of the )ontra)t. ,. : Commer)e : Commer)e has $een and )ontin'es to $e an a&&o/a$&e means to )ond')t pro)'rements. ?f a grantee )hooses to 'ti&iGe : Commer)e, /ritten pro)ed'res m'st $e deve&oped and a&& re<'irements for f'&& and open )ompetition m'st $e met. C. *TA C4220.!D, -aragraph !2.a. Advan)e -a0ments
There )ontin'es to $e some )onf'sion a$o't *TA po&i)0 /ith respe)t to advan)e pa0ments, stemming from the interpretation of Ameri)an -'$&i) Transportation Asso)iation+s Standard ,'s -ro)'rement ='ide&ines and s'$se<'ent *TA Dear Co&&eag'e 7etters. The )&arifi)ation of re<'irements regarding advan)e pa0ments provided in the Dear Co&&eag'e 7etter of 6'ne !5, 200!, remains a))'rate, $'t is f'rther )&arified as fo&&o/s( *TA C 4220.!D, -aragraph !2, >-a0ment -rovision in Third -art0 Contra)ts,> states( >*TA does not a'thoriGe and /i&& not parti)ipate in f'nding pa0ments to a )ontra)tor prior to the in)'rren)e of )osts $0 the )ontra)tor 'n&ess prior /ritten )on)'rren)e is o$tained from *TA.> This po&i)0 remains 'n)hanged( *TA f'nds ma0 not $e 'sed to ma2e advan)e pa0ments 'n&ess prior /ritten )on)'rren)e is o$tained from *TA. There is no prohi$ition on a grant re)ipient+s 'se of &o)a& f'nds for advan)e pa0ments. Bo/ever, advan)e pa0ments made /ith &o)a& f'nds $efore a grant has $een a/arded, or $efore the iss'an)e of a &etter of no pre@'di)e or other pre a/ard a'thorit0, are ine&igi$&e for reim$'rsement. D. *TA C 4220.!D, -aragraph 4 L App&i)a$i&it0 8Iegarding Operating Assistan)e and -reventive .aintenan)e9 *TA grant re)ipients /ho 'ti&iGe *TA form'&a f'nds for operating assistan)e are re<'ired to fo&&o/ the re<'irements of the *TA C 4220.!D for a&& operating )ontra)ts. Sin)e *TA form'&a f'nds pa0 a per)entage of the net operating defi)it, s')h )ontra)ts )annot $e segregated and *TA C 4220.!D m'st $e app&ied. Congestion .itigation and Air N'a&it0 8C.AN9 and 6o$ A))essAIeverse Comm'te 86AIC9 pro@e)t f'nds ma0 $e 'sed for operations. =rantees m'st fo&&o/ the Cir)'&ar re<'irements for an0 spe)ifi) )ontra)ts that 'ti&iGe C.AN or 6AIC f'nds. Bo/ever, the 'se of C.AN and 6AIC f'nds for operations does not trigger the app&i)a$i&it0 of the Cir)'&ar to a&& other operating )ontra)ts.
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=rantees /ho 'ti&iGe form'&a )apita& f'nds for preventive maintenan)e )ontra)ts are s'$@e)t to the fo&&o/ing re<'irements 'nder the Cir)'&ar. ?f the *TA form'&a f'nds are a&&o)ated to dis)rete )ontra)ts identified in the grant app&i)ation for preventive maintenan)e, then *TA C 4220.!D /i&& app&0 on&0 to those spe)ifi) )ontra)ts. ?f the *TA form'&a f'nds are not a&&o)ated to dis)rete )ontra)ts in the grant app&i)ation, then a&& preventive maintenan)e )ontra)ts are s'$@e)t to the re<'irements of the Cir)'&ar. BEST PRACTICES INITIATIPES A. ,est -ra)ti)es Contest Whi&e the ,est -ra)ti)es -ro)'rement .an'a& 8,--.9 )ontains some e;)e&&ent e;amp&es of grantee >$est pra)ti)es,> /e are eager to en)o'rage the sharing of man0 more of these pra)ti)a& ideas among grantees. :ver0one /ho s'$mits a $est pra)ti)e that is in)orporated into the .an'a& /i&& $e p'$&i)&0 re)ogniGed at Ameri)an -'$&i) Transit Asso)iation+s Ann'a& .eeting. ?n addition, one individ'a&Aagen)0 /i&& $e re)ogniGed at the ann'a& A/ards Ceremon0, and A-TA /i&& /aive the )onferen)e registration fee for the person /ho s'$mits the /inning >$est pra)ti)e.> ,. :;perimenta& -ro)'rement 7a$orator0 *TA a&so is )reating an e;perimenta& >pro)'rement &a$orator0.> The goa& of this initiative is to a&&o/ and en)o'rage grantees to improve or stream&ine their )ontra)ting pro)esses thro'gh innovative approa)hes. =rantees are invited to propose pro)'rement innovations for )onsideration and approva& $0 *TA. ?f the e;periment is s'))essf'&, the pra)ti)e /i&& $e p'$&ished in the ,est -ra)ti)es -ro)'rement .an'a&. .ore information a$o't the ,est -ra)ti)es Contest and the :;perimenta& -ro)'rement 7a$orator0 initiative /i&& $e p'$&ished soon on the *TA /e$site, the ,--. /e$site, and the A-TA /e$site, and /i&& $e made avai&a$&e at *TA )onferen)es and #ationa& Transit ?nstit'te pro)'rement )o'rses. ? appre)iate 0o'r )ontin'ed s'pport, and &oo2 for/ard to /or2ing /ith 0o' to f'rther improve pro)'rement pra)ti)es in the transportation ind'str0. Iegiona& Offi)e. Sin)ere&0,
6ennifer 7. Dorn
-age H
-$ Lune (0! *::(3 Feed&acE on t/e Effecti%eness of FTAMs T/ird Part# Contractin" ReAuirements and Procurement Assistance Pro"ram
U.S. Department Of Transportation
400 Seventh St. S.W. Washington, D.C. 20590 Dep't0 Administrator
C 0H 0!
6'ne !5, 200! Dear Co&&eag'e( ?n .a0 !999, the *edera& Transit Administration 8*TA9 iss'ed a s'rve0 inviting feed$a)2 on the effe)tiveness of *TA+s Third -art0 Contra)ting Ie<'irements and -ro)'rement Assistan)e -rogram. ,ased on )omments and s'ggestions in the s'rve0 responses, *TA imp&emented )ertain )hanges to these t/o areas of o'r program. These )hanges in)&'de offering an in)reased n'm$er and variet0 of pro)'rement )o'rsesQ adding to and refining the >,est -ra)ti)es -ro)'rement .an'a&Q> and posting pro)'rement <'estions and ans/ers on the ?nternet. D'ring a /or2shop he&d on .a0 9, 200&, at the Ameri)an -'$&i) Transportation Asso)iation 8A-TA9 ,'s and -aratransit Conferen)e in Ca&gar0, Canada, *TA provided an 'pdate on the a)tions it has 'nderta2en. The parti)ipants fe&t it /as ne)essar0 to /or2 )o&&a$orative&0 to address the 5 0ear term &imitation iss'e at a /or2shop dedi)ated so&e&0 to this topi) at the *a&& A-TA ,'s :<'ipment and .aintenan)eA-ro)'rement and .ateria&s .anagement Conferen)e in *t. Worth, Te;as. ,oth *TA and A-TA agreed to this re)ommendation. ?t /as a&so agreed that in the interim, *TA /o'&d e;empt )ertain )&asses of )ontra)ts from the re<'irement to o$tain prior *TA approva& for periods of performan)e in e;)ess of a 5 0ear term, and that *TA /o'&d )&arif0 other areas of Cir)'&ar 4220.!D, >*TA Third -art0 Contra)ting Ie<'irements,> that the s'rve0 revea&ed /ere in need of f'rther )&arifi)ation. A. *TA Cir)'&ar 4220.!D, -aragraph 18m9 L Contra)t -eriod of -erforman)e 7imitation -aragraph 18m9 states, >grantees sha&& not enter into either servi)e or s'pp&0 )ontra)ts /ith a period of performan)e e;)eeding five 0ears in)&'sive of options /itho't prior /ritten *TA approva&. A ma;im'm of five 0ears+ re<'irements ma0 $e a)<'ired 'nder a sing&e )ontra)t /itho't prior *TA approva& 8in)&'ding ro&&ing sto)29, even tho'gh de&iver0 ma0 o))'r $e0ond five 0ears after the date of )ontra)t a/ard. *TA approva& is re<'ired for )ontra)t e;tensions or rene/a&s $e0ond a five 0ear term. This &imitation does not app&0 to )onstr')tion )ontra)ts or to
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&eases of rea& propert0 for the &ife of a transit asset to $e )onstr')ted on s')h propert0 8/hi)h
-age !0
period /i&& e;tend $e0ond five 0ears in order to f'&fi&& the stat'tor0 re<'irements that grantees have Usatisfa)tor0 )ontin'ing )ontro&.+9> *'rther, a $&an2et /aiver is granted to e;empt the fo&&o/ing )&ass of )ontra)ts from the re<'irement to o$tain *TA prior approva& for a )ontra)t term in e;)ess of five 0ears( #on )onstr')tion re&ated )ontra)ts s')h as proprietar0 soft/are maintenan)e, )ons'&ting and other professiona& servi)es )ontra)ts 8e;)ept )ontra)ts for genera& engineering servi)es9 a/arded for a dis)rete, identifia$&e item, e.g., a parti)'&ar pie)e of &itigation, a dis)rete tort )&aim, and a'dit of a parti)'&ar transa)tion or fis)a& 0ear. This $&an2et /aiver, ho/ever, does not )over the fo&&o/ing )&ass( A&& )ontra)ts for genera& engineering )ons'&tant servi)es are non e;empt. Tas2 order t0pe arrangements for engineering, ar)hite)t'ra&, &ega&, a))o'nting, non proprietar0 soft/are maintenan)e or other professiona& servi)es not tied dire)t&0 to a re&ated )onstr')tion )ontra)t or a dis)rete identifia$&e item, re<'ire prior *TA approva& for periods of performan)e in e;)ess of five 0ears. ,. Ieven'e Contra)ts L *ive 5ear Term 7imitation ?t is *TA+s po&i)0 that a&& persons $e afforded an e<'a& opport'nit0 to $enefit from $'siness opport'nities arising from 'se of *TA f'nded assets. ?t is a&so *TA+s po&i)0 to en)o'rage *TA re)ipients to ma;imiGe non fare$o; reven'es thro'gh )ontra)t'a& and other appropriate arrangements invo&ving non interfering 'ses of s')h *TA f'nded assets. The esta$&ishment of a five 0ear )ontra)t term &imitation is one means $0 /hi)h *TA see2s to $a&an)e these potentia&&0 )onf&i)ting po&i)ies. A revie/ of re)ent re<'ests for e;emption from the 5 0ear &imitation in the area of >reven'e )ontra)ts,> ho/ever, s'ggests that prior *TA approva& is not re<'ired 'nder )ertain )onditions. A))ording&0, prior *TA approva& of the fo&&o/ing )ategories of >reven'e )ontra)ts> in e;)ess of five 0ears is no &onger re<'ired( !9. #on e;)&'sive reven'e )ontra)ts( Ieven'e )ontra)ts invo&ving $'siness opport'nities, that d'e to their nat're and the )apa)it0 of the transit s0stem, are not &imited $0 ph0si)a& )onstraints or grantee po&i)0 to an0 spe)ifi) n'm$er of entrants do not re<'ire prior *TA approva&. *or e;amp&e, if a grantee a&&o/s an0 vendor to insta&& fi$er opti) )a$&e /ithin the grantee+s right of /a0 on reasona$&e terms and )onditions, 'nti& s')h time as the grantee de)ides to &imit the n'm$er of entrants d'e to )apa)it0 of the s0stem or other fa)tors, there is no need for prior *TA revie/. Another e;amp&e might $e a&&o/ing m'&tip&e vendors to p't transmission to/ers or antennas on grantee propert0. 29. :;)&'sive reven'e )ontra)ts 'nder )ertain )onditions( Ieven'e )ontra)ts invo&ving $'siness opport'nities d'e to their nat're and the )apa)it0 of the transit s0stem /hi)h are &imited to a spe)ifi) n'm$er of entrants, /hether d'e to ph0si)a& )onstraints or grantee po&i)0, do not re<'ire prior *TA approva& /here the fo&&o/ing )onditions e;ist and are do)'mented in the grantee+s fi&es(
-age !!
a9. Contra)ts are a/arded thro'gh a )ompetitive pro)essQ $9. :)onomi) ana&0sis sho/s that a )ontra)t term &onger than five 0ears is ne)essar0 to a&&o/ the )ontra)tor to re)over an0 re<'ired )apita& investment and a reasona$&e ret'rn on investment ta2ing into a))o'nt $oth ta; 8depre)iation9 and e)onomi)A$'siness )onsiderations. "9. Transit OrientedA6oint Deve&opment Ieven'e Contra)ts. Transit Oriented Deve&opments and 6oint Deve&opment pro@e)ts 'nderta2en in )onforman)e /ith *TA @oint deve&opment po&i)ies ma0 s'$se<'ent&0 give rise to reven'e )ontra)ts. -rior *TA )on)'rren)e in a )ontra)t term in e;)ess of five 0ears is governed $0 the same )riteria as des)ri$ed in paragraphs !9 and 29 a$ove. #ote that *TA ro'tine oversight and )on)'rren)e in transit oriented deve&opment and @oint deve&opment pro@e)ts remains 'n)hanged $0 this e;emption. C. *TA Cir)'&ar 4220.!D, -aragraph !2 -a0ment -rovisions in Third -art0 Contra)ts The s'rve0 res'&ts indi)ated that there is some )onf'sion )on)erning the 'se of advan)e pa0ments. With regard to advan)e pa0ments, the Cir)'&ar states, >*TA does not a'thoriGe and /i&& not parti)ipate in f'nding pa0ments to a )ontra)tor prior to the in)'rren)e of )osts $0 the )ontra)tor 'n&ess prior /ritten )on)'rren)e is o$tained from *TA.> This po&i)0 is 'n)hanged. To )&arif0, ho/ever, there is no prohi$ition on a =rantee+s 'sing &o)a& f'nds for advan)e pa0ments /here a grant has $een a/arded or the pro@e)t is )overed $0 a &etter of no pre@'di)e, or other pre a/ard a'thorit0. -&ease note that advan)e pa0ments made $efore a grant has $een a/arded or $efore the pro@e)t is )overed $0 a &etter of no pre@'di)e or other pre a/ard a'thorit0, /i&& $e ine&igi$&e for reim$'rsement. D. -reventive .aintenan)e -reventive maintenan)e is an e&igi$&e e;pense 'nder *TA+s )apita& and operating assistan)e programs depending 'pon the siGe of the pop'&ation served $0 the grantee. =rantees have as2ed ho/ the re<'irements of *TA Cir)'&ar 4220.!D app&0 /hen preventive maintenan)e a)tivities are )ontra)ted to third parties 'nder a )apita& assistan)e program rather than an operating assistan)e program. The <'estion arises $e)a'se of the different treatment of )apita& and operating )ontra)ts $0 the Cir)'&ar in a))ordan)e /ith app&i)a$&e &a/. There are t/o options. Under the )apita& assistan)e program, the grantee ma0 app&0 the Cir)'&ar on&0 to the spe)ifi) preventive maintenan)e )ontra)ts identified in the grant app&i)ation, $'t not others. A&ternative&0, the grantee ma0 e&e)t to re)eive preventive maintenan)e f'nds as a )ertain per)entage of tota& maintenan)e )osts. Under this a&ternative, the re<'irements of the Cir)'&ar app&0 a)ross the $oard to a&& of the grantee+s maintenan)e )ontra)ts. -&ease note that 'nder the &atter option, grantees ma0 not se&e)tive&0 e;)&'de )ertain maintenan)e )ontra)ts from the tota& operations amo'nt on /hi)h the0 $ase their per)entage )a&)'&ation. A&& of the )hanges ref&e)ted in this >Dear Co&&eag'e> &etter are effe)tive immediate&0.
-age !2
*TA does appre)iate 0o'r feed$a)2. -&ease )ontin'e to give 's 0o'r s'ggestions for improving o'r pro)'rement program. Sin)ere&0, Signed Biram 6. Wa&2er A)ting Dep't0 Administrator
-age !"
.$ Decem&er *(! (8853 Loint Procurements! D*Q Com liance ReAuirements
400 Seventh St. S.W. Washington, D.C. 20590 The Administrator
C 9H "9
De)em$er 2!, !99H
Dear Co&&eag'e( Ie)ent&0, there have $een severa& re<'ests for more insight and g'idan)e on the *edera& Transit AdministrationKs 8*TA9 po&i)0 and phi&osoph0 on vario's aspe)ts of pro)'rement, and spe)ifi)a&&0 on the 'se of different strategies and approa)hes in f'&fi&&ing 5ear 2000 852Y9 )omp&ian)e re<'irements. The minim'm re<'irements app&i)a$&e to *TA f'nded pro)'rements are set forth in *TA Cir)'&ar 4220.!D, >Third -art0 Contra)ting ='ide&ines.> The Cir)'&ar has $een designed to provide grant re)ipients ma;im'm f&e;i$i&it0 to operate /ithin the frame/or2 of the minim'm re<'irements. ?n 2eeping /ith the dis)retionar0 po/ers and a'thorit0 /hi)h are vested in grant re)ipients thro'gh the Cir)'&ar, the *TA f'&&0 s'pports the 'se of )reative and innovative pro)'rement te)hni<'es and strategies. =rant re)ipients ma0 'ti&iGe these too&s to pro)'re their a)t'a& needs and for the p'rpose of &everaging $argaining po/er, a)hieving e)onomies of s)a&e andAor f'&fi&&ing 52Y )omp&ian)e re<'irements. *'rther, re)ipients are afforded the freedom to )o&&a$orate and to partner /ith ea)h other in order to fa)i&itate and to ma;imiGe the 'se of innovative pro)'rement te)hni<'es. This in)&'des, $'t is not &imited to, )ond')ting @oint pro)'rementsQ pro)eeding /ith a/ards that res'&t from proper >pigg0$a)2ing> transa)tionsQ andAor deve&oping standard spe)ifi)ations for )onso&idated p'r)hases to address )ommon needs for e<'ipment and servi)es s')h as es)a&ators, 52Y te)hno&og0, hard/are and soft/are. *TA re)ent&0 )&arified its position on >pigg0$a)2ing> and >tag one> in a >Dear Co&&eag'e> &etter dated O)to$er !, !99H, a )op0 of /hi)h is atta)hed. -resent&0, that po&i)0 app&ies to ro&&ing sto)2 pro)'rements on&0Q ho/ever, )onsideration is $eing given to e;panding the po&i)0 to )over other pro)'rements in the near f't're. 6oint pro)'rements ma0 $e )ond')ted on a regiona&, state/ide or nationa& $asis p'rs'ant to the needs and app&i)a$&e reg'&ator0 and stat'tor0 re<'irements of the parties to the pro)'rement. The *TA has spe)ifi)a&&0 en)o'raged the 'se of @oint pro)'rements for ro&&ing sto)2. ='idan)e on
-age !4
innovative pro)'rement te)hni<'es, s')h as @oint pro)'rements, /i&& $e )overed in the ne;t iss'e of the >,est -ra)ti)es -ro)'rement .an'a&> 8,--.9. C'rrent&0, the ,--. )ontains an e;amp&e
-age !5
of a state/ide a)<'isition of $'ses /hi)h /as provided $0 the #e/ 5or2 Department of Transportation to fa)i&itate and to assist others in 'se of the @oint pro)'rement )on)ept. Iegard&ess of the pro)'rement methodo&og0 or strateg0 )hosen, the )ontro&&ing re<'irement is that *TA f'nded pro)'rements m'st )onform to the re<'irements of *TA Cir)'&ar 4220.?D. The g'iding prin)ip&e of the Cir)'&ar is that pro)'rements m'st $e )ond')ted in a manner that provides for f'&& and open )ompetition. Bo/ever, this does not pre)&'de the a/ard of )ontra)ts on a non )ompetitive $asis /hen s'pported $0 so'nd reasons do)'mented in the re)ipientsK fi&es. *or e;amp&e, so'nd reasons ma0 e;ist to either )ond')t a &imited )ompetition among a fe/ 2no/n so'r)es or to ma2e a/ard to a sing&e so'r)e on a non)ompetitive $asis in order to f'&fi&& the 52Y )omp&ian)e re<'irements. Spe)ifi)a&&0, the a/ard of a non)ompetitive )ontra)t to address a 52Y pro$&em /o'&d $e permissi$&e if )ir)'mstan)es e;isted /here time is of the essen)e to avoid )reating a safet0 haGard in the operation of 0o'r transit s0stem. Sho'&d 0o' have <'estions or desire assistan)e in addressing pro)'rement iss'es re&ating to f'&fi&&ing 52Y )omp&ian)e re<'irements, p&ease )onta)t 0o'r respe)tive *TA Iegiona& Offi)e. Sin)ere&0,
=ordon 6. 7inton
-age !%
0$ Octo&er (! (8853 Re%enue Contracts! Pi""#&acEin"! Ta")ons
C 9H 25 O)to$er !, !99H
Dear Co&&eag'e( ? am p&eased to anno'n)e the pro)'rement initiatives 'nder/a0 in the *edera& Transit Administration 8*TA9 and to provide re)ent *TA po&i)0 on some 2e0 areas /hi)h /i&& impa)t 0o'r pro)'rement transa)tions. *irst, the *TA has initiated steps to )ond')t a s'rve0 of its )'stomers /hose operations and $'siness transa)tions are impa)ted $0 the *TA Cir)'&ar 4220.&D, Third -art0 Contra)ting Ie<'irements. As 0o' ma0 re)a&&, the )ir)'&ar, as amended, /as iss'ed on O)to$er !, !995. The )ir)'&ar /as /e&& re)eived, and the feed$a)2 has $een )onsistent&0 favora$&e. Bo/ever, as /e strive to enhan)e )'stomer satisfa)tion thro'gh the )ontin'o's improvement in the de&iver0 of servi)es, the s'rve0 /i&& ena$&e 's to meas're the degree to /hi)h the needs of o'r grantees and ind'str0 have $een met. Se)ond, the *TA p&ans to iss'e the Third -art0 Contra)ting Ie<'irements as a forma& r'&e fo&&o/ing a #oti)e of -roposed I'&e .a2ing 8#-I.9. The #-I. /i&& afford $oth grantees and ind'str0 representatives the opport'nit0 to partner /ith the *TA thro'gh the e;)hange of ideas and re)ommendations to inf&'en)e and shape the fina& r'&e. Third, in response to n'mero's re<'ests for *TA po&i)0 and g'idan)e in some 2e0 areas, the fo&&o/ing po&i)0 and g'idan)e is effe)tive immediate&0 re&ating to transa)tions in the )ategories identified( !. >Tag ons> are not permitted. This term is defined as the adding on to the )ontra)ted <'antities 8$ase and option9 as origina&&0 advertised, )ompeted, and a/arded, /hether for the 'se of the $'0er or for others and then treating the add on portion as tho'gh it met the re<'irement of )ompetition. The term >pigg0$a)2ing> is defined as the post a/ard 'se of a )ontra)t'a& do)'mentApro)ess that a&&o/s someone /ho /as not )ontemp&ated in the origina& pro)'rement to p'r)hase the same s'pp&ies or e<'ipment thro'gh the origina&
2.
-age !1
do)'mentApro)ess. -igg0$a)2ing is permissi$&e /hen( 8a9 the so&i)itation do)'ment and the res'&tant )ontra)t )ontain an assigna$i&it0 )&a'se that provides for the assignment of a&& or part of the spe)ified de&ivera$&es as origina&&0 advertised, )ompeted, eva&'ated, and a/arded. This in)&'des the $ase and option <'antities. ?n addition, the origina& so&i)itation and res'&tant )ontra)t m'st )ontain $oth a minim'm and a ma;im'm <'antit0, /hi)h represent the reasona$&0 foreseea$&e needs of the parties to the so&i)itation. ". Ieven'e )ontra)ts are defined as third part0 )ontra)ts /hose primar0 p'rpose is to either generate reven'es in )onne)tion /ith a transit re&ated a)tivit0, or to )reate $'siness opport'nities 'ti&iGing an *TA f'nded asset. *TA re<'ires that these )ontra)ts $e a/arded 'ti&iGing )ompetitive se&e)tion pro)ed'res and prin)ip&es. The e;tent of and t0pe of )ompetition re<'ired is /ithin the dis)retionar0 @'dgment of the grantee. ?n addition, *TA re<'ires that the )ontra)t term $e &imited to a period of 5 0ears, e;)ept in those instan)es /here *TA has /aived this re<'irement. Ie<'ests for /aivers from the term &imitation ma0 $e s'$mitted to 0o'r Iegiona& Offi)e. ?n those sit'ations /here *TA ma0 provide prior approva& on a pro@e)t 8e.g., Transit Oriented Deve&opment pro@e)ts, Cross ,order &eases9 the /aiver for a reven'e )ontra)t in e;)ess of five 0ears ma0 $e o$tained as part of the initia& *TA approva& of the pro@e)t.
='idan)e on ea)h of these pro)'rement )ategories /i&& $e p'$&ished in the ,est -ra)ti)es -ro)'rement .an'a& /ithin the ne;t fe/ months. *ina&&0, the Offi)e of *edera& -ro)'rement -o&i)0 is )'rrent&0 re e;amining the pro)'rement re<'irements in the Common =rant I'&es /hi)h form the $asis for the re<'irements )ontained in 4220.&D. ?f 0o' /ish to s'ggest ideas or )hanges to the Common =rant I'&es, p&ease )onta)t the Offi)e of A)<'isition and =rant .anagement, Offi)e of the Se)retar0 at the address $e&o/ or )a&& area )ode 82029 "%% 42H9. .r. Io$ert =. Ta0&or Chief, =rants .anagement Division, . %0 Offi)e of the Se)retar0 of Transportation Washington, DC 20590
? &oo2 for/ard to 0o'r )ontin'ed s'pport and inva&'a$&e )ontri$'tions to/ard these efforts. Sin)ere&0,
-age !H
=ordon 6. 7inton
-age !9
2$ Se tem&er .! (8853 APTAMs Standard Bus Procurement <uidelines
C 9H !%
Septem$er 4, !99H Dear Co&&eag'e( With the -'$&i)ation of the Standard ,'s -ro)'rement ='ide&ines 8S,-=9, ? iss'ed a &etter prono'n)ing m0 s'pport of the )o&&a$orative efforts of the Ameri)an -'$&i) Transit Asso)iation 8A-TA9 and the *edera& Transit Administration 8*TA9. ?n that &etter ? ass'red A-TA mem$ers that an0 *TA f'nded pro)'rement in )onforman)e /ith the -hase ? g'ide&ines /o'&d $e deemed to )omp&0 /ith *TAKs third part0 pro)'rement g'ide&ines /ith respe)t to the areas addressed. Ie)ent&0, it has )ome to m0 attention that m0 &etter has )reated some )onf'sion regarding its app&i)ation and impa)t on the re<'irements of third part0 )ontra)ting set forth in the *TA Cir)'&ar 4220.&D. To )&arif0 this iss'e, ? /ish to reiterate that the re<'irements for *TA f'nded pro)'rements are )overed in *TA Cir)'&ar 4220.?D. ? strong&0 'rge grantees desiring to )ond')t *TA f'nded $'s pro)'rements 'ti&iGing the S,-= to ens're there are no )onf&i)ts /ith the *TA )ir)'&ar. Sho'&d )&arifi)ation $e re<'ired, grantees sho'&d )onta)t their appropriate *TA regiona& offi)e for g'idan)e.
?n )&osing, ? hope this )&arifies an0 )onf'sion re&ating to *TA pro)'rement re<'irements, and ? offer m0 )ontin'ed s'pport to this effort and those in the f't're. Sin)ere&0,
-age 20
=ordon 6. 7inton
-age 2!
4$ Marc/ (5! (8843 Bu# America ReAuirements of Pre)A1ard and Post)Deli%er#
C 91 0"
.ar)h !H, !991 Dear Co&&eag'e( A ,'0 Ameri)a pro$&em and fo&&o/ 'p s'rve0s of severa& -re A/ard and -ost De&iver0 Ievie/s of $'s pro)'rements indi)ates that man0 grantees and their )ontra)tors are not )ond')ting ade<'ate revie/s of the ,'0 Ameri)a re<'irements. The -re A/ard and -ost De&iver0 Ievie/s are designed to ens're that an0 vehi)&e p'r)hased /ith *edera& Transit Administration f'nds has at &east a %0 per)ent domesti) )ontent and 'ndergoes fina& assem$&0 in the United States. ?n genera&, /e have fo'nd that, parti)'&ar&0 in the )ase of fina& assem$&0 a)tivities, the grantees s'rve0ed did not provide a des)ription of the man'fa)t'rerKs fina& assem$&0 a)tivities and an eva&'ation of /hether ,'0 Ameri)a re<'irements /ere met. When a grantee re)eives information from a man'fa)t'rer, it m'st revie/ this information to determine /hether it is s'ffi)ient to determine if the man'fa)t'rer has met the ,'0 Ameri)a re<'irements. ?f the information is ins'ffi)ient, the grantee m'st ta2e /hatever steps are ne)essar0 to satisf0 itse&f that the man'fa)t'rer is )omp&0ing /ith the ,'0 Ameri)a re<'irements. This /i&& 's'a&&0 invo&ve see2ing additiona& information from the man'fa)t'rer. Other/ise, the grantee )ertifies )omp&ian)e /ith ,'0 Ameri)a at its o/n ris2. ?n order to assist 0o' in )ond')ting revie/s in a))ordan)e /ith the -re A/ard and -ost De&iver0 Ievie/ Ieg'&ation, 49 C*I -art %%", ? have o't&ined in the en)&os're the pro)ed'res a grantee m'st 'se to ens're that an0 vehi)&es it p'r)hases )omp&0 /ith ,'0 Ameri)a. ?f 0o' have an0 <'estions regarding ,'0 Ameri)a )omp&ian)e, p&ease )onta)t 0o'r Iegiona& Offi)e. Sin)ere&0,
-age 22
=ordon 6. 7inton :n)&os're
-age 2"
FEDERAL TRANSIT ADMINISTRATION <UIDANCE ON BUD AMERICA RE@UIREMENTS OF TCE PRE)ABARD AND POST)DELIPERD REPIEBS This g'idan)e on&0 addresses the ,'0 Ameri)a re<'irements of the -re A/ard and -ost De&iver0 Ievie/s. The -'r)haserKs Ie<'irements and the *edera& .otor Oehi)&e Safet0 Standards re<'irements m'st sti&& $e met. ?. -re A/ard Ievie/ 8$efore )ontra)t a/ard9 Ievie/ data and information on ,'0 Ameri)a )omp&ian)e s'$mitted $0 the man'fa)t'rer, in)&'ding -roposed domesti) )ontent of vehi)&e )omponents to determine that the %0 per)ent United States )ontent re<'irement is metQ -roposed fina& assem$&0 &o)ationQ and .an'fa)t'ring a)tivities that /i&& ta2e p&a)e d'ring fina& assem$&0. The man'fa)t'rer sho'&d provide eno'gh detai& a$o't these a)tivities to a&&o/ for the determination that these a)tivities /o'&d )onstit'te ade<'ate fina& assem$&0 'nder ,'0 Ameri)a re<'irements. ?f the man'fa)t'rer does not provide s'ffi)ient information, the grantee m'st see2 additiona& information. ?f the grantee determines that the a)tivities are not ade<'ate, the man'fa)t'rer m'st $e as2ed to s'$mit a revised man'fa)t'ring p&an. A )ontra)t ma0 not $e a/arded 'nti& the grantee is ass'red that the ,'0 Ameri)a re<'irements /i&& $e met. *ina& assem$&0 is defined in 49 C*I -art %%! ,'0 Ameri)a Ie<'irementsQ *ina& I'&e as >the )reation of the end prod')t from different e&ements $ro'ght together for that p'rpose thro'gh the app&i)ation of man'fa)t'ring pro)esses.> ?n the )ase of the man'fa)t're of a ne/ rai& )ar, fina& assem$&0 /o'&d t0pi)a&&0 in)&'de, as a minim'm, the fo&&o/ing operations( insta&&ation and inter)onne)tion of prop'&sion )ontro& e<'ipment, prop'&sion )oo&ing e<'ipment, $ra2e e<'ipment, energ0 so'r)es for a';i&iaries and )ontro&s, heating and air )onditioning, )omm'ni)ations e<'ipment, motors, /hee&s and a;&es, s'spensions and framesQ the inspe)tion and verifi)ation of a&& insta&&ation and inter)onne)tion /or2Q and the in p&ant testing of the stationar0 prod')t to verif0 a&& f'n)tions. ?n the )ase of a ne/ $'s, fina& assem$&0 /o'&d t0pi)a&&0 in)&'de, at a minim'm, the insta&&ation and inter)onne)tion of the engine, transmission, a;&es, in)&'ding the )oo&ing and $ra2ing s0stemsQ the insta&&ation and inter)onne)tion of the heating and air )onditioning e<'ipmentQ the insta&&ation of pne'mati) and e&e)tri)a& s0stems, door s0stems, passenger seats, passenger gra$ rai&s, destination signs, /hee&)hair &iftsQ and road testing, fina& inspe)tion, repairs and preparation of the vehi)&es for de&iver0. ?f a man'fa)t'rerKs fina& assem$&0 pro)esses do not in)&'de a&& the a)tivities that are
-age 24
t0pi)a&&0 )onsidered the minim'm re<'irements, it )an re<'est a *edera& Transit Administration 8*TA9 determination of )omp&ian)e. *TA /i&& revie/ these re<'ests on a )ase $0 )ase $asis to determine )omp&ian)e /ith ,'0 Ameri)a. The information revie/ed s'pports a -re A/ard ,'0 Ameri)a Certifi)ation that the proposed pro)'rement meets the domesti) )ontent, the fina& assem$&0 &o)ation and fina& assem$&0 a)tivities re<'irements. ??. -ost De&iver0 Ievie/ Ie<'irements 8d'ring and after man'fa)t'ring9 The grantee is re<'ired to( Ievie/ a)t'a& )omponent )ontent to ens're that the vehi)&e meets the %0 per)ent ,'0 Ameri)a domesti) )ontent re<'irementQ Che)2 that the fina& assem$&0 &o)ation is in the United States and the man'fa)t'rerKs fina& assem$&0 a)tivities meet the re<'irements o't&ined in paragraph ? a$oveQ and Bave an on site inspe)tor for rai& )ar pro)'rements and $'s pro)'rements of greater than !0 vehi)&es. The inspe)tor m'st verif0 that the a)t'a& man'fa)t'ring pro)esses are )onsistent /ith the information provided $0 the man'fa)t'rer or /ith the granteeKs o/n assessments. The post de&iver0 revie/s verifies a granteeKs -ost De&iver0 ,'0 Ameri)a Certifi)ation that the domesti) )ontent, fina& assem$&0 &o)ation and fina& assem$&0 a)tivities re<'irements are met. An0 <'estions or 'n)ertainties )on)erning these a)tivities sho'&d $e referred immediate&0 to *TA.
,est -ra)ti)es -ro)'rement .an'a& L Appendi; A.!
-age !
APPENDIV B$( EVAMPLE EPALUATION PROCESS :;)erpt from the Ameri)an -'$&i) Transit Asso)iation Standard ,'s -ro)'rement ='ide&ines Draft as of 87*:782
($($. PROPOSAL EPALUATION! NE<OTIATION AND SELECTION -roposa&s /i&& $e eva&'ated, negotiated, se&e)ted and an0 a/ard made in a))ordan)e /ith the )riteria and pro)ed'res des)ri$ed $e&o/. The approa)h and pro)ed'res are those /hi)h are app&i)a$&e to a )ompetitive negotiated pro)'rement /here$0 proposa&s are eva&'ated to determine /hi)h proposa&s are /ithin a )ompetitive range. Dis)'ssions and negotiations ma0 then $e )arried o't /ith Offerors /ithin the )ompetitive range, after /hi)h ,est and *ina& Offers 8,A*Os9 ma0 $e re<'ested. Bo/ever, the -ro)'ring Agen)0 ma0 se&e)t a proposa& for a/ard /itho't an0 dis)'ssions or negotiations or re<'est for an0 ,A*O8s9. S'$@e)t to the -ro)'ring Agen)0Ks right to re@e)t an0 or a&& proposa&s, the Offeror /i&& $e se&e)ted /hose proposa& is fo'nd to $e most advantageo's to the -ro)'ring Agen)0, $ased 'pon )onsideration of the )riteria of >N'a&ifi)ation Ie<'irements> 8Se)tion !.!.4.".!9 and >-roposa& :va&'ation Criteria> 8Se)tion !.!.4.".29 $e&o/. ($($.$( O enin" of Pro osals -roposa&s /i&& not $e p'$&i)&0 opened. A&& proposa&s and eva&'ations /i&& $e 2ept stri)t&0 )onfidentia& thro'gho't the eva&'ation, negotiation and se&e)tion pro)ess. On&0 the mem$ers of the Se&e)tion Committee and :va&'ation Team and other -ro)'ring Agen)0 offi)ia&s, emp&o0ees and agents having a &egitimate interest /i&& $e provided a))ess to the proposa&s and eva&'ation res'&ts d'ring this period. ($($.$* Selection Committee and E%aluation Team (N,T8= &rocurin! A!ency to s%ecify )ow it will or!ani@e t)e evaluation and a%%ro%riately title t)is section. T)e followin! is %rovided as an e7am%le.) A Selection Committee will $e esta$lis)ed. T)e Committee will ma(e all decisions re!ardin! t)e evaluations/ determination of res%onsi$le ,fferors and t)e com%etitive ran!e/ ne!otiations and t)e selection of t)e ,fferor/ if any/ t)at may $e awarded t)e Contract. T)e Selection Committee will $e assisted $y an 8valuation Team w)ic) will include officers/ em%loyees and a!ents of t)e &rocurin! A!ency. T)e 8valuation Team will carry out t)e detailed evaluations and re%ort all of its findin!s to t)e Selection Committee.
-age 2
($($.$- Pro osal Selection Process The fo&&o/ing des)ri$es the pro)ess $0 /hi)h proposa&s /i&& $e eva&'ated and a se&e)tion made for a potentia& a/ard. An0 s')h se&e)tion of a proposa& $0 a responsi$&e Offeror sha&& $e made $0 )onsideration of on&0 the )riteria of >N'a&ifi)ation Ie<'irements> 8Se)tion !.!.4.".!9 and >-roposa& :va&'ation Criteria> 8Se)tion !.!.4.".29 $e&o/. Se)tion !.!.4.".! spe)ifies the re<'irements for determining responsi$&e Offerors, a&& of /hi)h m'st $e met $0 an Offeror to $e fo'nd <'a&ified. *ina& determination of an OfferorKs <'a&ifi)ation /i&& $e made $ased 'pon a&& information re)eived d'ring the eva&'ation pro)ess and as a )ondition for a/ard. Se)tion !.!.4.".2 )ontains a&& of the eva&'ation )riteria, and their re&ative order of importan)e, $0 /hi)h a proposa& from a <'a&ified Offeror /i&& $e )onsidered for se&e)tion. An a/ard, if made, /i&& $e to a responsi$&e Offeror for a proposa& /hi)h is fo'nd to $e in the -ro)'ring Agen)0Ks $est interest, pri)e and other eva&'ation )riteria )onsidered. The pro)ed'res to $e fo&&o/ed for these eva&'ations are provided in >:va&'ation -ro)ed'res> 8Se)tion !.!.4.49 $e&o/. ($($.$-$( @ualification ReAuirements The fo&&o/ing are the re<'irements for <'a&if0ing responsi$&e Offerors. A&& of these re<'irements m'st $e metQ therefore, the0 are not &isted $0 an0 parti)'&ar order of importan)e. The Offeror of an0 proposa& that the Se&e)tion Committee finds not to meet these re<'irements, and )annot $e made to meet these re<'irements, ma0 $e determined $0 the Se&e)tion Committee not to $e responsi$&e and its proposa& re@e)ted. The re<'irements are as fo&&o/s( (N,T8= Requirements s)own in italics are e7am%les to serve as !uidelines. T)e &rocurin! A!ency is to c)oose and s%ecify t)e a%%ro%riate requirements.) ?. S'ffi)ient finan)ia& strength and reso'r)es and )apa$i&it0 to finan)e the /or2 to $e performed and )omp&ete the Contra)t in a satisfa)tor0 manner as meas'red $0( A. OfferorKs finan)ia& statements prepared in a))ordan)e /ith United States =enera&&0 A))epted A))o'nting -rin)ip&es 8=AA-9 and a'dited $0 an independent )ertified p'$&i) a))o'ntant a'thoriGed to pra)ti)e in the @'risdi)tion of either the -ro)'ring Agen)0 or the Offeror. (N,T8= &rocurin! A!ency to determine any minimum requirements for equity/ wor(in! ca%ital/ de$t/ etc. For e7am%le w)ere it would $e %ossi$le to esta$lis) some minimum numerical values for equity/ de$t to assets ratio/ etc. as a screenin! mec)anism/ t)is s)ould $e done on an a%%ro7imate $asis to avoid )avin! to rule out an ot)erwise via$le ,fferor w)ic) is 5ust $elow a ri!id minimum. ')atever measures are esta$lis)ed s)ould $e consistent wit) w)at t)e financial stren!t) needs are for t)e %ro5ect. +ere it is only im%ortant to determine if t)e ,fferor will )ave sufficient financial stren!t) to %ay its $ills on time/ fund t)e cas) flow/ and meet o$li!ations to su$contractors. T)e evaluation of financial stren!t) s)ould ta(e into account t)e ,fferor4s ot)er contractual commitments) ,. (N,T8= 3f %erformance $ondin! is s%ecified as an alternative to or to!et)er wit) ot)er financial qualifications and assurances) A$i&it0 to se)'re re<'ired $ond8s9
-age "
as eviden)ed $0 a &etter of )ommitment from an 'nder/riter )onfirming that the Offeror )an $e $onded for the re<'ired amo'nt. C. Wi&&ingness of an0 parent )ompan0 to provide the re<'ired finan)ia& g'arant0 eviden)ed $0 a &etter of )ommitment signed $0 an offi)er of the parent )ompan0 having the a'thorit0 to e;e)'te the parent )ompan0 g'arant0. (N,T8= 3f t)e ,fferor is a su$sidiary(ies) of anot)er com%any(ies) or is a 5oint venture/ !uaranties from t)e %arents and*or cor%orate mem$ers of t)e 5oint venture s)ould $e required. #an!ua!e can $e sti%ulated $y t)e &rocurin! A!ency to assure t)at t)e !uaranty is effective.) D. A$i&it0 to o$tain re<'ired ins'ran)e /ith )overage va&'es that meet minim'm re<'irements eviden)ed $0 a &etter from an 'nder/riter )onfirming that the Offeror )an $e ins'red for the re<'ired amo'nt. ??. :viden)e that the h'man and ph0si)a& reso'r)es are s'ffi)ient to perform the )ontra)t as spe)ified and ass're de&iver0 of a&& e<'ipment /ithin the time spe)ified in the Contra)t, to in)&'de( A. :ngineering, management and servi)e organiGations /ith s'ffi)ient personne& and re<'isite dis)ip&ines, &i)enses, s2i&&s, e;perien)e, and e<'ipment to )omp&ete the Contra)t as re<'ired and satisf0 an0 engineering or servi)e pro$&ems that ma0 arise d'ring the /arrant0 period. ,. Ade<'ate man'fa)t'ring fa)i&ities s'ffi)ient to prod')e and fa)tor0 test e<'ipment on s)hed'&e. C. A spare parts pro)'rement and distri$'tion s0stem s'ffi)ient to s'pport e<'ipment maintenan)e /itho't de&a0s and a servi)e organiGation /ith s2i&&s, e;perien)e, and e<'ipment s'ffi)ient to perform a&& /arrant0 and on site /or2. ???. :viden)e that Offeror is <'a&ified in a))ordan)e /ith -art 4( N'a&it0 Ass'ran)e -rovisions. ?O. :viden)e of satisfa)tor0 performan)e and integrit0 on )ontra)ts in ma2ing de&iveries on time, meeting spe)ifi)ations and /arrant0 provisions, parts avai&a$i&it0, and steps Offeror too2 to reso&ve an0 @'dgments, &iens, f&eet defe)ts histor0, and /arrant0 )&aims. :viden)e sha&& $e $0 )&ient referen)es. ($($.$-$* Pro osal E%aluation Criteria The fo&&o/ing are the )omp&ete )riteria, &isted $0 their re&ative degree of importan)e, $0 /hi)h proposa&s from responsi$&e Offerors /i&& $e eva&'ated and ran2ed for the p'rposes of determining an0 )ompetitive range and to ma2e an0 se&e)tion of a proposa& for a potentia& a/ard. An0 e;)eptions, )onditions, reservations or 'nderstandings e;p&i)it&0, f'&&0 and separate&0 stated on the >*orm for -roposa& Deviation 8Se)tion !.!.%.99 /hi)h do not )a'se the -ro)'ring Agen)0 to )onsider a proposa& to $e o'tside the )ompetitive range, /i&& $e eva&'ated a))ording to the respe)tive eva&'ation )riteria andAor s'$ )riteria /hi)h the0 affe)t.
-age 4
The )riteria are &isted n'meri)a&&0 $0 their re&ative order of importan)e. Bo/ever, )ertain )riteria ma0 have s'$ )riteria that are &isted $0 their re&ative order of importan)e /ithin the spe)ifi) )riterion the0 )omprise. A&so, )ertain s'$ )riteria ma0 have s'$ )riteria that are &isted $0 their re&ative degree of importan)e /ithin the spe)ifi) s'$ )riterion the0 )omprise. (N,T8= &rocurin! A!ency to define and insert t)e evaluation criteria. At t)e o%tion of t)e &rocurin! A!ency wei!)ts s)ould $e assi!ned to eac) criterion and su$1criterion and s)own in t)e document. T)e criteria are to $e listed $y t)eir order of im%ortance in t)e evaluation. T)e followin! are su!!ested cate!ories of criteria for &rocurin! A!ency consideration/ $ut not listed in su!!ested order of im%ortance= Tec)nical 0ualifications and Resources ana!ement &rice ,t)er Financial 3m%acts 87am%le evaluation criteria are %resented in A%%endi7 at t)e end of t)is Section 1.) ($($.$. E%aluation Procedures A&& aspe)ts of the eva&'ations of the proposa&s and an0 dis)'ssionsAnegotiations, in)&'ding do)'mentation, )orresponden)e and meetings, /i&& $e 2ept )onfidentia& d'ring the eva&'ation and negotiation pro)ess. -roposa&s /i&& $e ana&0Ged for )onforman)e /ith the instr')tions and re<'irements of the I*and Contra)t do)'ments. -roposa&s that do not )omp&0 /ith these instr')tions and do not in)&'de the re<'ired information ma0 $e re@e)ted as ins'ffi)ient or not $e )onsidered for the )ompetitive range. -ro)'ring Agen)0 reserves the right to re<'est an Offeror to provide an0 missing information and to ma2e )orre)tions. Offerors are advised that the detai&ed eva&'ation forms and pro)ed'res /i&& fo&&o/ the same proposa& format and organiGation spe)ified in >?nstr')tions to Offerors> 8Se)tion !.!."9. Therefore, Offerors sha&& pa0 )&ose attention to and stri)t&0 fo&&o/ a&& instr')tions. S'$mitta& of a proposa& /i&& signif0 that the Offeror has a))epted the /ho&e of the Contra)t do)'ments, e;)ept s')h )onditions, e;)eptions, reservations or 'nderstandings e;p&i)it&0, f'&&0 and separate&0 stated on the forms and a))ording to the instr')tions of >*orm for -roposa& Deviation.> An0 s')h )onditions, e;)eptions, reservations or 'nderstandings /hi)h do not res'&t in the re@e)tion of the proposa& are s'$@e)t to eva&'ation 'nder the )riteria of >-roposa& :va&'ation Criteria> 8Se)tion !.!.4.".29. :va&'ations /i&& $e made in stri)t a))ordan)e /ith a&& of the eva&'ation )riteria and pro)ed'res spe)ified in >-roposa& Se&e)tion -ro)ess> 8Se)tion !.!.4."9. The -ro)'ring Agen)0 /i&& se&e)t for an0 a/ard the highest ran2ed proposa& from a responsi$&e Offeror, <'a&ified 'nder >N'a&ifi)ation Ie<'irements> 8Se)tion !.!.4.".!9 /hi)h does not render this pro)'rement finan)ia&&0 infeasi$&e and is @'dged to $e most advantageo's to the -ro)'ring Agen)0 $ased on )onsideration of the eva&'ation >-roposa& :va&'ation Criteria> 8Se)tion !.!.4.".29.
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($($.$.$( E%aluations of Com etiti%e Pro osals I$ @ualification of Res onsi&le Offerors$ -roposa&s /i&& $e eva&'ated in a))ordan)e /ith re<'irements of >N'a&ifi)ation Ie<'irements> 8Se)tion !.!.4.".!9 to determine the responsi$i&it0 of Offerors. An0 proposa&s from Offerors /hom the -ro)'ring Agen)0 finds not to $e responsi$&e and finds )annot $e made to $e responsi$&e ma0 not $e )onsidered for the )ompetitive range. *ina& determination of an OfferorKs responsi$i&it0 /i&& $e made 'pon the $asis of initia& information s'$mitted in the proposa&, an0 information s'$mitted 'pon re<'est $0 the -ro)'ring Agen)0, information s'$mitted in a ,A*O and information res'&ting from -ro)'ring Agen)0 in<'ir0 of OfferorKs referen)es and its o/n 2no/&edge of the Offeror. II$ Detailed E%aluation of Pro osals and Determination of Com etiti%e Ran"e$ :a)h proposa& /i&& $e eva&'ated in a))ordan)e /ith the re<'irements and )riteria spe)ified in >-roposa& Se&e)tion -ro)ess> 8Se)tion !.!.4."9. The fo&&o/ing are the minim'm re<'irements that m'st $e met for a proposa& to $e )onsidered for the )ompetitive range. A&& of these re<'irements m'st $e metQ therefore, the0 are not &isted $0 an0 parti)'&ar order of importan)e. An0 proposa& that the -ro)'ring Agen)0 finds not to meet these re<'irements, and ma0 not $e made to meet these re<'irements, ma0 $e determined $0 the -ro)'ring Agen)0 to not $e )onsidered for the )ompetitive range. The re<'irements are as fo&&o/s( A. Offeror is initia&&0 eva&'ated as responsi$&e in a))ordan)e /ith the re<'irements of >N'a&ifi)ation Ie<'irements> 8Se)tion !.!.4.".!9, or that the -ro)'ring Agen)0 finds it is reasona$&e that said proposa& )an $e modified to meet said re<'irements. *ina& determination of responsi$i&it0 /i&& $e made /ith fina& eva&'ations. ,. Offeror has fo&&o/ed the instr')tions of the I*- and in)&'ded s'ffi)ient detai& information, s')h that the proposa& )an $e eva&'ated. An0 defi)ien)ies in this regard m'st $e determined $0 the -ro)'ring Agen)0 to $e either a defe)t that the -ro)'ring Agen)0 /i&& /aive in a))ordan)e /ith >A))eptan)eAIe@e)tion of -roposa&s> 8Se)tion !.!.5.!9 or that the proposa& )an $e s'ffi)ient&0 modified to meet these re<'irements. C. -roposa& pri)e /o'&d not render this pro)'rement finan)ia&&0 infeasi$&e, or it is reasona$&e that s')h proposa& pri)e might $e red')ed to render the pro)'rement finan)ia&&0 feasi$&e. The -ro)'ring Agen)0 /i&& )arr0 o't and do)'ment its eva&'ations in a))ordan)e /ith the )riteria and pro)ed'res of >-roposa& Se&e)tion -ro)ess> 8Se)tion !.!.4."9. An0 e;treme proposa& defi)ien)ies /hi)h ma0 render a proposa& 'na))epta$&e /i&& $e do)'mented. The -ro)'ring Agen)0 /i&& ma2e spe)ifi) note of <'estions, iss'es, )on)erns and areas re<'iring )&arifi)ation $0 Offerors and to $e dis)'ssed in an0 meetings /ith Offerors /hi)h the -ro)'ring Agen)0 finds to $e /ithin the )ompetitive range.
-age %
Ian2ings and spreads of the proposa&s against the eva&'ation )riteria /i&& then $e made $0 the -ro)'ring Agen)0 as a means of @'dging the overa&& re&ative spread $et/een proposa&s and of determining /hi)h proposa&s are /ithin the )ompetitive range, or ma0 $e reasona$&0 made to $e /ithin the )ompetitive range. III$Pro osals not 1it/in t/e Com etiti%e Ran"e$ Offerors of an0 proposa&s that have $een determined $0 the -ro)'ring Agen)0 as not in the )ompetitive range, and )annot $e reasona$&0 made to $e /ithin the )ompetitive range, /i&& $e notified in /riting, in)&'ding the short)omings of their proposa&s. IP$ Discussions 1it/ Offerors in t/e Com etiti%e Ran"e$ The Offerors /hose proposa&s are fo'nd $0 the -ro)'ring Agen)0 to $e /ithin the )ompetitive range, or ma0 $e reasona$&0 made to $e /ithin the )ompetitive range, /i&& $e notified and an0 <'estions andAor re<'ests for )&arifi)ations provided to them in /riting. :a)h s')h Offeror ma0 $e invited for a private intervie/8s9 and dis)'ssions /ith the -ro)'ring Agen)0 to dis)'ss ans/ers to /ritten or ora& <'estions, )&arifi)ations, and an0 fa)et of its proposa&. ?n the event that a proposa&, /hi)h has $een in)&'ded in the )ompetitive range, )ontains )onditions, e;)eptions, reservations or 'nderstandings to an0 Contra)t re<'irements as provided in >*orm for -roposa& Deviation,4 said )onditions, e;)eptions, reservations or 'nderstandings ma0 $e negotiated d'ring these meetings. Bo/ever, the -ro)'ring Agen)0 sha&& have the right to re@e)t an0 and a&& s')h )onditions andAor e;)eptions, and instr')t the Offeror to amend its proposa& and remove said )onditions andAor e;)eptionsQ and an0 Offeror fai&ing to do so ma0 )a'se the -ro)'ring Agen)0 to find s')h proposa& to $e o'tside the )ompetitive range. #o information, finan)ia& or other/ise, /i&& $e provided to an0 Offeror a$o't an0 of the proposa&s from other Offerors. Offerors /i&& not $e given a spe)ifi) pri)e or spe)ifi) finan)ia& re<'irements the0 m'st meet to gain f'rther )onsideration, e;)ept that proposed pri)es ma0 $e )onsidered to $e too high /ith respe)t to the mar2etp&a)e or 'na))epta$&e. Offerors /i&& not $e to&d of their ran2ings among the other Offerors. P$ Factor# and Site Pisits$ The -ro)'ring Agen)0 reserves the right to )ond')t fa)tor0 visits to inspe)t the OfferorKs fa)i&ities andAor other transit s0stems /hi)h the Offeror has s'pp&ied the same or simi&ar e<'ipment. PI$ Best and Final Offers 6BAFO9$ After a&& intervie/s have $een )omp&eted, ea)h of the Offerors in the )ompetitive range /i&& $e afforded the opport'nit0 to amend its proposa& and ma2e its ,A*O. The re<'est for ,A*Os sha&& in)&'de( A. #oti)e that dis)'ssionsAnegotiations are )on)&'dedQ ,. #oti)e that this is the opport'nit0 for s'$mission of a ,A*OQ C. A )ommon date and time for s'$mission of /ritten ,A*Os, a&&o/ing a reasona$&e opport'nit0 for preparation of the /ritten ,A*OsQ D. #oti)e that if an0 modifi)ation to a ,A*O is s'$mitted, it m'st $e re)eived $0 the date and time spe)ified for the re)eipt of ,A*Os and is s'$@e)t to the &ate
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s'$missions, modifi)ations, and /ithdra/a&s of proposa&s provisions of the Ie<'est for -roposa&Q :. #oti)e that if Offerors do not s'$mit a ,A*O or a noti)e of /ithdra/a& and another ,A*O, their immediate previo's Offer /i&& $e )onstr'ed as their ,A*O. An0 modifi)ations to the initia& proposa&s made $0 an Offeror in its ,A*O sha&& $e identified in its ,A*O. ,A*Os /i&& $e eva&'ated $0 the -ro)'ring Agen)0 a))ording to the same re<'irements and )riteria as the initia& proposa&s >-roposa& Se&e)tion -ro)ess> 8Se)tion !.!.4."9. The -ro)'ring Agen)0 /i&& ma2e appropriate ad@'stments to the initia& s)ores for an0 s'$ )riteria and )riteria /hi)h have $een affe)ted $0 an0 proposa& modifi)ations made $0 the ,A*Os. These fina& s)ores and ran2ings /ithin ea)h )riteria /i&& again $e arra0ed $0 the -ro)'ring Agen)0 and )onsidered a))ording to the re&ative degrees of importan)e of the )riteria defined in >-roposa& :va&'ation Criteria> 8Se)tion !.!.4.".29. The -ro)'ring Agen)0 /i&& then )hoose that proposa& /hi)h it finds to $e most advantageo's to the -ro)'ring Agen)0 $ased 'pon the eva&'ation )riteria. The res'&ts of the eva&'ations and the se&e)tion of a proposa& for an0 a/ard /i&& $e do)'mented in a report. The -ro)'ring Agen)0 reserves the right to ma2e an a/ard to an Offeror /hose proposa& it @'dges to $e most advantageo's to the -ro)'ring Agen)0 $ased 'pon the eva&'ation )riteria, /itho't )ond')ting an0 /ritten or ora& dis)'ssions /ith an0 Offerors or so&i)itation of an0 ,A*Os. APP"=:<L AD <88U%TRAT<C" "CA8UAT<3= CR<T"R<A A=: %C3R<=0 PR3C":UR" T/o s)oring methods, ea)h in)&'ding )riteria and app&i)ation of the )riteria, are presented $e&o/. The first is a )omp&ete&0 /eighted method, in /hi)h a&& the )riteria have a predetermined ro&e and, given the 'navoida$&0 s'$@e)tive assignment of passAfai& or n'meri)a& s)ores to spe)ifi) )riteria, res'&ts in a sing&e, )ertain tota& s)ore for ea)h proposa&. The se)ond method, the narrativeAtrade off method, provides more s'$@e)tivit0 in the assignment and )om$ination of te)hni)a& s)ores, and in the trade offs $et/een pri)e and non pri)e )riteria. An infinite n'm$er of variations and )om$inations of these methods )o'&d $e deve&oped. I$ COMPLETELD BEI<CTED FORMULA METCOD 1!1!4!G!2 <llustrati-e "-aluation Criteria (Com%letely 'ei!)ted Formula 3llustrative et)od)
<! A**orda$ility 6#ass or *ail7! T)e %rice %ro%osals will $e assessed for afforda$ility. T)e &rocurin! A!ency will not ma(e an award for any %ro%osal w)ic) %ro%oses %rices t)at would render t)e %rocurement infeasi$le.
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<<! 4inimum Technical Requirements 6#ass or *ail7! Tec)nical %ro%osals s)all meet t)e followin! minimum tec)nical requirements for any consideration for selection and award. A %ro%osal not meetin! all of t)ese requirements will $e re5ected. (N,T8= Certain requirements of t)e s%ecification can $e selected as a$solute requirements/ suc) t)at w)ere any one is not %ro%osed to $e met would $e reason to re5ect a %ro%osal. ')en doin! so/ t)e s%ecific requirements must $e identified $y detailed references.) 8UA &#8S= 1. &assen!er Ca%acity s%ecified in SSSSSSS. <. ,verall dimensions s%ecified in SSSSSSS. C. &erformance (s%eed/ acceleration/ $ra(in!/ turnin! radius) s%ecified in SSSSSSS. A. 8missions s%ecified in SSSSSSS. 5. &ro%ulsion system requirements of SSSSSSS. J. ?ody structural and material requirements of SSSSSSS. E. Service %roven tec)nolo!y <<<! Unacce#ta$le "+ce#tions, Conditions, Reser-ations and Understandings 6#ass or *ail7! 87ce%tions/ conditions/ reservations or understandin!s t)at are e7%licitly/ fully and se%arately stated on t)e required form of Section 1.1.J.: GForm for &ro%osal "eviationG will $e evaluated for t)eir acce%ta$ility. A %ro%osal )avin! a %re%onderance of unacce%ta$le e7ce%tions and conditions may $e cause for t)e %ro%osal to $e re5ected. 8ac) of any e7ce%tions and*or conditions made in a %ro%osal will $e evaluated and t)e &rocurin! A!ency will determine t)eir individual acce%ta$ility. An unacce%ta$le e7ce%tion/ condition/ reservation or understandin!/ if not wit)drawn $y t)e ,fferor u%on t)e request $y t)e &rocurin! A!ency/ would $e cause for t)e %ro%osal to $e re5ected. For t)e %ur%oses of determinin! t)e com%etitive ran!e a %ro%osal containin! unacce%ta$le e7ce%tions/ conditions/ reservations or understandin!s may $e included on t)e $asis t)at t)e %ro%osal is ca%a$le of $ein! made acce%ta$le %rovided t)at t)e ,fferor wit)draw or modify t)e unacce%ta$le e7ce%tions/ conditions/ reservations or understandin!s. Any e7ce%tions/ conditions/ reservations or understandin!s w)ic) do not cause t)e &rocurin! A!ency to consider a %ro%osal to $e outside t)e com%etitive ran!e/ will $e evaluated accordin! to t)e res%ective evaluation criteria and*or su$1criteria w)ic) t)ey affect. <C! Technical Pro#osal %coring Criteria 6/eight M NNNNNNN7 T)e transit $us offered in t)e tec)nical %ro%osal will $e evaluated for t)e followin! factors w)ic) are listed in t)eir relative order of im%ortance= A. 8n!ine 1 ,%eratin! e7%erience of %revious users and test results of %ro%osed en!ine and su$systems in transit service. T)e de!ree to w)ic) %erformance
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requirements of &art C= Tec)nical S%ecifications/ for t)e en!ine are %ro%osed to $e met. T)e ris( of develo%ment tas(s (if any) will $e assessed. (su$1wei!)t V SSSSSS) ?. Transmission 1 ,%eratin! e7%erience of %revious users and test results of %ro%osed transmission in transit service. T)e de!ree to w)ic) %erformance requirements of &art C= Tec)nical S%ecifications/ for t)e transmission are %ro%osed to $e met. T)e ris( of develo%ment tas(s (if any) will $e assessed. (su$1wei!)t V SSSSSS) C. a5or Su$systems 1 ,%eratin! e7%erience of %revious users and test results of %ro%osed ma5or su$systems in transit service. T)e de!ree to w)ic) %erformance requirements of &art C= Tec)nical S%ecifications/ for eac) ma5or su$system are %ro%osed to $e met. T)e ris( of develo%ment tas(s (if any) will $e assessed. (su$1 wei!)t V SSSSSS) ". 0uality Assurance 1 Sufficiency of in1%lace 0uality Assurance &ro!ram and %rocedures to meet requirements. (su$1wei!)t V SSSSSS) 8. S%are &arts Availa$ility 1 "e!ree to w)ic) t)e required availa$ility of s%are %arts (Section <.5.A) are %ro%osed to $e met or e7ceeded. (su$1wei!)t V SSSSSS) F. Standard 'arranty 1 "e!ree to w)ic) t)e standard warranty of &art 5 is %ro%osed to $e met or e7ceeded. (su$1wei!)t V SSSSSSS) .. System Su%%ort 1 "emonstrated a$ility to meet or e7ceed relia$ility and maintaina$ility requirements6 suita$ility of test equi%ment6 quality of manuals6 and effectiveness of trainin! %ro!rams. (su$1wei!)t V SSSSSS) C! Pro#osed Price 6/eight M NNNNNNN7! T)e lowest %ro%osal %rice (amon! all %ro%osals) will $e divided $y t)e %ro%osal %rice $ein! scored/ and t)e resultin! quantity will $e multi%lied $y t)e wei!)t for t)e %ro%osed %rice criterion. C<! 9uali*ications 6/eight M NNNNNNN7! "e!ree to w)ic) ,fferor e7ceeds t)e required qualifications of Section 1.1.A.C.1 a$ove. A. Financial Stren!t) and Resources (su$1wei!)t V SSSSSS) ?. +uman and &)ysical Resources (su$1wei!)t V SSSSSS) C. Record of &erformance on ?us Contracts (su$1wei!)t V SSSSSS) C<<! 3ther Financial <m#acts 6/eight M NNNNNNN7! T)is factor will consider t)e followin! financial im%acts= maintenance costs resultin! from %arts relia$ility/ %arts standardi@ation/ warranties/ timeframe for Contract %erformance and final delivery/ and t)e e7tent to w)ic) t)e &rocurin! A!ency can analy@e cost and %ricin! data.
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1!1!4!G!G A##lication o* "-aluation Criteria! (Com%letely 'ei!)ted Formula 3llustrative et)od) (N,T8= T)is section may or may not $e included/ de%endent u%on t)e s%ecific criteria t)at are included in Section 1.1.A.C.<.) &ro%osals will $e evaluated a!ainst t)e %ass*fail Criteria Nos. 1/ < and C. Any %ro%osal w)ic) meets all %ass*fail criteria/ or fails one or more of t)ese criteria $ut is susce%ti$le of $ein! made to meet suc) failed criteria/ will $e considered wit)in t)e com%etitive ran!e. ,t)erwise/ a %ro%osal may not $e considered to $e wit)in t)e com%etitive ran!e. Su$1criteria of Criteria Nos. A and J will $e scored $ased on t)e reviewer4s determination of t)e de!ree of com%liance wit) Contract requirements/ %otential ris(s and $enefits/ and stren!t)s and wea(nesses. T)e score is reduced in %ro%ortion to t)e e7tent of non1conformance/ discre%ancies/ errors/ omissions/ and ris(s to t)e &rocurin! A!ency. Scores will $e assi!ned accordin! to t)e followin!= : 1 1D 87ce%tional. Fully com%liant wit) Contract requirements and wit) desira$le stren!t)s or $etterments6 no errors/ or ris(s/ or wea(nesses or omissions. .ood to Su%erior. Com%liant wit) Contract requirements6 some minor errors/ or ris(s/ or wea(nesses or omissions. Adequate. inimally com%liant wit) Contract requirements6 errors/ or ris(s/ or wea(nesses or omissions6 %ossi$le to correct and ma(e acce%ta$le. &oor to "eficient. Non1com%liant wit) Contract requirements6 errors/ or ris(s/ or wea(nesses or omissions6 difficult to correct and ma(e acce%ta$le. 2nacce%ta$le. Totally deficient and not in com%liance wit) Contract requirements6 not correcta$le.
J1;
A15
11C
An estimate of t)e im%act costs to t)e &rocurin! A!ency will $e made for t)e items listed in Criterion No. E. Resultant scores for eac) su$1criterion will $e wei!)ed $y t)e a%%ro%riate wei!)t factors and a total score for eac) criterion determined. T)e scores of Criteria Nos. A/ 5 and J will t)en $e wei!)ed $y t)e a%%ro%riate wei!)t factors and a total score develo%ed for t)e %ro%osal. T)e followin! ta$le illustrates t)e %rocedure. <<! =ARRAT<C" B TRA:"13FF 4"T23: 1!1!4!G!2 "-aluation Criteria (Narrative * Trade1,ff 3llustrative et)od)
<! Unacce#ta$le "+ce#tions, Conditions, Reser-ations and Understandings 6#ass or *ail7! 87ce%tions/ conditions/ reservations or understandin!s t)at are e7%licitly/ fully and se%arately stated on t)e required form of Section 1.1.J.: GForm for &ro%osal "eviationG will $e evaluated for t)eir acce%ta$ility. A %ro%osal )avin! a %re%onderance of unacce%ta$le
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e7ce%tions and conditions may $e cause for t)e %ro%osal to $e re5ected. 8ac) of any e7ce%tions and*or conditions made in a %ro%osal will $e evaluated and t)e &rocurin! A!ency will determine t)eir individual acce%ta$ility. An unacce%ta$le e7ce%tion/ condition/ reservation or understandin!/ if not wit)drawn $y t)e ,fferor u%on t)e request $y t)e &rocurin! A!ency/ would $e cause for t)e %ro%osal to $e re5ected. For t)e %ur%oses of determinin! t)e com%etitive ran!e a %ro%osal containin! unacce%ta$le e7ce%tions/ conditions/ reservations or understandin!s may $e included on t)e $asis t)at t)e %ro%osal is ca%a$le of $ein! made acce%ta$le %rovided t)at t)e ,fferor wit)draw or modify t)e unacce%ta$le e7ce%tions/ conditions/ reservations or understandin!s. Any e7ce%tions/ conditions/ reservations or understandin!s w)ic) do not cause t)e &rocurin! A!ency to consider a %ro%osal to $e outside t)e com%etitive ran!e/ will $e evaluated accordin! to t)e res%ective evaluation criteria and*or su$1criteria w)ic) t)ey affect. <<! 3ther PassBFail Criteria 1 (N,T8= 3f t)e %rocurin! a!ency wis)es to im%ose any ot)er unaltera$le conditions on t)e %ro%osals/ t)ese may $e included as %ass*fail criteria. &ro%oser criteria in addition to t)ose s%ecified in Section 1.1.A.C.1 H0ualification RequirementsI (suc) as financial ca%a$ility/ %roof of a$ility to %rovide %erformance $onds/ or %roven e7%erience record) or essential tec)nical criteria (suc) as %ro%ulsion system or a%%roved equal/ or structural requirements) may $e eit)er included in t)is cate!ory as %ass*fail criteria/ or evaluated under t)e followin! criteria wit) e7tremely low ran(in! for attri$utes t)at are unsatisfactory. T)e necessary in%ut data s)ould corres%ond to %ro%osal requirements listed in Sections 1.1.C.<.< GTec)nical &ro%osalG or 1.1.C.<.C G ana!ement &lan.G) <<<! Technical Pro#osal 1 T)e transit $us and su%%ort offered in t)e tec)nical %ro%osal will $e evaluated for t)e followin! factors w)ic) are listed in t)eir relative order of im%ortance= A. &owertrain 1 ,%eratin! e7%erience of %revious users and test results of %ro%osed en!ine/ transmission/ and su$systems in transit service. T)e de!ree to w)ic) %erformance requirements of &art C= Tec)nical S%ecifications and t)e needs of t)e &rocurin! A!ency/ for t)e en!ine and transmission are %ro%osed to $e met. T)e ris( of develo%ment tas(s (if any) will $e assessed. ?. Structure/ Sus%ension/ and ?ody 1 ,%eratin! e7%erience of %revious users and test results of %ro%osed structure/ sus%ension (includin! $ra(in! systems and steerin!) and $ody in transit service. T)e de!ree to w)ic) %erformance requirements of &art C= Tec)nical S%ecifications and t)e needs of t)e &rocurin! A!ency/ for t)ese systems are %ro%osed to $e met. T)e ris( of develo%ment tas(s (if any) will $e assessed. C. ,t)er a5or Su$systems 1 ,%eratin! e7%erience of %revious users and test results of %ro%osed ma5or su$systems in transit service. T)e de!ree to w)ic) %erformance requirements of &art C= Tec)nical S%ecifications and t)e needs of t)e &rocurin! A!ency/ for eac) ma5or su$system are %ro%osed to $e met. T)e ris( of develo%ment tas(s (if any) will $e assessed.
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". 0uality Assurance 1 Sufficiency of in1%lace 0uality Assurance &ro!ram and %rocedures to meet requirements. 8. S%are &arts Availa$ility 1 "e!ree to w)ic) t)e required availa$ility of s%are %arts (Section <.5.A) are %ro%osed to $e met or e7ceeded. F. Standard 'arranty 1 "e!ree to w)ic) t)e standard warranty of &art 5 is %ro%osed to $e met or e7ceeded. .. System Su%%ort 1 "emonstrated a$ility to meet or e7ceed relia$ility and maintaina$ility requirements6 suita$ility of test equi%ment6 quality of manuals6 and effectiveness of trainin! %ro!rams. +. ,t)er Financial 3m%acts 1 T)is factor will consider t)e followin! financial im%acts= maintenance costs resultin! from %arts relia$ility/ %arts standardi@ation/ warranties/ timeframe for Contract %erformance and final delivery/ and t)e e7tent to w)ic) t)e &rocurin! A!ency can analy@e cost and %ricin! data. 3. 0ualifications 1 "e!ree to w)ic) ,fferor e7ceeds t)e required qualifications of Section 1.1.A.C.1 a$ove. a) +uman and &)ysical Resources. $) Financial Stren!t) and Resources. c) Record of &erformance on ?us Contracts. (N,T8= T)e necessary in%ut data s)ould corres%ond to %ro%osal requirements listed in Sections 1.1.C.<.< GTec)nical &ro%osalG or 1.1.C.<.C G ana!ement &lan.G) <C! Pro#osed Price. T)e %rice %ro%osals will $e evaluated and a%%ro%riate/ uniform treatment of unit costs/ ancillary %roducts and services/ escalators/ e7c)an!e rates/ deviations and o%tions will reduce eac) %ro%osal to a sin!le %rice evaluation fi!ure. (N,T8= FTA com%etitive %rocurement requirements s%ecify t)at to %reserve t)e ri!)t to e7ercise o%tions/ t)ey s)ould $e included in t)e evaluation). 1!1!4!G!G A##lication o* "-aluation Criteria! (Narrative * Trade1,ff 3llustrative et)od)
(N,T8= T)is section may or may not $e included/ de%endent u%on t)e s%ecific criteria t)at are included in Section 1.1.A.C.<.) 1. &ro%osals will $e evaluated a!ainst t)e %ass*fail Criteria Nos. 1 and <. Any %ro%osal w)ic) meets all %ass*fail criteria/ or fails one or more of t)ese criteria $ut is deemed susce%ti$le of $ein! made to meet suc) failed criteria/ will $e considered wit)in t)e com%etitive ran!e. ,t)erwise/ a %ro%osal may not $e considered to $e wit)in t)e com%etitive ran!e.
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Su$1criteria of Criterion No. C will $e evaluated $ased on t)e reviewer4s determination of t)e de!ree of com%liance wit) Contract requirements/ %otential ris(s and $enefits/ and stren!t)s and wea(nesses. ,ne of t)e followin! ad5ectival ratin!s s)ould $e used for eac) su$criterion= 87cellent Nery .ood .ood ar!inal Si!nificantly e7ceeds in all res%ects t)e minimum requirements6 )i!) %ro$a$ility of success6 no si!nificant wea(nesses. Su$stantial res%onse6 meets in all as%ects and in some cases e7ceeds/ t)e critical requirements6 no si!nificant wea(nesses. .enerally meets minimum requirements6 !ood %ro$a$ility of success6 wea(nesses can $e readily corrected. #ac( of essential information6 low %ro$a$ility for success6 si!nificant wea(nesses/ $ut correcta$le.
2nsatisfactory Fails to meet minimum requirements6 needs ma5or revision to ma(e it acce%ta$le. 8valuators are to su$stantiate eac) ratin! wit) a $rief narrative e7%lainin! t)eir evaluation. T)e narrative will $e s%ecific in nature/ addressin! t)e stren!t)s*wea(nesses of t)e %ro%osal in eac) area and %rovide a sound rationale for t)e conclusion reac)ed. T)is $ecomes t)e $asis for t)e evaluator4s overall ratin! and com%arison to ot)er %ro%osals. To arrive at t)e overall tec)nical ratin!/ t)e evaluator will develo% a summary statement. 8valuators may utili@e an informal wei!)tin! sc)eme as a tool (not to $e considered t)e formal evaluation) to assist t)em in formulatin! t)eir evaluation. T)is may $e )el%ful to individual evaluators in terms of remainin! focused on t)e relations)i% $etween criteria and facilitate t)e evaluation %rocess. <. T)e individual evaluators will ran( eac) of t)e %ro%osals reviewed in descendin! order and %rovide a su%%ortin! narrative/ addressin! t)e s%ecific elements of t)e %ro%osal t)at are t)e determinin! factors (consistent wit) ste% 1 findin!s) for t)eir %osition wit)in t)e ran(in!. C. Committee mem$ers will review and discuss t)e individual findin!s and develo% a consensus ran(in! consistent wit) t)e evaluation criteria. T)e committee ran(in! must also $e su%%orted $y a narrative t)at %rovides t)e rationale (s%ecific stren!t)s and wea(nesses) for t)eir determination. A. T)e ran( ordered list of %ro%osals will $e arrayed in descendin! order to!et)er wit) t)e %rice evaluation fi!ure for eac) %ro%osal. As t)e list is reviewed in descendin! order/ any increase in %rice as tec)nical merit decreases will cause t)e elimination of t)e %ro%osal from t)e list. 3f more t)an one %ro%osal remains/ t)e committee will review t)e trade1offs $etween descendin! tec)nical merit and descendin! %rice. T)e committee will t)en ma(e a decision re!ardin! w)ic) of t)e %ro%osals is t)e most advanta!eous to t)e &rocurin! A!ency/ %rice and ot)er factors considered.
,est -ra)ti)es -ro)'rement .an'a& Appendi; A.2 L Dear Co&&eag'e 7etters
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APPENDIV B$* SPECIFICATION7SCOPE OF SERPICE <UIDE Pre ared &# Office of Procurement T/e Metro olitan Transit Aut/orit# of Carris Count#! Te;as Lanuar# (854
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FOREBORD This do)'ment has $een prepared to assist .etropo&itan Transit A'thorit0 8.:TIO9 personne& in the preparation of :<'ipment Spe)ifi)ations, Data Sheets, S)ope of Servi)es and Statements of Wor2. INTRODUCTION This do)'ment provides g'ide&ines and re)ommendations for deve&oping the format and )ontent of a spe)ifi)ation, data sheet, S)ope of Servi)e or Statement of Wor2 for the fo&&o/ing, $'t not &imited to( Capita& e<'ipment pro)'rement ,'s modifi)ations .aintenan)e e<'ipment Off the she&f e<'ipment or hard/are Servi)es professiona& Servi)es persona& and non persona& S'pp&ies
Statements sho/n in &ight t0pe provide instr')tion and )&arifi)ation for a spe)ifi)ation or S)ope of Servi)e paragraph, and statements in $o&d t0pe are s'ggested /ordings for the )ontent of a paragraph. :a)h spe)ifi)ation, data sheet or statement of /or2 statement adopted from this do)'ment sho'&d $e )aref'&&0 revie/ed and modified as needed prior to $eing in)orporated into a spe)ifi)ation. The s)ope of servi)e statements are t0pi)a& e;amp&es for servi)es re<'ired and sho'&d on&0 $e 'sed as a g'ide. The 'se of the /ord Contra)tor is s0non0mo's /ith the /ords vendor, s'pp&ier, se&&er or $idder. Commer)ia& t0pe re<'irements s')h as /arrant0 provisions, )ost information, de&iver0 information and method of pa0ments sho'&d not appear in a te)hni)a& spe)ifi)ation or s)ope of servi)e sin)e the0 /i&& $e spe)ified in other do)'ments provided $0 the Offi)e of -ro)'rement. OBLECTIPE OF A SPECIFICATION OR A SCOPE OF SERPICE The o$@e)tive of a spe)ifi)ation, data sheet or s)ope of servi)e is to )omm'ni)ate to Contra)tors and -ro)'rement personne& /hat is re<'ired and a&so provide the $asis for <'a&it0 ass'ran)e to determine if the Contra)tor has met the re<'irements of the )ontra)t or p'r)hase order. The spe)ifi)ation or s)ope of servi)e m'st $e /ritten in )&ear, 'nam$ig'o's and pre)ise &ang'age to )omm'ni)ate effe)tive&0 /hat is re<'ired. Iemem$er, the Contra)tor has tota& responsi$i&it0 for the /or2 after re)eipt of order.
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BCICC TDPE OF SPECIFICATION OR SCOPE OF SERPICE TO USE The fo&&o/ing is an e;amp&e of /hi)h t0pe of spe)ifi)ation or s)ope of servi)e ma0 $e 'sed, $'t not ne)essari&0 &imited to( Si; Se)tion :<'ipment Spe)ifi)ation Capita& e<'ipment pro)'rement ,'s modifi)ations .aintenan)e e<'ipment S)ope of Servi)e Servi)es professiona& Servi)es persona& and non persona& ,rand #ame or :<'a& :<'ipment Spe)ifi)ationAData Sheet Capita& e<'ipment pro)'rement .aintenan)e e<'ipment Off the she&f e<'ipment or hard/are 8)omp&e;9 Statement of Wor2A-'r)hase Des)ription Off the she&f e<'ipment or hard/are 8ro'tine9 Servi)es persona& and non persona& S'pp&ies DOKS AND DONKTS OF A SPECIFICATION OR SCOPE OF SERPICE The fo&&o/ing is a &ist of doKs and donKts that sho'&d $e revie/ed prior to starting the first draft of a Spe)ifi)ation or S)ope of Servi)e( DOKS Deve&op the )orre)t menta& attit'de. ,e positive. 7earn the )ontent and format of a si; se)tion spe)ifi)ation. 8On)e 0o' have done this and adopted the proper spe)ifi)ation /riting attit'de, 0o' /i&& $e a$&e to /rite an0 t0pe or format of Spe)ifi)ation or S)ope of Servi)es. This /i&& ho&d tr'e /hether 0o' re<'ire e<'ipment, s'pp&ies, or servi)es.9 Write the Spe)ifi)ation or S)ope of Servi)e to $e pre)ise and perfe)t&0 )&ear. Write the Spe)ifi)ation or S)ope of Servi)e in short, )on)ise senten)es in the simp&est form possi$&e. Determine and separate 0o'r essentia& re<'irements from desira$&es or >ni)e to have> needs. Whenever possi$&e, /rite spe)ifi)ations that a&&o/ open )ompetition. Spe)if0 re<'irements /ithin the state of the art of the ind'str0.
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O$tain te)hni)a& information from so'r)es s')h as( p'$&i)ations ind'str0 re&eases man'fa)t'rers )ontra)tors fe&&o/ /or2ers
?n the pro)ess of o$taining te)hni)a& information, do not )ommit .:TIO in an0 /a0. ?n)&'de N'a&it0 Ass'ran)e -rovisions that mesh /ith the stated re<'irements. C&ear&0 )omm'ni)ate 0o'r te)hni)a& 2no/&edge in the Spe)ifi)ation. Use de)ima&s in preferen)e of fra)tions. After 0o' have /ritten /hat 0o' fee& is a perfe)t&0 )&ear and $rief statement of re<'irement, as2 0o'rse&f, >?s there an0 /a0 that an0one )o'&d mis)onstr'e this statementW> DO#KTS
>Ie invent the /hee&> /hen an e;isting Spe)ifi)ation or S)ope of Servi)e is avai&a$&e. .a2e am$ig'o's statements, i.e.Q the highest <'a&it0, in a))ordan)e /ith ind'str0 pra)ti)es, a))eptan)e per ind'str0 pra)ti)es. Spe)if0 'nrea&isti) or 'nne)essari&0 restri)tive re<'irements. -rovide information to one $idder that /i&& give an advantage over another $idder. A&&o/ man'fa)t'rerKs or man'fa)t'rerKs representatives to /rite the Spe)ifi)ation or S)ope of Servi)e. Use 'nfami&iar /ords, )o&&o<'ia&isms and /ords having more than one meaning. Use open ended re<'irements s')h as( As dire)ted S'$@e)t to approva& Satisfa)tor0 to
Use >,idder to do at no additiona& )ost> 87eave an0 addresses to mone0 o't of the Spe)ifi)ation or S)ope of Servi)e.9 Use the term >andAor> in the Spe)ifi)ation or S)ope of Servi)e. Di)tate to the Contra)tor ho/ to a))omp&ish the re<'irements.
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PROLECT MANA<ER7USER RESPONSIBILITD TO PROCUREMENT Upon preparing an ?nvitation for ,id 8?*,9, -ro)'rement /ith assistan)e from the -ro@e)t .anager or 'ser has tota& responsi$i&it0 for preparing the fo&&o/ing se)tions( ,idding Ie<'irements *orms for ,idding -roposed Contra)t
The -ro@e)t .anager or 'ser sho'&d inp't to -ro)'rement an0 information that does not app&0 to the Spe)ifi)ation or S)ope of Servi)e via memorand'm and the information /i&& $e in)&'ded in the appropriate do)'ment. :;amp&es of this t0pe of information are as fo&&o/s( Ie<'irements that m'st $e provided to .:TIO /ith $ids or prior to a/ard Ie<'irements that m'st $e )omp&eted prior to #oti)e to -ro)eed of the Contra)t Cost ?nformation De&iver0 ?nformation Warrant0 -rovisions .ethods of -a0ments 7i<'idated Damages ?nstr')tions on Ie/or2ing Ie@e)ted ?tems Avai&a$i&it0 of :<'ipment for Ietrofit, .odifi)ations, Servi)e or Iepair ?nspe)tionAA))eptan)e -rovisions
This sha&& a&so $e tr'e for Ie<'est for -roposa&s 8I*-9 or -'r)hase Orders. The Spe)ifi)ation or S)ope of Servi)e of the ?*,, is the tota& responsi$i&it0 of the -ro@e)t .anager or 'ser /ith the assistan)e of Contra)ts. The Spe)ifi)ation or S)ope of Servi)e sho'&d $e provided to -ro)'rement do'$&e spa)ed and in the fina& format. To $e )onsistent /ith the t0ping of the entire )ontra)t, the spe)ifi)ation or s)ope of servi)e sho'&d $e t0ped /ith a !0 pit)h )o'rier print /hee& and margins of H and 11. The '&timate goa& is for the -ro@e)t .anager or 'ser to f'rnish to Contra)ts a spe)ifi)ation or s)ope of servi)e that )an $e 'ti&iGed in a $id pa)2age /itho't dis)'ssions /ith the -ro@e)t .anager or 'ser.
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PART I SIV)SECTION E@UIPMENT SPECIFICATION The si; se)tion spe)ifi)ation, sometimes )a&&ed a detai& spe)ifi)ation, is 'sed /here there is a need to p'r)hase the same prod')t or e<'ipment repeated&0. The se)tion n'm$ers and headings sho/n $e&o/ sho'&d $e 'sed on a&& spe)ifi)ations /hen the headings are app&i)a$&e. #'m$er !.0 2.0 ".0 4.0 5.0 %.0 Se)tion S)ope Ieferen)e Do)'ments Ie<'irements Contra)tor N'a&it0 Ass'ran)e -rogram -reparation for Shipment Contra)t Data Ie<'irements 7ist
The re)ommended )ontent for ea)h se)tion is sho/n $e&o/.
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Sco e
-rovide a $rief des)ription of the prod')t or item of e<'ipment to $e p'r)hased and a genera& des)ription of the )ontents of the spe)ifi)ation. A&so, state /here the e<'ipment is to $e 'sed and if insta&&ation is re<'ired. This spe)ifi)ation sha&& govern the materia&s, fa$ri)ation, assem$&0, testing, and other re<'irements for 8:;amp&e( )entrif'ga& p'mps9 for 'se 8:;amp&e( in .:TIOKs Yashmere .aintenan)e *a)i&it09 .
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Reference Documents
7ist governmenta& reg'&ations, ma@or )odes, ind'str0 standards, and other simi&ar do)'ments /hi)h are 'ti&iGed in the spe)ifi)ation to define the design, materia&s, fa$ri)ation, testing, insta&&ation, servi)es, and other simi&ar re<'irements. :ver0 referen)e do)'ment &isted here sho'&d $e addressed at the appropriate point in the $od0 of the spe)ifi)ation. The introd')tor0 /ording given $e&o/ for this paragraph esta$&ishes the date of in<'ir0 iss'e as the )ontro& data for app&i)a$&e editions of standards, )odes and addenda referen)ed /ithin a spe)ifi)ation. The responsi$&e individ'a& sho'&d verif0 that a )ontro& data is esta$&ished for referen)e standards at the time of 'se. ?n addition to the re<'irements designated e&se/here in this spe)ifi)ation, the design, materia&s, fa$ri)ation, and testing of the e<'ipment, materia&s, and servi)es sha&& $e, to the e;tent spe)ified
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herein, in a))ordan)e /ith the &atest iss'es and addenda, in effe)t at the date of in<'ir0 iss'e, of the fo&&o/ing ind'str0 )odes and standards. Ieferen)e standards emp&o0ed $0 this o't&ine are &isted $e&o/ to provide an e;amp&e of formatting for ind'str0 referen)es.
Document Identification A?SC S"2%
Title
American Institute of Steel Construction 6AISC9 Spe)ifi)ation for the Design, *a$ri)ation, and :re)tion of Str')t'ra& Stee& for ,'i&dings. American National Standards Institute 6ANSI9 A#S? A5H.! .inim'm Design 7oads for ,'i&ding and Other Str')t'res American Societ# for Testin" and Materials 6ASTM9 AST. A"% American Beldin" Societ# 6ABS9 AWS D!.! #*-A 10 Str')t'ra& We&ding Code, Stee& #ationa& :&e)tri)a& Code 8#:C9 National Fire Protection Association 6NFPA9 Occu ational Safet# and Cealt/ Standards of t/e U$S$ De artment of La&or! Part (8(: 6OSCA9 Se)tion !9!0.95 O))'pationa& #oise :;pos're S'$part D -$: -$( ReAuirements <eneral Wa&2ing Wor2ing S'rfa)es Spe)ifi)ation for Str')t'ra& Stee&
?n)&'de statements of those re<'irements that are )ommon to a&& )omponents of the e<'ipment of s0stem $eing spe)ified.
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Performance
-rovide a definition of the performan)e re<'irements for rating the e<'ipment.
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S#stem Descri tion
-rovide a $rief $'t in)&'sive s0stem des)ription for a spe)ifi)ation /ritten for a me)hani)a& s0stem or e<'ipment pa)2age. Sing&e e<'ipment items 's'a&&0 /i&& not re<'ire a s0stem des)ription.
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Mec/anical Desi"n
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-$.$(
Com onent Des)ri$e re<'irements for the individ'a& )omponents that ma2e 'p the pie)e of e<'ipment 'nder this series of headings. This /o'&d in)&'de s')h things as a &isting of design re<'irements for the )omponents that ma2e 'p an e<'ipment item 8e.g., shaft, sea&s, )o'p&ing, impe&&er9.
-$0
Electrical
A referen)e sho'&d $e provided here for invo2ing the #ationa& :&e)tri)a& Code and for identif0ing the re<'ired haGardo's area )&assifi)ation for e&e)tri)a& )omponents that are to $e provided. This referen)e sho'&d $e a statement s')h as( ".5.! :&e)tri)a& e<'ipment f'rnished 'nder this spe)ifi)ation sha&& $e in )omp&ian)e /ith #*-A ,'&&etin #o. 10, >#ationa& :&e)tri)a& Code,> 8#:C9 and sha&& )omp&0 /ith #:C re<'irements for the haGardo's and non haGardo's area )&assifi)ations spe)ified on the data sheets.
-$2
Structural
Spe)if0 the str')t'ra& re<'irements for the item of e<'ipment 'nder this heading. This se)tion sho'&d in)&'de a referen)e to appropriate A?SC and AST. standards and re<'irements of a genera& nat're. Spe)ifi) re<'irements s')h as design )riteria or a $asis for hand&ing /ind &oads, transportation and other spe)ifi) detai&s sho'&d $e in)orporated $0 &ine entries on the e<'ipment data sheets. The fo&&o/ing /ording is s'ggested for genera& str')t'ra& re<'irements in an e<'ipment spe)ifi)ation( ".%.! A&& str')t'ra& stee& sha&& $e ne/ and damage free. :a)h str')t'ra& stee& mem$er for s2ids, $ases or other assem$&0 sha&& $e a hot ro&&ed str')t'ra& shape, p&ate or $ar meeting the re<'irements of AST. a "%. An)hor $o&t detai&s and design sha&& $e provided $0 the )ontra)tor. An)hor $o&ts /i&& $e f'rnished $0 .:TIO. 7adders and p&atforms /ith handrai&s sha&& $e f'rnished for a))ess to a&& servi)e and inspe)tion openings for e<'ipment re<'iring inspe)tion and servi)ing. Stair treads, p&atforms, /a&2ing and /or2 s'rfa)es, and a))ess /a0s sha&& $e provided /ith stee& grating /a&2ing s'rfa)es.
".%.2 ".%." ".%.4
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E;ce tions
Spe)ifi)ations that are /ritten aro'nd a )ode or ind'str0 standard s')h as AS.: or A-? sho'&d &ist e;)eptions or )&arifi)ations to those standards. The fo&&o/ing is an e;amp&e of ho/ this /o'&d $e done( ".1.! Ie<'irements :a)h )entrif'ga& p'mp sha&& $e in a))ordan)e /ith A-? %!0 e;)ept for the additions, modifi)ations, de&etions, or f'rther )&arifi)ations stated $e&o/(
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API 2(: Para$ No$
Bu#er E;c$ No$
Descri tion S:CT?O# 2 ,AS?C D:S?=# =enera&
2.!.2!
2.!.22
Add the fo&&o/ing ne/ paragraph( Sing&e stage pro)ess p'mps are to have a do'$&e vo&'te )asing /hen the p'mp has a " in)h 81% mm9 dis)harge or &arger and a !0.5 in)h 82%1 mm9 ma;im'm a&&o/a$&e impe&&er diameter, or &arger. Add the fo&&o/ing ne/ paragraph( .e)hani)a& e<'ipment and )omponents of )entrif'ga& p'mps <'oted in a))ordan)e /ith this spe)ifi)ation m'st $e proven in servi)e for at &east one 0ear in not &ess than t/o simi&ar app&i)ations.
.$: .$(
Contractor @ualit# Assurance Pro"ram Ins ection And Testin"
*or spe)ifi)ations /ritten for a prod')t, materia&, servi)e, e<'ipment or $'s modifi)ationsAretrofit /ith a standard &eve& of <'a&it0 the fo&&o/ing /ording is s'ggested( The responsi$i&it0 for N'a&it0 Ass'ran)e sha&& $e /ith the Contra)tor s'$@e)t to verifi)ation $0 .:TIO.
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Contractor Sur%eillance
The p'rpose of this se)tion is to initiate .:TIO s'rvei&&an)e of Contra)tor man'fa)t'ring operations and do)'ment )ertifi)ation re<'irements. -aragraphs in)&'ded in this se)tion sho'&d define /here to find the spe)ifi) re<'irements. The fo&&o/ing /ording is s'ggested(
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.$*$(
-rod')t s'rvei&&an)e and do)'ment )ertifi)ation sha&& $e as spe)ified in the pro)'rement do)'ments, e.g., spe)ifi)ation, data sheets, )ontra)tor data re<'irements &ist.
0$: 0$(
Pre aration for S/i ment Cleanin" 6su""ested 1ordin"9
A&& dirt, grime, grease, and shop resid'e sha&& $e removed from s'rfa)es of f'rnished e<'ipment prior to pa)2aging and shipping from the Contra)torKs fa)i&it0.
0$*
Lu&rication 6su""ested 1ordin"9
A&& $earings and other simi&ar parts of f'rnished e<'ipment sha&& $e s'ita$&0 &'$ri)ated prior to shipment in a))ordan)e /ith the Contra)torKs re)ommended &'$ri)ation instr')tions. 0$Paintin" 6su""ested 1ordin"9
The items provided 'nder this spe)ifi)ation sha&& $e painted in a))ordan)e /ith the painting re<'irements spe)ified on the data sheets.
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Preser%ation and PacEa"in"
The fo&&o/ing /ording ma0 $e 'sed in spe)ifi)ations for items /here the Contra)torKs standard preservation and pa)2aging methods are )onsidered to $e a))epta$&e and preservation and pa)2aging re<'irements are not defined $0 a nationa& standard. 0$.$( 0$.$* .a)hined and interior s'rfa)es of f'rnished e<'ipment sha&& $e )oated /ith a preservative materia& )apa$&e of preventing )orrosion damage for a minim'm of % months in )overed storage. Contra)torKs standard preservation and pa)2aging methods /i&& $e a))epta$&e if s')h )omp&0 /ith app&i)a$&e re<'irements of governing freight )&assifi)ations and provide ade<'ate prote)tion from a&& anti)ipated shipping e;pos'res.
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EAui ment Identification 6Su""ested Bordin"9
:<'ipment identifi)ation re<'irements are spe)ified on the atta)hed data sheets.
2$: 2$(
Contract Data ReAuirements 6su""ested 1ordin"9 Contract data reAuirements s/all &e as s ecified on t/e attac/ed Contract Data ReAuirements List 6CDRL9$
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DATA SCEET FOR SIV)SECTIONS SPECIFICATIONS The data sheet is 'sed to des)ri$e spe)ifi) re<'irements of a prod')t or e<'ipment item. The originator sha&& )omp&ete the des)ription and re<'irements )o&'mn of the data sheet. DATA SB::T ?dentifi)ation #o.JJJJJJJJJ Des)ription( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ N'antit0(JJJJJJJJJJJJJ ?*, #o.( JJJJJJJJJJJJJJJJ
7o)ation( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ UT?7?T5 Oo&ts -hase S0stem Air AOA?7A,7: !20A4%0 !A" %0 BG 90 psi CO#TIACTOIKS I:NU?I:.:#TS JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ
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INSTRUCTION TO CONTRACTOR This data sheet /i&& a&so $e 'sed as a part of the te)hni)a& $id ta$'&ation. Contra)tor sha&& )omp&ete the right hand )o&'mn of this data sheet to identif0 the e<'ipment that is to $e f'rnished. Contra)tor sha&& print the Contra)torKs )ompan0 name and proposa& n'm$er on the top &ine of ea)h s')h right hand )o&'mn. The fo&&o/ing &egend is 'sed to define the Ie<'irement C&ass 8Ie<mt C&9( I A , \ .andator0 Ie<'irement .:TIO :ngineering -referen)e As Spe)ified or :<'a& Se&&er to Spe)if0
A&& data sheet items noted $0 a $'&&et 8o9 in the right hand margin sha&& $e )omp&eted /ith the Contra)torKs $id. Contra)tor sha&& )omp&0 /ith a&& I 8mandator0 re<'irement9 )&ass re<'irements to $e )onsidered te)hni)a&&0 a))epta$&e. DESCRIPTION JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ RE@UIREMENTS JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ RE@MT Cl JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ REMARQS JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ
-age !4
CONTRACT DATA RE@UIREMENTS LIST FOR SIV)SECTION SPECIFICATION OR E@UIPMENT SPECIFICATION7DATA SCEET The Contra)t Data Ie<'irements 7ist 8CDI79 is 'sed $0 .:TIO to )onve0 to the Contra)tor the re<'ired )ontra)t data do)'ments, t0pe of do)'ment and the time span that ea)h t0pe of do)'ment m'st $e s'$mitted to .:TIO. The fo&&o/ing &ist is an e;amp&e of the t0pes of re<'ired Contra)tor data. :a)h individ'a& spe)ifi)ation sho'&d $e revie/ed for the spe)ifi) re<'ired t0pes of Contra)tor data. Des)ription( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 7o)ation(JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ ?*,AI*- #o.( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Contra)tA-.O. #o.(JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Contra)tor( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ The Contra)torKs $id sha&& state his intended )omp&ian)e /ith this &isting, as regards to the t0pe of data re<'ired and s)hed'&e for data s'$mitta&, as /e&& as the N'antit0 and Data *orm 8reprod')i$&e, prints, et).9 indi)ated in the ?*, and Contra)t. The Contra)tor sha&& )onfirm responsi$i&it0 for simi&ar )omp&ian)e $0 his s'$)ontra)tors as a part of the Contra)torKs $id. Deviation8s9 from the Data S'$mitta& S)hed'&e sha&& $e sho/n in the )omments )o&'mn. A&& data s'$mitted sha&& $e identified as a minim'm /ith identifi)ation n'm$er, des)ription and Contra)t n'm$er. When an >R> has $een indi)ated in the >,> 8/ith $id9 )o&'mn on the fo&&o/ing &ist, JJJJJ )opies of the re<'ired data sha&& a))ompan0 the $id. After noti)e of a/ard, the Contra)tor sha&& f'rnish <'antities of reprod')i$&es and )opies of a&& data to $e s'$mitted as fo&&o/s( *or Approva& Certified Ie)ord JJJJJJ reprod')i$&es, JJJJJJ )opies JJJJJJ reprod')i$&es, JJJJJJ )opies JJJJJJ reprod')i$&es, JJJJJJ )opies
The a$ove <'antities are to $e s'$mitted to the -ro@e)t .anager /ith a )op0 of the transmitta& to Contra)ts. Dra/ing prints ma0 $e fo&ded, $'t reprod')i$&es sha&& $e ro&&ed. Where the Contra)torKs origina&s are m'&ti)o&ored or ha&ftone >s&i)2 paper> $ro)h'res, $'&&etins, instr')tion $oo2s, and other simi&ar preprinted do)'ments, the Contra)tor sha&& f'rnish origina&s for the <'antit0 of )opies re<'ired. After noti)e of a/ard, 'n&ess other/ise noted in the )omments )o&'mn, the fo&&o/ing data s'$mitta& s)hed'&e sha&& app&0(
-age !5
*OI A--IOOA7 DATA DU: JJJJ W::YS A*T:I CO#TIACT #OT?C: O* AWAID, C:IT?*?:D COII:CT DATA DU: JJJJ W::YS A*T:I .:TIOKS A--IOOA7, I:COID DATA DU: JJJJ W::YS A*T:I CO#TIACT #OT?C: O* AWAID. A,,I:O?AT?O#S( , With ,id, A Approva&, C Certified, I Ie)ord 8information on&09
DATA DESCRIPTION7DEFINITION OUT7?#: DIAW?#=S -&anAe&evation dra/ings /ith overa&& dimensions, )onne)tion dimensions, and re<'ired )&earan)es for assem$&0, operation, and maintenan)e a))ess. :NU?-.:#T AIIA#=:.:#T DIAW?#=S Ie&ative dimensioned &o)ation of Contra)tor s'pp&ied )omponents. ASS:.,75 DIAW?#=S Ie&ative &o)ation and dimensions of )omponents and s'$assem$&ies re<'ired for insta&&ation. O#: 7?#: :7:CTI?CA7 D?A=IA. One &ine representation of an e&e)tri)a& po/er andAor )ontro& )ir)'it. *A,I?CAT?O# OI -IODUCT?O# SCB:DU7: Ca&endar dated s)hed'&e for man'fa)t're of Contra)tor s'pp&ied e<'ipmentA )omponents, in)&'ding s)hed'&e or in<'ir0 -'r)hase Order, and de&iver0 of s'$)ontra)tor items /ith s'$)ontra)tor names. :NU?-.:#T W:?=BTS :mpt0, operating and shipping /eight. CO.-7:T:D .:TIOKS DATA SB::TS CATA7O= DATA 7?ST O* :RC:-T?O#S TO S-:C?*?CAT?O# O-:IAT?#= ?#STIUCT?O#S .A?#T:#A#C: A#D 7U,I?CAT?O# I:CO..:#DAT?O#S Ie)ommend maintenan)e pro)ed'res and
DATA RE@UIRED B A C R R R R JJ
COMMENTS
JJ
JJ
JJ
JJ JJ
R JJ
R JJ
JJ R
R R R R JJ JJ
JJ JJ JJ JJ JJ JJ
JJ JJ JJ JJ JJ JJ
R JJ JJ JJ R R
-age !%
DATA RE@UIRED DATA DESCRIPTION7DEFINITION B A C R interva&s, /ith &'$ri)ant des)riptions, grades, and a&ternate s'pp&ier designations. .AST:I -AITS 7?ST JJ JJ JJ R 7ist parts, part n'm$ers, seria& n'm$ers, and inter)hangea$i&it0 information. S-:C?A7 .A?#T:#A#C: TOO7 R JJ JJ JJ I:NU?I:.:#TS SB?--?#=, BA#D7?#= A#D STOIA=: JJ JJ JJ R -IOC:DUI:S ?#STA77AT?O#A:I:CT?O# JJ JJ JJ R -IOC:DUI: D,:AW,: ASSUIA#C: STAT:.:#T R JJ JJ JJ D,:AW,: U#AOA?7A,?7?T5 C:IT?*?CAT: CO#TIACTOI A#D *?IST T?:I SU,CO#TIACTOI -AIT?C?-AT?O# D,:AW,: UT?7?XAT?O# I:-OIT R R JJ JJ JJ JJ JJ JJ JJ JJ R R
COMMENTS
-age !1
CCECQLIST FOR SIV)SECTION SPECIFICATION 6PART I9 !. Ievie/ Se)tion ! for( A))'rate statement of s)ope 2. Ievie/ the referen)es in Se)tion 2 for( a. #e)essit0 $. Avai&a$i&it0
". Ievie/ the re<'irements of Se)tion " to determine that( a. Ieferen)ed do)'ments are ne)essar0 and app&i)a$&e $. ). Ie<'irements are predominant&0 design or performan)e and that the same re<'irement is not )overed $oth /a0s #o re<'irement is Unrea&isti) ?ndefinite Iestri)tive d. e. f. The re<'irements meet the needs of .:TIO The re<'irements are /ithin ind'str0Ks )apa$i&it0 :a)h re<'irement is )apa$&e of $eing inspe)ted or other/ise verified
4. Ievie/ Se)tion 4 to determine that( The Contra)torKs standard <'a&it0 ass'ran)e program /i&& $e s'ita$&e to .:TIO 5. Ievie/ Se)tion 5 to ins're that( -reservation, pa)2aging, and pa)2ing are rea&isti) %. Ievie/ Se)tion % to ins're that( a. De&iver0 of ade<'ate data, i.e., dra/ings, )a&)'&ations, )ata&ogs, reports, et)., is identified on the CDI7 to a))omp&ish a pro@e)t. $. Ie<'ested data /i&& meet the needs of an insta&&ation )ontra)tor.
PART II SCOPE OF SERPICE The S)ope of Servi)e is the )ontra)t'a& do)'ment for e;pressing e;a)t&0 /hat servi)es or prod')t 0o' re<'ire and for eva&'ating the servi)e or prod')t of the )ontra)tor.
-age !H
The s'ggested se)tion headings sho/n $e&o/ sho'&d $e 'sed in a&& s)ope of servi)es /hen the heading is app&i)a$&e. Appropriate headings sho'&d $e added as re<'ired. Se)tion Beadings ,a)2gro'nd -rimar0 Wor2 Tas2 Other Wor2 Tas2sAServi)es Ordering -ro)ed're Contra)tor N'a&it0 Ass'ran)e Te)hni)a& Ieports BACQ<ROUND -rovide a des)ription of the servi)esAprod')t to $e )ontra)ted for and a genera& des)ription of the )ontents of the s)ope of servi)e. -rovide an0 spe)ia& $a)2gro'nd information avai&a$&e. PRIMARD BORQ TASQS ?n)&'de statements 'nder this heading to thoro'gh&0 des)ri$e the primar0 /or2 tas2 e;pe)ted 'nder the s)ope of servi)e. OTCER BORQ TASQS7SERPICES ?n)&'de statements 'nder this heading to des)ri$e additiona& /or2 tas2s or servi)es that ma0 $e re<'ired 'nder the s)ope of servi)e. CONTRACTOR @UALITD ASSURANCE ?n)&'de statements to des)ri$e an0 spe)ia& <'a&it0 re&ia$i&it0 or <'a&it0 ass'ran)e re<'irements. TECCNICAL REPORTS ?n)&'de statements to in)&'de an0 and a&& te)hni)a& reports that /i&& $e re<'ired d'ring the term of the )ontra)t. SCCEDULE OF ITEMS AND PRICIN< The fo&&o/ing is a s'ggested format to &ist items and re<'est 'nit pri)ing for pa0 items referen)ed in the S)ope of Servi)es. The S)hed'&e of ?tems and -ri)e sho'&d $e an atta)hment to the S)ope of Servi)es. SCCEDULE OF ITEMS AND PRICES The Contra)tor sha&& )omp&ete the fo&&o/ing pri)e s)hed'&e $ased on the ann'a& estimated <'antities of the servi)es re<'ired(
-age !9
?tem
Des)ription
:stimated N'antit0
Unit -ri)e
PART III BRAND NAME OR E@UAL E@UIPMENT SPECIFICATION7DATA SCEET The $rand name or e<'a& e<'ipment spe)ifi)ationAdata sheet format is 'sed for the pro)'rement of items s')h as ma)hine too&s, fa$ri)ation e<'ipment, )&eaning e<'ipment, mo$i&e e<'ipment, and standard off the she&f e<'ipment. The fo&&o/ing is an e;amp&e of a spe)ifi)ationAdata sheet for a !9> ; 1H> engine &athe that )an $e 'sed as a g'ide for the pro)'rement of an0 of the a$ove &isted items( SPECIFICATION7DATA SCEET EN<INE LATCE (8F V 45F <ENERAL DESCRIPTION This Data Sheet )overs the re<'irements for a rigid $ase, f&oor mo'nted, meta& )'tting, e&e)tri) motor driven engine &athe s'ita$&e for genera& p'rpose meta& t'rning, fa)ing, $oring, dri&&ing and threading operations in a =enera& -'rpose .aintenan)e Shop for a Transit A'thorit0. The ma)hine sha&& )onsist of a f&oor mo'nted $ase and $ed /ith /a0s, head sto)2, tai& sto)2, )arriage and other spe)ified )omponents. The &athe sha&& $e a .onar)h Dean Smith C =ra)e 7imited .ode& M!9!0 or e<'iva&ent. DESI<N FEATURES =IOU#D?#= The point of )onne)tions for .:TIOKs po/er s'pp&0 is to in)&'de a gro'nding point for the e&e)tri)a& gro'nding of the ma)hine frame. Contra)tor to provide a gro'nding st'd. #A.:-7AT: A )orrosion resistant meta& namep&ate sha&& $e atta)hed to the .a)hine /ith remova$&e )orrosion resistant s)re/s. The namep&ate sha&& )ontain at &east the fo&&o/ing information( .an'fa)t'rerKs name .ode& n'm$er of .a)hine Seria& n'm$er of .a)hine .:TIOKs )ontra)t n'm$er .:TIOKs e<'ipment tag n'm$er Date of man'fa)t're
-age 20
7U,I?CAT?O# A means of positive &'$ri)ation sha&& $e provided for a&& )omponents of the .a)hine that re<'ire &'$ri)ation. :#=7?SBA.:TI?C When app&i)a$&e, ma)hines /ith thread )'tting )apa$i&ities m'st have the )apa$i&it0 in $oth :ng&ish and .etri). SINES AND CAPACITIES The :ngine 7athe m'st )omp&0 /ith the fo&&o/ing siGes and )apa)ities. The Contra)tor m'st f'rnish $ro)h'res, information re<'ested and fi&& in the $&an2 spa)es. SINES7CAPACITIES RE@UIREMENT CONTRACTORKS SPECIFICATION The fo&&o/ing are s'ggested ma@or headings /ith an e;amp&e of ea)h from a $ro)h're of a .onar)h Dean Smith C =ra)e 7imited .ode& M!9!0( BORQIN< CAPACITD S/ing Over ,ed 8.in9 SPEEDS + FEEDS Bead sto)2 *or/ard C Ieverse Speeds 8.in9 Universa& =ear$o; 7ongit'dina& *eeds 8.in9 SINES Bead sto)2 Cam&o)2 Spind&e #ose SCREB CUTTIN< Thread -er ?n)h TAIL STOCQ Spind&e Diameter 8.in9 SADDLE AND APRON 7ength of Sadd&e ='ide .fr. Std. JJJJJJJJJJJJJJJJJJJ ".5> JJJJJJJJJJJJJJJJJJJ 45 from 2 to 5% tpi no e;)eption D! H> JJJJJJJJJJJJJJJJJJJ "0 JJJJJJJJJJJJJJJJJJJ !% JJJJJJJJJJJJJJJJJJJ !9.5> JJJJJJJJJJJJJJJJJJJ
-age 2!
OPTIONS AND ACCESSORIES The Contra)tor m'st f'rnish man'fa)t'rer and des)riptive &iterat're of the fo&&o/ing &isted options and a))essories. OPTION7ACCESSORD RE@UIREMENT CONTRACTORKS SPECIFICATION =ap ,ed /AIemova$&e -ie)e ! ea. JJJJJJJJJJJJJJJJJ Trave&ing Stead0 .%25> to 4.5> Stationar0 Stead0 !> 1> 4 6a/ Ch')2 !H> ! ea. ! ea. ! ea. JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJ
TOOLIN< The Contra)tor m'st f'rnish man'fa)t'rer and des)riptive &iterat're of the fo&&o/ing &isted too&ing. TOOLIN< RE@UIREMENT CONTRACTORKS SPECIFICATION 6a)o$s I'$$erf&e; Co&&et Ch')2s ! set JJJJJJJJJJJJJJJJJ 8Spe)if0 Capa)it09 6a)o$s I'$$erf&e; Co&&ets for ! set JJJJJJJJJJJJJJJJJ 'se /ith a$ove Co&&et Ch')2s Ievo&ving 7ive Center for Tai& ! ea. JJJJJJJJJJJJJJJJJ sto)2 *a)e -&ate !%> ! ea. JJJJJJJJJJJJJJJJJ
UTILITIES The fo&&o/ing 'ti&ities are avai&a$&e at the maintenan)e fa)i&it0. The Contra)tor m'st f'rnish the re<'ired 'ti&it0 )ons'mption. UTILITD APAILABLE CONTRACTORKS RE@UIREMENTS Oo&ts !20A4%0 JJJJJJJJJJJJJJJJJJJ -hase S0stem A.-S !A" %0 BG #AA JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJ
-age 22
CONTRACTOR INFORMATION RE@UIRED 6MUST BE FILLED IN BD BIDDER9 .ACB?#: S?X: A#D W:?=BT Weight /ith Standard :<'ipment in)&'ding .otors Shipping Weight of Comp&eted .a)hine Overa&& Dimensions of .a)hine 87 ; W ; B9 .A#U*ACTUI:I O* .ACB?#: COU#TI5 O* OI?=?# O* .ACB?#: COU#TI5 O* OI?=?# O* O-T?O#S A#D ACC:SSOI?:S COU#TI5 O* OI?=?# O* TOO7?#= T:CB#?CA7 DATA O# .ACB?#: ATTACB:D :NU?-.:#T ?.D. #U.,:I JJJJJJJJJJ &$s. JJJJJJJJJJ &$s. JJJ> ; JJJ> ;JJJ> JJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJ 5es JJJJ #o JJJJ JJJJJJJJJJJJJJJJ
PART IP STATEMENT OF BORQ7PURCCASE DESCRIPTION The Statement of Wor2 8SOW9 is a spe)ia& )ategor0 of a spe)ifi)ation that is 'sed /hen )ontra)ting for servi)es and e<'ipment. The SOW o't&ines the nat're of the /or2, the &eve& of effort re<'ired and the anti)ipated res'&ts of the /or2, rather than detai&ed te)hni)a& spe)ifi)ations of a parti)'&ar item. *or servi)es and e<'ipment that )an $e ade<'ate&0 des)ri$ed /ith &ess data than that )ontained in the Si; Se)tion :<'ipment Spe)ifi)ation, S)ope of Servi)es or ,rand #ame or :<'a& :<'ipment Spe)ifi)ationAData Sheet *ormat, 0o' )an /rite a short SOW. This approa)h is 's'a&&0 reserved for Off the She&f hard/are or )ommon&0 avai&a$&e servi)es. When /riting a SOW, 0o' m'st 'ti&iGe 0o' spe)ia& 2no/&edge of the s'$@e)t in de)iding the )ontent of the SOW. The 2e0 e&ements are the same as those for an0 Spe)ifi)ation or S)ope of Servi)e, /ith the added re<'irement that 0o' m'st state /hen and /here the /or2 is to $e performed. The SOW m'st dea& /ith the fo&&o/ing $asi) <'estions( What needs to $e doneW Where sho'&d it $e doneW When sho'&d it $e doneW What sho'&d the fina& o'tp't )onsist ofW When the SOW has ans/ered the a$ove <'estions, it is essentia&&0 )omp&ete.
,est -ra)ti)es -ro)'rement .an'a& Appendi; ,.! L :;amp&e :va&'ation -ro)ess
-age !
APPENDIV B$LI@UIDATED DAMA<ES CCECQ LIST

,AIT -IO6:CT #O. JJJJJJJJJJJ CO#TIACT T?T7:( JJJJJJJJJJJJJJJJ :ST?.AT:D CO#TIACT OA7U:( =enera& JJJJJJJ.e)hani)a& JJJJJJJJ :&e)tri)a& JJJJJJJJOther JJJJJJJJJJ
Item
!. Costs ref&e)ting the re&ative importan)e of )omp&etion of this )ontra)t to the )omp&etion of other dire)t&0 asso)iated a)tivities, e.g., if a S!0 mi&&ion do&&ar s'$station is $eing pro)'red and re<'ires )onstr')tion of a $'i&ding, the )ost to ,AIT of de&a0s 'pon the )omp&etion of the $'i&ding on the s'$station pro)'rement sho'&d $e )onsidered. 2. Ienta& )osts for ea)h da0 of fa)i&ities and e<'ipment ne)essitated $0 the de&a0s in )ontra)t )omp&etion. ". Cost8s9 for additiona& maintenan)e re<'ired on e<'ipment or str')t'res $eing rep&a)ed for ea)h da0 of de&a0 in )omp&etion of the pro@e)t. 4. Additiona& operating )osts to ,AIT for ea)h da0 of de&a0 in )omp&etion, in)&'ding $'t not &imited to )ashier, operator and s'pervisor0 )osts res'&ting from )ontra)t )omp&etion de&a0s. Costs of ro'te deto'rs or s'$stit'tion of one transit mode for another sha&& $e )onsidered. 5. 7oss of reven'e to ,AITKs operations for ea)h da0 d'e to de&a0 in )ontra)t )omp&etion. %. An0 other damages for ea)h da0 of de&a0 in )omp&etion /hi)h ,AIT ma0 anti)ipate, e.g., is there a high potentia& for de&a0 of one prime )ontra)t /ith res'&ting )osts to ,AIT for the other prime )ontra)ts. 1. :stimated )osts of inspe)tion. H. A)t'a& damages 8-ro@e)t .anager to indi)ate /hether a)t'a& t0pes of damages sho'&d $e e;)&'ded from the )a&)'&ations9.
Pro'ect Mana"erKs Determination Non) A lica&le A lica&le
If A lica&le! Dollar Amount
S?=#:D JJJJJJJJJJJJJJJJJJJJJJJJJ -IO6:CT .A#A=:I
,est -ra)ti)es -ro)'rement .an'a& Appendi; ,.2
-age !
APPENDIV B$0 BART PURCCASE CARD SDSTEM ($: PURPOSE AND CONTENT The ,AIT p'r)hase )ard s0stem provides a means for 'sing )redit )ards for sma&& p'r)hases. The reg'&ations governing the 'se of the ,AIT p'r)hase )ards are set forth in the Distri)tKs -ro)'rement .an'a&, Chapter O, Se)tion D.F .i)rop'r)hase pro)ed'res and other re&ated se)tions. The s0stem )ontains spe)ifi) pro)ed'res for 'se $0 pro)'rement personne& as /e&& as a /ide range of individ'a&s /ho parti)ipate in the p'r)hase )ard program. These pro)ed'res integrate diverse reg'&ator0 and operationa& information from n'mero's so'r)es in a 'ser oriented do)'ment. The S'pervisor, -ro)'rement Administration has $een designated $0 the Department .anager, -ro)'rement as the fo)a& point for app&i)ations, iss'an)e and destr')tion of )ards, esta$&ishment of reports, and administrative training for this -rogram. *$: INTRODUCTION The State of Ca&ifornia 8>State>9 has a/arded a )ontra)t for state/ide )ommer)ia& )redit )ard servi)es to Io)20 .o'ntain ,an2Card S0stem, ?n). 8>)ontra)tor>9. The )ontra)t /as intended to provide, at the re<'est of state ordering agen)ies, state /ide )ommer)ia& p'r)hase )ards and asso)iated servi)es to state emp&o0ees for the p'rpose of pa0ing for p'r)hases made for offi)ia& state p'rposes. ?n !995, the State made these servi)es avai&a$&e to an0 of its po&iti)a& s'$divisions of /hi)h ,AIT as a p'$&i) 'ti&it0 distri)t <'a&ifies for parti)ipation in the program. On 6'&0 !, !99%, the Distri)t )ommen)ed its program and iss'ed these pro)ed'res. These pro)ed'res are designed to s'pp&ement the Distri)tKs -ro)'rement .an'a& and an0 >?nstr')tions for the Use of the Distri)t -'r)hase Card> distri$'ted to the )ardho&der and >Approving Offi)ia& ?nstr')tions for the Use of the Distri)t -'r)hase Card> distri$'ted to the approving offi)ia& at the time the )ard is iss'ed. ?n the event these pro)ed'res )onf&i)t /ith an0 instr')tions provided $0 the )ontra)tor, these pro)ed'res ta2e pre)edent. A77 -UICBAS:S TBAT W?77 ,: -A?D *OI US?#= TB: CAID SBA77 CO.-75 W?TB ,AITKS -IOCUI:.:#T .A#UA7 A#D TB:S: -IOC:DUI:S U#7:SS OTB:IW?S: A--IOO:D ,5 ,AITKS -IOCUI:.:#T D:-AIT.:#T.
-age "
The approving offi)ia& /i&& )ertif0 the )ardho&derKs month&0 statements and ens're that pa0ments are for p'r)hases /hi)h are a'thoriGed and made in a))ordan)e /ith the Distri)tKs -ro)'rement .an'a& and these pro)ed'res. The approving offi)ia& /i&& a&so assist the )ardho&der in reso&ving disp'ted pa0ments. :ither the approving offi)ia& or the Department .anager, -ro)'rement has a'thorit0 to dire)t -ro)'rement Administration to instr')t the )ontra)tor to )an)e& a )ard at an0 time. .$.$( This approving a'thorit0 nomina&&0 rests /ith the Sponsoring or Using Department .anager and ma0 not $e f'rther rede&egated other than for temporar0 a$sen)es /itho't the )on)'rren)e of the Department .anager, -ro)'rement. =enera&&0, this a'thorit0 sho'&d $e rede&egated /here the Division .anager f'n)tion oversees 50 emp&o0ees or more. An0 s')h rede&egation on a standing $asis s')h as mentioned a$ove, m'st $e revie/ed at &east semi ann'a&&0 $0 the s'pervisor as part of emp&o0ees performan)e eva&'ation. An0 pertinent information )oming o't of these revie/s sho'&d $e separate&0 s'mmariGed and transmitted to the -ro)'rement Department for their revie/. .$0 -ro)'rement Administration sha&& esta$&ish a $'dgetar0 &imit for ea)h offi)e that does not e;)eed the s'm of the approving offi)ia&Ks )ardho&dersK month&0 p'r)hase &imits. This sho'&d $e revie/ed <'arter&0 and ad@'sted if ne)essar0 to ref&e)t the )ardho&dersK a)t'a& spending patterns and minimiGe the ris2 to the Distri)t of a spending overr'n in the fo'rth <'arter of the then )'rrent fis)a& 0ear. -ro)'rement Administration sha&& a&so )oordinate, pro)ess and monitor reso&'tion of a&& disp'ted p'r)hases, )redits or $i&&ing errors, 'n&ess the Department .anager, -ro)'rement designates another individ'a& or offi)e to perform this f'n)tion. .$2 0$: 0$( Distri)t Contro&&erKs Offi)e sha&& ans/er the )ontra)torKs <'estions a$o't pa0ment of month&0 statements as /e&& as ma2e pa0ments 'nder this program. USE OF TCE DISTRICT PURCCASE CARD The -'r)hase )ard ma0 $e 'sed to pa0 for sma&& p'r)hases made in a))ordan)e /ith Chapter O of the Distri)tKs -ro)'rement .an'a& and these pro)ed'res. ?t ma0 a&so $e 'sed to pa0 for orders p&a)ed against esta$&ished re<'irements )ontra)ts or /ith esta$&ished so'r)es of s'pp&0, /hen a'thoriGed $0 the )ontra)t or reg'&ation re<'iring 'se of the so'r)e. Bo/ever, Distri)t inventories sho'&d $e )he)2ed for avai&a$i&it0 prior to ma2ing a p'r)hase 'sing the )ard. The -'r)hase )ard )an $e 'sed to pa0 for s'pp&ies or servi)es a)<'ired 'sing ora& so&i)itation pro)ed'res. ?t ma0 a&so $e 'sed to pa0 for s'pp&ies or servi)es that are a)<'ired thro'gh a p'r)hase order or an individ'a& order 'nder a re<'irements )ontra)t /here the )ontra)t spe)ifi)a&&0 a&&o/s s')h pa0ment method.
0$*
-age 4
0$0$. 2$:
Witho't e;)eption, the -'r)hase )ard ma0 on&0 $e 'sed to pa0 for a'thoriGed Distri)t p'r)hases. Under no )ir)'mstan)es, /i&& the -'r)hase )ard $e 'sed for )ash advan)es. SETTIN< UP TCE PURCCASE CARD ACCOUNT The )ontra)tor /i&& provide -ro)'rement Administration /ith a&& the ne)essar0 app&i)ation forms 8)ardho&der, approving offi)ia&, disp'tes, destr')tion noti)e et).9. The Sponsoring Department /i&& re<'est that -ro)'rement iss'e p'r)hase )ard8s9 to named Distri)t emp&o0ee8s9 and ass're f'nding of s')h p'r)hases $0 'sing the ,'&2 f'nding pro)ed're in ,AITKs -ro)'rement .an'a&, Chapter O. S'$@e)t to the pro)'rement a'thorit0 de&egation pro)ed'res in the -ro)'rement .an'a&, Chapter ?, -ro)'rement Administration /i&& distri$'te the forms to se&e)ted )ardho&ders and approving offi)ia&s for )omp&etion. The Cardho&der8s9 and Approving Offi)ia& /i&& )omp&ete the forms indi)ating the0 'nderstand the terms of its 'se and /i&& agree to a$ide $0 these pro)ed'res. The )ards are iss'ed for a one 0ear period and /i&& $e s'$@e)t to revie/ $0 the -ro)'rement Department ea)h 0ear prior to rene/a&. 8Other organiGationa& f'n)tions at ,AIT, s')h as ?nterna& A'dit or Civi& Iights, ma0 revie/ 'sage of the p'r)hase )ard $0 the Sponsoring Department.9 Upon )omp&etion, -ro)'rement Administration sha&& pro)ess and for/ard the forms to the )ontra)tor and then iss'e the )ards to the sponsoring department /hen re)eived. The )ontra)tor is )apa$&e of providing vario's reports to meet management and administrative needs. D'ring the a))o'nt set'p pro)ess, -ro)'rement Administration /i&& dis)'ss the vario's reports avai&a$&e /ith Sponsoring Department management personne&.
4$:
SI<NATURE CARDS When the a))o'nt information is s'$mitted to -ro)'rement Administration, a signat're )ard m'st $e )omp&eted $0 ea)h approving offi)ia& that states the approving offi)ia& ma0 approve the a))'ra)0 of the Statement of A))o'nt for pa0ment. The signat're )ard /i&& $e for/arded to the Contro&&erKs offi)e $0 -ro)'rement Administration after )omp&etion. Sponsoring departments are responsi$&e for de&egating Approving Offi)ia& a'thorit0 as ne)essar0 to avoid statement pro)essing de&a0s and &ate pa0ment pena&ties.
5$:
DOLLAR LIMITS ASSOCIATED BITC TCE PURCCASE CARD Use of the p'r)hase )ard $0 a )ardho&der is s'$@e)t to a sing&e p'r)hase &imit and a month&0 )ardho&der &imit. The p'rpose of these do&&ar &imits is as fo&&o/s >Sing&e -'r)hase 7imit> is a &imitation on the pro)'rement a'thorit0 8>mi)rop'r)hase a'thorit0>9 de&egated to the )ardho&der $0 the Department .anager, -ro)'rement )onsistent /ith the re<'irements of the Distri)tKs -ro)'rement .an'a&, Chapter ?.
-age 5
This &imit )annot $e e;)eeded 'n&ess a revised de&egation of a'thorit0 is iss'ed $0 the Department .anager, -ro)'rement or his or her designee, raising the &imit. 8A >sing&e p'r)hase> 'sing the )ard ma0 in)&'de m'&tip&e items. Bo/ever, no sing&e p'r)hases ma0 e;)eed the a'thoriGed sing&e p'r)hase &imit esta$&ished for ea)h )ardho&der.9 >.onth&0 Cardho&der 7imit> is a $'dgetar0 &imit assigned $0 the approving offi)ia& and ma0 $e modified if ne)essar0 $0 the -ro)'rement Department. The approving offi)ia& sha&& )oordinate /ith -ro)'rement Administration /hen determining a month&0 &imit and sho'&d ref&e)t spending histor0 as /e&& as $'dgetar0 trends. The tota& do&&ar va&'e of p'r)hases /hen 'sing the )ard for an0 sing&e month ma0 not e;)eed the month&0 p'r)hase &imit set $0 the approving offi)ia& s'$@e)t to )on)'rren)e $0 the -ro)'rement Department. 8$: 8$( 8$* AUTCORINED USE OF TCE CARD The 'ni<'e -'r)hase )ard O?SA )ard that the )ardho&der re)eives, ma0 $e 'sed on&0 $0 that )ardho&der. #o other person is a'thoriGed to 'se the )ard and the )ard ma0 on&0 $e iss'ed to Distri)t emp&o0ees. The )ard /as spe)ia&&0 designed sho/ing the Distri)t &ogo imprinted 'pon it to avoid $eing mista2en for a persona& p'r)hase )ard. When iss'ing this )ard to an emp&o0ee, a'thoriGation )odes /i&& $e esta$&ished $0 -ro)'rement Administration and /i&& $e in)orporated in the )ard. Under norma& )ir)'mstan)es, mer)hants are re<'ired to o$tain a'thoriGation from the )ontra)tor for p'r)hases over S50.00. Bo/ever, man0 mer)hants no/ 'se e&e)troni) a'thoriGation methods a&&o/ing them to o$tain a'thoriGation for a&& p'r)hases regard&ess of amo'nt. When a'thoriGation is so'ght for a p'r)hase $0 the mer)hant, the )ontra)tor a'thoriGation s0stem /i&& e&e)troni)a&&0 )he)2 ea)h individ'a& )ardho&derKs sing&e p'r)hase and month&0 &imits, the month&0 offi)e &imit, and the t0pe of mer)hant /here the )ardho&der is ma2ing the p'r)hase $efore a'thoriGation for the transa)tion /i&& $e granted. 8$. Use of the )ard m'st meet the fo&&o/ing )onditions( 8!9 The tota& of a sing&e p'r)hase to $e paid for 'sing the )ard ma0 $e )omprised of m'&tip&e items and )annot e;)eed the a'thoriGed sing&e p'r)hase &imit. -'r)hases /i&& $e denied if the a'thoriGed sing&e p'r)hase &imit is e;)eeded. -a0ment for p'r)hases ma0 not $e sp&it in order to sta0 /ithin the sing&e p'r)hase &imit. 829 A&& items p'r)hased over the )o'nter to $e paid for 'sing the )ard m'st $e immediate&0 avai&a$&e. #o $a)2 ordering is a&&o/ed as /e&& as deposits for spe)ia& orders. 8"9 A&& items p'r)hased $0 a te&ephone order that /i&& not $e )onfirmed /ith a /ritten order and $e paid for 'sing the )ard sho'&d genera&&0 $e de&ivered $0 the mer)hant /ithin the "0 da0 $i&&ing )0)&e. Bo/ever, a &onger period 8'p to !20 da0s for de&iver09 ma0 $e 'ti&iGed $0 Sponsoring Departments. ?f the &onger period is e&e)ted, pro)ed'res need to $e
8$-
-age %
esta$&ished $0 the Sponsoring Department for proper re)on)i&iation of the month&0 $i&&s, a&&o/ing for the )arr0ing for/ard of items ordered $'t not re)eived. 849 A&& items p'r)hased d'ring one te&ephone transa)tion that /i&& not $e )onfirmed $0 a /ritten order sho'&d genera&&0 $e de&ivered in a sing&e de&iver0. ?f a Sponsoring Department e&e)ts to a&&o/ partia& de&iveries, Sponsoring Department pro)ed'res m'st $e imp&emented to ens're proper re)on)i&iation of a&& s')h orders. 859The -'r)hase )ard ma0 not $e 'sed to p'r)hase persona& propert0 items over S!,000 in va&'e 'n&ess p'r)hased /ith the Contro&&erKs offi)e )on)'rren)e prior to p'r)haseQ so the proper tagging )an $e done and the re<'ired a))o'nta$i&it0 esta$&ished. 8%9 When p'r)hasing items $0 phone or over the )o'nter, the )ardho&der sho'&d inform the mer)hant that the p'r)hase is s'$@e)t to state and &o)a& ta;. Conta)t the Contro&&erKs offi)e for <'estions in this area. 819 At the $eginning of ea)h Distri)t fis)a& 0ear and prior to the 'se of the p'r)hase )ards, the Sponsoring Department sha&& )ertif0 that f'nds as avai&a$&e 'sing the $'&2 f'nding pro)ed'res in the Distri)tKs -ro)'rement .an'a&, Chapter O. (:$: UNAUTCORINED USE OF TCE CARD Un&ess other/ise approved in /riting $0 the Department .anager, -ro)'rement, the )ard m'st not $e 'sed for the fo&&o/ing( 8!9 Cash advan)esQ 829 Ienta& or &ease of motor vehi)&esQ 8"9 Ienta& or &ease of &and or $'i&dingsQ 849 -'r)hase of air&ine, $'s, train, or other trave& re&ated ti)2etsQ 859 -'r)hase of mea&s, drin2s, &odging, or other trave& or s'$sisten)e )ostsQ 8%9 -'r)hase of gaso&ine or oi& for Distri)t a'tomotive vehi)&esQ 819 Iepair of Distri)t a'tomotive vehi)&esQ and 8H9 Te&ephone )a&&s (($: (($( AC@UISITION PROCEDURES FOR USE BCEN PADIN< BITC TCE PURCCASE CARD When ma2ing p'r)hases that /i&& $e paid for 'sing the -'r)hase )ard, a&& the app&i)a$&e a)<'isition reg'&ations app&0. Iegard&ess of /hether the open mar2et p'r)hase is made 'sing ora& pro)ed'res or 'sing a /ritten p'r)hase order or )ontra)t, the )ardho&der m'st( 8!9 :ns're that f'nds are avai&a$&e and )ertified to pa0 for the items $eing p'r)hased. A f'nded -'r)hase Ie<'est 8-I9 sha&& s'pport ea)h )redit )ard p'r)hase. The -I ma0 $e $'&2 f'nded.
-age 1
829 ,e a/are of the Distri)tKs )ommitment to D,: firms and the0 /i&& $e he&d a))o'nta$&e for their D,: parti)ipation d'ring the fis)a& 0ear. 8"9 So&i)it )ompetition for p'r)hases (($*$( Users sho'&d $e a/are that it is )ommon )ommer)ia& pra)ti)e for $an2s to )harge mer)hants for their parti)ipation in p'r)hase )ard programs $0 >dis)o'nting> their pa0ment $0 2 to as m')h as !5P of the tota& )harge. A S!00 $i&& to the )'stomer and paid to the $an2 in a month&0 statement ma0 on&0 represent S9H to SH5 in a)t'a& reven'e to the mer)hant from the $an2. .er)hants are a/are of this and restrained on&0 $0 )ompetition, /i&& ad@'st their pri)ing to ref&e)t these )ostsQ or the0 /i&& offer their )'stomers a )ash dis)o'nt. (($*$* ?t is against Distri)t po&i)0 to pa0 an0 t0pe of a >s'r)harge> to a .er)hant, offsetting the $an2 dis)o'nt. 7i2e/ise, 'sers sho'&d not agree to a .er)hantKs re<'est to revise the pri)e a$ove /hat the genera& p'$&i) pa0s for an item in order to ma2e 'p for the $an2Ks dis)o'nt. (($-$( Users sho'&d a&so $e a/are that proper f'n)tioning of this program rests 'pon time&0 pa0ments to the Contra)tor. Disp'tes sho'&d $e hand&ed thro'gh the .er)hant, not the Contra)tor. Users m'st 2no/ the ref'nd, e;)hange and /arrant0 terms offered $0 the .er)hant prior to ma2ing the p'r)hase. Ad@'stment of p'r)hases of defe)tive materia&s from mer)hants is the responsi$i&it0 of the sponsoring department and not the -ro)'rement Department, or the Contra)tor. (($-$* ?t is Distri)t po&i)0 to p'r)hase goods, materia&s, or e<'ipment on&0 from those .er)hants that offer the Distri)t f'&& ref'nd or e;)hange rights at the Distri)tKs dis)retion. S')h rights sha&& $e in /riting, either transmitted to the Distri)t emp&o0ee, or other/ise p'$&i)&0 noti)ed. (($. (($0 Ora& so&i)itations sho'&d $e 'sed /henever possi$&e /ithin the &o)a& trade area. >7o)a& trade area> is defined as the three )o'nt0 area that en)ompasses the Distri)t. Written so&i)itations are re)ommended to $e 'sed /hen 8?9 a &arge n'm$er of &ine items are in)&'ded in a sing&e proposed a)<'isition, 8ii9 o$taining ora& <'otations is not )onsidered e)onomi)a& or pra)ti)a&, 8iii9 spe)ia& spe)ifi)ations are re<'ired $e)a'se items or servi)es )annot $e easi&0 e;p&ained or 8iv9 .er)hants are &o)ated o'tside the &o)a& trade area -'r)hases not in e;)ess of S2,500 ma0 $e a))omp&ished /itho't se)'ring )ompetition if the )ardho&der 8f'n)tioning as the )ontra)ting offi)er9 )onsiders the pri)es to $e reasona$&e.
(($2
(($2$( =enera&&0 spea2ing, the Distri)tKs pri)ing o$@e)tive in ma2ing mi)rop'r)hases, is to o$tain the same pri)e that the genera& p'$&i) /o'&d pa0 for the item if the0 /ere $'0ing s')h an item in simi&ar )ir)'mstan)es and <'antities. ?f the item is not a $road&0 distri$'ted )ommer)ia& prod')t, then the Distri)tKs pri)ing o$@e)tive is to a)hieve the same terms as that of the .er)hantKs most favored )'stomer if possi$&e.
-age H
(($2$* These p'r)hases are to $e distri$'ted e<'ita$&0 among <'a&ified .er)hants $0 means of .er)hant rotation. ?f pra)ti)a&, other than the previo's .er)hant sho'&d $e so&i)ited /hen p&a)ing repeat orders. (($4 A reasona$&e n'm$er of so'r)es m'st $e so&i)ited 8at &east three9 for p'r)hases over S2,500. ?f pra)ti)a&, t/o of these so'r)es sha&& not have $een previo's&0 so&i)ited. ?f mer)hants f'rnish standing pri)e <'otations or )ata&og pri)es on a re)'rring $asis, verif0ing the <'otations or pri)es for individ'a& p'r)hases is not ne)essar0, $'t the pri)es sho'&d $e periodi)a&&0 )onfirmed as )'rrent. When determining the n'm$er of so'r)es to so&i)it, )onsider 8?9 the nat're of the item or servi)e to $e p'r)hased and /hether it is high&0 )ompetitive, 8ii9 information from re)ent p'r)hases of the same or simi&ar item or servi)e, 8iii9 the 'rgen)0 of the p'r)hase, 8iv9 the do&&ar va&'e of the p'r)hase, and 8v9 past e;perien)e )on)erning mer)hantsK pri)es. Cardho&ders are not re<'ired to do)'ment their p'r)hases 'nder S2,500 /ith respe)t to )ompetition or reasona$&eness of pri)e 'n&ess 8!9 The Distri)t emp&o0ee has reasona$&e $asis to s'spe)t or has other information to indi)ate the pri)e ma0 not $e reasona$&e or 829 it is the p'r)hase of an item for /hi)h no )ompara$&e pri)ing information is avai&a$&e. The month&0 invoi)e approva& pa)2age transmitted to the approving offi)ia& m'st )ontain an e;p&anation of ho/ pri)e reasona$&eness /as determined in those instan)es. (($8 Ora& -'r)hase -ro)ed'res Ora& pro)ed'res ma0 $e 'sed to a)<'ire s'pp&ies or servi)es that )an $e des)ri$ed in s'ffi)ient detai& so that the parties to the agreement have a )&ear 'nderstanding of /hat is $eing a)<'iredQ and a p'r)hase order or )ontra)t is not re<'ired $0 either the .er)hant or the Distri)t. When p&a)ing a te&ephone order to $e paid 'sing the -'r)hase )ard, the )ardho&der /i&&( 8!9 #otif0 the .er)hant that the p'r)hase is s'$@e)t to state and &o)a& ta;es. 829 Confirm that the .er)hant is a/are of a&& re<'ired Distri)t terms and )onditions. 8"9 Confirm that the .er)hant agrees to )harge the p'r)hase )ard /hen shipment is made so that re)eipt of the s'pp&ies ma0 $e )ertified on the month&0 Statement of A))o'nt. 849 ?nstr')t the .er)hant to in)&'de the fo&&o/ing information /ith the shipping do)'ments or pa)2ing s&ip( 8i9 Cardho&der name and mai& )odeQ 8ii9 ,'i&ding n'm$er, room n'm$er, street address, )it0 and stateQ 8iii9 Cardho&der te&ephone n'm$erQ 8iv9 The term( -'r)hase )ardQ 8v9 -'r)hase Ie<'est or -'r)hase Order #'m$er.
(($5
-age 9
This information /i&& a&ert the re)eiving offi)es and the re<'isitioner that the s'pp&ies have $een p'r)hased /ith the p'r)hase )ard. A &og sho'&d $e 'sed to do)'ment or re)ord te&ephone p'r)hase )ard orders of S2,500 or &ess /hen )ompetitive <'otes are not so&i)ited. ?f )ompetitive <'otes are so&i)ited for p'r)hases of S2,500 or &ess, or if the p'r)hase e;)eeds S2,500 and therefore re<'ires )ompetition 8-ro)'rement staff on&09, the re)ord sha&& $e do)'mented. The do)'mentation sho'&d $e he&d 'nti& the month&0 $i&&ing statement is re)eived and then atta)hed to the statement /hen it is s'$mitted to the approving offi)ia&. (($(: -'r)hases Ie<'iring the ?ss'an)e of a Written Order or Contra)t ?f the -'r)hase )ard is 'sed to pa0 for a p'r)hase made $0 'sing one of the p'r)hase order or )ontra)t forms, the .er)hant sho'&d $e provided the ne)essar0 information from the )ard ora&&0, either in person or $0 te&ephone, and the statement >-a0ment to $e made $0 p'r)hase )ard> sho'&d $e inserted on the form. Do not in)&'de spe)ifi) information from the )ard on the p'r)hase order. ?f the .er)hant re<'ires an order, an a'thoriGed Sponsoring Department form ma0 $e 'sed. The .er)hant is given its )op0 of the p'r)hase order and the )ardho&der maintains a )op0. (*$: (*$( DOCUMENTATION! RECONCILIATION AND PADMENT PROCEDURES( An0 time a p'r)hase is made that /i&& $e paid 'sing the )ard, /hether it is done over the )o'nter or $0 te&ephone, a do)'ment m'st $e retained as proof of p'r)hase. These do)'ments /i&& &ater $e 'sed to verif0 the p'r)hases sho/n on the )ardho&der month&0 statement. 8!9 When a p'r)hase is made over the )o'nter, the )ardho&der is to o$tain a )'stomer )op0 of the )harge s&ip, /hi)h /i&& $e)ome the a))o'nta$&e do)'ment 8ma2e s're a&& )ar$ons are destro0ed9. 829 When ma2ing p'r)hases $0 phone, the )ardho&der is to do)'ment the transa)tion on a &og, annotate the -I, and atta)h an0 shipping do)'ments asso)iated /ith the order. (*$* The )ontra)tor /i&& provide and distri$'te three month&0 statements /ithin five /or2ing da0s after the end of the "0 da0 $i&&ing )0)&e. 8!9 Cardho&der /i&& re)eive a statement sho/ing a&& p'r)hases, )redits and other data on transa)tions the )ardho&der has made in the "0 da0 $i&&ing )0)&e. 829 Approving offi)ia& /i&& re)eive a )op0 of a&& )ardho&der statements for /hi)h heAshe has approving a'thorit0 and a s'mmar0 sheet for these statements. 8"9 Contro&&erKs Offi)e /i&& re)eive a statement providing s'mmar0 data $0 )ardho&der and approving offi)ia&. (*$At the end of ea)h month&0 $i&&ing )0)&e, the )ardho&der m'st re)on)i&e the information on hisAher statement. The )ardho&der m'st fi&& in the appropriate a))o'nting )&assifi)ation in the a))o'nting )ode $&o)2, if not the same as the .aster A))o'nting Code, the organiGation or individ'a& for /hom the p'r)hase /as made, and a des)ription, if not
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provided, for ea)h p'r)hase. The )ardho&der m'st then sign the statement, atta)h a&& s'pporting do)'mentation and for/ard it to the approving offi)ia& or designated a&ternate. ?t is important that the )ardho&der )he)2 ea)h p'r)hase on the statement to verif0 the a))'ra)0. ?f an item has $een ret'rned and a )redit vo')her re)eived, the )ardho&der /i&& verif0 that the )redit is ref&e)ted on the statement. ?f p'r)hased items and )redits are not on the ne;t month&0 statement, the transa)tion do)'mentation /i&& $e retained $0 the )ardho&der 'nti& the p'r)hase or )redit appears on the statement. ?f the p'r)hase or )redit does not appear on the ne;t month&0 statement, the )ardho&der or approving offi)ia& m'st notif0 the Administrative Offi)e Conta)t to reso&ve and re)on)i&e the statement. (*$. ?f for some reason the )ardho&der does not have do)'mentation of the transa)tion to send /ith the statement, heAshe m'st atta)h an e;p&anation that in)&'des a des)ription of the item, date of p'r)hase, mer)hantKs name and /h0 there is not s'pporting do)'mentation. The )ardho&der m'st sign the month&0 statement and for/ard it to the approving offi)ia& /ithin five /or2ing da0s of re)eipt. ?f the )ardho&der )annot revie/ the statement at the time that it is re)eived, the approving offi)ia& is responsi$&e for revie/ing and )ertif0ing the )ardho&derKs statement. The approving offi)ia& /i&& go over the )ardho&derKs statement /ith the )ardho&der 'pon hisAher ret'rn. The approving offi)ia& is responsi$&e for the fo&&o/ing( 8!9 S'pp&0ing the appropriate finan)ia& management offi)e /ith the date servi)es provided $0 the )ontra)tor /ere re)eived and the date servi)es /ere a))epted. The date servi)es /ere re)eived /i&& $e the &ast da0 of the month&0 $i&&ing )0)&e for the )ontra)tor. The date servi)es /ere a))epted /i&& $e the date the approving offi)ia& signs the reverse side of the statement of a))o'nt. ?f the approving offi)ia& ta2es more than seven )a&endar da0s to a))ept the servi)es, a))eptan)e 8for determining pa0ment d'e date for )omp&ian)e /ith prompt pa0ment reg'&ations on&09 /i&& $e deemed to o))'r seven )a&endar da0s after re)eipt of the servi)es. ?f an0 p'r)hased items have not $een re)eived or a))epted $0 the time the statement is re)eived, the items sho'&d $e disp'ted 'sing the pro)ed'res in paragraph !", in order to prevent pa0ment de&a0s. ?t is )riti)a& that this information $e s'pp&ied in order to avoid &ate pa0ment pena&ties. 829 Certif0ing and signing month&0 )ardho&der signed statements and s'mmar0 statementsQ 8"9 *or/arding signed )ardho&der statements and finan)e )opies of re)eiving reports and s'pporting do)'ments to the Distri)tKs Contro&&erKs offi)e for pa0ment. 849 *or/arding month&0 s'mmar0 statements, and the )ardho&der statements to the Distri)t Contro&&erKs offi)e in time to $e re)eived /ithin !5 /or2ing da0s of re)eipt $0 the approving offi)ia& to avoid &ate pa0ment pena&tiesQ 859 Ietaining )opies of s'mmar0 statements and f'nd )ertifi)ation, so&i)itation and a/ard do)'mentation as s'pporting do)'mentation on p'r)hases. Ie)ords retention and disposition pro)ed'res in ,AITKs -ro)'rement .an'a&, Chapter O, sho'&d $e fo&&o/ed for do)'mentation of p'r)hases paid for 'sing the p'r)hase )ard.
(*$0
(*$2
-age !!
(-$: (-$(
BILLIN< ERRORS AND DISPUTES3 ?f a )ardho&der re)eives a statement that &ists a transa)tion for mer)handise that has not $een re)eived, the )ardho&der 8or the approving offi)ia&9 m'st first attempt to reso&ve the iss'e /ith the .er)hant =enera&&0 spea2ing, this /i&& mean that the $i&& gets paid in f'&&, in)&'ding the disp'ted )harge and the mer)hant )redit /i&& )&ear in the fo&&o/ing $i&&ing )0)&e This is some/hat of a depart're from the norma& $'siness pra)ti)es of the Distri)t. The reason is the administrative effort re<'ired on the part of the Contra)tor, -ro)'rement department and Contro&&erKs offi)e to tra)2 disp'ted items. 8See a&so !!.".! and !!.".2 of this -ro)ed're re<'iring Sponsoring departments to )ond')t $'siness on&0 /ith those mer)hants that offer f'&& ref'nds or e;)hanges.9 ?n those instan)es /here these pro)ed'res are not effe)tive, Sponsoring Departments /i&& notif0 -ro)'rement Administration and )omp&ete the Cardho&der N'estioned item form. The )ontra)tor /i&& )redit the transa)tion 'nti& the disp'te is reso&ved. ?n addition, a )op0 of the form m'st $e atta)hed to the )ardho&derKs month&0 statement and sent to the Contro&&erKs offi)e.
(-$*
?f items p'r)hased /ith the )ard are fo'nd to $e defe)tive, the )ardho&der has the responsi$i&it0 to o$tain rep&a)ement or )orre)tion of the item as soon as possi$&e 'sing the same pro)ed'res in Se)tion !".! a$ove. 8See a&so !!.".! and !!.".2 of this -ro)ed're re<'iring Sponsoring departments to )ond')t $'siness on&0 /ith those mer)hants that offer f'&& ref'nds or e;)hanges.9 ?f the mer)hant ref'ses to rep&a)e or )orre)t the fa'&t0 item, then the p'r)hase of the item /i&& $e )onsidered in disp'te. ?tems in disp'te are hand&ed in the same manner as $i&&ing errors.
(-$-
?f items p'r)hased /ith the )ard donKt in)&'de the appropriate amo'nt of sa&es ta;, the Sponsoring Department /i&& )omm'ni)ate to the Contro&&erKs offi)e /ith the month&0 $i&&ing that the sa&es ta; needs to $e a))r'ed for this item. CONTACT BITC TCE CONTRACTOR The )ontra)tor sho'&d $e )onta)ted on&0 to report a 7OST OI STO7:# )ard 'sing the te&ephone n'm$ers given $e&o/ in Se)tion !5.0. A&& other <'estions sho'&d $e dire)ted to either -ro)'rement Administration or the Contro&&erKs offi)e.
(.$:
(0$: (0$(
LOST OR STOLEN CARDS ?f the )ard is &ost or sto&en, it is important that the )ardho&der immediate&0 notif0 Io)20 .o'ntain ,an2Card S0stem, ?n)., at the fo&&o/ing n'm$ers( 8!9 24 ho'rs a da0, 1 da0s a /ee2 8As2 for ?...-.A.C. )'stomer servi)e9 8A9 ! H00 221 %1"%
829 A'tomated a'thoriGation servi)e n'm$er for 'se $0 mer)hants on&0 8A9 ! H00 525 509"
-age !2
(0$*
The )ardho&der m'st a&so notif0 the approving offi)ia& of the &ost or sto&en )ard /ithin one /or2da0 after dis)overing the )ard missing. The approving offi)ia& m'st a&so notif0 ,AIT -o&i)e at the same time the0 re)eive noti)e. The approving offi)ia& sha&& s'$mit a /ritten report to -ro)'rement Administration /ithin five /or2da0s. The report /i&& in)&'de( 8!9 the )ard n'm$er 829 the )ardho&derKs )omp&ete name 8"9 the date and &o)ation of the &oss 849 the date reported to ,AIT po&i)e 859 date and time the )ontra)tor /as notified 8%9 an0 p'r)hase8s9 made on the da0 the )ard /as &ostAsto&en 819 an0 other pertinent information
(0$-
(0$.
A )ard that is s'$se<'ent&0 fo'nd $0 the )ardho&der after $eing reported &ost or sto&en /i&& $e )'t in ha&f and given to hisAher approving offi)ia&. The approving offi)ia& /i&& )omp&ete the destr')tion noti)e and for/ard the noti)e to -ro)'rement Administration and ,AIT -o&i)e. CARD SECURITD ?t is the )ardho&derKs responsi$i&it0 to safeg'ard the p'r)hase )ard and a))o'nt n'm$er at a&& times. The )ardho&der m'st not a&&o/ an0one to 'se hisAher )ard or a))o'nt n'm$er. A vio&ation of this tr'st /i&& re<'ire that the )ard $e /ithdra/n from the )ardho&der /ith the possi$i&it0 of s'$se<'ent dis)ip&inar0 a)tion.
(2$:
(4$:
SEPARATION OF CARDCOLDER Upon separation of a )ardho&der, the )ardho&der m'st s'rrender the )ard to hisAher approving offi)ia& /ho /i&& )omp&ete the destr')tion noti)e and for/ard the noti)e to -ro)'rement Administration.
(5$:
TRANSFER OF CARDCOLDER TO ANOTCER APPROPIN< OFFICIAL ?f a )ardho&der is transferred to another Department or Division /ith a different approving offi)ia&, the ne/ approving offi)ia& m'st determine if the emp&o0ee /i&& )ontin'e to $e a )ardho&der /ithin hisAher Department or Division. ?f it is determined that the )ard sho'&d $e 2ept $0 the )ardho&der, the master fi&e )an $e )hanged $0 re<'esting, in /riting, that -ro)'rement Administration have the )ontra)tor add the )ardho&der to the ne/ approving offi)ia&Ks responsi$i&it0 and de&ete himAher from the o&d fi&e /itho't iss'ing a ne/ )ard.
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(8$:
UNAUTCORINED PURCCASES OR CARELESS USE OF TCE PURCCASE CARD A )ardho&der /ho ma2es 'na'thoriGed p'r)hases or )are&ess&0 'ses the )ard ma0 $e &ia$&e to ,AIT for the tota& do&&ar amo'nt of 'na'thoriGed p'r)hases made in )onne)tion /ith the mis'se or neg&igen)e. A&so, the )ardho&der ma0 $e s'$@e)ted to dis)ip&inar0 a)tion for 'na'thoriGed or )are&ess 'se. ,AIT /i&& $e &ia$&e for the 'se of -'r)hase )ards $0 a'thoriGed 'sers 8)ardho&ders9
,est -ra)ti)es -ro)'rement .an'a& Appendi; ,." 7i<'idated Damages Che)2&ist
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APPENDIV B$2 PRENE<OTIATION POSITION PROFESSIONAL ARCCITECTURAL7EN<INEERIN< DESI<N SERPICES ADDICQS PARQ + RIDE LOT SECOND EVPANSION RE@UEST FOR PROPOSAL 8.A:4*P Date -repared( 6'&0 2H, !994 -'rpose and ,a)2gro'nd( The p'rpose of this do)'ment is to esta$&ish a -renegotiation -osition /ith respe)t to the Cons'&tantKs proposa& for design of the Addi)2s -ar2 and Iide 7ot Se)ond :;pansion. On De)em$er 20, !99", .:TIO ,oard Ieso&'tion #o. 9" 2!" /as passed a'thoriGing and dire)ting the =enera& .anager to negotiate, e;e)'te and de&iver a Contra)t /ith JJJJJJJJJJJJJJJJJJ for ar)hite)t'ra&A engineering design of the Addi)2s -ar2 and Iide 7ot Se)ond :;pansion. S)ope of Servi)es( The proposed Cons'&tant sha&& perform pre&iminar0 ar)hite)t'ra& engineering design 8-hase ?9 and fina& ar)hite)t'ra& engineering design of the Se)ond :;pansion of the Addi)2s -ar2 C Iide 8-hase ??9 and design s'pport servi)es d'ring )onstr')tion. ?t is )'rrent&0 intended that a firm fi;ed pri)e Contra)t $e negotiated for providing the re<'ired design servi)es and that a not to e;)eed amo'nt and 'nit rates $e negotiated for the re<'ired design s'pport servi)es d'ring )onstr')tion. Ie<'est for -roposa&( A Ie<'est *or -roposa& #o. 94A012- /as s'$se<'ent&0 iss'ed to JJJJJJJJJJJJ On 6an'ar0 !4, !994. D'ring the proposa& period,JJJJJJJJJJJJ /as re<'ested to )onsider three 8"9 a&ternatives for the pedestrian )rossing from the e;pansion fa)i&it0 to the e;isting fa)i&it0( an at grade )rossing, an overhead )rossing, and an 'ndergro'nd )rossing. Their initia& proposa& /as re)eived 6an'ar0 "!, !994. S'$se<'ent to re)eipt of the Cons'&tantKs initia& proposa&, it /as de)ided that the Cons'&tant /o'&d '&timate&0 $e dire)ted to perform to the >Undergro'nd Crossing> A&ternative, and therefore, on&0 this a&ternative /as )onsidered in the )omp'tation of this -renegotiation -osition. Additiona& information /as re<'ired and /as re<'ested /ith respe)t to their proposa& for an 'ndergro'nd )rossing and this /as re)eived on .ar)h 2!, !994. -roposa&( The Cons'&tantKs firm fi;ed pri)e proposa& for design of the fa)i&it0 /ith an 'ndergro'nd pedestrian )rossing /as S"02,095.00 p&'s a #ot to :;)eed a&&o/an)e of S45,000.00 for design s'pport servi)es d'ring )onstr')tion, for a tota& #ot to :;)eed S"41,095.00. -&ease see Atta)hment >A> for a s'mmar0 $rea2do/n of the Cons'&tantKs proposa& for this a&ternative. .:TIO :stimate( The Contra)t A)<'isition Ie<'est 8CAI9 )ontained the -ro@e)t .anagerKs initia& estimate $ased on an at grade or overhead )rossing. The -ro@e)t .anager s'$se<'ent&0 prepared an estimate of S2H9,000.00 for design of the fa)i&it0 /ith an 'ndergro'nd pedestrian )rossing p&'s a #ot to :;)eed a&&o/an)e of S45,000.00 for design s'pport servi)es d'ring )onstr')tion, for a tota& #ot to :;)eed S""4,000.00. *or a Dis)ip&ine )omparison of the -ro@e)t .anagerKs revised estimate /ith the Cons'&tantKs proposa&, p&ease see Atta)hment >,>.
,est -ra)ti)es -ro)'rement .an'a& Appendi; ,." 7i<'idated Damages Che)2&ist
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/ith that of the other parti)ipants. ,oth agreed to a))ept K proposa& for =eote)hni)a& Servi)es and JJJJJJJJJJJJKs proposa& for S'rve0ing e;a)t&0 as s'$mitted. *or a Dis)ip&ine )omparison of the #egotiation -osition agreed to $0 the -ro@e)t .anager and Contra)t Administrator, as )ompared /ith the Cons'&tantKs proposa&, p&ease see Atta)hment >:>. Con)&'sion( ,ased on the information provided a$ove, the .:TIO negotiation position of S2H2,920.00 for the design of the Addi)2s -ar2 C Iide 7ot Se)ond :;pansion p&'s a #ot to :;)eed a&&o/an)e of S45,000.00 for design s'pport servi)es d'ring )onstr')tion, for a #ot to :;)eed tota& of S"21,920.00 is deemed to $e fair and reasona$&e. #egotiations /i&& )ommen)e immediate&0 'pon approva& of this p&an. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Contra)ts Administrator JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ -ro@e)t .anager JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Division Dire)tor JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ .anager of Contra)ts
,est -ra)ti)es -ro)'rement .an'a& Appendi; ,.5 ,AIT -'r)hase Card S0stem
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APPENDIV B$4 OFFER AND ACCEPTANCE FORM

($* OFFER The *ollo/ing is an e+am#le 3**erBA/ard *orm to $e modi*ied as a##ro#riate $y the Procuring Agency and included in the RFP! Offeror sha&& )omp&ete the fo&&o/ing form and in)&'de same in the pri)e proposa&. OFFER ,0 e;e)'tion $e&o/ Offeror here$0 offers to f'rnish e<'ipment and servi)es as spe)ified in 8&rocurin! A!ency insert name9 Ie<'est for -roposa&s #o. 8&rocurin! A!ency insert RF& Num$er 9 in)&'ding the =enera& -rovisions 8Se)tion 29, N'a&it0 Ass'ran)e -rovisions 8Se)tion "9, Warrant0 -rovisions 8Se)tion 49 and Te)hni)a& Spe)ifi)ations 8Se)tion 59, therein. Offeror( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ #ame JJJJJJJJJJJJJJJJJJJJJJJJJJJJ Street Address JJJJJJJJJJJJJJJJJJJJJJJJJJJJ Cit0, State, Xip JJJJJJJJJJJJJJJJJJJJJJJJJJJJ Signat're of A'thoriGed Signer JJJJJJJJJJJJJJJJJJJJJJJJJJJJ Tit&e JJJJJJJJJJJJJJJJJJJJJJJJJJJJ -hone ($- ABARD NOTICE OF ABARD ,0 e;e)'tion $e&o/, -ro)'ring Agen)0 a))epts Offer as indi)ated a$ove. Contra)ting Offi)er( JJJJJJJJJJJJJJJJJJJJJJJJJJJJ Signat're
Date of A/ard( JJJJJJJJJJJJJJJJJJJJJJJJJJ
,est -ra)ti)es -ro)'rement .an'a& Appendi; ,.% -renegotiation -osition
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APPENDIV B$8 MEMORANDUM OF NE<OTIATIONS Date Pre ared3 6'&0 2H, !994 Consultant3 Contract No$3 Pro'ect Title3 D:, Ar)hite)ts A"0%1HC *ina& Design Servi)es for the Centra& Contro& *a)i&it0
Pro'ect Descri tion3 -rovide fina& ar)hite)t'ra&Aengineering design servi)es and design s'pport servi)es d'ring )onstr')tion of the Centra& Contro& *a)i&it0 in a))ordan)e /ith .:TIOKs S)ope of Servi)es. Contract Palue3 7'mp S'm 87.S.9 *a)i&it0 Design 7.S. *'rnishings Tota& 7.S. *ina& Design Design S'pport Servi)es 8#T:9 Tota& #T: S4H4,02" S 22,452 S50%,415 S!!5,000 S%2!,415
CAR Amount3 S490,000 8Order of .agnit'de9 Source of Funds3 50P *edera&A50P .:TIO Contract T# e3 *irm *i;ed 7'mp S'm -ri)e 8**7S-9 for fina& ar)hite)t'ra&Aengineering design servi)es, /ith *irm *i;ed Unit -ri)es 8**U-9 for design s'pport servi)es d'ring )onstr')tion, for a tota& Contra)t #ot to e;)eed 8#T:9 -ri)e. Performance Period3 The fina& ar)hite)t'ra&Aengineering design s)hed'&e is for a tota& of one h'ndred t/ent0 8!209 )a&endar da0s from the #oti)e to pro)eed, not )o'nting .:TIO revie/ time. Design s'pport servi)es d'ring )onstr')tion /i&& $egin 'pon re)eipt of another separate #oti)e to pro)eed and )ontin'e thro'gho't )onstr')tion, as re<'ired $0 the .:TIO -ro@e)t .anager. Insurance3 See -roposed Contra)t Arti)&e 2", >Cons'&tantKs ?ns'ran)e>. DBE Partici ation3 The Ie<'est for -roposa& 8I*-9 spe)ified 2!P in a))ordan)e /ith the Contra)t A)<'isition Ie<'est 8CAI9. Cons'&tant )'rrent&0 intends to 'ti&iGe D.:.*. Asso)iates, ?n). 8,*9 for str')t'ra& design, at 9.%"P of the tota& estimated not to e;)eed pri)eQ TA, :ngineering Compan0 8A.9 for )ivi& engineering and s'rve0, at 9."4PQ and CD: Asso)iates, ?n). 8C*9 for &ands)aping, at 2.92PQ for a tota& of 2!.H9P of the tota& estimated not to e;)eed pri)e for D,: parti)ipation.
-age "
2!st f&oor at !20! 7o'isiana on Th'rsda0, A'g'st 5, !99", at !0(00 a.m., /ith the fo&&o/ing parti)ipants in attendan)e( 6Full Time9 A,C I. Case 6Part Time9 TOC -et'&a C&ar2 S. Camins2i D.?.5. D. .orr0 TSC Ton0 Change Io0 Canoe TS5 S/imming -oo& 6oe .israhi So& A$d'&&a Bameed .er)hant David 7entG .i)hae& Wi&&iams
.:TIO :d *anning 6im S)hmid
At this meeting, a&& of the parti)ipants /ere advised that .:TIO intended to a&ter the S)ope of Servi)es to provide for dra/ings at 20th s)a&e in &ie' of 40th s)a&e, so that the ha&f siGed dra/ings re<'ired for the pro@e)t /o'&d $e reada$&e. A&& of the parti)ipants agreed that this /o'&d not $e a pro$&em, inasm')h as a&& dra/ings /ere $eing prod')ed on CADD. At this meeting, -ro@e)t .anagement satisfied itse&f that a&& ma@or parti)ipants in the pro@e)t, /ith the possi$&e e;)eption of the Civi&ATraffi) s'$)ons'&tant, had proper&0 estimated their /or2 s)opes 8?t /as s'ggested that the Civi&ATraffi) s'$)ons'&tant red')e their s'rve0 time and in)rease their traffi) design time s&ight&0 and the need for some additiona& geote)hni)a& $orings /ere s'ggested to the -rime Ar)hite)t and Civi&ATraffi) s'$)ons'&tant9. Bo/ever, it /as a&so determined that the -rime Ar)hite)t, Str')t'ra& s'$)ons'&tant, and 7ands)aping s'$)ons'&tant 8as per their proposa&9, had in)&'ded design s'pport servi)es d'ring )onstr')tion into their proposa&s for design of the fa)i&it0. The0 /ere advised that the I*- had re<'ested a separate #T: proposa& for s')h servi)es to $e performed on an >as re<'ired> time and materia& $asis, and /ere re<'ested to s'$mit s')h an #T: -roposa& and red')e their design proposa&s a))ording&0. Whi&e A,C and R5X had not in)&'ded an0 s')h Design S'pport Servi)es monies or time in their origina& proposa&s, A,C /as as2ed to revie/ and revise their proposa& to ref&e)t the revisions referen)ed
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a$ove, and R5X /as advised that, $e)a'se of the ris2s asso)iated /ith a &'mp s'm proposa&, the0 /ere entit&ed to a profit fa)tor of !0P, in &ie' of the 5P fa)tor the0 initia&&0 proposed. A,C and R5X had $een &imited to a 5P profit fa)tor in the origina& Cost -&'s *i;ed *ee 8C-**9 Contra)t for -re&iminar0 :ngineering, in &ight of their &imited ris2 in the pro@e)t, and R5X had ass'med that .:TIO simp&0 /o'&d not a))ept a higher fa)tor 'nder an0 )ir)'mstan)es. D:, /as a&so advised that their method of app&0ing a !0P profit fa)tor to their s'$)ons'&tants, as /e&& as themse&ves, )onstit'ted fee on top of fee, and as s')h /as 'na))epta$&e to .:TIO. The0 /ere advised that .:TIO /o'&d, ho/ever, )onsider the addition of a reasona$&e n'm$er of appropriate man ho'rs for )ontra)t administration as an a))epta$&e s'$stit'tion for )omp'tation of fee in this fashion, and .orris agreed to restr')t're their -roposa& a))ording&0. D:, '&timate&0 agreed to revise and res'$mit their entire proposa& in a))ordan)e /ith the 'nderstandings rea)hed at this meeting. Their revised proposa& for fa)i&it0 design and design s'pport servi)es d'ring )onstr')tion 8atta)hed9 /as re)eived on A'g'st !!, !99". This revised proposa& /as for a firm &'mp s'm of S500,!29 8H,1"% man ho'rs9 for fa)i&it0 design, /ith an #T: tota& of S!50,"04 82,944 man ho'rs9 for design s'pport servi)es d'ring )onstr')tion 8See Atta)hment >D> for a S'mmar0 of the Cons'&tantKs revised proposa& for fa)i&it0 design as /e&& as Atta)hment >:> for a S'mmar0 Comparison of their initia& proposa& for fa)i&it0 design /ith their revised proposa& for fa)i&it0 designQ and Atta)hment >*> for a S'mmar0 of their #T: proposa& for design s'pport servi)es d'ring )onstr')tion as /e&& as Atta)hment >=> for a S'mmar0 Comparison of their #T: proposa& for design s'pport servi)es d'ring )onstr')tion /ith the -ro@e)t .anagerKs #T: estimate, as a&&'ded to a$ove9. Upon revie/, the Cons'&tantKs revised proposa& for fa)i&it0 design /as a))epted as s'$mitted, s'$@e)t to a'dit disa&&o/an)es, $'t the design s'pport servi)es #T: and man ho'rs /ere sti&& signifi)ant&0 more than that origina&&0 estimated $0 the -ro@e)t .anager. The -ro@e)t .anager reeva&'ated design s'pport servi)e re<'irements for the pro@e)t, and )ame 'p /ith a revised estimate 8atta)hed9 #T: S!!",04" 8!,10H man ho'rs9Q this fig're /as adopted as a negotiation position for s')h servi)esQ and D:, /as advised of this position. D:,Ks a))epta$&e revised man ho'r proposa& for fa)i&it0 design /as then s'$@e)ted to .:TIO A'dit and Contra)t Administrator disa&&o/an)es. Whi&e no a'dits /ere re<'ested for this parti)'&ar pro)'rement, the ma@or parti)ipants, D:,, R5X C Asso)iates and A,C :ngineering had a&read0 re)ent&0 $een a'dited $0 .:TIO in )on@'n)tion /ith the pre&iminar0 engineering )ontra)t referen)ed a$ove, and those a'dit reports 8atta)hed9 /ere 'ti&iGed for )omp'tation of these disa&&o/an)es. D:,Ks initia& proposa& had )ontained a !45P overhead fa)tor, in &ie' of their .:TIO a'dited overhead of !40.H9P, and this had $een <'estioned $0 .r. S)hmid d'ring the S)oping .eeting referen)ed a$ove. .r. Case had rep&ied that he had essentia&&0 emp&o0ed it as a sa&ar0 es)a&ator, and inasm')h as its emp&o0ment here rather than at the dire)t sa&ar0 &eve& /o'&d )ertain&0 net m')h &ess of an a)t'a& in)rease, this matter /as not p'rs'ed f'rther. Bo/ever, other disa&&o/an)es netted red')tions in D:,Ks proposa& and that of their Civi&ATraffi) s'$)ons'&tant, R5X, as /e&& their A))essi$i&it0 Cons'&tantKs )omp'tation of profit, for a tota& red')tion of S20,!4!, or 4.0"P, from the Cons'&tantKs revised proposa& of S500,!29, for a negotiation position of S419,9HH for fa)i&it0 design 8See Atta)hment >B> for a S'mmar0 of the
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Cons'&tantKs revised proposa& for fa)i&it0 design, &ess A'dit and Contra)t Administrator disa&&o/an)es as /e&& as Atta)hment >?> for a S'mmar0 Comparison of their revised proposa& for fa)i&it0 design /ith their revised proposa& /ith A'dit and Contra)t Administrator disa&&o/an)e app&ied. D:,Ks origina& man ho'r proposa& for f'rnishings design /as a&so s'$@e)ted to .:TIO A'dit and Contra)t Administrator disa&&o/an)es, for a red')tion of S!0H, or H.0HP, from the Cons'&tantKs initia& proposa& of S22,4H4, for a negotiation position of S22,21% for f'rnishings design 8See Atta)hment >?.!>9. A negotiation meeting /as he&d /ith D:, in the Iea& :state Conferen)e Ioom on the !9th f&oor at !20! 7o'isiana on .onda0, A'g'st 2", !99", at !!(00 a.m., /ith the fo&&o/ing parti)ipants in attendan)e( DEB METRO :d *anning 6im S)hmid At that meeting, D:, f'rnished a revised proposa& #T: S!!5,000 for design s'pport servi)es d'ring )onstr')tion, and this /as a))epted as s'$mitted, inasm')h as it )onformed )&ose&0 to the -ro@e)t .anagerKs revised estimate of S!!",04", as a&&'ded to a$ove. D:, a))epted the ma@orit0 of .:TIOKs A'dit disa&&o/an)es /ith regard to their revised proposa& for fa)i&it0 design and f'rnishings design, /ith the e;)eption of .:TIOKs a)t'a& dire)t rate )omp'tation for D:,Ks prin)ipa&s. .r. advised that D:,Ks prin)ipa&s had had their pa0 rates restored to their !992 rates 8the prin)ipa&s had ta2en a vo&'ntar0 pa0 )'t effe)tive 6an'ar0 !, !99"9 s'$se<'ent to the a'dits referen)ed a$ove, and therefore .:TIOKs )omp'tations in that regard /ere in)orre)t. .r. S)hmid re)omp'ted disa&&o/an)es 'sing the prin)ipa&sK origina& dire)t rates, and .:TIO and D:, '&timate&0 agreed to the res'&tant red')tions in their proposa&, as /e&& as that app&ied to the t/o 829 s'$)ons'&tants 'nder fa)i&it0 design. The res'&tant firm &'mp s'm for fa)i&it0 design /as S4H4,02", a red')tion of S!%,!0%, or ".22P, from the Cons'&tantKs revised proposa& of S500,!29 8See Atta)hment >Y> , for a S'mmar0 of the Cons'&tantKs fina& proposa& for fa)i&it0 design, as '&timate&0 negotiated, as /e&& as Atta)hment >Y> for a S'mmar0 Comparison of their revised proposa& for fa)i&it0 design /ith their fina& proposa&, as '&timate&0 negotiated9. The res'&tant firm &'mp s'm for f'rnishings design /as S22,452, a red')tion of S"2, or .!4P, from the Cons'&tantKs origina& f'rnishings design proposa& 8See Atta)hment >Y.!>9. The on&0 items that remained to $e negotiated /ere the rates for design s'pport servi)es d'ring )onstr')tion, inasm')h as .orris had not in)&'ded an0 s')h proposed rates in their proposa&8s9. .r. S)hmid f'rnished .r. a >-roposed Contra)t Atta)hment >,,4 $ased 'pon D:,Ks and A,CKs a'dited rates, as /e&& as e;isting design s'pport servi)e rates for the remaining parti)ipants, and .r. a))epted these, /ith the e;)eption of the rate for D:,Ks
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-rin)ipa&s, /hi)h /ere revised to ta2e the aforementioned sa&ar0 reinstatements into )onsideration. Contract Articles 6Terms and Conditions9( The Cons'&tant too2 no e;)eption to the Contra)t Arti)&es, and therefore the -roposed Contra)t Terms )ontained in the I*- have $een in)orporated into the Contra)t ver$atim. Summar# and Recommendations( ,ased on )ostApri)e ana&0sis and negotiations, as )a&&ed o't in the .emorand'm of #egotiations, the firm &'mp s'm pri)es of S4H4,02" for fa)i&it0 design and S22,452 for f'rnishings design, for a tota& firm &'mp s'm of S50%,415 for a&& fina& ar)hite)t'ra& engineering design servi)esQ and an #T: of S!!5,000 for design s'pport servi)es d'ring Constr')tion, for an overa&& #ot to e;)eed pri)e of S%2!,415 for this proposed Contra)t are )onsidered fair and reasona$&e. Approva& of this Contra)t /ith D:, Ar)hite)ts for the tota& &'mp s'm pri)e of S50%,415 for fina& design and an overa&& amo'nt #ot to e;)eed S%2!,415 is therefore re)ommended.
Contra)ts Administrator
-ro@e)t .anager
Division Dire)tor
Affirmative A)tion
.anager of Contra)ts
,est -ra)ti)es -ro)'rement .an'a& L Appendi; ,.1 Offer and A))eptan)e *orm
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APPENDIV B$(: DISCLOSURE OF CONFLICTS OF INTEREST 6OCT (88.9 ?t is the Department of TransportationKs 8DOT9 po&i)0 to a/ard )ontra)ts to on&0 those offerors /hose o$@e)tivit0 is not impaired $e)a'se of an0 re&ated past, present, or p&anned interest, finan)ia& or other/ise, in organiGations reg'&ated $0 DOT or in organiGations /hose interests ma0 $e s'$stantia&&0 affe)ted $0 Departmenta& a)tivities. ,ased on this po&i)0( 8a9 The offeror sha&& provide a statement in its proposa& /hi)h des)ri$es in a )on)ise manner a&& past, present or p&anned organiGationa&, finan)ia&, )ontra)t'a& or other interest8s9 /ith an organiGation reg'&ated $0 DOT, or /ith an organiGation /hose interests ma0 $e s'$stantia&&0 affe)ted $0 Departmenta& a)tivities, and /hi)h is re&ated to the /or2 'nder this so&i)itation. The interest8s9 des)ri$ed sha&& in)&'de those of the proposer, its affi&iates, proposed )ons'&tants, proposed s'$)ontra)tors and 2e0 personne& of an0 of the a$ove. -ast interest sha&& $e &imited to /ithin one 0ear of the date of the offerorKs te)hni)a& proposa&. Ye0 personne& sha&& in)&'de an0 person o/ning more than 20P interest in the offeror, and the offerorKs )orporate offi)ers, its senior managers and an0 emp&o0ee /ho is responsi$&e for ma2ing a de)ision or ta2ing an a)tion on this )ontra)t /here the de)ision or a)tion )an have an e)onomi) or other impa)t on the interests of a reg'&ated or affe)ted organiGation.
8$9 The offeror sha&& des)ri$e in detai& /h0 it $e&ieves, in &ight of the interest8s9 identified in 8a9 a$ove, that performan)e of the proposed )ontra)t )an $e a))omp&ished in an impartia& and o$@e)tive manner.
8)9 ?n the a$sen)e of an0 re&evant interest identified in 8a9 a$ove, the offeror sha&& s'$mit in its proposa& a statement )ertif0ing that to its $est 2no/&edge and $e&ief no affi&iation e;ists re&evant to possi$&e )onf&i)ts of interest. The offeror m'st o$tain the same information from potentia& s'$)ontra)tors prior to a/ard of a s'$)ontra)t. 8d9 The Contra)ting Offi)er /i&& revie/ the statement s'$mitted and ma0 re<'ire additiona& re&evant information from the offeror. A&& s')h information, and an0 other re&evant information 2no/n to DOT, /i&& $e 'sed to determine /hether an a/ard to the offeror ma0 )reate a )onf&i)t of interest. ?f an0 s')h )onf&i)t of interest is fo'nd to e;ist, the Contra)ting Offi)er ma0 8!9 dis<'a&if0 the offeror, or 829 determine that it is other/ise in the $est interest of the United States to )ontra)t /ith the offeror and in)&'de appropriate provisions to mitigate or avoid s')h )onf&i)t in the )ontra)t a/arded.
8e9 The ref'sa& to provide the dis)&os're or representation, or an0 additiona& information re<'ired, ma0 res'&t in dis<'a&ifi)ation of the offeror for a/ard. ?f nondis)&os're or misrepresentation is dis)overed after a/ard, the res'&ting )ontra)t ma0 $e terminated. ?f after a/ard the Contra)tor dis)overs a )onf&i)t of interest /ith respe)t to the )ontra)t a/arded as a res'&t of this so&i)itation, /hi)h )o'&d not reasona$&0 have $een 2no/ prior to a/ard, an immediate and f'&& dis)&os're sha&& $e made in /riting to the Contra)ting Offi)er. The dis)&os're sha&& in)&'de a f'&& des)ription of the )onf&i)t, a des)ription of the a)tion the )ontra)tor has ta2en, or proposes to ta2e, to avoid or mitigate s')h )onf&i)t. The Contra)ting Offi)er ma0, ho/ever, terminate the )ontra)t for )onvenien)e if he or she deems that termination is in the $est interest of the =overnment.
,est -ra)ti)es -ro)'rement .an'a& L Appendi; ,.9 .emorand'm of #egotiation
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APPENDIV B$(( NEB DORQ CITD TRANSIT AUTCORITD Di%ision of Materiel Procurement Su&)Di%ision Sc/edule L BIDDERKS @UALIFICATION @UESTIONNAIRE
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2.
-&ease state >not app&i)a$&e> in <'estions )&ear&0 not app&i)a$&e to ,idderA-roposer in )onne)tion /ith this so&i)itation. Do not omit an0 <'estion. ?f an0 representation is not a))'rate and )omp&ete at the time ,idderA-roposer signs this N'estionnaire, ,idderA-roposer m'st, as part of its ,idA-roposa&, identif0 the provision and e;p&ain the reason in detai& in the spa)e provided $e&o/. ?f additiona& spa)e is needed, add additiona& sheet8s9 to this N'estionnaire. ?f this spa)e is &eft $&an2, ,idderA-roposer sha&& $e deemed to have represented and /arranted the a))'ra)0 and )omp&eteness of the representations on this N'estionnaire( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ A&& information m'st $e &egi$&e. Comp&eted N'estionnaire m'st $e s/orn to $0 a partner 8if partnership9, a d'&0 a'thoriGed offi)er or individ'a& 8if a )orporation9, or a prin)ipa& 8if a so&e proprietorship9. The term >-roposer> in)&'des the term >,idder> and a&so refers to the firm a/arded the Contra)t. The term >-roposa&> in)&'des the term >,id>. ?f d'ring the performan)e of this Contra)t, either of the fo&&o/ing o))'rs, ,idder sha&& prompt&0 give noti)e in /riting of the sit'ation to the A'thorit0+s Chief -ro)'rement Offi)er, and therefore )ooperate /ith the A'thorit0Ks revie/ and investigation of s')h information. i9 -roposer has reason to $e&ieve that an0 representation or ans/er to an0 <'estion )ontained in this N'estionnaire /as not a))'rate or )omp&ete at the time this N'estionnaire /as signedQ or ii9 events o))'r or )ir)'mstan)es )hanges so that an ans/er to an0 <'estion in -art ?O is no &onger a))'rate or )omp&ete.
". 4. 5. %.
?n the A'thorit0Ks so&e dis)retion, the fo&&o/ing sha&& )onstit'te gro'nds for the A'thorit0 to ta2e remedia& a)tion 'p to and in)&'ding immediate termination of the Contra)t for )onvenien)e /itho't pa0ment for profit and overhead for /or2 not performed if( i9 -roposer fai&s to notif0 the Chief -ro)'rement Offi)er as re<'ired $0 >%> a$ove( ii9 -roposer fai&s to )ooperate /ith the A'thorit0Ks re<'est for additiona& information as re<'ired $0 >%> a$ove. 1. The A'thorit0 reserves the right to in<'ire f'rther /ith respe)t to -roposerKs responsesQ and -roposer )onsents to s')h f'rther in<'ir0 and agrees to f'rnish a&& re&evant do)'ments and information as re<'ested $0 the A'thorit0. An0 response to this do)'ment prior or
-age 4
s'$se<'ent to -roposerKs -roposa& /hi)h is or ma0 $e )onstr'ed as 'nfavora$&e to -roposer /i&& not ne)essari&0 a'tomati)a&&0 res'&t in a negative finding on the <'estion of -roposerKs responsi$i&it0 or a de)ision to terminate the Contra)t if it is a/arded to -roposer.
PART II ) IDENTITD OF PROPOSER !. -roposerKs *'&& 7ega& #ame(JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ The -roposer represents that it operates as the fo&&o/ing form of &ega& entit0( 8Che)2 /hi)hever app&ies and fi&& in an0 appropriate $&an2s.9 an individ'a& or so&e proprietorship a genera& partnership a &imited partnership a @oint vent're )onsisting of(JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ and JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 87ist a&& @oint vent'rers on a separate sheet if this spa)e is inade<'ate.9 a non profit organiGation a )orporation organiGed or in)orporated 'nder the &a/s of the fo&&o/ing state or )o'ntr0( JJJJJJJJJJJJJJJJJJJJJJJJJ on the fo&&o/ing date( JJJJJJJJJJJJJJJJJJJJJJJJ ". 4. -roposerKs federa& ta;pa0er identifi)ation n'm$er( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ -roposerKs &ega& address( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Te&ephone #'m$er( 8JJJJ9 JJJJJJJJJJJJJJJJJ *a; #'m$er( 8JJJJ9JJJJJJJJJJJJJJJJJ 5. -roposerKs &o)a& or a'thoriGed point of )ontra)t address( #ame(JJJJJJJJJJJJJJJJJJJJJJJ Tit&e( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
2.
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Address(JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Te&ephone #'m$er( 8JJJJ9 JJJJJJJJJJJJJJJJJ *a; #'m$er( 8JJJJ9JJJJJJJJJJJJJJJJJ %. a. ?f -roposer is a )orporation, has a Certifi)ate of ?n)orporation $een previo's&0 fi&ed /ith the #e/ 5or2 Cit0 Transit A'thorit0W 5:S #O ?f ans/er is >#O,4 atta)h a )ertified )op0.
$. Atta)h a )ertified )op0 of the ,0 7a/s and Ieso&'tion of the Corporation giving the names and tit&es of the )orporate offi)ers other than -resident, as /e&& as non offi)er emp&o0ees, /ho are a'thoriGed to sign )ontra)ts, $onds, $i&&s of sa&e and other &ega& instr'ments in )onne)tion /ith the Contra)t, if the same have not $een previo's&0 fi&ed. ). ?f a foreign )orporation, has proof of a'thorit0 to transa)t $'siness in the State of #e/ 5or2 $een previo's&0 fi&ed /ith the #e/ 5or2 Cit0 Transit A'thorit0W 5:S #O ?f ans/er is >#O,> atta)h a )ertified )op0.
?n the event that an0 of -roposerKs previo's s'$missions to the Transit A'thorit0 in response to the a$ove 8<'estions a )9 no &onger represent the -roposerKs )'rrent )orporate stat's, -roposer m'st atta)h a )ertified )op0 of an0 do)'ments amending its previo's s'$missions. 1. a. Bo/ &ong has the -roposer $een in $'sinessW $. Bave -roposerKs ma@or shareho&ders, offi)ers or prin)ipa&s $een in $'siness 'nder another nameW ?f so, identif0 name and dates 'sed. ). Bo/ man0 0ears e;perien)e as a prime )ontra)torA)ons'&tantW JJJJJJJJJJJJJJJJJJJJJJJJJJJ d. H. Bo/ man0 0ears e;perien)e as a s'$)ontra)torAs'$)ons'&tantW JJJJJJJJJJJJJJJJJJJJJJJJJJ
7ist $e&o/ the names, $'siness addresses, tit&es, and te&ephone n'm$ers of the fo&&o/ing peop&e( if a )orporation, identif0 the president, e;e)'tive offi)ers, and an0 other offi)ers dire)t&0 responsi$&e for this -roposa&Q if a partnership, identif0 the partners dire)t&0 responsi$&e for this -roposa&Q or, if another form of $'siness entit0, identif0 the prin)ipa&s dire)t&0 responsi$&e for this -roposa&.
-age %
#ame Address Tit&e Te&ephone #o. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 9. ?f 0o'r firm )onsiders itse&f to $e an .,:, W,: or D,:, then /ithin the past three 0ears has the -roposer had an0 .,:, W,:, or D,: )ertifi)ation 8or app&i)ation for s')h )ertifi)ation9 revo2ed or, if 0o' made app&i)ation for s')h )ertifi)ation d'ring s')h period /as same deniedW 5:S #O ?f ans/er is >#O,> atta)h a )ertified )op0.
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ PART III)PROPOSERKS REPRESENTATIONS !. ,0 s'$mission of this -roposa&, the 'ndersigned and ea)h person signing on $eha&f of the 'ndersigned )ertifies, and in the )ase of a @oint proposa& ea)h part0 thereto )ertifies, as to its o/n organiGation, as re<'ired $0 Se)tion 2H1H of the -'$&i) A'thorities 7a/ of the State of #e/ 5or2, 'nder pena&t0 of per@'r0, that to the $est of its 2no/&edge and $e&ief( a. the pri)es in this -roposa& have $een arrived at independent&0 /itho't )o&&'sion, )ons'&tation, )omm'ni)ation, or agreement for the p'rpose of restri)ting )ompetition, as to an0 matter re&ating to s')h pri)es /ith an0 other proposer or /ith an0 )ompetitorQ $. 'n&ess other/ise re<'ired $0 &a/, the pri)es /hi)h have $een <'oted in this -roposa& have not $een 2no/ing&0 dis)&osed $0 the -roposer arid /i&& not 2no/ing&0 $e dis)&osed $0 the 'ndersigned prior to opening, dire)t&0 or indire)t&0, to an0 other proposer or to an0 )ompetitor prior to the )&osing date for proposa&sQ ). no attempt has $een or /i&& $e made $0 the -roposer to ind')e an0 other person, partnership or )orporation to s'$mit or not to s'$mit a proposa& for the p'rpose of restri)ting )ompetitionQ
-age 1
A -roposa& sha&& not $e )onsidered for a/ard nor sha&& an0 a/ard $e made /here a, $, and ), a$ove, have not $een )omp&ied /ith provided, ho/ever, that if in an0 )ase the -roposer )annot ma2e the foregoing )ertifi)ation, the -roposer sha&& so state and sha&& f'rnish /ith the -roposa& a signed and notariGed statement /hi)h sets forth in detai& the reasons therefor. Where a, $, and ), a$ove, have not $een )omp&ied /ith, the -roposa& sha&& not $e )onsidered for a/ard nor sha&& an0 a/ard $e made 'n&ess the Oi)e -resident, Division of .aterie& of the A'thorit0, or hisAher designee, determines that s')h dis)&os're /as not made for the p'rpose of restri)ting )ompetition. The fa)t that a -roposer 8i9 has p'$&ished pri)e &ists, rates, or tariffs )overing items $eing pro)'redQ 8ii9 has informed prospe)tive )'stomers of proposed or pending p'$&i)ation of ne/ or revised pri)e &ists for s')h itemsQ or 8iii9 has so&d the same items to other )'stomers at the same pri)es $eing proposed, does not )onstit'te, /itho't more, a dis)&os're /ithin the meaning of a, $, and ) a$ove 2. Statement of no )onf&i)t of interest a. #o appointed or e&e)ted offi)ia&, mem$er or other offi)er or emp&o0ee of the Cit0 or State of #e/ 5or2, or of the .etropo&itan Transportation A'thorit0 8>.TA>9, or .TAKs affi&iates arid s'$sidiaries /hi)h )onsist of the #e/ 5or2 Cit0 Transit A'thorit0, .anhattan C ,ron; S'rfa)e Transit Operating A'thorit0, Staten ?s&and Iapid Transit Operating A'thorit0, .etro #orth Comm'ter Iai&road, 7ong ?s&and Iai& Ioad, Tri$oro'gh ,ridge and T'nne& A'thorit0, .etropo&itan S'$'r$an ,'s A'thorit0, and .etropo&itan Transportation A'thorit0 Card Compan0( i9 is interested dire)t&0 or indire)t&0, in an0 manner /hatsoever in or in the performan)e of the Contra)t or in the s'pp&ies, /or2 or $'siness to /hi)h it re&ates or in an0 portion of the profits thereofQ or ii9 has $een or /i&& $e offered or given an0 tangi$&e )onsideration in )onne)tion /ith this -roposa&AContra)t.
$. -roposer )ovenants that neither -roposer nor, to the $est of the -roposerKs 2no/&edge after di&igent in<'ir0, an0 dire)tor, offi)er, o/ner or emp&o0ee of the -roposer has an0 interest nor sha&& the0 a)<'ire an0 interest, dire)t&0 or indire)t&0, /hi)h /o'&d )onf&i)t in an0 manner or degree /ith the faithf'& performan)e of the Contra)t here'nder. ). ?n the event -roposer has no prior 2no/&edge of a )onf&i)t of interest as set forth in >a> and >$> a$ove and hereafter a)<'ires information /hi)h indi)ates that there ma0 $e an a)t'a& or apparent vio&ation of an0 of the a$ove, -roposer sha&& prompt&0 $ring s')h information to the attention of the A'thorit0Ks Chief -ro)'rement Offi)er, -roposer sha&& thereafter )ooperate /ith the A'thorit0Ks revie/ and investigation of s')h information, and )omp&0 /ith an0 instr')tion it re)eives from the Chief -ro)'rement Offi)er in regard to remed0ing the sit'ation.
-age H
".
The fo&&o/ing statements app&0 to an0 proposa& or )ontra)t $et/een -roposer and the Cit0 or State of #e/ 5or2, an0 other state, an0 p'$&i) a'thorit0 or other p'$&i) entit0, the United States government, the .etropo&itan Transportation A'thorit0 8>.TA>9, and .TAKs affi&iates and s'$sidiaries /hi)h are the #e/ 5or2 Cit0 Transit A'thorit0, .anhattan C ,ron; S'rfa)e Transit Operating A'thorit0, Staten ?s&and Iapid Transit Operating A'thorit0, .etro #orth Comm'ter Iai&road, 7ong ?s&and Iai& Ioad, Tri$oro'gh ,ridge and T'nne& A'thorit0, .etropo&itan S'$'r$an ,'s A'thorit0, and .etropo&itan Transportation A'thorit0 Card Compan0. a. Statements $, ), d. e, f and g $e&o/ a&so app&0 to i9 -roposerKs parent, s'$sidiaries and affi&iates 8if an09, ii9 an0 @oint vent're 8in)&'ding its individ'a& mem$ers and an0 other form of partnership 8in)&'ding its individ'a& mem$ers9 /hi)h in)&'des -roposer or -roposerKs parent, s'$sidiaries, or affi&iatesQ iii9 -roposerKs dire)tors, offi)ers, prin)ipa&s, and manageria& emp&o0ees and an0 person or entit0 /ith a !0P or more interest in -roposerQ iv9 an0 &ega& entit0 )ontro&&ed, or !0P or more of /hi)h is o/ned, $0 -roposer, or $0 an0 dire)tor, offi)er, prin)ipa& or manageria& emp&o0ee of -roposer, or $0 an0 person or entit0 /ith a !0P or more interest in -roposerQ or v9 an0 parent, s'$sidiar0 or affi&iate of an0 &ega& entit0 )ontro&&ed, or !0P or more of /hi)h is o/ned, $0 -roposer, or $0 an0 dire)tor, offi)er, prin)ipa& or manageria& emp&o0ee of -roposer, or an0 person or entit0 /ith a !0 P or more interest in -roposer. $. Bas the -roposer $een de)&ared not responsi$&e. 8Che)2 >5:S> or F#O,F as appropriate.9 5:S ). #O
Bas the -roposer $een de$arred, s'spended, proposed for de$arment, de)&ared ine&igi$&e, vo&'ntari&0 e;)&'ded, or other/ise dis<'a&ified from $idding, proposing, or )ontra)ting. 8Che)2 >5:S> or >#O,> as appropriate.9 5:S #O
d.
Bas the -roposer $een a defa'&ter, as prin)ipa&, s'ret0 or other/ise. 8Che)2 >5:S> or >#O,> as appropriate.9 5:S #O
e.
Bas the government or other p'$&i) entit0 re<'ested or re<'ired enfor)ement of an0 of its rights 'nder a s'ret0 agreement on the $asis of a -roposer defa'&t or in &ie' of de)&aring -roposer in defa'&t. 8Che)2 >5:S> or >#O,4 as appropriate.9
-age 9
5:S f.
#O
?s the -roposer in arrears 'pon a )ontra)t or de$t. 8Che)2 >5:S> or >#O,4 as appropriate 5:S #O
g. Are there an0 pro)eedings pending re&ating to -roposerKs responsi$i&it0, de$arment, s'spension, vo&'ntari&0 e;)&'sion or <'a&ifi)ation to re)eive a p'$&i) )ontra)t. 8Che)2 >5:S> or >#O>. as appropriate.9 5:S h. #O
7ist the name and $'siness address of ea)h person or &ega& entit0 /hi)h has a !0P or more o/nership or )ontro& interest in -roposer 8atta)h additiona& pages as needed9.
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ i. :;p&ain an0 >5:S> ans/ers to $, ), d, e, f and g in the spa)e provided $e&o/ 8atta)h additiona& pages as needed9. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
-age !0
-age !!
PART IP ) @UESTIONS BCICC MUST BE ANSBERED FDESF OR FNOF 8?n the event of a >5:S,> the A'thorit0 reserves the right to in<'ire f'rther /ith respe)t thereto.9 To the $est of 0o'r 2no/&edge after di&igent in<'ir0, in )onne)tion /ith the $'siness of proposer or an0 other firm /hi)h is re&ated to -roposer $0 an0 degree of )ommon o/nership, )ontro&, or other/ise, do an0 of the fo&&o/ing statements app&0 to( i9 -roposerQ ii9 -roposerKs parentQ iii9 an0 -roposer s'$sidiar0 or affi&iateQ iv9 an0 @oint vent're 8in)&'ding its individ'a& mem$ers9 or an0 other partnership 8in)&'ding its individ'a& mem$ers9 /hi)h in)&'des -roposer or -roposerKs parent, s'$sidiaries, or affi&iates, v9 an0 &ega& entit0, or parent, s'$sidiar0 or affi&iate of an0 &ega& entit0, )ontro&&ed. or !0P or more of /hi)h is o/ned, $0 -roposer, or $0 an0 dire)tor, offi)er, prin)ipa& or manageria& emp&o0ee of -roposer, or $0 an0 person or entit0 /ith a !0P or more interest in -roposer. or vi9 an0 person /ho is a dire)tor, offi)er, prin)ipa&, or, manageria& emp&o0ee, or person or entit0 /ith a !0P or more interest in an0 of the aforesaid( !. Bas $een )onvi)ted $0 a p&ea or verdi)t of g'i&ti&0 of, or p&eaded no&o )ontendere to, a misdemeanor or fe&on0 in an0 federa&, state or &o)a& )o'rt. 8Che)2 >5:S> or >#O,4 as appropriate.9 5:S 2. #O
Bave pending an0 state or federa& grand @'r0 or )o'rt an indi)tment or information for the )ommission of a )rime /hi)h has riot $een favora$&0,K terminated. 8Che)2 >5:S> or >#O,4 as appropriate.9 5:S #O
".
?s the s'$@e)t of an0 pending investigation $0 an0 grand @'r0, )ommission, )ommittee or other entit0 or agen)0 or a'thorit0 of an0 state or the federa& government in )onne)tion /ith the )ommission of a )rime. 8Che)2 >5:S> or >#o,4 as appropriate.9 5:S #O
4.
?s )'rrent&0 dis<'a&ified from se&&ing or s'$mitting $idsAproposa&s to or re)eiving a/ards from or entering into an0 )ontra)ts /ith an0 federa&, state or &o)a& governmenta& entit0, an0 p'$&i) a'thorit0 or an0 p'$&i) entit0 8Che)2 >5:S> or >#O,4 as appropriate.9 5:S #O
5.
Within the past five 0ears, has ref'sed to testif0 or to ans/er an0 <'estion )on)erning a $id or )ontra)t /ith an0 federa&, state, or &o)a& governmenta& entit0, an0 p'$&i) a'thorit0
-age !2
or other p'$&i) entit0 /hen )a&&ed $efore a grand @'r0 or other )ommittee, agen)0 or for'm /hi)h is empo/ered to )ompe& the attendan)e of /itnesses and e;amine them 'nder oath, 'pon $eing advised that neither the personKs statement nor an0 information or eviden)e derived from s')h statement /i&& $e 'sed against that person in an0 s'$se<'ent )rimina& pro)eeding. 8Che)2 >5:S> or >#O> as appropriate.9 5:S %. #O
?s )'rrent&0 dis<'a&ified from se&&ing or s'$mitting a $id to, or re)eiving an a/ard from, or entering into an0 )ontra)t /ith an0 p'$&i) entit0 or p'$&i) a'thorit0 /ithin the State of #e/ 5or2 $e)a'se, /ithin the past five 0ears, s')h entit0 or person ref'sed to testif0 or to ans/er an0 re&evant <'estion )on)erning a transa)tion or )ontra)t /ith the State of #e/ 5or2, an0 po&iti)a& s'$division of the State of #e/ 5or2, or a p'$&i) a'thorit0 or a p'$&i) department, agen)0 or offi)ia& of the State of #e/ 5or2 or of a po&iti)a& s'$division of the State of #e/ 5or2, /hen )a&&ed $efore a grand @'r0 or other state or &o)a& department, )ommission or agen)0 /hi)h is empo/ered to )ompe& the attendan)e of /itnesses and e;amine them 'nder oath. 'pon $eing advised that neither that personKs statement nor an0 information or eviden)e derived from s')h statement /i&& $e 'sed against that person in an0 s'$se<'ent )rimina& pro)eeding, 8Che)2 >5:S> or >#O,4 as appropriate.9 5:S #O
1.
Bas /ithin a three 0ear period pre)eding this -roposa& $een )onvi)ted of or had a )ivi& @'dgment rendered against them for )ommission of fra'd or a )rimina& offense in )onne)tion /ith o$taining, attempting to o$tain. or performing a p'$&i) 8*edera&, State or &o)a&9 transa)tion or )ontra)t 'nder a p'$&i) transa)tionQ vio&ation of *edera& or State antitr'st stat'tes or )ommission of em$eGG&ement, theft, forger0, $ri$er0, fa&sifi)ation or destr')tion of re)ords, ma2ing fa&se statements, or re)eiving sto&en propert0. 8Che)2 >5:S> or >#O,4 as appropriate.9 5:S #O
H.
:;p&ain an0 >5:S> ans/ers to !, 2, ", 4, 5, % or 1, in the spa)e provided $e&o/ 8atta)h additiona& pages as needed9.
-age !"
PART P)TECCNICAL !. 7ist the name, tit&e and $'siness address of ea)h dire)tor and prin)ipa& offi)er of -roposer. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J 2. ". #'m$er of emp&o0ees( JJJJJJJJJJJJJJJ in)&'ding JJJJJJJJJJJJ emp&o0ees in the =reater #e/ 5or2 .etropo&itan Area. Does the -roposer have an0 o'tstanding $ids or proposa&s for )ontra)ts 8i.e., $ids or proposa&s pending /here no )ontra)t has 0et $een a/arded9 /ith the State or Cit0 of #e/ 5or2, or an0 other p'$&i) a'thorit0 of the State of #e/ 5or2, or the .etropo&itan Transportation A'thorit0 8>.TA>9, and .TAKs affi&iates and s'$sidiaries /hi)h are the #e/ 5or2 Cit0 Transit A'thorit0, .anhattan C ,ron; S'rfa)e Transit Operating A'thorit0, Staten ?s&and Iapid Transit Operating A'thorit0, .etro #orth Comm'ter Iai&road, 7ong ?s&and Iai& Ioad, Tri$oro'gh ,ridge and T'nne& A'thorit0, .etropo&itan S'$'r$an ,'s A'thorit0, and .etropo&itan Transportation A'thorit0 Card Compan0W ?f none, state >#one>. ?f 0es, p&ease &ist them and provide the name of the re<'esting agen)0, the )ontra)t n'm$er, a $rief des)ription of the /or2 effort and the stat's of the $id or proposa&. ?ndi)ate if the $idAproposa& /as s'$mitted $0 the ,idder as prime )ontra)tor or @oint vent're.
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-age !4
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J 4. Bas the -roposer $een a/arded an0 )ontra)ts /ithin the &ast three 0ears $0 the State or Cit0 of #e/ 5or2, or an0 other p'$&i) a'thorit0 of the State of #e/ 5or2, or the .etropo&itan Transportation A'thorit0 8>.TA>9, and .TAKs affi&iates and s'$sidiaries /hi)h are the #e/ 5or2 Cit0 Transit A'thorit0, .anhattan C ,ron; S'rfa)e Transit Operating A'thorit0, Staten ?s&and Iapid Transit Operating A'thorit0, .etro #orth Comm'ter Iai&road, 7ong ?s&and Iai& Ioad, Tri$oro'gh ,ridge and T'nne& A'thorit0, .etropo&itan S'$'r$an ,'s A'thorit0, and .etropo&itan Transportation A'thorit0 Card Compan0W ?f none, state >#one>. ?f 0es, des)ri$e those )ontra)ts $eginning /ith the most re)ent. State the name of the )ontra)ting entit0Q give a $rief des)ription of the )ontra)t and the )ontra)t n'm$erQ state the )ontra)t period, the stat's of the )ontra)t, and the name, address, and te&ephone n'm$er of a )onta)t person at the agen)0. ?ndi)ate if a/ard /as made to -roposer as prime )ontra)tor or @oint vent're. -roposer need not provide more than si; s')h des)riptions.
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-age !5
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J 5. Does the -roposer have an0 )'rrent private se)tor pro@e)tsW ?f none, state >#one.> ?f 0es, provide name and address of o/ner, a $rief des)ription of /or2, stat's of )ontra)ts and name, address and te&ephone n'm$er of )onta)t person as to ea)h, $eginning /ith the most re)ent. ?ndi)ate if -roposer is a)ting as prime )ontra)tor or @oint vent're. -roposers need not provide more than si; s')h des)riptions.
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J %. *or ea)h of the fo&&o/ing )ontra)ts, provide a $rief des)ription of the /or2 performed, the )ontra)t n'm$er, the do&&ar amo'nt at a/ard and at )omp&etion, date )omp&eted, and the name and te&ephone n'm$er of the o/nerKs representative. a. :a)h )ontra)t )omp&eted d'ring the &ast three 0ears or, if &ess than three )ontra)ts have $een )omp&eted d'ring the &ast three 0ears, &ist the &ast three )ontra)ts )omp&eted. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
-age !%
$. :a)h )ontra)t )omp&eted d'ring the &ast three 0ears or, if &ess than three )ontra)ts have $een )omp&eted d'ring the &ast three 0ears, &ist the &ast three )ontra)ts )omp&eted, for /hi)h &i<'idated damages or pena&t0 provisions /ere assessed against 0o' for fai&'re to )omp&ete the /or2 on time or for an0 other reason. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 1. 7ist ea)h )ontra)t /hi)h, d'ring the &ast three 0ears, the personAentit0 )ontra)ting /ith 0o'( i9 terminated for defa'&tQ ii9 s'ed to )ompe& performan)eQ iii9 s'ed to re)over damages, in)&'ding, /itho't &imitation, 'pon a&&eged $rea)h of )ontra)t, misfeasan)e, error or omission or other a&&eged fai&'re on 0o'r part to perform as re<'ired $0 0o'r )ontra)tQ or iv9 )a&&ed 'pon a s'ret0 to perform the /or2. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J
H.
Des)ri$e /hether an0 present or anti)ipated )ommitments andAor )ontra)t'a& o$&igations might have an inf&'en)e on the )apa$i&ities of the -roposer to perform the /or2 )a&&ed for $0 this Contra)t. An0 apparent )onf&i)ts as $et/een the re<'irementsA)ommitments for this Contra)t and the matters &isted in items ", 4, 5 or %, a$ove, /ith respe)t to the 'se of -roposerKs reso'r)es, s')h as management or te)hni)a& e;pertise or finan)ing, sho'&d $e e;p&ained. ?f none, state >#one>.
-age !1
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J 9. Des)ri$e an0 &itigation in /hi)h the -roposer is invo&ved, /hi)h( a. has or ma0 have an impa)t on the -roposerKs a$i&it0 to perform an0 /or2 )a&&ed for $0 this so&i)itationQ or $. the demand or potentia& e;pos're is for more than S250,000, e;)&'sive of persona& in@'r0 &itigation /here the &ia$i&it0 is )overed $0 ins'ran)e. ?f none, state >#one.> JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ !0. D'ring the past three 0ears, has the -roposerKs firm ever $een a part0 to a $an2r'pt)0 or reorganiGation pro)eedingW 5:S !!. a. #O ?f ans/er is >5:S,> e;p&ain $e&o/.
?f an0 professiona& or other &i)enses, permits, or )ertifi)ations are re<'ired to perform the /or2Aservi)es )a&&ed for $0 this so&i)itation, &ist the &i)ense, permit, or
-age !H
)ertifi)ation that the -roposer or -roposerKs emp&o0ees or agents possess. ?f none, state >#one>. 7i)ense or -ermit or Certifi)ation #ame of Bo&der ?ss'ing State or :ntit0
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ $. Bave an0 of the -roposerKs offi)ers, partners, o/ners, managers or emp&o0ees had an0 pro@e)t re&ated &i)enses, permits or )ertifi)ations revo2ed or s'spended in the past three 0ears. 5:S #O !2. ?f ans/er is >5:S,> e;p&ain detai&s $e&o/.
Does the -roposerKs firm share offi)e spa)e, staff or e<'ipment 8in)&'ding te&ephone e;)hanges9 /ith an0 other $'siness or organiGationW 5:S #O ?f ans/er is >5:S,> &ist firm name, address and nat're of shared fa)i&ities. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J
-age !9
!".
Bas -roposerKs safet0 pra)ti)esApro)ed'res $een eva&'ated or rated as &ess then satisfa)tor0 $0 the Cit0 or State of #e/ 5or2, an0 other state, an0 p'$&i) a'thorit0 or other p'$&i) entit0, the United States government, the .etropo&itan Transportation A'thorit0 8>.TA>9, and .TAKs affi&iates and s'$sidiaries /hi)h are the #e/ 5or2 Cit0 Transit A'thorit0, .anhattan C ,ron; S'rfa)e Transit Operating A'thorit0, Staten ?s&and Iapid Transit Operating A'thorit0, .etro #orth Comm'ter Iai&road, 7ong ?s&and Iai& Ioad, Tri$oro'gh ,ridge and T'nne& A'thorit0, .etropo&itan S'$'r$an ,'s A'thorit0, and .etropo&itan Transportation A'thorit0 Card Compan0 /ithin the past five 0earsW 5:S #O ?f ans/er is >5:S,4 e;p&ain detai&s $e&o/.
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J !4. ?s 0o'r firmKs Wor2ers Compensation :;perien)e Iating !.2 or greaterW 5:S #O ?f ans/er is >5:S,4 e;p&ain detai&s $e&o/. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J
-age 20
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J
!5.
Does -roposer have either a histor0 of )&aims &oss or an0 s'$stantia& individ'a& )&aim &oss /ithin the past five 0ears d'e to genera& &ia$i&it0 or /or2ers )ompensation )&aimsW 5:S #O ?f ans/er is >5:S,4 e;p&ain detai&s $e&o/. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J !%. 7ist the names, tit&es and atta)h res'mes /hi)h indi)ate the re)ord of s2i&& and e;perien)e of 0o'r proposed pro@e)t management team. 8See Spe)ifi)ations or the S)ope of Wor2 for the f'n)tions of the pro@e)t management team, as app&i)a$&e, and other re<'irements in regard to pro@e)t management.9 JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J
-age 2!
!1.
Whi)h of the individ'a&s named in item !%, a$ove, /i&& $e 'ti&iGed e;)&'sive&0 on this Contra)t on a f'&& time $asisW 8The Spe)ifi)ation or the S)ope of Wor2 ma0 indi)ate re<'irements for )ertain dedi)ated staff.9 JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
J J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J !H. Whi)h of the individ'a&s named in item !%, a$ove, are not present&0 offi)ers, partners, o/ners or emp&o0ees of the firmW JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J !9. Atta)h an o't&ine of 0o'r proposed N'a&it0 Contro& program 8see appropriate se)tion of the Spe)ifi)ations or the S)ope of Wor29 for this Contra)t. Where the Spe)ifi)ations or the S)ope of Wor2 set o't re<'ired e&ements for the program, s')h o't&ine m'st )over ea)h e&ement.
-age 22
PART PI ) ADDITIONAL @UESTIONS !. 7ist a&& -roposerKs emp&o0ees( a. /ho are )'rrent&0 emp&o0ees of the .etropo&itan Transportation A'thorit0 8>.TA>9, or an0 .TA s'$sidiar0 or affi&iate 8#e/ 5or2 Cit0 Transit A'thorit0, .anhattan C ,ron; S'rfa)e Transit Operating A'thorit0, Staten ?s&and Iapid Transit Operating A'thorit0, .etro #orth Comm'ter Iai&road, 7ong ?s&and Iai& Ioad, Tri$oro'gh ,ridge and T'nne& A'thorit0, .etropo&itan S'$'r$an ,'s A'thorit0, and .etropo&itan Transportation A'thorit0 Card Compan09. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ $. /ho /ithin the past t/o 0ears have $een .TA or .TA s'$sidiar0 or affi&iate emp&o0ees /ho /ere invo&ved on $eha&f of -roposer /ith the preparation of this -roposa& or /o'&d $e invo&ved in the performan)e of the Contra)t if it is a/arded to -roposer. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 2. Does -roposer have a s'$sidiar0 or affi&iateW 5:S #O ?f ans/er is >5:S,4 &ist firm name, address and affi&iation JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
-age 2"
".
?s -roposer a s'$sidiar0 of another entit0W
5:S #O ?f ans/er is >5:S,4 &ist firm name, address and affi&iation JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 4. Does -roposer, an0 dire)tor, offi)er, prin)ipa& or manageria& emp&o0ee of -roposer, or an0 other person or entit0 /ith a !0P or more interest in -roposer have an interest of !0P or more in an0 other firm or &ega& entit0W
5:S #O ?f ans/er is >5:S,4 &ist individ'a&s name and firm or entit0 JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 5. ?f the ans/er to 2, " or 4 is >5:S,4 /o'&d -roposerKs ans/ers pertaining to -arts ??? and ?O $e the same for ea)h s')h parent, s'$sidiar0, affi&iate, firm or &ega& entit0W 5:S #O ?f ans/er is >#O,4 e;p&ain $e&o/ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ PART PII = FINANCIAL !. -rovide )ertified finan)ia& statements for the &ast three fis)a& 0ears. ?f )ertified finan)ia& statements are not avai&a$&e, provide finan)ia& statements s/orn to $0 the firmKs Chief *inan)ia& Offi)er. The -roposer ma0 s'$mit its prior " 0earsK finan)ia& statements in &ie' of )omp&eting Se)tion ! 8,a&an)e Sheet9, Se)tion 2 8Comparative Statement of ?n)ome C Ietained
2.
-age 24
:arnings9, and Se)tion " 8Comparative Statements of Cash *&o/s9. Bo/ever, Se)tion !, S)hed'&es A, ,, C, D, : and * and Se)tions 4, % and 1 m'st $e )omp&eted. ?f the -roposer is re<'ired to s'$mit a performan)e $ond, Se)tion 5 m'st a&so $e )omp&eted.
-age 25
SECTION ( CO.-AIAT?O: ,A7A#C: SB::T as of 8S0009 !9JJJ S ?. CUII:#T ASS:TS( Cash JJJJJJJJJJJJJJJJJJJJJJJJJJJ .ar2eta$&e Se)'rities JJJJJJJJJJJJJJ #otes Ie)eiva$&e 8S)hed'&e A9 JJJJJJJ A))o'nts Ie)eiva$&e 8S)hed'&e ,9 JJJJ ,id Deposits 8S)hed'&e C9 JJJJJJJJJJ ?nventories JJJJJJJJJJJJJJJJJJJJJJ -repaid :;penses JJJJJJJJJJJJJJJJJ Other C'rrent Assets( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ TOTA7 CUII:#T ASS:TS ??. OTB:I ASS:TS( ?nvestment in Affi&iates JJJJJJJJJJJJ Other #on C'rrent Assets( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ TOTA7 OTB:I ASS:TS ???. JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ SJJJJJJJJJ SJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ SJJJJJJJJJ !9JJJ S JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ SJJJJJJJJ SJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ SJJJJJJJJJ !9JJJ S JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ SJJJJJJJJJ SJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ SJJJJJJJJJ
-IO-:IT5, -7A#T C :NU?-.:#T( #:T -IO-:IT5, -7A#T C :NU?-.:#T 8#et of Depre)iation9 SJJJJJJJJJ TOTAL ASSETS SJJJJJJJJJ
SJJJJJJJJJ SJJJJJJJJJ
SJJJJJJJJJ SJJJJJJJJJ
-age 2%
7?A,?7?T?:S 8S0009 ?. CUII:#T 7?A,?7?T?:S #otes -a0a$&e 8S)hed'&e D9 JJJJJJJJ A))o'nts -a0a$&e 8S)hed'&e :9 JJJJJ 7oans -a0a$&e 8S)hed'&e *9 JJJJJJJJ Ta;es -a0a$&e JJJJJJJJJJJJJJJJJJJ C'rrent -ortion of 7ong Term De$t JJ A))r'ed 7ia$i&ities JJJJJJJJJJJJJJJ Other C'rrent 7ia$i&ities( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ TOTA7 CUII:#T 7?A,?7?T?:S ??. #O# CUII:#T 7?A,?7?T?:S 7ong Term De$t JJJJJJJJJJJJJJJJJJ Other( JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ TOTA7 #O# CUII:#T 7?A,?7?T?:S TOTA7 7?A,?7?T?:S ???. :NU?T5 Capita& Sto)2 -aid Up( Common JJJJJJJJJJJJJJJJJJJJJJ -referred JJJJJJJJJJJJJJJJJJJJJJ S'rp&'s 8net /orth9 JJJJJJJJJJJJJJJJ TOTA7 :NU?T5 TOTAL LIABILITIES AND E@UITD !9JJJ S JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ SJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ SJJJJJJJJJ SJJJJJJJJJ !9JJJ S JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ SJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ SJJJJJJJJ SJJJJJJJJ !9JJJ S JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ SJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ SJJJJJJJJJ SJJJJJJJJJ
SJJJJJJJJJ SJJJJJJJJJ SJJJJJJJJJ SJJJJJJJJJ R]]]]]]]]]
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-age 21
DETAILS RELATIPE TO ASSETS SCCEDULE A Notes Recei%a&le 8a9 d'e /ithin 90 da0s JJJJJJJJJJJJSJJJJJJJJJJJJJJ 8$9 d'e after 90 da0s JJJJJJJJJJJJSJJJJJJJJJJJJJJ 8)9 past d'e JJJJJJJJJJJJJJJJJJJJJSJJJJJJJJJJJJJJ
-'rpose Date of .at'rit0 Bo/ Se)'red S Amo'nt
Ie)eiva$&e *rom( #ame
TOTAL
SCCEDULE B A"in" of Accounts Recei%a&le

C'rrent Trade S Other S Total R S S S ! to "0 da0s S S S "! to %0 da0s S S S
P A
%! to 90 da0s
T
Over 90 Da0s
D U
E
Tota&
S S S
S S S
SCCEDULE C
Bid De osit Bo&der of Deposit( #ame Des)ription S Amo'nt
TOTAL
-age 2H
DETAILS RELATIPE TO LIABILITIES SCCEDULE D Notes Pa#a&le 8a9 #ot -ast D'e JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJ 8$9 -ast D'e JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJ
-'rpose When D'e S Amo'nt
S S
To Whom( #ame
TOTAL
SCCEDULE E Accounts Pa#a&le 8a9 #ot -ast D'e JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJ 8$9 -ast D'e JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJ
-'rpose Date -a0a$&e S Amo'nt
S S
To Whom( #ame
TOTAL
SCCEDULE F Loans Pa#a&le 8a9 #ot -ast D'e JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJ 8$9 -ast D'e JJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJ
-'rpose Date -a0a$&e S Amo'nt
S S
To Whom( #ame
TOTAL
-age 29
SECTION * CO.-AIAT?O: STAT:.:#T O* ?#CO.: C I:TA?#:D :AI#?#=S STAT:.:#T *OI -:I?ODS :#D:D !9JJJ SA7:SJJJJJJJJJJJJJJJJJJJJJJJJJJJ 7ess( COST O* SA7:S( 7a$or JJJJJJJJJJJJJJJJJJJJJ .ateria& JJJJJJJJJJJJJJJJJJJ Depre)iation JJJJJJJJJJJJJJJJ Other Overhead JJJJJJJJJJJJJ =IOSS .AI=?# 7ess( Se&&ing, =enera& and Administrative :;penses JJJJJJ ?n)ome ,efore Ta;es JJJJJJJJJ 7ess( ?n)ome Ta;es JJJJJJJJJJ #:T ?#CO.: Ietained :arnings ,eginning of -eriod JJJJJJJJJJJJJJJ 7ess( Cash Dividends -aid JJJJ Other(JJJJJJJJJJJJJJJJ #et Ietained :arnings :nd of -eriod JJJJJJJJJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ SJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ SJJJJJJJJ SJJJJJJJJ SJJJJJJJJ SJJJJJJJJ R]]]]]]]]] JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ SJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ SJJJJJJJJ SJJJJJJJJ SJJJJJJJJ SJJJJJJJJ R]]]]]]]]] JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ SJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ SJJJJJJJJJ SJJJJJJJJJ SJJJJJJJJJ SJJJJJJJJJ R]]]]]]]]] SJJJJJJJJ !9JJJ SJJJJJJJJJ !9JJJ SJJJJJJJJJ
-age "0
SECTION CO.-AIAT?O: STAT:.:#TS O* CASB *7OWS *OI TB: 5:AIS :#D:D ?n)rease 8De)rease9 in Cash !9JJJ Cash f&o/s from operating a)tivities(JJJJJJJ Cash re)eived from )'stomers JJJJJJJJJJJJ Cash paid to s'pp&iers C emp&o0ees JJJJJJJ ?nterest -aid JJJJJJJJJJJJJJJJJJJJJJJJJJ ?n)ome Ta;es -aid JJJJJJJJJJJJJJJJJJJJJ .is)e&&aneo's re)eipts 8pa0ments9 JJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ #et )ash provided $0 operating. a)tivities JJJ Cash f&o/s from investing a)tivities( -ro)eeds from sa&e of e<'ipment(JJJJJJJJJJ -a0ments for p'r)hase of e<'ipment(JJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ SJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ SJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ !9JJJ SJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ SJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ SJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ JJJJJJJJJ SJJJJJJJJ SJJJJJJJJ SJJJJJJJJ SJJJJJJJJ !9JJJ SJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ SJJJJJJJJJJ JJJJJJJJJJJ JJJJJJJJJJJ JJJJJJJJJJJ JJJJJJJJJJJ JJJJJJJJJJJ JJJJJJJJJJJ SJJJJJJJJJJ JJJJJJJJJJJ JJJJJJJJJJJ JJJJJJJJJJJ JJJJJJJJJJJ JJJJJJJJJJJ JJJJJJJJJJJ JJJJJJJJJJJ JJJJJJJJJJJ SJJJJJJJJJJ SJJJJJJJJJJ SJJJJJJJJJJ SJJJJJJJJJJ
#et Cash Used in ?nvesting a)tivities(JJJJJJJ SJJJJJJJJJ Cash f&o/s from finan)ing a)tivities( #et in)rease in short term de$t( -ro)eeds from iss'an)e of &ong term de$t JJJ Iepa0ment of &ong term de$t JJJJJJJJJJJJJ -a0ment of Dividends JJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ #et Cash provided $0 8'sed in9 finan)ing a)tivities #et in)rease 8de)rease9 in )ash JJJJJJJJJJJJ Cash at $eginning of 0ear JJJJJJJJJJJJJJJJ Cash at end of 0ear JJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ JJJJJJJJJJ SJJJJJJJJJ SJJJJJJJJJ SJJJJJJJJJ SJJJJJJJJJ
-age "!
SECTION . ) IDENTITD OF OBNERS Who are the prin)ipa& o/ners or shareho&ders of the $'siness enterprise and appro;imate&0 /hat per)entage does ea)h o/nW #ame -er)ent O/ned
SECTION 0 ) PERFORMANCE BOND INFORMATION Se)tion 5 is on&0 app&i)a$&e to so&i)itations in /hi)h the -roposer is re<'ired to provide a performan)e $ond. #ames and addresses of $onding )ompan0 or )ompanies that have agreed to f'rnish the performan)e $ond re<'ired $0 the Contra)t. #ame Address S Amo'nt :;piration Date
-age "2
SECTION 2 ) SUBCONTRACTS What parts of this Contra)t, if an0, does -roposer e;pe)t to s'$)ontra)tW -ortion of Wor2 #ame and Address of -roposed S'$)ontra)tor, if 2no/n
SECTION 4 ) CERTIFICATION ? )ertif0 that the atta)hed finan)ia& statements for this -roposa& proper&0 ref&e)t the finan)ia& position of the )ompan0 for the periods indi)ated on the finan)ia&s. JJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJ Chief *inan)ia& Offi)er Date PART PIII )PERIFICATION AND ACQNOBLED<MENT STATE OF ]]]]]]]]]]]]]]]]]]]]]]]]]]]]] COUNTD OF ]]]]]]]]]]]]]]]]]]]]]]]]]]]
On the JJJJJJ da0 of JJJJJJJJJJJJJJJJJ !99JJ, $efore me persona&&0 )ame and appeared. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ $0 me 2no/n to $e said person, /ho s/ore 'nder oath as fo&&o/s( !. BeAshe is JJJJJJJJJJJJJJJJJJJJJ of JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 8-rint tit&e9 8-rint name of firm9 BeAshe is d'&0 a'thoriGes to sign this N'estionnaire on $eha&f of said firm and d'&0 signed this do)'ment p'rs'ant to said a'thoriGation. The ans/ers to the <'estions set forth in this N'estionnaire are tr'e, a))'rate and )omp&ete.
2.
".
-age ""
4.
BeAshe a)2no/&edged and 'nderstands that the N'estionnaire in)&'des provisions /hi)h are deemed in)&'ded in the Contra)t if a/arded to the firm.
S/orn to $efore me this JJJJJJJJJJJ da0 of JJJJJJJJJJJJJJJJ, !99JJ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 8#otar0 -'$&i)9
,est -ra)ti)es -ro)'rement .an'a& L Appendi; ,.!0 Dis)&os're of Conf&i)ts of ?nterest
-age !
APPENDIV B$(* NE<OTIATION MEMORANDUM SAMPLE FORMAT Where the pri)e /as esta$&ished $ased on an eva&'ation of )ost e&ements and fee in the offeror+s proposa&, the negotiation memorand'm sho'&d )&ear&0 set forth the vario's amo'nts as the0 /ere proposed, eva&'ated, and negotiated. *or e;amp&e( Cost Elements3 Dire)t 7a$or( S :ngr. .fg. Overhead( :ngr. .fg. .ateria&s =CA Tota& Costs *ee Tota& -ri)e JJJJJJJJJ J JJJJJJJJJ J S JJJJJJJJJJJJ JJJJJJJJJJJJ S JJJJJJJJJJJ JJJJJJJJJJJ S JJJJJJJJJJ JJJJJJJJJJ S Pro osed Inde endent Cost Est$ S S Pre)Ne"$ Plan Ne"otiated S
Note3 0o'r narrative sho'&d dis)'ss ea)h of the )ost e&ements and the feeAprofit, des)ri$ing ho/ the fina& negotiated amo'nt for ea)h e&ement and profit /as determined. 5o' sho'&d referen)e the -re #egotiation -&an o$@e)tives 8if one /as prepared9, or the ?ndependent Cost :stimate, in 0o'r narrative.
,est -ra)ti)es -ro)'rement .an'a& L Appendi; ,.!! #5CTA ,idders N'estionnaire
-age !
APPENDIV B$(BARRANTD + <UARANTEE RE<ISTER MARTA C-, L Senoia ?ntermoda& *a)i&it0 ?tem Warrant0A=rantee Spe) #' Des)ription Se)tion m$e r
! 2 " " 4 4 5 5 % 1 H 9 !0 !! RRR 1!H0 14!! 14!! 15"2 15"2 1525 1252 1920 H"!! H""! H""2 H1!0 H000 =enera& Constr')tion Water Iepe&&ant Coatings -erformed .eta& Ioofing .eta& Ioofing 7oose 7aid .em$rane Ioofing .em$rane Ioofing .odified ,it'mino's Sheet Ioofing ,it'mino's Sheet Ioofing Sea&ants S&iding Stee& Door Co'nter *ire Door ?ns'&ated Se)tiona& Doors Bard/are ?nsta&&ing =&aGing
-roviding Compan0
Date( 1A!0A91 :;piration Compan0 Address Date

%A!5A91 %A!5A0! %A!5A!% %A!5A!% %A!4A!% %A!4A!% %A!4A!% %A!4A!% %A!5A91 %A!5A91 %A!5A91 %A!5A91 %A!5A91 %A!5A0! 10 :&&is Street, #.:. At&anta, =A "0"0" 29"5 A&)ove Drive S)ottda&e, =A "0019 410 ,a2ers *err0 Ioad At&anta, =A "0"%2 "449 Bemp&and Ioad 7an)aster, -A !1%0! -ost Offi)e ,o; 4H!24 At&anta, =A "0"%2 -ost Offi)e ,o; !404 6op&in, .iss %4H02 -ost Offi)e 4H!24 At&anta, =A "0"%2 -ost Offi)e !404 6op&in, .iss %4H02 29"5 A&)ove Drive S)ottda&e, =A "0019 5!! Stephens Ioad At&anta, =A "0"!0 5!! Stephens Ioad At&anta, =A "0"!0 5!! Stephens Ioad At&anta, =A "0"!0 5%95 Oa2$roo2 -ar2/a0 #or)ross, =A "009" HH4 Y'rtG Ioad .arietta, =A "00%%
,eers Constr')tion .etro Waterproofing, ?n). ?nsta&&er( 5an)e0 C 6amison .an'fa)t'rer( *a$ra& ?nsta&&er( Standard Ioofing .an'fa)t'rer( TA.YO ?nsta&&er( Standard Ioofing .an'fa)t'rer( TA.YO .etro Waterproofing, ?n). Overhead Door Compan0 Overhead Door Compan0 Overhead Door Compan0 At&anti) Bard/are C S'pp&0 Compan0 =&asstream
,est -ra)ti)es -ro)'rement .an'a& L Appendi; ,.!2 #egotiation .emorand'm Samp&e *ormat
-age
APPENDIV B$(. CONTRACT CLOSEOUT CCECQ LIST

.emorand'm
Date3 To3 From3 Su&'ect3
-)Lan)85 Director of Construction and Contract Administration Resident En"ineer Contract CF4*:! Nort/ Point Station and ParEin" DecE Contract Closeout
This is to advise that Contra)t C*120, #orth -oint Station and -ar2ing De)2, is read0 for forma& )&oseo't $0 the AITA ,oard. The Contra)t )omp&etion date /as De)em$er 1, !991. The fina& Contra)t amo'nt is S42,%51,"20.00, &eaving a Contingen)0 $a&an)e of S22%,!H!.00. The ta$'&ation $e&o/ is a )omp&ete )he)2&ist of )&oseo't a)tions, ref&e)ting their )'rrent stat's. ITEM !. Certifi)ates of ,enefi)ia& O))'pan)0AS'$stantia& Comp&etion 2. -'n)h 7ist ". 7i<'idated Damages 4. Temporar0 Constr')tion :asement Signoffs 5. Change Orders ?ss'ed %. C&aims 1. *ina& N'antities H. :<'ipmentAS0stem Testing 9. Spare -artsASpare .ateria&s !0. Operation C .aintenan)e .an'a&s !!. Warranties !2. -ro@e)t Ie)ord Do)'ments !". *ina& Corre)ted Shop Dra/ings !4. -rod')t Data ,oo2 !5. *ina& 7a$or S'mmar0 !%. 7ist of S'$)ontra)tors !1. Affidavit of *ina& -a0ment !H. *ina& -a0ment !9. *ina& .arta A'dit 20. Certifi)ate of Comp&etion 2!. Sign Offs $0 Co'nt0 C State 22. Contra)t *i&es C C&oseo't ,oo2 STATUS Comp&ete Comp&ete #AA Comp&ete Comp&ete C&osed Agreed A))epted Ie)eived Ie)eived A))epted A))epted A))epted A))epted Ie)eived Ie)eived Ie)eived -ro)essed Comp&ete Comp&ete Co'nt0 -ending *ore)ast Comp. %A2A91 1A!1A91 #AA 5A20A91 %A!HA91 4A%A91 5A2A91 1AHA91 HA!4A91 1A21A91 HA24A91 9A2A91 !0A!2A91 !0A!2A91 !!A!4A91 !!A!4A91 !2A1A91 !2A20A91 !!A2!A91 !2A1A91 !A!5A9H
,est -ra)ti)es -ro)'rement .an'a& L Appendi; ,.!4 Contra)t C&oseo't Che)2&ist
-age !
EVCIBIT A APPENDIV B$(0 RE@UEST FOR PROPOSAL NO$ 5882. FLEET PECICLE SERPICES SPECIAL TERMS AND CONDITIONS I$ BACQ<ROUND A. Oanpoo& ?n)entive -rogram 8O?-9 *&eet The -a)e Oanpoo& ?n)entive -rogram 8O?-9 offi)ia&&0 &a'n)hed in #ovem$er !99! is a s'$sidiGed program avai&a$&e /ithin the s'$'r$an si; )o'nt0 #ortheastern ?&&inois area. O?- trips )an either originate or terminate /ithin the -a)e servi)e area. Thro'gh O)to$er !999 the O?- servi)e f&eet siGe /as appro;imate&0 "15 vans /ith a tota& of "20 vans in operation. Oans are 'ti&iGed primari&0 to ta2e emp&o0ees to and from /or2. -a)e anti)ipates a minim'm ann'a& gro/th rate of 40 vans per 0ear, /hi)h /o'&d p&a)e the f&eet siGe at appro;imate&0 500 vans /ith a tota& of 440 vans in operation $0 the end of 2002. Bo/ever, -a)e is not )ommitted to having an0 minim'm n'm$er of vans in operation. ,. -a)e #on Ieven'e *&eet -a)e+s non reven'e f&eet )onsists of appro;imate&0 !"0 o/ned and &eased passenger sedans and servi)e vehi)&es that are &o)ated and operated at vario's -a)e o/ned fa)i&ities /ithin the si; )o'nt0 #ortheastern ?&&inois area. The ma@orit0 of vehi)&es are 'ti&iGed $0 -a)e staff to )ond')t -a)e re&ated $'siness a)tivities. II$ SCOPE OF BORQ -a)e, the S'$'r$an ,'s Division of the Iegiona& Transportation A'thorit0, is see2ing proposa&s from <'a&ified )ompanies to provide f&eet vehi)&e servi)es for its Oanpoo& f&eet and non reven'e f&eet. These servi)es /i&& in)&'de vehi)&e &easing, f&eet vehi)&e management, f'e& )redit )ard and a))ident managementAs'$rogation servi)es. A&& firms /ishing to s'$mit proposa&s ma0 do so for an0 or a&& of the servi)es re<'ired. -a)e /i&& eva&'ate ea)h )omp&eted proposa& s'$mitted and se&e)t either a tota& pa)2age or se&e)t e&ements of a parti)'&ar proposa& /hi)h provide -a)e /ith the most )ost effe)tive and effi)ient means of operating its vanpoo& and non reven'e f&eet vehi)&e program.
-age "
*.
Dis)'ss the top three 8"9 distin)tions $et/een 0o'r )ompan0 and its )ompetitors.
-age 4
=.
?dentif0 the n'm$er of )'stomers and average f&eet siGe that ea)h of 0o'r sa&esmanArepresentative oversees. Bo/ man0 )a&&s per da0 does heAshe average and response time. -rovide the )ompan0 name, )onta)t, phone n'm$er and f&eet siGe of at &east t/o 829 a))o'nts that have &eft 0o'r )ompan0 /ithin the past t/o 0ears. Des)ri$e ho/ 0o'r )ompan0 performs <'arter&0, semi or ann'a& f&eet revie/s /ith 0o'r )&ients and the pro)ess of ho/ these revie/s are )ond')ted. Des)ri$e in detai& a&& )harges, administrative fees, pro)essing fees, mar2 'ps, et). in a 3fee s)hed'&e4. This sho'&d in)&'de, as e;amp&es, s'$rogation fees, a))ident report fees, et). Des)ri$e the mediation pro)ed're for a )'stomer )omp&aint a$o't one of 0o'r emp&o0ees or vendors. ?dentif0 ho/ man0 of 0o'r )&ients 'se ea)h of the fo&&o/ing servi)es( -reventative .aintenan)e Oehi)&e .aintenan)e Assistan)e :mergen)0 Ioadside Assistan)e A))ident .anagementAS'$rogation Servi)e *'e& Servi)e
B. ?. 6.
Y. 7.
P$
PECICLE LEASIN< A&& )ompanies s'$mitting proposa&s for this portion of the )'rrent I*- m'st )omp&0 /ith the spe)ifi)ations &isted $e&o/ in their proposa& to ass're an a))'rate and fair eva&'ation( @uantit# and Term The n'm$er of vehi)&es to $e )onsidered as part of the &easing portion of this I*/i&& $e a minim'm of 4! vehi)&es 'p to a ma;im'm of 45 vehi)&es for the 2000 mode& 0ear 8'p to 5 of /hi)h ma0 $e station /agons9 and 'p to an additiona& H vehi)&es for the 200! mode& 0ear9. Oehi)&es ma0 $e &eased 'p to the end of the t/o 0ear )ontra)t /ith )omp&ete t/o 0ear &ease periods g'aranteed at the proposed pri)ing. Oehi)&e &ease terms sha&& $e for a $ase period of 24 months /ith an option to e;tend the &ease period for an additiona& !2 months if -a)e )hooses to do so and informs the &easing agent at &east three months prior to the end of the )'rrent &ease period.
-age 5
Pricin" -ri)ing <'oted in the proposa& sha&& $e for the d'ration of the )ontra)t period and for the &ength of an0 &ease entered into d'ring the )ontra)t period. ?t sha&& in)&'de a&& )osts asso)iated /ith the preparation of a&& paper/or2 ne)essar0 to pro)'re and the a)t'a& pro)'rement of a&& vehi)&e tit&es, &i)enses, and an0 other mis)e&&aneo's fees. The &ease pri)ing /i&& $e $ased on an ann'a& 'sage of !5,000 mi&es. The proposa& /i&& spe)if0 an0 additiona& per mi&e )harges sho'&d this mi&eage $e e;)eeded.
S ecifications 7eased vehi)&es sha&& $e those of the )'rrent mode& 0ear as determined $0 the date on /hi)h the vehi)&es are forma&&0 re<'ested. Oehi)&e /arrant0 /i&& $e $'mper to $'mper for a minim'm of " 0ears or "%,000 mi&es and a 24 ho'rA1 da0 roadside driver assistan)e program /i&& $e provided. A&& pre de&iver0 vehi)&e servi)ing /i&& $e performed in a))ordan)e /ith a))epted ne/ )ar de&iver0 preparation standards. Oehi)&e spe)ifi)ations &isted $e&o/ are for a mid siGe, 5 passenger, 4 door sedan, 8or station /agon9 front /hee& drive, gaso&ine po/ered, a'tomo$i&e that f'&&0 )omp&ies /ith the C&ean *'e& *&eet -rogram Ie<'irements of the ?&&inois :nvironmenta& -rote)tion Agen)0. S ecificall#! t/e en"ine must &e certified &# t/e United States En%ironmental Protection A"enc# 6EPA9 to &e a "asoline o1ered! Lo1 Emission Pe/icle 6LEP9 to com l# 1it/ reAuired clean air s ecifications. A&& standard e<'ipment /ith no de&etions :ngine /i&& $e 7:O )omp&iant, gaso&ine po/ered Transmission( 4 speed a'tomati) Steering( po/er ,ra2es( po/er dis) Air Conditioning( To in)&'de fa)tor0 insta&&ed air )onditioning , )omp&ete tinted g&ass, and a&& heav0 d't0 e<'ipment norma&&0 re<'ired as part of a man'fa)t'rer+s air )onditioning insta&&ation. Cr'ise )ontro& Iear /indo/ defroster, e&e)tri) .irrors( interior rearvie/ 8da0Anight9, e;terior 7B C IB remote Seating( )&oth, front $')2ets /ith )onso&e, rear f'&& /idth $en)h
-age %
*'&& interior )arpeting /ith f&oor mats Iadio( A. A *. stereo Tires( ne/ a&& season, stee& $e&ted radia&s 8,SW9 /ith standard /hee&s A )overs and a spa)e saver spare ,od0 side mo&ding .'&ti speed /indshie&d /ashers /ith intermittent and /ashers Ti&t steering /hee& -o/er /indo/s -o/er door &o)2s Air $ags( driver and front passenger Co&or of interior and e;terior to $e se&e)ted at time of order from man'fa)t'rer+s standard se&e)tions
T/is element 1ill &e a1arded on t/e lo1est res onsi%e and res onsi&le total rice of all items listed in E;/i&it C for 6Pe/icle Leasin"9$ PI. PECICLE MAINTENANCE AND MANA<EMENT SERPICES *irms are to s'$mit month&0 per vehi)&e )ost <'otations and identif0 an0 dis)o'nts that the0 )an offer asso)iated /ith providing *&eet .aintenan)e and *&eet Administration for appro;imate&0 5H0 reven'e and non reven'e passenger t0pe vehi)&es and servi)e vans. 8See the atta)hed s)hed'&e of vehi)&es.9 *irms are to s'$mit pri)ing $ased on servi)es &isted $e&o/ and ma0 &ist additiona& servi)es that the0 are )apa$&e of providing a&ong /ith per 'nit pri)ing for ea)h additiona& servi)e in :;hi$it C. -a)e ma0 )hoose to se&e)t additiona& proposed servi)es, $'t /i&& not $e re<'ired to do so. The s)ope of servi)es -a)e is see2ing 'nder this se)tion in)&'de the fo&&o/ing( A. ,. C. D. :. *. Driver s'pport to )oordinate repairs and minimiGe vehi)&e do/ntime Cost and <'a&it0 )ontro&s for vehi)&e repairs *&eet management s'pport and re)ommendations Driver D.O revie/sA)he)2s :mergen)0 roadside assistan)e N'arter&0 metri)s for )osts and servi)es
Servi)es &isted $e&o/ /i&& $e )onsidered minim'm and m'st $e identified and addressed in 0o'r proposa&( A. O:B?C7: I:7AT:D
-age 1
Oendor /i&& ass'me oversight responsi$i&it0 for a&& s)hed'&ed and 'ns)hed'&ed maintenan)e of -a)e o/ned and &eased reven'e and non reven'e passenger and servi)e vehi)&es.
-age H
!. -reventive .aintenan)e 8-.9 a. Bo/ is the -. s)hed'&e determined and do)'mentedW $. Bo/ /o'&d -. e;)eptions $e hand&ed and at /hat point /o'&d -a)e $e notifiedW ). Does 0o'r firm iss'e -. )o'ponsW d. Bo/ are these )o'pons iss'edW e. Bo/ is a )'stomer notified /hen a -. is d'eW f. What )ontro&s do 0o' have in p&a)e to pre)&'de 'na'thoriGed 'se of servi)es, s')h as a &ost maintenan)e )o'ponW g. Bo/ is -. servi)e do)'mented 8-.A, -.,9W h. Des)ri$e the s'pport pro)ess for a repair dis)over0 d'ring a -. servi)e. 8Who )onta)ts 0o'r )ompan0 the vendor or the )'stomer, /hat if another vendor is re<'ired to do the servi)e ho/ is this a))omp&ishedAhand&edW9 i. Des)ri$e the pro)ess of do)'menting the -. from initiation to )&os're. @. Des)ri$e in detai& 0o'r firm+s pro)ed're on ho/ 0o' /o'&d monitor maintenan)e /or2 $eing performed on a vehi)&e /itho't the 'se of the maintenan)e )o'pon $oo2. Des)ri$e ho/ 0o'r firm identifies that the /or2 /as performed so it /i&& not appear, via the e;)eption report, that the driver did not have the /or2 done. 2. .aintenan)e and Iepair a. ?n)&'de servi)e providers for vario's t0pes of repair and maintenan)e /or2 and an0 app&i)a$&e dis)o'nts that -a)e /o'&d rea&iGe /hen 'sing these vendors. $. Des)ri$e 0o'r firm+s )apa$i&ities for providing 24 A 1 driver+s aide /ith regards to emergen)0 roadside assistan)e. Bo/ do 0o' hand&e after norma& $'siness ho'r maintenan)e pro$&emsW ). *'rnish a des)ription of ho/ 0o'r vehi)&e maintenan)e pro)ed'res /or2 and /hat t0pes of servi)es are in)&'ded in 0o'r firm+s maintenan)e program( 8&oaner vehi)&e servi)e, renta& vehi)&e servi)e, vehi)&e drop off, driver pi)2 'p, et).9. d. Des)ri$e 0o'r firm+s )riteria for eva&'ating s'ggested repairs, verif0ing the fairness of pri)ing, and a'thoriGing 'ns)hed'&ed repairs. e. Des)ri$e /hat a driver sho'&d do if there is not a dea&ership or repair fa)i&it0 that is an a'thoriGed fa)i&it0 'nder 0o'r program. What steps are ne)essar0 to add a dea&ership or repair fa)i&it0 as an a'thoriGed fa)i&it0 'nder 0o'r program. f. Des)ri$e 0o'r $i&&ing pro)ed'res for non approved parti)ipating repair fa)i&ities. g. Des)ri$e ho/ a repair fa)i&it0 'sed $0 -a)e /hi)h is not a nationa& a))o'nt or approved $0 0o'r )ompan0 $e)ome approved and dire)t $i&& 0o'r )ompan0. h. Des)ri$e ho/ 0o' tra)2 servi)es provided for reporting servi)es and
-age 9
des)ri$e the $i&&ing for an0 maintenan)e mar2'ps. Des)ri$e the pro)ess for do)'menting the vehi)&e repair servi)e from initiation to )&os're. @. Bo/ do 0o' ins're the <'a&it0 of 0o'r program and servi)esW 2. Do 0o' s)reen )ompanies in 0o'r $od0 shop net/or2W ?f so, des)ri$e the pro)ess. &. Des)ri$e /hat )ontro&s 0o' have in p&a)e to ens're that on&0 ne)essar0 maintenan)e is performed on -a)e+s vehi)&es. m. Des)ri$e 0o'r firm+s strategies for minimiGing repair times and driver do/ntime. n. Des)ri$e 0o'r firm+s pro)ess for monitoring the repair pro)ess 8time, &a$or rates, parts 'sed, <'a&it0 of repair and driver satisfa)tion9. o. Des)ri$e the s'pport pro)ess in the event that a vehi)&e re<'ires repair servi)e $'t is 'nder a man'fa)t'rer or repair fa)i&it0 /arrant0. p. Des)ri$e /hat government pri)ing 0o' )an provide for tires thro'gh 0o'r f&eet vendors. <. The )ompan0 se&e)ted is re<'ired to provide the fo&&o/ing maintenan)e and repair re&ated informationAreports for -a)e( i.
.onth&0 Ieports S'mmar0 )ost reports 8$od0 repairs, me)hani)a& repairs, g&ass, )ar renta&s, et).9 C'stom Ieports as Ie<'ested ?nformation -ro)essing A))ept /ee2&0 do/n&oad of driver information from -a)e. A))ept month&0 do/n&oad of vehi)&e odometer readings from -a)e. N'arter&0 .etri)s -a)e trends 8average )ost of repairs, average n'm$er of da0s for repairs, et).9 -a)e performan)e vs. other a))o'nts. Oendor performan)e vs. ?nd'str0 8average )ost of repairs, average n'm$er of da0s for repairs, et).9. Semi Ann'a& Ievie/ -a)e trends. ?nd'str0 trends. -a)e opport'nities.
". Warrant0 Ie&ated a. Des)ri$e 0o'r firm+s /arrant0 monitoring and management /arrant0 )&aim $. servi)e. Bo/ does 0o'r firm se)'re e;tended /arrant0 8o't of /arrant09 non /arrant0 itemsW ). Des)ri$e 0o'r re)over0 rate for the a$oveW ?dentif0 ho/ man0 /arrant0 )&aims /ere s'$mitted, and the n'm$er ret'rned and amo'nt re)eived. 4. Sa&es Ie&ated
,est -ra)ti)es -ro)'rement .an'a& L Appendi; ,.!4 Contra)t C&oseo't Che)2&ist !0
-age
a. $. ). d.
Des)ri$e 0o'r firm+s a$i&it0 to provide vehi)&e disposa& and 0o'r firms remar2eting pro)ed'res. ?s it done geographi)a&&0W Bo/ do 0o' )ompare to A.I )&ean regarding sa&e of vehi)&es. Des)ri$e /hat per)entage of vehi)&es so&d are sent to a')tion for resa&e. -rovide 0o'r pro)ess for ins'ring that -a)e+s &ia$i&it0 for $odi&0 in@'r0 and propert0 damage ends on)e a vehi)&e is re&eased to 0o'r firm+s a'to sa&vager or disposa& vendor. Des)ri$e /hen -a)e+s &ia$i&it0 ends on the sa&e of vehi)&e and provide an0 e;isting )ontra)t &ang'age /hi)h des)ri$es this pro)ess.
,. ,?77?#= !. 2. ". 4. 5. %. 1. Des)ri$e 0o'r firm+s $i&&ing pro)ed'res a&ong /ith an0 reserve deposits or initia& fee re<'irements. Des)ri$e 0o'r firm+s a$i&it0 to provide ta; e;empt $i&&ing for -a)e, or to provide reports to -a)e that /i&& sho/ a&& ta;es paid in a format that /i&& aid -a)e in retrieving these ta;es from the ta;ing agen)ies. Des)ri$e 0o'r servi)e &eve& regarding vendor pa0ment of nationa& )hains and independent vendors. Des)ri$e 0o'r pro)ess of $i&&ing -a)e on a month&0 $asis. Des)ri$e in detai& 0o'r $i&&ing format. ?s 0o'r firm a$&e to provide s'mmar0 $i&&ingW And is 0o'r s'mmar0 $i&&ing -a)e defined or )annedW Des)ri$e ho/ 0o'r )ompan0 provides e&e)troni) a'diting and pa0ment of maintenan)e $i&&ing to 0o'r vendors in detai&. -a)e re<'ires that a&& month&0 )harges appearing on the month&0 $i&&ing statement are f'&&0 e;p&ained, either /ithin the $i&& or in a s'pp&ementar0 s)hed'&e. Des)ri$e ho/ 0o'r firm is a$&e to address this )on)ern.
C. CO.-UT:I SO*TWAI:AI:-OITS A#D ?#*OI.AT?O# -IOC:SS?#= !. 2. ". Oendor /i&& maintain detai&ed, )omp'teriGed maintenan)e re)ords on ea)h vehi)&e and )'rrent data on the entire f&eet. Des)ri$e the vario's t0pes of servi)e and management reports avai&a$&e thro'gh 0o'r )ompan0, as /e&& as 0o'r a$i&it0 to provide )'stomiGed report. ?dentif0 an0 additiona& )ost for )'stomiGed reports. Des)ri$e 0o'r firm+s a$i&it0 to perform maintenan)e ana&0sis identif0ing e;)essive )ons'mption or repair vo&'mes 8e;)eption reports9. ?dentif0 their fre<'en)0, /hat per)entage of the f&eet is samp&ed, and the a$i&it0 to provide persona&iGed reports. Does 0o'r s0stem a&&o/ -a)e to $e immediate&0 notified as soon as a vehi)&e is o'tside the a))epta$&e standardArange esta$&ished $0 -a)eW ?f so, ho/ is it doneW Des)ri$e 0o'r firm+s a$i&it0 to provide information to and )o&&e)t information from )&ients via the ?nternet( i.e. on &ine report generation, a))o'nt a))ess, inp'tting of )&ient vehi)&e information s')h as mi&eage or e;tra vehi)&e servi)es.
4.
,est -ra)ti)es -ro)'rement .an'a& L Appendi; ,.!4 Contra)t C&oseo't Che)2&ist !!
-age
5.
Des)ri$e 0o'r firm+s a$i&it0 to a))ept reports from different )ompanies, i.e. f'e& )ard programs, prior maintenan)e servi)es et). into 0o'r s0stem for the p'rpose of generating a))'rate and )omp&ete vehi)&e histor0 reports.
-age
%. 1.
H. 9.
Des)ri$e the t0pe and n'm$er of maintenan)eAmanagement reports avai&a$&e and their fre<'en)0. Des)ri$e and provide samp&es of the t0pe of 3standard4 f&eet reports avai&a$&e on 0o'r s0stem. Des)ri$e ho/ 0o'r firm /o'&d hand&e the transition of -a)e f&eet information from -a)e+s present f&eet management provider into 0o'r programW Des)ri$e 0o'r )ompan0+s strateg0 to ens're a seam&ess transition if 0o'r )ompan0 is se&e)ted. Des)ri$e ho/ the )omp'ter s0stem 0o' provide /i&& operate as a standa&one s0stem to s'pport a&& f&eet operations a)tivit0 regard&ess of the programs 'ti&iGed $0 0o'r )ompan0. Des)ri$e in detai& ho/ 0o'r )omp'ter s0stem 0o' provide to -a)e a))epts data do/n&oads from other so'r)es other than 0o'r o/nW
D. CUSTO.:I S:IO?C: I:7AT:D !. :;p&ain 0o'r )ompan0+s to&& free n'm$er for )'stomers to a))ess repair servi)e. 2. :;p&ain /hat ho'rs and da0s these servi)es are in operation. ". Des)ri$e the <'a&ifi)ations and e;perien)e of 0o'r emp&o0ees regarding these servi)es. 4. ?dentif0 /hat other responsi$i&ities 0o'r maintenan)e personne& has other than hand&ing maintenan)e re&ated )a&&s in detai&. 5. Des)ri$e the average n'm$er of )a&&s 0o'r maintenan)e management department re)eives ea)h da0 and ea)h /ee2. %. Des)ri$e the servi)e &eve&s regarding( When )a&&s are ans/eredW Iesponse timeW ,oth nationa& )hains and independent vendors 1. Des)ri$e if 0o'r )ompan0 performs <'arter&0, semi or ann'a& f&eet revie/s /ith 0o'r )&ients. H. Des)ri$e /hat t0pe of do)'mentation is presented at these revie/s. Who )ond')ts these revie/sW -&ease provide samp&es of these reports. 9. Des)ri$e 0o'r )apa$i&ities in providing in ho'se reports to -a)e on a month&0, <'arter&0, semi or ann'a& $asis. !0. Des)ri$e the mediation pro)ed're for a )'stomer )omp&aint a$o't one of 0o'r emp&o0ees or one of 0o'r vendors. :. AD.?#?STIAT?O# !. -a)e prefers that the se&e)ted vendor+s staff 8not a third part09 hand&e the initia& )a&& from -a)e O?- drivers, even after norma& $'siness ho'rs . Des)ri$e 0o'r )a&& )enter. 2. Des)ri$e 0o'r )apa$i&ities in providing -a)e /ith a dedi)ated to&& free n'm$er for its O?- drivers. ". Des)ri$e 0o'r firm+s )apa$i&ities in providing ?nternet )apa$i&ities for retrieving
,est -ra)ti)es -ro)'rement .an'a& L Appendi; ,.!4 Contra)t C&oseo't Che)2&ist !"
-age
f&eet re&ated information, sending driverAf&eet re&ated information, et). 4. Des)ri$e 0o'r )'stomers+ data retrieva& )apa$i&ities on f&eet re&ated )osts, servi)es, information, et).. Bo/ &ong does it ta2e for maintenan)e andAor f'e& re&ated p'r)hases to $e)ome avai&a$&e 8!2 ho'rs, 24 ho'rs, 2 da0s, et).9. Do 0o' have modem $ased on &ine informationa& retrieva& )apa$i&itiesW 5. Des)ri$e information )ontained in 0o'r vehi)&e maintenan)e )o'pon $oo2&et. Can it $e )'stomiGed, spe)ifi) to a vehi)&e, et). %. Des)ri$e ho/ 0o' s'rve0 0o'r )'stomers to determine satisfa)tion /ith staff, f&eet vendor servi)es, et). 1. Des)ri$e 0o'r firm+s a$i&it0 to offer Oisa or .aster)ard t0pe )harge )apa$i&ities for -a)e. A )ard /o'&d not $e iss'ed to -a)e $'t /o'&d $e avai&a$&e via 0o'r firm for )ertain servi)esQ renta& )ar, &imo servi)e, repair fa)i&it0 re<'ires immediate pa0ment, et). A -a)e staff person /o'&d $e )onta)ted $0 0o'r firm to a'thoriGe a )harge for a -a)e driver via this me)hanism. H. Des)ri$e 0o'r firm+s pro)ess in providing $ase month&0 per vehi)&e )ost and s)hed'&e of dis)o'nts $ased on in)rementa& vo&'me asso)iated /ith f&eet management 9. Des)ri$e 0o'r firm+s emergen)0 roadside assistan)e program. Bo/ do 0o' eva&'ate andAor grade vendors 'ti&iGed in 0o'r )ompanies emergen)0 roadside assistan)e programW !0. Des)ri$e /hether 0o'r firm offers more than one maintenan)e or gas )ard program, and identif0 them and their asso)iated )osts in :;hi$it C. !!. Des)ri$e a&& )ontro&s $'i&t into 0o'r program8s9 and the nat're of 0o'r revie/ pro)ess. !2. Des)ri$e the pro)ess to remove a vehi)&e from servi)e. !". Des)ri$e ho/ -a)e+s f&eet information 8f'e& )ons'mptionA)ost, maintenan)e repair histor0A)osts, a))ident histor0, et).9 )an $e integrated into other ind'str0 f&eet soft/are management s0stems 8i.e., :(Tra)29. T/is element of t/e RFP as art of t/e o%erall e%aluation! tec/nical factors 1ill &e 1ort/ 2:O and rice is 1ort/ .:O$ PII$ FUEL CARD MANA<EMENT SERPICES *irms s'$mitting proposa&s for this portion of the I*- sho'&d $e )ertain to provide information )on)erning their a$i&it0 to )omp&0 /ith a&& of the re<'irements &isted $e&o/ as /e&& as an0 other information regarding their a$i&it0 to initiate and maintain a program that /i&& satisf0 -a)e+s needs. The f'e& )ards /hi)h are provided $0 0o'r firm m'st $e vehi)&e spe)ifi) /ith the vehi)&e &i)ense n'm$er andAor -a)e assigned n'm$er appearing on the )ard. ?n addition, -a)e re<'ires that the )ard $e ta; 8federa& motor f'e&, state and )o'nt09 e;empt and minima&&0, have the a$i&it0 to p'r)hase f'e& at t/o 829 different oi& )ompan0 servi)e stations.
-age
-age
!. 2. ". 4. 5. %. 1. H.
9. !0. !!. !2. !".
Des)ri$e 0o'r a$i&it0 to offer a sing&eA'niversa& f'e&ing )harge )ard that is ta; e;empt and a))epted at a variet0 of name $rand stations thro'gho't -a)e+s si; )o'nt0 servi)e area. 7ist the different )ompanies that /i&& a))ept 0o'r )ard. Des)ri$e 0o'r )ompanies a$i&it0 to provide assistan)e to drivers that ma0 e;perien)e pro$&ems /ith 0o'r )ard thro'gh a 24 A 1 )'stomer servi)e ! H00 he&p &ine. Des)ri$e 0o'r )ompanies identifi)ation and verifi)ation )apa$i&ities for drivers /ho /i&& $e 'sing 0o'r f'e& )ard, i.e., ?DM, sing&e )ard m'&tip&e -?# M, et). Des)ri$e 0o'r $i&&ing pro)ed'res /ith respe)t to the t0pes of information 0o' are )apa$&e of providing and 0o'r a$i&it0 to provide -a)e /ith $i&&ing that /i&& e;)&'de sa&e ta;. Des)ri$e 0o'r se&e)tion of reports and 0o'r a$i&it0 to )'stom design reports sho'&d -a)e re<'ire a different format. Des)ri$e 0o'r tra)2ing program that /o'&d high&ight e;)essive f'e& p'r)hases on an0 )ard and 0o'r method of notif0ing 0o'r )&ient. Des)ri$e 0o'r a$i&it0 to for/ard information )on)erning f'e& p'r)hases and re&ated reports to a third part0 f&eet administration vendor for the p'rpose of maintaining a&& vehi)&e information at a )entra& &o)ation for )omprehensive reporting p'rposes. ?f 0o'r )ompan0 is notified to )an)e& a f'e& )ard, ho/ &ong does it ta2e $efore the )ard is sh't off /ith the f'e& )ard )ompan0 providerW Des)ri$e the steps re<'ired to )an)e& f'e& )ards. When does -a)e+s &ia$i&it0 end and /hat is the ma;im'm do&&ar amo'nt that -a)e is responsi$&e for d'ring that period. Des)ri$e pro)ed'res 0o' have in p&a)e to prevent as e&& as dete)t a$'seAmis'se of f'e& )ards. *rom the time 0o'r )ompan0 is notified to order a f'e& )ard for a vehi)&e, ho/ &ong does it ta2e to re)eive the )ardW 7ist a&& f'e& )ards 8in)&'ding ta; e;empt9 0o'r )ompan0 is a$&e to interfa)e and re)eive data from. 7ist a&& data 0o' are a$&e to re)eive and formats needed to re)eive it. Des)ri$e 0o'r )ompan0+s a$i&it0 to provide rea& time )ard 'sage information via ?nternet or soft/are driven e&e)troni) )omm'ni)ations.
T/is element of t/e RFP as art of t/e o%erall e%aluation! rice is 1ort/ 2:O and tec/nical factors are 1ort/ .:O$ PIII$ ACCIDENT7SUBRO<ATION SERPICES *'rnish a des)ription of ho/ 0o' firm /o'&d manage a&& administrative detai&s for a&& a))ident reportsArepairs and s'$rogation pro)esses in)&'ding( !. 2. ". 4. 5. To/ing arrangements CarAvan renta& arrangements Appraisa&s and photographs Sa&vage C&aims re)over0 assistan)e
,est -ra)ti)es -ro)'rement .an'a& L Appendi; ,.!4 Contra)t C&oseo't Che)2&ist !%
-age
%. 1. H. 9.
Coordination of s'$rogation and &oss re)over0 Third part0 ph0si)a& damage )&aims Ieporting asso)iated /ith a))ident, repair, s'$rogation )&aims, re)overies and &ega& pro)eedings A))ident a)tivit0 reports
?n)&'ded in the des)ription sho'&d $e an estimate of e;penses for a )omp&ete 0ear, in)&'ding fees, s'$rogation re)overies et)., $ased on the 3app&i)a$&e fee s)hed'&e4 and !00 a))identsAin)idents per 0ear. As part of the a))ident administration, the vendor /i&& $e re<'ired to re)eive te&ephoni) reports of a&& a))idents invo&ving propert0 damage. The asso)iated )osts for this servi)e m'st $e identified in :;hi$it C. -a)e prefers that the se&e)ted vendor have the )apa$i&it0 of providing immediate on &ine a))ess to a&& information, in)&'ding a))ident damage photographs. .inima&&0, the se&e)ted vendor /i&& $e re<'ired to provide the fo&&o/ing information( !. 2. ". 4. 5. %. .onth&0 &isting of a&& a))idents that have $een reported /ith an indi)ation of &ia$i&it0. Set 'p sheet for ea)h s'$rogation fi&e that is opened. N'arter&0 s'$rogation a)tivit0 report sho/ing the )'rrent stat's of ea)h fi&e. .onth&0 report sho/ing damages re)overed for the reporting period and the )ost of repairs for ea)h vehi)&e. *'nds re)overed sho'&d a))ompan0 this report. Semi ann'a& report to in)&'de tota& )ost of repairs and tota& of re)overed damages. Semi ann'a& report sho/ing -a)e trends, ind'str0 trends, and -a)e opport'nities.
For t/is /ase of t/e RFP as art of t/e o%erall e%aluation! rice is 1ort/ 0:O and tec/nical factors are 1ort/ 0:O$ IV$ PROPOSAL EPALUATION -a)e staff /i&& eva&'ate the proposa&s and deve&op a &ist of firms to intervie/ on the $asis of the fo&&o/ing )riteria, &isted in des)ending order of importan)e, ho/ever, for ea)h of the servi)es to $e provided as identified in the s)ope of /or2. As noted on the previo's pages Oehi)&e 7easing /i&& $e determined on !00P pri)e. Oehi)&e .aintenan)e and .anagement Servi)es /i&& $e eva&'ated %0P te)hni)a& and 40P )ost, *'e& Card .anagement Servi)es /i&& $e eva&'ated %0P )ost and 40P te)hni)a& and A))identAS'$rogation Servi)es /i&& $e eva&'ated 50P )ost and 50P te)hni)a&. A. The <'a&it0 and )omprehensiveness of ea)h e&ement, i.e., Oehi)&e 7easing Servi)es, Oehi)&e .aintenan)e and .anagement Servi)es, et). that 0o'r firm is addressing in this proposa&. , The firm+s e;perien)e and histor0 on )ompara$&e pro@e)ts, )&ient re&ationship re)ords, and referen)es on simi&ar pro@e)ts.
-age
,est -ra)ti)es -ro)'rement .an'a& L Appendi; ,.!4 Contra)t C&oseo't Che)2&ist !H
-age
C. The firm+s 'nderstanding of the re<'irements, de&ivera$&es, te)hni)a& approa)h and an e;p&anation of /hat servi)es 0o'r firm /i&& provide to meet -a)e+s needs. D. -ro)ed'res des)ri$ing firm+s monitoring )ontro&s, reporting methods, report detai& and do)'mentation and e&e)troni) data inter)hange )apa$i&ities $et/een -a)e, and servi)e vendors and 0o'r firm or other firms. :. N'a&it0 of 0o'r firm+s s'rve0s, pro)ed'res, past pra)ti)es in monitoring )'stomer needs and providing <'a&it0 and responsive )'stomer servi)e 8in)&'ding pro$&em intervention, reso&'tion, fo&&o/ 'p, satisfa)tion, et)9. *. -ri)e 8*a)tors var0 for t0pe of servi)es to $e provided as identified in the proposa&9. V$ ABARD OF CONTRACT -a)e reserves the right to a/ard one )ontra)t or m'&tip&e )ontra)ts /itho't dis)'ssion. Offerors sho'&d ta2e this into )onsideration and provide their $est proposa& at their most )ompetitive pri)e. -roposa&s )an $e s'$mitted for individ'a& e&ements of this pro)'rement. VI$ DURATION OF CONTRACT The )ontra)t term /ith the e;)eption of the Oehi)&e 7easing e&ement /i&& $e for three 8"9 0ears from the date of a/ard and in)&'de t/o one 8!9 0ear options. VII$ PROPOSAL SUBMITTAL RE@UIREMENTS -&ease &imit 0o'r responses to three or fo'r pages for ea)h e&ement proposed. A. -ri)e proposa& to $e fi&&ed in and s'$mitted separate&0 $'t )on)'rrent&0 in the M!0 enve&ope mar2ed 3-ri)e -roposa&4. ,. *TAA?DOTAITA re<'irements m'st $e s'$mitted /ith proposa& 8-ages !" !H in :;hi$it ,9. C. #on Co&&'sion Affidavit and Contra)tor Certifi)ation m'st $e signed and notariGed as indi)ated. D. S'$mit fo'r 849 )opies of 0o'r proposa& These )opies /i&& $e distri$'ted to the eva&'ation team. DO #OT ?#C7UD: 5OUI -I?C?#= ?#*OI.AT?O# /ith 0o'r te)hni)a& proposa&. :. On&0 one )op0 of the )ontra)t, affidavits, )omp&ian)e re<'irements and pri)e proposa& are needed.
-age
VIII$
CONTRACT DOCUMENTS :;hi$it A( Spe)ia& Terms and Conditions. :;hi$it ,( ?nstr')tions to Contra)tors C =enera& Contra)t -rovisions. :;hi$it C( -ri)e -roposa& -age. :;hi$it D( ?ns'ran)e Ie<'irements.
,est -ra)ti)es -ro)'rement .an'a& Appendi; ,.!5 Ie<'est *or -roposa& #o. H99%4 APPENDIV B$(2 PI<<DBACQIN< BORQSCEET
-age !
Definition3 &i!!y$ac(in! is t)e %ost1award use of a contractual document*%rocess t)at allows someone w)o was not contem%lated in t)e ori!inal %rocurement to %urc)ase t)e same su%%lies*equi%ment t)rou!) t)at ori!inal document*%rocess. 8>*TA Dear Co&&eag'e> &etter, O)to$er !, !99H9. ?n order to assist in the performan)e of 0o'r revie/, to determine if a sit'ation e;ists /here 0o' ma0 $e a$&e to parti)ipate in the pigg0$a)2ing 8assignment9 of an e;isting agreement, the fo&&o/ing )onsiderations are provided. :ns're that 0o'r fina& fi&e in)&'des do)'mentation s'$stantiating 0o'r determination. BORQSCEET !. Bave 0o' o$tained a )op0 of the )ontra)t and the so&i)itation do)'ment, in)&'ding the spe)ifi)ations and an0 ,'0 Ameri)a -re a/ard or -ost De&iver0 a'ditsW Does the so&i)itation and )ontra)t )ontain an e;press 3assigna$i&it04 )&a'se that provides for the assignment of a&& or part of the spe)ified de&ivera$&esW Did the Contra)tor s'$mit the 3)ertifi)ations+ re<'ired $0 *edera& reg'&ationsW See ,--. Se)tion 4.".".2. Does the )ontra)t )ontain the )&a'ses re<'ired $0 *edera& reg'&ationsW See ,--. Appendi; A!. Were the pigg0$a)2ing <'antities in)&'ded in the origina& so&i)itationQ i.e., /ere the0 in the origina& $id and /ere the0 eva&'ated as part of the )ontra)t a/ard de)isionW ?f this is an indefinite <'antit0 )ontra)t, did the origina& so&i)itation and res'&tant )ontra)t )ontain $oth a minim'm and ma;im'm <'antit0, and did these represent the reasona$&0 foreseea$&e needs of the parties to the )ontra)tW ?f this pigg0$a)2ing a)tion represents the e;er)ise of an option in the )ontra)t, is the option provision sti&& va&id or has it e;piredW Does 0o'r State &a/ a&&o/ for the pro)ed'res 'sed $0 the origina& )ontra)ting agen)0( e.g., negotiations vs. sea&ed $idsW
DES NO
2.
". 4. 5.
%.
1. H.
,est -ra)ti)es -ro)'rement .an'a& Appendi; ,.!5 Ie<'est *or -roposa& #o. H99%4
-age 2
EVPERIENCE %. 1. Bo/ man0 0ears of e;perien)eW JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ =ive, $rief&0, previo's e;perien)e of dire)ting offi)ers in)&'ding )hief engineer and genera& s'perintendent on simi&ar /or2.
NAME PRESENT POSITION DRS$ OF CONSTRUCTION EVPERIENCE MA<NITUDE AND TDPE OF BORQ BCAT CAPACITD
H.
7ist prin)ipa& )ontra)ts )omp&eted $0 present organiGation.

LOCATION CONTRACT PRICE CLASS OF BORQ PERCENT COMPLETED NAME AND ADDRESS OF ABARDIN< PARTD
9.
7ist )ontra)ts, if an0, that present organiGation has on hand.

LOCATION CONTRACT PRICE CLASS OF BORQ PERCENT COMPLETED NAME AND ADDRESS OF ABARDIN< PARTD
!0.
=ive referen)es of at &east t/o engineers or ar)hite)ts for /hom present organiGation has done simi&ar /or2.
NAME TELEPCONE NUMBER ADDRESS POSITION
!!. !2.
7a$or emp&o0ed thro'gh JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ =ive an0 s'pp&ementa& information that the 'ndersigned desires to s'$mit. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ J
,est -ra)ti)es -ro)'rement .an'a& Appendi; ,.!5 Ie<'est *or -roposa& #o. H99%4
-age "
The 'ndersigned agrees to f'rnish the #e/ 5or2 Cit0 Transit A'thorit0 additiona& or s'pp&ementa& information )on)erning its finan)ia& andAor te)hni)a& <'a&ifi)ations, /hen and as re<'ired. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ JJJJJJJJJJJJJJJJJJ
#ame Date
,est -ra)ti)es -ro)'rement .an'a& L Appendi; ,.!% -igg0$a)2ing Wor2sheet
-age !
APPENDIV B$(5 CIABATCA LINE PUBLIC ART + DESI<N BUD<ET Estimated Additional Fa&rication Allocation and for Installation Construction P/ase Ma; Dra1in"s Allocation S5,000 #ot App&i)a$&e S5,000 #ot App&i)a$&e SH,500 #ot App&i)a$&e SH,500 #ot App&i)a$&e S5,000 S!!0,000 S!,500 S!0,000 S4,000 S90,000 S2,500 S2,000 S",000 S",000 S"0,000 S%H,000 S!00,000 S90,000
Descri tion of Commission ! S0stem Wide ?ntera)tive Art/or2 2 Design -&atform S'rfa)e -atterns " S0stem Wide 7ighting :&ements Co&or S)heme for -&atform C S20/a0 Iestoration of 3*ran2&in4 .ar<'ee 4 Se<'entia& =ate/a0 5 7andmar2 % .asonr0 ?)ons 1 Spe)ia& -&atform S'rfa)e Treatment =&ass Winds)reen Treatment 7andmar2 H Comm'nit0 Ti&es 9 ?ntegrated Art/or2 !0 Trans&')ent -hoto ?mages :t)hed =&ass for To/ers and Winds)reens !! .eta& O$@e)tsATe;t in Canop0 6oist Str')t're Canop0 C ,'s She&ter -ergo&a S)'&pt're !2 .eta& Tree =rates Uti&it0 A))ess Covers Design -&atform S'rfa)e -attern .eta& -aver ?nserts C ?n&a0 ?mager0 !" Design -&atform S'rfa)e -attern .eta& -aver ?nserts C ?n&a0 ?mager0 Canop0 Drain S)'ppers and =ri&&s !4 .eta& Iai&ing A'gmentation .eta& Winds)reen Over&a0 !5 7andmar2 !% ,as Ie&ief or Ti!e .'ra&s
Desi"n P/ase Allocation S45,000 S2",500 S1%,500 S"!,500 S!5,000 S",500 S!%,000 S!2,500 S!0,000 S!1,000 S!1,000
Ma;imum Total Commission S50,000 S2H,500 SH5,000 S40,000 S!"0,000 S!5,000 S!!0,000 S45,000 SH0,000 S!20,000 S!!0,000
S!0,000
S2,000
S"5,000
S41,000
S!2,000 S!1,000 S!0,000 S2%,000
S",000 S",000 S2,000 S4,000
S%H,500 S!42,000 S%H,000 S!90,000
SH",500 S!%2,000 SH0,000 S220,000
,est -ra)ti)es -ro)'rement .an'a& L Appendi; ,.!1 :;amp&e of Statement of N'a&ifi)ation of S'$)ontra)tor -age !
APPENDIV B$(8 MANDATORD PROCUREMENT STANDARDS BORQSCEET No$

!9 29 "9 49 59 %9 19 H9 99 !09 !!9 !29 !"9 !49 !59 !%9 !19 !H9 !99 209 2!9 229 2"9
Element
Written Standards of Cond')t Contra)t Administration S0stem Written -rotest -ro)ed'res -re<'a&ifi)ation S0stem S0stem for :ns'ring .ost :ffi)ient and :)onomi) -'r)hase -ro)'rement -o&i)ies and -ro)ed'res ?ndependent Cost :stimate AC: =eographi) -referen)e Unreasona$&e N'a&ifi)ation Ie<'irements Unne)essar0 :;perien)e and :;)essive ,onding OrganiGationa& Conf&i)t of ?nterest Ar$itrar0 A)tion ,rand #ame Iestri)tions =eographi) -referen)es Contra)t -eriod of -erforman)e 7imitation Written -ro)'rement Se&e)tion -ro)ed'res So&i)itation -re<'a&ifi)ation Criteria A/ard to Iesponsi$&e Contra)tors So'nd and Comp&ete Agreement #o Sp&itting D.i)ro p'r)haseF *air and Ieasona$&e -ri)e Determination D.i)ro p'r)haseF .i)ro -'r)hase Davis ,a)on -ri)e N'otations DSma&&
FTA Circular .**:$(E Para"ra / No$ 1.).

1.$. 1.&. H.d. 1.d. 1.a. !0. H.$. H.a.8!9 H.a.829 H.a.859 H.a.819 H.a.8%9 and H.). H.$. 1.m. H.). H.d. 1.h. !5. 9.a. 9.a. 9.a. 9.$.
<rantee Procurement Polic#7Procedure Reference
,est -ra)ti)es -ro)'rement .an'a& L Appendi; ,.!1 :;amp&e of Statement of N'a&ifi)ation of S'$)ontra)tor -age "
5!9
Seria& -ri)e #egotiations DAC:F
9.e.
No$
529 5"9 549
Element
,id Se)'rit0 DConstr')tion over S!00,000F -erforman)e Se)'rit0 DConstr')tion over S!00,000F -a0ment Se)'rit0 DConstr')tion over S!00,000F
FTA Circular .**:$(E Para"ra / No$ !!.a.

!!.$. !!.).
<rantee Procurement Polic#7Procedure Reference

U.S. DOT Federal Transit Administration Best Practices Procurement Manual

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Department Of Transportation Federal Transit Administration

400 Seventh St. S.W. Washington, D.C. 20590 Administrator C !" 0!

6ennifer 7. Dorn Administrator

FEDERAL TRANSIT ADMINISTRATION

,est -ra)ti)es -ro)'rement .an'a& L Ie)ent Updates to ,--.

,est -ra)ti)es -ro)'rement .an'a& L Ie)ent Updates to ,--.

,est -ra)ti)es -ro)'rement .an'a& Ta$&e of Contents

(FEDERAL TRANSIT ADMINISTRATION

,est -ra)ti)es -ro)'rement .an'a& Ta$&e of Contents

,est -ra)ti)es -ro)'rement .an'a& Ta$&e of Contents

,est -ra)ti)es -ro)'rement .an'a& Ta$&e of Contents

,est -ra)ti)es -ro)'rement .an'a& Ta$&e of Contents

,est -ra)ti)es -ro)'rement .an'a& Ta$&e of Contents

,est -ra)ti)es -ro)'rement .an'a& Ta$&e of Contents

,est -ra)ti)es -ro)'rement .an'a& Ta$&e of Contents

,est -ra)ti)es -ro)'rement .an'a& Ta$&e of Contents

,est -ra)ti)es -ro)'rement .an'a& Ta$&e of Contents

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

Federal AcAuisition Re"ulation 6FAR9

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

Procurement S#stem Self)Assessment <uide

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

*orm *TA .A8!29, O)to$er !, 2005. ?d. at Se)tion !.m.

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

?d. at Se)tion !.p.

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

3d. at -aragraph 1.a.

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

-aragraph 4, *TA Cir)'&ar 4220.!:.

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

.A8!29, dated O)to$er !, 2005.

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

Competitive Se&e)tion -ro)ed'res

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

-ossi$&e *&o/ Do/n of Certain *edera& C&a'ses

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

($-$-$(( O eratin" Assistance! Pre%enti%e Maintenance! CMA@ and LARC Pro'ects

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter ! L -'rpose and S)ope

,est -ra)ti)es -ro)'rement .an'a& L Chapter 2 L -ro)'rement -&anning C OrganiGation

,est -ra)ti)es -ro)'rement .an'a& L Chapter 2 L -ro)'rement -&anning C OrganiGation

orm TA .A8!29, O)to$er !, 2005. ?d. at Se)tion !.m.

-ossi$&e &o/ Do/n of Certain edera& C&a'ses

) TA Cir)'&ar 4220.!: T H.).8!9. ) TA Cir)'&ar 4220.!: T 9.h.8!9. ) 3d.