Owner Furnished Materials
Third Party Procurement
Frequently Asked Questions
Q = Question; A = Answer
Q. Regarding owner furnished materials, where in the BPPM can I find guidance, and requirements if applicable, for these type purchases? Our design/build project solicitation has language allowing us to make owner direct purchases. We plan on making many of these purchases to save money.
A. The BPPM has no coverage of this specific issue; however, there is no problem with your agency purchasing materials and furnishing them to the contractor in order to save money, such as state sales taxes, contractor overhead and profit, etc. FTA requires that these purchases comply with FTA Circular 4220.1F. Keep in mind that your agency will assume responsibility for the suitability of the materials as well as the timeliness of their delivery to the contractor. Failure in either of these responsibilities may entitle the contractor to a price adjustment for owner caused delays. (Posted: January, 2012)
Q. Completion of our new transit facility is expected in the fall of this year. Our entire operation will move to the new facility. As use of the vacated facility by FTA is rather restricted, it makes sense to lease the maintenance/ops facilities to the paratransit contractor at a reasonable lease rate amount. We would like to require them to use it as opposed to hoping they would want to use it.
A. As a general rule the owner is permitted to provide the contractor with owner - furnished supplies, materials and facilities if it is in the best interest of the owner (e.g., that it will be more cost effective) and assuming the equipment, supplies, facilities are suitable and available for the performance of the contract. Should the owner - furnished facilities prove to be unsuitable for use, the contractor is excused from contract performance and the owner will be liable for breach of contract since there is an implied warranty that the owner-furnished materials will be suitable for contract performance. In this case suitability of the facility is a major question that must be addressed by the owner and the prospective contractors prior to submission of proposals. As the owner you should make the facility available for inspection by prospective contractors during the solicitation period and well in advance of submission of proposals. Issues such as insurance, wiring for today's IT requirements, maintenance issues, and modifications that may be required to make the facility suitable and available for its intended use are serious questions affecting the use of this facility. All of these questions must be addressed to the satisfaction of the prospective contractors as well as the owner. The owner cannot simply "require" the contractor to use the facility if it is unsuitable for use. (Posted: December, 2014)