Utility Purchases

Q. Are purchases from a public utility exempt from competitive procurement requirements?

A. Purchases from a public utility are exempt from the FTA competition requirements. Utility prices are established by law or regulation and therefore are not subject to the competitive procurement requirements described in FTA Circular 4220.1F, “Third Party Contracting Guidance.” (Revised: July, 2010)

 
Q.
Pacific Gas & Electric would not allow other contractors to perform any related task that encroaches on their lines such as disconnection and reconnection of customer-owned facilities, and installation of second service meters. Questions: Is bidding required? If not, do we need a sole source waiver approval from FTA?  Is there any existing automatic waiver for utility companies like PG & E which have exclusive or propriety rights to service their own facilities or equipment?

A. The utility owner is not treated as a contractor, but rather, as the actual property owner of the utility equipment (meters, electrical lines, etc.).  The property owner is not being hired [as a contractor] by your agency to perform work - rather, it is merely being reimbursed for the costs of relocating its assets due to an FTA-funded project.  You should contact the FTA San Francisco Regional Office regarding this cost, to make sure you have a letter in the project file that correctly characterizes the expense.
(Reviewed: July, 2010)



Q. What sole source justification citation is to be used for utility purchases?  PG&E services are needed as related to a hydrogen project in accordance with gas rule 16f2b, amount to be paid: $23,877.63, under a Federal grant.

A. Purchases from a public utility are exempt from the FTA competition requirements. Utility prices are established by law or regulation and therefore are not subject to the competitive procurement requirements described in FTA Circular 4220.1F, “Third Party Contracting Guidance.”  You do not need to process a sole source justification for utility purchases. (Posted: November, 2010)