Best Practices Procurement & Procurement Manual

Best Practices Procurement & Lessons Learned Manual

OCTOBER 2016

FTA Report No. 0105 Federal Transit Administration

PREPARED BY

Federal Transit Administration

COVER PHOTO Courtesy of Edwin Adilson Rodriguez, Federal Transit Administration

DISCLAIMER This document is disseminated under the sponsorship of the U.S. Department of Transportation in the interest of information exchange. The United States Government assumes no liability for its contents or use thereof. The United States Government does not endorse products of manufacturers. Trade or manufacturers' names appear herein solely because they are considered essential to the objective of this report.

Best Practices Procurement & Lessons Learned Manual

OCTOBER 2016

FTA Report No. 0105

PREPARED BY

Federal Transit Administration

SPONSORED BY

Federal Transit Administration Office of Chief Counsel U.S. Department of Transportation 1200 New Jersey Avenue, SE Washington, DC 20590

AVAILABLE ONLINE

transit.funding/procurement/procurement

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SYMBOL

in ft yd mi

fl oz gal ft3 yd3

oz lb T

oF

MeMMtreeicttrrCiiccoCCnoovnenvrvesresiroisoninoTTnaaTbbaleble

WHEN YOU KNOW

MULTIPLY BY

TO FIND

LENGTH

inches

25.4

millimeters

feet

0.305

meters

yards

0.914

meters

miles

1.61

kilometers

VOLUME

fluid ounces

29.57

milliliters

gallons

3.785

liters

cubic feet

0.028

cubic meters

cubic yards

0.765

cubic meters

NOTE: volumes greater than 1000 L shall be shown in m3

MASS

ounces

28.35

grams

pounds

0.454

kilograms

short tons (2000 lb)

0.907

megagrams (or "metric ton")

TEMPERATURE (exact degrees)

Fahrenheit

5 (F-32)/9 or (F-32)/1.8

Celsius

SYMBOL

mm m m km

mL L m3 m3

g kg Mg (or "t")

oC

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FEDERAL TRANSIT ADMINISTRATION

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REPORT DOCUMENTATION PAGE

Form Approved OMB No. 0704-0188

Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington Headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the Office of Management and Budget, Paperwork Reduction Project (0704-0188), Washington, DC 20503.

1. AGENCY USE ONLY

2. REPORT DATE October 2016

4. TITLE AND SUBTITLE Best Practices Procurement & Lessons Learned Manual

3. REPORT TYPE AND DATES COVERED 5. FUNDING NUMBERS

6. AUTHOR(S) Cecila Comito

7. PERFORMING ORGANIZATION NAME(S) AND ADDRESSE(ES) Federal Transit Administration

8. PERFORMING ORGANIZATION REPORT NUMBER FTA Report No. 0105

9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES)

U.S. Department of Transportation Federal Transit Administration Office of Chief Counsel East Building 1200 New Jersey Avenue, SE Washington, DC 20590

10. SPONSORING/MONITORING AGENCY REPORT NUMBER

FTA Report No. 0105

11. SUPPLEMENTARY NOTES []

12A. DISTRIBUTION/AVAILABILITY STATEMENT Available from: National Technical Information Service (NTIS), Springfield, VA 22161. Phone 703.605.6000, Fax 703.605.6900, email [orders@]

12B. DISTRIBUTION CODE TRI

13. ABSTRACT

This manual provides Federal Transit Administration (FTA) recipients with examples of procurement practices and lessons learned from a variety of third party procurements undertaken by FTA recipients. It is divided into four major sections that cover the entire procurement cycle: Planning, Selecting Type of Contracting Method, Evaluation of Proposals and Contract Award, and Contract Administration. The topics discussed in each section are derived from Federal statutes, regulations, and guidance that affect recipients' FTA assisted procurements. It does not include any requirements that are not included in statutes, regulations, FTA Circular 4220.1F, FTA's Master Agreement, or the Uniform Guidance (also referred to as the "Super Circular," found at 2 C.F.R. 200, replacing and superseding FTA's Common Grant Rules found at 49 C.F.R. 18). Examples of procurement practices and lessons learned are provided to help recipients improve their internal procurement processes and avoid common pitfalls. In addition to this manual, FTA provides other resources and guidance on the Procurement page of its website and recipients and vendors are encouraged to sign up for email alerts when FTA posts updates to procurement issues. FTA posts responses to procurement questions it receives from recipients and vendors that may be of general interest to FTA recipients. These Frequently Asked Questions are located on the Procurement page of FTA's website.

14. SUBJECT TERMS

Government procurement, government third party procurement, FAST Act, procurement guidance, best practices procurement, FAR

15. NUMBER OF PAGES 319

16. PRICE CODE

17. SECURITY CLASSIFICATION OF REPORT

Unclassified

18. SECURITY CLASSIFICATION OF THIS PAGE Unclassified

19. SECURITY CLASSIFICATION OF ABSTRACT

Unclassified

20. LIMITATION OF ABSTRACT

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PREFACE

This Manual provides Federal Transit Administration (FTA) recipients with examples of procurement practices and lessons learned from a variety of third party procurements undertaken by FTA recipients. The Manual is divided into four major sections that cover the entire procurement cycle: Planning, Selecting Type of Contracting Method, Evaluation of Proposals and Contract Award, and Contract Administration. The topics discussed in each section are derived from Federal statutes, regulations, and guidance that affect recipients' FTA assisted procurements. This Manual does not include any requirements that are not included in statutes, regulations, FTA Circular 4220.1F, FTA's Master Agreement, or the Uniform Guidance (also referred to as the "Super Circular," found at 2 C.F.R. 200, replacing and superseding FTA's Common Grant Rules found at 49 C.F.R. 18).

Examples of procurement practices and lessons learned are provided to help recipients improve their internal procurement processes and avoid common pitfalls. Following only the guidance provided in this Manual will not provide a definitive assurance of compliance with federal third party procurement requirements or with state and local requirements. The examples provided are not intended to be all-inclusive given the many unique situations recipients face when undertaking third party procurements. Nor are the examples necessarily available to every recipient in every state. Recipients must comply with state and local laws, except where explicitly prohibited from doing so by Federal law. Rather, the Manual's examples are intended as a resource and a starting point for recipients to explore how other recipients have approached procurement compliance.

Finally, in addition to this manual, FTA provides other resources and guidance on the Procurement page of its website and recipients and vendors are encouraged to sign up for email alerts when FTA posts updates to procurement issues. FTA posts responses to procurement questions it receives from recipients and vendors that may be of general interest to FTA recipients. These Frequently Asked Questions are located on the Procurement page of FTA's website.

* When consulting FTA Circular 4220.1F, recipients should be mindful that there are statutory and regulatory requirements that have superseded the current version of the circular. In that case, the federal statute or regulation must be consulted. If a recipient is unsure of the applicability of FTA Circular 4220.1F in light of the Uniform Guidance (a/k/a "Super Circular"), 2 C.F.R. part 200, or the FAST Act amendments to Title 49 United States Code, Chapter 53, please contact your FTA regional office for further guidance.

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TABLE OF CONTENTS

1 1 1 2 2 2 2 3

13 13 14 18 21 22 25 28 29

33

39 47 53 62 68 69

72 72 73 80 93 97 99 105 108 109

112 114 119 136 137 140

Section 1: Purpose and Scope 1.1 Introduction 1.2 Third Party Contracting Guidance, Circular 4220.1F 1.3 FTA Waivers and Approvals 1.4 Master Agreement 1.5 FTA Administrator's Policy Letters 1.6 FTA Third Party Procurement Frequently Asked Questions 1.7 Definitions

Section 2: Planning 2.1 Standards of Conduct 2.2 Organizational Roles and Responsibilities 2.3 Long Range and Annual Planning Cycles 2.4 Competition Requirements 2.5 Restraints on Competition 2.6 Organizational Conflicts of Interest 2.7 Prequalification 2.8 Other than Full and Open Competition

Section 3: Types of Contracts 3.1 General Federal Requirements 3.2 Construction Contracts 3.3 Rolling Stock Contracts 3.4 Procurement Methods 3.5 Common Elements of the Solicitation Process 3.6 Common Elements of Offers 3.7 Other Types of Contracts

Section 4: Evaluation of proposals and Contract Award 4.1 Responsibility of Contractor 4.2 Sealed Bid Evaluation Process 4.3 Competitive Proposals Evaluation Process 4.4 Two-Step Procurement Evaluation Process 4.5 Sole Source Proposals Evaluation Process 4.6 Cost and Price Analysis 4.7 Documentation of Procurement Actions 4.8 Award Procedures 4.9 Protest Procedures

Section 5: Contract Administration 5.1 Contract Changes 5.2 Construction Contract Changes 5.3 Approval of Subcontractors 5.4 Termination 5.5 Claims, Grievances and Other Disputes with Contractors

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146 150 152 154

233

5.6 Contract Closeout 5.7 Audits

Endnotes Appendix A: Federally Required and Other Model Contract

Clauses Appendix B: Examples of Procurement Practices

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