4838 Federal Register / Vol. 90, No. 10 / Thursday, January 16, 2025 / Notices 

CSX states that the Trip Optimizer 

product is an energy management 

system installed on locomotives that is 

used by the train’s operator to improve 

the energy efficiency of train operations. 

CSX goes on to state that TO Air Brake 

Control is an expansion of the Trip 

Optimizer product that was initially 

deployed by CSX starting in 2008. CSX 

indicates that TO Air Brake Control 

functionality is designed to increase the 

number of miles of automatic operation 

and thereby decrease fuel consumption 

and the emissions output from all 

locomotives in the train. CSX also 

indicates that a train equipped with TO 

Air Brake Control will continue to 

operate under the supervision of a 

qualified train crew, who are required to 

assume control of the train and operate 

in manual mode, when necessary, and 

to retain overall responsibility for the 

safe operation of the train. 

Interested parties are invited to 

comment on CSX’s PSP by submitting 

comments to the electronic docket. 

Please refer to the ADDRESSES section 

above for guidance on how to submit 

comments to the electronic docket. 

Issued in Washington, DC. 

John Karl Alexy, 

Associate Administrator for Railroad Safety, 

Chief Safety Officer. 

[FR Doc. 2025–00862 Filed 1–15–25; 8:45 am] 

BILLING CODE 4910–06–P 

DEPARTMENT OF TRANSPORTATION 

Federal Transit Administration 

[Docket No. FTA–2024–0015] 

Third Party Contracting Guidance 

AGENCY: Federal Transit Administration 

(FTA), Department of Transportation 

(DOT). 

ACTION: Notice of availability of final 

circular and response to comments. 

SUMMARY: The Federal Transit 

Administration (FTA) has made 

available on its website the final 

updated Third-Party Contracting 

Guidance Circular (C 4220.1G). The 

updated circular reflects statutory and 

regulatory changes that have occurred 

since the last update, provides 

additional non-binding guidance, and 

supersedes the previous Third-Party 

Contracting Guidance Circular C 

4220.1F. This notice responds to the 

comments FTA received on the 

proposed circular, which was published 

in the Federal Register on November 27, 

2024. 

DATES: The applicable date of this 

circular is February 18, 2025. 

ADDRESSES: One may view the 

comments at docket number FTA–2024– 

0015. For access to the docket, please 

visit https://www.regulations.gov or the 

Docket Operations office located in the 

West Building of the United States 

Department of Transportation, Room 

W12–140, 1200 New Jersey Avenue SE, 

Washington, DC 20590, between 9 a.m. 

and 5 p.m. Monday through Friday. 

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 tara.murphy@

dot.gov. For legal questions, Christopher 

Hall, Office of Chief Counsel, same 

address, Room E56–316, phone (202) 

941–9595 or email christopher.hall@

dot.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Overview 

II. Responses to Public Comments 

A. Chapter I 

B. Chapter II 

C. Chapter III 

D. Chapter IV 

E. Chapter V 

F. Chapter VI 

G. Chapter VII 

I. Overview 

This notice announces the availability 

of FTA Circular C 4220.1G, Third Party 

Contracting Guidance. C 4220.1G 

replaces C 4220.1F. The purpose of 

Circular 4220.1 is to provide updated 

Third-Party Contracting Guidance for 

Federal Transit Administration (FTA) 

assistance programs. This circular 

incorporates provisions of Federal law 

enacted since the publication of C 

4220.1F, including the Infrastructure 

Investment and Jobs Act (Pub. L. 117– 

58, Nov. 15, 2021); the Office of 

Management and Budget’s (OMB) and 

United States Department of 

Transportation’s (USDOT) updated 

Uniform Administrative Requirements, 

Cost Principles, and Audit 

Requirements for Federal Awards at 2 

CFR part 200 (78 FR 78608, Dec. 26, 

2013; 89 FR 30046, Apr. 22, 2024) and 

2 CFR part 1201 (79 FR 76049, Dec. 19, 

2014), respectively; USDOT’s regulation 

implementing the Uniform Relocation 

Assistance and Real Property 

Acquisition Policies Act of 1970 

(Uniform Act) (49 CFR part 24, 89 FR 

36944, May 3, 2024); and USDOT’s 

Disadvantaged Business Enterprise 

(DBE) regulation (49 CFR part 26, 89 FR 

24963, Apr. 9, 2024). 

A copy of the final circular is in the 

docket and is posted on FTA’s Circulars 

page (https://www.transit.dot.gov/ 

regulations-and-guidance/fta-circulars/ 

circulars). 

II. Response to Comments 

FTA issued a notice of availability 

and request for comments for the 

proposed circular, C 4220.1G ‘‘Third 

Party Contracting Guidance’’ on 

November 27, 2024 (89 FR 93824). The 

public comment period closed on 

December 27, 2024. 

FTA received comments from 27 

unique commenters including transit 

authorities, businesses and industry 

organizations, private individuals, and 

State and local departments of 

transportation. 

FTA received seven requests to 

extend the comment period for the 

proposed circular. FTA declined to 

extend the comment period because 

FTA believes that the comment period 

was sufficient for interested parties to 

provide comment, evidenced by the 

number of comments FTA received on 

the proposed circular. In addition, the 

circular does not contain any binding 

requirements that are not already 

effective through statutory changes or 

regulatory changes established through 

a notice and comment process during 

which interested parties could have 

provided input. 

FTA reviewed all relevant comments 

and took them into consideration when 

developing this final circular. FTA 

addresses these comments in the 

corresponding sections below. Some 

comments were outside the scope of the 

circular, and FTA does not respond to 

those comments in this notice. Several 

comments suggested typographical 

updates or changes. These changes, 

where appropriate, were incorporated. 

In response to comments, FTA made 

changes to the final guidance which are 

discussed in detail in the corresponding 

sections below. 

A. Chapter I 

Comment: A consulting firm asserted 

that the concept of ‘‘premium’’ in the 

definition of the term ‘‘best value’’ is 

confusing and lacks a clear definition. 

FTA Response: FTA declines to define 

the term ‘‘premium’’ further, as its 

meaning is context-specific and 

generally understood within the 

framework of best value procurements. 

In this context, premium refers to the 

additional cost a recipient may choose 

to pay for a proposal offering superior 

technical quality, performance, or other 

non-cost factors. Recipients are 

encouraged to clearly articulate 

evaluation criteria and the basis for 


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determining best value in their 

procurement documentation to ensure 

transparency and understanding. 

Comment: A consulting firm 

suggested removing the term ‘‘Common 

Grants Rule’’ from Chapter I, noting that 

it is not appropriate in the context of the 

Americans with Disabilities Act (ADA) 

and 2 CFR part 200. 

FTA Response: FTA has struck the 

definition, because the term is not 

actually used in the Circular. 

Comment: A consulting firm 

suggested changing the defined term 

‘‘grant’’ to ‘‘award’’ in the definitions to 

ensure consistency with terminology 

used in other FTA circulars and 

reviews. 

FTA Response: FTA declines to 

replace the term ‘‘grant’’ with ‘‘award’’ 

in this definition, as the purpose of the 

definition is to define grants 

specifically, as distinct from other forms 

of financial assistance awards. (Compare 

with the nearby definition of 

‘‘cooperative agreement’’ in the 

circular.) However, FTA has changed 

the definite article ‘‘the’’ to the 

indefinite article ‘‘an’’ (‘‘Grant means an 

instrument . . .’’) to reflect the 

existence of other forms of assistance 

awards. 

Comment: A consulting firm noted 

that there are no mechanisms or tests to 

verify the accuracy of self-certifications 

and suggested instead asking recipients 

to affirm their agreement to comply with 

procurement regulations. 

FTA Response: FTA declines to revise 

the approach to self-certifications, as the 

current process is well established and 

aligns with Federal requirements and 

standard oversight practices. Selfcertifications serve as a formal 

acknowledgment of a recipient’s 

commitment to comply with 

procurement regulations, and recipients 

remain responsible for ensuring their 

accuracy and validity. Additionally, 

FTA conducts periodic reviews and 

audits to verify compliance, providing 

further assurance beyond selfcertification. 

Comment: A consulting firm 

suggested deleting references to the Best 

Practices Procurement Manual (BPPM), 

arguing that it lacks authority, does not 

cover all areas, contains incorrect 

examples, and is often copied by 

recipients without proper analysis, 

making it unhelpful for ensuring 

compliance. Similarly, a state 

department of transportation noted that 

the proposed circular, C 4220.1G, 

referenced the Best Practices 

Procurement Manual, last updated in 

2016, and suggested either removing 

these references or updating the manual 

to include new requirements from the 

Infrastructure Investment and Jobs Act 

and 2 CFR part 200, which was last 

updated in October 2024. 

FTA Response: FTA declines to 

remove references to the Best Practices 

Procurement Manual (BPPM), as it 

serves as a valuable resource offering 

practical examples and guidance to 

assist recipients in navigating complex 

procurement requirements. The BPPM 

does not carry regulatory authority. It 

complements regulations and FTA’s 

other guidance by providing illustrative 

scenarios and best practices. Recipients 

can use the BPPM as another guidance 

tool, applying their own judgment and 

analysis to ensure compliance with 

Federal procurement standards. 

Comment: An individual commenter 

suggested that in construction manager/ 

general contractor (CM/GC) contracts, 

the Guaranteed Maximum Price (GMP) 

should be negotiated before contract 

award, with a fixed price finalized at 

60–90% design completion, and an ‘‘offramp’’ available for the owner to seek 

competitive bids if needed. For 

Progressive Design-Build contracts 

(PDB), the commenter highlighted a 

concern that because the GMP or Target 

Maximum Price (TMP) is determined 

late in the design process, it prevents a 

fair and reasonable price determination 

at the time of award and may lead to 

uncontrolled cost escalation without a 

firmly established in upfront budget. 

FTA Response: FTA acknowledges the 

commenters’ concerns regarding CM/GC 

and PDB contract structures and has 

made clarifications in the Circular to 

address them. With respect to CM/GC 

contracts, FTA recognizes the value of 

early contractor involvement in the 

design process to optimize lifecycle 

costs, value engineering, and scheduling 

outcomes. While the reference to CM/ 

GC contributing to design up to the 60– 

90% design stage reflects common 

industry practice, it is not intended to 

preclude earlier involvement where it 

aligns with project goals. The definition 

aims to provide general guidance rather 

than prescriptive instructions on 

implementing alternative contracting 

methods. 

Regarding the timing of GMP 

negotiations, FTA acknowledges that 

practices may vary based on projectspecific factors and local preferences. 

The Circular now clarifies that GMP or 

equivalent price negotiations may occur 

either before or after the 60–90% design 

stage, depending on the recipient’s risk 

tolerance and procurement strategy. 

FTA also notes that recipients have the 

flexibility to structure GMP negotiations 

to include ‘‘off-ramps’’ for competitive 

bidding if the GMP does not align with 

budgetary or value expectations. 

For PDB contracts, FTA recognizes 

the potential risk of cost escalation if the 

GMP or TMP is established late in the 

design process. However, PDB remains 

an allowable contracting method under 

FTA regulations. FTA emphasizes the 

importance of strong project 

management capacity when using 

alternative contracting approaches to 

mitigate risks and ensure effective 

outcomes. Lastly, while the term 

‘‘Guaranteed Maximum Price’’ is widely 

understood in the industry, FTA 

acknowledges that some recipients may 

prefer terms like ‘‘final construction 

price’’ to better reflect their 

procurement and project management 

processes. 

Comment: A city agency commented 

that the new definition in Chapter I, 

Section 5b for Approval, Authorization, 

Concurrence, Waiver is overly general 

and suggested retaining the more 

specific language from the previous 

version (4220.1F). 

FTA Response: FTA declines to revise 

Chapter I, Section 5b to reintroduce the 

prior definition from C 4220.1F. The 

updated definition aligns with Federal 

procurement standards, and further 

specificity is unnecessary to meet 

compliance objectives. 

Comment: A city agency commented 

that Chapter I, Section 5dd should 

clarify that the term ‘‘recipient’’ refers to 

the entire legal entity, not just a specific 

component, as was explicitly stated in 

the prior version (C 4220.1F). 

FTA Response: FTA declines to revise 

this section to restate that the term 

‘‘recipient’’ applies to the entire legal 

entity. The recipient is the entity with 

authority to enter into an assistance 

agreement with FTA and to execute 

certifications, which may at times be a 

unit of local government. The updated 

language provides sufficient clarity and 

aligns with Federal regulatory 

standards. 

Comment: A city agency commented 

that Chapter I, Section 6 should 

reinstate references to the Master 

Agreement, as its removal has created a 

gap in clarity. 

FTA Response: FTA declines to 

reinstate the description of the Master 

Agreement in this section. The purpose 

of Chapter I Section 6 is to describe 

FTA’s role and oversight activities. The 

Master Agreement is not an oversight 

activity by FTA, but is the document 

incorporated into every financial 

assistance award describing the 

recipient’s obligations. 

B. Chapter II 

Comment: A consulting firm 

suggested removing references to 


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revenue contracts, stating that they are 

not evaluated for compliance. 

FTA Response: The FTA declines to 

remove references to revenue contracts, 

as they remain an important aspect of 

third-party contracting activities. 

Comment: A consulting firm 

suggested removing references to the 

Federal Acquisition Regulation (FAR), 

expressing concern that recipients might 

rely on it as a primary procurement 

guide rather than using it solely as a 

reference. 

FTA Response: The FTA declines to 

remove references to the FAR, because 

it is important to plainly distinguish 

between the FAR and the procurement 

standards of 2 CFR part 200 so 

recipients are not confused. 

Additionally, recipients may at times 

use the FAR as an additional source of 

guidance. 

Comment: A city agency commented 

that Chapter II, Section 2.a(1) 

distinguishes Cooperative Agreements 

but does not reference Joint Partnership 

Agreements, creating inconsistency with 

earlier chapters. 

FTA Response: FTA has revised this 

section to provide a more concise 

statement regarding its applicability to 

grants and cooperative agreements. 

Grants and cooperative agreements are 

forms of financial assistance awarded by 

FTA. FTA declines to revise this section 

to include a reference to Joint 

Partnership Agreements, which are not 

a form of financial assistance awarded 

by FTA. The current language aligns 

with applicable regulatory 

requirements. 

Comment: A city agency commented 

that Chapter II, Section 2.b(8) should 

expand the definition of Force Account 

to include activities performed by 

contractors, as the current definition 

limits it to a recipient’s own forces. 

FTA Response: FTA declines to 

expand the definition of Force Account 

to include contractor activities. The 

current definition reflects the Federal 

intent for force account work to refer 

specifically to the recipient’s own noncontracted workforce. 

C. Chapter III 

Comment: A consulting firm noted 

that all ability to accept gifts of 

‘‘nominal value’’ should be removed, 

advocating for a zero-tolerance policy as 

the best practice. 

FTA Response: FTA declines to 

remove all ability to accept gifts of 

‘‘nominal value’’ because 2 CFR 200.318 

authorizes a recipient or subrecipient to 

‘‘set standards for situations where the 

financial interest is not substantial or a 

gift is an unsolicited item of nominal 

value.’’ 

Comment: A consulting firm noted 

that the phrase ‘‘sound and complete 

agreement’’ is too ambiguous unless 

specific elements can be stated or 

evaluated. 

FTA Response: FTA disagrees that the 

term is ambiguous and declines to make 

a change. The phrase recognizes the 

broad discretion recipients have to 

design and form contracts. Furthermore, 

the statement that recipients should take 

care to include contract terms that form 

a sound and complete agreement is 

advisory. It is not intended to create 

criteria by which FTA will inspect 

recipients’ contracts for Federal 

compliance. 

Comment: A consulting firm noted 

that the term ‘‘Industry Contract’’ is 

unclear and should either be redefined 

or removed altogether. 

FTA Response: FTA disagrees that the 

term is unclear and declines to redefine 

or remove the term ‘‘Industry Contract.’’ 

FTA believes the term is contextually 

clear within the procurement framework 

and allows for broad application across 

diverse procurement scenarios. 

Comment: A consulting firm noted 

that the term ‘‘reasonable 

documentation’’ lacks clarity and is 

overly subjective, which could lead to 

inconsistent compliance assessments. 

FTA Response: FTA declines to revise 

the term ‘‘reasonable documentation.’’ 

The term allows for recipients to 

exercise their discretion across diverse 

procurement scenarios and aligns with 

standard Federal practices for 

documentation. It would be impractical 

to attempt to specify recordkeeping 

requirements to apply to everything a 

recipient might procure, from micropurchases to mega-projects. 

FTA encourages recipients to 

maintain records sufficient to 

demonstrate compliance with 

applicable procurement regulations. 

Comment: A consulting firm noted 

that ‘‘access to records’’ should be a 

mandatory clause in all third-party 

contracts. 

FTA Response: The commenter was 

not specific about whose records he 

means to be accessed by whom. 

Nonetheless, FTA declines to add such 

a requirement for another mandatory 

clause in recipients’ contracts. A 

recipient’s obligation to maintain 

records related to its award and provide 

access to the Federal Government 

already is well established. A recipient 

must take whatever measures are 

required to assure compliance, which 

may, in some cases, include making 

provisions to obtain records from 

contractors. Specifying a new required 

clause is not necessary. 

Comment: A consulting firm noted 

that the criteria for using reverse 

auctions are insufficient and should not 

be limited to the Simplified Acquisition 

Threshold (SAT) and commented that 

clear reasons for their use, similar to 

Requests for Proposals (RFPs) and 

Invitations for Bids (IFBs), should be 

provided. 

FTA Response: FTA declines to 

expand the use of reverse auctions for 

procurements above the SAT. This is 

because 2 CFR 200.320 specifies 

procurement methods to be used for 

procurements above the SAT and does 

not include reverse auctions. Reverse 

auctions are primarily suited for 

procurements involving standardized 

goods or services where price is the 

primary evaluation factor and technical 

complexity is minimal. Sealed bidding 

is the procurement method required by 

regulation for such procurements when 

they exceed the SAT. 2 CFR 

200.320(b)(1). 

Comment: A consulting firm noted 

that audits are not clearly stated as a 

requirement and may cause confusion 

for recipients, suggesting their removal. 

FTA Response: FTA declines to 

remove references to audits as they are 

a requirement pursuant to 2 CFR part 

200, subpart F, but has clarified the 

requirements to describe the procedure 

more accurately. 

Comment: A state department of 

transportation noted that one of the 

proposed changes required annual selfcertification of the procurement policy. 

It was recommended to add criteria 

outlining the attributes that this selfcertification should include. 

FTA Response: Self-certification is not 

a change. For many years, FTA has 

relied on recipients self-certifying their 

procurement systems annually. The 

certification is made as part of a 

recipient’s annual Certifications and 

Assurances, which can be found on 

FTA’s website here (along with previous 

years’ versions): https://

www.transit.dot.gov/funding/granteeresources/certifications-and-assurances/ 

certifications-assurances. The 

Certifications and Assurances are 

standardized for all recipients and 

provide the exact text of the 

certification. Therefore, it is not 

necessary for the Circular to describe 

the contents that must be included in 

such a certification. 

Comment: A state department of 

transportation noted that the Circular 

recommends reviewing Federal 

requirements when deploying an ecommerce system but does not specify 

which requirements to follow. The 

commenter recommended FTA include 

these specific Federal requirements. 


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FTA Response: FTA refers the 

commenter to Chapter III, Section 3, 

paragraph e, subparagraphs i-iii for 

these requirements. 

Comment: A transit bus manufacturer 

suggested using stronger language to 

encourage electronic procurement 

methods rather than printed documents 

in Chapter III, Section 3(e). 

FTA Response: FTA declines to revise 

this section to include stronger language 

encouraging the use of electronic 

methods over printed documents. The 

existing guidance already supports and 

promotes the use of electronic 

documentation as a best practice while 

allowing recipients the flexibility to 

determine the most appropriate format 

for their specific circumstances. 

Mandating stronger language may not 

account for varying technological 

capabilities or regulatory requirements 

across different recipients and 

procurement environments. Recipients 

are encouraged to adopt electronic 

methods where feasible and practical to 

improve efficiency and reduce 

administrative burdens. 

D. Chapter IV 

Comment: An individual commenter 

urged FTA to explicitly clarify whether 

third-party contractors must be 

registered in SAM.gov at the time of 

offer or quotation to be eligible for an 

award. The commenter described 

inconsistencies between the Circular’s 

description of the requirement that a 

recipient verify a contractor’s exclusion 

status (i.e., suspension or debarment) 

and the expectations of triennial 

reviewers, noting that SAM checks often 

seemed mandatory in practice despite 

the Circular’s statement that checking 

SAM is strongly recommended. 

FTA Response: In response to the 

comment, FTA has added a statement to 

clarify that contractors are not required 

to be registered in SAM to do business 

with FTA recipients. FTA also has 

reworded the paragraph about verifying 

prospective contractors’ exclusion 

status, to clarify that SAM is one of 

several methods available to a recipient 

to confirm a prospective contractor’s 

non-exclusion. 

Comment: A county requested 

clarification on the percentage 

requirements for Disadvantaged 

Business Enterprises (DBEs) and which 

clauses must be flowed down to 

subcontractors in the proposed FTA 

Circular 4220.1G. 

FTA Response: FTA declines to revise 

Circular 4220.1G to provide the 

requested clarification because the 

Circular is focused on procurement 

standards and not the U.S. Department 

of Transportation’s DBE program. The 

Circular directs readers to 49 CFR 26.49 

and 2 CFR 200.321(b)(3) for detailed 

requirements regarding DBE 

participation. The U.S. DOT’s website is 

another useful source of guidance for 

administering a DBE program or 

competing for work as a DBE: https://

www.transportation.gov/civil-rights/ 

disadvantaged-business-enterprise. 

When a recipient is required to set a 

percentage goal for DBE contracting, the 

recipient creates its own goal, based on 

the availability of DBEs in its area. In 

other words, there is no one DBE goal 

for FTA recipients. Regarding flowdown clauses, FTA separately will 

update its guidance on flow-down 

clauses on the FTA website soon. 

Comment: A consulting firm noted 

that the phrase ‘‘sound business 

judgment’’ should be removed as it 

cannot be objectively evaluated. 

FTA Response: FTA declines to 

remove the term ‘‘sound business 

judgment.’’ The term is intentionally 

broad to allow recipients flexibility in 

decision-making while maintaining 

accountability. 

Comment: A consulting firm noted 

that if seat belt use is only encouraged 

and not mandated, it should be removed 

from the guidance. 

FTA Response: FTA declines to 

remove references to seat belt use. 

Executive Order 13043 (note at 23 

U.S.C. 402) requires Federal agencies to 

encourage seat belt use in Federal 

grants. Furthermore, encouraging seat 

belt use remains an important safety 

consideration, even when it is not a 

requirement. 

Comment: A consulting firm noted 

that if texting policies are only 

encouraged and not mandated, they 

should be removed from the guidance. 

FTA Response: FTA declines to 

remove references to texting policies. 

Executive Order 13513 (note at 23 

U.S.C. 402) requires Federal agencies to 

encourage recipients to adopt policies to 

ban text messaging while driving in 

carrying out a Federal award. While not 

mandatory, encouraging safe texting 

practices supports broader safety 

objectives within transit operations. 

Comment: A consulting firm noted 

that the civil rights clauses should be 

reviewed to determine if they should 

flow down to contractors and 

subcontractors, with revisions made as 

necessary. 

FTA Response: FTA intends 

separately to update its guidance on 

mandatory clauses and flow-down 

clauses on FTA’s website. The existing 

guidance in the Circular aligns with the 

applicable Federal statutes. 

Comment: A consulting firm noted 

that the word ‘‘considered’’ in Chapter 

IV, Section 3.b in references to Small 

and Disadvantaged Business Enterprises 

should be removed because it cannot be 

quantitatively measured or evaluated. 

FTA Response: FTA declines to 

remove the term ‘‘considered’’ in 

relation to Small and Disadvantaged 

Business Enterprises. Examples of what 

consideration means are provided in the 

paragraph at Section 3.b. The text of the 

Circular closely follows the text of 2 

CFR 200.321, which requires, when 

possible, that the recipient ensure 

disadvantaged businesses are 

‘‘considered’’. 

Comment: A consulting firm noted 

that spare ratios are an agency planning 

function and not related to 

procurement. The commenter noted 

spare ratios already are discussed in 

FTA’s Circular 5010.1F and should not 

be addressed in Circular 4220.1G. The 

commenter suggested spare ratios 

should be tracked through the Triennial 

Review. 

FTA Response: FTA declines to 

remove references to spare ratios from 

procurement guidance. Although spare 

ratios are addressed primarily in 

Circular 5010.1F, referring to spare 

ratios in the procurement circular helps 

ensure a recipient is aware of the spare 

ratio policy when undertaking a vehicle 

procurement. The Triennial Review 

serves as a broad assessment of a 

recipient’s compliance across multiple 

areas, including procurement, 

maintenance, and financial 

management, and does review a 

recipient’s spare ratio. 

Comment: An individual commenter 

noted difficulty finding confirmation of 

the Micro-purchase threshold increase 

to $50,000 in the proposed FTA Circular 

4220.1G and mentioned their 

understanding that the threshold 

increase became effective on October 2, 

2024. 

FTA Response: The Federal micropurchase threshold has not changed; it 

is still $10,000. However, as of October 

1, 2024, 2 CFR 200.320(a)(1) permits a 

recipient to certify for itself a higher 

micro-purchase threshold, up to $50,000 

in certain instances. This higher 

threshold is not automatic and requires 

the recipient’s self-certification and 

supporting documentation. The circular 

discusses this change in Chapter VI, 

Section 4. 

Comment: An individual commenter 

sought clarification on two points in the 

proposed Circular 4220.1G: whether the 

removal of the prohibition on 

geographic preferences formally stated 

at 2 CFR 200.319 affected the guidance 

provided in Chapter VI of the Circular 

regarding geographic preferences; and 

clarification of the statement regarding 


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Patent and Restricted Data Rights as a 

possible reason for a non-competitive 

procurement, specifically the statement, 

‘‘However, the mere existence of such 

rights does not by itself justify a 

noncompetitive award,’’ and whether 

such scenarios should be treated as 

unsolicited proposals. 

FTA Response: Circular 4220.1G does 

reflect the removal of the prohibition 

against geographic preference from 2 

CFR 200.319. However, 2 CFR 200.319 

was not the only rule affecting 

geographic preferences in FTA 

procurements. The Circular presents 

FTA’s explanation of the current status 

of geographic preferences across various 

procurement types, reading relevant 

statutes and regulations together. 

Additionally, the statement that ‘‘the 

mere existence of [patent and restricted 

data] rights does not by itself justify a 

noncompetitive award,’’ does not imply 

that these scenarios should be treated as 

unsolicited proposals. It means that just 

because a single company may own 

rights necessary to the delivery of the 

product or service being acquired, does 

not mean that company is the only 

possible source for the product or 

service. Recipients should conduct 

market research, including 

consideration of Brand Name or Equal 

products or services, and document 

their findings in the procurement file 

before pursuing a sole source award. 

Comment: A State department of 

transportation noted that in Chapter IV, 

the section on Small Procurements 

references DBEs but does not include 

small businesses or veteran-owned 

businesses. 

FTA Response: The Small 

Procurement section in Chapter IV does 

reference women owned businesses. 

FTA has added reference to veteran 

owned businesses to correctly reflect the 

requirements of 2 CFR 200.321. 

Additionally, FTA refers the commenter 

to Chapter IV, section 2, ‘‘Small and 

Disadvantaged Business Enterprises,’’ 

for information on small and veteran 

owned businesses. 

Comment: A state department of 

transportation noted that the section of 

Chapter IV related to small 

procurements allowed splitting a 

procurement to increase DBE 

participation, and that this appeared to 

be in conflict with other statements in 

Chapter IV that prohibit dividing 

procurements to meet the micropurchase limit. The commenter 

requested clarification on whether 

splitting the procurement when using a 

DBE is permissible if the end result 

were procurements that met the micropurchase threshold. 

FTA Response: As noted in Chapter 

IV, Section 1(c)(2), a known requirement 

must not intentionally be divided into 

multiple smaller procurements to fall 

below the simplified acquisition 

threshold or micro-purchase threshold, 

regardless of the use of DBEs. The 

Uniform Requirements and U.S. DOT’s 

DBE rule suggest ways to increase DBE 

participation by ‘‘dividing procurement 

transactions into separate 

procurements’’ (2 CFR 200.321) or 

‘‘breaking out contract work items into 

economically feasible units (for 

example, smaller tasks or quantities)’’ 

(App. A to 49 CFR part 26). These 

suggestions must be interpreted 

consistently with the requirement not to 

undermine full and open competition. 

For example, it may be possible to 

unbundle a solicitation for multiple 

services or supplies that do not 

necessarily have to be combined under 

the same contract. 

Comment: A law firm on behalf of an 

industry coalition suggested FTA state 

that liquidated damages should not 

exceed incentives but rather should be 

balanced with incentives. 

FTA Response: FTA declines to 

specify that liquidated damages should 

not exceed incentives but rather should 

be balanced with them. Liquidated 

damages and incentive provisions serve 

distinct purposes in a contract, with 

liquidated damages addressing the costs 

associated with non-performance or 

delays, and incentives encouraging 

superior performance or early 

completion. Balancing these two 

elements in every contract may not 

always align with the specific goals or 

circumstances of the procurement. 

FTA’s existing guidance allows 

recipients the flexibility to structure 

contracts, including liquidated damages 

and incentives, in a manner that reflects 

their unique project needs and risk 

assessments. Recipients are encouraged 

to ensure that both liquidated damages 

and incentives are reasonable, 

justifiable, and aligned with the overall 

objectives of the procurement. 

Comment: A city agency commented 

that Chapter IV, Section 2.b.5(b) omits 

the Percentage of Completion Method 

for progress payments, which was 

previously included in C 4220.1F. The 

commenter suggested including 

language on this method. 

FTA Response: FTA declines to add 

language about the Percentage of 

Completion Method. Until 2014, the 

now-superseded Common Rule at 49 

CFR 18.21(d) (2014) specified that 

recipients may use the percentage of 

completion method to pay their 

construction contractors. The current 

procurement standards at 2 CFR part 

200 do not mention percentage of 

completion. Recipients retain flexibility 

in structuring construction progress 

payments under Federal requirements. 

Comment: A city agency commented 

that the last sentence at Chapter IV, 

Section 2.b(9)(d) contains unclear 

language regarding returning liquidated 

damages to the award budget, and 

recommended clarification. 

FTA Response: FTA has revised the 

last sentence of this section for clarity. 

Comment: A city agency commented 

that Chapter IV, Section 2.c(3)(b) should 

clarify whether DBEs have priority over 

other small, minority, or disadvantaged 

business enterprises as defined by the 

USDOT. 

FTA Response: There is no 

prioritization. Under U.S. DOT’s 

disadvantaged business enterprise (DBE) 

rule, a DBE means a for-profit small 

business that is at least 51% owned by 

one or more individuals who are both 

socially and economically 

disadvantaged. 49 CFR 26.5. The rule 

rebuttably presumes that women and 

persons of certain racial descent are 

socially disadvantaged. 49 CFR 26.67(a). 

Firm owners whom the rule does not 

presume to be socially disadvantaged 

can register their firms as DBEs by 

demonstrating their disadvantage 

through a narrative description. 49 CFR 

26.67(d). 

Comment: A city agency commented 

that Chapter IV, Section 2.a(1) 

introduces a requirement for recipients 

to verify contractor employee 

classification. They requested additional 

guidance, including whether FTA will 

provide a standard contract clause or 

certification. 

FTA Response: The U.S. Office of 

Management and Budget added this to 

the Uniform Requirements in 2024. 89 

FR 30136. As part of assessing a 

potential contractor’s responsibility, the 

rule now requires the recipient or 

subrecipient to consider the contractor’s 

proper classification of its employees 

under the Fair Labor Standards Act. 2 

CFR 200.318(h). The rule does not 

specify that the recipient must make a 

special investigation or acquire relevant 

information in any other particular 

manner. The commenter’s suggestion 

that a certification or contract clause 

could be employed may be acceptable. 

FTA does not have further guidance to 

provide at this time. 

Comment: A city agency asked 

whether the Circular’s new guidance 

regarding protection and types of data 

rights created a change to the required 

clauses recipients must include in their 

contracts. The commenter also asked 

where to find a list of required clauses 


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now that Appendix D no longer is part 

of the Circular. 

FTA Response: The Circular’s 

guidance regarding data rights has not 

created a new required clause. FTA 

intends to update and maintain a table 

of required clauses separate from 

Circular 4220.1G on FTA’s website. 

Comment: Regarding organizational 

conflicts of interest during contracting, 

a city agency asked whether a 

consultant who assisted in drafting 

reports or partial designs can still bid on 

future project phases if the recipient 

discloses the consultant’s work to other 

potential bidders. 

FTA Response: The comment presents 

a fact-specific hypothetical that is 

beyond the scope of this comment 

process. FTA encourages the commenter 

to contact its FTA regional office if it 

has discovered or is trying to cure an 

organizational conflict of interest. 

Comment: A city agency commented 

that Chapter IV, Section 2.b(4) creates a 

barrier for non-profits and SBEs/DBEs 

by requiring an indirect cost rate for 

non-A&E services. They suggested 

flexibility to allow fixed or fully 

burdened rates, especially for 

community engagement work. 

FTA Response: The cost principles 

and requirements related to indirect cost 

rates found in 2 CFR part 200 specify 

how recipients may charge indirect 

costs to their FTA awards. FTA does not 

have rules about how the recipient’s 

contractors charge indirect costs to the 

recipient. (An exception to this exists 

for A&E firms. The law requires a 

recipient to accept and use an A&E 

firm’s indirect rate established in 

accordance with the Federal Acquisition 

Regulation. 49 U.S.C. 5325(b).) That 

being said, the commenter’s local rules 

may impose such requirements, but 

FTA cannot comment on local 

requirements. 

Comment: A transit bus manufacturer 

requested that FTA change its guidance 

that recipients ‘‘may use’’ progress 

payments and advance payments to say 

recipients ‘‘should use’’ such payments. 

The commenter also requested that FTA 

rephrase other parts of the section on 

advance and progress payments and 

include more examples to promote the 

use of advance and progress payments 

by recipients. 

FTA Response: FTA declines to 

replace the permissive ‘‘may use’’ with 

the more prescriptive ‘‘should use’’. The 

current language provides recipients 

with the flexibility to determine the 

most appropriate procurement approach 

based on their specific project needs 

and circumstances, while still adhering 

to Federal requirements. Additionally, 

FTA declines to provide exhaustive 

descriptions of circumstances where 

phrases like ‘‘in some circumstances’’ 

apply. The variability in procurement 

scenarios across agencies and projects 

makes it impractical to prescribe a onesize-fits-all definition. Recipients are 

encouraged to consult with their FTA 

Regional Offices for guidance when 

specific scenarios arise that require 

further clarification. 

Comment: In Chapter IV, Section 

2(b)(9)(d), Liquidated Damages, a transit 

bus manufacturer suggested that FTA 

include statements balancing risk and 

related penalties, add descriptions of 

excusable delay on the part of 

contractors, and add a statement 

recommending that recipients allow 

contractors to be reimbursed for costs 

and damages associated with delivery 

delays requested or caused solely by the 

recipient. The commenter noted this is 

particularly relevant with respect to 

zero-emission bus delivery delays 

caused by charging or fueling 

infrastructure. 

FTA Response: FTA declines to revise 

this section to include specific 

descriptions of risk-balancing and 

excusable delay or to recommend 

contractor reimbursement for costs and 

damages associated with delivery delays 

caused solely by the recipient. The 

existing guidance provides sufficient 

flexibility for recipients to negotiate 

contract terms with their vendors, 

including provisions for liquidated 

damages, excusable delays, and risksharing, tailored to the specific 

circumstances of their procurements. 

Comment: A transit bus manufacturer 

suggested that in Chapter IV, Section 

2(e), where the Circular discusses 

special considerations for rolling stock 

procurements, FTA include a paragraph 

on Excessive Bonding that discourages 

excessive bonding and includes 

descriptions of situations deemed 

excessive. The commenter suggested 

examples deemed excessive include 

bonding required when no payments are 

made until acceptance of vehicles, 

bonding that exceeds the amount of 

contracted work remaining or the 

amount of advance payments or 

progress payments, and bonding that 

exceeds the term of the period of 

performance. The commenter also 

suggested such a detailed list be 

included in the section on Excessive 

Bonding in Chapter VI. This commenter 

also suggested that Chapter IV, Section 

2(e) clarify that Federal law only 

requires security for rolling stock 

procurements using advance or progress 

payments. 

FTA Response: FTA declines to revise 

this section to include a paragraph on 

Excessive Bonding with a detailed list of 

specific situations deemed excessive. 

Prescribing an exhaustive list of 

scenarios could unintentionally limit 

recipients’ ability to make risk-based 

determinations suited to their unique 

procurement needs. The situations 

described by the commenter may or may 

not be excessive based on the specific 

facts and circumstances of any 

particular procurement. Therefore, it is 

better for FTA not to be so prescriptive, 

and to leave that to the discretion of the 

parties to the contract. The current 

guidance already aligns with Federal 

procurement standards and provides 

recipients with flexibility to assess 

bonding requirements based on their 

project-specific risks and financial 

considerations. 

Regarding the clarification on security 

for advance or progress payments in 

rolling stock procurements, FTA affirms 

that it requires security only for rolling 

stock procurements involving advance 

or progress payments. However, this 

requirement is already addressed in the 

guidance in the section describing 

advance and progress payments, which 

have application beyond just rolling 

stock procurements, and further 

clarification is unnecessary. FTA notes 

that recipients may require security in 

excess of the minimums required by 

FTA. 

Comment: A transit bus manufacturer 

requested that FTA include in Chapter 

IV, Section 2(e)(3) (paragraph referring 

to FTA’s minimum useful life policy for 

rolling stock), a statement that 

infrastructure and other property 

included in rolling stock purchases are 

also subject to the minimum useful life 

requirements in Circular 5010.1F. The 

commenter also requested FTA repeat 

the list of acceptable methods to 

determine minimum useful life from 

Circular 5010.1F, rather than referring to 

Circulars 5010.1F and 9050.1A. 

FTA Response: FTA declines to revise 

this section to include a statement about 

the useful life of infrastructure and 

other property related to rolling stock, 

or a list of acceptable methods for 

determining minimum useful life, rather 

than referencing Circulars 5010.1F and 

9050.1A. These circulars already 

provide detailed guidance on 

determining minimum useful life and 

duplicating their content within 

Circular 4220.1G would create 

unnecessary redundancy and potential 

inconsistencies across guidance 

documents. Recipients are encouraged 

to consult Circulars 5010.1F and 

9050.1A for specific requirements 

regarding minimum useful life 

determinations for rolling stock and 

related infrastructure. 


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Comment: A transit authority 

commented that in regions with a 

limited number of DBEs, meeting the 

specialized needs of Federally funded 

procurements is challenging. The 

commenter stated that the proposed 

tiered compliance standards and 

enhanced documentation requirements 

place significant administrative burdens 

on agencies without delivering 

corresponding benefits due to the 

scarcity of qualified DBEs in the region. 

FTA Response: FTA declines to revise 

the description of the DBE rule. The 

U.S. DOT DBE rule is a Departmentwide rule administered by the Office of 

the Secretary of Transportation, and 

changes to it are beyond the scope of 

this circular update. FTA notes, 

however, that the DBE rule directs 

recipients to take into account the 

availability of DBEs when setting their 

DBE goals. 49 CFR 26.45. 

Comment: A transit authority 

commented that proactive measures to 

increase DBE participation, such as 

breaking contracts into smaller 

components or altering delivery 

schedules, are often impractical and 

may compromise cost efficiency and 

operational effectiveness. The transit 

authority commented that mandating 

these measures risks causing delays and 

increased costs for critical 

procurements. 

FTA Response: FTA declines to make 

changes in response to the comment. 

FTA declines to revise the description 

of the DBE rule. The U.S. DOT DBE rule 

is a Department-wide rule administered 

by the Office of the Secretary of 

Transportation, and changes to it are 

beyond the scope of this circular 

update. The DBE rule does not mandate 

the actions the commenter described; 

the DBE rule suggests them as actions a 

recipient can ‘‘consider’’ as part of good 

faith efforts to increase DBE 

participation. 49 CFR part 26, app. A 

para. IV. 

Comment: A transit authority 

commented that greater flexibility 

should be provided in compliance 

expectations for regions with limited 

DBE availability. The commenter 

specifically commented that FTA 

should allow recipients to demonstrate 

‘‘good faith efforts’’ without punitive 

measures if participation goals cannot 

be met due to local constraints and offer 

exemptions or modified compliance 

standards for regions where DBE 

participation opportunities are 

demonstrably limited. 

FTA Response: FTA declines to make 

changes in response to the comment. 

The U.S. DOT DBE rule is a Departmentwide rule administered by the Office of 

the Secretary of Transportation, and 

changes to it are beyond the scope of 

this circular update. The commenter 

should review the DBE rule, 49 CFR part 

26, which does make provision for 

‘‘good faith efforts’’ on the part of a 

recipient. 

Comment: A transit authority 

commented that rather than imposing 

rigid participation requirements, FTA 

should prioritize capacity-building 

initiatives for DBEs in underserved 

regions. The commenter suggested that 

this approach would expand the pool of 

qualified DBEs over time and better 

align with long-term equity goals. 

FTA Response: FTA declines to make 

changes in response to the comment. 

The U.S. DOT DBE rule is a Departmentwide rule administered by the Office of 

the Secretary of Transportation, and 

changes to it are beyond the scope of 

this circular update. 

Comment: A transit authority 

requested that FTA expand the 

Circular’s guidance related to softwareas-a-service (SaaS) agreements. The 

commenter requested that FTA add 

more detail addressing shared data 

ownership in SaaS agreements, the 

eligibility of SaaS licensing for Federal 

funds, and detailed clarification about 

the respective cybersecurity 

responsibilities of the customer and the 

SaaS vendor. The commenter also 

requested that FTA create a requirement 

about data portability at the end of a 

SaaS contract and develop model 

clauses and forms for recipients to use 

when procuring SaaS. 

FTA Response: FTA declines to make 

these revisions. The purpose of the 

Circular is to describe the Federal 

procurement standards and how they 

apply to recipients’ transit related 

procurements. The commenter’s 

suggestions are far more detailed and 

specific than the Federal standards and 

are beyond the scope of this Circular. 

The guidance in the Circular section 

acknowledges these data issues at a high 

level, while not being unnecessarily 

prescriptive, and allows recipients and 

their vendors to make these 

determinations for themselves. 

Comment: A transit authority 

commented that FTA should include a 

dedicated appendix featuring case 

studies of successful P3 

implementations, highlighting best 

practices and lessons learned, noting 

that examples would offer practical 

insights into how P3s have been 

structured, financed, and managed 

effectively in real-world scenarios. 

FTA Response: FTA declines to create 

a dedicated appendix featuring case 

studies of successful P3 

implementations. While case studies 

can offer valuable insights, the purpose 

of FTA Circular 4220.1G is to provide 

regulatory guidance and requirements 

for federally funded procurements. The 

Transit Cooperative Research Program 

(TCRP) conducts research on P3s and 

some of their reports may include case 

studies. Interested stakeholders may 

review these studies on TCRP’s website: 

https://nap.nationalacademies.org/ 

search/ 

?term=public+private+partnerships. 

Comment: A transit authority 

commented that FTA should simplify 

compliance requirements for procuring 

products with recycled content, 

prioritize high-impact product 

categories, and allow greater flexibility 

for product categories with lower 

environmental impact. They suggested 

allowing agencies to document ‘‘good 

faith efforts’’ when such products are 

either unavailable in the market or costprohibitive. Additionally, they 

recommended a self-certification 

process to reduce the administrative 

burden associated with compliance and 

requested a balance between benefits 

and practicality. 

FTA Response: FTA declines to revise 

the guidance. The requirements related 

to procurement of recovered or recycled 

materials are a governmentwide 

regulation, 2 CFR 200.323, and FTA 

cannot amend them. The text in the 

Circular closely follows the text of the 

regulation, which already allows for 

practicality. 

Comment: A transit authority 

commented that FTA should offer 

technical assistance and training to help 

agencies effectively incorporate recycled 

content requirements into their 

procurement processes. They suggested 

providing webinars, guides, or resources 

outlining best practices and market 

opportunities. They also suggested that 

FTA should promote collaboration 

through joint procurements or 

cooperative purchasing agreements for 

recycled-content products, which would 

enable smaller agencies to access 

competitive pricing and a broader range 

of product options. 

FTA Response: FTA acknowledges the 

request for additional support to 

procure recycled-content products, but 

such efforts are beyond the scope of the 

Circular update. 

Comment: A transit authority 

commented that FTA should 

incorporate the following verbiage to 

Chapter IV, Section 1.a: FTA prohibits, 

with limited exceptions, the use of 

capital assistance for the recipient’s 

operating expenses. 

FTA Response: FTA declines to add 

the suggested language because the 

existing language in this section already 

reflects FTA’s policy regarding the use 


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of capital assistance, and adding 

specific examples may create 

unnecessary redundancy or confusion. 

Recipients are expected to understand 

and adhere to statutory and regulatory 

limitations on the use of capital funds, 

as outlined in the applicable FTA 

circulars and other guidance 

documents. 

E. Chapter V 

Comment: A consulting firm noted 

that interstate cooperative procurement 

contracts should also be allowed for 

non-rolling stock purchases as long as 

they comply with 2 CFR part 200. 

FTA Response: FTA declines to 

extend the use of interstate cooperative 

procurement contracts to non-rolling 

stock purchases. Current guidance 

aligns with section 3019(b) of the FAST 

Act, which authorizes such interstate 

purchasing from cooperative 

procurement contracts only for rolling 

stock and related equipment. 

Comment: A consulting firm noted 

that the term ‘‘open market’’ needs to be 

clearly defined to avoid ambiguity. 

FTA Response: FTA declines to define 

the term ‘‘open market’’ further because 

the term is contextually understood 

within procurement practices, and 

additional definition is unnecessary. 

Comment: A state department of 

transportation commented that the 

proposed Third-Party Contracting 

Guidance (FTA C 4220.1G) should 

explicitly allow state and local agency 

technology procurement through 

interstate cooperative purchasing 

agreements and purchasing schedules, 

provided the participating states’ 

procurement policies allow it, 

regardless of the state in which the 

agencies are located. The commenter 

suggested that restricting interstate 

purchasing schedules would 

disproportionately harm smaller and 

rural transit agencies, which often lack 

the resources to conduct independent 

procurements or establish state-specific 

schedules for modern transit 

technologies. 

FTA Response: Section 3019(b) of the 

FAST Act authorizes such interstate 

purchasing from cooperative 

procurements only for rolling stock and 

related equipment. FTA cannot amend 

it to include other products. 

Comment: A transit technology 

company commented in support of 

FTA’s clarifications in Chapter V 

regarding joint procurement, state or 

local government purchasing schedules, 

and intergovernmental agreements. 

They noted that public sector entities 

often misunderstand FTA’s stance on 

these arrangements and believe this 

clarification will encourage their use, 

ultimately improving efficiency and 

cost-effectiveness in the procurement 

process. 

FTA Response: FTA appreciates the 

comments of support for the proposed 

clarifications which are intended to 

provide transit agencies and 

stakeholders with guidance that ensures 

compliance with applicable laws and 

regulations while promoting efficiency 

and cost-effectiveness in procurement 

practices. 

Comment: A city agency commented 

that Chapter V, Section 4.d lacks clarity 

on why Interstate Purchasing Schedules 

are restricted, despite aligning with 

intergovernmental agreement principles. 

The commenter requested further 

explanation. 

FTA Response: FTA has added 

clarification to the Circular. Interstate 

purchasing schedules generally are 

ineligible for FTA funding because they 

curtail opportunities for competitive 

procurements. Section 3019(b) of the 

FAST Act makes an exception for 

interstate purchases of rolling stock and 

related equipment, but only for rolling 

stock and related equipment. 

F. Chapter VI 

Comment: A consulting firm noted 

that evaluation criteria, including how 

proposals will be scored or rated, 

should be explicitly stated. 

FTA Response: Existing regulation, 2 

CFR 200.320(b), requires that 

solicitations identify all evaluation 

factors and their relative importance. 

The Circular already states this 

requirement. 

Comment: A consulting firm noted 

that the $50,000 threshold for contracts 

under the micro-purchase threshold 

should be tied to the total contract value 

rather than an annual limit. 

FTA Response: FTA has revised the 

Circular to clarify that the selfcertification to use a higher threshold 

must occur annually. The threshold is 

not an annual ‘‘budget’’ for micropurchases. 

Comment: A consulting firm noted 

that task order contracts should be 

evaluated as competitive procurements 

among the pool of selected contractors. 

FTA Response: FTA declines to make 

this change, as the suggestion exceeds 

the requirements in the Federal 

procurement standards of 2 CFR part 

200. The procurement standards do not 

prescribe how task orders are to be 

assigned under multiple award 

contracts. Recipients have discretion to 

manage their contracts and assign task 

orders effectively. 

Comment: A consulting firm noted 

that the requirement to ‘‘consider 

workforce impacts’’ under cost and 

price analysis is unclear and should be 

clarified in terms of method and 

analysis depth. 

FTA Response: In 2024, the U.S. 

Office of Management and Budget 

amended 2 CFR 200.324(a) to add that 

a ‘‘recipient or subrecipient should 

consider potential workforce impacts in 

their analysis if the procurement 

transaction will displace public sector 

employees,’’ as part of analyzing the 

cost or price of a procurement. (89 FR 

30046). FTA will leave this term broad, 

to provide maximum discretion to 

recipients and to accommodate varied 

workforce considerations across 

projects. 

Comment: A consulting firm noted 

that cost analysis requirements should 

explicitly apply to single-bid or singleproposal conditions. 

FTA Response: FTA declines to revise 

the language to explicitly mandate a 

cost analysis for single-bid or singleproposal conditions. The provision as 

written notes that a recipient should 

perform a cost analysis when price 

competition is inadequate. 

Comment: A state department of 

transportation noted that the 

requirement to negotiate profit 

separately was removed from 2 CFR 

200.324 in the October 2024 update. 

However, the circular’s language still 

included this requirement, creating a 

perceived conflict between the two 

regulations. 

FTA Response: FTA acknowledges 

this change to 2 CFR 200.324. It is 

considered a best practice to perform 

these tasks, and the Circular had 

preserved it as a recommendation, not a 

requirement. FTA has removed this 

from the final version of the Circular. 

Comment: A law firm on behalf of an 

industry coalition requested that FTA 

clarify that recipients planning to 

procure operations services through a 

multiyear contract should define the 

scope of work and performance metrics 

in their Request for Proposals. The 

commenter also noted that the contract 

should provide pricing flexibility. The 

commenter suggested that FTA should 

encourage recipients to seek input 

before putting out an RFP and include 

information that will aid bidders in 

developing proposals in the RFP. The 

commenter also suggested that RFPs 

should provide flexibility regarding 

substitutions of key staff. 

FTA Response: FTA declines to revise 

the Circular. The existing guidance in 

Chapter VI already emphasizes the 

importance of clearly defining 

requirements, evaluation criteria, and 

contract expectations in RFPs to ensure 

fair and effective competition, 

consistent with regulation, 2 CFR 


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200.320. Recipients have flexibility in 

structuring their RFPs and contracts to 

address the unique needs of their 

operations services procurements, 

including considerations for pricing 

structures and staffing substitutions. 

Furthermore, while seeking industry 

input before issuing an RFP may be 

useful, it is not universally required. 

The current guidance provides 

sufficient flexibility for recipients to 

develop RFPs that align with their 

procurement objectives while 

complying with Federal requirements. 

Comment: A law firm on behalf of an 

industry coalition suggested that FTA 

include a series of recommendations to 

recipients on what to include in 

contracts, such as provisions requiring 

the provision of detailed information 

from contract bidders, specifying a 

contract base period, bilateral rather 

than unilateral options for contract 

extension, inflation adjustment and 

force majeure clauses. This commenter 

also suggested FTA specify that fixed 

monthly fee and variable rate; variable 

rate; and cost plus rate structures are all 

appropriate for operations contracts. 

FTA Response: FTA declines to 

include these specific 

recommendations. FTA’s existing 

guidance already provides recipients 

with the flexibility to structure contracts 

in a manner that best meets their 

operational and financial needs, 

provided they remain compliant with 

Federal procurement requirements. 

Similarly, FTA declines to prescribe 

specific pricing structures—such as 

fixed monthly fees, variable rates, or 

cost-plus rates—as universally 

appropriate for recipients. Recipients 

have discretion to select contract terms 

and pricing structures based on their 

procurement objectives, market 

conditions, and the specific 

requirements of each procurement. 

Comment: A city agency commented 

that Chapter VI, Section 2.g(1) should 

clarify whether contracts using 

negotiated hourly rates fall under the 

Cost Reimbursement category. 

FTA Response: FTA declines to 

amend the Circular to describe different 

types of cost reimbursement contracts, 

because these terms are generally 

understood in the contracting 

community, and recipients have broad 

discretion to craft contracts within the 

limits of the Federal procurement 

standards (e.g., cost-plus-percentage-ofcost contracts are ineligible). If the 

commenter has a question about a 

specific procurement, the commenter 

should contact its FTA regional office. 

Comment: A city agency commented 

that Chapter VI, Section h.2(c) should 

clarify the prohibition on using 

qualifications based selection (QBS) 

procedures to procure actual 

construction. They suggested adding a 

cross-reference for exceptions under 

alternative contracting methods. 

FTA Response: FTA has added a 

cross-reference to the section of the 

Circular discussing alternative 

contracting methods. 

Comment: A transit bus manufacturer 

suggested that in Chapter VI, Section 

2(g), ‘‘Contract Type Specified,’’ FTA 

include language on price adjustment 

clauses and contract modifications on 

price increases. 

FTA Response: FTA declines to revise 

this section. The current guidance 

already provides recipients with 

flexibility to structure contracts, 

including incorporating price 

adjustment provisions where 

appropriate, as long as they remain 

consistent with Federal procurement 

requirements and principles of fair and 

reasonable pricing. 

G. Chapter VII 

FTA is adopting as proposed the 

proposal to eliminate Chapter VII and 

replace it with a new paragraph in 

proposed Chapter III on Recipient 

Responsibilities and FTA’s Role in 

Procurement Disputes. 

Veronica Vanterpool, 

Deputy Administrator. 

[FR Doc. 2025–00992 Filed 1–15–25; 8:45 am] 

BILLING CODE 4910–57–P 

DEPARTMENT OF TRANSPORTATION 

National Highway Traffic Safety 

Administration 

[Docket No. NHTSA–2025–0001] 

Denial of Motor Vehicle Defect Petition 

AGENCY: National Highway Traffic 

Safety Administration (NHTSA), 

Department of Transportation. 

ACTION: Denial of petition for a defect 

investigation. 

SUMMARY: This notice sets forth the 

reasons for the denial of a defect 

petition, DP23–003, submitted on July 2, 

2023, by Aldelberto A. Cordova (the 

‘‘Petitioner’’) to NHTSA’s Office of 

Defects Investigation (ODI). The petition 

requests that NHTSA (the ‘‘Agency’’) 

investigate an alleged defect in the ‘‘ISG 

48-volt on-board electrical system,’’ 

which resulted in a warning light 

illumination and an inability to start the 

Petitioner’s 2023 Mercedes-Benz 

GLC300. The Petitioner further 

requested a recall for 2023 MercedesBenz GLC300 vehicles based on this 

issue. After conducting a technical 

review of the Petitioner’s submissions, 

reviewing complaints related to MY 

2023 Mercedes-Benz GLC300 warning 

light illumination as well as the 

inability to start a vehicle, and 

reviewing information provided by 

Mercedes-Benz regarding the ISG 48- 

volt system, NHTSA has concluded that 

the issues raised by the petition do not 

warrant a defect investigation at this 

time. Accordingly, the Agency has 

denied the petition. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Alexa Ardron, Vehicle Defects Division 

D, Office of Defects Investigation, 

NHTSA, 1200 New Jersey Avenue SE, 

Washington, DC 20590. Phone: (202)- 

819–4554. Email: Alexa.Ardron@

dot.gov. 

SUPPLEMENTARY INFORMATION: 

Introduction 

Interested persons may petition 

NHTSA requesting that the Agency 

initiate an investigation to determine 

whether a motor vehicle or an item of 

replacement equipment does not 

comply with an applicable motor 

vehicle safety standard or contains a 

defect that relates to motor vehicle 

safety. 49 U.S.C. 30162(a)(2); 49 CFR 

552.1. Upon receipt of a properly filed 

petition, the Agency conducts a 

technical review of the petition, 

material submitted with the petition, 

and any additional information. 49 

U.S.C. 30162(a)(2); 49 CFR 552.6. The 

technical review may consist solely of a 

review of information already in the 

possession of the Agency or it may 

include the collection of information 

from the motor vehicle manufacturer 

and/or other sources. After conducting 

the technical review and considering 

appropriate factors, which may include, 

but are not limited to, the nature of the 

complaint, allocation of Agency 

resources, Agency priorities, the 

likelihood of uncovering sufficient 

evidence to establish the existence of a 

defect, and the likelihood of success in 

any necessary enforcement litigation, 

the Agency will grant or deny the 

petition. See 49 U.S.C. 30162(a)(2); 49 

CFR 552.8. 

Background Information 

In a letter dated July 2, 2023, 

Aldelberto A. Cordova (the ‘‘Petitioner’’) 

submitted a petition requesting that 

NHTSA initiate an investigation into an 

alleged defect in the ISG 48-volt onboard electrical system, which allegedly 

resulted in warning light illumination 

and an inability to start the Petitioner’s 

2023 Mercedes-Benz GLC300 vehicle. 


ddrumheller on DSK120RN23PROD with NOTICES1