Best Practices Procurement & Procurement Manual

1 best Practices Procurement & Lessons Learned ManualPREPARED BY Federal Transit AdministrationOCTOBER 2016FT A Report No. 0105 Federal Transit AdministrationCOVER PHOTO Courtesy of Edwin Adilson Rodriguez, Federal Transit Administration DISCLAIMER This document is disseminated under the sponsorship of the 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 TRANSIT ADMINISTRATION iOCTOBER 2016FT A Report No. 0105 PREPARED BYFederal Transit AdministrationSPONSORED BYFederal Transit AdministrationOffice of Chief Department of Transportation1200 New Jersey Avenue, SEWashington, DC 20590 AVAILABLE Practices Procurement & Lessons Learned ManualFEDERAL TRANSIT ADMINISTRATION ivMetric ConversionTableSYMBOL WHEN YOU KNOW MULTIPLY BY TO FIND SYMBOL LENGTH in inches millimeters mm ft feet meters m yd yards meters m mi miles kilometers km VOLUME fl oz fluid ounces milliliters mL gal gallons liters L ft3 cubic feet cubic meters m3 yd3 cubic yards cubic meters m3 NOTE.

2 Volumes greater than 1000 L shall be shown in m3 MASS oz ounces grams g lb pounds kilograms kg T short tons (2000 lb) megagrams (or "metric ton") Mg (or "t") TEMPERATURE (exact degrees) oF Fahrenheit 5 (F-32)/9 or (F-32) Celsius oC FEDERAL TRANSIT ADMINISTRATION iiMetric Conversion TableMetric Conversion TableFEDERAL TRANSIT ADMINISTRATION vREPORT DOCUMENTATION PAGEForm ApprovedOMB No. 0704-01881. AGENCY USE ONLY2. REPORT DATEO ctober 20163. REPORT TYPE AND DATES COVEREDP ublic reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instruc-tions, 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 TITLE AND SUBTITLEBest Practices Procurement & Lessons Learned Manual5.

3 FUNDING NUMBERS6. AUTHOR(S)Cecila Comito7. PERFORMING ORGANIZATION NAME(S) AND ADDRESSE(ES)Federal Transit Administration8. PERFORMING ORGANIZATION REPORT NUMBER FTA Report No. 01059. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES) Department of TransportationFederal Transit AdministrationOffice of Chief CounselEast Building1200 New Jersey Avenue, SEWashington, DC 2059010. SPONSORING/MONITORING AGENCY REPORTNUMBERFTA Report No. 010511. SUPPLEMENTARY NOTES [ ]12A. DISTRIBUTION/AVAILABILITY STATEMENT Available from: National Technical Information Service (NTIS), Springfield, VA 22161. Phone , Fax , email DISTRIBUTION CODE TRI13. ABSTRACTThis 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.

4 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 , FTA sMaster Agreement, or the Uniform Guidance (also referred to as the Super Circular, found at 2 200, replacing and superseding FTA s Common Grant Rules found at 49 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.

5 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 SUBJECT TERMSG overnment Procurement , government third party Procurement , FAST Act, Procurement guidance, best Practices Procurement , FAR15. NUMBER OF PAGES31916. PRICE CODE17. SECURITY CLASSIFICATIONOF REPORTU nclassified18. SECURITY CLASSIFICATIONOF THIS PAGE Unclassified19. SECURITY CLASSIFICATIONOF ABSTRACTU nclassified20. LIMITATION OF ABSTRACTFEDERAL TRANSIT ADMINISTRATION viPREFACE 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.

6 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 , FTA s Master Agreement, or the Uniform Guidance (also referred to as the Super Circular, found at 2 200, replacing and superseding FTA s Common Grant Rules found at 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.

7 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 , 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 , recipients should be mindful that there are statutory and regulatoryrequirements that have superseded the current version of the circular.

8 In that case, the federal statute orregulation must be consulted. If a recipient is unsure of the applicability of FTA Circular in light ofthe Uniform Guidance (a/k/a Super Circular ), 2 part 200, or the FAST Act amendments to Title 49 United States Code, Chapter 53, please contact your FTA regional office for further TRANSIT ADMINISTRATION vii 1 Section 1: Purpose and Scope 1 Introduction 1 Third Party Contracting Guidance, Circular FTA Waivers and Approvals2 Master Agreement2 FTA Administrator s Policy Letters2 FTA Third Party Procurement Frequently Asked Questions3 Definitions13 Section 2: Planning 13 Standards of Conduct14 Organizational Roles and Responsibilities18 Long Range and Annual Planning Cycles21 Competition Requirements22 Restraints on Competition25 Organizational Conflicts of Interest28 Prequalification29 Other than Full and Open Competition33 Section 3: Types of Contracts33 General Federal Requirements39 Construction Contracts47 Rolling Stock Contracts53 Procurement Methods62 Common Elements of the Solicitation Process68 Common Elements of Offers69 Other Types of Contracts72 Section 4.

9 Evaluation of proposals and Contract Award 72 Responsibility of Contractor73 Sealed Bid Evaluation Process80 Competitive Proposals Evaluation Process93 Two-Step Procurement Evaluation Process97 Sole Source Proposals Evaluation Process99 Cost and Price Analysis 105 Documentation of Procurement Actions 108 Award Procedures 109 Protest Procedures 112 Section 5: Contract Administration 114 Contract Changes 119 Construction Contract Changes 136 Approval of Subcontractors 137 Termination 140 Claims, Grievances and Other Disputes with ContractorsTABLE OF CONTENTSFEDERAL TRANSIT ADMINISTRATION viii 146 Contract Closeout 150 Audits 152 Endnotes 154 Appendix A: Federally Required and Other Model Contract Clauses 233 Appendix B: Examples of Procurement Practices SECTION 1 FEDERAL TRANSIT ADMINISTRATION 1 Purpose and Scope Introduction, Guidance and RequirementsThis Manual provides recipients of Federal assistance awarded by the Federal Transit Administration (FTA) with examples of Procurement Practices and lessons learned from a variety of third party Procurement actions undertaken by FTA grant recipients.

10 The Manual is divided into 4 major sections that cover the entire Procurement cycle: Planning, Selecting Type of Contracting Method, Contract Award, and Contract Administration. The topics discussed in each section are derived from various Federal laws and regulations that affect recipients FTA-assisted an FTA third party Procurement requirement exists that recipients must follow, a table entitled REQUIREMENT will set forth a brief summary of the pertinent sections from the Code of Federal Regulations ( s), the FTA Master Agreement (MA) and FTA Circulars that are the source of the requirement. The Manual provides examples of Procurement Practices and lessons learned in order to help recipients improve their Procurement processes and avoid common pitfalls. The examples provided are by no means intended to be all-inclusive given the many unique situations recipients face when undertaking an FTA funded third party Procurement .