Geographical Restrictions

Q. Could the use of a set of Uniform Standard Specifications prepared by a local association of governments be considered as providing a geographic preference to local bidders contravening the "full and open competition" requirement for procurements funded in part by the FTA? The suggestion has been made to provide specifications with which "local contractors are familiar" during the bidding process.

A. The use of Uniform Standard Specifications prepared by a local association of governments would not appear to violate the prohibition against geographic preferences. The prohibition relates to requirements that bidders be located in a certain geographic area in order to be considered for a contract. Assuming that your Uniform Standard Specifications do not restrict bids to firms located in your geographic area, we see no prohibition to their use. The fact that local firms may be more familiar with these specifications does not violate the 49 U.S.C. § 5325 requirement for full and open competition. You should consider holding a Bidders Conference prior to preparation of bids in order to allow firms the opportunity to ask questions about any areas of the specifications that they do not understand. Any questions submitted, along with your answers, should be provided to all prospective bidders.

Q. FTA Circular 4220.1F prohibits geographic preferences in non-A&E procurements. However, if the funding source of the procurement is the State of California, rather than FTA, does Circular 4220.F apply?

A. FTA Circular4220.1F is not applicable to procurements conducted without FTA funding. If your procurement is being funded by the State of California and does not involve FTA funds, the prohibition in 4220.1F is not applicable.

Q. We want to include the following statement in an upcoming RFP: "The successful Proposer should also be able to perform the core required tasks from an office in the region."  Does this statement unfairly restrict competition due to geographic preference?

Background: We are procuring the services of a consultant to create a regional transit action plan that may affect multiple agencies and jurisdictions within our region.  This will be a labor–intensive contract with a short contract term.  We believe that a familiarity with the transit atmosphere in our region as well as the ability to perform most of the work from an office in our region is a fair qualification for consultants for this project.

A.  Federal regulations prohibit geographical preferences in making contractor selections except for A&E contracts. However, your RFP could evaluate the expected responsiveness of each proposer in terms of the time it will take them to be at the site of the work, the time it would take to be at your offices or those of other agencies in the area, for conferences, the cost to your agency of the travel expenses and the time for traveling, etc. In other words, you can evaluate the important parameters involved with responsiveness and economics without requiring a local office.  You could require, for example, that the proposer be able to comply with a time limit between your notifying them and their presence at the sites where they are needed.  This would not be a violation of the geographical preference rule. You could also state in your RFP that your agency will not pay for travel expenses to bring consultants into the area for meetings or consultations with local agencies that must participate in planning this program. Based on this decision not to pay for travel, you could then state in the RFP that your agency strongly recommends a local presence as the only feasible way to efficiently accomplish the work within the time and dollars allotted.  (Revised: August 21, 2009)

Q. It becomes cost-prohibitive to a transit agency to tow disabled vehicles beyond a certain distance to be repaired. When procuring vehicles, would a transit agency violate the prohibition against establishing a geographic preference if it required that a vendor or a manufacturer: 1) have a vehicle service facility located within a certain jurisdiction, like a state, or 2) have a vehicle service facility located within a specified distance?

A. You are permitted to require all vendors to have a local vehicle service facility so that your towing service will be both timely and cost effective.  Non-local bidders must, however, have the freedom to open a local service facility if they choose to do so.  You are not restricting the bidding to companies who are located nearby.  We would suggest that your solicitation require the service provider to respond within a certain amount of time to a request for towing and also stipulate other reasonable time requirements for service.  This way if a non-local vendor promises to open a local facility if awarded the contract, he may do so. We would not see this as a geographic restriction as such.  A geographic restriction would prohibit non-local companies from submitting proposals, and you are not doing that.  (Posted: December 2009)

Q. The states of Missouri and Illinois both have statutes that require during high unemployment periods that only workers that reside in the state could be used for public works projects.  It would appear that Federal requirements take precedent.  However, at a recent NTI training session, we were informed that State statute would take precedent.  Please advise.

A. FTA Circular 4220.1F prohibits geographic preferences on FTA-funded projects, with no special dispensation based on economic circumstances.  FTA requirements take precedence over state or local laws on this issue. FTA has a webpage dedicated to the topic: http://www.fta.dot.gov/funding/thirdpartyprocurement/faq/grants_financing_6146.html.  Can you advise us of which NTI instructor provided this information, and in what context it was given? (Posted: January, 2010)

 Q. For projects requiring quotes only (no bid or proposal is required because the value is under $100,000), does the non-geographic preference requirement still apply? In other words someone is spending $25,000 on a project to pave a parking lot that will include FTA funds but due to the low projected value they will only need to obtain quotes. Under 49 CFR 18.36 (c)(1)(2) seems to indicate it applies only to projects requiring bid or proposals and the answer would be no.

A. 49 CFR 18.36 (2) applies to all "procurements" conducted by the grantee, including small purchases. The terms "bids and proposals" would include all price quotations solicited by the grantee, whether in a formal or informal process. Geographic preferences are never permitted for FTA funded contracts except in the case of A&E procurements. (Posted: January, 2013)

Q. What are the applicable Federal statutes that expressly mandate or encourage geographic preference? Background Information: The grant rules specify that no geographical preference should be imposed: "except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference". This quote is referenced in all circulars, but there is no source or direction as to which statutes these are.

A. FTA Circular 4220.1F, Chapter VI, 2.a. (4)(g) presents FTA (i.e., Federal) policies regarding in-state or local geographic restrictions. Such geographic restrictions are prohibited except as noted below:

(g) In-State or Local Geographic Restrictions. Specifying in-State or local geographical preferences, or evaluating bids or proposals in light of in-State or local geographic preferences, (is prohibited) even if those preferences are imposed by State or local laws or regulations. In particular, 49 U.S.C. Section 5325(i) prohibits an FTA recipient from limiting its bus purchases to in-State dealers. Exceptions expressly mandated or encouraged by Federal law include the following:
1. Architectural Engineering (A&E) Services. Geographic location may be a selection criterion if an appropriate number of qualified firms are eligible to compete for the contract in view of the nature and size of the project.
2. Licensing. A State may enforce its licensing requirements, provided that those State requirements do not conflict with Federal law.
3. Major Disaster or Emergency Relief. Federal assistance awarded under the Stafford Act, 42 U.S.C. Section 5150, to support contracts and agreements for debris clearance, distribution of supplies, reconstruction, and other major disaster or emergency assistance activities permits a preference, to the extent feasible and practicable, for organizations, firms, and individuals residing or doing business primarily in the area affected by a major disaster or emergency. (Posted: August, 2013)