Federal Transit Administration Cooperative Procurement Pilot Program, 67211-67213 [05-22058]

Agencies

• Federal Transit Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 70, Number 213 (Friday, November 4, 2005)]
[Notices]
[Pages 67211-67213]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-22058]


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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

[[Page 67213]]

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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