Additional FTA Guidance on Aspects of Procurement and the Use of Differing Strategies and Approaches in Fulfilling Year 2000 Compliance Requirements

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Number C-98-39

U.S. Department
Of Transportation
The Administrator

400 Seventh St. S.W.
Washington, D.C. 20590

Federal Transit

Dear Colleague:

Recently, there have been several requests for more insight and guidance on the Federal Transit Administration's (FTA) policy and philosophy on various aspects of procurement, and specifically on the use of different strategies and approaches in fulfilling Year 2000 (Y2K) compliance requirements. The minimum requirements applicable to FTA funded procurements are set forth in FTA Circular 4220.1D, "Third Party Contracting Guidelines." The Circular has been designed to provide grant recipients maximum flexibility to operate within the framework of the minimum requirements.

In keeping with the discretionary powers and authority which are vested in grant recipients through the Circular, the FTA fully supports the use of creative and innovative procurement techniques and strategies. Grant recipients may utilize these tools to procure their actual needs and for the purpose of leveraging bargaining power, achieving economies-of-scale and/or fulfilling Y2K compliance requirements. Further, recipients are afforded the freedom to collaborate and to partner with each other in order to facilitate and to maximize the use of innovative procurement techniques. This includes, but is not limited to, conducting joint procurements; proceeding with awards that result from proper "piggybacking" transactions; and/or developing standard specifications for consolidated purchases to address common needs for equipment and services such as escalators, Y2K technology, hardware and software. FTA recently clarified its position on "piggybacking" and "tag-one" in a "Dear Colleague" letter dated October 1, 1998, a copy of which is attached. Presently, that policy applies to rolling stock procurements only; however, consideration is being given to expanding the policy to cover other procurements in the near future.

Joint procurements may be conducted on a regional, statewide or national basis pursuant to the needs and applicable regulatory and statutory requirements of the parties to the procurement. The FTA has specifically encouraged the use of joint procurements for rolling stock. Guidance on innovative procurement techniques, such as joint procurements, will be covered in the next issue of the "Best Practices Procurement Manual" (BPPM). Currently, the BPPM contains an example of a statewide acquisition of buses which was provided by the New York Department of Transportation to facilitate and to assist others in use of the joint procurement concept.

Regardless of the procurement methodology or strategy chosen, the controlling requirement is that FTA funded procurements must conform to the requirements of FTA Circular 4220. ID. The guiding principle of the Circular is that procurements must be conducted in a manner that provides for full and open competition. However, this does not preclude the award of contracts on a non-competitive basis when supported by sound reasons documented in the recipients' files. For example, sound reasons may exist to either conduct a limited competition among a few known sources or to make award to a single source on a noncompetitive basis in order to fulfill the Y2K compliance requirements. Specifically, the award of a noncompetitive contract to address a Y2K problem would be permissible if circumstances existed where time is of the essence to avoid creating a safety hazard in the operation of your transit system.

Should you have questions or desire assistance in addressing procurement issues relating to fulfilling Y2K compliance requirements, please contact your respective FTA Regional Office.


Gordon J. Linton

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