Q = Question; A = Answer
A. FTA encourages grantees to enter into State and local agreements for the procurement of common goods and services in order to foster greater economy and efficiency. The Best Practices Procurement Manual (BPPM), Section 6.3.3 - Joint Procurements of Rolling Stock and Piggybacking, provides FTA policy and guidance on the subject of joint procurements, including “piggybacking.” “Piggybacking” is defined as “the post-award use of a contractual document/process that allows someone who was not contemplated in the original procurement to purchase the same supplies/equipment through that original document/process.” The BPPM defines the circumstances when piggybacking is permissible:
Grantees are encouraged to read the BPPM, Section 6.3.3, for guidance on advance planning of joint procurements with other agencies or transit systems. Advance planning and joint procurement are greatly encouraged. (Reviewed: May 2010)
A. Yes, you may order the flush mount windows. This would be in the nature of a "contract change order" to the original specification, which is always permissible (assuming the change is not a "cardinal change"). Thus you would be invoking the "changes" clause to the contract, not the option provision. The Best Practices Procurement Manual (BPPM) discusses contract changes such as this in Section 9.2.1 - Contract Scope and Cardinal Changes. (Reviewed: May 2010)
A. FTA’s policy is that Grantees are encouraged to utilize available state and local intergovernmental agreements for procurement or use of common goods and services. When obtaining goods or services in this manner, grantees must ensure all federal requirements, required clauses, and certifications (including Buy America) are properly followed and included, whether in the master intergovernmental contract or in the grantees purchase document. When buying from these schedule contracts, grantees should obtain Buy America certification before entering into the purchase order. Where the product to be purchased is Buy America compliant, there is no problem. Where the product is not Buy America compliant, the grantee will still have to obtain a waiver from FTA before proceeding.
FTA allows grantees to use their state GSA–type contracts if the contracts contain all the Federal requirements or if the grantee adds the Federal requirements when it issues its first purchase order under the state contract. Grantees may not modify the contract of another transit agency and purchase from it if that contract did not originally contain the required Federal clauses. (Revised May 2010)
In the same situation we would like to have high-backed seats as opposed to the mid-backed seats used in the out of state agency's specifications. Would that change be considered much like paint or fabric changes, or does it exceed the scope of the contract?
A. We do not think the changes you describe (venue change and high-backed seats) would be cardinal changes. You need to be sure that the contract you intend to piggyback does have deliverable items that can be assigned to you. We mention this only to caution that tag-ons (i.e., the ordering of items not originally competed and that really represent sole source add-ons to the contract.) are not approved by FTA. The BPPM discusses piggybacking in sections 18.104.22.168 and 6.3.3. (Reviewed: May 2010)
Our agency is reviewing this type of contract to determine if we can “piggyback” for the same services.
A. Piggybacking is not permissible under these circumstances. First, when the transit agency conducted the competition for their revenue contract, the companies that offered bids or proposals were not aware of your opportunity, and had they known, may have significantly altered the proposals that they submitted. In a normal piggybacking situation, the bidders offer prices on a specified quantity of deliverables, and so all competitors know up-front what the scope of the contract will be. Their prices reflect this understanding. That was not the case with the contract you describe. One cannot assume that had all the offerors known of your program, their offers would not have changed. FTA’s concern is not only that grantees reap the maximum benefit from these revenue sharing contracts (which works to lower the grant program cost), but also that all interested private parties have an opportunity to benefit from the Federally funded asset such as your parking facility, and this would require a new competitive process. (Revised: May 2010)
A. Grantees can order off of state GSA-type contracts that do not include Federal clauses if the grantee adds the Federal clauses in its first purchase order issued under the state contract. Grantees may not, however, piggyback another grantee transit agency’s contract if that agency awarded its contract without Federal clauses.
The Best Practices Procurement Manual, section 22.214.171.124, discusses FTA’s rationale in making a distinction between state GSA-type contracts and those of other transit agencies:
“The rationale is that, in a State GSA-type contract, the purchase order is the transit community’s initial work on the contract – much as any buy off the Federal GSA IT schedule will be when a grantee chooses to use this Federal contract. In other cases (like transit agency A buying off transit B’s contract), the transit-unique rules are in place and known from the beginning, there is no expressed intent in the common grant rule (as with State schedules) to balance the rules against each other, and it would infer that a transit agency could essentially avoid most Federal rules by placing orders through another transit agency. In short, the integrity of the system would be threatened by extending the after-the-fact option beyond schedule purchases.”
(Reviewed: May 2010)
A. FTA has no prescribed language for assignability clauses, nor is there a particular place in the solicitation where the clause must be placed, although it should be conspicuous. FTA does require that an assignability clause be in the IFB, or RFP, and resulting contract in order for other agencies to order under the contract. The clause cannot be added to the contract after award if it was missing from the original solicitation. The reason for the FTA policy is that bidders must be placed on notice that an assignment is likely and that they will thus be delivering all of the quantities called for by the contract. FTA sees the assignability clause as an important factor in the original competitive bidding and not as a mere formality. The language must convey to the grantee a right to assign the deliverable items in part or in whole to another agency. The contract must also have the required federal clauses and certifications (e.g., Buy America), unless it is a state GSA-type contract, in which event a grantee may order against it and add the federal clauses and certifications later. (Reviewed: May 2010)
The amendment clearly states that no more than 15 buses will be purchased by the issuing agency, but that up 35 buses may be purchased under the contract. We wrote a letter to the agency, requesting a re-consideration of the denied RFAs, since the scope of the contract had now changed and other agencies may want to take advantage of the features offered on our product. We were denied any reconsideration. Our contention is that if we do not meet the criteria set forth for this particular agency that's OK. But we should not be shut out of potential business for other agencies that may take advantage of this new amendment.
A. Based on information you provided to us about the fact that a bus supplier suggested adding 30 more buses as options to the IFB amount issued originally by the transit agency, we would be concerned that this is a marketing ploy by the supplier and not a legitimate and foreseeable need of the buying agency. FTA encourages agencies to conduct joint procurements but the circumstances of this IFB amendment adding 30 buses to an initial order of 15 buses causes some concern.
The other aspect of this procurement that causes concern is that denial of your request for an "approved equal" of a 102" bus in lieu of the 92" bus in the specification. Of course, the agency may have an absolute requirement for 92" but it is clear that at least two manufacturers cannot bid because of this width requirement (leaving perhaps only one bidder, or two at most). While this may in fact be defensible based on this agency's needs, it may not be at all defensible with respect to the optional 30 buses that are apparently being added for the benefit of other agencies. Those agencies may very well have no legitimate requirement for 92" buses, and could use 102" buses, which means that the 102" bids should be accepted for the 30 bus optional quantities. If the other agencies that will "piggyback" this contract cannot demonstrate why they cannot accept 102" buses, then it will be improper for them to piggyback this contract because of the unnecessarily restrictive competition. Those agencies should in fact be procuring their own buses under a less restrictive specification. We would advise calling this to the attention of the decision-makers at the buying agency in a formal written communication, before bids are accepted. (Reviewed: May 2010)
A. The issue of "piggybacking" another agency's contract is covered in the Best Practices Procurement Manual, Section 6.3.3 - Joint Procurements of Rolling Stock and Piggybacking. As you review this material you will note that one of the issues to be considered is whether you will require changes to the specifications. These changes must be within the scope of the original contract to be permissible. Further guidance on what constitutes an in scope change vs. a cardinal change (out of scope) is given in the BPPM Section 9.2.1 - Contract Scope and Cardinal Changes. Applying these criteria, we conclude that the addition of a radio system to the bus would be a change within the scope of the contract, and therefore permissible. The enlargement of the bus, on the other hand, would clearly be a cardinal change and therefore impermissible. The latter change would be one that was not within the scope of the original competition (i.e., not within the contemplation of the suppliers when they bid the contract) and also the collateral impacts of the change would be significant.
As to how to procure the radio systems, you will have to decide if adding the systems during assembly of the buses (i.e., issuing a change order) is the most efficient and economical approach, or whether you could take delivery of the buses and compete the installation of the radio systems later. If you choose to wait and compete the radio systems you will be getting competition to ensure a fair and reasonable price as well as a quality product, but this may not be the most economical approach. On the other hand, if you issue a change order to the manufacturer, you will have to do a cost analysis of the manufacturer's proposal for the radios and ensure the price quoted is fair and reasonable based on your analysis. (Revised: May 2010)
A. The issue of greatest concern in light of your need for a 30' bus in lieu of the 40' buses under contract is the problem of having to issue an out-of-scope change order. The BPPM guidance notes that only changes "within the scope" of a contract are permissible. Examples of within scope changes would include things like fabrics and colors, paint schemes, signage, etc. A discussion of the criteria to be applied in deciding if a change is within or not within scope is included in Section 9.2.1 - Contract Scope and Cardinal Changes. Application of these criteria to your case would indicate that a change from a 40' bus to a 30' bus would be a cardinal change and thus impermissible. The scope of the original competition did not anticipate such a change (assuming the original solicitation did not advise bidders of the possibility of this change), so that it was not within the contemplation of the parties when the contract was being competed. Additionally, the collateral impacts of the change are significant. If the contract you wished to piggyback included options for 30' buses, then piggybacking would not be a problem from the perspective of a cardinal change. (Revised: May 2010)
A. Our view is that the awarding agency or your agency must make an independent determination of price reasonableness; i.e., that the price to be paid is fair and reasonable. To do this, a price analysis must be performed. If the awarding agency did not document its price analysis at the time of award, then your agency could do its own price analysis and document the file before an award is made. You should review prices paid for similar buses under competitive situations and document your files accordingly. (Revised: May 2010)
Can we add an assignability clause in a final contract (or as part of the Best and Final Offer letter) with the preferred vendor, if additional quantities were not mentioned as part of the RFP that went out to the entire prospective pool of vendors? Do we have to re-release the RFP?
A. The Best Practices Procurement Manual (BPPM) discusses the topic of "Piggybacking" in Section 6.3.3 - Joint Procurements of Rolling Stock and Piggybacking. A Piggybacking Worksheet is included as Appendix B.16 (MS Word) and is discussed in the Piggybacking paragraph. You will note that item 2 of the worksheet discussed FTA's policy that the original solicitation must have had an "Assignability" clause so that the bidders would be on notice that an assignment was likely and they would be delivering all of the quantities called for by the contract. FTA sees the assignability clause as an important factor in the original competitive bidding and not as a mere formality that must be complied with.
The other issue raised by your question is whether the original quantities advertised will need to be increased because of the "piggybacking" interest expressed by other agencies. Certainly if you envision having to buy more units that you advertised, you need to re-solicit for the total quantities you would expect to buy given the interests of the other agencies. The quantities that others might buy could be included as options if you are not certain they will be bought. If you include options, the optional quantities must be evaluated as part of the contract award decision in order for them to qualify as having been part of the original competition. You could not add on these additional quantities later through a non-competitive contract modification. FTA refers to these as "tag-ons" and they are not permitted. (Revised: May 2010)
A. The facts you present do not suggest any impediments to piggybacking for these two buses. However, we would suggest the grantee review the Best Practices Procurement Manual (BPPM), Section 6.3.3 - Joint Procurements of Rolling Stock and Piggybacking. This section contains a "Piggybacking Worksheet" that discusses important issues to be considered when piggybacking, including whether the contractor furnished the required "certifications;" whether the piggybacking quantities were included in the original solicitation; i.e., were they in the original bid and were they evaluated as part of the contract award decision; whether the awarding agency performed the required Pre-Award and Post-Delivery Buy America audits; whether the option provision in the contract is still valid; and other issues. (Revised: May 2010)
A. You are not required to obtain FTA approval before conducting either a joint procurement or "piggybacking." In fact, FTA encourages agencies to plan their procurements and to jointly procure rolling stock whenever this is feasible. We would suggest, however, that you review the Best Practices Procurement Manual (BPPM), Section 6.3.3 - Joint Procurements of Rolling Stock and Piggybacking. This section contains a discussion of both joint procurements and "piggybacking," including FTA policies that must be followed. Important issues include such things as the "certifications" required by Federal regulations, inclusion of the additional (piggybacking) quantities in the original solicitation and evaluation for contract award, performance of the required Pre-Award and Post-Delivery Buy America audits, and other issues. (Reviewed: May 2010)
A. The question of whether you can order computer equipment from the California contract depends on whether the state contract complies with the FTA procurement requirements. The procedure of using another agency's contract is commonly referred to as "piggybacking." Piggybacking is defined as the post-award use of a contractual document/process that allows an entity that was not contemplated in the original procurement to purchase the same supplies/equipment through that original document/process. Of course it may be argued that organizations such as yours were indeed contemplated in the original procurement to be potential users of the state contract. But what is important is that your agency be able to affirmatively determine that the state contract meets FTA requirements. The FTA requirements that must be met are discussed in the Best Practices Procurement Manual (BPPM), Section 6.3.3 - Joint Procurements of Rolling Stock and Piggybacking, in the paragraph entitled "Piggybacking." We would note that although this discussion of "piggybacking" is in the rolling stock section of the BPPM, the requirements would apply to the procurement of other types of commodities as well. Please note, however, that item #10 (five-year contract term limit) in the "Piggybacking Worksheet" would not apply to you since FTA rescinded the five-year term limit for all contracts except rolling stock. (Revised: May 2010)
A. FTA policy is to require that indefinite quantity contracts (assuming that this is an IQ type of contract), contain minimum and maximum quantities in order to avoid potentially abusive situations where the grantee awarding the contract, as well as other agencies wishing to piggyback that contract, could order quantities at prices never intended to reflect that quantity of orders. The potential harm here is to (1) the supplier who never intended to ship an excessive number of items at the original contract prices, and (2) other prospective suppliers who would have initially submitted bids, or bid different prices, had they known the actual orders to be placed under this contract. We would conclude, therefore, that this contract, if it is open-ended with respect to the maximum quantities, cannot be piggybacked pursuant to FTA policy. (Reviewed: May 2010)
A. In using the Federal GSA IT Schedule 70, you do not have to complete the BPPM piggybacking worksheet. FTA would assume that the contracts awarded by the U.S. GSA meet most Federal requirements, and you do not have to confirm this fact by an independent assessment of your own (i.e., by completing the piggybacking worksheet). However, you must add the Buy America clause with your purchase order. The same would hold true of contracts awarded by a State GSA-type agency for all State public organizations. However, with the State contract you would need to review the specific State contract you wanted to piggyback in order to determine if it contained the required Federal clauses and "representations and certifications" (such as Buy America), and if not, then you would have to add these clauses and obtain the required certifications with your first purchase order issued under the State contract. (Revised: May 2010)
A. In order for an agency to piggyback another agency’s contract, a number of requirements must be met. They are discussed in the FTA Best Practices Procurement Manual (BPPM), Section 6.3.3 - Joint Procurements of Rolling Stock and Piggybacking.
The answer to your question as to what changes may be made to the buses will depend on whether the changes are such that they would fall “within the scope of the contract”, and not be considered “cardinal changes”. A discussion of what constitutes a permissible vs. an impermissible change may be found in the BPPM, Section 9.2.1 - Contract Scope and Cardinal Changes. The BPPM refers to a number of issues that have been established over the years to determine if a change is within scope or out of scope. You should review these criteria and decide how they would apply to the changes you need to make.
If you change the bus design to delete any systems (such as electronic devices), you should expect the contractor to give you a price credit unless the contractor can demonstrate that removing the item will not result in a savings. You can add things to the bus; however, you must apply the criteria set forth in the BPPM as to the nature of the change and how it might impact the overall system design and if it will change the nature of what was originally intended (collateral impacts of the change). For example, you could not change from a high floor to a low floor configuration but you could add bike racks, security cameras, etc.
The BPPM specifically addresses changes to contracts for buses and applies the criteria discussed in this section to some bus design changes to determine if they are permissible. Following is the BPPM discussion of several specific bus changes:
A. Your agency does not need to be identified in the original contract as one that would be exercising the options. However, the original contract does need to contain an assignment clause giving the awarding agency the right to assign part of the deliverables to another agency. For additional requirements concerning piggybacking, see the FTA Circular 4220.1F, Chapter V., Paragraph 7(2). (Reviewed: May 2010)
A. The contract language you cite satisfies the FTA piggybacking requirement for an assignment clause and would give you the authority to piggyback the contract. However, you should review the Best Practices Procurement Manual (BPPM), Section 6.3.3 - Joint Procurements of Rolling Stock and Piggybacking - to be sure you comply with all of the FTA requirements. You should especially determine that all of the quantities up to the limit of 525 buses were priced in the original contract and that the option quantity prices were evaluated by the lead agency as part of the original contract award determination. In other words, be certain that these additional option quantities were not "unpriced options”. If they were unpriced options then they may not be exercised as being a part of the basic contract competitive award - they can only be negotiated now as a sole source action with appropriate agency approvals for sole source. (Posted: February 2009)
In our case we want to purchase hybrid buses from an existing contract. The bus is exactly what we are looking for but the contract does not require a performance bond. Our internal policy requires that we have a performance bond for all rolling stock procurements. If we ask and the vendor agrees to this does it require a sole source justification? We would pay for the additional cost of the bond.
A. Adding a performance bond requirement would not be an impediment to “piggybacking" this bus contract. However, you should carefully review the FTA requirements for using existing contracts before proceeding with the procurement. FTA requirements are discussed in (1) the Best Practices Procurement Manual (BPPM) Section 6.3.3 - Joint Procurements of Rolling Stock and Piggybacking, and (2) FTA Circular 4220.1F, Chapter V 7. - "Existing Contracts" (Posted: May 2010)
A. FTA would not permit piggybacking a contract issued by a foreign government. (Posted: September 2010)
A. FTA does allow and in fact encourages its grantees to use state or local government purchase schedules. The FTA Circular 4220.1F, Chapter V, Section 4 discusses this procedure. The Circular may be accessed online.
You should note that all FTA procurement requirements apply to these procurements, including Buy America. If the contract awarded by the state or local government did not include the federal clauses or certifications, including Buy America, you may add them to the first purchase order that you issue against the contract. If the product, however, is not Buy America compliant, you will need to obtain a waiver from FTA before purchasing it.
These clauses can only be added if they are accepted by the vendor, thereby making a bilateral purchasing document which would require the vendor's signature. (Posted: June, 2011)
Background Information: Once we took assignment of the terms at a not to exceed value, we issued our own uniquely numbered contract which included the other agencies terms from their procurement action.
A. The proper approach would be to get the awarding agency to assign more units to your agency, assuming there are additional units that can be assigned. If there are no additional units for assignment, then you would have to process a sole source justification in order to procure additional units, or conduct a new competitive procurement. (Posted: January, 2012)
Minnesota Cooperative Purchasing Venture Letter (PDF) (Posted: July 30, 2013)