PUBLIC TRANSIT

Updated Guidance 

and Expanded 

Federal Authority 

Could Facilitate Bus 

Procurement 

Report to the Honorable Matthew

Cartwright, House of Representatives

September 2015

GAO-15-676

United States Government Accountability Office
Highlights of GAO-15-676, a report to the 

Honorable Matthew Cartwright, House of 

Representatives

September 2015

PUBLIC TRANSIT

Updated Guidance and Expanded Federal Authority 

Could Facilitate Bus Procurement

Why GAO Did This Study

Buses are critical to the nation’s public 

transportation services. According to 

data from FTA’s National Transit 

Database, buses carry more 

passengers than all other modes 

combined. FTA provides grants to 

transit agencies to buy buses. When 

making these purchases, agencies 

must comply with a range of federal 

requirements. GAO was asked to 

review the transit bus market and 

federal role in bus procurement. 

This report examines (1) the 

characteristics of the U.S. transit bus 

market, (2) the federal role in transit 

bus procurement, and (3) views of 

selected transit agencies on 

challenges, if any, agencies face when 

procuring new buses and federal 

actions that could address those 

challenges. GAO reviewed FTA’s 

National Transit Database data from 

2004 and 2013 and applicable federal 

law, regulations, and grant documents;

conducted six discussion groups with 

representatives of 36 rural and urban 

transit agencies; and interviewed FTA 

and GSA officials, national transit 

industry organizations, and transit bus 

manufacturers. 

What GAO Recommends

GAO recommends FTA update its Best

Practices Procurement Manual, assess 

its other related guidance, and update 

that guidance as needed. GAO also

recommends FTA work with GSA to 

develop a legislative proposal to 

authorize transit agencies that receive 

relevant FTA grants to access GSA

sources of supply for the purchase of

transit buses. FTA and GSA agreed 

with our recommendations.

What GAO Found

Overall, the number of manufacturers of transit buses has declined in recent 

years, but bus production has remained constant. Transit agencies purchase 

over 5,000 buses per year—about half are heavy-duty buses and half are smaller 

buses called “cutaways” because they consist of a bus body on top of a chassis 

built by another manufacturer. The number of firms that produce most heavy-duty 

transit buses declined from 10 in 2004 to 4 in 2013, the latest year data were

available, due to business failures and consolidation. In contrast, the number of 

firms that produce most cutaways increased over the same time frame from 13 to 

15. The number of buses procured annually by transit agencies from 2009–2013,

using grant funds other than American Recovery and Reinvestment Act 

(Recovery Act) funds, ranged from 4,670 to 5,652. Transit agencies and others 

used Recovery Act funds to purchase 7,544 more buses in 2009 and 2010. 

The amount of Federal Transit Administration’s (FTA) grant funding that transit 

agencies used for bus procurement increased from $794 million in 2009 to $1.3 

billion in 2013. Also, agencies spent $1.7 billion in funds from the Recovery Act 

on buses from 2009 to 2010. FTA oversees transit agencies by requiring them to 

certify their compliance with a range of federal requirements and by periodic 

reviews. FTA also provides bus procurement guidance and technical assistance. 

However, GAO found that some resources provided by FTA, such as its Best 

Practices Procurement Manual, reference obsolete FTA documents. Without 

updated guidance, transit agency officials may not be able to purchase buses as 

efficiently as possible because they may need to spend additional time 

researching the guidance or to repeat a required step in the procurement 

process. 

Transit agency officials GAO spoke with identified a range of challenges they 

face when procuring buses. Those challenges include difficulties in complying 

with federal procurement requirements. For example, officials reported that it is 

time consuming to comply with a requirement to certify that at least 60 percent of 

the bus’s components are made in the U.S. because the agency must conduct 

pre- and post-award reviews of bus manufacturers. Transit agency officials in 

four of six discussion groups also identified the procurement process as difficult 

and resource-intensive, particularly for those transit agencies that do not 

purchase buses each year and may lack procurement capacity. Transit agency 

officials in four of six discussion groups stated these challenges could be 

addressed by allowing agencies access to General Services Administration’s 

(GSA) sources of supply. Purchasing through GSA could allow agencies to 

decrease the time they spend on bus procurements since GSA would be

responsible for ensuring that vehicles comply with federal procurement 

requirements. Further, purchasing through GSA could result in lower prices for 

buses, given GSA’s ability to purchase vehicles well below the dealer invoice. 

According to FTA and GSA officials, both agencies have explored the feasibility 

of establishing a process to allow transit agencies to procure buses through

GSA, but neither agency has developed a legislative proposal requesting that 

Congress grant authority to allow transit agencies to do so. In the past, 

nonfederal entities, such as state and local governments, have been authorized 

to purchase items through GSA. 

View GAO-15-676. For more information, 

contact David J. Wise at (202) 512-2834 or 

wised@gao.gov. 

United States Government Accountability Office
Letter 1

Background 3

The Number of Bus Manufacturers Has Declined, but Bus 

Production Has Remained Constant 7

FTA Funds Bus Procurements through Grant Programs and 

Provides Oversight and Guidance to Transit Agencies 10

Selected Transit Agencies Identified an Array of Bus Procurement 

Challenges and Potential Strategies to Address Them 18

Conclusions 25

Recommendations for Executive Action 26

Agency Comments 26

Appendix I Objectives, Scope, and Methodology 28

Appendix II Comments from the Department of Transportation 32

Appendix III Comments from the General Services Administration 33

Appendix IV GAO Contact and Staff Acknowledgments 34

Tables

Table 1: Comparison of Heavy-duty and Cutaway Bus 

Characteristics 5

Table 2: Number of Buses Procured by Transit Agencies Using 

Non-American Recovery and Reinvestment Act (Recovery 

Act) Funds, Fiscal Years 2009–2013 9

Table 3: Federal Transit Administration (FTA) Funds Obligated for 

Bus Purchase by Grant Program, Fiscal Years 2009–

2013 (in Millions) 12

Table 4: Select Federal Requirements for Transit Agencies 

Procuring Buses Using Federal Funds 13

Table 5: Transit Agencies Suggested Actions to Address Bus 

Procurement Challenges 23

Contents

Page i GAO-15-676 Transit Bus Procurement
Figure

Figure 1: Transit Agencies Use Heavy-duty and Smaller Cutaway 

Buses to Provide Transit Services 5

Abbreviations

AASHTO American Association of State Highway and 

Transportation Officials

ADA Americans with Disabilities Act 1990

Recovery Act American Recovery and Reinvestment Act

APTA American Public Transportation Association

BPPM Best Practices Procurement Manual

CTAA Community Transportation Association of America

DBE Disadvantaged Business Enterprise

ERM Enhanced Review Module

FTA Federal Transit Administration

FAQ Third Party Procurement Frequently Asked 

Questions

GSA General Services Administration

MAP-21 Moving Ahead for Progress in the 21st Century Act

NTD National Transit Database

NTI National Transit Institute

PSR Procurement System Review

RTAP National Rural Transit Assistance Program

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page ii GAO-15-676 Transit Bus Procurement
441 G St. N.W.

Washington, DC 20548

September 10, 2015

The Honorable Matthew Cartwright 

House of Representatives 

Buses are the most widely used form of public transportation in the United 

States. In fact, according to data from the Federal Transit Administration’s 

(FTA) National Transit Database (NTD), buses carry more passengers 

than all other modes—such as commuter rail, light rail, and ferries—

combined.1 Buses play a particularly important role in the provision of 

paratransit services for people with disabilities.2 To support public 

transportation, Congress, through grant programs managed by FTA 

provides billions of dollars annually to transit agencies for operations and 

capital investments, including bus procurement. In fiscal year 2013, 

transit agencies used $1.3 billion of the funds provided by FTA to buy 

buses.3

In total, transit agencies use FTA’s grant funding to purchase about 5,000 

buses per year, although not all agencies purchase buses each year.

New buses are needed to replace aging existing buses or to expand an 

agency’s existing service. Transit agencies have raised concerns about 

the difficulties of complying with federal procurement requirements for 

buses and have sought alternative ways to buy buses. For example, 

many agencies have purchased buses through buying cooperatives or by 

acquiring the rights to procure buses under another transit agency’s 

existing contract, a process known as piggybacking. Both methods of 

procurement are acceptable to FTA, if done in compliance with federal 

procurement requirements.

1

For the purposes of this report, we refer to buses as vehicles used by transit agencies to 

provide transportation services on a fixed-route or in response to calls from passengers, 

but not including automobiles, sports utility vehicles, mini-vans, and passenger vans. The 

NTD is maintained by FTA and includes operational data on agencies’ bus fleets as well 

as data on all other transit modes. 

2

Paratransit services operate based on requests from riders and are accessible to 

individuals with disabilities.

3

For the purposes of this report, “transit agency” refers to any organization that provides 

public transit service using buses and receives FTA grant funding. Fiscal year 2013 is the 

latest year these data are available.

Letter

Page 1 GAO-15-676 Transit Bus Procurement
You asked us to review the market for transit buses, the relevant federal 

role, and impediments to transit bus procurement. This report examines 

(1) the characteristics of the U.S. transit bus market, including 

manufacturing capacity and the production of new buses; (2) the federal 

role in transit bus procurement, including funding, procurement 

requirements, and oversight and guidance; and (3) the views of selected 

transit agencies on challenges, if any, that they face when procuring new 

buses and federal actions that could address those challenges.

To determine the characteristics of the U.S. transit bus market, we 

reviewed FTA’s Annual Statistical Summaries from 2009 to 2013, the 

latest year data are available, and American Recovery and Reinvestment 

Act of 2009 (Recovery Act) Statistical Summaries. We reviewed data from 

the NTD for the years 2004 and 2013 to evaluate changes to transit 

agencies’ bus fleets over time. We included vehicles agencies used for 

fixed route, demand response, and deviated-fixed route services and 

excluded vehicles used for other services—commuter buses, inter-city 

buses, trolley or specialty buses, vanpool vans, and automobiles—

because these excluded vehicles represent a small portion of all vehicles 

used. To assess the reliability of NTD data, we spoke with FTA officials 

about data quality control procedures and reviewed relevant 

documentation and determined that the data were sufficiently reliable for 

the purposes of this report. We reviewed relevant literature and 

interviewed officials representing FTA; American Public Transportation 

Association (APTA); Community Transportation Association of America 

(CTAA); transit agencies; and transit bus manufacturers. To determine 

the federal government’s role in transit bus funding, procurement 

requirements, and oversight and guidance, we reviewed applicable 

federal law, regulations, FTA guidance and grant documents, as well as 

interviewed FTA officials.

Finally, to identify any challenges transit agencies face when procuring 

transit buses and federal actions that could address those challenges, we 

conducted six discussion groups with officials from 36 rural and urban 

transit agencies with bus fleets. We recruited discussion group 

participants through a mass e-mail solicitation to transit agencies and 

solicited the help of three national transit industry groups that work closely 

with transit and state transportation agencies–APTA, CTAA, and 

American Association of State Highway and Transportation Officials 

(AASHTO)—to send our solicitation e-mail to transit agencies. We 

allocated participants into homogeneous groups based on whether they 

receive an urban or rural FTA grant, their location, and size of the transit 

agency. To ensure we received input from urban transit agencies of 

Page 2 GAO-15-676 Transit Bus Procurement
varying sizes, we established three size categories: large (with more than 

100 buses); medium (with 50–100 buses), and small (with less than 50 

buses). We did not group rural agencies into size categories because we 

selected all who volunteered and 97 percent of rural agencies have less 

than 50 buses. We conducted two of the four urban group discussions 

with small agencies due to the higher proportion of small agencies in the 

total population of transit agencies, and we conducted one group 

discussion each with medium and large urban-transit agencies. Based on 

our findings from these discussion groups and a review of literature, we 

summarized the challenges related to bus procurement into general 

categories. While these challenges were consistently identified by both 

urban and rural transit agencies with a mix of bus fleets, their views were 

based on a self-selecting, non-representative sample of transit agencies, 

and thus the results are not generalizable to all transit agencies. We also 

interviewed FTA and General Services Administration (GSA) officials 

about potential changes to transit bus procurement identified by the 

discussion groups. Appendix I describes our objectives, scope, and 

methodology in greater detail.

We conducted this performance audit from October 2014 to September

2015 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

According to data from the NTD, there were about 2,200 transit agencies 

in the U.S. in 2013, most of which used buses.4 The bus fleets ranged in 

size from large agencies operating more than a thousand buses to small 

agencies with a single bus. For example, MTA New York City Transit 

reported that it had more than 3,300 buses and the city of Goodland, 

Kansas, reported that it had one. Although bus fleets of transit agencies 

in most major cities number in the hundreds, 85 percent of all transit 

agencies operated fewer than 50 buses.

Bus transit services from these agencies include:

4

A small number of transit agencies operate only rail systems, ferries, or vanpool service.

Background

Page 3 GAO-15-676 Transit Bus Procurement
• fixed routes, in which buses operate according to a set route and

schedule;

• demand response, including paratransit service required under the

Americans with Disabilities Act 1990, as amended (ADA),5 in which

buses are scheduled in response to calls from passengers; and,

• deviated-fixed routes, which are fixed routes that allow for minor route

deviations in response to passenger calls.

To provide these services, transit agencies reported that they used a total 

of nearly 92,000 buses, representing a wide range of types and sizes. For 

the purposes of this report, we categorized buses as follows:

• Heavy-duty buses—the largest buses used for public transportation,

typically used for fixed-route service (see fig. 1). Almost all heavy-duty

buses are made specifically for the transit market, although many

major components—including the engine, transmission, axles, and

brakes—are also used in heavy-duty trucks.

• Cutaway buses—predominately used for demand response (see fig.

1). On cutaways, a bus body is manufactured and mounted on a

chassis built by another manufacturer.6 Virtually all are equipped to

accommodate wheelchairs.

Buses most commonly use diesel as a fuel source, but alternative fuel 

options are used, including compressed natural gas, biodiesel, and hybrid 

electric.

5

Pub. L. No. 101-336, § 223, 104 Stat. 327, 340.

6

Cutaway chassis is a term the vehicle industry uses to describe a full-size van with the 

section of the body behind the front passenger seats removed.

Page 4 GAO-15-676 Transit Bus Procurement
Figure 1: Transit Agencies Use Heavy-duty and Smaller Cutaway Buses to Provide Transit Services

Table 1 compares various characteristics of the types of buses used by 

transit agencies.

Table 1: Comparison of Heavy-duty and Cutaway Bus Characteristics

Bus characteristic Heavy-duty Cutaway

Length 30’ to 60’ 16’ to 28’

Passenger seating capacity 26 to more than 60 10 to 25

Minimum life requirementa 10 years/350,000 miles to 12 years/500,000 

miles

4 years/100,000 miles to 5 years/150,000 miles

Cost (approximate) $164,000 to $940,000 $53,000 to $100,000

Source: GAO analysis of Federal Transit Administration (FTA) and transit industry data. | GAO-15-676

a

Minimum life requirement is the minimum time or mileage that FTA requires a bus to be in service 

before being replaced.

Transit agencies procure new buses to replace aging existing fleets or 

when expanding service and FTA policies specify how agencies manage, 

use, and dispose of buses acquired with federal funds. For example, FTA 

has established a minimum useful life for buses, in terms of years in 

service or accumulation of miles, and requires that buses are maintained 

and remain in use for at least their minimum life. To avoid the purchase of 

unnecessary vehicles, FTA policy limits the size of each agency’s bus 

fleet to those the agency needs to provide its services. Thus, for each 

new replacement bus purchased, FTA requires agencies to provide plans 

for disposition of the vehicle to be replaced.

While some transit agencies purchase buses frequently, most do not 

make purchases every year and some go years between purchases.

When transit agencies purchase buses using federal funds, there are four 

Page 5 GAO-15-676 Transit Bus Procurement
procurement methods recognized by FTA that they typically use, 

depending on their needs:

• Stand-alone procurement—conducted by a single agency and

resulting in a contract between it and a bus manufacturer or vendor.

• Joint procurement—conducted by two or more agencies where each

is a party from the outset to a single contract with a bus manufacturer

or vendor.

• Assignment of options (also referred to as “piggybacking”)—

conducted by two or more agencies where one agency with an

existing bus procurement contract determines that it inadvertently

contracted to purchase more buses than it needs. The agency may

assign the rights to purchase some or all of its unneeded buses to

other transit agencies.

• Purchasing from a state schedule—many states create purchasing

schedules by which the state and its subsidiaries may acquire goods,

including buses. Some subsidiaries—including cities and counties—

are also transit agencies and purchase buses from the state’s

purchasing schedule. FTA approves of this procurement method as

long as the state ensures that procurement contracts include any

clauses required by federal law.

Recipients of FTA assistance are required to conduct procurements in 

accordance with FTA procurement rules including, for example, that all 

procurement transactions, such as stand-alone, joint, and assignment of 

options, be conducted in a manner that provides full and open 

competition and that recipients agree to purchase a finite number of 

vehicles based on the agency’s needs. Purchases from a state schedule 

also must follow FTA procurement rules such as the inclusion of FTArequired clauses and certifications but are typically completed by the state 

and not a transit agency.

Page 6 GAO-15-676 Transit Bus Procurement
Over the last decade, the number of heavy-duty transit bus manufacturers 

in the U.S. has declined due to business failures and consolidation. The 

final assembly of heavy-duty buses purchased by transit agencies using 

funds from FTA generally takes place in the U.S., in order to meet Buy 

America requirements.7 In 2013, four companies produced virtually all 

heavy-duty buses used in the U.S.

Transit agencies that receive federal funds are required to report 

operational data at least annually to the NTD, including information on the 

agencies’ bus fleets. Using these data,8 we identified the year and 

manufacturer of buses that transit agencies reported they owned or used 

in 2004 and 2013 and compared the two time periods.9 Our analysis of 

this data shows:

7

See 49 U.S.C. § 5323(j); see also FTA Buy America regulations at 49 C.F.R. Part 661. In 

general, under these Buy America requirements, all iron, steel, and manufactured 

products used in FTA-funded projects must be produced in the U.S. When procuring 

rolling stock, such as passenger rail cars and transit buses, transit agencies are generally 

not subject to these requirements when the cost of components produced in the U.S. is 

more than 60 percent of the value of all components used in producing rolling stock and 

final assembly takes place in the U.S. Some transit agencies have procured foreign-made 

buses using other than federal funds.

8

For this analysis, we used data reported by transit agencies that receive Urbanized Area 

(49 U.S.C. § 5307) grants. Data reported by agencies that receive Rural Area (49 U.S.C. § 

5311) grants do not include as much detail as data reported by urban recipients. For 

example, rural agencies do not report vehicle manufacturers. 

9

For 2004, we identified manufacturers of buses for model years 2004 to 1999; for 2013, 

the latest year data are available, we identified manufacturers of buses for model years 

2013 to 2008. Some bus manufacturers are not included in the data presented because 

they produce no buses or a very small number. For example, there are at least two 

manufacturers of battery-powered buses in the U.S., but no agency reported that they own 

or use a bus from either company.

The Number of Bus 

Manufacturers Has 

Declined, but Bus 

Production Has 

Remained Constant

The Number of Heavyduty Manufacturers Has 

Declined

Page 7 GAO-15-676 Transit Bus Procurement
• The number of heavy-duty manufacturers declined—in 2004, 10

manufacturers produced almost all of the reported buses; by 2013,

four manufacturers produced almost all of the buses.10

• Smaller manufacturers stopped bus production—most manufacturers

that stopped producing heavy-duty buses between 2004 and 2013

were relatively small, with each making 4 percent or fewer of the 2004

reported buses, although one manufacturer made 11 percent.

• The market share for the largest manufacturers increased —in 2004,

the largest three manufactures produced 68 percent of the reported

heavy-duty buses; in 2013, the same three manufacturers produced

81 percent of the buses.

In contrast with heavy-duty manufacturers, the number of manufacturers 

of cutaway transit buses has remained about the same. As with heavyduty buses, final assembly of cutaway buses purchased by transit 

agencies using funds from FTA generally takes place in the U.S., to meet 

Buy America requirements. According to FTA, transit agencies generally 

procure cutaways through dealers representing the manufacturers; each 

bus is to be produced to an agency’s specifications. There is also a 

substantial private market for cutaway buses. Specifically, hotels, rental 

car agencies, and universities also purchase cutaway buses. In 2007, 

FTA estimated that sales to these entities surpassed transit-related sales.

Our analysis of bus information reported by transit agencies in 2004 and 

2013 shows that:

• Almost all cutaway bus manufacturers continued to produce buses—

of the 13 largest manufacturers in 2004, all continued to produce

transit buses in 2013.

• At least two companies started producing buses—two companies not

identified in 2004 each produced about 4 percent of the cutaway

buses in 2013.

• Market share is more evenly distributed—in 2004, the three largest

manufacturers made 64 percent of the cutaway buses; in 2013, the

three largest manufacturers made 47 percent. In general, because the

10In 2004, 10 manufacturers produced 98 percent of the reported buses; in 2013, 4 

manufacturers produced 99 percent of reported buses.

The Number of Cutaway 

Manufacturers Has 

Remained Consistent

Page 8 GAO-15-676 Transit Bus Procurement
market share of the largest manufacturers declined, other 

manufacturers had larger shares.

The decline in the number of heavy-duty bus manufacturers has not 

affected the number of buses produced.11 Excluding buses purchased 

with funds from the Recovery Act, the number of buses procured by 

transit agencies annually varied slightly from 2009 through 2013 (see 

table 2). Approximately half of the bus purchases were for heavy-duty 

buses and half were for cutaway buses, although the percentages vary 

from year to year. The Recovery Act provided additional funds for capital 

projects, including bus procurement, in 2009 and 2010.12 Specifically, 

transit agencies and others purchased 7,544 buses using Recovery Act 

funds over those 2 years.13

Table 2: Number of Buses Procured by Transit Agencies Using Non-American 

Recovery and Reinvestment Act (Recovery Act) Funds, Fiscal Years 2009–2013

Year Number of buses (non-Recovery Act)

2009 4,903

2010 4,670

2011 5,652

2012 5,523

2013 5,562

Total 26,310

Source: GAO analysis of Federal Transit Administration Annual Statistical Summary data. | GAO-15-676

The number of transit buses produced annually is relatively small 

compared to heavy-duty trucks. Specifically, there are approximately 

2,500 heavy-duty buses produced each year and approximately 300,000 

heavy-duty trucks. Similarly, of the 370,000 cutaway chassis sold 

annually, 2,500 are purchased and modified for transit use. According to 

a 2007 FTA report, this situation is both beneficial and problematic for the 

transit industry.14 Components shared by multiple industries likely make 

11Bus manufacturers custom-make each bus based on a contract with a transit agency. 

12Pub. L. No. 111-5, 123 Stat. 115, 209 (2009). 

13According to FTA officials, Recovery Act bus purchases are not identified by fiscal year 

because the grants were awarded from March 2009 through September 2010. 

14FTA, Useful Life of Transit Buses and Vans (April 2007).

Production of Transit 

Buses Has Remained 

Constant

Page 9 GAO-15-676 Transit Bus Procurement
their costs lower than if they were used only for transit. Conversely, the 

transit industry as a whole exerts little influence on availability of 

components or their design.

FTA provides support for public transportation by awarding federal 

funding—about $11 billion in 2013—to transit agencies in the form of 

grants. Grant recipients have specific responsibilities associated with the 

use of this funding. For example, transit agencies are required to conduct 

procurements involving federal funds in compliance with applicable 

federal requirements. FTA is responsible for ensuring compliance with 

these requirements and for ensuring that these agencies use the funding 

prudently. In addition, FTA describes its role as one where, in general, 

FTA does not substitute its judgement for that of its recipients by making 

contract decisions for recipient transit agencies entering into procurement 

contracts with third parties, such as bus manufacturers or vendors.15

There were at least 11 federal grant programs in fiscal year 2013 that 

allowed funds to be used for bus procurement. The rules associated with 

use of grant money vary by program, but generally transit agencies have 

flexibility in deciding how to use these funds. For example, an agency 

may use most of its grant funding one year on a commuter rail project and 

use most of its funding for bus procurement in the next year. Transit 

providers may, and often do, receive funding from more than one 

program. Further, in each year, FTA may obligate funds—that is, enter 

into a grant agreement with a transit agency to, for example, procure 

buses—that were appropriated in that year or in prior years.16 As a result, 

the amount obligated by FTA in any given year is not the same as is 

appropriated. Four federal grant programs provide 95 percent of the 

funding awarded to transit agencies for bus procurement:

15See e.g., FTA Circular 4220.1F – Third Party Contracting, in which FTA cites Executive 

Order 13132, Federalism, 64 Fed. Reg. 43255 (Aug. 4, 1999) as directing federal 

agencies to refrain from substituting their judgment for that of their state recipients unless 

the matter is primarily a federal concern. 

16The number of years that appropriated funds are available to recipients varies by grant 

program. For example, the Urbanized Area Formula Program funds appropriated for fiscal 

year 2013 are available for obligation by the recipient for 6 years—the year of the 

apportionment plus 5 additional years.

FTA Funds Bus 

Procurements 

through Grant 

Programs and 

Provides Oversight 

and Guidance to 

Transit Agencies

Federal Funding Used for 

Bus Procurement 

Increased from 2009 

through 2013

Page 10 GAO-15-676 Transit Bus Procurement
• Urbanized Area Formula Program (49 U.S.C. §5307)—provides funds

to urban areas, defined as those with a population of at least 50,000

based on census information. Funds provided under this program may

be used for capital projects, such as purchasing buses, planning, job

access and reverse commute projects, and operating and other

expenses.

• Bus and Bus Facilities Formula Program (49 U.S.C. §5339)—provides

funds to allow transit agencies to overhaul and retrofit their buses as

well as purchase new buses and construct bus-related facilities, such

as bus maintenance facilities.

• Enhanced Mobility of Seniors and Individuals with Disabilities

Program (49 U.S.C. §5310)—provides funds to transit agencies and

other organizations for transportation programs for seniors and

individuals with disabilities that go beyond the scope of public

transportation fixed-route service as well as providing funds for ADA

complementary paratransit services. At least 55 percent of these

funds must be used on capital expenses, such as bus procurement.

• Rural Area Formula Program (49 U.S.C. §5311)—provides funds to

states and tribal areas for use in areas with populations of less than

50,000. States distribute these funds to non-urban and rural areas.

Funds can be used to support public transportation in rural areas in

order to support the needs of rural areas such as access to

healthcare, education, employment, public services, and recreation.

Funds can also be directed towards capital, operating, and other

expenses.

Transit agencies have recently used increasing amounts from their grant 

funds to purchase buses. Specifically, from fiscal years 2009 to 2013, the 

most recent year data are available, obligations made by FTA to transit 

agencies for bus procurement increased (see table 3). These figures

represent only the money that transit agencies have decided to use 

towards bus purchases and do not represent all other forms of transit 

spending. In addition, transit agencies have used funds from other 

sources to procure buses. For example, transit agencies and others used 

approximately $1.7 billion provided by the Recovery Act for procuring 

7,544 buses from 2009 to 2010.

Page 11 GAO-15-676 Transit Bus Procurement
Table 3: Federal Transit Administration (FTA) Funds Obligated for Bus Purchase by 

Grant Program, Fiscal Years 2009–2013 (in Millions)

Grant Program Name 2009 2010 2011 2012 2013

Urbanized Area(49 U.S.C. §5307) $518.4 $512.3 $622.4 $613.1 $751.5

Capital Programa $154.5 $138.9 $348.2 $380.1 $416.3

Seniors and Individuals with 

Disabilities (49 U.S.C. §5310)

$65.1 $56.4 $59.0 $76.4 $46.0

Rural Area (49 U.S.C. § 5311) $19.4 $22.1 $24.7 $32.7 $48.0

Otherb $36.0 $17.4 $98.9 $67.9 $40.7

Year total $793.5 $747.2 $1,153.2 $1,170.2 $1,302.4

Source: GAO analysis of FTA Annual Statistical Summary data. Data are unadjusted for inflation. | GAO-15-676

Note: Numbers in table may not total exactly due to rounding.

a

The Capital Program from 2009 to 2012 was comprised of three FTA grant programs: Bus and Bus 

Facilities, Fixed Guideway Modernization, and New Starts. In 2013, the Capital Program was 

comprised of Bus and Bus Facilities, Fixed Guideway Capital Investment, and State of Good Repair 

programs, as well as funds from the prior years’ Bus and Bus Facilities and Fixed Guideway 

Modernization programs.

b

Other programs include Clean Fuels, Job Access and Reverse Commute, New Freedom, Sarbanes 

Transit in the Parks, Transportation Investment Generating Economic Recovery (TIGER), Transit 

Investment for Greenhouse Gas and Energy Reduction (TIGGER), and Miscellaneous Federal 

Highway Administration Transfers. The Clean Fuels Program, as well as the Job Access and Reverse 

Commute, New Freedom, and Sarbanes Transit in the Parks programs were repealed in July 2012 by 

the Moving Ahead for Progress in the 21st Century Act, Pub. L. No. 112-141, § 20002, 126 Stat. 405, 

622 (2012).

Some of these grant programs changed over this 5-year period. For 

example, the Bus and Bus Facilities program was a discretionary program 

through fiscal year 2012, after which it became a formula program 

pursuant to changes made by the Moving Ahead for Progress in the 21st 

Century Act (MAP-21).17

When using federal funds from FTA to procure buses, transit agencies 

must comply with a range of federal requirements that include 

government-wide requirements, such as complying with the ADA, as well 

as FTA-specific requirements, such as providing a local funding match for 

federal grants. FTA includes federal requirements in the FTA Master 

Agreement, which contains the terms and conditions applicable to each 

17MAP-21 was the surface transportation authorization in effect for fiscal years 2013 and 

2014, and has been extended several times.

Transit Agencies Are 

Responsible for 

Complying with FTA’s Bus 

Procurement 

Requirements

Page 12 GAO-15-676 Transit Bus Procurement
grant. Some of the relevant clauses that apply to bus procurements are 

shown in table 4.

Table 4: Select Federal Requirements for Transit Agencies Procuring Buses Using Federal Funds

• Full and open competition—transit agencies must conduct procurements in a manner providing full and open competition that is

not restrictive of competition.

• Recipient’s Responsibility to Extend Federal Requirements to Third Party Participants—transit agencies must ensure that all third

party contractors, such as bus manufacturers, also meet all applicable federal requirements.

• Buy America—for any purchase over $100,000, transit agencies must ensure that more than 60 percent of the value of the bus

and bus components are manufactured in the U.S. and the bus’s final assembly is in the U.S.

• Local Share – transit agencies are required to match a portion of each federal grant, typically 20 percent for bus procurement,

from local or state sources.

• Disadvantaged Business Enterprise (DBE)—transit agencies must have a DBE policy statement in place and procure buses only

from FTA-approved vendors.a

• Price or Cost Analysis—transit agencies are required to justify the price they pay for buses. If the bus is commercially available,

a transit agency may perform a price analysis. If the bus is not commercially available, the transit agency is required to perform a

cost analysis to evaluate the cost elements and proposed profit of a contractor’s proposal.

Source: GAO analysis of Federal Transit Administration documents. | GAO-15-676

a

DBEs are small businesses owned and operated by socially and economically disadvantaged 

individuals such as members of specified minority groups. Under federal law, except to the extent that 

the Secretary of Transportation determines otherwise, DOT is to use at least 10 percent of the funds 

authorized for transit financial assistance programs with DBEs. DOT regulations provide that this 10 

percent amount is an aspirational goal at the national level, which the Department uses as a tool in 

evaluating and monitoring DBEs’ opportunities to participate in DOT-assisted contracts.

FTA is responsible for ensuring that grant recipients comply with federal 

bus procurement requirements. According to FTA, it relies on transit 

agencies to annually certify, for each grant, that its procurement system 

meets all federal requirements and that those requirements are also met 

by third party contractors.

FTA conducts periodic reviews to assess transit agencies’ performance 

and adherence to FTA requirements and policies. For example, FTA 

conducts triennial reviews of transit agencies receiving Urbanized Area 

grant funds.18 According to FTA officials, about 600 transit agencies 

receive Urbanized Area funds and approximately one-third of these 

agencies (200) undergo a triennial review each year. These triennial 

reviews include a review of an agency’s procurement system but may 

18We previously reported on FTA’s triennial review process. See GAO, Public 

Transportation: FTA’s Triennial Review Program Has Improved, But Assessments of 

Grantees’ Performance Could Be Enhanced, GAO-09-603 (Washington, D.C., June 30, 

2009). 

FTA Oversees Transit 

Agencies’ Procurement 

Process through Agency 

Self-Certification and 

Various Reviews

Page 13 GAO-15-676 Transit Bus Procurement
also include an Enhanced Review Module (ERM) with a specific focus on 

procurement. ERMs can be triggered by factors including high funding 

levels, open or repeated findings from previous reviews, unusual or 

complex procurements, a large number of change orders, bid protests, or 

Buy America issues. Based on its own risk assessment findings,19 FTA 

may also conduct a Procurement System Review (PSR). According to 

FTA officials, these PSRs examine at least 56 different elements of a 

transit agency’s procurement system plus its Buy America certifications to 

determine if it meets FTA procurement requirements and to identify 

needed corrective actions.

FTA has found errors in the way transit agencies procure buses. For 

example, in 2013, FTA found that several bus procurement contracts did 

not comply with federal procurement requirements that limit the number of 

buses an agency may purchase to those needed for its public 

transportation services.20 According to FTA, these contracts, in which the 

parties contracted to buy more buses than they currently or could 

reasonably be expected to need, were apparently specifically designed 

for piggybacking—or assigning contract rights to other transit agencies—

at a later date. Under FTA rules, piggybacking is allowed only when an 

agency inadvertently contracts for more buses than it needs. FTA also 

found that agencies procured buses from a Minnesota state contract even 

though the agencies were located outside that state, in violation of FTA 

rules. FTA noted that under this contract, to purchase a bus, a transit 

agency needed only to submit a simple, one-third page application to the 

State of Minnesota, receive a membership permit number, and send a 

purchase order to the vendor of its choosing listed in the contract. While 

some states have established purchasing schedules for use by state 

agencies and other authorized entities, FTA prohibits transit agencies 

using federal funds from FTA to procure buses from out-of-state 

contracts. Despite that, at the time of the FTA review, at least 13 transit 

agencies located outside of Minnesota had pending orders to procure 

buses through the Minnesota state contract with a single bus 

manufacturer, according to FTA. In both the piggybacking and Minnesota 

19FTA regional offices use the results of an annual risk assessment of each grantee to 

identify transit agencies that may have a greater risk for procurement problems and to 

focus oversight resources on those agencies. 

20These requirements are intended to prevent agencies from purchasing unnecessary 

property.

Page 14 GAO-15-676 Transit Bus Procurement
state contract cases, FTA prohibited future purchases but allowed 

pending purchases to stand.

FTA provides guidance and technical assistance to help transit agencies 

comply with federal bus procurement requirements. Transit agencies 

access this guidance through FTA’s website or by contacting officials in 

FTA regional offices. According to FTA, the primary source of 

procurement guidance from FTA is FTA Circular 4220.1F – Third Party 

Contracting Guidance, which describes how transit agencies can comply 

with federal requirements when using federal funds for procurements, 

such as for buses. FTA issued the current version of the circular in 

November 2008, and revised it most recently in March 2013. In addition, 

individual circulars for some of the grant programs used for bus 

procurement provide guidance related to that program. For example, the 

circular for the Urbanized Area grant program provides information on the 

eligible uses of funding, such as for bus replacement, overhaul, or 

expansion of service. Further, FTA periodically issues Administrator’s 

Policy Letters to clarify FTA procedures or indicate changes to an existing 

policy. For example, FTA issued a policy letter in March 2013 to clarify 

the conditions under which transit agencies could piggyback off another 

transit agency’s contract.

FTA also provides supplemental guidance through its Best Practices 

Procurement Manual (BPPM), Third Party Procurement Frequently Asked 

Questions (FAQ), and an online tool that transit agencies can use to 

assess their procurement systems. This supplemental guidance is 

designed to assist transit agency officials throughout the procurement 

process and facilitate their compliance with FTA regulations. However, 

this guidance is outdated.

• The BPPM addresses each step in the procurement process using a

standardized format consisting of requirements, discussion, and best

practices. Requirements include relevant sections from FTA circulars,

the Master Agreement, federal laws and regulations, and FTA

Administrator’s Policy Letters. The discussion sections provide

definitions and guidance concerning the meaning or purpose of the

topic being presented, and the best practices section describes

practices that have proved to be effective in the past, according to

FTA. Although FTA states that it envisions the BPPM to be an

ongoing and expanding document that will be updated periodically,

FTA has not updated sections of the manual in at least 10 years. As a

result, the manual includes outdated references to important

FTA Provides Guidance to 

Transit Agencies on Bus 

Procurement, but Some Is 

Outdated

Page 15 GAO-15-676 Transit Bus Procurement
procurement policy documents. For example, it includes a previous 

version of FTA Circular 4220.1E, which was replaced by the current 

version, FTA Circular 4220.1F, in 2008. Moreover, the fiscal year 

2015 FTA Master Agreement notes that the BPPM may lack the 

necessary information for compliance with certain federal 

requirements. In June 2015, an FTA official told us that FTA made 

draft revisions to the BPPM but FTA is awaiting internal approval 

before releasing it and has not set a time frame for approval.

• The FAQs on FTA’s website is an online resource for transit agencies

to review FTA’s answers to frequently asked procurement-related

questions.21 Visitors to the site can also submit questions to FTA. FTA

adds new answers to the website but also retains undated answers

with outdated guidance. For example, the bus procurement category

includes answers added in 2014 but undated answers refer to the

outdated Circular 4220.1E.

• FTA’s online Procurement System Self-Assessment Guide can be

used by transit agencies to assess whether their own procurement

system complies with FTA procurement requirements in 10 common

areas of deficiency. However, the guide also includes outdated

information. For example, the guide references the BPPM for

additional guidance; as discussed previously, the BPPM includes

outdated information. Furthermore, the guide does not include

instructions for completing the self-assessment or obtaining results,

and a user is not able to answer the self-assessment questions

online. Although there is an area that allows for electronic submission

of the self-assessment form to FTA, any form submitted this way

would be blank because the form does not allow a user to enter any

text.

It is important to have updated guidance because transit agencies and 

state departments of transportation rely on the guidance when procuring 

buses to ensure compliance with federal requirements. Standards for 

Internal Control in the Federal Government states that management 

should ensure that there are adequate means of communicating with 

external stakeholders that may have a significant impact on the agency 

21The FAQs is also referred to as Third Party Procurement Helpline and Frequently Asked

Questions in Circular 4220.1F. See http://www.fta.dot.gov/grants/14032.html.

Page 16 GAO-15-676 Transit Bus Procurement
achieving its goals.22 Without updated guidance, transit agencies may not 

be able to purchase buses as efficiently as possible; for example, they 

may need to spend additional time researching the guidance or they may 

have to repeat a required step in the procurement process. As discussed 

in the next section, transit agency officials in four of our six discussion 

groups identified outdated guidance as a challenge in bus procurement.

FTA also provides technical assistance and training on bus procurement.

According to FTA, the National Transit Institute (NTI) developed two-day

training on bus procurements in 2011 and held 12 training sessions from

2011 through 2013. The training is now held annually and transit 

agencies can use FTA grant funds to send personnel to the training.23 In 

addition, an FTA headquarters official stated that he provides in-person

bus procurement trainings to transit agencies approximately 8 times per

year. FTA and APTA developed a standardized format for transit

agencies to use for bus procurements.24 This format is designed to

provide a common method of contracting and is intended to save time 

and effort for the parties to a particular transaction. According to APTA,

industry stakeholders such as bus manufacturers and transit agencies

contributed to the standard’s development. Use of the standardized 

format is not required but FTA and APTA encourage its use.

Finally, the National Rural Transit Assistance Program (RTAP) offers 

technical assistance and training, including for procurement, to transit 

agencies in rural areas. For example, RTAP developed and made 

available a free web-based application that is designed to guide agencies 

through FTA procurement procedures as well as provide required federal 

clauses and certifications.

22GAO, Standards for Internal Control in the Federal Government. GAO/AIMD-00.21.3.1 

(Washington, D.C.: November 1999). 

23FTA held one training in 2014 and has one training scheduled for July 2015. 

24American Public Transportation Association, Standard Bus Procurement Guidelines

(May 2013).

Page 17 GAO-15-676 Transit Bus Procurement
Transit agency officials we spoke to told us that they face an array of 

challenges in procuring buses. A 2006 FTA report concluded that “the 

greatest challenges cited by both transit agencies and bus manufacturers 

were related to bus procurement and contracting.”25 As discussed 

previously, to identify and understand procurement challenges faced by 

transit agencies, we conducted six discussion groups with officials of 36 

rural and urban transit agencies.26 We recruited discussion group 

participants through mass e-mail solicitation and allocated participants 

into homogeneous groups based on their location and size of the transit 

agency.27 Our six discussion groups included the following:

• two groups of officials from small, rural transit agencies;

• two groups of officials from small, urban transit agencies;

• one group of officials from medium, urban transit agencies; and

25FTA, Non-Rail Vehicle Market Viability Study, (Jan. 19, 2006).

26For the purposes of this report, rural agencies are recipients of Rural Area (49 U.S.C. § 

5311) grants and urban agencies are recipients of Urban Area (49 U.S.C. § 5307) grants.

27To ensure we receive input from a range of sizes of urban agencies, we established 

three size categories: large (more than 100 buses); medium (50–100 buses), and small 

(less than 50 buses). Using these categories, approximately 7 percent of urban agencies 

are large, 16 percent are medium, and 77percent are small. For rural agencies, we did not 

group into size categories because they tend be very similar in size (97 percent have less 

than 50 buses). 

Selected Transit 

Agencies Identified 

an Array of Bus 

Procurement 

Challenges and 

Potential Strategies to 

Address Them

Transit Agencies Identified 

a Wide Range of 

Procurement Challenges

Page 18 GAO-15-676 Transit Bus Procurement
• one group of officials from large, urban transit agencies.28

Participants in all six discussion groups identified some aspect of FTA’s 

guidance, as well as some federal legal and regulatory requirements, as 

posing challenges to procuring new buses. For example:

• FTA guidance: Participants from four groups noted that some FTA

guidance is outdated, as discussed in the previous section.

Participants in three groups also cited that getting technical

assistance from FTA was challenging. For example, a participant said

that they contacted FTA officials about the applicability of a particular

requirement but FTA officials would not provide a specific answer,

leaving it to the transit agency to interpret. Participants in two rural

groups said that they do not have the resources or experience to

interpret these FTA requirements. While some participants

appreciated the assistance from FTA regional staff, other participants

in the large and small urban groups reported variation in the

assistance received from FTA; some participants stated that FTA staff

gave inconsistent advice or showed a lack of technical expertise.

Participants in one group mentioned that FTA could be more proactive

and provide more assistance to agencies during the procurement

process.

• Requirements: Participants from two groups described instances

where procurement requirements are seemingly unnecessary or not

relevant. For example, participants in the discussion groups

representing large and medium urban-transit agencies said that some

FTA requirements do not reflect the reality of the transit bus market.

According to these participants, FTA requires transit agencies to

conduct a price analysis to ensure the price is reasonable, but this

requirement seems unnecessary when there is only a single

manufacturer that builds a specific type of bus. However, FTA does

not require a price analysis when there is only a single manufacturer

of a bus but does require a different type of analysis.

29 This

discrepancy illustrates that some transit agency officials are confused

28We conducted four of the six groups with officials from small agencies due to the 

proportion of small agencies in the total population of transit agencies. Our findings are 

based on a self-selecting, non-representative sample of transit agencies, and thus the 

results are not generalizable to all transit agencies.

29When there is only a single source for an item, such as a bus, FTA requires transit 

agencies to conduct a cost analysis, as described in table 4.

Compliance with Federal 

Procurement Requirements

Page 19 GAO-15-676 Transit Bus Procurement
about FTA requirements. Participants in the medium urban group said 

they find a lack of potential bidders when they attempt to procure 

buses, and also have difficulty demonstrating that pricing is fair and 

reasonable, which is required by federal regulations.

• Buy America: Participants from four groups told us that the Buy

America certification requirements can be burdensome, complex, and

costly. FTA requires transit agencies procuring buses with federal

funds from FTA to certify compliance with Buy America requirements

through pre-award and post-delivery reviews of bus manufacturers.30

Participants in two discussion groups from rural and medium urban

transit agencies explained that their agencies needed consultants’

help with required pre- and post-award audits for the Buy America

certification.

• Contract Length: Participants in one small urban group told us that a

federal requirement intended to encourage competition among

manufacturers creates challenges. Specifically, the federal statutory

provision prohibits transit agencies from entering into multiyear rollingstock contracts with options to buy additional rolling stock or

replacement parts for longer than 5 years if federal funds are used.

Although FTA officials told us that the requirement is in place to

ensure that the market is fair and open, participants told us that the

restriction is burdensome; if they decide to procure new buses after

the 5th year, they must initiate the procurement process all over

again, which can be lengthy and costly.

• Joint Procurement and “Piggybacking:” While participants in some of

the groups we spoke with said piggybacking in particular is a useful

procurement tool, other participants cited challenges and limitations

associated with piggybacking. For example, one small urban agency

said that piggybacking was the only way they could procure a small

quantity of buses—such as one or two—because they did not receive

any bids in response to a request for proposal. Participants in three

30The pre-award review, to be conducted before an agency signs a procurement contract 

with a manufacturer, requires agencies to either certify that at least 60 percent of the bus’ 

components will be made in the U.S. and that final assembly of the bus will take place in 

the U.S. or obtain an FTA waiver exempting the bus from the Buy America requirements. 

The post-delivery review requires agencies to certify that either the manufacturer actually 

met these requirements for the buses procured or the procurement was subject to an FTA 

Buy America waiver.

Page 20 GAO-15-676 Transit Bus Procurement
groups from rural, small, and medium urban-transit agencies said that

the opportunities for joint procurement and piggybacking may be

limited because there is no formal mechanism to identify mutually

beneficial opportunities for joint procurement or piggybacking and the 

regulations regarding piggybacking are confusing. As a result, some

participants who had previously used piggybacking began to handle 

their own procurements. Participants in two groups told us that transit 

agencies are not generally aware of other transit agencies’ 

procurement plans, and there is no entity to formally help facilitate 

joint purchases.31 Some participants said they have learned of these

types of procurements through informal means, such as existing

relationships with other agencies or at industry conferences, and 

through representatives of bus manufacturers. In addition, even if

agencies identify piggybacking opportunities, some participants found 

the rules confusing. For example, officials in three discussion groups

(rural, small, and medium urban) were confused about whether FTA

allows agencies to participate in piggybacking options. FTA officials

told us that piggybacking options are allowed as long as an agency

unintentionally orders more buses than it requires. Transit agency

officials in two groups stated that piggybacking rules limit agencies’ 

options related to the buses to be procured. These rules allow some 

changes to the buses originally ordered that are within the general

scope of the contract—such as seat fabric or exterior paint color—but 

prohibit changes outside the scope of the contract.32 One small urban 

participant said these rules effectively prevent them from

piggybacking because the features his agency prefers to include in 

their buses—such as an extra wheel-chair securement location—are

not features most other agencies include in contracts. Instead, the 

participant said his agency prefers to conduct its own procurement so

it can get the features it needs.

31GAO previously reported on challenges faced by transit agencies in procuring transit rail 

cars. We recommended that FTA develop a process to systematically identify and 

communicate opportunities for transit agencies with similar needs to participate in joint rail 

car procurements. FTA has not yet implemented our recommendation. See GAO, Transit 

Rail: Potential Rail Car Cost-Saving Strategies Exist, GAO-10-730 (Washington, D.C.: 

June 30, 2010).

32FTA’s BPPM provides that if a change is not within scope, it is considered a cardinal 

change that is beyond the scope of the contract. There are various tests used to 

determine if a change is within scope, according to the BPPM. 

Page 21 GAO-15-676 Transit Bus Procurement
In addition to the challenges above, some transit agency officials in our 

discussion groups cited challenges that specifically affect rural, urban 

small and medium-sized agencies:

• Participants in four groups noted that the procurement process is

difficult and resource intensive. Participants in four groups (rural,

small, and medium urban) noted that smaller agencies tend to have

few or no dedicated procurement staff and lack technical, engineering,

or specification-writing expertise needed for bus procurement. Several

participants noted that the procurement process can take from 6

months to a year. Further, small agencies said that they procure

buses infrequently, such as every few years, so it is difficult for them

to become familiar with the process. In addition, these procurements

are often for 1–3 buses and sometimes generate few bids from

manufacturers.

• Participants in three groups stated that procurement training

opportunities through the NTI are not always designed to meet the

needs of smaller agencies. Some participants told us that the material

in the training courses is targeted to larger agencies, for example by

assuming a level of support staff similar to what a larger transit

agency would have. When these participants asked questions specific

to their situations, they said the course instructors were not able to

answer them. Additionally, participants in the rural group explained

that with their limited staff resources, it was difficult to spare anyone to

attend off-site training for multiple days.

Participants in all six discussion groups cited the following challenges 

stemming from changes in the transit bus industry:

• Participants in all six discussion groups said there is limited

competition to produce heavy-duty buses. Specifically, participants

told us that there are currently three heavy-duty bus manufacturers

and one that makes 60 foot buses. According to participants in one

small urban group, the limited number of heavy-duty bus

manufacturers has led to a longer delivery time (18 months) and the

price of new buses has increased faster than inflation.

• Furthermore, participants also noted a lack of vendors for vehicle

components. Specifically, participants told us that there is currently

only one engine manufacturer for heavy-duty buses that complies with

Buy America requirements. Participants in four discussion groups

stated that Buy America and DBE requirements and consolidation of

Challenges Related to Transit 

Bus Industry Changes

Page 22 GAO-15-676 Transit Bus Procurement
the industry have contributed to the lack of available vehicle 

component vendors. 

Participants in four discussion groups stated that it was a challenge to 

secure funding for transit buses. Transit agencies may use federal, state, 

and local funds to purchase or replace buses but must weigh these 

purchases against other capital and operating needs. Transit agencies 

also told us that the federal surface transportation authorizations and 

appropriations process creates year-to-year uncertainty that can be a 

challenge for long-term planning. Obtaining state or local funding to meet 

federal local match requirements was identified as a challenge by 

participants in three discussion groups. Constrained state and local 

budgets can make securing these funds difficult. We have previously 

found that some states provide limited or no state funds for rural transit, a 

process that increases the pressure on rural transit agencies to secure 

local funds.33

Participants in all six discussion groups offered ideas about possible ways 

that the federal government could address some of the procurement 

challenges they identified (see table 5).

Table 5: Transit Agencies Suggested Actions to Address Bus Procurement Challenges

Challenge area How challenge could be addressed 

Federal procurement process and 

Federal Transit Administration (FTA) 

Guidance

• Develop a national procurement schedule for transit agencies similar to a General

Services Administration (GSA) procurement schedule

• Update the Best Practices Procurement Manual (BPPM)

• Create a template for cutaway bus procurement with standardized specifications for rural

and small transit agencies

• To reduce the burden of reporting required information to the National Transit Database,

FTA allows agencies with 30 or fewer buses to report less information less frequently.

Consider raising the threshold to 75 buses

• The procurement process for small purchases—those less than $100,000—is simpler

and with fewer federal requirements than for larger purchases. Consider raising the

threshold to $150,000

• Consider shifting the responsibility for certification for Buy America to manufacturers

33GAO, Public Transportation: Federal Role Key to Rural and Tribal Transit. GAO-14-589, 

(Washington, D.C.: June 24, 2014)

Funding Challenges

Transit Agencies’ Access 

to Federal Sources of 

Supply Could Address 

Many Challenges

Page 23 GAO-15-676 Transit Bus Procurement
Challenge area How challenge could be addressed 

Piggybacking/Joint procurement • Consider an e-commerce/ electronic clearinghouse as an effective portal for information 

exchange to help facilitate joint procurement and piggybacking opportunities 

Procurement training • Provide procurement training tailored for transit agency size (large v. small) and types of 

buses being purchased

• Offer flexibility in training options such as via webinar or WebEx 

Source: GAO analysis of discussions with transit agencies. | GAO-15-676

Participants in four discussion groups from rural, urban-medium, and 

urban small-transit agencies suggested that FTA develop a national 

procurement schedule similar to that of the GSA’s. GSA establishes 

long-term government-wide contracts for millions of products with 

commercial firms and provides federal agencies and others with access 

to these sources of supply.34 According to GSA officials, GSA negotiates 

volume discounted prices and its policies and procedures are designed to 

ensure that vendors comply with federal procurement requirements.

Transit agencies are not permitted to purchase through GSA because 

they are not federal agencies or other authorized users. In the past, 

entities other than federal agencies have been authorized to purchase 

items through GSA. For example, states and units of local government

have been authorized pursuant to statute to purchase equipment, 

including vehicles, in support of counter-drug, homeland security, and 

emergency response activities.35 Purchasing through GSA could allow 

for more streamlined procurement for transit agencies and potentially cost 

savings because GSA would be responsible for ensuring that any bus 

procured through GSA complies with federal and FTA requirements. As a 

result, transit agency officials would not need to develop their own 

specifications or procurement requirements and would not be required to 

ensure the buses comply with the Buy America certification. In addition, 

GSA officials noted that they are usually able to secure very good pricing 

because the purchasing power of the federal government results in 

volume discounts. For example, they said the price of vehicles they 

procure averages 17 percent below the dealer invoice price. Officials said 

these prices compare favorably to prices paid by other large capacity 

vehicle purchasers, such as rental car companies. According to FTA and 

GSA officials, both agencies have explored the feasibility of establishing a 

process to allow transit agencies to procure buses through GSA and both 

34Schedules consist of a group of contracts for a category of items, such as vehicles or 

furniture, from which authorized users place orders directly with vendors.

3510 U.S.C. § 381(c).

Page 24 GAO-15-676 Transit Bus Procurement

 
agencies support the concept. GSA officials said they have the capability 

to provide a streamlined procurement process to transit agencies that 

complies with federal and FTA requirements. However, GSA officials told 

us that Congress would have to authorize transit agencies to purchase 

through GSA. Neither agency has submitted a legislative proposal to 

Congress.

Buses are an important part of public transit. Transit agencies maintain a 

fleet of buses to provide transit service. In order to do so, transit agencies 

purchase buses to either replace their existing fleet or expand service. In 

2013, transit agencies used over $1 billion of federal funding to purchase 

buses. While some large agencies purchase buses each year and have a 

dedicated procurement staff for doing so, other transit agencies purchase 

buses only occasionally. Moreover, participants in our discussion groups 

explained that smaller agencies tend to have few or no dedicated 

procurement staff and lack expertise needed for bus procurement. Thus, 

they are challenged to knowledgably and efficiently complete all of the 

steps required to procure buses with FTA funds. Therefore, FTA guidance 

and assistance in helping transit agencies procure buses is important.

While this guidance is widely available on-line, some FTA guidance is out 

of date and refers to incorrect regulations and information. As a result, 

transit agencies may not be able to purchase buses as efficiently as 

possible, as they may need to spend additional time researching the 

guidance or they may have to repeat a required step in the procurement 

process.

While transit agencies face several challenges in procuring buses, many 

of these challenges could be alleviated if agencies were allowed to 

purchase buses through GSA. By purchasing through GSA, agencies 

would know that they are getting a bus that complies with federal 

procurement requirements. In addition, transit agency staff—particularly 

those at smaller agencies who may lack procurement expertise—would 

be able purchase buses more easily and efficiently. Specified non-federal 

entities have been authorized to purchase through GSA in the past.

Specifically, states and local governments have been authorized under 

federal statute to purchase through GSA for emergency equipment and 

homeland security-related items, among other things. Transit agencies 

could experience cost savings if they were able to purchase buses 

through GSA, as agencies will not need to spend as much time on the 

procurement process. Allowing transit agencies to make such purchases 

could also lead to cost savings because GSA staff have expertise in price 

negotiation and they have procured vehicles that, given the volume of 

purchases, are on average 17 percent below the invoice price. Ultimately, 

Conclusions

Page 25 GAO-15-676 Transit Bus Procurement
the efficient purchasing of buses may also save money for the federal 

government, as transit agencies may require fewer federal funds to 

operate their transit programs.

To ensure that transit agencies have appropriate and current guidance to 

assist them when procuring transit buses, we recommend that the 

Administrator of FTA update its Best Practices Procurement Manual and 

assess its other related guidance identified in this report and update that 

guidance as needed.

To provide a more efficient and cost-effective way for transit agencies to 

procure transit buses while complying with federal procurement 

requirements, we recommend that the Administrator of FTA, in 

conjunction with the Administrator of the General Services Administration, 

submit a legislative proposal to Congress that would authorize transit 

agencies that are recipients of FTA grants to access GSA sources of 

supply for the purchase of transit buses.

We provided a draft of this report to the Department of Transportation and 

the General Services Administration for review and comment prior to 

finalizing the report. The Department of Transportation provided written 

comments, which are reprinted in appendix II, and agreed with our 

recommendations. The General Services Administration provided written 

comments, which are reprinted in appendix III, and agreed with our 

recommendations. GSA also provided technical comments on the draft 

that we incorporated as appropriate.

As agreed with your office, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the Department of 

Transportation and the General Services Administration. In addition, the 

report is available at no charge on the GAO website at 

http://www.gao.gov.

Recommendations for 

Executive Action

Agency Comments

Page 26 GAO-15-676 Transit Bus Procurement
If you or your staff have any questions about this report, please contact 

me at (202) 512-2834 or wised@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. GAO staff who made key contributions to this report 

are listed in appendix IV.

David J. Wise

Director

Physical Infrastructure Issues

Page 27 GAO-15-676 Transit Bus Procurement
Appendix I: Objectives, Scope, and 

Methodology

The objectives of this report were to examine (1) the characteristics of the 

U.S. transit bus market, including manufacturing capacity and the 

production of new buses; (2) the federal role in transit bus procurement, 

including funding, procurement requirements, and oversight and 

guidance; and, (3) the views of selected transit agencies on challenges, if 

any, that they face when procuring new buses and any federal actions 

that could address those challenges.

To address all three of our objectives, we reviewed relevant literature 

from the Federal Transit Administration (FTA), industry, and academia 

and interviewed officials representing FTA; General Services 

Administration (GSA); American Public Transportation Association 

(APTA); Community Transportation Association of America (CTAA); 

transit agencies; and bus manufacturers.

To determine the characteristics of the U.S. transit bus market, we 

reviewed FTA’s Annual Statistical Summaries from fiscal years 2009 to 

2013, the latest year data are available, and American Recovery and 

Reinvestment Act (Recovery Act) Statistical Summaries. We reviewed 

data from the National Transit Database (NTD) for the years 2004 and 

2013 to evaluate changes to transit agencies’ bus fleets over time. We 

chose those years because 2013 was the latest data available and 2004 

represented data 10 years earlier, which we believe to be sufficient to 

show any changes in the industry. We included vehicles used for fixedroute, demand-response, and deviated-fixed route services and excluded 

vehicles used for other services—commuter buses, inter-city buses, 

trolley or specialty buses, vanpool vans, and automobiles—because 

these vehicles represent a small portion of all vehicles used. To assess 

the reliability of data from NTD, we interviewed officials about data quality 

control procedures and reviewed relevant documentation and determined 

that the data were sufficiently reliable for the purposes of this report.

We categorized buses generally and for the purposes of this report as 

heavy-duty or cutaway. FTA also uses these categories as well as three 

others, which we did not include for ease of reporting and because the 

heavy-duty and cutaway categories encompassed over 95 percent of 

transit buses, according to FTA in 2006.1

1

Non-Rail Vehicle Market Viability Study, FTA, January 19, 2006 

Appendix I: Objectives, Scope, and 

Methodology

Page 28 GAO-15-676 Transit Bus Procurement

 
Appendix I: Objectives, Scope, and 

Methodology

To identify bus manufacturers, the number of buses produced, and any 

changes over time, we reviewed NTD urban vehicle inventory reports 

from 2004 and 2013, the most recent year data are available. Transit 

agencies receiving federal grant funding from FTA are required to report 

operating information to NTD, including detailed information on their bus 

fleet.2 For each year, we limited the data to reported vehicles that are 1) 

used to provide bus or demand response transportation services; 2) 

shown as bus and articulated bus vehicle types; and 3) within a 5-year 

model range of the year of the data report (2004 to 2000 model years for 

the 2004 data and 2013 to 2009 for the 2013 data). We further grouped 

the data set by vehicle length: generally, vehicles 30 feet in length or 

greater (heavy-duty buses) and vehicles less than 30 feet (cutaway 

buses). For each group, we identified the number of vehicles from each 

manufacturer and calculated an approximate market share by dividing 

that number by the total number of vehicles.

Within the data set, some records included missing data, particularly for 

manufacturer’s name and for model year. We excluded these records 

from our analysis. The number of vehicles associated with missing data 

records represented 11 percent of the total number of vehicles in the 

2004 data and 10 percent in the 2013 data. We also manually reviewed 

all records and identified some information that appeared to be incorrect 

based on other data in the record. Most commonly, vehicles were 

categorized as a vehicle type van when other evidence, such as the 

manufacturer name, indicated they should be categorized as a bus.3 We 

included these vehicles in our analysis. In more limited cases, vehicles 

were categorized as a bus when other evidence indicated they should be 

categorized as a van. We excluded these vehicles from our analysis. The 

net change in vehicles because of these changes represented less than 3

percent of the total number of vehicles in the 2004 and 2013 analyses.

To determine the federal government’s role in procurement of transit 

buses—including funding, oversight and guidance, and procurement 

requirements—we reviewed applicable federal law, regulations, guidance, 

2

For this analysis, we used data reported by transit agencies that receive Urbanized Area 

(49 U.S.C. § 5307) grants. Data reported by agencies that receive Rural Area (49 U.S.C. §

5311) grants do not include as much detail as data reported by urban recipients. For 

example, rural agencies do not report vehicle manufacturers. 

3

NTD’s 2013 Urban Module Reporting Manual states that cutaway vehicles should be 

classified as buses.

Page 29 GAO-15-676 Transit Bus Procurement

 
Appendix I: Objectives, Scope, and 

Methodology

and FTA documentations on federal grant programs including FTA’s 

Master Agreement; Circular 4220.1E; Circular 4220.1F; Administrator’s 

Policy Letters; Best Practices Procurement Manual; Triennial, State 

Management, and Procurement Systems reviews; and APTA’s Standard 

Bus Procurement Guidelines.

To identify any challenges transit agencies face when procuring transit 

buses and federal actions that could address those challenges, we 

conducted six discussion groups with 36 rural and urban transit agencies.

We recruited discussion group participants through mass e-mail 

solicitation to approximately 1,900 transit agencies that report to the NTD. 

In our email, we requested participation from transit agencies that had 

received funding from FTA since 2009 and that were interested in 

speaking with us on challenges they faced regarding transit bus 

procurement. We also solicited the help of three national transit industry 

groups to send our solicitation e-mail to rural transit agencies— APTA, 

CTAA, and American Association of State Highway and Transportation 

Officials (AASHTO) —that work closely with transit and state 

transportation agencies.

For each volunteer received, we identified whether it was an urban or 

rural recipient, the number of buses each reported, and their NTD 

identification number to identify the FTA region. From our pool of 

volunteers, we recruited participants based on a range of criteria, 

including: agencies that purchase and operate buses; a mix of urban and 

rural FTA grantees; a mix of the size of bus fleet and type of bus used; 

and geographic diversity of various FTA regions. In order to include a 

wide geographical distribution of participating agencies, we conducted all 

six discussion groups remotely via WebEX. We established three size 

categories to ensure we received input from a range of sizes of urban 

agencies: large (more than 100 buses); medium (50–100 buses), and 

small (less than 50 buses). We did not group rural agencies into size 

categories because 97 percent of these agencies have less than 50

buses. After grouping the full list of volunteers, we allocated transit 

agency participants into six homogeneous groups. Our six discussion 

groups included the following:

• two groups of rural transit agencies (total of 9 agencies);

• two groups of small, urban transit agencies (total of 13 agencies);

Page 30 GAO-15-676 Transit Bus Procurement
Appendix I: Objectives, Scope, and 

Methodology

• one group of medium, urban transit agencies (total of 6 agencies); 

and

• one group of large, urban transit agencies (total of 8 agencies).

In order to ensure the appropriateness of the questions for the 

discussions, we pretested our moderator guide with three transit agencies 

and modified the guide based on those pretest results as needed. We 

conducted four of the six groups with rural and small urban transit 

agencies due to the proportion of rural and small agencies in the total 

population of transit agencies. As we were unable to accommodate all 

volunteers with our discussion groups, we gave the non-selected 

volunteers the opportunity to send us written responses to the discussion 

questions; nine transit agencies provided written responses about the 

challenges they faced procuring transit buses. Based on our findings from 

the discussion groups, written responses and a review of literature, we 

summarized the challenges related to bus procurement into general 

categories. While these challenges were consistently identified across 

agencies we spoke with, our findings are based on a self-selecting, nonrepresentative sample of transit agencies, and thus the results are not 

generalizable to all transit agencies.

We conducted this performance audit from October 2014 to September

2015 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

Page 31 GAO-15-676 Transit Bus Procurement
Appendix II: Comments from the Department Appendix II: Comments from of Transportation the Department 

of Transportation

Page 32 GAO-15-676 Transit Bus Procurement
Appendix III: Comments from the General Appendix III: Comments Services Administration from the General 

Services Administration

Page 33 GAO-15-676 Transit Bus Procurement
Appendix IV: GAO Contact and Staff 

Acknowledgments

David J. Wise, (202) 512-2834, or wised@gao.gov

In addition to the contact named above, John W. Shumann (Assistant 

Director), Melissa Bodeau, Timothy Guinane, Geoffrey Hamilton, Rosa 

Leung, Erik Shive, Travis Thomson, Elizabeth Wood and William T. 

Woods made key contributions to this report.

Appendix IV: GAO Contact and Staff 

Acknowledgments

GAO Contact 

Staff 

Acknowledgments

(542238) Page 34 GAO-15-676 Transit Bus Procurement
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