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[Federal Register Volume 89, Number 229 (Wednesday, November 27, 2024)]
[Notices]
[Pages 93824-93827]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-27645]

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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket No. FTA-2024-0015]

Notice of Availability of Proposed Circular Updates and Request 
for Comments

AGENCY: Federal Transit Administration (FTA), Department of 
Transportation (DOT).

ACTION: Notice; request for comments.

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SUMMARY: The Federal Transit Administration (FTA) has placed in the 
docket and on its website proposed guidance in the form of an updated 
circular pertaining to procurements financed in whole or part with 
Federal assistance awarded by FTA through grants or cooperative 
agreements (i.e., ``third party'' procurements). This updated circular 
would cancel and replace Circular FTA C 4220.1F, most recently revised 
March 18, 2013. The proposed updates reflect statutory and regulatory 
changes that have occurred since the last update, as well as providing 
additional non-binding guidance. By this notice, FTA invites public 
comment on its proposed circular, ``Third Party Contracting Guidance.''

DATES: Comments must be submitted by December 27, 2024. Late-filed 
comments will be considered to the extent practicable.

ADDRESSES: Please submit your comments by only one of the following 
methods, identifying your submission by docket number FTA-2024-0015. 
All electronic submissions must be made to the U.S. Government 
electronic site at https://www.regulations.gov/.
    (1) Federal eRulemaking Portal: Go to https://www.regulations.gov/ 
and follow the online instructions for submitting comments.
    (2) Mail: Docket Management Facility: U.S. Department of 
Transportation, 1200 New Jersey Avenue SE, West Building, Ground Floor, 
Room W12-140, Washington, DC 20590-0001.
    (3) Hand Delivery or Courier: West Building Ground Floor, Room W12-
140, 1200 New Jersey Avenue SE, between 9 a.m. and 5 p.m. Eastern time, 
Monday through Friday, except Federal holidays.
    (4) Fax: 202-366-7951.
    Instructions: You must include the agency name (Federal Transit 
Administration) and docket number (FTA-2024-0015) at the beginning of 
your comments. Submit two copies of your comments if you submit them by 
mail. For confirmation that FTA received your comments, include a self-
addressed stamped postcard. Note that all comments received will be 
posted without change to https://www.regulations.gov/ including any 
personal information provided and will be available to internet users. 
For information on DOT's compliance with the Privacy Act, please visit 
https://www.transportation.gov/privacy.
    Docket: For access to the docket to read background documents and 
comments received, go to https://www.regulations.gov/ at any time or to 
the U.S. Department of Transportation, 1200 New Jersey Avenue SE, 
Docket Operations, M-30, West Building Ground Floor, Room W12-140, 
Washington, DC 20590 between 9 a.m. and 5 p.m. Eastern Time, Monday 
through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: For third party contracting questions, 
contact Tara Murphy, Division Chief, Office of Administration, Federal 
Transit Administration, 1200 New Jersey Ave. SE, Room E41-311, 
Washington, DC 20590, phone: (202) 366-5647 or email 
[email protected]. For legal questions, Christopher Hall, Office of 
Chief Counsel, same address, Room E56-312, phone (202) 941-9595 or 
email [email protected].

SUPPLEMENTARY INFORMATION: 

Overview

    FTA proposes an update to its Third Party Contracting Guidance 
Circular, which would replace and cancel the current iteration dated 
March 18, 2013 (C 4220.1F). The proposed circular would update FTA's 
guidance for

[[Page 93825]]

recipient procurements financed with FTA assistance (third party 
contracts) to reflect current statutory and regulatory text, including 
the Infrastructure Investment and Jobs Act (IIJA), Public Law 117-582, 
signed into law on November 15, 2021; the Fixing America's Surface 
Transportation (FAST) Act, Public Law 114-94, signed into law on 
December 4, 2015; and new or updated administrative requirements from 2 
CFR parts 200 and 1201.
    This notice does not include the proposed circular; electronic 
versions of the proposed circular may be found on the docket at https://www.regulations.gov, docket number FTA-2024-0015, or on FTA's website 
at https://www.transit.dot.gov.

Chapter-By-Chapter Summaries

    Throughout the proposed circular, revisions are proposed that would 
clarify or reorganize sections for improved readability, without 
substantively altering guidance from the current Circular 4220.1F. The 
proposed circular also updates citations to authority and adds 
citations to improve transparency about the sources of requirements. 
Proposed changes that would not have a substantive effect are not 
necessarily called out in this notice.

Chapter I

    In Chapter I, FTA proposes to revise several key definitions, 
including ``Approval, Authorization, Concurrence, Waiver,'' ``Best 
Value,'' ``Change Order,'' ``Common Grant Rules,'' ``Constructive 
Change,'' ``Contract,'' ``Design-Build Project,'' ``Governmental 
Recipient,'' ``Joint Procurement,'' ``Non-Governmental Recipient,'' 
``Recipient,'' ``State or Local Government Purchasing Schedule or 
Purchasing Contract,'' ``Third Party Contract,'' and ``Value 
Engineering.'' In most cases, revisions were to simplify definitions, 
or align definitions with existing statute or regulations. 
Additionally, this chapter would introduce new definitions, such as 
``Alternate Contracting Method (ACM),'' ``Progressive Design-Build 
(PDB),'' and ``Public-Private Partnership (P3).''
    FTA also proposes to update language in this chapter describing the 
Federal Transit Administration (FTA) and the roles of FTA's 
headquarters, regional, and metropolitan offices in supporting public 
transportation agencies.

Chapter II

    FTA proposes to revise Chapter II to clarify the circular's effect 
and applicability, including by distinguishing between binding 
requirements (e.g., described using ``must'' or ``shall'') and non-
binding recommendations (e.g., described using ``may'' or ``should''). 
Throughout the proposed circular, revisions would take care to 
distinguish between the mandatory and the advisory. The proposed 
revisions would specify how the circular applies to different entities, 
including States, Tribes, non-State recipients, and third party 
contractors, and would simplify the Project Types and Third Party 
Contracts sections under the Applicability of the Circular. Updates 
would consolidate or remove outdated and inapplicable sections from 
this Chapter, such as those on ``Other Agreement'' Assistance, Art, the 
Over the Road Bus Accessibility Program, and certain Operations and 
Preventive Maintenance contracts. These sections are redundant or 
otherwise no longer relevant due to program changes.
    Additionally, proposed changes would expand the descriptions of 
available project delivery options for recipients by adding 
Construction Manager/General Contractor (CM/GC), Full Delivery or 
Program Management, and Progressive Design-Build (PDB) to the list of 
project delivery systems. Proposed revisions to Chapter II would also 
add guidance on Alternative Contracting Methods (ACMs) regarding PDB 
and P3. Finally, the proposed updates would revise the Federal Laws and 
Regulations section and the State and Local Laws and Regulations 
section to update the description of the relationships among Federal 
and State laws, regulations, and the FTA grant agreements and Master 
Agreement.

Chapter III

    FTA proposes amendments to Chapter III that would update guidance 
on recipients' responsibilities, with particular emphasis on Written 
Standards of Conduct to address Gifts and Violations, along with new 
guidance on Organizational Conflicts, to reflect current Federal 
regulations. Similarly, the proposed changes would update guidance on 
Self-Certification and Third Party Contracting Capacity to clarify 
FTA's use of certifications and describe existing practice and 
procedures at FTA. Proposed revisions to Adequate Third Party Contract 
Provisions, Industry Contracts, Record Keeping, Procurement History, 
Procurement Method, Contract Type, and Contractor Selection would 
improve clarity, update citations, and bring them into alignment with 
current Federal regulations.
    Proposed revisions to Chapter III would also incorporate new 
guidance on Constructive Changes, update guidance on Access to Records, 
and remove Special Notification Requirements to align with current 
Federal regulations. Additionally, proposed changes would update 
guidance regarding Use of Technology/Electronic Commerce and Electronic 
Bidding and Reverse Auctions.
    To address the industry's growing need for control and access to 
data, as contracts increasingly involve data collection, new guidance 
would be added on Data Rights. This guidance would cover aspects such 
as data collection, ownership, and usage, with specific provisions on 
negotiating data rights to secure adequate licenses for federally 
funded data. It would also ensure the clear definition of data rights, 
negotiation of data access rights to meet Federal objectives, and 
inclusion of appropriate clauses.
    Proposed updates would update guidance on Audits to align with 
updated Federal regulations.
    To replace the current circular's description of protests and 
appeals to FTA (see below, under Chapter VII), Chapter III would 
include a new section describing FTA's role in the recipient's 
procurement disputes and FTA's interest in settlements impacting 
Federal funds.

Chapter IV

    In Chapter IV, FTA proposes to clarify the Determining the 
Recipient's Needs section, including guidance on Necessity, Unnecessary 
Reserves and Spare Ratios, Acquisition for Assignment Purposes 
(``piggybacking''), Changes in the Recipient's Needs, and Joint 
Procurements, as well as State or Local Government Purchasing Schedules 
or Purchasing Contracts, in accordance with current FTA guidance and 
purchasing authorities and to reduce duplication of other sections of 
the circular. Guidance on Joint Procurements would be clarified, while 
Small Procurements and Lease-versus-Purchase guidance would be updated 
to align with existing Federal regulation. New guidance to reflect 
innovative procurement flexibilities introduced by the FAST Act would 
be introduced on Leases of Rolling Stock and Related Equipment, Leases 
of Removable Power Sources, reporting requirements, and lease 
specifications.
    Additional updates would clarify Federal requirements affecting 
recipient acquisitions. Guidance on Responsibility Requirements and DOT 
Debarment and Suspension would be updated, with references to the GSA 
Excluded Parties List replaced by the System for Award Management 
(SAM). Updates to Conflicts of Interest, and Lobbying Certification and 
Disclosure

[[Page 93826]]

would improve clarity and reflect current Federal regulations and FTA 
policy.
    The Federal Civil Rights Laws and Regulations section would be 
renamed Civil Rights and moved and consolidated with other civil 
rights-related sections for better flow. Updates within Administrative 
Requirements would include minor clarifications for accuracy. Under 
Cost Principles, unnecessary guidance on Governmental Entities, 
Educational Institutions, Non-Profit Entities, and For-Profit Entities 
would be removed because these entities all apply the same cost 
principles under FTA's policy.
    The Payments Provision section would be updated with the latest FTA 
guidance on Advance Payments and Progress Payments.
    Wage and Hour Requirements under Socio-Economic Requirements would 
be renamed the Contract Work and Hours and Safety Standards Act, to be 
consistent with regulation, and the information therein would be 
updated to reflect the most current description in Federal regulation. 
Fair Labor Standards guidance would be similarly updated.
    Under Civil Rights, guidance would be reorganized for flow, and new 
guidance would address changes in the law regarding nondiscrimination 
on the basis of sexual orientation and gender since the last circular 
update.
    The Targeted Contracting section would be updated. The description 
of U.S. DOT's Disadvantaged Business Enterprise (DBE) rule would be 
updated to reflect changes to that rule that took effect in 2024. The 
section on Small and Disadvantaged Business Enterprises and HUBZones 
would be expanded in accordance with existing Federal regulation.
    Under Environmental Protection, guidance on the Clean Air Act, the 
Federal Water Pollution Control Act, and Recycled Products would be 
updated to reflect current Federal regulations. Energy Conservation 
would be updated to refer to current regulation. Preference for U.S. 
Property--Buy America would be updated to add reference to the Build 
America, Buy America Act that became law in 2021, the addition of 
construction materials to the list of products that must be 
manufactured in the United States on an FTA funded project, and 
reference to 2 CFR part 184, which implements the new requirement for 
construction materials. Guidance on Shipments by Ocean Vessel would be 
clarified.
    Under Technical Restrictions, updates would remove unnecessary 
Metric Measurements guidance, because 2 CFR part 200 does not require 
this.
    Under Rolling Stock--Special Requirements, guidance on Transit 
Vehicle Manufacturer Compliance with DBE Requirements would expand to 
include guidance on project-specific DBE participation goals. Updates 
on Minimum Useful Life and Spare Ratios would make clarifications and 
align with FTA's latest guidance. Outdated guidance on Air Pollution 
and Fuel Economy would be removed. Minor corrections and 
simplifications would be made to Preaward and Post Delivery Review, Bus 
Testing, In-State Dealers, and Rolling Stock Contract Options.
    The Art section would be substantially removed because art no 
longer is an eligible expense under FTA's statute.
    Guidance on Architectural and Engineering (A&E) Services would 
include updates on Qualifications-Based Selection, renamed from 
Qualifications-Based Requirements, to reorganize and clarify without 
substantive changes. Related updates for Construction, Service 
Purposes, Equivalent State Law, and Indirect Cost Rates would enhance 
clarity.
    Under Construction--Special Requirements, guidance on Bonding, Bid 
Guarantees, Performance Bonds, Payment Bonds, Reduced Bonding, and 
Excessive Bonding would be updated to refer to current regulations and 
updated URLs without substantive change. Seismic Safety, Value 
Engineering, Equal Employment Opportunity, Davis-Bacon Wages, Anti-
Kickback, Contract Work Hours and Safety Standards, and Labor 
Neutrality would receive non-substantive updates for clarity and 
regulatory alignment, and a new section on veterans' employment would 
be added in accordance with FTA's existing statute. The section on 
Preference for U.S. Property--Buy America would be consolidated earlier 
in the chapter. Accessibility guidance would also be relocated for 
clarity.
    The Research, Development, Demonstration, Deployment, and Special 
Studies--Special Requirements section would include updates to Patent 
Rights, Rights in Data, Export Control, Protection of Human Subjects, 
and Protection of Animals to cite to current Federal regulations and 
FTA's Master Agreement where appropriate.
    Finally, updates in Audit Services would align with current Federal 
regulations and dollar thresholds, with revisions to the Single Audit 
Act, Organizational Conflicts of Interest, Eligibility Costs, and 
verification processes. The section on Obtaining Indirect Cost Rates 
would be simplified and references to current Federal regulation would 
be added.

Chapter V

    Chapter V would update the Force Account and Shared Use sections 
for clarity to refer to FTA's latest guidance on the subjects. Under 
Joint Procurement, guidance would be clarified. Updates to the guidance 
on State or Local Government Purchasing Schedules or Purchasing 
Contracts would be clarified, and new guidance would be provided on 
Interstate Purchasing of Rolling Stock and Related Equipment to account 
for changes to rolling stock purchasing authorities. New guidance would 
be added on Interstate Purchasing Schedules and guidance on 
Intergovernmental Agreements would be updated to reflect new 
authorities introduced by the FAST Act for rolling stock procurements.
    New guidance on Cooperative Procurement of Rolling Stock and 
Related Equipment would be added to reflect new FAST Act authorities.
    Guidance on Competition and Price Reasonableness would be revised 
to align with current Federal regulations.
    The Existing Contracts (Assignments) section would be reorganized 
and streamlined for clarity. Information on Alternatives to Assigned 
Contract Rights, Joint Procurements, and Intergovernmental Procurements 
would be removed and consolidated with the sections elsewhere in the 
circular dealing with those topics. Guidance related to Impermissible 
Actions, Improper Contract Expansion and Improper Cardinal Changes 
would be updated to improve clarity. Sections on Tests, Rolling Stock, 
and Federal Procurement Standards would be removed from this section 
and consolidated with sections elsewhere in this circular dealing with 
those topics.

Chapter VI

    For Chapter VI, the Competition Required section would incorporate 
changes to more closely reflect existing Federal regulations. The 
subsection on Unsolicited Proposals would be reorganized for flow 
without substantive change. Prequalification guidance would be updated 
to match current regulation, adding Objective Factors and refining 
sections on Currentness (formerly Lists), Sources, and Qualification 
Periods.
    Solicitation Requirements and Restrictions would also be updated to 
align with Federal regulations, including clarifications in the 
subsections What to Include and Brand Name or Equal. Prohibitions would 
be revised, with updates on Excessive Qualifications, Unnecessary 
Experience, Improper Prequalification, Retainer

[[Page 93827]]

Contracts, Excessive Bonding, Brand Name Only, and Geographic 
Restrictions (formerly In-State or Local Geographic Restrictions). 
Regarding geographic restrictions, changes since the last circular 
update include authority in IIJA to apply local hiring targets to 
construction projects, and the removal of a former prohibition against 
geographic restrictions from 2 CFR part 200. A reference to Self-
Dealing and Bid Rigging would be added to the list of prohibited 
restrictions on competition.
    The section on Organizational Conflicts of Interest would be 
revised to include new guidance on the Recipient's Conflicts in 
accordance with current regulation. Updates to Contractor's Conflicts 
would include expanded guidance on Biased Ground Rules in accordance 
with existing regulation.
    The Prohibited or Restricted Contract Types section would be 
simplified, with clarifications on Cost Plus a Percentage of Cost--
Prohibited, Percentage of Construction Cost--Prohibited, and Time and 
Materials--Restricted. Subsections on When to Use and Firm Ceiling 
Price would be removed as unnecessary.
    Methods of Procurement would be revised to reflect updated Federal 
regulations, including a new section on Self-Certified Micro-Purchase 
Thresholds, which were introduced by a new provision in 2 CFR part 200 
that took effect in 2024. Under the new provision, a recipient may set 
for itself a micro-purchase threshold that is higher than the Federal 
micro-purchase threshold. Procedures, including Distribution (formerly 
Competition) and Documentation, would be clarified, and the Small 
Purchases subsection would be renamed Simplified Acquisitions for 
accuracy, regulatory alignment, and to avoid confusion with FTA's 
unrelated ``small purchases'' Buy America waiver. The Simplified 
Acquisitions section would be updated to align with the current 
regulations, including updates to Competition and Documentation.
    Sealed Bids (Formal Advertising) would undergo updates to align 
with current Federal regulations and simplify guidance, with specific 
clarifications in When Appropriate, Fixed Price Contract, Discussions 
Unnecessary, and Procurement Procedures.
    Competitive Proposals (Request for Proposals) would be updated for 
regulatory consistency, with clarification in When Appropriate and 
Discussion Expected. Procurement Procedures would see updates in Notice 
(formerly Publicity), Written Procedures (formerly Evaluation Method), 
Price and Other Factors, and the absorption of Best Value into Price 
and Other Factors.
    The section on Two-Step Procurement Procedures would receive 
additional guidance and clarifications.
    Guidance on Architectural and Engineering (A&E) Services and Other 
Services would be updated for clarity, and a new statement would be 
added to make clear that Multiple Award Indefinite-Delivery A&E 
Contracts are permissible.
    Information on Design-Bid-Build (DBB) would be incorporated into a 
new section on Mixed A&E-Construction Contracts, covering both DBB and 
Progressive Design-Build (PDB). The Procurement Method section would be 
updated, with Construction Predominant, Design Services Predominant, 
and Selection Processes sections absorbed into Procurement Method for 
streamlined guidance.
    The Other Than Full and Open Competition section would be revised 
to more closely follow Federal regulations. Guidance on Micro-
Purchases, Sole Source, Unsolicited Proposals, and Restricted Data 
Rights would be updated for clarity. The Exigency or Emergency section 
would be clarified, with Unusual and Compelling Urgency absorbed under 
Exigency or Emergency. The significantly outdated paragraph about 
Associated Capital Maintenance Item Exception would be removed.
    Updates would clarify guidance on Cardinal Changes, including 
revised guidance on when cardinal changes impair competition and how to 
recognize cardinal changes that impair competition.
    Eligible Costs would be updated to align with the current Federal 
regulation and FTA policy in its Master Agreement. The section on 
Adjustments to Project Costs would be removed as unnecessary.
    Cost Analysis and Price Analysis would receive minor revisions for 
clarity and organization, and the sentence on Federal cost principles 
would be removed as redundant with the following subsection, Guidance 
on Cost and Price Analysis.
    Guidance on Evaluations and Contract Award would be updated with 
minor changes for clarity, and a new information on disqualifying 
offerors with recent Tax Liability or Felony Convictions.

Chapter VII

    Chapter VII in Circular 4220.1F deals with protests, changes, 
disputes, and appeals of the recipient's procurement decisions to FTA. 
The proposed circular would eliminate Chapter VII and replace it with a 
new paragraph in proposed Chapter III on Recipient Responsibilities and 
FTA's Role in Procurement Disputes. That paragraph would restate the 
current regulation, which commits procurement decisions to the 
discretion of the recipient and states that FTA will not substitute its 
judgment for that of the recipient unless the matter is primarily a 
Federal concern. It also would state FTA's interest in settlements of 
procurement disputes that would commit Federal funds or the proceeds of 
procurement disputes arising from federally funded procurements.

Appendices

    FTA proposes to revise the appendices of the circular to improve 
accuracy, accessibility, and ensure alignment with current best 
practices. Specifically, Appendix A, References, would be revised to 
reflect sources incorporated in this version. Appendix B, FTA Regional 
and Metropolitan Office Contact Information, and Appendix C, Third 
Party Contracting Checklist, would be removed to streamline the 
document and focus on core guidance. Additionally, Appendix D, 
Provisions, Certifications, Reports, Forms, and Other--Matrices, would 
be removed to enable more timely updates to this information on the FTA 
website.

Closing

    After a review and consideration of the comments provided on the 
updates proposed, FTA will publish the updated Third Party Contracting 
Guidance Circular (C 4220.1G) on its website and will announce the 
availability of the updated circular and the response to comments in 
the Federal Register.

Veronica Vanterpool,
Deputy Administrator.
[FR Doc. 2024-27645 Filed 11-26-24; 8:45 am]
BILLING CODE 4910-57-P
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