Texas Administrative Code › Title 43 - TRANSPORTATION › Part 1 - TEXAS DEPARTMENT OF TRANSPORTATION › Chapter 9 - CONTRACT AND GRANT MANAGEMENT › Subchapter C - CONTRACTING FOR ARCHITECTURAL, ENGINEERING, AND SURVEYING SERVICES › Section 9.34 - Non-Federal Process

Current through Reg. 49, No. 28; July 12, 2024
(a) Applicability.
				  The non-federal process, also referred to as the state process, described under
				  this section may be used for contracts that are not subject to §
										9.35
				  of this subchapter (relating to Federal Process).
(b) Administrative qualification.
(1) Administrative qualification is a process
				  used by the department to verify that a provider performing engineering and
				  design related services has an indirect cost rate that meets department
				  requirements. Except as provided by paragraph (8) of this subsection, to
				  compete for a contract under this section a provider performing engineering and
				  design related services either must be administratively qualified or must
				  accept an indirect cost rate under paragraph (7) of this subsection.
(2) Factors in determining administrative
				  qualification.
(A) A provider may demonstrate
				  administrative qualification by an audit or by self-certification.
(i) An audit may be performed by an
				  independent certified public accountant (CPA), an agency of the federal
				  government, another state transportation agency, or a local transit agency. An
				  audit performed by an independent CPA must be conducted in accordance with the
				  current versions of 48 C.F.R. Part 31 , the Generally Accepted Government
				  Auditing Standards (GAGAS), and the American Association of State Highway and
				  Transportation Officials (AASHTO) Uniform Audit and Accounting Guide. The
				  provider must provide the department with unrestricted access to the audit work
				  papers, records, and other information as requested by the
				  department.
(ii) Self-certification
				  may be conducted by the provider and must include a cost report and an internal
				  controls report. The self-certified cost report must comply with the current
				  versions of 48 C.F.R. Part 31, the GAGAS, and the AASHTO Uniform Audit and
				  Accounting Guide. The self-certified internal control report must certify the
				  provider has internal controls in place within its organization. Both the cost
				  report and the internal control report must be signed by a company officer and
				  notarized.
(B) The audit
				  or self-certification shall be based on the provider's fiscal year. The
				  indirect cost rate, as approved by the department, shall become effective six
				  months after the end of the provider's fiscal year, or immediately if filed
				  more than six months after the end of the provider's fiscal year. It shall be
				  effective no more than twelve months and shall expire eighteen months after the
				  end of the fiscal year upon which it is based, except that, for the purpose of
				  competition referred to in paragraph (1) of this subsection, negotiations
				  referred to in subsection (b)(5) of this section, or administratively qualified
				  under §
												9.35(b)
				  of this subchapter, the department may extend an approved indirect cost rate
				  for 90 days if the department has received the provider's annual administrative
				  qualifications information submittal before the rate's expiration
				  date.
(C) A provider must submit on
				  an annual basis:
(i) a cognizant letter of
				  concurrence issued by a state transportation agency in accordance with the
				  AASHTO Uniform Audit and Accounting Guide; or
(ii) a compensation analysis for all
				  executives and employees in accordance with the AASHTO Uniform Audit and
				  Accounting Guide for which the provider may use either the National
				  Compensation Matrix or surveys as prescribed in the AASHTO Uniform Audit and
				  Accounting Guide.
(D) A
				  provider's payment of a bonus or incentive compensation to an employee is
				  allowable only if the bonus or compensation is paid under a written bonus plan
				  that:
(i) is consistent with the AASHTO
				  Uniform Audit and Accounting Guide that identifies eligibility requirements and
				  provides details regarding how bonus payments are determined; and
(ii) includes an adequate description of the
				  performance measures used to determine bonus amounts, such as employee
				  performance evaluation ratings, contributions toward the firm's revenue growth,
				  and responsibilities for cost containment.
(E) A provider must submit on an annual basis
				  the salary rates for employees that it anticipates using on contracts that may
				  be executed during the next 12-month period. The department will review the
				  salary rates for reasonableness and consistency with industry norms and, when
				  approved, will apply the rates to contracts negotiated within the next 12-month
				  period. During the 12-month period, the provider must submit the salary rate
				  for any employee who is used on a contract and whose salary rate has not been
				  provided under this subparagraph. The department will continue to negotiate
				  contracts on an individual basis during the initial 12-month implementation
				  period.
(F) The department may
				  audit the indirect cost rate of a provider under contract with, or seeking to
				  do business with, the department. These audits will be conducted in accordance
				  with the criteria outlined in this subsection.
(G) A provider must submit a signed
				  Certification of Final Indirect Costs with the audit report or
				  self-certification. The certification must follow the requirements of the
				  Federal Highway Administration.
(H)
				  The department will treat the cost data as confidential pursuant to
				  23 U.S.C. Section
				  112 and 23 C.F.R. Part 172 .
(3) Submittal and review process
				  for administrative qualification.
(A) A
				  provider must submit its administrative qualification information to the
				  department in accordance with the instructions on the department's
				  website.
(B) Upon review of an
				  audit report or self-certification received from a provider, the department may
				  request additional information from the provider. If the submittal is not
				  complete and accurate, the department will return it to the provider for
				  correction. The provider shall submit the additional information or the
				  corrected administrative qualification submittal within 30 days after the day
				  that it receives the department's request. If the information is not received
				  within the 30-day period, the department will reject and not process the
				  administrative qualification submittal.
(C) If an administrative qualification
				  submittal is rejected under subparagraph (B) of this paragraph, the provider
				  may refile a corrected audit report or self-certification and shall include any
				  previously requested information. The provider may not refile earlier than 90
				  days after the day that the department sends the notice rejecting the
				  submittal.
(D) The department will
				  make a good faith effort to complete the administrative qualification review
				  process within 60 days after the day that it receives a complete and accurate
				  audit report or self-certification.
(4) Administrative qualification is
				  applicable only to the incorporated business entity upon which the indirect
				  cost rate is based and does not extend to a subsidiary, affiliate, or parent of
				  the incorporated entity, except as provided by this paragraph. A corporation
				  may administratively qualify a business segment of the corporation if the
				  business segment is not limited to a geographical area that is less than the
				  entire state of Texas and if the corporation is able to demonstrate and justify
				  the allocation of costs between the business segment and other corporate
				  operations. If a corporate business segment is administratively qualified, the
				  resulting indirect cost rate is not applicable to staff not employed by the
				  business segment.
(5) In
				  negotiations under §
											9.38
				  of this subchapter (relating to Emergency Contract Process ), the department
				  will use the selected firm's indirect cost rate information that is in effect
				  at that time the negotiations begin.
(6) The department will not provide a firm's
				  administrative qualification information, including salary information, to the
				  department's staff conducting negotiations or the consultant selection team
				  before the selection of that firm.
(7) Providers not administratively qualified.
				  The department may contract with a prime provider or allow the use of a
				  subprovider that is not administratively qualified if:
(A) the provider has been in operation, as
				  currently organized, for less than one fiscal year and the provider accepts an
				  indirect cost rate developed by the department; or
(B) on request by the department during the
				  selection process, the prime provider provides written certification that the
				  prime provider or subprovider, as applicable, does not have an indirect cost
				  rate audit and will accept an indirect cost rate developed by the
				  department.
(8)
				  Exemptions to administrative qualification.
(A) A non-engineering firm is exempt from the
				  administrative qualification requirement of this section.
(B) A provider performing a service under
				  standard work category 18.2.1, subsurface utilities engineering, or any of the
				  following work groups, as listed on the department's precertification website,
				  is exempted from administrative qualification, to the extent of the service
				  being performed:
(i) Group 6, bridge
				  inspection;
(ii) Group 12,
				  materials inspection and testing;
(iii) Group 14, geotechnical
				  services;
(iv) Group 15, surveying
				  and mapping;
(v) Group 16,
				  architecture; and
(vi) Group 17,
				  facilities engineering.
(C) The department may exempt services other
				  than those indicated in subparagraph (B) of this paragraph on a case-by-case
				  basis. Any request for an exemption must be received by the department by the
				  closing date of the RFP .