Source: http://thefederalregister.com/2012/09/04/2012-21520.html
Timestamp: 2018-02-18 10:34:30
Document Index: 649264013

Matched Legal Cases: ['art 172', 'ART 172', 'art 31', 'art 18', '§ 172', 'art 31', 'art 31', 'art 31', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', 'art 26', '§ 172', 'art 180']

Federal Register | Procurement, Management, and Administration of Engineering an
[FHWA Docket No. FHWA-2012-0043]
RIN 2125-AF44
SUMMARY: The FHWA proposes to update the regulations governing the procurement, management, and administration of engineering and design related services directly related to a highway construction project and reimbursed with Federal-aid highway program (FAHP) funding. The intent is to make the regulations consistent with prior changes in legislation and other applicable regulations. These revisions also address certain findings and recommendations for the oversight of consultant services contained in national review and audit reports.
DATES: Comments must be received on or before November 5, 2012. Late comments will be considered to the extent practicable.
ADDRESSES: Mail or hand deliver comments to the U.S. Department of Transportation, Dockets Management Facility, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590, or submit electronically athttp://www.regulations.govor fax comments to (202) 493-2251. All comments should include the docket number that appears in the heading of this document. All comments received will be available for examination and copying at the above address from 9 a.m. to 5 p.m., e.t., Monday through Friday, except Federal holidays. Those desiring notification of receipt of comments must include a self-addressed, stamped postcard or you may print the acknowledgment page that appears after submitting comments electronically. You may review DOT's complete Privacy Act Statement in theFederal Registerpublished on April 11, 2000 (Volume 65, Number 70, Page 19477-78), or you may visithttp://dms.dot.gov.
FOR FURTHER INFORMATION CONTACT: Mr. Jon Obenberger, Preconstruction Team Leader, FHWA Office of Program Administration, (202) 366-2221, or via email atjon.obenberger@dot.gov, or Mr. Steven Rochlis, Attorney Advisor, FHWA Office of the Chief Counsel, (202) 366-1395, or via email atsteve.rochlis@dot.gov.Office hours for the FHWA are from 8 a.m. to 4:30 p.m., e.t., Monday through Friday, except Federal holidays.
This document and all comments received may be viewed online through the Federal eRulemaking portal at:http://www.regulations.gov.The Web site is available 24 hours each day, 366 days this year. Please follow the instructions. Electronic submission and retrieval help and guidelines are available under the help section of the Web site.
An electronic copy of this document may also be downloaded by accessing the Office of the Federal Register's home page at:http://www.archives.gov/federal-register/, or the Government Printing Office's Web page at:http://www.gpo.gov/fdsys.
The FHWA proposes to modify existing regulations for the administration of engineering and design related service contracts to ensure consistency and compliance with prior changes in authorizinglegislation codified in 23 U.S.C. 112(b)(2) and changes in other applicable Federal regulations. Proposed revisions will also address certain findings contained in a 2008 U.S. Government Accountability Office (GAO) review report (http://www.gao.gov/products/GAO-08-198) regarding increased reliance on consulting firms by State transportation agencies (STAs) and a 2009 DOT Office of Inspector General (OIG) audit report (http://www.oig.dot.gov/library-item/4710) regarding oversight of engineering consulting firms' indirect costs claimed on Federal-aid grants. This rulemaking does not otherwise impose any new burdens on States, local public agencies, or other grantees and subgrantees.
In addition, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council published a final rule in theFederal Registerof August 30, 2010 (75 FR 53129), and effective on October 1, 2010, raising the Federal simplified acquisition threshold established in 48 CFR 2.101 of the FAR from $100,000 to $150,000 to account for inflation using the Consumer Price Index as required in statute. The FHWA proposes to revise the small purchase procedures section to reflect this increase in the Federal threshold.
Subparagraph (a)(2) would be amended to clarify the requirements for use of small purchase procedures and reflect the increase in the Federal simplified acquisition threshold from $100,000 to $150,000 (as specified in the final rule published in theFederal Registerof August 30, 2010 (75 FR 53129)). Additional revisions woulddefine the negotiation requirements for small purchase procedures and clarify the limitations on participation of FAHP funding in contract costs exceeding the established small purchase threshold.
Old section New section 172.1 172.1 Revised. 172.3 172.3 Revised. Audit Revised. Cognizant agency Revised. Competitive negotiation Revised. Contract Added. Contracting agencies Revised. Contract modification Added. Engineering and design related services Revised. Federal cost principles Added. Fixed fee Added. Management role Added. One-year applicable accounting period Revised. Scope of work Added. State transportation agency Added. 172.5(a) 172.7(a) Revised. 172.5(a)(1) 172.7(a)(1) Revised. 172.5(a)(2) 172.7(a)(2) Revised. 172.5(a)(3) 172.7(a)(3) Revised. 172.5(a)(4) Removed. None 172.7(b) Added. 172.5(b) 172.7(b)(2) Revised. None 172.9(a) Added. 172.5(c) 172.9(b) None 172.9(c), (d), and (e) Added. None 172.11(a), (b), and (c) Added. 172.7(a) 172.11(c)(2) Revised. 172.7(b) 172.11(b)(1) Revised. 172.7(c) 172.11(b)(1) Revised. 172.7(d) 172.11(d) Revised. None 172.5(a) and (b) Added. 172.9(a) 172.5(c) Revised. 172.9(a)(5) 172.5(c)(11), (12), and 172.9(d) Revised. None 172.5(d) and (e) Added. 172.9(b) 172.9(f) Revised. 172.9(c) Removed. 172.9(d) 172.7(b)(5) Revised. Rulemaking Analyses and Notices Executive Order 12866 (Regulatory Planning and Review), Executive Order 13563 (Improving Regulation and Regulatory Review), and DOT Regulatory Policies and Procedures
In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 5 U.S.C. 60l-612), the FHWA has evaluated the effects of this proposed rule on small entities, such as local governments and businesses. Based on the evaluation, the FHWA anticipates that this action would not have a significant economic impact on a substantial number of small entities. The proposed amendments clarify and revise requirements for the procurement, management, and administration of engineering and design related services using FAHPfunding and directly related to a construction project. After evaluating the cost of these proposed amendments, as required by changes in authorizing legislation, other applicable regulations, and industry practices, the FHWA believes the projected impact upon small entities which utilize FAHP funding for consultant engineering and design related services would be negligible. Therefore, I certify that the proposed action would not have a significant economic impact on a substantial number of small entities.
title 23—highways 1. Revise Part 172 to read as follows: PART 172-PROCUREMENT, MANAGEMENT, AND ADMINISTRATION OF ENGINEERING AND DESIGN RELATED SERVICES Sec. 172.1 Purpose and applicability. 172.3 Definitions. 172.5 Program management and oversight. 172.7 Procurement methods and procedures. 172.9 Contracts and administration. 172.11 Allowable costs and oversight. Authority:
23 U.S.C. 106, 112, 114(a), 302, 315, and 402; 40 U.S.C. 1101et seq.;48 CFR part 31; 49 CFR 1.48(b) and part 18.
§ 172.1 Purpose and applicability.
Auditmeans a formal examination, in accordance with professional standards, of a consultant's accounting systems, incurred cost records, and other cost presentations to test the reasonableness, allowability, and allocability of costs in accordance with the Federal cost principles (as specified in 48 CFR part 31).
Cognizant agencymeans any agency described below that has performed an audit in accordance with generally accepted government auditing standards to test compliance with the requirements of the Federal cost principles (as specified in 48 CFR part 31) and issued an audit report of the consultant's indirect cost rate, or any described agency that has conducted a review of an audit report and related workpapers prepared by a certified public accountant and issued a letter of concurrence with the audited indirect cost rate(s). A cognizant agency may be any of the following:
Competitive negotiationmeans qualifications-based selection procurement procedures complying with 40 U.S.C. 1101-1104, commonly referred to as the Brooks Act.
Consultantmeans the individual or firm providing engineering and design related services as a party to a contract.
Contractmeans a procurement contract or agreement between a contracting agency and consultant under a FAHP grant or subgrant and includes any procurement subcontract under a contract.
Contracting agenciesmeans State transportation agency or a procuring agency of the State acting in conjunction with and at the direction of the State transportation agency, other direct grantees, and all subgrantees that are responsible for the procurement, management, and administration of engineering and design related services.
Contract modificationmeans an agreement modifying the terms or conditions of an original or existing contract.
Engineering and design related servicesmeans:
Federal cost principlesmeans the cost principles contained in 48 CFR part 31 of the Federal Acquisition Regulations for determination of allowable costs of commercial, for-profit entities (as specified in 49 CFR 18.22(b)).
Fixed feemeans a dollar amount established to cover the consultant's profit and business expenses not allocable to overhead.
Management rolemeans acting on the contracting agency's behalf, subject to review and oversight by agency officials, to perform management services such as a program or project administration role typically performed by the contracting agency and necessary to fulfill the duties imposed by title 23 U.S.C., other Federal and State laws, and applicable regulations.
One-year applicable accounting periodmeans the annual accounting period for which financial statements are regularly prepared by the consultant.
Scope of workmeans all services, work activities, and actions required of the consultant by the obligations of the contract.
State transportation agency (STA)means that department or agency maintained in conformity with 23 U.S.C. 302 and charged under State law with the responsibility for highway construction (as defined in 23 U.S.C. 101); and that is authorized by the laws of the State to make final decisions in all matters relating to, and to enter into, all contracts and agreements for projects and activities to fulfill the duties imposed by title 23 United States Code, title 23 Code of Federal Regulations, and other applicable Federal laws and regulations.
§ 172.5 Program management and oversight.
(a)STA responsibilities.STAs (or other direct grantees) shall develop and sustain organizational capacity and provide the resources necessary for the procurement, management, and administration of engineering and design related consultant services, reimbursed in whole or in part with FAHP funding (as specified in 23 U.S.C. 302(a)). Responsibilities shall include the following:
(4) Administering subgrants in accordance with State laws and procedures (as specified in 49 CFR 18.37) and the requirements of 23 U.S.C.106(g)(4)). This shall include providing oversight of the procurement, management, and administration of engineering and design related consultant services by subgrantees to assure compliance with applicable Federal and State laws and regulations. Nothing in this part shall be taken as relieving the STA of its responsibility under laws and regulations applicable to the FAHP for the work performed under any consultant agreement or contract entered into by a subgrantee.
(b)Subgrantee responsibilities.Subgrantees shall develop and sustain organizational capacity and provide the resources necessary for the procurement, management, and administration of engineering and design related consultant services, reimbursed in whole or in part with FAHP funding (as specified in 23 U.S.C. 106(g)(4)(A)). Responsibilities shall include the following:
(c)Written policies and procedures.The contracting agency shall prepare and maintain written policies and procedures for the procurement, management, and administration of engineering and design related consultant services. The STA (or other direct grantee) written policies and procedures and all revisions shall be approved by the FHWA. Written policies and procedures prepared by subgrantees shall be approved by the awarding STA (or other direct grantee). Any deviations from approved policies and procedures shall require review by FHWA, or the direct grantee as appropriate, to assess compliance with applicable requirements. These policies and procedures shall, as appropriate for each method of procurement a contracting agency proposes to use, address the following items to assure compliance with Federal and State laws, regulations, and the requirements of this part:
(7) Selecting appropriate contract type, payment method(s), and terms and incorporating required contract provisions, assurances, and certifications in accordance with § 172.9;
(9) Establishing elements of contract costs, accepting indirect cost rate(s) for application to contracts, and assuring consultant compliance with the Federal cost principles in accordance with § 172.11;
(a)Procurement methods.The procurement of engineering and design related services funded by FAHP funds and directly related to a highway construction project subject to the provisions of 23 U.S.C. 112(a) shall be conducted in accordance with one of three methods: Competitive negotiation (qualifications-based selection) procurement, small purchase procurement for small dollar value contracts, and noncompetitive procurement where specific conditions exist allowing solicitation and negotiation to take place with a single consultant.
(1)Competitive negotiation (qualifications-based selection).Except as provided in (2) and (3) below, contracting agencies shall use the competitive negotiation method for the procurement of engineering and design related services when FAHP funds are involved in the contract (as specified in 23 U.S.C. 112(b)(2)(A)). The solicitation, evaluation, ranking, selection, and negotiation shall comply with the qualifications-based selection procurement procedures for architectural and engineering services codified under 40 U.S.C. 1101-1104, commonly referred to as the Brooks Act. In accordance with the requirements of the Brooks Act, the followingprocedures shall apply to the competitive negotiation procurement method:
(i)Solicitation.The solicitation process shall be by public announcement, public advertisement, or any other public forum or method that assures qualified in-State and out-of-State consultants are given a fair opportunity to be considered for award of the contract. Procurement procedures may involve a single step process with issuance of a request for proposal (RFP) to all interested consultants or a multiphase process with issuance of a request for statements or letters of interest or qualifications (RFQ) whereby responding consultants are ranked based on qualifications and request for proposals are then provided to three or more of the most highly qualified consultants. Minimum qualifications of consultants to perform services under general work categories or areas of expertise may also be assessed through a prequalification process whereby statements of qualifications are submitted on an annual basis. Regardless of any process utilized for prequalification of consultants or for an initial assessment of a consultant's qualifications under an RFQ, a RFP specific to the project, task, or service is required for evaluation of a consultant's specific technical approach and qualifications.
(ii)Request for proposal (RFP).The RFP shall provide all information and requirements necessary for interested consultants to provide a response to the RFP and compete for the solicited services. The RFP shall:
(D) Specify the contract type and method(s) of payment to be utilized in accordance with § 172.9;
(iii)Evaluation factors.(A) Criteria used for evaluation, ranking, and selection of consultants to perform engineering and design related services must assess the demonstrated competence and qualifications for the type of professional services solicited. These qualifications-based factors may include, but are not limited to, technical approach (e.g., project understanding, innovative concepts or alternatives, quality control procedures), work experience, specialized expertise, professional licensure, staff capabilities, workload capacity, and past performance.
(iv)Evaluation, ranking, and selection.(A) Consultant proposals shall be evaluated by the contracting agency based on the criteria established and published within the public solicitation.
(C) Following submission and evaluation of proposals, the contracting agency shall conduct interviews or other types of discussions determined appropriate for the project with at least three of the most highly qualified consultants to clarify the technical approach, qualifications, and capabilities provided in response to the RFP. Discussion requirements shall be specified within the RFP and should be based on the size and complexity of the project as defined in contracting agency written policies and procedures (as specified in § 172.5(c)). Discussions may be written, by telephone, video conference, or by oral presentation/interview. Discussions following proposal submission are not required provided proposals contain sufficient information for evaluation of technical approach and qualifications to perform the specific project, task, or service with respect to established criteria.
(F) The contracting agency shall retain acceptable documentation of the solicitation, proposal, evaluation, and selection of the consultant inaccordance with the provisions of 49 CFR 18.42.
(v)Negotiation.(A)Independent estimate.Prior to receipt or review of the most highly qualified consultant's cost proposal, the contracting agency shall prepare a detailed independent estimate with an appropriate breakdown of the work or labor hours, types or classifications of labor required, other direct costs, and consultant's fixed fee for the defined scope of work. The independent estimate shall serve as the basis for negotiation and ensuring the consultant services are obtained at a fair and reasonable cost.
(B) Elements of contract costs (e.g., indirect cost rates, direct salary or wage rates, fixed fee, and other direct costs) shall be established separately in accordance with § 172.11.
(D) The contracting agency shall retain documentation of negotiation activities and resources used in the analysis of costs to establish elements of the contract in accordance with the provisions of 49 CFR 18.42. This documentation shall include the consultant cost certification and documentation supporting the acceptance of the indirect cost rate to be applied to the contract (as specified in § 172.11(c)).
(2)Small purchases.The small purchase method involves procurement of engineering and design related services where an adequate number of qualified sources are reviewed and the total contract costs do not exceed an established simplified acquisition threshold. Contracting agencies may use the State's small purchase procedures which reflect applicable State laws and regulations for the procurement of engineering and design related services provided the total contract costs do not exceed the Federal simplified acquisition threshold (as specified in 48 CFR 2.101). When a lower threshold for use of small purchase procedures is established in State law, regulation, or policy, the lower threshold shall apply to the use of FAHP funds. The following additional requirements shall apply to the small purchase procurement method:
(3)Noncompetitive.The noncompetitive method involves procurement of engineering and design related services when it is not feasible to award the contract using competitive negotiation or small purchase procurement methods. The following requirements shall apply to the noncompetitive procurement method:
(b)Additional procurement requirements.(1)Common grant rule.(i) STAs (or other direct grantees) and their subgrantees must comply with procurement requirements established in State and local laws, regulations, policies, and procedures which are not addressed by or in conflict with applicable Federal laws and regulations (as specified in 49 CFR 18.36).
(2)Disadvantaged Business Enterprise (DBE) program.(i) Contracting agencies shall give consideration to DBE consultants in the procurement of engineering and design related service contracts subject to 23 U.S.C. 112(b)(2) in accordance with 49 CFR part 26. When DBE program participation goals cannot be met through race-neutral measures, additional DBE participation on engineering and design related services contracts may be achieved in accordance with a contracting agency's FHWA approved DBE program through either:
(A) Use of an evaluation criterion in the qualifications-based selection of consultants (as specified in § 172.7(a)(1)(iii)(D)); or
(3)Suspension and debarment.Contracting agencies must verify suspension and debarment actions and eligibility status of consultants and subconsultants prior to entering into an agreement or contract in accordance with 49 CFR 18.35 and 2 CFR part 180.
(4)Conflicts of interest.(i) Contracting agencies shall maintain a written code of standards of conduct governing the performance of their employees engaged in the award and administration of engineering and design related services contracts under this part and governing the conduct and roles of consultants in the performance of services under such contracts to prevent, identify, and mitigate conflicts of interest in accordance with 23 CFR 1.33 and the pr