[Federal Register: November 4, 2005 (Volume 70, Number 213)]
[Notices]
[Page 67211-67213]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04no05-118]
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DEPARTMENT OF TRANSPORTATION
Federal Transit Administration
Federal Transit Administration Cooperative Procurement Pilot
Program
AGENCY: Federal Transit Administration, DOT.
ACTION: Notice; request for proposals.
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SUMMARY: This notice solicits proposals for consideration for the
Cooperative Procurement Pilot Program (CPPP). Section 166 of the
Transportation, Treasury, and Independent Agencies Appropriations Act,
2004 directs the Federal Transit Administration (FTA) to establish a
pilot program to determine the benefits of encouraging cooperative
procurement of major capital equipment. As specified in the
Appropriations Act, three pilot projects were selected in November
2004. Section 167 of the Transportation Treasury, and Independent
Agencies Appropriations Act, 2005 directs the FTA to continue the CPPP
and to expand the program to five pilot projects. Under the CPPP,
competitively selected grantees, consortiums of grantees, or members of
the private sector acting as agents of grantees will develop
cooperative specifications and conduct joint procurements. For this
program, Congress has raised the Federal share to be provided from 80
percent to 90 percent.
DATES: Proposals (2 copies) and/or comments will be evaluated in the
order they are received and the proposing party will receive
notification of acceptance or denial no later than 90 days after FTA
receives the proposal.
ADDRESSES: Proposals and/or comments should be submitted to Bruce
Robinson, 400 Seventh Street, SW., Suite 9401, Washington, DC 20490 or
bruce.robinson@fta.dot.gov and shall reference CPPP.
FOR FURTHER INFORMATION CONTACT: Bruce Robinson, Office of Research,
Demonstration, and Innovation, Federal Transit Administration, (202)
366-4209, or e-mail: bruce.robinson@fta.dot.gov.
SUPPLEMENTARY INFORMATION:
Background
The Federal Transit Administration provides grants to State and
local government agencies to support public transportation in
communities across America. A major portion of these funds is used to
purchase major capital equipment (e.g., buses, vans, railcars) used in
providing public transit service. FTA's annual budget exceeds $7
billion, or which more than $3 billion is distributed by formula to
more than 1,000 grantees nationwide. On average, FTA funds more than
half of the bus purchases in any given year in the United States. The
bus industry and FTA have promoted standard contract terms and
conditions to try to reduce the number of individualized bus orders.
Voluntary standard technical specifications and warranties have been
developed and promoted by FTA and the American Public Transportation
Association. To date, none of these efforts has reduced the use of
individualized designs and specifications. This phenomenon also
[[Page 67212]]
occurs, perhaps less visibly, in the small vehicle groups (vans) and
rail vehicles as well. The result is higher prices for vehicles. FTA
believes that, in addition to cost savings, cooperative procurements
could ease the burden on individual transit agencies and their
specification writers, manufacturers, and suppliers, and promote
healthy, competitive, and predictable transit related capital equipment
markets. The program may also serve as an opportunity to improve the
existing standard bus procurement guidelines.
This document lays out the proposed demonstration elements, as
specified in FTA's 2004 Appropriations Act (Pub. L. 108-199), the
benefits of the program, the application process, the evaluation
criteria, and the technical assistance available. In addition this
notice briefly describes the FTA report to Congress mandated for this
demonstration.
The Cooperative Procurement section 166 of Public Law 108-199
directs FTA to conduct a Cooperative Procurement Pilot Program. The
legislation contains specific language concerning the purpose of the
pilot program, eligible expenses, maximum Federal share, outreach, and
reporting. A summary of the section follows.
Section 167 of the Transportation Treasury, and Independent
Agencies Appropriations Act, 2005 directs the FTA to continue the CPPP
and to expand the program to five pilot projects. Section 166 calls for
the Secretary of Transportation to conduct a pilot of three cooperative
procurements of major capital equipment under sections 4307 (Urban
Formula grants), 5309 (Discretionary Capital grants), and 5311 (Rural
Formula grants) of FTA's authorizing legislation. It authorizes a 90
percent Federal share for grants to purchase major capital equipment
under this program, compared to the 80 percent otherwise authorized in
sections 5307, 5309 and 5311. Title 49 of the United States Code,
chapter 53, authorizes FTA to provide grants to governmental agencies
to promote the provision of transit services. The full text of section
166 is as follows:
Sec. 166. (a) In General--The Secretary shall establish a pilot
program to determine the benefits of encouraging cooperative
procurement of major capital equipment under sections 5307, 5309, and
5311. The program shall consist of three pilot projects. Cooperative
procurements in these projects may be carried out by grantees,
consortiums of grantees, or members of the private sector acting as
agents of grantees.
(b) Federal Share--Notwithstanding any other provision of law, the
Federal share for a grant under this pilot program shall be 90 percent
of the net project cost.
(c) Permissible Activities--
(1) Developing Specifications--Cooperative specifications may be
developed either by the grantees or their agents.
(2) Requests for Proposals--To the extent permissible under State
and local law, cooperative procurements under this section may be
carried out, either by the grantees or their agents, by issuing one
request for proposal for each cooperative procurement, covering all
agencies that are participating in the procurement.
(3) Best and Final Offers--The cost of evaluating best and final
offers either by the grantees or their agents, is an eligible expense
under this program.
(d) Technology--To the extent feasible, cooperative procurements
under this section shall maximize use of Internet-based software
technology designed specifically for transit buses and other major
capital equipment to develop specifications; aggregate equipment
requirements with other transit agencies; generate cooperative request
for proposal packages; create cooperative specifications; and automate
the request for approved equals process.
(e) Eligible Expenses--The cost of the permissible activities under
(c) and procurement under (d) are eligible expenses under the pilot
program.
(f) Proportionate Contributions--Cooperating agencies may
contribute proportionately to the non-Federal share of any of the
eligible expenses under (e).
(g) Outreach--The Secretary shall conduct outreach on cooperative
procurement. Under this program the Secretary shall: (1) Offer
technical assistance to transit agencies to facilitate the use of
cooperative procurement of major capital equipment; and (2) conduct
seminars and conferences for grantees, nationwide, on the concept of
cooperative procurement of major capital equipment.
(h) Report--Not later than 30 days after delivery of the base order
under each of the pilot projects, the Secretary shall submit to the
House and Senate Committees on Appropriations a report on the results
of that pilot project. Each report shall evaluate any savings realized
through the cooperative procurement and the benefits of incorporating
cooperative procurement, as shown by that project, into the mass
transit program as a whole.
On November 16, 2004 FTA announced the selection of the first 3
CPPP pilot projects. Theses are:
1. A consortium organized and led by STV. This group will focus on
purchasing low floor diesel buses in 30', 35' and 40' configurations.
2. The Texas Department of Transportation. TxDOT will enter into a
requirements contract applicable to its subgrantees and other local
government entities thoughtout the state. They will focus on purchasing
diesel cutaway buses appropriate for rural and paratransit
applications.
3. A consortium led by the Regional Transportation Commission of
Southern Nevada. This group expects to focus on purchasing CNG buses in
several configurations.
Goals
FTA's goals for the CPPP are to develop, refine, and prove
innovative procurement practices that provide significant benefits to
the public transit industry, including cost savings compared to a
standard procurement (both in initial procurement costs and operational
costs over the life of the equipment); improved efficiency of the
procurement processes; procurement methods that are easily implemented;
decreased managerial burden on the organization involved; and efficient
use of Interned-based software technology in developing specifications,
aggregating equipment requirements with other transit agencies, and
generating cooperative requests for proposal packages.
Initial Issues
By introducing a number of innovative procurement practices, this
program could identify and provide significant advantages to the
transit industry. We also recognize that the failure to consider the
full effects of any particular project could prove disruptive to the
transit industry. The major issues related to competition are captured
in this section and proposers are asked to address these concerns in
their proposals.
It is important that this program not artificially skew
the bus, supplier, or other major capital equipment markets. Sound
manufacturing and supply markets are vital to maintaining the
availability of high quality, reasonably priced buses and other major
capital equipment. In this program, FTA hopes to secure the best
available pricing and quality for grantees' major capital equipment
purchases and achieve the best value for taxpayer dollars.
The pilot projects ought to be narrowly tailored (e.g.,
one project may involve procurement of 40', 102''-wide, low-floor,
clean diesel buses) toor enhance the program's viability and our
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ability to obtain realistic comparisons of the procurement methods
employed.
Because procurements of buses and other rolling stock
often extend to five years of requirements, many interested transit
agencies may be obligated under the terms of existing multi-year
contracts. A transit agency obligated under a current contract may wish
to be involved in a pilot project's out-years. For example, a transit
agency obligated to buy buses under a current contract for two more
years may wish to join the project for purchases effective in year
three (assuming a five-year contract duration under a project). If a
transit agency holds an existing option or other right to purchase
buses in the future, participation in the CPPP might provide better
pricing that would warrant a decision not to exercise the option. A
proposal including participants facing this situation should explain
how it will address this issue, e.g., forego or assign the option to
other nonparticipants.
Similarly, current practice allows transit agencies to
assign rights to purchase buses to other transit agencies not parties
to the original contract, a practice known in the industry as
``piggybacking.'' This practice may be inconsistent with the concept of
joint procurement, a potential threat to the market, or otherwise
inappropriate in this program. Proposals should address this issue in
terms of the intent to allow or not allow assignments.
One joint procurement model involves designating a lead
transit agency to act as the ``contracting officer'' for all project
participants, with other participants limited to the role of
``authorized purchaser'' without authority to change, curtail, or
extend the single contract. Another model could have all participants
in a project cooperate in issuing specifications but independently
contract with the supplier(s) selected according to each transit
agency's independent analysis of the suppliers' proposals. CPPP
proposals should explain how this, or other methods they propose to
use, would serve the program's goals and the intent of the individual
project.
Bonding and payment terms, as well as overall risk
management and mitigation, are concerns for both transit agencies and
suppliers. This program offers an opportunity to foster innovative
approaches to these issues that fairly and economically allocate risks.
The voluntary industry bus specification (the Standard Bus
Procurement Guidelines) funded by FTA and issued by the American Public
Transportation Association may serve as a baseline for one or more
project specifications.
Submission of Proposals
FTA solicits proposals for two pilot CPPP projects. Proposals
should present an overview of the proposed project, a preliminary list
of the participants, the objectives of the procurement, technological
aspects of the proposed project, anticipated costs (not including the
purchase price of the equipment to be procured), and a description of
how the project meets the selection criteria below and approaches the
issues described above. Not all project participants need be identified
at the time of the proposal; they may be added to the project once the
selection is made.
Selection Criteria
In selecting the pilot CPPP projects, FTA will give preference to
proposals aimed primarily at procurements of rolling stock, but will
consider cooperative procurement proposals of other major capital
equipment as well. FTA's selection will be based on a determination of
how to best test different methods of joint procurement, so that FTA
can compare and contrast those methods and report the results to
Congress and the industry as a guide for future procurement actions.
FTA will select the two pilot projects after consideration of:
Sound business planning. Proposals should demonstrate a
clear, concise procurement plan, ordering procedures, financial and
contractual aspects of their approach, and contract administration
techniques.
Identification, mitigation, management, and sharing of
risk. This includes approaches to bonding, payment terms, warranties,
and other elements of risk that affect pricing.
Amount and likelihood of economic benefits. Proposals
should present, to the extent possible, projected costs savings to be
garnered through administrative efficiencies, as well as potential
savings predicated on volume buying.
Administrative efficiency. This includes streamlining
efforts that assist buyers and sellers alike.
Innovative techniques. This includes the use of technology
to promote efficiency and/or reduce costs for buyers and sellers, novel
approaches to financing, maintenance, parts supplies, or other aspects
of total costs of ownership.
Approach to the initial issues. Proposals should explain
how they will approach FTA's systemic concerns explained above.
Technical capacity. This refers to the capacity of the
proposers to undertake and manage a joint procurement of this nature.
Evaluation Process
FTA staff will evaluate all proposals based on the selection
criteria listed above. We may engage in discussions with individual
proposers to further define the pilot projects, but reserve the right
to select one or more pilot projects based on the original submissions
and without discussions.
Program Evaluation and Reporting
Following the award of the procurement contract(s) in each pilot
project, FTA will evaluate the procurement process used and the results
achieved in each project, and report the findings to Congress. FTA's
evaluation will be based on the cost savings compared to a standard
procurement; the improvement in the efficiency of the procurement
process; the ease of implementing the procurement methods; the decrease
in managerial burden on the organizations involved; and the use of
Internet-based software technology in developing specifications,
aggregating equipment requirements with other transit agencies, and
generating cooperative requests for proposal packages. FTA will use the
results of this evaluation to formulate guidance for grantees on the
use of cooperative procurement methods. Participating entities will be
required to cooperate in the information gathering, reporting, and
outreach processes.
Issued on: November 1, 2005.
Jennifer L. Dorn,
Administrator.
[FR Doc. 05-22058 Filed 11-3-05; 8:45 am]
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