Attachment_J-5_Draft_Triennial_Review_Workbook.pdf

FY2013

DRAFT TRIENNIAL REVIEW WORKBOOK

For Use in the Triennial Review RFP ONLY

CONTENT REVIEW AREAS

Part I: Review Areas with a Pre-Review Phase and Optional Enhanced Review Modules (ERMs)…………..….Page 2

Part II: Remaining Review Areas………………………………….. Page 147

For Triennial Review Contractor RFP Use ONLY August, 2012

FY2013 DRAFT Triennial Review Workbook Page 1

TRIENNIAL REVIEW WORKBOOK – PART 1

REVIEW AREAS WITH A PRE-REVIEW ASSESSMENT PHASE

AND OPTIONAL ENHANCED REVIEW LEVEL(S)

TABLE OF CONTENTS

PROCUREMENT, DISADVANTAGED BUSINESS ENTERPRISE (DBE) AND BUY AMERICA

FINANCIAL MANAGEMENT & FINANCIAL CAPACITY

MAINTENANCE

TITLE VI

TECHNICAL

AMERICANS WITH DISABILITIES ACT

Special Note

The specific things that will be examined and the corresponding questions asked during the pre-review assessment phase, the standard review phase and as part of an enhanced review module (if selected) will likely be modified for FY2013 due to the recent MAP-21 legislation and a new Title VI Circular FTA is publishing.

However, the contractor’s level of effort will remain approximately the same as what is depicted in this DRAFT workbook.

FY2013 DRAFT Triennial Review Workbook Page 2

PROCUREMENT, DISADVANTAGED BUSINESS

ENTERPRISE (DBE) AND BUY AMERICA

Contents

PART 1 – BASIC REQUIREMENT

A. AREAS TO BE EXAMINED

B. APPLICABILITY OF REQUIREMENTS

C. COMPLIANCE

D. REFERENCE

E. USEFUL WEB LINKS

F. FTA HEADQUARTERS TECHNICAL ADVISORS

PART II - PREPARE FOR THE SCOPING MEETING

A. THE PRE-REVIEW INFORMATION REQUEST

B. CONTRACTOR’S PRE-REVIEW QUESTIONS

PART III – CONDUCTING THE ONSITE REVIEW

A. STANDARD REVIEW QUESTIONS

B. ENHANCED LEVEL OF REVIEW

PART IV – EXHIBITS AND WORKSHEETS

EXHIBIT 6.1.A: REQUIRED THIRD-PARTY CONTRACT CLAUSES

EXHIBIT 6.1.B: REQUIRED CERTIFICATIONS, REPORTS, AND FORMS

EXHIBIT 6.1.C: OTHER REQUIRED ITEMS

EXHIBIT 6.2: APPLICABILITY OF THIRD-PARTY CONTRACT CLAUSES

FY2013 DRAFT Triennial Review Workbook Page 3

PART 1 – BASIC REQUIREMENT

FTA grantees use their own procurement procedures that reflect applicable state and local laws and regulations, provided that the process ensures competitive procurement and the procedures conform to applicable Federal law, including 49 CFR Part 18 (specifically Section 18.36) and FTA Circular 4220.1F, “Third Party Contracting Guidance.”

A. AREAS TO BE EXAMINED

1. Procurement Policies and Procedures, with emphasis on:

a. Written standards of conduct for employees regarding organizational and personal conflicts of interest

b. Written protest procedures

c. Procurement records retention procedures

d. Contract administration procedures

2. Third-Party Contracts

3. Vehicle Procurements

4. Buy America

5. Disadvantaged Business Enterprise (DBE) Program

a. DBE Plan

b. DBE goals and reports

c. DBE Certification

d. Complaints and protests

B. APPLICABILITY OF REQUIREMENTS

As a general rule, where FTA funds are used in procurements for services or supplies, or where FTA funded facilities or assets are used in revenue contracts, FTA C 4220.1F applies. FTA funds, even operating assistance, can be segregated from local funds. FTA C 4220.1F does not apply to wholly locally funded capital procurements.

A grantee that is a state agency may follow its own procurement procedures but, at a minimum, must comply with the following statutory requirements:

Provide full and open competition, Include all applicable FTA clauses, Comply with the Brooks Act if the state does not have a statute governing the procurement of architectural and engineering services, Prohibit geographic preferences, Comply with the five-year limitation on purchases of rolling stock or replacement parts, Award only to responsible contractors

Instrumentalities of the state are considered state agencies. Regional transit authorities are not state agencies.

Guidance on procurements of works of art and artist services is included in FTA C 4220.1F, Ch. IV, Section

FY2013 DRAFT Triennial Review Workbook Page 4

2.g., and in FTA C 9400.1A, “Federal Transit Administration Design and Art in Transit Projects.” In addition, FTA’s “Best Practices Procurement Manual” includes extensive non-binding suggestions and advice on implementing FTA C 9400.1A and related provisions.

Procurements of real property consisting of land and any existing buildings or structures on that land are generally beyond the scope of FTA C 4220.1F. Real property acquisition is addressed in 49 CFR Part 24, “Uniform Relocation Assistance and Real Property Acquisition for Federal and Federally Assisted Programs.”

For further guidance, see also FTA C 5010.1D, “Grant Management Requirements.”

C. COMPLIANCE

If a grantee fails to comply with FTA procurement requirements, including procurement-related areas such as DBE, Buy America, and lobbying, FTA may decide to not participate in the procurement.

D. REFERENCE

1. 49 USC Chapter 53, Federal Transit Laws

2. Transportation Equity Act for the 21st Century, Public Law No. 105-178

3. 49 CFR Section 18.36, “Procurement"

4. FTA Master Agreement

5. FTA C 4220.1F, “Third-Party Contracting Guidance"

6. FTA Circular 5010.1D, "Grant Management Requirements"

7. FTA Circular 9030.1D, “Urbanized Area Formula Program: Program Guidance and Application Instructions”

8. FTA Circular 9400.1A, “Federal Transit Administration Design and Art in Transit Projects”

9. 49 CFR Part 26, “Participation by Disadvantaged Business Enterprises in Department of Transportation Financial Assistance Programs”

10. Deputy Administrator Letter on TEAM- Web DBE reporting

11. Instructions for uploading DBE programs to TEAM-Web

E. USEFUL WEB LINKS

FTA's Best Practice Procurement Manual (see note below)

FTA Procurement Frequently Asked Questions

FTA Procurement Helpline

Bus Testing Website

National RTAP Procurement PRO

FTA Buy America Home Page

Conducting Pre-Award and Post-Delivery Audits for Bus Procurements, FTA T-90-7713-93-1 Rev. B

Conducting Pre-Award and Post-Delivery Audits for Rail Vehicle Procurements, FTA DC-90-7713-94-1 Rev. B

FTA Third Party Contracting FAQs

FY2013 DRAFT Triennial Review Workbook Page 5

U.S. DOT Buy America Webpage

Excluded Parties Listing System

Standard Form LLL

FTA DBE Website

DOT Office of Small and Disadvantaged Business Utilization (OSDBU)

OSDBU’s Guidance for DBE Program Administrators

OSDBU and Minority Resource Center

DOT DBE Regulation Questions and Answers

Tips for Goal Setting

List of Transit Vehicle Manufacturers

Sample DBE Program

Note on the Best Practices Procurement Manual – The Best Practices Procurement Manual (BPPM) is a good resource for grantees to use in conducting FTA-assisted procurements. However, it is only a guidance document and is not the source of any FTA requirements. Grantees may refer to the BPPM as a guide for the procurement process, but should not rely solely on the BPPM for ensuring that FTA requirements will be met.

FTA requirements are found in the following sources: U.S. Code and Public Laws, Code of Federal Regulations, FTA Circulars, Dear Colleague Letters, and the Master Agreement.

F. FTA HEADQUARTERS TECHNICAL ADVISORS

DBE Technical Advisor: Randelle Ripton, Randelle.Ripton@dot.gov; (202) 366-5086

Buy America Technical Advisor:

Other FTA Procurement Requirements:

FY2013 DRAFT Triennial Review Workbook Page 6

PART II - PREPARE FOR THE SCOPING MEETING

A. THE PRE-REVIEW INFORMATION REQUEST

The grantee will be asked to provide the following information:

1. Provide a copy of your written procurement policies and procedures as required per 49 CFR 18.36(b).

NOTE: Failure to provide the requested procurement policies and procedures during this pre-review assessment phase will lead the following deficiencies being recorded in the triennial review report.

Grantees may be able to close those deficiencies if the policies and procedures are provided later during the review process, but the deficiencies will still be identified in the final report as having been found.

49 CRF

Reference

Missing or Insufficient Documentation Deficiency

Code 18.36(b)(1) Written Policies & Procedures for Procurement 01

18.36(b)(2) Contract administration system 03

18.36(b)(3) Employee standards of conduct 04

18.36(b)(9) Procurement records retention requirements 06

18.36(b)(12) Bid protest procedures 07

2. Provide a list of all FTA-funded procurements over $100,000 conducted in the past three years, with the following information:

a. Brief description of the services or materials being procured (e.g. office supplies, bus parts, vehicle repair services, HVAC, engineering services, ITS consulting, transit service provider, etc.)

b. Dollar value of contract awarded or purchase order issued

c. Method of procurement (e.g. IFB, RFQ/RFP, Sole Source, Piggyback)

d. The procuring agency if not procured directly by the grantee (e.g. county, state, or city)

NOTE: Based upon FTA’s review of your list of procurements, be prepared to provide a copy of one or two contract files that FTA selects for pre-review, preferably in electronic format. This request will be made within 10 business days after this list is submitted and the contract files will need to be provided within 10 business days after they are requested.

3. Over the next one to three years, do you plan to conduct any procurement which involves either: (a) a method of procurement not previously used, or b) a type and size of project which you have not managed in the past three years (including vehicles)?

4. Provide a list of all bid protests received in the past 3 years, describe what was being procured; the nature of the protest, and the final disposition. Also identify how and when FTA was notified of protests.

NOTE: Information provided by the grantee may lead to a deficiency in the triennial review report if proper bid protest procedures were not followed or if FTA was not notified of a bid protest expeditiously.

5. Who is your DBE Liason Officer (DBELO) and who does that person report to for DBE-related matters?

Provide a job description for the DBELO, including any non-DBE functions and responsibilities assigned to this person.

6. Provide a list of all DBE complaints received over the past three years including:

a. Date the complaint was received,

b. Disposition of the complaint

c. Date resolved / complaint closed

FY2013 DRAFT Triennial Review Workbook Page 7

B. CONTRACTOR’S PRE-REVIEW QUESTIONS

Using information provided by the grantee in response to the Pre-Review Information Request (above), information readily available in FTA files and software systems and information provided by FTA regional staff, the contractor will answer the following questions in preparation for the scoping meeting.

1. Did the previous triennial review identify any procurement, DBE or Buy America deficiencies or material weaknesses? If yes, were the finding(s) closed on time?

2. Has FTA conducted a Procurement System Review (PSR), a DBE compliance Review or a Buy America audit during the past two Federal fiscal years? If yes, were there any findings? Are any of these findings still open?

3. If a PSR or DBE compliance review has been requested for the upcoming year, what triggered the review request (e.g. a Top 30 grantee; new grantee, known procurement and/or DBE problems, etc.)?

EXPLANATION

Areas of past non-compliance by the grantee with procurement requirements deserve special focus.

If a PSR or DBE compliance review has been requested but not yet conducted, it is important to understand what triggered the compliance review and how the triennial and the specialized review will be coordinated.

REFERENCE

None

SOURCES OF INFORMATION

Review information provided by the regional office and in OTRAK.

DETERMINATION

None

SUGGESTED CORRECTIVE ACTION

None

ENHANCED REVIEW TRIGGERS

Consider an enhanced level of review if the grantee has had any repeat findings, if the grantee was slow to implement prior corrective actions, or if there are ongoing concerns that previously implemented corrective actions are not being maintained.

4. Does the grantee have written procurement policies and procedures, addressing at a minimum

a. Employee standards of conduct,

b. Bid protests,

c. Contract administration and

d. Procurement records retention?

EXPLANATION

The Common Grant Rule for non-governmental recipients requires the grantee to have written procurement procedures, and by implication, the Common Grant Rule for governmental grantees requires written procurement procedures as a condition of self-certification. Grantees are required to use their own procurement policies and procedures that reflect applicable state and local laws and regulations, provided that

FY2013 DRAFT Triennial Review Workbook Page 8 they conform to applicable Federal law. These policies and procedures must be followed when procuring materials and/or services using FTA funds.

The procurement policies and procedures are not required to be part of a single document. FTA C 4220.1F includes items that it expects written procedures to cover, such as nonrestrictive specifications, necessity, procurement methods, and resolution of third party contracting issues.

Question 4.a.: Grantees are required to maintain written standards of conduct governing the performance of their employees engaged in the award and administration of contracts supported by Federal funds. The standards should:

Preclude any employee officer, agent, or board member or his or her immediate family member, partner, or organization that employs or is about to employ any of the foregoing from participating in the election, award, administration of a contract supported with FTA assistance. Such a conflict would arise when any of those previously listed has a financial or other interest in the firm selected for award.

Include information that the grantee’s officers, employees, agents or board members may neither solicit nor accept gifts, gratuities, favors, or anything of monetary value from contractors, potential contractors, or parties to subagreements. The grantee may set minimum rules when the financial interest is not substantial or the gift is an unsolicited item of nominal intrinsic value.

Provide for penalties, sanctions, or other disciplinary action for violation of such standards by the grantee’s officers, employees, agents, board members, or by contractors or subrecipients or their agents to the extent permitted by state or local law or regulations.

Question 4.b.: Grantees must have written protest procedures to handle and resolve protests of award of its procurements. A grantee is to notify FTA when it receives a third party contract protest and keep FTA informed about the status of the protest. When a grantee denies a bid protest, and especially if an appeal to FTA is likely to occur, FTA expects the grantee to inform the FTA Regional Administrator for the region administering a regional project, or the FTA Associate Administrator for the program office administering a headquarters project directly.

A protester must exhaust all administrative remedies before pursuing a protest with FTA. The protester must deliver its appeal to the FTA Regional Administrator for the region administering its project or the FTA Associate Administrator for the program office administering its project within five working days of the date when the protester has received actual or constructive notice of the grantee’s final decision. Information on this process should be provided to those bidding on grantee procurements.

Question 4.c.: Grantees and subrecipients are must maintain a contract administration system which ensures that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.

Question 4.d.: Grantees and subrecipients are required to maintain records sufficient to detail the significant history of all procurements. These records will include, but are not necessarily limited to the following:

rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.

REFERENCE

49 CFR 18.36(b)

FTA C 4220.1F, Ch. III, Section 3.a

SOURCES OF INFORMATION

Review information provided by the grantee in response to the Pre-Review Information Request.

FY2013 DRAFT Triennial Review Workbook Page 9

DETERMINATIONS

49 CFR

Reference

Missing or Insufficient Documentation Deficiency

Code 18.36(b)(1) Written Policies & Procedures for Procurement 01

18.36(b)(2) Contract administration system 03

18.36(b)(3) Employee standards of conduct 04

18.36(b)(9) Procurement records retention requirements 06 18.36(b)(12) Bid protest procedures 07

SUGGESTED CORRECTIVE ACTION

Direct the grantee to provide the FTA regional office with written procurement policies and procedures addressing the missing or insufficient items noted above, along with a description of how they will be implemented.

ENHANCED REVIEW TRIGGERS

Consider an enhanced level of review if the grantee:

Is unable to provide written procurement policies and procedures.

Provides procurement policies and procedures but they are missing one or more of the significant elements, as identified above, required under 49 CFR Part 18.36(b) and/or is outdated compared to FTA’s current’s version of Circular 4220.

The grantee’s levels of authority for procurement actions are not clearly identified or appear inappropriate.

5. If the grantee meets the threshold for having a DBE program,

a. Is an approved DBE program uploaded in TEAM?

b. Has the grantee complied with the requirement to include a small business element (by February 28, 2012), either by (i) updating the DBE plan and getting it approved by FTA or (ii) getting a conditional approval letter from FTA of the grantee’s small business element and goal?

c. Has the grantee been submitting the Uniform Report of DBE Awards and Payments semi-annually in TEAM?

d. Were overall three-year DBE goals submitted to FTA by August 1 preceding the designated submission year?

EXPLANATION

Question 5.a.: FTA recipients of planning, capital, and/or operating assistance that will have contracting opportunities (excluding transit vehicle purchases) of $250,000 or more with those funds in a Federal fiscal year are required to have a written DBE program plan. Contracting opportunities are counted in the aggregate, and include FTA funded purchase orders, capital projects, professional services, Transportation Infrastructure Finance and Innovation Act (TIFIA) loan funded projects, and contracting activities of subrecipients.

The DBE program plan is not an annual submission and grantees do not submit regular updates of their DBE programs. However, significant changes to the programs must be submitted for approval. Grantees (particularly new grantees) that do not meet the threshold are not required to develop a written DBE program.

A grantee that is required to have a written program that is part of a local government may be allowed to submit a single plan to FHWA if it receives more funding from FHWA than from FTA. However, the grantee must still submit transit-specific overall three-year agency goals to FTA, if applicable.

Question 5.b.: By February 28, 2012, grantees must have added an element to their DBE program for

FY2013 DRAFT Triennial Review Workbook Page 10 fostering small business participation. This new element, required by a February 2011 change to the DBE regulation, must include provisions to structure contracting requirements to facilitate competition by small business. Grantees must take all reasonable steps to eliminate obstacles to DBE participation, including unnecessary and unjustified bundling of contract requirements that may preclude small business participation in procurements as prime contractors or subcontractors.

As part of this program element grantees may include, but are not limited to, the following strategies:

Establishing a race-neutral small business set-aside for prime contracts under a stated amount (e.g.,$1 million)

In multi-year design-build contracts or other large contracts (e.g., for “megaprojects”) requiring bidders on the prime contract to specify elements of the contract or specific subcontracts that are of a size that small businesses, including DBEs, can reasonably perform

On prime contracts not having DBE contract goals, requiring the prime contractor to provide subcontracting opportunities of a size that small businesses, including DBEs, can reasonably perform, rather than self- performing all the work involved

Identifying alternative acquisition strategies and structuring procurements to facilitate the ability of consortia or joint ventures consisting of small businesses, including DBEs, to compete for and perform prime contracts

To meet the race-neutral portion of overall agency goal, ensuring that a reasonable number of prime contracts are of a size that small businesses, including DBEs, can reasonably perform.

Question 5.c.: Each grantee that meets the threshold requiring it to have a DBE program and overall goal is also required to submit a Uniform Report of DBE Awards or Commitments and Payments semi-annually in TEAM- Web. The report addresses the contracting opportunities of the grantee and its subrecipients. It includes information on awarded and completed contracts – for those that included DBE participation, as well as those that did not. Reports are due by June 1 (for the period covering October 1 – March 31) and by December 1 (for the period covering April 1 – September 30).

FTA has established a policy that all civil rights programs must be submitted to FTA's Transportation Electronic Award Management (TEAM-Web) system. Instructions on uploading these programs were provided to grantees in FY2011 and are on FTA’s Civil Rights website.

Question 5.d.: Effective FY 2011, grantees will submit their overall goals every three fiscal years in lieu of each fiscal year if a grantee projects that it will meet the threshold in any of the three years in its cycle. FTA provides a document on its website indicating which fiscal year each grantee is required to make this submission.

Overall three-year goals should be calculated as a percentage of all FTA funds (exclusive of funds to be used for the purchase of transit vehicles) that the grantee will expend in FTA-assisted contracts during the period covered. With prior FTA approval or at FTA’s direction, grantees may also be permitted or required to express an overall goal as a percentage of funds for a particular grant and/or project. An example of this may occur with a major project such as a New Start project.

Overall three-year DBE goals must be based on demonstrable evidence of the availability of ready, willing, and able DBEs relative to all businesses ready, willing, and able to participate on FTA-assisted contracts (“relative availability of DBEs”). The goal must reflect the grantee’s determination of the level of DBE participation the grantee would expect absent the effects of discrimination. Grantees cannot rely on either the 10 percent aspirational goal at the national level, or the previous goal, or past DBE participation rates without reference to the relative availability of DBEs in the market.

Overall three-year goals must include a projection of what proportion of the recipient’s DBE participation will be met through race neutral means and how much will be met using race conscious means. The submittal should carefully explain why the recipient projected that it could achieve the level of race/gender-neutral participation it proposes and the specific reasoning and data that support the conclusion. Some items that may be considered when making this projection include: past ability/inability to meet overall goals, the level of past

FY2013 DRAFT Triennial Review Workbook Page 11 participation by DBE subcontractors when contract goals were not in use, the frequency in which DBE firms performed as prime contractors on the recipient’s contracting opportunities. Note: race conscious contract goals may only be used where subcontracting possibilities exist.

Overall three-year goals must be submitted to FTA for review by August 1 preceding the Federal fiscal year in which the goal submission is due. The submittal must include a description of the methodology used to establish the goal and other items detailed in 49 CFR 26.45. FTA will review the submittals and advise the grantee if the overall three-year goal has not been calculated correctly or if the method used for calculating the goal is inadequate. If so, FTA may, after consulting with the grantee, adjust the overall three-year goal or require the grantee to make the adjustment.

REFERENCE

49 CFR 26.11

49 CFR 26.21

49 CFR 26.45

Instructions for uploading programs to TEAM-Web

Deputy Administrator Letter on TEAM-Web reporting

DBE Semi-Annual Reporting Form

FTA schedule for three-year goal submittal

SOURCES OF INFORMATION

Confirm grantee exemption from DBE requirements, if applicable, by reviewing the list of procurements provided by the grantee in response to the Pre-Review Information Request, and any contracting opportunities of subrecipients, if applicable, to determine if the aggregate value of purchases from FTA funded operating budgets, preventive maintenance budgets and capital programs used $250,000 or more in FTA funds during a single Federal fiscal year.

Look in TEAM to see if an approved DBE program plan has been uploaded. If not, ask the RCRO about the status. Many of these program plans may be dated in 1999, when the regulation first became effective. If the local government submits a single plan to FHWA, confirm with the RCRO that a separate FTA program plan is not required.

Look in TEAM to see if the approved DBE plan on file includes strategies for fostering small business participation.

Look in TEAM to make sure the grantee is submitting the Uniform Report of DBE Awards or Commitments and Payments reports semi-annually as required.

Review FTA’s DBE website to verify which Federal fiscal year the grantee is to submit its three-year goal. Ask the RCRO if the grantee submitted its overall three-year goals by August 1 preceding the Federal fiscal year in which the goal submission is due.

DETERMINATION

A grantee is deficient if a DBE program has not been submitted and it has $250,000 of FTA funds in contracting opportunities or has not responded to FTA's request for additional information. (DEFICIENCY CODE 02: No approved program)

The grantee is deficient if it has not uploaded its program to TEAM (DEFICIENCY CODE 21: Program not uploaded to TEAM).

The grantee is deficient if it has not submitted the reports semi-annually, has not submitted them timely, or is not using the correct form. (DEFICIENCY CODE 07: Uniform reports not submitted semi-annually)

FY2013 DRAFT Triennial Review Workbook Page 12

The grantee is deficient if overall DBE goals were not submitted to FTA before August 1 preceding the Federal fiscal year in which the goal submission was due (or by another date established by FTA based on an extension request). (DEFICIENCY CODE 05: Goal not submitted to FTA)

SUGGESTED CORRECTIVE ACTION

Direct the grantee to submit its DBE program to the FTA RCRO and upload it to TEAM.

Direct the grantee to submit to the FTA RCRO the Uniform Report of DBE Awards or Commitments and Payments semi-annually (due June 1 and December 1) in TEAM along with an implemented procedure to ensure future reports are submitted on time.

Direct the grantee to submit to the FTA RCRO its overall three-year DBE goal or adjusted goal and implement a procedure to ensure that future goals will be submitted by August 1.

ENHANCED REVIEW TRIGGERS

Consider an enhanced level of review if the grantee meets the DBE threshold, but has not:

Submitted a DBE program plan to FTA for approval, Complied with the small business element.

Submitted the Uniform Report of DBE Awards or Commitments in TEAM semi-annually.

Submitted overall three year DBE goals on time.

6. Does the grantee’s history of bid protests over the past three years indicate there might be problems with the Grantee’s procurement practices (including DBE and Buy America) or their bid protest procedures?

EXPLANATION

The grantee is to notify FTA when it receives a third party contract protest and keep FTA informed about the status of the protest. When a grantee denies a bid protest, and especially if an appeal to FTA is likely to occur, FTA expects the grantee to inform the FTA Regional Administrator for the region administering a regional project, or the FTA Associate Administrator for the program office administering a headquarters project directly.

Bids may be protested for a wide variety of reasons and the existence of one or more bid protests does not, by itself, indicate problems with a grantee’s procurement practices. However, bid protests may indicate problems if multiple protests are received by bidders on a single procurement action or multiple procurements result in recurring protests of a similar nature.

REFERENCE

49 CFR 18.36(b)(12) FTA C 4220.1F, Ch. VII, Section 1

SOURCES OF INFORMATION

Review information provided by the grantee in response to the Pre-Review Information for evidence of bid protest disclosure to FTA and written documentation including protest decisions.

Review the list of protests against the grantee’s bid protest procedures (if provided in the policies and procedures manual) for evidence that the written policy is being followed.

Review information provided about the nature of the bid protests and the solicitations affected for indications that improper procurement practices and/or mismanagement of the grantee’s DBE program may have contributed to the protests.

FY2013 DRAFT Triennial Review Workbook Page 13

DETERMINATION

The grantee is deficient if written protest procedures exist but the grantee has not disclosed information regarding protests to FTA. (DEFICIENCY CODE 07: No written protest procedures)

SUGGESTED CORRECTIVE ACTION

Consider an enhanced level of review if the grantee has not properly responded to one or more bid protests, or if a pattern of bid protests indicates the Grantee’s procurement policies may be improper.

Direct the grantee to provide the FTA regional office with written protest procedures and an explanation of how they intend to implement a process for providing FTA with all information related to protests in a timely manner.

ENHANCED REVIEW TRIGGERS

Consider an enhanced level of review if the grantee has not properly responded to one or more bid protests, or if a pattern of bid protests indicates the Grantee’s procurement policies may be improper.

7. Based on a review of the grantee’s list of procurements conducted over the past three years, including those handled by a state, county or other local entity on their behalf, the grantee’s list of DBE-related complaints and a cursory review of one or two contracts awarded during that same timeframe, does the grantee appear to be:

a. Including all required federal clauses, including those required for Buy America and DBE as applicable?

b. Using few if any non-competitive methods of procurement?

c. Appropriately including all eligible procurements in establishing its DBE goals.

d. Including appropriate DBE enforcement mechanisms in contracts?

e. Violating any other aspects of FTA Circular 4220 (e.g. geographical preferences, brand names, etc.)?

f. Obtaining Buy America Certificates from successful vendors (as applicable)?

EXPLANATION

Grantees should be able to document all procurements involving FTA funds conducted over the past 3 years however, different record keeping practices and software systems by individual grantees will likely lead to a wide variation in how this information is provided and how readily the grantee can produce it.

Insight can be gained about a grantee’s potential non-compliance with procurement practices by reviewing a composite list of all procurements along with one or two contracts. State, county and city agencies who conduct procurements for the grantee may be at increased risk of non-compliance with FTA-specific requirements.

The grantee’s DBE Semi-annual Awards and Commitments reports in TEAM should show a correlation with the list of procurements provided by the grantee.

Grantees must implement appropriate mechanisms to ensure compliance with the DBE program by all program participants (i.e., applying legal and contract remedies available under Federal, state, and local law).

These mechanisms must be set forth in the grantee’s DBE program and be evident in any contracts awarded with a DBE goal. In February 2011, the regulation added a requirement that grantees and their subrecipients must require that a prime contractor not terminate or substitute a DBE subcontractor listed in a contract with a DBE goal without good cause and prior written consent from the grantee.

The number and nature of DBE complaints the grantee receives, in conjunction with other information obtained, may identify areas of potential DBE program deficiencies.

FY2013 DRAFT Triennial Review Workbook Page 14

The grantee, and those procuring on its behalf, must obtain a signed certification from each successful bidder providing steel, iron, or manufactured products when the total purchase price exceeds the simplified acquisition threshold. The contractor is required to certify that the materials provided either comply or do not comply with Buy America requirements. The grantee is required to retain these certifications in the contract file and make them available for inspection upon request. If a bidder or offeror certifies that it does not comply with the Buy America requirements, then the grantee must request, receive, and retain a waiver from FTA before it may award a contract to that bidder or offeror.

Grantees may not obtain signed Buy America certifications after contract award for its own contracts or contracts of other grantees to make the contracts eligible for Federal funding. Grantees may, however, obtain signed Buy America certifications before buying off state GSA-type contracts to make them eligible for Federal funding. The grantee should consider the amount of its purchase, not the contract amount of the whole state GSA-type contract, when determining whether Buy America requirements apply to those purchases.

REFERENCE

49 CFR 26.37

49 CFR 26.53

49 CFR 18.37 and 18.40

49 CFR 661.6

49 CFR 661.7

49 CFR 661.12

49 CFR 661.13

Federal Register Vol. 71, No. 54, pp. 14112-14118

Notice of Buy America Waiver for Minivans and Minivan Chassis

Best Practices Procurement Manual. FTA Third Party Contracting FAQs

SOURCES OF INFORMATION

Review information provided by the grantee in response to the Pre-Review Information Request. Spot check procurements list against information in TEAM.

Compare the list of prime contracts awarded this period, as reported on the grantee’s Semi-annual Awards and Commitments, with the list of procurements (as provided by the grantee in response to the Pre-Review Information Request) conducted during the same period.

Review the grantee’s DBE program to identify the methods that the grantee states it will use to monitor contractors and subrecipients.

Review sampled contracts for evidence that all required federal clauses were included and that DBE requirements (including monitoring/enforcement mechanisms) were included, if applicable.

Review the grantee’s list of DBE complaints.

Focus on a procurement of vehicles or other procurement involving steel, iron, or manufactured products greater than the simplified acquisition threshold. Review contract files to see if Buy America provisions were included in the solicitation and if properly executed Buy America certifications were obtained.

None at this time.

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SUGGESTED CORRECTIVE ACTION

None at this time.

ENHANCED REVIEW TRIGGERS

Consider an enhanced level of review if:

Selected contracts indicate required federal clauses are missing.

The number and/or dollar value of non-competitive procurements looks disproportionately high

The grantee fails to provide a complete list of all FTA-funded procurements during the pre-review assessment phase

The grantee appears to be awarding DBE-eligible contracts without a DBE goal.

The grantee conducted a size or type of procurement that is highly unusual for the grantee.

The grantee relies on another entity (e.g. state, county, city) to conduct procurements on their behalf.

Any other evidence of contracts being awarded in violation of FTA Circular 4220.

The number and nature of DBE complaints indicates possible non-compliance with DBE requirements.

A procurement was conducted that likely involves components or materials which are prone to Buy America compliance issues and there is no evidence that signed Buy America Certifications were received prior to contract award (or at all).

8. Did the grantee identify any upcoming procurements planned in the next three years which:

a. Will make use of a procurement method that the Grantee is unfamiliar with or has limited experience conducting in the past?

b. Corresponds to a type of project (including vehicle procurements) which the Grantee has not managed in the preceding three years

c. Might require DBE participation for a grantee that is currently exempt?

EXPLANATION

Some methods of procurement are infrequently used by many grantees and they may not understand all FTA requirements related to that method of procurement. For example, upcoming vehicle procurement by a grantee that has not purchased vehicles in many years, may present unique challenges and an increased risk of non-compliance. Infrequent procurements for architectural/engineering services and construction also present unique challenges to the Grantee.

REFERENCE

None

SOURCES OF INFORMATION

Review information provided by the grantee in response to the Pre-Review Information Request. Spot check procurements list against information in TEAM.

Review the grantee’s overall three-year DBE goal, if it has been submitted.

None

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SUGGESTED CORRECTIVE ACTION

None

ENHANCED REVIEW TRIGGERS

Consider an enhanced level of review if the grantee plans to conduct a procurement in the next three years that is unusual for them, specifically:

Vehicle procurement(s), Architectural and/or engineering services, Construction services for a new or modified facility, A public-private partnership (P3) procurement, The grantee will need to comply with DBE requirements for the first time

Procurements prone to Buy America issues

9. Does the grantee’s organizational structure:

a. Agree with the DBE program on file with FTA?

b. Identify a direct reporting relationship between the DBELO and the CEO on DBE-related matters?

c. Avoid conflicts of interest in DBE-related matters?

d. Provide adequate levels of staffing to administer the DBE program?

EXPLANATION

Grantees are required to follow their approved DBE programs, and such programs need to be updated when significant changes occur. FTA has found in its DBE reviews that organizational changes have occurred and grantees have not updated their programs. A typical organizational change has been a revision to the position of the DBELO and the resulting reporting relationship to the CEO. FTA considers this to be a significant change to a grantee’s DBE program that should be communicated to the RCRO for approval.

For grantees that meet the threshold requiring that they have a DBE program, the grantee’s chief executive officer (CEO) must designate a DBE liaison officer (DBELO) and adequate staff to administer the DBE program. The DBELO must have direct and independent access to the CEO concerning DBE matters.

Direct and independent access to the CEO does not mean that there has to be a direct reporting relationship.

This means that the DBELO must not be required to get anyone's consent or sign-off or “go through channels'' to talk and write personally to the CEO about DBE program matters. If the DBELO has a “dotted line” reporting relationship (in lieu of a direct reporting relationship) to the CEO for DBE matters, this direct and independent access should be verified through job descriptions, organizational charts, and evidence of direct and independent communication between the two individuals.

Care should be taken to avoid conflicts when assigning the DBELO as a collateral duty assignment. The DBELO performs an oversight function. Therefore, if, for example, the procurement director is made the DBELO on a collateral duty basis, there may be a potential conflict of interest. If such an arrangement exists, the grantee should be requested to provide an explanation of how such conflict of interest situations are resolved and/or handled on a day-to-day basis. Large grantees should have clear reporting relationships with no conflicts of interest. Small grantees often have limited personnel with shared roles.

In its Notice of Proposed Rulemaking of May 2010, USDOT called attention to the last section of 49 CFR26.25, which requires that the recipient have adequate staff to administer the DBE program. They also noted that, “In times of budget stringency, it may be tempting to cut back on staff and other resources needed for certification, program oversight, and other key DBE program functions.” This sentence emphasizes that

FY2013 DRAFT Triennial Review Workbook Page 17 it is a requirement of Federal law that the DBE program be adequately staffed to ensure compliance with Part 26.”

REFERENCE

49 CFR 26.25

49 CFR 26.21

SOURCES OF INFORMATION

Review the detailed organizational chart and DBELO job description (provided by the grantee in response to the Pre-Review Information Request) against the DBE program plan on file in TEAM-Web. Look specifically for the DBELO’s reporting relationship with the CEO and other job duties assigned to the DBELO. The current DBELO listed in the agency’s contact information in TEAM-Web should agree with the organizational chart.

Consult the RCRO for any indications of past problems with staffing. The grantee’s DBE program plan should indicate the staffing that should be in place to administer the program and this level of staffing should agree with the grantee’s organizational charts.

DETERMINATION

The grantee is deficient if the DBELO cannot demonstrate direct and independent access to the CEO.

(DEFICIENCY CODE 01: Inadequate designation of DBE Officer)

The grantee is deficient if organizational changes that affect the DBE program have occurred and the DBE program on file with FTA has not been updated or resubmitted to FTA. (DEFICIENCY CODE 16: Policy not updated).

SUGGESTED CORRECTIVE ACTION

Direct the grantee to submit to the FTA RCRO evidence of corrective actions taken to designate DBE responsibilities properly.

Direct the grantee to submit an update of its DBE program to the FTA RCRO for approval.

ENHANCED REVIEW TRIGGERS

Consider an enhanced level of review if the grantee’s organizational structure and/or DBELO job description:

Significantly differs from the DBE program on file with FTA, or

Does not show a direct reporting relationship between the DBELO and the CEO on DBE-related matters.

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PART III – CONDUCTING THE ONSITE REVIEW

A. STANDARD REVIEW QUESTIONS

1. As part of the grantee’s procurement planning and execution procedures, does the grantee demonstrate that they:

a. Maintain written documentation of the procurement’s history?

b. Analyze acquisitions in order to identify, evaluate and mitigate potential organizational conflicts of interest?

c. Conduct solicitations in a manner that ensures full and open competition including (i) proper use of vendor pre-qualification practices, (ii) proper use of specifications and “brand names”, and (iii) proper justification for sole source procurements?

d. Avoid the use of geographical preferences?

e. Review procurement requests to avoid duplicative or unnecessary purchases?

f. Perform an independent cost estimate before receiving bids or proposals?

EXPLANATION

Question 1.a.: Grantees must maintain records sufficient to detail the significant history of all procurements involving FTA funds. At a minimum, such records must include:

rationale for the method of procurement (i.e., request for proposals, invitation for bids, sole source) sole source justification for any purchase that is not competitive selection of contract type (i.e., fixed price, cost reimbursement) reason for contractor selection or rejection written responsibility determination for the successful contractor basis for the contract price (i.e. cost/price analysis)

The extent of documentation should be reasonable. Documents included in a procurement history should be commensurate with the size and complexity of the procurement itself. FTA recognizes that these written records will vary greatly for different procurements.

Question 1.b.: FTA expects grantees to analyze each planned acquisition in order to identify and evaluate potential organizational conflicts of interest as early in the acquisition process as possible, and to avoid, neutralize, or mitigate potential conflicts before contract award.

An organizational conflict of interest occurs when any of the following circumstances arise:

Lack of impartiality or impaired objectivity. When the contractor is unable, or potentially unable, to provide impartial and objective assistance or advice to the grantee due to other activities, relationships, contracts, or circumstances.

Unequal access to information. The contractor has an unfair competitive advantage through obtaining access to nonpublic information during the performance of an earlier contract.

Biased ground rules. During the conduct of an earlier procurement, the contractor has established the ground rules for a future procurement by developing specifications, evaluation factors, or similar

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Question 1.c.: Grantees must conduct procurement transactions in a manner providing full and open competition. Except for small and micro purchases, proposals and/or bids must be publicly solicited from an adequate number of sources. Grantees are prohibited from restricting competition in federally supported procurement transactions.

(a) Grantees are not required to prequalify potential bidders. However, grantees that place such a requirement on potential bidders must adhere to FTA’s requirements. If a grantee requires prospective bidders to prequalify, it must ensure that all lists of prequalified persons, firms, or products that are used in acquiring goods and services are current and include enough sources to ensure full and open competition. Grantees must permit potential bidders or offerors to qualify during the solicitation period (from the issuance of the solicitation to its closing date). Prequalification should not be confused with reviews of technical qualifications that are an essential process in two-step and qualifications-based procurements.

(b) Grantees must ensure that all solicitations incorporate a clear and accurate description of the material, product, or services being procured as well as identify all requirements that the offerors must fulfill and all other factors to be used in evaluating bids or proposals. Descriptions must not contain features that unduly restrict competition. Detailed product specifications should be avoided. “Brand name or equal” descriptions should be avoided unless it is impractical or uneconomical to make a clear and accurate description of the technical requirements.

(c) When the grantee requires supplies or services available from only one responsible source, and no other supplies or services will satisfy its requirements, the grantee may make a sole source award.

The property or services are available from one source if one of the conditions described below is present:

Unique or Innovative Concept. Unique or innovative concept means a new, novel, or changed concept, approach, or method that is the product of original thinking, the details of which are kept confidential or are patented or copyrighted, and is available to the grantee only from one source and has not in the past been available to the grantee from another source.

Patents or Restricted Data Rights. Patent or data rights restrictions preclude competition.

Substantial Duplication Costs. In the case of a follow-on contract for the continued development or production of highly specialized equipment and major components thereof, when it is likely that award to another contractor would result in substantial duplication of costs that are not expected to be recovered through competition.

Unacceptable Delay. In the case of a follow-on contract for the continued development or production of a highly specialized equipment and major components thereof, when it is likely that award to another contractor would result in unacceptable delays in fulfilling the grantee’s needs.

In the case of a sole source award, the documentation should be a written sole source justification, which includes a cost analysis.

With a single bid, the documentation should include a cost analysis, as well as an explanation as to why a single bid was obtained. Upon receiving a single bid or proposal in response to a solicitation, the grantee should determine if competition was adequate. This should include a review of the specifications for undue restrictiveness and might include a survey of potential sources that chose not to submit a bid or proposal.

When it is impractical or uneconomical to provide a clear and accurate description of the technical requirements of the property to be acquired, a “brand name or equal” description may be used to define the performance or other salient characteristics of a specific type of property. The grantee must identify the salient characteristics of the named brand that offerors must provide. When using a “brand name” specification, the grantee does not need to reverse- engineer a complicated part to identify precise measurements or specifications in order to describe its salient characteristics.

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A recurring problem has been the procurement of professional services. Often these services are procured with little or no competition. While such services can be procured on a sole source basis if justified, in general, a competitive environment does exist for professional services and the…