The Federal Transit Administrations Capital Cost of Contracting

The Federal Transit Administration's “Capital Cost of Contracting” Jon W. Martz Director, Government and Public Affairs Enterprise Holdings Inc. jon. martz@ehi. com 1

Types of Contracts • Capital Contracts for services, incl. vehicles • Preventive Maintenance Contracts • Operations Contracts Public/Private Partnerships (P 3 s) Private Investment Project Procedures (PIPP) May 30 th 2018 2

FTA Capital Cost of Contracting • In mid ‘ 80 s, the FTA recognized that transit service contracts were being treated as operating expenses, even though vehicles and facilities could be part of the agreement. Federal Operating Assistance 0% / Local 100% Federal Capital Assistance 80% / Local 20% • To avoid imposing burdensome accounting rules, the FTA allows the recipient to consider a percentage of service costs without further justification. 3

FTA Capital Cost of Contracting Type of Contractor provides Vehicles Maintenance Transit Service Percent of Contract Eligible for 80 Percent Federal Share 1 Typical Service Contract 0% 2 CCof. C Service Contract 40% 3 Vehicle Maintenance Contract 100% 4 Vehicle Lease Contract 100% 5 Maintenance/Lease Contract 100% 6 Turnkey Contract 50% 7 Vehicle/Service Contract 10% 4

FTA Capital Cost of Contracting • Only the costs attributable to privately-owned assets are eligible under this policy. • A recipient may request FTA participation at a higher percentage of the contract than shown, but must provide actual costs and justification. • Capital consumed for service or maintenance in the provision of service outside the public transportation portion of the contract, e. g. for charter/school bus/taxi/TNC service, is not an eligible cost. 5

FTA Capital Cost of Contracting • The percentages are calculations using data from the National Transit Database (NTD). • The percentages have been adjusted over the course of the last thirty-two years. • Presented by type of contract, the calculations represent industry averages in counting capital-eligible activities as a share of total cost. • The percentages apply whether the service is local, express, shuttle, or paratransit. 6

FTA Capital Cost of Contracting 7

Certifications & Requirements • Civil Rights ‒ Title VI ‒ Americans with Disabilities Act (ADA) ‒ Equal Employment Opportunity (EEO) • Disadvantaged Business Enterprise (DBE) • Buy America Compliance ‒ In FY 18, 65% domestic content… In FY 19, 70%. ‒ Vans and Minivans… Certified assembly in the USA 8

Certifications & Requirements • Transit Employee Protective Arrangements ‒ Section 13(c) • Drug and Alcohol Testing Program ‒ Safety-Sensitive Employees, e. g. drivers, mechanics, etc. ‒ Pre-employment, Post-Accident, Random • Safety Management Systems (SMS) ‒ Risk Management and Driver Safety Program • Transit Asset Management (TAM) ‒ Who owns the assets? • National Transit Database (NTD) Reporting 9

Unsolicited Proposals (USP) • Unless USP offers a proprietary concept essential to contract performance, FTA expects the recipient to seek competition. • To satisfy the FTA requirement for full and open competition, FTA expects the recipient to take the following actions : • Publicize receipt of the USP and include an adequate description of the services offered without improperly disclosing proprietary information or disclosing the originality of thought or innovativeness of the services sought; • Publicize recipient’s interest in acquiring the services described in the USP and provide an adequate opportunity for interested parties to comment or submit competing proposals; and • Publicize recipient’s intention to award a contract based on the USP or another proposal submitted in response to the publication 10

Single Proposal (Sole Source Justification) • Adequate or Inadequate Competition • Was RFP unduly restrictive? • Price/Cost Analysis • Must prove “reasonableness” of award • Comparison to previous purchases, market prices, or comparison to a valid independent cost estimate (ICE). • Negotiation • Must be documented, and in accordance with State laws. 11