Construction Projects

Third Party Procurement

Frequently Asked Questions

Q = Question; A = Answer

Q. For construction projects over $1M: (1) What type of public notice is required by FTA? (2) Does FTA approve the bid package prior to award? (3) What is the FTA clause which must be included if a vendor wishes to submit a bid protest to FTA?

A. FTA procurement requirements are set forth in FTA Circular 4220.1F. FTA requires only that the project be advertised, but has no specific advertising requirements. Grantees may advertise in whatever media they think will best inform prospective bidders of the project and the IFB. This may be local newspapers, the Dodge Report (construction), the Agency's or city's Website, trade magazines, etc.

FTA does not review the bid package prior to award. There is no prescribed clause to be included in your solicitation for FTA bid protests. You should include your own agency protest procedures, and FTA would become involved only after the protestor has exhausted its appeals to the agency and feels the agency has not followed its official procedures. (Revised: May 2010)

Q. I would like to receive a description of the responsibilities that should be discharged by the construction inspector in an FTA grant project. I am an independent consultant (PE) under contract to provide advice on construction management, etc.

A. FTA has published general guidance for grantees on managing major capital projects: "Project & Construction Management Guidelines (2003 Update)." This document is the only official guidance published by FTA on this subject. (Reviewed: May 2010)

Q. What is the definition of “construction” for purposes of the contract clauses in FTA Circular 4220.1F?

A. “Construction” means construction, alteration, or repair (including dredging, excavating, and painting) of buildings, structures, or other real property. For purposes of this definition, the terms “buildings, structures, or other real property” include, but are not limited to, improvements of all types, such as bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, cemeteries, pumping stations, railways, airport facilities, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, canals, and channels. Construction does not include the manufacture, production, furnishing, construction, alteration, repair, processing, or assembling of vessels, aircraft, or other kinds of personal property. (Posted: December 2009)

Q. I have a requirement to have the windows in a building tinted. Since the building is real property would the tinting of the windows (applying a film to the inside) be considered construction?

A. The tinting of windows would be considered construction since it provides a permanent improvement to the building. (Posted: December 2009)

Q. On a construction project where the prime is required to perform at least 20% of the work would accounting and administrative work be considered a part of the work?

A. A contract requirement that the prime contractor perform a certain percentage of the work with its own forces is normally a matter of ensuring that an experienced and qualified construction firm wins the contract award. What the prime contractor is allowed to subcontract, and with whom, is a matter for your agency's discretion, and not a federal requirement. The minimum percentage performance requirement of the prime usually means work that is construction in nature, not administrative or overhead, but again that is your decision.

If the contract is fixed price in nature, the prime contractor is assuming 100% of the risk of performance of the subcontractors, but you should still review the qualifications of the proposed subcontractors and determine them to be "responsible" contractors in terms of resources to perform, past performance, integrity, etc. (Posted: May 2010)

Q. Is there a location where I can read the definition of what is considered highway construction and what is considered heavy construction?

A. We would recommend you contact the local New York DOL office: Assistant Regional Administrator for Wage-Hour, Employment Standards Administration, U.S. Department of Labor, 1515 Broadway, room 3300, New York, New York 10036 (telephone: 212–399–5443). (Posted: February 18, 2011)

Q. Is there a required minimum of work that the prime contractor has to perform itself (not sub out)?

A. A contract requirement that the prime contractor perform a certain percentage of the work with its own forces is normally a matter of ensuring that an experienced and qualified construction firm wins the contract award. What the prime contractor is allowed to subcontract, and with whom, is a matter for your agency's discretion, and not a federal requirement. The minimum percentage performance requirement of the prime usually means work that is construction in nature, not administrative or overhead, but again that is your decision.

If the contract is fixed price in nature, the prime contractor is assuming 100% of the risk of performance of the subcontractors, but you should still review the qualifications of the proposed subcontractors and determine them to be "responsible" contractors in terms of resources to perform, past performance, integrity, etc. (Posted: July, 2011)

Q. Do you recommend the use of plan rooms?

I have seen that the BPPM encourages the use of plan rooms. I see some agencies use them and some don't, for various reasons. WMATA and CTA do not. I know the two plan rooms close to our location charge the vendors to use the room (I am assuming for profit). One of them is online only and one has a physical address. We must note that our agency does have a website and the plans can either be downloaded or the vendor can pick them up at cost.

A. FTA has no policy on small construction project "plan rooms." We believe that your practice of making plans and specification available on your web site is now a rather common practice. It does satisfy FTA requirements for publicizing procurements. (Posted: June, 2012)

Q. I have researched the FTA’s Circular 4220.1F, Third Party Contracting, and the FTA’s Best Practices Procurement Manual, and have found no language restricting the establishment of a lump sum in a contract for General Conditions. Can you advise if FTA allows lump sum payments for general conditions?

A. There is no FTA prohibition in FTA C4220.1F regarding use of FP for General Conditions. However, the General Condition payment items must be clearly defined in the bid and contract so as to avoid any possibility of duplicate payments for those items. For example, the contractor cannot be recovering these expenses through overhead as well as through fixed price payments under general conditions. . The agency must carefully review the contractor's overhead expense pool prior to contract negotiations and award to see that the pool does not already include the expenses that are being bid under General Conditions. The lump sum amount for general conditions in the bid must be broken down to show the amounts associated with various expense items and these items are to be billed lump sum as the expenses are incurred and not paid in advance since FTA policy precludes advance payments. (Posted: March, 2013)

Q. Can a grantee use a fixed price agreement to pay for general conditions on a construction contract?

A. There is no FTA prohibition in FTA C4220.1F regarding use of a fixed price for General Conditions. However, the General Conditions payment items must be clearly defined in the bid and contract so as to avoid any possibility of duplicate payments for those items. For example, the contractor cannot be recovering these expenses through overhead as well as through fixed price payments under general conditions. The agency must carefully review the contractor's overhead expense pool prior to contract negotiations and award to see that the pool does not already include the expenses that are being bid under General Conditions. The lump sum amount for general conditions in the bid must be broken down to show the amounts associated with various expense items and these items are to be billed lump sum as the expenses are incurred and not paid in advance since FTA policy precludes advance payments. (Posted: August, 2013)

Q. We need a replacement HVAC system for our building. Can we combine evaluation of existing system and proposed solution for replacement system into one RFP and use one firm? If so, what classification of purchase is this considered and which FTA Contract Clauses do we include?

A. Based on the definition of “construction” as given in the CFRs (see below), we would consider the replacement of an HVAC system as construction. Merely replacing components of an existing system, such as a boiler, would be considered maintenance. As for the contract clauses required, the FTA Procurement Circular 4220.1F, Appendix D, lists the clauses required for “Construction” and those for “Materials and Supplies,” which we would use for maintenance contracts.

Your question about using one contractor to define the new HVAC configuration and supply the system creates a potential conflict of interest. The potential problem is bias or lack of objectivity in recommending the new system. You will have to find a way to ensure that the design contractor has no financial interest in recommending any particular system configuration or solution to your problem. The usual approach would be to employ a consultant to study the alternatives and recommend a solution that it deems best for the agency. The consultant would be precluded from performing the work in order to ensure there is no bias in its recommendations.

“Construction” means construction, alteration, or repair (including dredging, excavating, and painting) of buildings, structures, or other real property. For purposes of this definition, the terms “buildings, structures, or other real property” include, but are not limited to, improvements of all types, such as bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, cemeteries, pumping stations, railways, airport facilities, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, canals, and channels. Construction does not include the manufacture, production, furnishing, construction, alteration, repair, processing, or assembling of vessels, aircraft, or other kinds of personal property. (Posted: February, 2014)

Q. We need a replacement HVAC system for our building. Can we combine evaluation of existing system and proposed solution for replacement system into one RFP and use one firm? If so, what classification of purchase is this considered and which FTA Contract Clauses do we include?

A. Based on the definition of “construction” as given in the CFRs (see below), we would consider the replacement of an HVAC system as construction. Merely replacing components of an existing system, such as a boiler, would be considered maintenance. As for the contract clauses required, the FTA Procurement Circular 4220.1F, Appendix D, lists the clauses required for “Construction” and those for “Materials and Supplies,” which we would use for maintenance contracts.

Your question about using one contractor to define the new HVAC configuration and supply the system creates a potential conflict of interest. The potential problem is bias or lack of objectivity in recommending the new system. You will have to find a way to ensure that the design contractor has no financial interest in recommending any particular system configuration or solution to your problem. The usual approach would be to employ a consultant to study the alternatives and recommend a solution that it deems best for the agency. The consultant would be precluded from performing the work in order to ensure there is no bias in its recommendations.

“Construction” means construction, alteration, or repair (including dredging, excavating, and painting) of buildings, structures, or other real property. For purposes of this definition, the terms “buildings, structures, or other real property” include, but are not limited to, improvements of all types, such as bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, cemeteries, pumping stations, railways, airport facilities, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, canals, and channels. Construction does not include the manufacture, production, furnishing, construction, alteration, repair, processing, or assembling of vessels, aircraft, or other kinds of personal property. (Posted: December, 2014)