WPCS Ö ^:8_:8==wg{f-V,1U6=bx+PO]=,;||zMoA`S=6=4؊9$_(Y;h95%:W<:`@"qA5@O`{f&RµyJ >R^LeYڱZ.p"F1@gCȵhAF Q#qGY~:٩;2彞T6}4B|8*g*ESNX`Ix#2UNY5 %5 0(5w54555f6a6 0@6 0DZ6 0]6 06f7 07 0r,8a9E.9 009M:M:f:a: 0-.:(: 1u: 0<Ja; 0@; 72; BJ<W:< 72= 0D=N> 1_ > 0Rh> 0C> 0Xb> 0 _? 0 ? 1u@ 1(A 0 A 0 vB 0 QC 0D@D 0NE 1 E 72]F 72F F 1F 72VGfGfGfGaG^ G 0'G 0H 0I 72fJ 0JazK 0KMmLfqL 0sLfOM 0QM 0*N 0O 0 FO 0"Q 0?HQ 0VCR 0R 0'oS 0vT 0 DwT 0T 0dU 0 8V 0W 0 X 0 Z 0 K\ 0 ^ 0^ 0_ 0 j` 1+b 72b 1b 72kcc 0lFeeg 0Ki 0 j 0k 0l 0 m 0Do 0U *fa 0, 0aDžDž 0ۅfaa 0ΆaD 0U>U @ 0V- A 0. 0< 0AA 0R6n 7 F 7 D-ȍfa 7 7  7 # 7 / 7 ;/GXv ΓΓ U > HHZ K 0Nۤ)& 1 0c!CZճճճ 0w/ D3ٴU>ee'U>ƽ 0sIMU>Q mS&jU>]]]U>jDDU>U>.M .WYaSUNfaU@U@ =LLL 0Y,,,  0 eeeeeeeeeeeee\KK OOOOOO[[[[)ZZZ'''''0 BU>[[<xM M G G   .   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 _ @  @ <( 4 <DLX<O @ XX   @ O}  XfXXXXXfL     45  L+  #mXX##m #mԀSeefootnoteabove. w $ P` XX  8  ڀ  _  4 O  5  http://constructioninstitute.org.XfX6O  7 Ԁ2/J 0_levsl9    L23  Ԁ  2( 4 <DL2  <+ :Outline006_1  , 2( 4 <DL2XXXA(\ Y`SymbolA23  ..  2( 4 <DL2XXXS\  `&Times New RomanS  2GJ 0_levnl1  X /%4 4 <DL/23   2( 4 <DL2  2DJ 0_levnl2   ," <DL,23   2( 4 <DL2  <+ :Outline007_1  , 2( 4 <DL2XXXA(\ Y`SymbolA23  ..  2( 4 <DL2XXXS\  `&Times New RomanS  <G+J :Outline008_1   /%` ` <DL/23  ..  2( 4 <DL2  2AJ 0_levnl3   ) <DL)23   2( 4 <DL2  <+ :Outline009_1  , 2( 4 <DL2XXXA(\ Y`SymbolA23  ..  2( 4 <DL2XXXS\  `&Times New RomanS  <+ :Outline010_1  , 2( 4 <DL2XXXA(\ Y`SymbolA23  ..  2( 4 <DL2XXXS\  `&Times New RomanS  <+ :Outline011_1  , 2( 4 <DL2XXXA(\ Y`SymbolA23  ..  2( 4 <DL2XXXS\  `&Times New RomanS  <+ :Outline012_1  , 2( 4 <DL2XXXA(\ Y`SymbolA23  ..  2( 4 <DL2XXXS\  `&Times New RomanS  <+ :Outline013_1  , 2( 4 <DL2XXXA(\ Y`SymbolA23  ..  2( 4 <DL2XXXS\  `&Times New RomanS  <+ :Outline014_1  , 2( 4 <DL2XXXA(\ Y`SymbolA23  ..  2( 4 <DL2XXXS\  `&Times New RomanS  <+ :Outline015_1  , 2( 4 <DL2XXXA(\ Y`SymbolA23  ..  2( 4 <DL2XXXS\  `&Times New RomanS  jjjjjjjj(35=EMU]em1(a)(a)(a)(a)(a)(a)(a)(a)XXXXXXXX(359=AEIMQ2PPPPPPPP\\\\\\\\(359=AEIMQ3PPPPPPPPnnnnnnnn(359=AEIMQ4PPPPPPPPVVVVVVVV(359=AEIMQ5PPPPPPPP2>J 0_levnl4  ` &<<DL&23   2( 4 <DL2  iiiiiiii(359=AEIMQ6PPPPPPPPTTTTTTTT(359=AEIMQ7PPPPPPPPWWWWWWWW(359=AEIMQ8PPPPPPPPqqqqqqqq(359=AEIMQ9PPPPPPPPmmmmmmmm(57;?CGKOS10PPPPPPPPpppppppp(57;?CGKOS11PPPPPPPPffffffff(57;?CGKOS12PPPPPPPPoooooooo(57;?CGKOS13PPPPPPPP)Hairline drrrrrrrr(57;?CGKOS14PPPPPPPPllllllll(57;?CGKOS15PPPPPPPP(\ Y`Symbol\  `&Times New Roman%2A`ArialTable_A2;J 0_levnl5   #DL#23   2( 4 <DL2  28J 0_levnl6    DL 23   2( 4 <DL2  TABLE A25J 0_levnl7  h DDL23   2( 4 <DL2  tTABLE DTABLE I22J 0_levnl8   L23   2( 4 <DL2  TABLE Fhttp://construction-institute.org2/J 0_levnl9    L23   2( 4 <DL2  \  `&Times New Roman(hH  Z(Times New Roman 6 4Heading 5   &Draw Object =8C HKKKK<OL:Definition L  , 8.4 <DL!8   5+ 4 <DL!5<:Default Para.UX ,Style    2( <DL!2   5+ 4 <DL!5  < :endnote text    http://www.forecastart.orgsTPhttp://www.americansforthearts.orgLevel 1Level 2Level 3Level 4Level 5sTP)!dxdx@TABLE JsVPt\PuWPvTPwXP % !  _<( 4 <DLX< @  @  @  @  @  @ O @ XX   @ O  XfXXXXXfL     46  LW  #mXX##m8#mԀTransportationInfrastructure:AdvantagesandDisadvantagesofWrapUpInsuranceforLargeConstruction  Projects,B281480,June1,1999.TheGAOreportmaybeaccessedat:O݌ t Ќ @ XXm  mXX4 O  5  http://www.gao.gov/archive/1999/rc99155.pdf6wO  7 #m#m#XXmX#.mXXԀOrdersmayalsobeplacedbycalling(202)5126000.#XXm#http://www.gao.gov/archive/1999/rc99155.pdf_Hlt55621314_Hlt55621597\  `&Times New Roman  !  _?+ 4 <DL!X?O @ XX  Oj    38  49_USC_Ԁ5325(b)demandsthatBrooksactproceduresbeusedfortheseserviceseventhoughtheyarenotroutinely  donebyA&Efirms(e.g.,surveying)anddonotrequirelicensedarchitectsorengineers.XfX  !  _<( 4 <DLX< @  @ O @ XX   @ O}  XfXXXXXfL     47  L+  #mXX##m #mԀSomeprojectownerssharetheinsurancerebateswiththeircontractors.Forexample,theBostonArteryproject  willshare20percentofanysavingswithcontractorsintheformofsafetyincentiveawards. @  !  _<(  <DL!X<O @ XX  Og  XfX  39  #XXf#ԀTheTransportationEquityActforthe21stCentury(TEA21)imposedregulationsaffectingtheadministration  ofcontractsawardedbygranteesforarchitecturalandengineeringservices.TheregulationsaffectingtheFederal t HighwayAdministration(_FHWA_)maybefoundin23U.S.C.112andthecorrespondingregulationsforFTA 8 granteesmaybefoundin49U.S.C.5325(b)._FHWA_ԀimplementedtheTEA21requirementsitsfinalrule, L "AdministrationofEngineeringandDesignRelatedServicesContracts,"datedJune12,2002  (4 O  5  "  http://_frwebgate.access.gpo.gov_/cgibin/_getdoc.c%  g%i?dbname_=2002_register&_docid_=0214751filed"1B  6  7 ').Thisfinalrule  hadbeenprecededbyaNoticeofProposedRulemaking,"AdministrationofEngineeringandDesignRelated H  ServicesContracts"publishedin65FR44486,July18,2000(4 O  5  "  http://frwebgate.access.gpo.gov/cgi  \ bin/getdo%  c%e.cgi?dbname=2000_register&docid=0017774filed"B  6  7 ).BecausethelanguageinFTA'ssectionoftheCode   wassubstantiallysimilartothatof_FHWA_,FTA'sOfficeofChiefCounselhasinterpretedthelanguageof49U.S.C.    5325(b)inamannerthatisconsistentwiththeprovisionsadoptedby_FHWA_ԀinitsNoticeofProposed_Rulemaking_ X   anditsfinalrule.Thereareseveralimportantaspectsofthesecontractingrequirementsthataffectthegrantee's  l  administrationofA&Econtracts:Og݌  0  Ќ @ XfX  O @ XXf  O   XfX(O$  $ P` XX  36  ڀ  _ @  @ XfXXXXXfO @ mXX   @ O  FTAaddedthisparagraphtoexplaintherequirementsthatapplytodesignbuildprocurementsbecausethey  involvesignificantarchitectural,engineering,orotherservicesthatnormallyrequirequalificationsbasedcompetitive t proposalsbutalsoincludesignificantworkthatdoesnotrequirethisextraordinaryprocurementmethod.Grantees 8 shoulddeterminewhichportionoftheworkispredominantandfollowthemethodforthattypeofprocurement.It L wouldnormallybeexpectedthattheconstructionportionofadesignbuildprocurementwouldbepredominantand,  inthatcase,normalprocurementmethodscanbeusedinlieuofqualificationsbasedcompetitiveproposals(the  BrooksActmethod). @ #mm##m#http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=2002_register&docid=02-14751-filedhttp://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=2000_register&docid=00-17774-filed(5hCEKQW]cioAutoList11.1.1.1.1.1.1.1.(;3$2#  0  .3  0    !  _?+ 4 <DL!X?O @ XX    Oj  L   XfX,  40  L   #XXf#ԀFAR53.301330.XfX  $ P` XX  37  ڀ  _ @  @ XfXXXXXfO @ mXX   @ O  LetterfromG.B.McBridetoNewYorkMTA,datedFeb2,2001.Theissuesaddressedinthislettermaybe  foundontheFTA_HelpLine_Ԁ(4 X O  5  _www.fta.dot.gov/ftahelpline/index.htm)_6O%  7 SԀundertheFrequentlyAskedQuestionstab(see t Architect&EngineeringContracts). @ #mm##m#  !  _?+ 4 <DL!X?O @ XX    Oj  L   XfX,  41  L   #XXf#ԀFAR53.301330.XfXhttp://www.fta.dot.gov/ftahelpline/index.htm(O;$0  2#  a  .3  0` (#(#'dxd  !  _?+ 4 <DL!X?O @ XX  Oj  L   XfX,  42  L   #XXf#ԀGranteesshouldconsiderusingatwostepprocedureinordertonarrowthenumberoffirmsallowedtosubmit  designproposals(tothosewitharealisticchanceofsuccess))andthustocontrolthecosttothegrantee.Stepone t mightbebasedonqualificationsstatementssuchasarenormallyusedtoselectA&Efirms,fromwhichalimited 8 numberoffirmswouldbeselectedandrequestedtosubmitdesignproposalsinsteptwo.XfX\  `&Times New Roman  !  _<( 4 <DLX< @  @  @  @ O @ XX   @ O  XfXXXXXfL     48  LA  #mXX##m"#mԀGAOalsonotesthatin1998anFTATransitConstructionRoundtablestudyof18membersindicatedthat  savingsof28percentwererealizedbypurchasingwrapupinsuranceformajorprojects. @   !  _?+ 4 <DL!X?O @ XX  Oj  L   XfX,  43  L   #XXf#ԀForadditionalinformation,contactMs.Ann_Geter_,CentralOhioTransitAuthority,at6142755903.XfX\  `&Times New Roman  !  _<( 4 <DLX< @  @ O @ XX   @ O}  XfXXXXXfL     49  L+  #mXX##m #mԀGAOnotedthatlargelaborintensiveprojectswithconstructioncostsbetween$50millionand$100million  wouldbeinabetterposition(i.e.,buyingpower)toobtainwrapupinsurance.B#c21, 2, 3,Numbers  .0 1, 2, 3,Level 1Level 2Level 3Level 4Level 5\  `&Times New RomanCU procurements  !  _<( 4 <DLX< @  @  @  @  @  @ O @ XX   @ O  XfXXXXXfL     50  LW  #mXX##m8#mԀTheBostonArteryprojectcitedalossratioof23percentcomparedtoahistoricnationalaverageofabout65  percentforthattypeofproject.TheMichiganBlueWaterBridgeprojectcitedalossratioof10percentcompared t toanationalaverageof50percentforthattypeofproject. @ \  `&Times New Roman  !  _<( 4 <DLX< @  @ O @ XX   @ O}  XfXXXXXfL     51  L+  #mXX##m #mԀWorkerscompensationinsurancepaysclaimantsincaseofinjury,disability,ordeathofemployeesresulting  fromworkonthejob. @ \  `&Times New Roman ` !  _XXXX<( 4 <DLX< @  @ O @ mXX   @ O  XXm#XfXXX+#XXXXfL     52  Lm  #mXX ##mN#mԀAccordingtoa1997GSAstudyofwrapupinsurance,NorthDakota,Ohio,Washington,WestVirginia,and  Wyominghaveastatefundintowhichallcontractorsmustpayandaprojectownercannotobtainseparateworkers t compensationinsurancecoverage.\  `&Times New Roman  !  _XXXX<( 4 <DLX< @  @ O @ mXX   @ O  XXm#XfXXX+#XXXXfL     53  Lm  #mXX ##mN#mԀForFTARegion1experiencewiththeCentralArteryProjectinBoston($11B),contactMr.RichardColeat  (617)4942395.\  `&Times New Roman  $ P` XX  54  ڀ  _GranteesmayaccessthisCircularat:4 O  5  6O  7 U"http://www.fta.dot.gov/legal/guidance/circulars/9000/433_1313_ENG_HTML.htm#"UI#http://www.fta.dot.gov C $ P` XX  55  ڀ  _Thesecasestudiesmaybefoundat:  4 O  5  6O  7 http://_www.fta.dot.gov_/_transit_data_info_/_reports_publications_/reports/_art_in_transit_/2260_ENG_HTML.htm.http://www.fta.dot.gov $ P` XX  56  ڀ  __LAMTA_,_NYMTA_,SEPTA,MetropolitanCouncilofMinneapolis,MN. O $ P` XX  57  ڀ  _ForfurtherinformationaboutthispublicartprogramcontactMr.DavidAllen,MetropolitanCouncil_Hiawatha_  PublicArtandDesignManagerat(612)2158221.  $ P` XX  58  ڀ  _Forfurtherinformation,contactElizabethMintz,ManagerofSEPTAsArtInTransitprogram,at  (215)5803633. W $ P` XX  59  ڀ  _R.S.MeansCompany,SquareFootCosts,23rdEdition,p.438.However,artistsmaynotnecessarilybasetheir  compensationratesonprovidingthesametypesofprofessionaldesignservicesaspracticedinanarchitectural t office,butbythetrackrecordofunique,oneofakindcommissionsthatrespondtocuratorialforcesoperatinginthe 8 curatorialworldofthegallery,themuseumandthebroaderartmarket. $ P` XX  23  ڀ  _FTAC9030.1C,ChapterIII,paragraph4.c. $ P` XX  24  ڀ  _FTAC9030.1C,ChapterV,paragraph9.b.3.  "'  _ "  "  XfXXXXXfBestPracticesProcurementManualChapter6ProcurementObjectTypes:SpecialConsiderationsf!f!!(#Page  1  #XfX#Ԉ  A)  xdEs xA#XfXXXfa# t  $ P` XX  25  ڀ  _C5010.1CinChapterIIManagementofRealProperty,EquipmentandSupplies,Subsection3.e(6).yv# Z6Times New Roman RegularTABLE H  $ P` XX  1  ڀ  _mmm?+ 4 <DL!X?ThisdocumentmaybeobtainedfromFTA,OfficeofProgramManagement,EngineeringandManagement  Division,_TPM_Ԅ42,at(202)3662440.#mm#(hH  Z(Times New Roman (hH  Z(Times New Roman  3 $ P` XX  2  ڀ  _SeeProjectandConstructionManagementGuidelines1996Update,Section3.2.2Configuration,  _Constructability_ԀReviews. z $ P` XX  3  ڀ  _TransportationResearchCircularNumber483,March1998.TransportationResearchBoard,NationalResearch  Council,NationalAcademyofSciences,2101ConstitutionAvenue,_N.W._,Washington,D.C.20418. $ P` XX  4  ڀ  _ContactDepartmentManagerProcurement,BARTat(510)4646380.64Hyperlink     $ P` XX  5  ڀ  _Seenote1._Hlt40086878  $ P` XX  6  ڀ  _MetropolitanAtlantaRapidTransitAuthority(MARTA),GeneralConditions1988,Clause49Value  EngineeringProposals.TodiscussMARTA'sapproach,contactMr._Wayner_ԀCrowder,DirectorofContractsand t Procurement,at(404)8485587.  $ P` XX  7  ڀ  _SanFranciscoBayAreaRapidTransitDistrict(BART),GeneralConditionsforConstructionContracts,February  1,1998,ClauseGC4.8.1Applicationof_VECP_.TodiscussBARTsapproach,contactDepartmentManager t Procurement,at(510)4646380.(b$0  0` (#(#2#   .3  0 ` (#` (# R $ P` XX  9  ڀ  _NewYorkCityTransit.ContactMs._Judi_ԀGibson,AssistantChiefProcurementOfficerEngineering,  Construction&CapitalDivisionofMaterielat(718)6944113. $ P` XX  10  ڀ  _Seenote11. $ P` XX  11  ڀ  _Forinformation,contactthePurchasingSectionManager,at(847)2283573. $ P` XX  12  ڀ  _ForinformationaboutNewYorkCitysleasingofcraneswithoperators,contactStanGrillat(718)6944350. $ P` XX  13  ڀ  _MTA,Houston,TX.ContactDonMurphyat(713)7394843orPaulComoat(713)7394803.  $ P` XX  14  ڀ  _AmericanPublicTransitAssociation,1201NewYorkAvenue,_N.W._,Suite400,Washington,D.C.  200056141.Copiesmaybeorderedbyphoneat(202)8984089.Technicalquestionsmaybeansweredat t (202)8984087.  $ P` XX  15  ڀ  _MARTARailCarprocurement,contactMr.RobertJune,ActingDirectorofSystemsEngineering,at  (404)8703203.  $ P` XX  17  ڀ  _Sub-paragraph(2)reflectsFTA'sbeliefthatgranteesshouldconsidercombiningeffortsintheirprocurementsto  obtainbetterpricingthroughlargerpurchases.Jointprocurementsoffertheadditionaladvantageofbeingableto t obtaingoodsandservicesthatexactlymatcheachcooperatinggrantee'srequirements.Jointprocurementsare 8 consideredsuperiortothepracticeof"piggybacking"since"piggybacking"doesnotcombinebuyingpoweratthe L pricingstageandmaylimitagrantee'schoicestothoseproductsexcesstoanothergrantee'sneeds.  $ P` XX  18  ڀ  _Sub-paragraph(3)reflectsgrantees'continuingabilitytoassigncontractualrightstoothers-"piggybacking."  FTAbelievesitisextremelyimportantthatgranteesensuretheycontractonlyfortheirreasonablyanticipatedneeds t anddonotaddquantitiesoroptionstocontractssolelytoallowthemtoassignthesequantitiesoroptionsatalater 8 date. $ P` XX  19  ڀ  _NYStateDOT(518)4578343.  $ P` XX  20  ڀ  _FTAhasintroducedalimiteddefinitionof"piggybacking"and,todifferentiatevastlydifferentpolicies,has  separatedthispracticeofassigningcontractualrightsamonggranteesfromjointprocurementsorother t intergovernmentalagreements.SeeCircular,paragraph7.e. & $ P` XX  21  ڀ  _FTAhassimilarlyattemptedtolimitthedefinitionof"tag-on"andalignitwiththeconceptofa"cardinal  change"or"out-of-scopechange."FTAbelievesthatearlierattemptstocategorizevirtuallyanychangeinquantity, t forexample,asaforbidden"tag-on,"failedtoaccountfortherealitiesofthemarketplaceandunnecessarilylimited 8 granteesfromexercisingreasonablefreedomtomakethoseminoradjustments"fairlyandreasonablywithinthe L contemplationofthepartieswhenthecontractwasenteredinto."_Freund_Ԁv.UnitedStates,260U.S.60(1922).  Inapplyingtheconceptof"cardinalchange"tothirdpartycontracts,FTArecognizesthatthisisadifficultconcept, H  noteasilyreducedtoapercentage,dollarvalue,numberofchanges,orotherobjectivemeasurethatwouldapplyto  \ allcases.FTAalsorecognizesthatthevariousBoardsofContractAppeals,Federalcourts,andComptrollerGeneral   havewrestledwiththeseissuesovermanyyearsandbuiltanextensivearrayofcaselawdifferentiatingin-scope    fromout-of-scopeorcardinalchanges.FTAdoesnotimplythattheBoardofContractAppealscasesare X   controlling,onlythattheywilllooktotheircollectivewisdominjudgingwherechangesingranteecontractsfall  l  alongthebroadspectrumbetweenclearlyin-scopeandclearlyout-of-scopechanges.ItisFTA'sintenttomonitorits  0  granteesandoversightcontractorstoensurethisconceptiswellunderstoodanduniformlyapplied,andtoissue   additionalguidanceasnecessarytoassistgranteesinexercisingthisauthority. h  Beforeattemptinganychangeinquantityormajoritems(e.g.,buses,railcars),granteesshouldreviewtheircontract @  clausestoensuretheyallowforsuchchanges.Forinstance,inFederalpractice,the"changes"clausefromthe   FederalacquisitionRegulationhasbeeninterpretednottoallowchangesinquantityofmajoritems.Federal x  contractingofficersuseadditionalclausesspecifictothisdesiredflexibilitywhentheyanticipatethattheremaybea < needtoaddquantitiesofthesemajoritems. 8 $ P` XX  22  ڀ  _ConductingPreAwardandPostDeliveryReviewsforBusProcurements.DocumentNo:FTADC90771393  1,Rev.B,datedMay1,1995.ConductingPreAwardandPostDeliveryReviewsforRailVehicleProcurements. t DocumentNo.:FTADC907713941,Rev.B,datedMay1,1995.ThesedocumentsmaybeobtainedfromFTA, 8 OfficeofProgramManagement,2023664020orbyemailat @  @  @ fm4h O  5  "  buyamerica% & @%&fta.dot.gov"  6u  7 .#fmS#ԀTheFTAwebsite L addressforBuyAmericamattersis:,4i .O  5  http://www.fta.dot.gov/legal/buy_america/14328_ENG_HTML.htm6HO\  7 \  `&Times New Romanmailto:buyamerica@fta.dot.govhttp://www.fta.dot.gov/legal/buy_america/14328_ENG_HTML.htm $ P` XX  26  ڀ  _SeegenerallyFederalAcquisitionregulationsat48_CFR_ԀSubpart46.7Warranties. $ P` XX  27  ڀ  _48_CFR_ԀSubpart46.7Warranties.  $ P` XX  28  ڀ  _Maybeaccessedat:4v  O  5  6O  7  Ԁ_www.fta.dot.gov_/legal/guidance/circulars/9000/433_1152_ENG_HTML.htmhttp://www.fta.dot.gov  $ P` XX  29  ڀ  _Toorderthisbookcall_APTA_Ԁat(202)4964800.DocumentisalsoavailableviaInternetat:  4y O  5  http://www.apta.com/research/info/online/6O#  7 Qhttp://www.apta.com/research/info/online/ $ P` XX  30  ڀ  _ԀTexasGovernmentCode,Section2254.002. - $ P` XX  31  ڀ  _~mTexasGovernmentCode,Section2254.003(a)#~m~#.##x9 Z&Times New Roman),h  Z (CG Times Regular $ P` XX  32  ڀ  _mTexasGovernmentCode,Section2254.004.#m~#x9 Z&Times New Roman $ P` XX  33  ڀ  _mTexasGovernmentCode,Section2254.005.#m~#x9 Z&Times New Roman ` $ P` XX  34  ڀ  _FTAhasexpandedthissectiontobetterexplainthebreadthofthisstatutorilyprescribedprocurementmethod.  FTArecognizesthatmostoftheserviceslisted(e.g.,surveying)arenotperformedbyarchitecturalorengineering t servicescompanies.Qualificationsbasedcompetitiveproposals(i.e.,BrooksActprocedures)stillmustbeapplied 8 totheseprocurementsbecauseofthestatutorydirectivein49U.S.C.5325(d).  $ P` XX  16  ڀ  _Sub-paragraph(1)looksprimarilytoStategovernmentcontractsthatallowsubordinategovernmentagenciesto  buyfromestablishedschedulesakintotheGSASchedulesinFederalpractice.FTAbelievesgranteesmaybuy t throughthesecontractsprovidedallpartiesagreetoappendtherequiredFederalclausesinthepurchaseorderor 8 otherdocumentthateffectsthegrantee'sprocurement.Whenbuyingfromtheseschedulecontracts,granteesshould L obtainBuyAmericacertificationbeforeenteringintothepurchaseorder.WheretheproducttobepurchasedisBuy  Americacompliant,thereisnoproblem.WheretheproductisnotBuyAmericacompliant,thegranteewillstill  havetoobtainawaiverfromFTAbeforeproceeding.TABLE KTABLE A !  _    ` Chapter6 3 96ProcurementObjectTypes:SpecialConsiderations    0  6.1Construction(10/98) (#(#   0 ` 6.1.1TheTraditionalConstructionProcessDesign/Bid/Build(10/98) ` (#` (#   0 ` 6.1.2ConstructionManagement("CM")(10/98) t` (#` (#   0 ` 6.1.3"FastTracking"PhasedDesign,AwardandConstruction(10/98)`` (#` (#   0 ` 6.1.4"Turnkey"Design/BuildContracting(10/98)L ` (#` (#   0 ` 6.1.5ValueEngineering(6/03)k8 ` (#` (#   0 ` 6.1.6FacilitiesMaintenanceJobOrderContracts(10/98)W$ ` (#` (#   0 ` 6.1.7Partnering(4/05)C ` (#` (#   0 ` 6.18CompetitiveProposalsvs.SealedBids(10/98)/ ` (#` (#   0 ` 6.1.9IncentivestoReduceProjectCompletionTime(10/98) ` (#` (#    ` 6.1.10SpecialContractProvisions(10/98)      `  0  6.2EquipmentandSupplies(2/00)(#(#   0 ` 6.2.1Lease/Maintain(2/00)` (#` (# 0   ` 0 (#(#6.2.1.1LeaseandMaintenanceofVehicles(2/00)\ (# (# 0   ` 0 (#(#6.2.1.2LeaseofHeavyEquipmentwithOperators(2/00){H (# (# 0  6.3RollingStock(10/98)S (#(#   0 ` 6.3.1Buses(10/98)+` (#` (#    ` 0 6.3.1.1CompetitiveProposalsvs.SealedBids(10/98)! (# (#    ` 0 6.3.1.2_APTA_ԀStandardBusProcurementGuidelines(10/98)! (# (#   0 ` 6.3.2RailCars(10/98)#` (#` (#    ` 6.3.3JointProcurementsofRollingStockand Piggybacking(6/03) $  0  0` (#(#6.3.4PreAwardandPostDeliveryReviewsforBuyAmericaAct%l!` (#` (# 0  0` (#(#󀀀Compliance(10/00)&X"` (#` (#    ` 6.3.5Warranties(6/03) w'D # 0  6.4ProfessionalServices(5/96)O)"%(#(# 0  6.5ArchitectEngineeringServices(3/04);*#&(#(# 0  6.6Insurance(11/03)'+#'(#(# 0  6.7Artwork(6/03),$((#(#   -&* _6.1CONSTRUCTION  3 Constructioncontractingpresentsauniquesetofproblemsfortheprocurementspecialist,and   thissectionoftheBPPMwillattempttoidentifysomeoftheseissues.Anumberoffactorstend   tomakeconstructioncontractinganareawhereproblemsabound.Thefirstistheuniquenessof   theprojectsthemselves;i.e.,theyareusuallyperformedwithdrawingsandspecificationswhich   aredevelopedforthefirst,andonlytime,forthatproject.Becausethedocumentsareoneofa   kind,therehasbeennopriorexperiencewhichwouldhaveidentifiederrorsandclarified  t ambiguities.Anotherfactoristhehighlycompetitivenatureofthebiddingprocess,producing ` priceswhichhavenoleewayforsolvingdesignproblemswhichariseduringperformanceofthe L  contractorforaccommodatingchanges.Addtothesefactorsthelegalcomplexitiesarisingfrom k8  Federal,Stateandlocalstatutes,regulationsandcodes,andtheprocessbecomesoneunlikeany W$  otherintheprocurementfield. C  Thereisahighdegreeofspecializationintheconstructionindustryamongfirms.Themajor   areasbeingexcavationandfoundations,masonry,steelwork,roofing,plumbing,electrical,and   heatingandairconditioning.Giventhisdegreeofspecialization,theroleofthegeneral  contractoristomanageotherspecialtycontractors,schedulingandcoordinatingtheirwork.In  thisrolegeneralcontractorsassumeahighdegreeofriskwhentheybidfirmfixedprices,thus  guaranteeingperformanceforthebidprice.ItshouldalsobenotedthatanumberofStates  requirethatthevarioustradesbebidasseparateprimes,whichaddstothecomplexityofproject p managementandcontracting;e.g.,whocontrolsthevariouscontractors?Ifthegeneraltrades \ contractorisgiventhisresponsibility,howwillitbecompensatedandwhatenforcement {H authoritydoesithaveagainsttheotherprimes? g4 Anotherpartyinthisprocessisthesurety,whoissuesabondassuringperformanceofthe ?  contract,includingthepaymentofsuppliersandmechanicsinaccordancewiththetermsoftheir + contractswiththeconstructioncontractor.   Anumberofdifferentconstructioncontractingstrategiesarediscussedbelow.Someofthe ! materialpresentedhasbeenexcerptedfromtheAmericanBarAssociation(ABA)Model " ProcurementCode,Chapter5,whichgranteesareencouragedtoread.Granteesarealso # encouragedtoobtaintheFTAconstructionmanagementmanualentitledProjectand $  ConstructionManagementGuidelines1996Update.    1      TheseGuidelinesweredevelopedbyFTA %l! "toassistlocalTransitagenciesindevelopingmanagementstructuresandworkprogramsto &X" effectivelyplanandimplementthevariousphasesofFTAfundedtransitcapitalimprovement w'D # projects."TheGuidelinescontainusefulprocurementinformationandguidancerelatedto c(0!$ constructionprojects. O)"%   ,$( 6.1.1TheTraditionalConstructionProcessDesign/Bid/Build 3  Ithasbeentraditionalintheconstructionindustrytoemployanarchitect/engineer(A/E)to   completeadetaileddesignoftheentireprojectbeforesolicitingbidsfromconstruction   contractors.Thistraditionalapproachisknownassequentialdesignandconstruction.This   sequentialdesign/constructionapproachrequiresthatadetaileddesignpackageoftheentire   projectbecompletebeforebidsaresolicitedfromconstructioncontractors.Followingawardof   theconstructioncontract,theA/Eisoftenretainedbytheownerfortheconstructionphase,and  t actsastheowner'sagent,toinspecttheconstructionworktoensurethatthestructuresarebuilt ` accordingtothedesignsandspecifications. L  Advantages󀄀Amajoradvantageofthesequentialdesignandconstructionapproachisthat W$  complexoroneofakindprojectscanbethoroughlyplannedandthoughtthroughbefore C  constructionbegins.Thetraditionalapproachthusproduces,inthedesignphaseoftheproject, /  themostaccurateestimateoffinalprojectcosts,andthisisanadvantageofthetraditional   technique.Ifproblemsareencounteredwithdesignaspectsforthelatterstagesoftheproject,the   earlierdesignfeaturesorphasescanbemodifiedbeforeanyconstructionworkhasbeendone,  thusavoidingconstructioncontractorclaimsanddelays.AnotheradvantageisthattheAgencyis  givenafixedpriceforcompletionoftheentireprojectbeforeconstructionbegins.Theremay  alsobeadvantagesinobtainingthenecessaryfinancingandprojectapprovals.Overall  managementoftheprojectshouldalsobesimplifiedbythisapproach. p DisadvantagesSequentialdesignandconstructionrequiresalongertimetocompletethe {H projectthanphaseddesignandconstruction("fasttracking").Andsincetimepressuresareoften g4 themostintenseissuesconfrontingtheAgency,thesequentialmethodmaynotbefeasible. S  Alternativecontractingapproacheshavearisentoshortentheprojectcompletiontime.These ?  includephaseddesignandconstruction("fasttracking"),whichofteninvolvestheuseofa + constructionmanager,andturnkey(designbuild)contracting.    6.1.2ConstructionManagement !  Inrecentyearsaconstructiontechniqueknownasconstructionmanagementhascomeinto # practice.Inthisschemetheowneremploysaconstructionmanagerwhoactsastheowner's $  agentduringthedesignphaseandasoverseerduringtheconstructionphase.Duringthedesign %l! phasetheconstructionmanagerworkscloselywiththeA/E,monitoringtheA/E'seffortsto &X" ensurethatthedesignwillbewithintheowner'sbudget,willaccomplishtheowner'spurposes, w'D # etc.OneofthecriticaltasksaCMcanperformduringthedesignphaseisaconstructability c(0!$ review,ensuringthatthedesigncanactuallybebuilt.   2      ׀Thespecificroleofconstruction O)"% managersinthisphasewillvarygreatlyfromprojecttoproject.Theirdutiesmayincludecost  ;*#& estimating,costevaluating,projectscheduling,revieworpreparationofcontractdocuments, 3 receivingbids,andadvisingtheownerofbidderqualificationsandtheacceptabilityofbids.  Multipleprimecontractors󀄀Duringtheconstructionphase,theconstructionmanagementrole   canalsotakeavarietyofforms.Underoneschemetheconstructionmanagerwillcoordinatethe   workofthevariousspecialtycontractors,whocontractdirectlywiththeownerasmultipleprime   contractors.Thespecialtycontractors,whowouldnormallyhavebeensubcontractorstoa   generalcontractorinthetraditionalconstructionarrangement,nowcontractdirectlywiththe  t owner,andthecoordinationnormallydonebythegeneralcontractorisperformedbythe ` constructionmanager. TheconstructionmanagermayalsoassisttheA/Ewithinspectionsof L  thework.Inthisschemetheconstructionmanagerhasnofinancialliabilityforsuccessful o<  completionoftheworkthereisnocontractwiththeownertocompletetheprojectforacontract [(  price. G   Advantages󀄀Theconstructionmanagerwillbringconstructionexpertisetotheprojectteamat   anearlydesignstageoftheproject,enablingdesigndecisionstobemadewithanappreciationof    theirimpactonconstruction.AconstructionmanagermaybeindispensableiftheAgencylacks  thepersonnelresourcestoadequatelyandaggressivelymanagetheproject.Phaseddesignand  constructionmaybeusedmuchmoreeasilybecausetheconstructionmanagercanperformthe  vitalfunctionsofcoordinatingtheworkoftheA/Econtractorandthespecialtyconstruction  contractors. t Disadvantages󀄀Theconstructionmanager'sfeewilladdtotheoverallcostoftheproject,andthe L costofemployinganindependentconstructionmanagermaynotbefeasibleonsmaller k8 constructionprojects. W$ Contractprovisions󀄀Itiscriticalthattheconstructionmanager'scontractclearlydefinethe / authorityandthedutiesoftheconstructionmanagerwithrespecttotheothercontractorsonthe   project;e.g.,howmuchauthoritydoestheconstructionmanagerhaveovertheworkoftheA/E ! andthespecialtyconstructioncontractors?Iftheconstructionmanagerfailstoproperly ! coordinatetheworkofthespecialtyconstructioncontractors,willtheconstructioncontractoror " theAgencybeliable?ItwillalsobenecessarytodefinetheCM'sauthorityinthedesignand # constructioncontracts,sothatthesecontractorswillknowthedegreetowhichtheyaretoaccept $  directionfromtheCM.  %p! 6.1.3"FastTracking"Phaseddesign,awardandconstruction {'H #  Fasttrackingisaproceduredesignedtoshortentheoveralltimeforprojectcompletionby S) "% phasingthedesignandconstructionactivitiessothattheycanbeperformedtogether.Inthis ?* #& schemeeachphaseoftheprojectisplacedundercontractoncethedesignforthatphaseis ++#' completed.Unlikethetraditionalapproach,wheretheentireprojectisfirstdesignedandthen ,$( contractedforwithoneconstructioncontract,thefasttrackschemewillcompletethedesign -%) workinphases,andthenawardconstructioncontractsforthevarioussubsystemsorphasesonce -&* thedesignforthatphaseisfinished.Thustherewillbeanumberofspecialtyconstruction_  .'+ contractsawardedbytheowner,andaconstructionmanagerwillnormally,thoughnot 3 necessarily,beretainedtoassistinpackagingthevariousspecialtycontractsandtomanagethe  workofthesespecialtycontractors.Thisworkofdefiningandmanagingthespecialtycontracts   canalsobedonebyinhouseprojectmanagementorbytheA/E.   Advantages󀄀Phaseddesignandconstructioncanreducetheoverallcompletiontimeofthe   project.ItcanalsoallowtheAgencytoreducethescopeofthelaterphasesifthecostofthe   earlierphasesexceedthebudget.ItalsoallowstheAgencygreaterflexibilityinthetimingofthe  t constructioncontractawards,thustakingadvantageofmarketconditions,ormanagingthe ` availablefunding. L  Disadvantages󀄀Thereisariskinherentinphaseddesignandconstructionbecauseportionsof W$  theprojectarebegunbeforethelaterportionsaredesigned.Ifmajorchangesoccurinthelater C  phases,theymaycausecostlychangesintheearlierworkanddelaystothespecialtycontractors. /  TheseareriskswhichwillbebornebytheAgency.    6.1.4TurnkeyorDesign/BuildContracting   Thiscontractingtechniquehasseenincreasinguseinrecentyears.Between1987and1992there  wasa300percentincreaseindesignbuildprojects,whichindicatesagrowingimportanceof  turnkeyprojectsintheconstructionindustry.Accordingtostatisticsprovidedbythe p EngineeringNewsRecord,by1995,30percentofallnonresidentialconstructionwasusingthe \ turnkeymethod.Thegrowingimportanceofturnkeymethodswasattributedtoitsbenefitsin {H savingtimeandcostswithnoreductionofqualityrelativetoconventionalprojectapproaches.It g4 mustbenoted,however,thatnotallStatespermitdesignbuildcontractingbyStateagencies. S  Inthisscheme,atransitagencycontractswithasingleprivateentity,theturnkeycontractor,for + thedesign,constructionanddeliveryofacompleteandoperationalproject.Insomeinstances,   thecontractorisrequiredtooperateandmaintainthesystemforadefinedperiodoftime.The ! privatecontractoristypicallyaconsortiumofprivatecompaniesofferingengineeringanddesign, ! construction,manufactureofvehicles,financeandrelatedsupportservices.Thedeveloper " contractorwillbeselectedcompetitivelybasedon"performancetype"(nondetailed) # specificationswhichdescribetheowner'sobjectivesandrequirements.Developerswillsubmit $  proposeddesignswiththeircompetitiveproposals,andownersmustselectbetweencompeting %l! designapproachesandprices. &X" Itshouldbenotedthatoneofthedrawbacksofdesignbuildisthattheownerdoesnothavean c(0!$ independentsource(theA/Eintraditionalconstruction)overseeingdesignimplementationand O)"% verifyingconformancewiththedrawingsandspecifications. ;*#&  WorkshoponInternationalTransitTurnkeyandJointDevelopment 󀄀TheTransportation ,$(  ResearchBoardhaspublishedaveryinformativeResearchCircularentitledProceedingsofthe -%) WorkshoponInternationalTransitTurnkeyandJointDevelopment._   3      _ԀThisWorkshopwasheld 3  onOctober1519,1996,anditspurposewas"toexplorecurrentinternationalexperienceinthe  developmentofturnkeytransitprojects,todiscusseffectiveturnkeypractices,andtoidentify   thoseaspectsthatwarrantfurtherconsideration."TheResearchCircularsummarizeseachofthe   presentationsmadeattheworkshop,andpresentsthe"lessonslearned"bythoseorganizations   usingvariousturnkeyapproaches.Thenamesofthepresentersandtheirorganizationsarealso   given,whichprovidesareferencetoolforcontactingotherswhoareinvolvedwithturnkey   projects.GranteesareencouragedtoobtainthisTransportationResearchCircularitisa  t valuablesourceofinformation.SomeofthemoreimportantobservationsmadeattheWorkshop ` includethefollowing: L  '  'N0  "0` (#(#  TheFederalgovernmentandmostStates,butnotall,allowturnkeyforsome W$  agenciesand/orprojects.Infact,therecentlyenactedFederalstatute C  TransportationEquityActForThe21stCentury(TEA21)permitsgranteesto'NN݌/ ` (#` (# Ќ   1-(),-./(#p30  0` (#(#useturnkeycontractingtodesignandbuildamasstransportationsystemoran   operablesegmentofamasstransportationsystem.SomeStateshaverecently   expandedtheirregulationstopermitdesignbuildcontracts,andthistrendislikely  tocontinue.Manyofthecurrenttransitturnkeyprojectshadtoenactlegislation` (#` (#    ` orreceivewaiverstopermittheturnkeyprocess.  "3"    3R2#3  0 `   Anegotiatedprocurementprocessisstronglyrecommendedforselectionofa p turnkeycontractor.Discussionsbetweentheownerand_offerors_Ԁfacilitatesatrue \ "meetingoftheminds";allowscraftingoftailoredsolutionsforcontractor {H concerns;andachievestheoptimumbalanceofriskandprice.Negotiationscan g4 leadtooptimumdecisions.Ifanegotiatedprocurementcannotbedone,thena S  twostepbiddingprocessisrecommendedasthenextbestapproach.SomeStates ?  whichallowdesignbuildcontractingrequireabidprocessratherthana3R S݌+` (#` (# Ќ     ` negotiatedprocurement.   '  'V0  "0` (#(#  Industryinputondocumentsshouldbesoughtpriortosolicitation.'VV݌!` (#` (# Ќ  '  'W0  "0` (#(#  Agenciesshoulddevelopandfollowadetailedselectionprocedurethatincludesa # multidisciplinedandknowledgeableevaluationcommittee.0 ` (#` (#'WW݌$  (# (# Ќ  '  'X0  "0` (#(#  Designbuildrequiresanewgenerationofcontractdocumentsthatincorporatethe &X" needsofthreedistinctelements:design,constructionandoperation.Meldingthe'XX݌w'D #` (#` (# Ќ  0  0` (#(#requiredpricingandproceduresintoonecontractisacomplexendeavor.c(0!$` (#` (#   O)"% _'  'Z0  "0` (#(#  Typicalpostawardconcernswithdesignbuildcontractsincludetheinterpretation 3 ofcommercialtermsandthepricingofchanges(includingtheobtainingof  adequatecostdatatosupportchangeorders).Specificrecommendationsinclude:   requirementsforcontractorjobcostsystems;pricingchangeordersbasedonthe   jobcostsystem;anddetailedauditprovisions.'ZZ݌ ` (#` (# Ќ  '  '@]0  "0` (#(#  Theturnkeyapproachmayresultinlowercapitalcostsandfewerchangeorders'@][]݌ ` (#` (# Ќ     ` andcontractdifficulties.  t 0   (#(# '  '^0  "0` (#(#  Theturnkeyapproachmayhaveanadverseimpactonsmallandmediumsized L  firms,includingDBEfirms.Agenciesmaywanttoconsiderusingincentive'^^݌k8 ` (#` (# Ќ  0  0` (#(#clausesintheirsolicitationstoencourageDBEparticipation,aswellasrequiring W$  offerorstoidentifysmallandminorityownedbusinessesintheirproposalsduring C  theprequalification/RFPstagesoftheprocurement.ItwasreportedthatBART /  hadbeenverysuccessfulwiththisprequalificationrequirementintheSan   FranciscoAirportExtensionturnkeydemonstrationproject.   4       ` (#` (# '  'Ib0  "0` (#(#  Environmentalapprovals,intergovernmentalcoordination,andfinanceshouldbe  inplacepriortotheturnkeyprocurement.Itiscriticallyimportantthatproject  participantsdevelopateamingperspective.Aformalpartneringagreementwith  thecontractorteamandtangentialagencieshasbeenusedwithsuccess.See p Section6.1.7Partnering.'Ibdb݌\` (#` (# Ќ    6.1.5ValueEngineering g4 *  ddd Xdd Xdd X(#(#,dd +  ? ?  REQUIREMENT  p H FTACircular4220.1E,Section7(g)encouragestheuseofvalueengineeringclausesin #  constructioncontracts:  !  0 l g.UseofValueEngineeringinConstructionContracts.Granteesareencouragedtouse " valueengineeringclausesincontractsforconstructionprojects.FTAcannotapprovea # NewStartsgrantapplicationforfinaldesignfundingorafullfundinggrantagreement $  untilvalueengineeringiscomplete(seeCircular5010).)%x!l#l# dH  ) DISCUSSION ' " FTACircular4220.1Edoesnotrequirevalueengineeringclausesbutitdoesencourage )p"$ theminconstructioncontracts.Valueengineeringisaproceduredesignedtoincentivize *\#% contractorstosubmitchangeproposalswhichreducethecostofcontractperformanceby  {+H$& promisingthecontractorashareofthesavings.Contractorscanoftenfindlessexpensive 3 waystoperformtheircontractsthanthemethodsprescribedintheircontract  specifications.Theywillbereluctant,however,toproposechangeswhichwillreducetheir   contractpriceandhavetheeffectofreducingtheirprofitonthecontract.Value   engineeringisatechniquedesignedtoovercomethisdisincentivebyofferingthemashare   ofthesavingsresultingfromtheirchangeproposals.   Itisimportanttonotethatsomecontractualarrangements(e.g.,designbuildcontracts)  t mayinherentlyincludevalueengineeringconceptsandprinciples.Wherethisisthecase, ` FTAdoesnotrequireseparatevalueengineeringproposals,changeorders,orother L  processes.Fromaprocurementview,theconceptofvalueengineeringismoreimportant k8  thantheformittakes. W$  TheFederalGovernmentusesvalueengineeringclausesincontractsforsupplies,services, /  constructionandarchitect/engineerservices.Part48oftheFARisdedicatedtothesubject   ofvalueengineering.TheprescribedclauseforFederalconstructioncontractsmaybe   foundatFAR52.2483ValueEngineeringConstruction.Whilethisclauseisnotrequired  forgranteethirdpartycontracts,itmayproveusefulasaguideastohowtostructurea  valueengineeringclause.  FTAsProjectandConstructionManagementGuidelines1996Update,Section4.2.3Value p EngineeringandPeerReview,presentsadiscussionofthevalueengineeringprocessduring \ thedesignphaseoftheproject.#   5       {H BestPractices S   ValueengineeringclausesinusebyTransitAgenciestendtolimitthetypeofsavingswhichthe + AgencywillsharewiththeContractortothoseexpectedonthecontractbeingperformed.These   arecommonlyknownas"instantsavings."TheContractorwouldnotsharein"collateral ! savings"or"futuresavings"resultingfromhischangeproposal."Collateralsavings"arethose ! savingsanticipatedbytheAgencyoutsidethecontract,suchasoperations,maintenance, " logisticalsupport,etc."Futuresavings"wouldbethoseresultingfromtheContractor'svalue # engineeringproposalsonfuturecontractsforthesamedeliverableitems.Thetypicalshareratio $  is50percentfortheAgencyand50percentfortheContractorofany"netsavings"resultingfrom %l! theContractor'schangeproposal."Netsavings"aredefinedas"grosssavings"lessthe &X" Contractor'scostsfordevelopingandimplementingtheproposalaswellasanyAgencycosts w'D # resultingfromthechange,suchasreview,implementation,inspection,etc.Estimated"gross c(0!$ savings"wouldincludetheContractor'slabor,material,equipment,overhead,profitandbond. O)"% Attheconclusionofnegotiationsforthechangeproposal,acontractmodificationisissued ;*#& reducingthecontractpricebytheAgency'sshare. '+#'   ,%) AnimportantfeatureofallvalueengineeringclausesisthattheAgency'sdecisiontoacceptor 3 rejectthecontractor'sproposalisfinalandconclusive,andnotsubjecttoappeal.  AnotherimportantfeatureoftheusualAgencyclausesisthattheContractor'svalueengineering   changeproposal(VECP)mustnot"impairanyessentialfunctionorcharacteristicoftheWork,   suchassafety,servicelife,reliability,economyofoperation,easeofmaintenance,andnecessary   standardizationoffeatures."(   6      ׀AnotherAgency'sclausereadsthattheContractor'sVECP"shall   notalteranyitem'scharacteristicssuchasfunctionality,servicelife,reliability,economyof  t operation,easeofmaintenance,andnecessarystandardizedfeaturesandappearance."+   7       `  6.1.6FacilitiesMaintenanceJobOrderContracts k8   TheMetropolitanAtlantaRapidTransitAuthority(MARTA)hasmadeuseofaverycost C  effectiveprocurementapproachknownasJobOrderContracting(JOC)foritsfacilities /  maintenancerequirements.Theserequirementswouldincludetherepair,alteration,   modernization,maintenanceandrehabilitationofbuildings,structures,orotherrealproperty.   TheJOCisacompetitivelybid,firmfixedpriceindefinitequantitycontract,againstwhich  MARTAissuesWorkOrdersasspecificneedsarise.  TheunusualfeatureoftheJOCisthattheInvitationForBid(IFB)includesalloftheconceivable  lineitemsofwork,withspecifications/definitionsforeachlineitem,andunitpricesforeach p item.ThesespecificationsandlineitempricesweredevelopedbyMARTAwiththeassistance \ ofaconsultingengineeringfirm.Thelineitemunitpriceswerefurnishedtoprospectivebidders {H ina"UnitPriceBook,"whichwasdevelopedbytheconsultant.TheUnitPriceBookhasover g4 90,000itemswhichdetailspecificrepairandconstructiontasksandspecifications.TheBook S  coversawiderangeofareassuchasconcrete,airdistribution,plumbing,electrical,and ?  hazardousandtoxicwaste.TheUnitPriceBookisworksegmentbased.Eachjobisdetailed + andbrokendownbytask.Thepricesarebasedontheuseofexperiencedlaborandhighquality   materials.TheBookalsoincorporatesprevailingmarketareacostdataandwages. ! Whenbidsaresolicited,theobjectiveistoobtainbidson"adjustmentfactors."Nospecific " projectsarebid.Awardisbasedonthelowestproposedadjustmentfactor.Thetwoprice # adjustmentfactorsarefornormalandovertimework.Thesetwoadjustmentfactorsareapplied $  toallitemsintheUnitPriceBook.Adjustmentfactorsarerequiredtobebidtofourdecimal %l! places.Thebestwayforabiddertodevelopitsadjustmentfactoristopriceoutseveraltypesof  &X" projectsandtakeanaverage.Forexample,ifthepricebookstatesthatthecosttoreplacea 3 windowis$100,andaprospectivebidderdevelopsanestimateof$75,thenthebidder's  adjustmentfactoris.7500.Likewise,ifthebidderestimatesapriceof$110toreplacethe   window,thenthebidder'sadjustmentfactorwouldbe1.1000.Onthemostrecentaward,the   winninglowbidofferedan"adjustmentfactor"of0.7700.   FollowingawardoftheJOC,theprocessforissuingWorkOrderswouldbeasfollows:   '  *,XX XX*'C0  "0` (#(#  Ameetingisheldwiththecontractortodiscussthescopeoftheworktobedone.'C݌`` (#` (# Ќ  '  '0  "0` (#(#  AWorkOrderProposalisthenrequestedfromtheContractor.TheContractor's   priceiscomputedby:'݌ ` (#` (# Ќ    c  >0  0` (#(#  c-0 ` (#` (#  SelectingvariousprepricedconstructiontasksfromtheUnitPriceBook.  c݌  (# (# Ќ    c  0  0` (#(#  cɋ-0 ` (#` (#  MultiplyingthepreestablishedpricesfromtheUnitPriceBookbyquantities   andthenbytheContractor'sadjustmentfactor.  cɋ݌  (# (# Ќ  '  '0  "0` (#(#  TheContractor'sproposaliscomparedtoanindependentAuthorityestimate.'@݌` (#` (# Ќ  '  '0  "0` (#(#  Ifthepriceisreasonable,aWorkOrderisissued.'+݌A` (#` (# Ќ  *'  '0  "0` (#(#  Ifthepriceisnotreasonable,thejobissolicitedundernormalprocurement p procedures.'݌\` (#` (# Ќ  . X,XX X^.TheJOCprocessofferstheopportunitytosavesignificanttimeandadministrativeeffortbecause g4 thereisonlyonecompetitivebidprocess,andthatiswhentheadjustmentfactorsaresolicited. S  Thereafter,individualjobsdonothavetobecompeted,sothereisnolengthyadvertisingor ?  solicitationtime,orcomplexsolicitationdocumentstoprepare,approveandissue.TheJOCcan + beamultiyearcontract,therebyreducingthenumberoftimestheprogrammustbecompeted.   MARTA'scontractisforonebaseyearplustwooneyearoptions,anditsvalueisapproximately ! $9million. ! 0   (#(#  6.1.7Partnering #!  Partneringisaconcept/techniquedesignedtofosterateambuilding,or"partnering"frameof %l# mindtowardtheaccomplishmentoftheconstructionproject.Partneringwasoriginally &X$ developedbytheArmyCorpofEngineersforuseonmajorconstructionprojectswithlarge w'D % projectstaffsontheworksiteandwhereeffectivecommunicationsareessential.Theparties c(0!& involvedintheperformanceoftheproject,includingtheAgency,theAEfirm,theprime O)"' Contractor,andallsubcontractorswouldmeettogetheronaregularbasis(atleastmonthly)to ;*#( establishandmaintainopenlinesofcommunication,withthegoalofensuringrelationshipsof '+#) trustandcooperation. ,$* ThepartneringprocessusuallyemploysaprofessionalFacilitatorwhoconductsthesessionsso -&, astopromotetrustandreachmutualagreementsonhowtheprojectistoproceed.The  .'- FacilitatorsfeeandassociatedcostsarepaidforbytheContractorwhoisinturnreimbursedby 3 theowner(50%)fromalineiteminthecontractPriceSchedule.Thepartneringprocessdoes  notchangeoralterthecontractagreement.Itisnotjustaonetimemeetingatthestartofthe   project,butisanongoingprocess.Itisusuallyaccomplishedinfivedistinctphases:   "3"  *,X,` XX*  3\2#3  0    PhaseIisajointsessionoftopexecutivesdesignedtoarriveataclearagreementonthe   projectsbusinessgoalsandestablishaclearissueresolutionprocess.Issuesgenerally   focusonsafety,budget,communications,quality,schedule,teamwork,impactonthe  t communityandacommitmenttoworktogetherforasuccessfulproject.MARTA ` developedaPartneringCharterforitsNorthSpringsStationProject,signedbyallthe L  teammembers,whichreadsasfollows:3\݌k8 (#(# Ќ  K+4 44 <DL!,X,` XK0  We,theteammembersoftheNorthSpringsStation(CF520)ProjectTeam,are C  committedtocontinuingthetraditionofeffectivepartneringamongourorganizations /  andtodeliveringafacilityinwhichallteammemberstakepride. (#(#   Wewillmeasureourcollectivesuccessthroughthefollowingprojectobjectives:  "3"  B(` ` <DL!444X!B X32#3  0 4   Completetheprojectonscheduleandmeetallmilestones3݌4(#4(# Ќ  "3"  B(` ` <DL!` ` X!B3Ɵ2#3  0 4   Provideasafeworksitetominimizelosttimeaccidents3Ɵ5݌4(#4(# Ќ  "3"  B(` ` <DL!` ` X!B32#3  0 4   Completetheprojectwithinbudget3f݌p4(#4(# Ќ  "3"  B(` ` <DL!` ` X!B32#3  0 4   Fairprofitearnedbycontractor3݌\4(#4(# Ќ  "3"  B(` ` <DL!` ` X!B3-2#3  0 4   Quicklyresolveclaimswithoutlitigation3-݌{H4(#4(# Ќ  "3"  B(` ` <DL!` ` X!B3P2#3  0 4   Deliveraqualityproductwithinspecifiedstandards3P݌g44(#4(# Ќ  "3"  B(` ` <DL!` ` X!B3~2#3  0 4   Serveasresponsibleneighborsandprovideapositiveimpacttothesurrounding S  community3~݌? 4(#4(# Ќ  E+4 44 <DL!` ` X!EWewillpromoteteamworkbasedonthefollowingprinciplesandattitudes:   / /"3"  B(` ` <DL!444X!B32#3  0 4   Timelyinputs,responsesanddecisions3'݌!4(#4(# Ќ  "3"  B(` ` <DL!` ` X!B3ب2#3  0 4   Open,effectivecommunications3بG݌"4(#4(# Ќ  "3"  B(` ` <DL!` ` X!B32#3  0 4   Honestyandtrust3_݌#4(#4(# Ќ  "3"  B(` ` <DL!` ` X!B32#3  0 4   Solvingproblemsatthelowestpossiblelevel3j݌$ 4(#4(# Ќ  "3"  B(` ` <DL!` ` X!B3"2#3  0 4   Workingtogetheragainstthejobnoteachother3"݌%l!4(#4(# Ќ  "3"  B(` ` <DL!` ` X!B3M2#3  0 4   Fullteamcommitmentandparticipationinpartnering3M݌&X"4(#4(# Ќ  E+ 4 <DL!` ` X!E XNotethatthePartneringCharteridentifiesitsgoalsasthebestinterestsofalltheparties.These c(0!$ interestsincludetheearningofafairprofitbytheContractor.ItiscriticalfortheAgency's O)"% personneltoseetheContractorasateammemberwhoseinterestinearningafairprofitis ;*#& equallyimportanttotheinterestsoftheAgency. '+#' "3"  *,` XxX!*  32#3  0    PhaseIIconsistsofaworkshopwhereallstakeholdersparticipateindevelopingaproject ,%) charterdefiningteamgoals,conductandrisks.WashingtonMetropolitanAreaTransit3݌ -&*(#(# Ќ  0  0(#(#Authority(WMATA)projectmembersdevelopedthefollowingProjectCharterforthe 3 MetroGeorgiaAvenuePetworthStation:(#(#  ,H+4 44 <DL!,` XxH   -4` Xx444X!- 4 ProjectPriorities:       v<=>@BEGH(0p1-(),-.// /"<" , XH+4 44 <DL!4` XxH  X?% <DL!444X!?<2o3   `   SuccessfulPartnering<z݌   Ќ *4` Xx  X!* ,  "<" , XH+4 44 <DL!4` XxH  X?% <DL!444X!?<R2o3   `   Earlyidentificationandresolutionofproblems<R0݌   Ќ *4` Xx  X!* ,  "<" , XH+4 44 <DL!4` XxH  X?% <DL!444X!?<"2o3   `   Realizingonesownresponsibilitiesandobligations<"݌  t Ќ *4` Xx  X!* ,  "<" , XH+4 44 <DL!4` XxH  X?% <DL!444X!?<2o3   `   Communityrelations<غ݌ ` Ќ *4` Xx  X!* ,  "<" , XH+4 44 <DL!4` XxH  X?% <DL!444X!?<2o3   `   Openness<݌ L  Ќ *4` Xx  X!* ,  "<" , XH+4 44 <DL!4` XxH  X?% <DL!444X!?<W2o3   `   Timeliness(especiallyearlysubmittals,earlypermits)<W5݌ k8  Ќ *4` Xx  X!* ,  "<" , XH+4 44 <DL!4` XxH  X?% <DL!444X!?</2o3   `   Beingabletolivewithchanges</ ݌ W$  Ќ *4` Xx  X!* ,  "<" , XH+4 44 <DL!4` XxH  X?% <DL!444X!?<2o3   `   Safety<݌ C  Ќ *4` Xx  X!* ,  "<" , XH+4 44 <DL!4` XxH  X?% <DL!444X!?<2o3   `   Quality<t݌ /  Ќ *4` Xx  X!* ,  "< " , XH+4 44 <DL!4` XxH  X?% <DL!444X!?<>2o3   `   Makingaprofit<>݌   Ќ *4` Xx  X!* ,  "< " , XH+4 44 <DL!4` XxH  X?% <DL!444X!?<2o3   `   EEO,disadvantagedbusinessprogram,employeesalaries<݌   Ќ *4` Xx  X!* ,  "< " , XH+4 44 <DL!4` XxH  X?% <DL!444X!?<2o3   `   Maintainingprofessionalism<݌  Ќ *4` Xx  X!* ,  H+4 44 <DL!4` XxH  04 Xx444X!0   4 ChallengesWeFace:     w<=>@BEGH(00 v<=>@BEGH"" , ,N.4 <DL!4 XxN  ,B% <DL!4X!B2o3   `   Gettingapprovalsquickly݌ p Ќ -4 Xx  X!- ,  "" , ,N.4 <DL!4 XxN  ,B% <DL!4X!B2o3   `   Resolvingissuesbygiveandtake݌ \ Ќ -4 Xx  X!- ,  "" , ,N.4 <DL!4 XxN  ,B% <DL!4X!Bx2o3   `   Minimizingchangesx_݌ {H Ќ -4 Xx  X!- ,  "" , ,N.4 <DL!4 XxN  ,B% <DL!4X!B72o3   `   Designingthroughchanges7݌ g4 Ќ -4 Xx  X!- ,  "" , ,N.4 <DL!4 XxN  ,B% <DL!4X!B2o3   `   Slurrywall݌ S  Ќ -4 Xx  X!- ,  "" , ,N.4 <DL!4 XxN  ,B% <DL!4X!B2o3   `   Architecturaldome݌ ?  Ќ -4 Xx  X!- ,  "" , ,N.4 <DL!4 XxN  ,B% <DL!4X!B|2o3   `   Beingpaidontime|c݌ + Ќ -4 Xx  X!- ,  "" , ,N.4 <DL!4 XxN  ,B% <DL!4X!B;2o3   `   Closeoutwithin60days;"݌   Ќ -4 Xx  X!- ,  "" , ,N.4 <DL!4 XxN  ,B% <DL!4X!B2o3   `   Noclaims8ifunavoidable,finalizepromptly݌ ! Ќ -4 Xx  X!- ,  " " , ,N.4 <DL!4 XxN  ,B% <DL!4X!B2o3   `   Cityconstruction݌ ! Ќ -4 Xx  X!- ,  " " , ,N.4 <DL!4 XxN  ,B% <DL!4X!B2o3   `   Publicsafety݌ " Ќ -4 Xx  X!- ,  " " , ,N.4 <DL!4 XxN  ,B% <DL!4X!BR2o3   `   HazardousmaterialR9݌ # Ќ -4 Xx  X!- ,  " " , ,N.4 <DL!4 XxN  ,B% <DL!4X!B2o3   `   Avoidinginterferencewithothercontractors݌ $  Ќ -4 Xx  X!- ,  " " , ,N.4 <DL!4 XxN  ,B% <DL!4X!B2o3   `   Stayinginharmony݌ %l! Ќ -4 Xx  X!- ,  ,K+ 4 <DL!4 XxKWMATAhasusedPartneringinitsmajorconstructioncontractsforovertenyearsandinitslast w'D # twoRailcarcontracts.WMATAbelievesthatpartneringmayalsobeusefulinbuscontracts c(0!$ wherethereisaneedtoenhancecommunicationsandworkingrelationshipsbetweentheowner O)"% andthebusmanufacturer.Forexample,issuesofdelivery,paymentandpotentialperformance ;*#& mattersrelativetotesting,warranty,etc.couldalsobeaddressed. '+#'   ! ! *-(),-./(Ix0w<=>@BEGH"3"  9"` ` ` DL!X!9 X 32I3  0    PhaseIIIprovidesformonthlyevaluationsbythosemanagingthejobforbothparties. ,%) Theobjectiveistosolveproblemsatthelowestlevel,andallmembersshouldbe -&* evaluatingtheteamsprogress,orlackthereof,inmeetingtheestablishedgoals.Monthly .'+ 3V݌ /(,(#(# Ќ    meetingsareheldattheexecutiveleveltoreviewanddiscussareasofconcernorinterest. 3 Problemsareidentifiedandsolutionsareagreedto.Organizationalimpedimentsto  solutionsareresolved.Ifnecessary,unresolvedissuesareescalatedtohighermanagers.   Manyissuesareresolvedbeforetheybecomemajorproblemsandthesesuccessesare   alsodiscussedatthemonthlymeeting.    ,XH+ ` <DL!` ` ` X!H   -X ` X!-"3"    32I3  0    PhaseIVisanexecutivesession,supplementedbykeyprojectpersonnelfromboth   parties.Thisisnormallyaquarterlymeeting.Thepurposeistoaddressthemainissues  t thatrequireresolution,andtoensurethatthePartneringprocessremainsontrack.3݌`(#(# Ќ   L  "3"    32I3  0    E+ ` <DL!X EPhaseVisaclosuresessiontoprovidefeedbackonthevalueofthePartneringprocess. k8  Thissessionisnotalwaysheld.3݌W$ (#(# Ќ  ,H+ ` <DL!` X!H C   l<`  H+ 4 <DL!` X!HAdditionalinformationonPartneringisavailablefromtheConstructionIndustryInstitute.L   L   d   8      L   L/   /  6.1.8CompetitiveProposalsvs.SealedBids   ProjectsInvolvingTechnology Generallysuchprojectsareeitherpartofalargerconstruction  project,inwhichcasetheymayfallundercompetitivebiddingrequirements,ortechnology  acquisitionprojectsinvolvingprofessionalservicesandpossiblyaninstallationcomponent,  whichtakesthemoutsidetheconstructionfieldwithitssealedbidrequirements.Wherethework t tobeperformedundercontractistoadominantextentotherthanconstruction,someTransit ` Agencieshaveexperiencedsituationswhereacompetitiveproposalhasproventobeabetter L methodofcontractingfortheprojectthanthetypicalsealedbidapproach.Thishasbeentruefor k8 projectswhichentailedtechnology,suchassoftwareandsystemsintegrationwork.Inthese W$ situationsyoumaywanttoevaluatealternativetechnicalapproachesoralternativewaysof C construction.TheseconditionslendthemselvestoanRFPtypeofsolicitation,whereyouwill / havetheflexibilitytoholddiscussionswiththeofferorsandselectthe"bestvalue"foryour   Agency,consideringnotonlypricebutthevalueoftheproductsbeingoffered,includingtheir ! expectedreliabilityandmaintainability.Onesuchprojectinvolvingtechnologywasacontract ! foraPublicAddress/CustomerInformationScreen.Thisprojectisbeingconstructedovera " numberofphases.Thefirstphasecontractwashandledasasealedbid.Theproblemwiththis # approachwasthatthelowestresponsiblebidderwasaconstructioncontractorandnotasystems $  integrator.Therewasaconsiderableamountofsoftwareinvolvedandthesolicitationdocuments %p! didnotmentionwhoretainedsoftwarerights.Aprojectsuchasthisshouldbesolicitedasan &\" RFPsothatnegotiationscantakeplaceandprospectivecontractorscanbeevaluatedonthebasis {'H # oftheirsuitabilityforthework.:   9       g(4!$    ?* #& CriticalProjectsInvolvingScheduleIncentives Ifstatelawpermits,itmaybeadvantageous 3 toconsideranegotiatedmethodofprocurementinsteadofsealedbidswhentheprojectinvolves # acriticalcompletionscheduleandwhereyouhavechosentouseincentiveprovisionsinthe   contractorabid/proposalevaluationmethodsuchasthosedescribedinsection6.1.9Incentives   toReduceProjectCompletionTimes.Wherethemethodologybeingusedtoevaluatebidsis   unconventional,andwhereitmaybeadvantageoustohavetheflexibilitytoholddiscussions   withtheprospectivecontractors,anRFPapproachmaybepreferabletoasealedbidmethod   becauseitwillgiveyoutheabilitytodiscussthecontractors'proposedapproachestoschedule  x improvementandtherealismofthoseproposals.Itmustberecognized,however,thata d negotiatedprocurementwillrequiremoretimetoaward,andthismaybecounterproductive P  whentheprojectisatimecriticalone. o<   6.1.9IncentivestoReduceProjectCompletionTimes G   Transitagencieshavehadsuccessinreducingprojectcompletiontimesbyusingatechnique   whereinbidsaresolicitedandevaluatedintermsofthepricesofferedandthebestachievable    completionschedule.=   10      ׀Thecontractawardisdeterminedbythelowestevaluatedbid,using  boththebidpriceandtheproposedcompletionschedule.Inthisprocurementscenario:  '  ff'r0  "0` (#(#  TheAgencyspecifiesthemaximumdurationoftheprojectinthebiddocuments.'r݌` (#` (# Ќ  '  't0  "0` (#(#  TheAgencydeterminesthevalueofa"day"duringthecontractperiodand  specifiesthisvalueinthebiddocuments.'t݌` (#` (# Ќ  '  '0  "0` (#(#  Biddersmustproposetheprojectduration(bestachievableschedule)intheirbids.'݌;` (#` (# Ќ  '  '0  "0` (#(#  Thebiddocumentswoulddefinethedamagesforfailuretoachievetheproposed R completionschedule,andthebonusesforearlycompletion,iftheAgencyshould q> choosetousethemwiththedamagesprovisions.Theuseofdamagesforfailure ]* tomeettheproposedcompletionscheduleisimportantinordertokeepthe I  bidders"honest"intheirproposedcompletionschedules.Theuseofbonuseswill 5! provideanevenstrongerincentiveforthebidderstosuccessfullymaketheir !" proposedschedulesaftercontractaward.'݌ #` (#` (# Ќ  ff'  '0  "0` (#(#  Price+Duration(#ofDays)=EvaluatedBid'݌W$$` (#` (# Ќ  Example: /&     `  Bid   h   CompanyX p Days  CompanyY󀀀Days '!  Valueofadayis A(BidPrice)0 h   $5,000,000 p   $5,500,000 F (!#h(#h(# $5,000   `  B(Contract )"$    `  Duration) h    p 720Days600Days *#%   +$&    `  ValueofDuration 3    `  (Daysx$5,000)  $3,600,000 p   $3,000,000      `  EvaluatedTotal  $8,600,000 p   $8,500,000    ThecontractwouldbeawardedtoCompanyYsinceitsevaluatedbidislowerthanthatof   CompanyXby$100,000.Valueofawardwouldbe$5.5million.     AdvantagestoPricePlusScheduleBidding  This techniqueislikelytoencourageefficient ` contractorstobid,anditoffersthelikelihoodofshorterconstructionprojectdurationsbecauseof P  thestrongfinancialincentivesforachievingthebestcompletionschedule. o<  ConcernswithPricePlusScheduleBidding󀄀Itisextremelyimportantthattheconstruction G  contractorhavecontrolovertheworksite,andthattheAgency'sresponsibilitiesattheworksite 3  beminimalor,preferably,nonexistent.IfthecontractorisdependentupontheAgencytofurnish   supportattheworksite,orifthecontractor'sworkisdependentupontheactivitiesofother    contractors,theAgencycanexpectclaimsregardingtheissueofdelays,whichinturnaffectthe  incentiveprovisionsoftheconstructioncontract.Inviewoftheprobabilitiesofclaimsand  litigation,Agenciesshouldavoidincentivecontractssuchasthisunlesstheycanturnaworksite  overtoaconstructioncontractorandallowthecontractortocontrolthatsiteandthescheduling  ofallworkrequiredtocompletetheproject.Wherecontractorslackthenecessarycontrolover t theworksite,Agenciesmaywellhavetopayhigherprices,basedonthecontractbonusesand ` thecontractor'ssuccessfulclaimsfordelays,andstillhaveaprojectthatislateincompletion. L   Completionincentivesmayworktodiscourageprimecontractorsfromsubcontractingwithsmall W$ ordisadvantagedbusinessfirms.Primeswillprobablyseekpartnerswhoarelargebusinesses C withproventrackrecords,andwhichhavesubstantialresourcesavailabletoperformtheworkas / expeditiouslyaspossible.   Thequalityofconstructionworkmaysufferduetotheschedulepressures,andAgencieswill ! needtoexertclosesurveillanceoverthecontractor.  " 6.1.10SpecialContractProvisions $   Constructioncontractsrequirecertainprovisions whichareuniquetothatactivity.These &\" provisionsarediscussedindetailinothersectionsoftheBPPM.Followingisasummaryofthe 'L # specialprovisionsandtheBPPMsectionswheretheyarediscussed. k(8!$  Labor 󀄀ThethreewageandhourlawsgoverningconstructionintheFederalrealmarethe C*#& DavisBaconAct,theContractWorkHoursandSafetyStandardsAct,andtheCopelandAnti 3+$' KickbackAct.TheapplicablecontractclausesarediscussedinAppendixA.1,clauses16,17 ,$( and18.Section8.1.2DavisBaconActcontainsmoredetailedguidancewithrespectto  -%) administeringtherequirementsofthisAct. -&* _  /(, Bonding 󀄀Constructioncontractsrequirecontractorstofurnishthreetypesofbondsbidbonds, 3 paymentbondsandperformancebondswhicharediscussedinAppendixA.1,clause13,with # moredetailedguidanceoneachtypeofbondinSection8.2.1PerformanceBonds.    Liquidateddamages 򀄀Section8.2.3LiquidatedDamagescontainsguidanceontheuseof   liquidateddamagesclauses.    DifferingSiteConditions 󀄀Section9.2.3.1containsguidanceonadministeringtheDiffering  | SiteConditionsclause. l  SpecificationsforConstruction 󀄀Section3.4SpecificationsforConstructiondiscusses wD  requirementswithinFTACircular4220.1EandtheMasterAgreement(MA)whichmayaffect g4  yourconstructionspecifications. S   Insurance 󀄀Section6.6Insurancediscussesanapproachtoinsuringconstructionproject +  contractorsknownasOwnerControlledInsurancePrograms(_OCIP_),whichhasproventobean   effectivemethodofinsuringthecontractorteamsinvolvedinconstructionprojects.   Warranties 󀄀Obtainingacceptablewarrantydocumentsinatimelymannerfromcontractorshas  beenhistoricallydifficult.Nocontractualincentivehasexistedtomotivatecontractorstosupply  therequiredwarranties.Granteesmaywishtoconsidermakingthesubmissionofanacceptable  warrantyformaconditionofproductorsystemacceptanceinordertomotivatecontractorsto t furnishtherequiredform.Granteesmightalsoincludethewarrantyformsasafixedpriceline ` iteminthecontractforpaymentpurposes,thusgivingthecontractorsastrongmotivationto L supplytherequiredforms. k8  ContractCloseout 󀄀Closeoutofconstructioncontractswillrequirecertaindocumentation C uniquetothesecontracts,suchaslienwaivers,asbuiltdrawings,etc.Theserequirementsare 3  discussedinChapter10,CloseOut. !  6.2EQUIPMENTANDSUPPLIES " 6.2.1Lease/Maintain $  &b %XX*ldddd   (#(#l,xZZ+  :'&`"&` :J    4 %&bh4h    XXXXXXd&&hJ%    REQUIREMENTJ%& "&Ԍ N;#&#    HNЌ   &%XX&b %%&     S  <%  <DLX!<  S'  Requirementsrelatedtotheleaseofequipmentandfacilitiesmaybefoundinthefollowing s(@!$ regulations:S'(݌ K)"% Ќ  $ X! X$    ?( 4 <DLX!?^\ %&b sjjjjjjjjj(8x*-(),-./9%` ` <DLX9XfX\^0 b (a)FTACircular4220.1Egenerally,andparagraph7dwhichrequires,where *z#' appropriate,ananalysisofleaseversuspurchasealternativestodeterminethe+f$(b"b" 0 b mosteconomicalapproach.,R%)b"b"  X?%4 4 <DL` ` X?^\XXf X9%` ` <DL44X90 b XfX\^(b)FTAMasterAgreement,MA(12),Section16,Leases.-&+b"b" ^\XXfXfX\^0 b _(c)_ԀCapitalLeases(49_CFR_,Part639.)=31q/>(-b"b" H    =3 DISCUSSION    Sinceequipmentleasesareconsidered thirdpartycontractswithinthemeaningofFTA   Circular4220.1E,therequirementsofthatCircularapplytosuchprocurements.The   Circularrequiresaleaseversuspurchaseanalysistodeterminethemosteconomical  x approachtoanygivenprocurement.TheMasterAgreement,Section16,concernscapital  d leases,inaccordancewith49_CFR_,part639.  P Leasevs.purchasealternatives!Wheneveranagencyisconsideringtheleasingof [( equipment,aleasevs.purchaseanalysisshouldbemade.Theanalysisshouldbe G  appropriatetothesizeandcomplexityoftheprocurement.Itisusuallymoreeconomical 3  topurchaseequipmentthantoleaseit.Thisisnotalwaystrue,however,especiallywhen   highlycomplexequipmentisinvolvedandthereareissuesofmaintainingtheequipmentor    havingtrainedpersonnelwhoarecompetenttooperatetheequipment.Indetermining   whethertheleaseofequipmentisfeasible,thefollowingfactorsmustbeconsidered:   *X X` ` X* *-(),-./(Ix8sjjjjjjjjj) 1-(),-./(#px*-(),-./"3"  30  342#3  0` (#(#  Estimatedlengthoftheperiodtheequipmentistobeusedandtheamountof  timeofactualequipmentusage;34d4݌t` (#` (# Ќ  "3"  0  3u52#3  0` (#(#  Whencircumstancesrequiretheimmediateuseofequipmenttomeet 8 programorsystemgoalsandtheleasingwouldserveasaninterimmeasure $ tomeettheseimmediateneeds.3u55݌` (#` (# Ќ  "3"  0  372#3  0` (#(#  Financialandoperatingadvantagesofalternativetypesandmakesof n equipment;37J7݌Z` (#` (# Ќ  "3"  0  3>82#3  0` (#(#  Totalrentalcostfortheestimatedperiodofuse;3>8w8݌` (#` (# Ќ  "3"  0  3:92#3  0` (#(#  Netpurchasepriceifacquiredbypurchase;3:9s9݌ |` (#` (# Ќ  "3"  0  3/:2#3  0` (#(#  Transportationandinstallationcosts;3/:h:݌@" ` (#` (# Ќ  "3"  0  3;2#3  0` (#(#  Maintenanceandotherservicecosts(e.g.,thecostofpermanenthousing #  facilitiesforheavycranesmightprecludetheirpurchase,andthelackof $! trainedoperatorsofheavyequipmentmaydictatethattheagencyleasethe %v" equipmentwithtrainedoperators);3;X;݌&b#` (#` (# Ќ  "3"  0  3&=2#3  0` (#(#  Differenceinwarrantycoveragesbetweenleaseandpurchase;e.g.,some &( % officeequipmentleasesdonotprovideforwarrantyrepairswhereasnew )!& purchaseswouldbecoveredbywarranties;3&=_=݌)"'` (#` (# Ќ  "3"  0  3>2#3  0` (#(#  Availabilityofaservicingcapability,especiallyforhighlycomplex0@v` (#` (#0@vD(#D(# +\$) equipment(CantheAgencyservicetheequipmentifitispurchased?);3> ?݌{,H%*` (#` (# Ќ  3D4"3 "   o80  3~@2#3  0` (#(#  Potentialobsolescenceoftheequipmentbecauseofimminenttechnological  .&, improvements;3~@@݌.'-` (#` (# Ќ  _"3 "  0  3A2#3  0` (#(#  Tradeinorsalvagevalue;3AB݌3` (#` (# Ќ  "3 "  0  3B2#3  0` (#(#  Imputedinterestcosts(netpresentvalueofleasepayments);and3BB݌b` (#` (# Ќ  @"3 "  0  3C2#3  0` (#(#  Insurancecosts.3C D݌ ` (#` (# Ќ  B( 4 <DLX XBBestPractices       Leaseswithoptionstopurchase!Whenaleaseisjustified,aleasewithoptiontopurchasemay  t beappropriate. `      Longtermleases!Generally,alongtermleaseshouldbeavoided,butmaybeappropriateifan k8  optiontopurchaseorotherfavorabletermsareincluded. W$   6.2.1.1LeaseandMaintenanceofVehicles /   Q    QG  QGAG݌̌    LeasevsBuyAnalysis ! Whencomparingthe costsofleasingvs.ownership,maintenancecosts   willusuallybeamajoreconomicfactor.Indeedtheprimaryadvantageofleasingisthe  avoidanceofmaintenancecostsforitemssuchasbrakes,batteries,etc.Granteesmustcarefully  estimatethemaintenancecostsovertheanticipatedlifeofthevehicle.Thecostsofownership  willbeincreasedbythesemaintenancecostsanddecreasedbytheanticipatedresalevalue  (salvagevalue)ofthevehiclewhenitissold. t  l` UsingaRequestforProposalvs.InvitationforBid!PACESuburbanBusServicesexperience L withcompetitiveprocurementsusinganRFPhasbeenpositive.?   11      ׀Thereismuchmoreflexibility k8 forthegranteewhenanRFPisusedinsteadofanIFB.TheRFPapproachgivesthegranteean W$ opportunitytoestablishevaluationcriteriaforimportantfactorsofperformance,includingsuch C itemsaspreventativemaintenance,emergencyroadsideassistance,repairs,fuelcard / managementservices,andaccidentservices.Proposalscanbeevaluatedwiththeobjectiveof   selectingthebestoverallcombinationofservicequalityandprice.Negotiationscanbeheldwith ! theofferorsinordertosecurethebestpossibleproposalandcontractterms.ThePACESuburban ! BusRFPissuedforleasingandmaintainingtheirfleetvehiclesmaybefoundinAppendixB.15. "     JointProcurementswithStateDOTs!GranteesshouldinquirewiththeirStateDepartmentsof $! Transportationastowhetheritwouldbefeasibletoleasevehiclesfromcontractsawardedbythe %p" State.TheseStatecontractsfrequentlyrepresentthebestpossibletermsavailableforvehicle &\# leasing.Whenpursuingthis piggybackingapproach,granteepersonnelmustdetermineifthe {'H $ StatecontractcontainsalltherequiredFederalclausesandcertificationsrequiredbyFederal g(4!% regulations.GranteesmaywishtotaketheinitiativewiththeirStateDOTstoplanaheadfor_  S) "& jointprocurementsofvehiclesinordertoassurethattheirneedsareaddressedandthatthe 3 Federalrequirementsareincludedwhentheprocurementsareinitiated.Foradditionalguidance,  seeSection6.3.3JointProcurementsofRollingStockand Piggybacking.   P  4XXf44  XfX4PR  PRS݌̌ XfXXXfXfXXXf   6.2.1.2LeaseofHeavyEquipmentwithOperators    Someagencieshavefounditbeneficialtolease,ratherthanpurchase,heavyequipment,suchas   cranes,withoperators.B   12      ׀Themoreimportantconsiderationsheretendtobeoperationalrather  t thaneconomic.Advantagestoleasingwouldincludesuchfactorsas: `    1-(),-./(#pp 1-(),-./"3"    0  3V2#3  0` (#(#  theavailabilityoffullytrainedandlicensedequipmentoperators;3VV݌k8 ` (#` (# Ќ   6" <DLX6 W$   1-(),-./(#pp1-(),-./"3"  <( 4 <DL  X<0  0(#(#3X2#3  0` (#(#  theconvenienceofhavingthelessorprovidetheveryspecializedmaintenance C  servicesandhousingstructuresfortheequipment;and3X%Y݌/ ` (#` (# Ќ  6" <DLX6    "3"  0  0(#(#3Z2#3  0` (#(#  thelessorsassumptionofliabilityincaseofaccidents.3Z[݌ ` (#` (# Ќ  <( 4 <DL  X<JointAgencyProcurements󀄀Heavyequipmentmaybeverydifficulttoobtainonshortnotice,  andlongertermleases,suchasthreeyears,maybeadvisable.Inaddition,competitionmaybe  virtuallynonexistent.Underthesecircumstances,agenciesmightbeadvisedtoseekoutother  agenciesintheirgeographicalregioninordertoconductajointprocurementfortheircommon p needssoastoobtainamorefavorablecontractthaneithercouldprocurebythemselves. \ LaborLaws!AgencieswillneedtobeawareoflocalorStatelaborlaws,aswellasFederallaws g4 ifconstructionisinvolved(e.g.,DavisBaconAct),whendevelopingtheirsolicitationdocument S  andcontract. ?  Insurance!Insurancerequirementswillbeanimportantpartofthecontractterms.Agency   procurementpersonnelshouldcarefullycoordinatetheinsuranceprovisionswiththeirinsurance ! departmentorlegalspecialists.Requirementsmightincludecoverageforcommercialgeneral ! liability,autovehicleinsurance,workerscompensation,andperhaps,aspecialrailwayprotective " policy.Theagencysinsurancespecialistsshoulddeterminespecificcoveragerequirementsand # amounts. $     6.3ROLLINGSTOCK  &X" *eddxZZx(#(#e,xdd +  c(0!$c(0!  REQUIREMENT  (!% HTheFTAMasterAgreement,_MA(12),_ԀSection15(l)definesseveralrequirementsforthe G*#& acquisitionofrollingstock: 3+$'  -%) dH    ?. ') *lFddxdd x(#(#l,xdd +  33  l.RollingStock.Inacquiringrollingstock,theRecipientagreesasfollows: d 0 l (1)MethodofAcquisition.TheRecipientmayawardathirdpartycontractforrolling o < stockbasedoninitialcosts,performance,standardization,lifecyclecosts,andother [ ( factors,orbasedonacompetitiveprocurementprocessinaccordancewith49U.S.C. G  Section5326_(c)_.3 l"l" &b %XXf#XfX %&bf#0 l (2)MultiyearOptions.Inaccordancewith49U.S.C.Section5326(b)(1),aRecipient   mayprocurerollingstockusingfinancialassistanceappropriatedfor49U.S.C.Chapter   53usingacontract,withanoption,nottoexceed5yearsafterthedateoftheoriginal   contract,topurchaseadditionalrollingstockorreplacement. l"l" 0 l (3)PreAwardandPostDeliveryRequirements.TheRecipientagreestocomplywith `  therequirementsof49U.S.C.Section5323(m)andFTAregulations,"PreAwardand L  PostDeliveryAuditsofRollingStockPurchases,"49_C.F.R._ԀPart663,andany k8  revisionthereto.W$l"l" 0 l (4)BusTesting.Totheextentapplicable,theRecipientagreestocomplywiththe / requirementsof49U.S.C.Section5323_(c)_ԀandFTAregulations,"BusTesting,"49  _C.F.R._ԀPart665,andanyrevisionthereto. #l"l" #6.3.1Buses    6.3.1.1CompetitiveProposalsvs.SealedBids   GranteeexperienceswithcompetitiveRequestsforProposals(_RFP_'s)forbusprocurements  indicatesthatthismethodmaybepreferabletotheuseofsealedbids.When_RFP_'sareused,the x granteehastheflexibilitytoholddiscussionswiththe_offerors_Ԁandtoevaluatetheproposalsand  d conductnegotiationsforthebestdeliveryschedules,warranties,quality/reliability,aftermarket !P supportintermsofpartsavailability,andprices.Inotherwords,granteescanawardtheir o"< contractsonthebasisofthebestvalue,withallimportantfactorsconsidered.SomeStatelaws, [#( however,requiretheuseofsealedbiddingproceduresforbuses,inwhichcasegranteeswould G$ notbeabletousecompetitive_RFP_'s. 3%  _Prequalification_Ԁofsystems/components󀄀TheMetropolitanTransitAuthority(MTA)ofHarris  '" County,Houston,TX,completedalarge243busprocurementwhichusedatwostepsealedbid ' # process.Thisentaileda_prequalification_Ԁprocedure"RequestforApprovedEquals"formajor (!$ systemsandcomponents.InStepone,MTAissuedaperformancetypespecificationidentifying )"% allthesystemsorcomponentswhichhadtobesubmittedforapprovalpriortobids.Examples *#& wouldinclude:engines,transmissions,doorsystems,etc.MTAreviewedthesubmissionsin +t$' termsoftheircharacteristics,specifications,etc.anddeterminedwhatsystemsandcomponents ,`%( theywouldaccept.MTAthenissuedanoticetoallbiddersidentifyingwhatcomponentswere -L&)  acceptable,sothatallbiddersknewbeforehandwhatitemswereacceptabletobidon.Sealed k.8'* _bidswerethenreceived,andwhenthelowbidderwasidentified,MTAperformedanauditfor 3 specificationcomplianceandcompliancewithBuyAmerica.E   13         6.3.1.2APTAStandardBusProcurementGuide+lines    TheAmericanPublicTransitAssociation(APTA)publishedtheStandardBusProcurement   Guidelines(SBPG)inJanuary1997as"amodelforsolicitationofoffersandcontractsforthe   supplyoftransitbuses."TheSBPGcontainssuggestedtermsandconditionsregardingthe  t solicitation,thecontractdocument,qualityassuranceandcontractorwarranties.Asecond ` volumecontainingtechnicalspecificationsisunderdevelopment.Granteesarecautioned, L  however,thattheAPTAH2   14      Guidelinesmaycontaintermsandconditionswhicharenotconsistent k8  withFTA'spoliciesassetforthinFTACircular4220.1E.Forexample,theprovisionsregarding W$  advancepaymentsandwarrantiesintheAPTAGuidelinescannotbeadoptedwithoutprior C  FTAwaivers. /   6.3.2RailCars    Therearecertainrealitiesintherailcarindustrywhichimpactthemannerinwhichrailcarsare  procured.TransitAgenciesbuyingrailcarstendtodosoinfrequently,withanumberofyears  betweenprocurements.Thetechnologycanbeexpectedtochangeconsiderablyduringthe  interveningyearsbetweentheseprocurements.ThisfactmakesitcriticalthatAgenciesdo p considerableadvanceplanninginordertodeterminethecurrentstateoftheartbeforethey \ formulatetheirspecificationstoprocurerailcars. {H BecausethereisvirtuallynostandardizationintheUnitedStatesintheareaoftrackgauges, S  stationplatformheights,tunneldesigns,etc.,andbecausenewrailcarsmustbecompatiblewith ?  existingcars,itisnotfeasibleforTransitAgenciestoconsolidateprocurementsofrailcarsand + usecommonbuysor"piggybacking."Whilejointpurchasingofrailcarsisdifficult,anagency   designingaspecificationshouldconsultwithotherswhohaveeitherrecentlypurchasedcarsor ! whoareintheprocessofdoingso,andattempttoachievewhatevercommonalityofcomponents ! ispossible.Thiswillfacilitatebothjointpurchasesofpartsinsubsequentyearsandtheabilityto " secondsource.Anotheraspectofthisproblemwithnonstandardizedrailcarsisthatitresultsin # highonetimedesigncostsforeachAgency'sprocurement.Thisinturnprovidesanincentiveto $  buyasmanycarsasfeasibleundereachsolicitationsothatthedesigncostscanbeamortized %l! overagreaternumberofvehicles,withacorrespondingreductioninunitprices.Onarecent &X" MARTAprocurement,forexample,theunitpricewasreducedby$400,000byincreasingthe w'D # quantityofcarstobeprocuredfrom30(theinitiallyplannednumber)to100.Thissavingswas c(0!$ duetoamortizingthenonrecurringdesigncostsoveralargernumberofunits.Agenciesshould  O)"% carefullyconsiderthemultiyearcontractingstrategiesdiscussedinSection2.2LongTerm 3 Planning.   BestPractices    MARTA'sexperiencewitharecentmajorrailcarprocurementoffersanumberofhelpful   insights.K   15          Competitiveproposals 󀄀Theprocurementspecificationsweresubjectedtoapeerreviewby ` otherTransitAgenciesandindependentconsultantspriortoreleaseintheRFP.Thisgave P  MARTAthebenefitofotherTransitAgencies'experienceswithmorerecentrailcar o<  procurements.MARTAelectedtouseacompetitiveRequestforProposal(RFP)approach [(  insteadofasealedbidmethod,whichhadbeentheirearlierpractice.Theywerepleasedwith G  thisdecisionbecauseitgavethemtheneededflexibilitytodiscussvarioustechnicalapproaches 3  forcomplexitemswitheachoftheofferors,andtoachievethe"bestvalue,"giventhedifferent   technicalapproachesofferedandthepricesproposedfortheseapproaches."Bestvalue"    includedexpectedreliabilityandmaintainabilityfeatures,suchasonboarddiagnostics.   MARTA'sRFPincludedaProposalDataRequirementsList(PDRL)whichdefinedtheformat  andcontentoftherequiredproposalinformation,therebycreatingproposaluniformity,whichin  turnincreasedthequalityandefficiencyofproposalevaluation.Theproposalevaluationplan, t includingthescoringmechanism,wascarefullydevelopedandtestedusingseveralmock ` proposalsbeforetheRFPwasissued.Onceproposalswerereceived,theproposalevaluation L planandscoringmechanismwereadheredtometiculouslyinordertoavoidanyappearanceof k8 bias.Thiskindofrigidadherencetotheproposalevaluationplanisacriticalrequirementfor W$ AgenciestoobserveiftheyusetheRFPmethodology.MARTA'suseofindividualsoutsidethe C Agencytoparticipateontheproposalevaluationcommitteeaddedanelementofobjectivityand / independencetotheprocess,aswellasenhancingtheoverallexperiencebaseoftheevaluation   team. ! MARTAkeptthetechnicalandpriceproposalevaluationsseparate,soasnottoinfluencethe " technicalevaluators.Theyalsoestablisheda"competitiverange"followinginitialproposal # evaluations,andhelddiscussionswiththosecompaniesinthecompetitiverange(thosethathada $  reasonablechanceforcontractaward).Offerorseliminatedfromthecompetitiverangewereto %p! benotifiedquicklyafterMARTA'sdecisionsothattheycouldreleasetheirteamstoother &\" opportunities. {'H # ThetimerequiredtocompletetheprocurementprocesswaslongerusingtheRFPmethodthanit S) "% wouldhavebeenwithsealedbids(IFB).UsinganIFBwasestimatedtotakebetweenfourand  ?* #& sixmonthsfromadvertisingtoaward,whereastheRFPmethodtookabout13monthsfrom 3 releaseoftheRFPtocontractaward.AgenciesplanningtousetheRFPmethodwillhaveto  allowformoretimethanifsealedbidsareused,butthefinalresultsmaybeworththeadded   procurementtime.    Futurepurchasesofproprietaryparts 󀄀Effortsshouldbemadeintheoriginalacquisitionof   railcars(andbuses)toincludean"advanceagreement"withthesupplierconcerningthefuture   acquisitionofproprietaryparts.Thiscouldbedoneasapercentagediscountofthelistprice.  x Thebestapproachmightbetohaveaoneyearcontractfortheproprietaryparts,withaseriesof d fouroneyearoptions(tobeextendedsubjecttoFTAapproval).Thiswouldenabletheagency, P  attheendofeachyear,todeterminewhetherthemarketplacehaschangedintermsofthe o<  competitiveavailabilityofpartsformerlyonlyavailablefromthevehiclemanufacturer. [(   6.3.3JointProcurementsofRollingStockand Piggybacking  3  *lddxdd xF(#(#l,dd +        REQUIREMENT  o< FTACircular4220.1Eappliestoallthirdpartycontractactionsundertakenbygranteeswith  Federalfunds,includingactionstakenpursuanttothecontractsofotherentities,suchas(1)  theexerciseofoptionswhichhavebeenassignedtothegranteebyanotherentitywhich  awardedthecontractinitially,(2)theassignmentofcontractsthemselvestoagranteeby  anotherentity(underwhichthegranteewillspendFederalfunds),and(3)jointprocurements l withotherentities(underwhichthegranteewillspendFederalfunds). X OfparticularsignificancearethefollowingprovisionsofFTACircular4220.1E: c0 $ XX$  7.e.IntergovernmentalProcurementAgreements. ; 0  X X00  0""1.0 ""Granteesareencouragedtoutilizeavailablestateandlocalintergovernmental ! agreementsforprocurementoruseofcommongoodsandservices.When ! obtaininggoodsorservicesinthismanner,granteesmustensureallfederal " requirements,requiredclauses,andcertifications(includingBuyAmerica)are # properlyfollowedandincluded,whetherinthemasterintergovernmental $  contractorinthegrantee'spurchasedocument.   16      %|! " "   &h" 0  0""2.0 ""Granteesarealsoencouragedtojointlyprocuregoodsandserviceswithother P  grantees.Whenobtaininggoodsorservicesinthismanner,granteesmust o < ensureallfederalrequirements,requiredclauses,andcertificationsareproperly [ ( followedandincludedintheresultingjointsolicitationandcontract G  documents.Q   17      3  " " 0  0""3.0 ""Granteesmayassigncontractualrightstopurchasegoodsandservicestoother   granteesiftheoriginalcontractcontainsappropriateassignabilityprovisions.   Granteeswhoobtainthesecontractualrights(commonlyknownas   'piggybacking')mayexercisethemafterfirstdeterminingthecontractprice   remainsfairandreasonable.UB   18        " " 0  8.a.FullandOpenCompetition.Allprocurementtransactionswillbeconductedina `  mannerprovidingfullandopencompetition.L "" 9.i.(1)EvaluationofOptions.Theoptionquantitiesorperiodscontainedinthecontractor's W$ bidoroffermustbeevaluatedinordertodeterminecontractaward.Whenoptionshavenot C beenevaluatedaspartoftheaward,theexerciseofsuchoptionswillbeconsideredasole / sourceprocurement.      DISCUSSION    Recently,therehasbeenagrowingtrendamongsttransitsystemstobecomecreativeinthe  acquisitionofrollingstock.Themostconstructiveofthesetechniquesinvolveadvance  planningandjointprocurementbyseveralsystems.FTAencouragesthistechnique.In  thesejointprocurements,theneedsofthevarioustransitsystemsaredefinedinthe  x solicitationandthemanufacturersareaskedtobiduponthetotalknownneedsofthe !d agenciesinvolved.Inothersituations,transitagencieswillidentifyanexistingcontractof "P anotheragencyand"piggyback"thatcontractbymeansofanassignmentofcontract o#< rightssuchasanassignmentofoptions.Additionally,thereistheoccasionwherean [$( agencyawardsanIndefiniteDelivery/IndefiniteQuantity(ID/IQ)contractandallows  G%  otheragenciestopurchasefromit.Regardlessoftheapproachused,itisimportantthat 3 granteesbeawareoftherequirementsofFTACircular4220.1Ewithrespectto  competition,evaluationofoptionsinmakingthebasiccontractaward,andtheexistenceof   asolesourceconditionwhenoptionalquantitiesareorderedwhichwerenotpricedand   evaluatedaspartofthebasiccontractawardprocess.  ItisFTAspolicythattheestimated   quantitiesmustreflecttheimmediateorreasonablyforeseeableneedsofthepartiestothe   solicitationand,inthecaseofindefinitedelivery/indefinitequantitycontracts,aminimum   andmaximumquantitymustbestated.  p BestPractices wD   Thestreamliningofbuspurchasescanoccurwhentwoormoresystemsjoinforcesusingthe O  samespecification,solicitationprocess,termsandconditions,etc.leadingtothepurchaseof ;  vehiclesfromthesamevendor.Thiscanbeaccomplishedusing(1)theservicesofonelead '  governmentalagency,(2)aconsortium,or(3)"piggybacking."Whileallofthesemechanisms   requireadvanceplanning,thefirsttwooccur preaward,whilethelatteroccurs post   award.Theadvantagesofusingaconsolidatedprocurementapproachincludethefollowing:  0` X  X0'  '@0  "0` (#(#  Smallertransitsystemslackthepersonnelandtheexpertisetoconductbus  procurementsexpeditiously,especiallyinlightofFederalrequirements. | Procurementleadtimesshouldbegreatlyreducedthroughaconsolidated h procurementprocedure.'@[݌T` (#` (# Ќ  '  '0  "0` (#(#  Stafftimeatthevarioustransitsystemsandthevehiclemanufacturerswillbe _, savedbyeliminatingtheredundancyinconductingmultiplebiddingprocessesfor0@"` (#` (#0@"(#(# K thesamevehicles.',݌7` (#` (# Ќ  '  '0  "0` (#(#  Qualityimprovementscouldresultfromthebusesbeingmanufacturedinamore   standardizedfashion.'б݌ ` (#` (# Ќ  '  'Ͳ0  "0` (#(#  Savingsintransitsystems'operatingcostswillberealizedfromearlierdeliveryof " newbuses,asoldervehicleswithhigheroperatingcostsareretiredearlier.'Ͳ݌#` (#` (# Ќ  '  '%0  "0` (#(#  Itistobehopedthatlargerquantitybuyingwouldresultinbetterpricesthana %d! numberofsmallerindividualsolicitations.'%@݌&P"` (#` (# Ќ  '  'X0  "0` (#(#  Whencommonvehiclesarepurchased,itmayresultinbetteroverall [((!$ coordination/learningamongtransitsystemsinthattheywillbeusingthesame G)"% vehicles.'Xs݌3*#&` (#` (# Ќ  AdvancePlanningJointProcurements   ,$( E+ 4 <DL!` XE ConsolidatedProcurements 󀄀Variousgovernmentalagenciesmayactasafacilitatorforthe -&* awardofmultiplecontracts.Thisapproachisparticularlybeneficialwhendealingwithalarge  .'+ numberofgrantees.Asanexample,theNewYorkStateDepartmentofTransportation 3 (NYSDOT)hasbeenusingtheservicesofitsOfficeofGeneralServices(OGS)formanyyears  topurchasevehiclesunderFTA'sSection5310Program.Here,sixdifferenttypesoflightduty   busesarepurchasedeveryyearforthe5310granteesusinganOGSbidprocessbasedupon   specificationsdeveloped,inpart,bythegranteesfacilitatedbyNYSDOT.DuringtheOGSbid   process,NYSDOTestimatesthenumberofvehiclestobepurchasednotonlyforthe5310   grantees,butalsoforotherpublictransportationprovidersintheState.Forthe5310Program,   NewYorkStatecontractsdirectlywiththesuccessfulmanufacturer.Thebusesarebuiltand  t delivereddirectlytothe5310granteealongwiththetitle.Otherpublictransportationsystems ` withinthestate(e.g.5311and5307grantees)mayaccessthesesamecontracts,contracting L  directlywiththesuccessfulmanufacturer.Byusingthiscontractingprocess,theefficiencies k8  describedpreviouslyaremaximized. W$   Consortiums 󀄀Consortiumshavebeenusedwhereanumberofsystemscometogethertojointly /  issueasolicitationandimmediatelyawardindividualcontractswiththesuccessfulbidder.   Giventhedifferenttypesofbusconfigurations(e.g.diesel/CNG;lowfloor/highfloor),itmaybe    usefultoidentifyaleadagencyfordevelopingaspecificationforeachtypeofbusconfiguration.  Thespecificationsdevelopedwouldthenbereviewedbytheothermembersoftheprocuring  group,whowouldprovidetheircommentsonthespecificationtotheleadsystem.Thelead  systemmightmodifythespecificationbasedonthecommentsreceived,butifthechangeswere  notinthebestinterestoftheleadsystem,thechangeswouldbeincludedasoptionsinthebid t package.Forexample,iftheleadsystemwantedrollcurtaindestinationsigns,andothersystems ` wantedelectronicdestinationsigns,thespecificationwouldcallforrollcurtaindestinationsigns, L andelectronicdestinationsignswouldbeincludedundertheoptionstobepricedbybiddersas k8 partofthebidpackage. W$ Thebidadvertisementwouldspecificallyidentifyhowmanybuseswerebeingpurchasedfor / whichtransitsystems.Differencesoroptionsinthespecificationforeachuniquesystemwould   beidentifiedandpricesobtainedfromthemanufacturersforthevariousoptionsoutsideofthe ! basespecification. ! Asanexample,NewYorkStatehasasuccessfulhistorywithaCNGconsortiuminvolvingFTA # grants.Sixmajorsystemsformedaconsortium,aidedbyNYSDOTasafacilitator,topurchase $  thefirstCNGbusesplacedintoserviceintheState.Asinglesolicitationwasused,afterwhich %p! eachtransitsystemawardeditsowncontractinaccordancewiththetermsofthesolicitationand &\" thewinningbid.X   19       {'H #    S) "% Piggybacking  3 T PiggybackingandTagons FTACircular4220.1EsetsforthFTApolicyandguidancerelated   toprocurementscommonlyreferredtoas piggybackingand tagons.Thesetermsare   definedintheCircularasfollows:   0   Piggybackingisanassignmentofexistingcontractrightstopurchasesupplies,   equipment,orservices.Z   20       x(#(# 0   (#(# 0  Tagonisdefinedastheadditionofwork(supplies,equipmentorservices)thatis P  beyondthescopeoftheoriginalcontractthatamountstoacardinalchangeasgenerally o<  interpretedinFederalpracticebythevariousBoardsofContractAppeals. Inscope [(  changesarenottagons.(See Tagonparagraphbelowforfurtherdiscussion)._   21      G (#(#  ________________________     CircumstancesWhenPiggybackingIsPermissible! Thereareanumberofissuesthatshould  beaddressedbyagranteebeforedecidingtopiggybackanotheragencyscontract.Granteesmust  beabletoaffirmativelydeterminethatthecontracttobepiggybackedmeetsFederal  requirements.TheseFederalrequirementsincludecompliancewithFTACircular4220.1Eand  theDearColleagueLetterC9825.Granteesareadvisedtopayparticularattentiontothe x specificissuesidentifiedinthePiggybackingWorksheetparagraphbelow.  d  P PiggybackingWorksheet! APiggybackingWorksheetmaybefoundinAppendixB.16.The 3 issuesreferredtointheworksheetthatmustbeevaluatedpriortoadecisiontopiggybackanother # contractareasfollows:   $,` XX$  1.0  Haveyouobtainedacopyofthecontractandthesolicitationdocument,includingthe   specificationsandanyBuyAmericaPreAwardorPostDeliveryaudits? (#(#   2.0  Doesthecontractcontainanexpressassignabilityclausethatprovidesfortheassignment  x ofallorpartofthespecifieddeliverables?FTAspolicyisthattheoriginalsolicitation d mustcontainanexpressnotificationtoallbiddersthatanassignmentwouldbepossible P  underthetermsofthecontract.Suchanotificationwouldputthebiddersonnoticethat o<  theywouldlikelybecalledupontodeliverallofthedeliverableitems,boththebaseas [(  wellastheoptionquantities.Theassignmentclausewouldthusbeanimportantfactorin G  theoriginalcompetitivebidding.Ifthecontractdoesnotcontainanexpressassignability 3  clause,piggybackingisnotpermitted. (#(#   3.0  DidtheContractorsubmitthe certificationsrequiredbyFederalregulationsin  accordancewiththerequirementsofthissolicitation?SeetheBPPMSection4.3.3.2.  FederallyRequiredSubmissionswithOffers.Piggybackingisnotpermittedwhenthe  ContractorhasfailedtosubmittherequiredFederalcertificationswithitsbid.(#(#   4.0  DoesthecontractcontaintheclausesrequiredbyFederalregulations?SeetheBPPM ` AppendixAFederallyRequiredandOtherModelContractClauses.Notethatnotall L clausesinAppendixAwillapplytoallcontracts!revieweachclauseforapplicabilityto k8 thespecificcontracttobepiggybacked.IfarequiredFederalclauseisnotincludedinthe W$ contract,piggybackingisnotpermitted.C(#(#   5.0  Werethepiggybackingquantitiesincludedintheoriginalsolicitation;i.e.,weretheyin   theoriginalbidandweretheyevaluatedaspartofthecontractawarddecision?Ifnot,a ! Tagonisnotpermitted.!(#(#   6.0  Ifthecontractisanindefinitequantitycontract,didtheoriginalsolicitationandresultant # contractcontainbothaminimumandamaximumquantity,whichrepresentthe $  reasonablyforeseeableneedsofthepartiestothesolicitation?SeeBPPMSection2.2.5.3 %p! !IndefinitequantityContracts,andtheparagraphbelowIndefiniteQuantityContracts, &\" UnlimitedOptionsandPiggybacking.{'H #(#(#   7.0  Ifthepiggybackingactionrepresentstheexerciseofanoptionprovisioninthecontract,S) "%(#(#   istheoptionstillvalid?Optionsthathaveexpiredmaynotbeexercised. ?* #&   8.0  DoesyourStatelawallowfortheproceduresusedbytheoriginalcontractingagency; ,$( e.g.,negotiationsvs.sealedbids?-%)(#(#   9.0  Wasacostorpriceanalysisperformedbytheoriginalprocuringagencydocumentingthe .'+ reasonablenessofthecontractprice?Includeacopyinyour_files./(,(#(# Ї  10.0  DoesthecontracttermcomplywiththefiveyeartermlimitestablishedbyFTA4220.1E, 3 paragraph7.m?(#(#   11.0  Wasthereaproperevaluationofthebidsorproposals?Includeacopyoftheanalysisin   yourfiles. (#(#   12.0  Whattypesofchangeswillyourequiretobemadetothevehicles?Foranassignment,   only withinscope(noncardinal)changesareallowed(e.g.,seatingfabricsandcolors,  t paintschemes,_signage_,floorcoloring,etc.).Forfurtherguidancesee_BPPM_ԀSection ` 9.2.1ContractScopeandCardinalChanges.L (#(# ( X,` XB( IndefiniteQuantityContracts,UnlimitedOptionsandPiggybacking !Seriousproblems W$  arisewhenagenciesissuesolicitationswithunlimitedquantities,whichresultinopenended G  contractswhichotheragenciesthenpiggyback.Thispracticecreatesanumberofserious 3  problems;therefore,unlimitedquantitiesarenotpermitted.   '  ', XX''0  "04(#(#  Sincetherollingstockmanufacturersdonotknowwhatthepotentialordersmaybe  underthecontract,theycannotplantheiroperationsnorcantheyquotepriceswhich  reflectthequantitiesthatmaybeproduced.'V݌4(#4(# Ќ  '  '0  "04(#(#  Unspecifiedquantitiesresultinhigherunitpricesfortheprocuringagency'݌t4(#4(# Ќ  0  04(#(#becausemanufacturersmustusetheminimumquantityspecifiedtocalculateprices ` formaterial,engineering,etc.L4(#4(# '  '0  "04(#(#  Forthesereasons,openended,indefinitequantity/indefinitedeliverycontracts,or W$ contractswithunlimitedoptionsarenotpermitted.Theyarenotonlydisruptiveto C busmanufacturersandtheirsuppliers,whocannotplantheirproductionschedules / giventhedegreeofuncertaintythatthesecontractsentail,buttheyarealsocounter   productivetothegranteecommunity,whichwillinvariablepayhigherpricesfor ! itemswhichwerenotreallycompetedina fullandopencompetition.'݌!4(#4(# Ќ  + X, X/+?+ 4 <DL!X? 6.3.4PreAwardandPostDeliveryReviewsforBuyAmericaActCompliance  # *eDddxdd (#(#e,dd +  $%p!%p $REQUIREMENT '&" H'TheFTAMasterAgreement,_MA(12),_ԀSection15(1)(3)definesthefollowingrequirements: 'T # 0 l (3)PreAwardandPostDeliveryRequirements.TheRecipientagreestocomplywith _),"% therequirementsof49U.S.C.Section5323(m)andFTAregulations, PreAwardand K*#& PostDeliveryAuditsofRollingStockPurchases,49_CFR_ԀPart663,andanyrevision 7+$' thereto.#,$(lZ#lZ# TheFTADearColleagueLetterC9703,datedMarch18,1997providesfurtherguidanceto -&* granteesonhowtocomplywiththeBuyAmericarequirementsofthePreAwardandPost .'+ Deliveryreviewsforrollingstockprocurementsetforthin49._CFR_ԀPart663 .TheFTA d AdministratorsDearColleagueLetterC9713,datedAugust5,1997,thatamendedtheMarch P 18,1997guidancebyremovingaxlesformtherequiredfinalassemblyactivities,was o < subsequentlywithdrawnbytheDearColleagueLetter,C9718,datedSeptember25,1997, [ ( whichrescindedtheAugust5,1997guidancebyredirectinggranteesandmanufacturersto G  followtheMarch18,1997guidanceonfinalassemblyrequirementsforbusprocurements. 3  $  dH   $ DISCUSSION ?  TheFTAAdministratorsDearColleagueLetterC9703datedMarch18,1997,outlines   thestepsthatagranteemusttakeinperformingpreawardandpostdeliveryreviewsof   rollingstockprocurementstoensuretheircompliancewithBuyAmericaActrequirements.   ThisDearColleagueLettermaybefoundinAppendixA.2ofthe_BPPM_.Thisletter   providesguidancetogranteesconcerningthesereviews.Itmustbestressedthatgrantees   aretodocumenttheirreviewsandincludethisdocumentationintheircontractfilesas  evidencethattheyhaveperformedtherequiredreviews.Thefiledocumentationmust l describethedataandinformationreviewedbythegranteespersonnelandthebasisfor X concludingthatthemanufacturerhascompliedwiththeBuyAmericaActrequirements, wD includingdomesticcontent,finalassemblylocationandfinalassemblyactivities.Also, c0 whereappropriate,copiesofcertificationsofcompliancewithorinapplicabilityofFederal O MotorSafetyStandardsshouldbeincludedinthefile. ; FTAhasalsopublishedtwomanualsthatprovidedetailedguidancetogranteesconcerning  whichBuyAmericacertificationsanddocumentsareneededtosupporttheprocurement  processfromissuanceofthesolicitationtotitletransfer,aswellastheproceduresthat  thegranteemayfollowwhenconductingthepreawardandpostdeliveryreviews.There  arealsoexamplesofBuyAmericacalculationsandresponsestofrequentlyasked   questions.b   22       !| Ѐ6.3.5Warranties #T *l8Adddd D(#(#l,dd +  _%, _%, REQUIREMENT  %! p FTACircular9030.1C, UrbanizedAreaFormulaProgram:GrantApplicationInstructions   C' " statesthefollowing: /( #  %    %  %݌̌    *#& p  _ԇ *lddxdd 8A(#(#l,xdd +  33  PreventiveMaintenance.Preventivemaintenance,anexpensethatbecameeligibleforFTA d capitalassistanceforoneyearwiththeDOT1998AppropriationsAct,wasestablishedas P eligibleforFTAcapitalassistanceunderTEA21,soFY1998fundsandsubsequentfiscal o < yearappropriationsmaybeusedforpreventivemaintenance.Preventivemaintenancecostsare [ ( definedasallmaintenancecosts8.    23       G      Warranty.Awarrantythatisanindustrystandardisaneligiblecapitalcostaspartofthe   acquisitionofabusoranycapitalasset. 2   24             FTACircular5010.1C,GrantManagementGuidelinesstatesthefollowing:     %    %.  %.U݌̌     Warrantystandards,whenpartofequipmentcontracts,shouldprovideforcorrectionof   defectiveorunacceptablematerialsorworkmanship.Theseshouldspecifycoverageand t  durationandmeetcurrentlyavailableindustrystandards.   25       `  DISCUSSION &   T Q    Qf  'EQf݌̌    S  9%  <DLX9  S  "Warranty"meansapromiseoraffirmationgivenbyacontractortothepurchaser _, regardingthenature,usefulness,orconditionofthesupplies,equipmentorperformanceof K servicesfurnishedunderthecontract.Theprincipalpurposesofawarrantyareto 7 delineatetherightsandobligationsofthecontractorandthepurchaserfordefectiveitemsSV݌ # Ќ  ! X X!  andservices,andtofosterqualityperformance.Thebenefitstobederivedfroma  warrantymustbecommensuratewiththecostofthewarrantytothepurchaser.pJ   26          S  9%  <DLX9  S  S ݌̌  ! X X!  S  9%  <DLX9  S}  Manytransitagenciespurchaseorprocureequipmentwithwarranties.Dependingupon  theitemandthecontractlanguage,amanufacturerwillthenrepairorreplaceanypieceof  equipmentthatfailsorisotherwisedefectiveduringthewarrantyperiod,thecommitment  x torepairorreplacebeingthe"warranty."FTAsgranteesthatspecifyandpurchaseS}݌ !d Ќ  ! X X!  warrantiesshouldappropriatelytailorthewarranties,includingbutnotlimitedto "P remedies,exclusions,limitationsanddurations. o#< <( 4 <DLX<Inmanyinstancesanitemiscustomarilywarrantedinthetrade,and,asaresultofthat G%  practice,thecostofanitemtothepurchaserwillbethesamewhetherornotawarrantyis 3&! included.Inthoseinstances,itwouldbeinthepurchaser'sinteresttoincludesucha_  '" warranty._r   27      _ԀInsomeinstances,industryassociationssuchastheAmericanPublicTransit 3 AssociationortheAmericanSocietyforTestingandMaterialshavedeveloped  specificationsincludingwarrantiesthatarerecognizedas IndustryStandard.   Granteesareencouragedtoexercisesoundbusinessdecisionsinstructuringbroaderand   morecomprehensivewarrantiesthanthatofferedasamatteroftradepracticeorasan   industrystandard(i.e.,an extendedwarranty)wheresuchwarrantiesareadvantageous   andcosteffective.Suchbusinessdecisionsmustbebaseduponmarketresearchand  t price/costanalysis. `   Forgranteligibilitypurposes,FTAhadhistoricallytreatedthecustomarywarranty k8  offeredasamatteroftradepracticeasanormalwarrantyandextendedwarranties W$  differently.Thisinturnaffectedtheircosteligibilitydifferently.  C   Priorto1998,normalwarrantieswereeligiblecapitalexpensesandthereforequalifiedfor   80%Federalparticipationundercapitalassistancegrants.TheOfficeofInspector   Generalsawthe extendedwarrantyasaformofoperatingexpense,impermissibleatthe  timeasacapitalexpense.Hence,extendedwarrantieswereclassifiedasmaintenance  (operating)expenseandassuchwereineligibleforfundingundercapitalassistancegrants  andwereonlyeligiblefor50%Federalparticipationunderoperatingassistancegrants.    р  WiththepassageofTEA21in1998,FTAreviseditspoliciestoreflecttheprovisionsofthe \ newstatute.FTAsnewpoliciesarestatedinFTACircular9030.1C,UrbanizedArea {H FormulaProgram:GrantApplicationInstructions,datedOctober1,1998._t2   28      _ԀUnderthenew g4 costeligibilityguidelines,maintenanceisnowaneligiblecapitalexpense,andthereisno S  longeradistinctionbetweennormalwarrantiesandextendedwarranties,asbothare ?  eligiblecosts.Thereare,however,procurementconsiderationsandthosearediscussed + below.     Withrespecttotheprocurementofwarranties,priorto1998FTAgrantapplication ! guidanceidentifiedspecificwarrantytimeframesasbeing normalforeachofthemajor " componentsofvehicles.In1998,FTAchangedthistoallowthegranteeonthebasisofits # marketresearchtodeterminewhatiscustomaryor normal. $  NormalwarrantycostsareeligibleforreimbursementunderFTAgrantstotheextentthat &X" thegranteedeterminesthattheyarecustomaryoranindustrystandardandFTAsother w'D # grantrequirementsaremetsuchasthatcontainedinFTAsC4220.1E. c(0!$ <( 4 <DLX<  ;*#& Similarly,extendedwarrantiesareeligiblecoststotheextentthat(1)thegrantee 3 determineswhatformofwarrantywouldbeadvantageousandcosteffectiveaspartofthe  granteesprocurementplanningeffort,and(2)extendedwarrantycostsareevaluated   separatelyanddeterminedtobe fairandreasonable.    J    4XXf4    XXXXXXJ"    J" #Ԍ̌   XXXXXfXXX   BestPractices      &  Anexampleofwarrantytermsisthelistdevelopedby_APTA_ԀinitsStandardBusProcurement  t Guidelines!CommercialTermsandConditions(October10,1997)._w   29      _ԀAmongtheissues ` addressedin_APTA_ssuggestedwarrantyprovisionsare:'  L       9%` ` <DLX9CompleteBus!SuggestedTerms W$    ?( 4 <DL` ` X?  9%` ` <DLX9BodyandChassisStructure!SuggestedTerms /    ?( 4 <DL` ` X?  9%` ` <DLX9PropulsionSystem!SuggestedTerms     ?( 4 <DL` ` X?   6" <DLX6   X9%4 4 <DL  X9"  MajorSubsystems!SuggestedTermsforBrakes,DestinationSigns,_HVAC_,Door  Systems,AirCompressorandDryer,WheelchairLiftandRampSystem,etc."#݌  Ќ X X44X    <( 4 <DLX< X9%4 4 <DLX9ExceptionstoWarranty!Forexample,whenProcuringAgencyhasnotallowedan p  equalrequestedbytheContractor,andsupplierwontofferthewarrantyrequiredby \ theProcuringAgency; {H  X<( 4 <DL44X<   6" <DLX6  &  DetectionofDefects!SchedulefornotifyingContractorandContractorsresponse;&N'݌ S  Ќ  X  X     X9%4 4 <DLX9FleetDefects!Contractorsdutytoimplementcorrectiveworkprogram; + RepairProcedures!WhenrepairsmaybemadebyProcuringAgencyandreimbursedby ! Contractor; !  X<( 4 <DL44X<   6" <DLX6   X9%4 4 <DL  X9)  WarrantyafterRepairs!Repairpartstohavetheunexpiredwarrantyperiodofthe)*݌ # Ќ X X44X      originalpart. $   <( 4 <DLX<% 4 %4+  6.4PROFESSIONALSERVICES &X"  *ewdxdd x(#(#e,xdd +  $c(0!$c(0! $ REQUIREMENT @6(!%$$ H@Professionalservicesotherthanarchitecturalandengineeringservicesmaybeobtainedthrough G*#& sealedbids,competitiveproposals,or(asthecontractvaluewarrants)smallpurchaseor 3+$' _micropurchase_Ԁprocedures. ,$(   -%) _ProcurementofArchitecturalandEngineeringServices(A&E).Granteesshallusecompetitive d proposalproceduresbasedontheBrooksActwhencontractingforA&Eservicesasdefinedin P 40U.S.C.Section541.OthertypesofservicesconsideredA&Eservicesincludeprogram o < management,constructionmanagement,feasibilitystudies,preliminaryengineering,design, [ ( surveying,mappingandserviceswhichrequireperformancebyaregisteredorlicensedarchitect G  orengineer....This"qualificationsbasedprocurementmethod"canonlybeusedforthe 3  procurementofA&Eservices.Itcannotbeusedtoobtainothertypesofserviceseventhougha   firmthatprovidesA&Eservicesisalsoavailabletoperformothertypesofservices.These   requirementsapplyexcepttotheextentanystateadoptsorhasadoptedbystatuteaformal   procedurefortheprocurementofarchitecturalandengineeringservices. (FTACircular   4220.1E,Section9.e.)5+)  dH   $$ 5  DISCUSSION   AlthoughyoumayuseanyoftheapplicableselectionmethodsdescribedinChapter4and   permittedbystatelawforprofessionalservices,thecompetitiveproposalmethodisthe  mostcommonforprocuringprofessionalservices.SpecialFederalrequirementsapplyto p architecturalandengineeringservices.Eventhoughprofessionalservicessuchaslegal \ advice,investmentadvice,auditingorengineeringadvicemayhavebeenrenderedtoyour {H agencyonalong-standingbasis,orwithoutawrittencontract,orbyformalapprovalatthe g4 highestlevel,suchpracticesdonotexemptthoseservicesfromtherequirementsforfree S  andopencompetition,maximumfiveyearterms,andwrittenselectionprocedures.  ?   Purpose   Youhavearequirementtocontractforalaboratorytoprovidetestingforyouragency'sdrugand  alcoholtestingprogram.Youcannotaffordtotakeachanceongettingacontractorwhohas  littleexperience,apoorhistoryofqualitycontrol,andanunreliableperformancehistoryinterms   ofchainofcustody.Ifyouhavetobidthiscontract,withlowpricebeingthedecidingelement, ! thatisapttobewhatyouget.Unfortunately,inafewjurisdictions,thatiswhatyoumaybefaced "l with.However,inmostjurisdictions,thestatelegislatureshavewiselyenactedaprocurement #X policythatexemptsprofessionalandpersonalservicecontractsfromthestrictrequirementsof w$D thecompetitiveprocurementlaws.Inthosestates,competitivesealedproposalstatutes, c%0  mini-"BrooksAct"statutesforarchitect/engineeringandrelatedservices,orexemptionsfrom O&! competitiverequirementsaltogether(oracombinationofalloftheabove)havebeenenacted. ;' " Thecriticalpointisthatyourstate,eitherlegislativelyorthroughstatutoryinterpretationsbythe '( # stateattorneygeneralorthecourts,willallowyousomeflexibilityinbuyingprofessional )!$ servicesbecauseitdoesnotmakesense"tobuytheservicesofbrainsurgeonthroughalow )"% bidderprocurementprocess." *#& ЀItisimportanttodistinguishbetweentwotypesofprofessionalservices: ,%( Ѐ  -|&) '  '=0  "0` (#(#  StatutoryProfessionalServices-Theseareservicesthatareclearlyspelledoutin  astatuteandprocurementprocessisdefinedforobtainingtheseservices.These   arethemini-"BrooksAct"statutesandincludearchitecturalandengineering   services.Thestatutemayalsoincludesomerelatedservicesorotherservicesthe   legislaturehasdeterminedshouldbeboughtinamulti-stepprocurementprocess.'==݌ ` (#` (# Ќ  InTexas,forinstance,theTexasProfessionalServicesActdefines"professionalservices"as  t serviceswithinthescopeofthepracticeofaccounting,architecture,landsurveying,medicine, ` optometryorprofessionalengineering,orareprovidedinconnectionwiththeprofessional L  employmentorpracticeofapersonwhoislicensedasacertifiedpublicaccountant,anarchitect, k8  alandsurveyor,aphysician(includingasurgeon),anoptometristoraprofessionalengineer.z   30      ׀ W$  Texashassaid,astothesecontractsorservices,thatcompetitivebiddingshallnotbeusedand C  thattheselectionandawardshallbemadeonthebasisof"demonstratedcompetenceand /  qualificationstoperformtheservice"andforafairandreasonableprice.|2   31      ׀Forarchitecturalor   engineeringservices,Texasmandatesa"BrooksAct"process   32      ׀andconcludesthisActwiththe   publicpolicystatementthatcontractsenteredintoinviolationoftheseprovisionsarevoid.P   33      ׀In  alllikelihood,yourstatewillhaveadoptedapublicpolicyontheprocurementofstatutorily  definedprofessionalservicesthatmaybesimilartotheTexasstatuteandyoushouldbevery  knowledgeableofthatstatute.  ', XX''  'G0  "04(#(#  OtherProfessionalServices-Moststatesofferyouotherwaystoavoidstrict \ compliancewithcompetitivebiddinglaws(and,insomestates,competitiveproposal {H lawsaswell)byexemptingtheprocurementofprofessionalorpersonalservicesfrom g4 followingcompetitiverequirements.Thus,itisimportanttoknowwhatisconsidered S  aprofessionalserviceforthepurposesofthisexemptionunderyourstate'slaw.This ?  mayvaryfromstatetostate.Theserviceusuallywillinvolvelaborandskillsthatare + predominatelymentalorintellectualratherthanphysicalormanualandtheproviders   oftheservicearemembersofdisciplinesrequiringspecialknowledgeorthe ! attainmentofahighleveloflearning,skillandintelligence.'GG݌!4(#4(# Ќ  Theexemptionsaredesignedtopermittheservicesofthemostqualified,competentand # experiencedindividualstobeobtainedandarecognitionthattheseservicescanseldombe $  measuredwithobjectivecriteria.Intheabsenceofastatutorydefinition,theseservicesmay %l! includesuchprofessionsasattorneys,constructionmanagementconsultants,insurancebrokers,  &X" physicians,auctioneers,medicallaboratorytesting,theologians,etc.Youmustconsultyourstate 3 lawontheseissues--unlikethestatutoryprofessionalservicesdiscussedabove,moststatesdo  notprohibityoufromusingacompetitiveprocesstoobtaintheservicesoftheseother   "professionals,"theyjustprovideanexemptionifyouchoosetouseit.    BestPractices    A&EServices-Fortheprocurementofarchitecturalandengineeringservices,theFTAandmost  t statelawsmandateaqualifications-basedprocurementprocess. ` OtherProfessionalServices-FortheprocurementofprofessionalservicesotherthanA&E k8  services,yougenerallyhaveagreatdealofflexibilityinhowyouobtainthoseservices.Insome W$  cases,youmaybeabletoadequatelyandobjectivelydefinetheservicesrequiredandobtain C  thoseservicesthroughacompetitivebiddingprocessonthebasisoflowpricedbids.Inother /  cases,eitherbecauseofaninabilitytoadequatelyand/orobjectivelydefineyourrequirementor   becauseofalimitationofyourstate'slaw,thecompetitivebiddingmethodofprocurementmay   notbepossibletobeused.Inthatcase,acompetitiveproposalprocessmaybethebestmethod  tousewheremoresubjectiverequirementscanbeevaluatedandweighedwiththepriceoffered  toarriveataproperlybalancedawarddecision.Dependinguponthestatementofworkandthe  estimateddollarvalueoftheprocurement,youmaybeabletoeffectivelyandefficientlyusethe  micro-purchasemethodofprocurement(detailedinSection4.1)orthesmallpurchasemethodof p procurement.Asthestewardsofpublicfunds,itisalwaysimportanttorememberthatyouare \ spendingtaxdollarsandtoproperlyweightheservicesyouareobtainingagainstwhatyouare {H payingforthoseservices. g4 Finally,itispossiblethattheprofessionalservicesyoudesiremaybeobtainedfromonlyone ?  sourceand,thus,youwillselectyourprofessionalserviceprovideronthebasisofasolesource + (noncompetitive)methodofprocurement.Inthiscase,youmustcomplywiththeprovisionsof   Section9.eofFTACircular4220.1Easwellasyourstatelaw.Again,eventhoughyouare ! negotiatingwithonlyonesourcefortheseservices,yourgoalshouldbetoobtainapricethatis ! fairandreasonable. "  6.5ARCHITECTENGINEERSERVICES $  *ldxdd xw(#(#l,dd +  &X"&X REQUIREMENT  &#  FTACircular4220.1Estates: o( X?( <DL!44X!?Ix  (A)  professionalservicesofanarchitecturalorengineeringnature,asdefinedby   Statelaw,ifapplicable,whicharerequiredtobeperformedorapprovedbya   personlicensed,registered,orcertifiedtoprovidesuchservicesasdescribedin   thisparagraph;Ixx݌   Ќ    E+  <DL!  X!E  t      E( <DL!  X!Ez  (B)  professionalservicesofanarchitecturalorengineeringnatureperformedby \ contractthatareassociatedwithresearch,planning,development,design, {H  construction,alteration,orrepairofrealproperty;andz={݌ g4  Ќ    E+ <DL!  X!E S  E( <DL!  X!E(C)  otherprofessionalservicesofanarchitecturalorengineeringnature,or ?  incidentalservices,whichmembersofthearchitecturalandengineering +  professions(andindividualsintheiremploy)maylogicallyorjustifiably   perform,includingstudies,investigations,surveyingandmapping,tests,   evaluations,consultations,comprehensiveplanning,programmanagement,  conceptualdesigns,plansandspecifications,valueengineering,construction  phaseservices,soilsengineering,drawingreviews,preparationofoperation  andmaintenancemanuals,andotherrelatedservices.   > XE+4 44 <DL!  X!E XE+ 4 <DL!444X!EThisistheportionofA&Eservicesthatreliesonindicatorssuchaslicensingandwhether X A&Efirmsnormallydothespecificsortoftaskunderconsideration.Ifthefunctionfits wD withinthisdefinitionofA&Eservices,BrooksActproceduresapply.  c0 Q    O  &  Q<  Q<݌̌    TheBrooksAct(40USC1102)definesthecompetitiveprocedurestobeusedinthe  selectionofAEfirms,andtheseprocedureswillapplytogranteeprocurementsofAE  servicesunlessthegrantee'sStatehasadoptedformalprocurementproceduresforAE  services,inwhichcasetheStateprocedureswillgovern.Aqualificationsbasedselection  y processmustbefollowedforallAEprocurementsregardlessofdollarvalue.' !e TheBrooksActrequiresaqualificationsbasedprocurementmethodfortheselectionofAE p#= firms.Priceisexcludedasanevaluationfactor,andnegotiationsareconductedwiththe \$)  mostqualifiedfirmonly.Ifanagreementcannotbereachedonpricewiththemost H%! qualifiedfirm,negotiationsareformallyterminatedwiththatfirm,therebyrejectingthat 4&" firmsproposal,andthegranteecannotreturntothisfirmatalaterdatetoresume  '# negotiations.Negotiationsarethenconductedwiththenextmostqualifiedfirm.This ( $ processcontinuesuntilanegotiatedagreementisreachedwhichthegranteeconsiderstobe (!%  fairandreasonable. )"& Q    3  & p  QZ  QZ݌̌    S?(  <DL!X!?  S   NegotiatingIndirectCosts L   L?      39      'p  Sk݌  Ќ' X! X!'  S?(  <DL!X!?  SԊ  SԊ.݌̌' X! X!'  ";"  -4 X X!-;0  2#  A  )3  04(#(#  Granteesmust(asageneralrule)acceptundisputedauditsthathavebeen  q conductedbyanyFederalorStateagencyoftheconsultantsindirectcostrateif  ] theauditreporthasbeendevelopedinaccordancewiththecostprinciples | I containedintheFARPart31.However,iftheauditisconductedbyanother h 5 Stateagency,andthegranteecanfullydocumentandjustifytoFTAwhythe T ! otherStateagencysauditshouldnotbeaccepted,thenFTAmaypermitthe @  granteetoconductitsownaudit.;݌, 4(#4(# Ќ  ";"  ;0  2#  B  )3  04(#(#  Undisputedauditedratesmustbeusedforthepurposeofcontractestimation,   negotiation,administration,reportingandcontractpayment.Thisrequirement   appliestotheundisputedauditedratesofA&Esubcontractorsthatare   performingundercostreimbursementsubcontractsaswellasprime   contractors.;?݌ 4(#4(# Ќ  SH(  <DL!4 X H  B(` ` <DL! X!BSq  Sq݌̌04 X ` ` X!0  ";"  ;0  2#  C  )3  04(#(#  Ifthereismorethanoneaudit,thegranteemayusewhicheveraudititwishes. Y However,asapracticalmatter,theauditsshouldhavevirtuallyidenticalresults xE iftheyareconductedinaccordancewithFARPart31.Also,iftheaudits d1 resultedindifferentfindings,itislikelythatsomeonewouldbedisputingoneor P moreoftheauditfindings.;݌< 4(#4(# Ќ  SH(  <DL!4 X H  B(` ` <DL! X!BS  S݌̌04 X ` ` X!0  ";"  3XX4X4 X 3;.0  2#  D  )3  04(#(#  IfaconsultanthasnotbeenauditedbyanyFederalorStategovernmentagency,  thegranteeorStategovernmentagencyshouldconductanauditandbecomethe  cognizantagency.However,inthecaseofaconsultantcontractinvolvingavery  smalldollaramount,thegranteeshouldbeabletorelyonitsowncostandprice  analysisinordertonegotiatethecontractprice.;.݌4(#4(# Ќ  SE(  <DL!XX4XE  B(` ` <DL! X!BS  S݌   } Ќ  -XX4X` ` X!-   5(8p1-(),-./! !";"  ;ؚ0  2  E  )3  04(#(#  Manyconsultantfirmshavemultipleindirectcostratessuchasanationalor  corporatewiderate,aregionalorStaterate,andabusinesssegmentrate.Ifa   consultantproposesaparticularratesuchasaregionalrateoraratefora   particularservice(e.g.,designservicesorconstructionmanagement),thatrate   musthavebeenauditedbyacognizantFederalorStategovernmentalagency   beforethegranteewouldberequiredtoacceptit.Ifanothergovernmental   agencysauditedrateisnotapplicabletothecontractinquestion,thegrantee  t mayperformitsownauditapplicabletotheunauditedrate.Forexample,ifthe ` consultanthasanauditedratefordesignservicesbutnotforconstruction L  managementservices,thegranteedoesnothavetoaccepttherateproposedfor k8  constructionmanagementservices.;ؚ݌W$ 4(#4(# Ќ  SE(  <DL!XX4XE  B(` ` <DL! X!BS  SW݌̌-XX4X` ` X!-  ";"  ;Ƞ0  2  F  )3  04(#(#  GranteesmaynotrequireorimposeacaporceilingonanA&Econsultants /  overheadrateseveniftheconsultantagreestosuchacapbycontract.Thekey   wordsherearerequireorimpose.Initsfinalrule,Section172.7(b)!Auditsfor   IndirectCostRate,FHWAmadethefollowingconcessioninresponsetoa  WisconsinDOTexpressedconcernthataStatemaynotbeabletoacceptalower  overheadratefreelyofferedbyaconsultantfirm:;Ƞ݌4(#4(# Ќ  SE(  <DL!XX4XE  B(` ` <DL! X!BSӣ  Sӣu݌̌-XX4X` ` X!-  SE(  <DL!XX4XE  ?% <DL! X!?S  TheFHWAagreestherearemanyreasonswhyanoverheadrateforafirm p maybeunusuallyhighforashortperiodoftime.Insuchcases,afirmmay X believethatitwouldbeinitsbestinteresttoofferalowerrate.TheFHWA s@ agreesthataconsultantshouldbefreetoofferaloweroverheadratethanthe [( onedeterminedbyacognizantFederalorStategovernmentagency,andthat C thecontractingagencyshouldbefreetoacceptitprovidedsuchrateisoffered + voluntarilybytheconsultant.Undernocircumstances,however,shalla  contractingagencyrequirealoweringoftheoverheadrate.S݌  Ќ  *XX4X  X!*   E( ` <DL!XX4XE0XX4X ` X!00  G)04(#(#Granteesmaynotnegotiateanoverheadratethatisfixedfortheentirecontract, ! orforanyparticularfiscalyear,andnotsubjecttoadjustmentbasedonanaudit " ofactualcostsincurred.Granteesmay,however,useprovisionalbillingrates #t whereabillingrateisestablishedforaparticularcontractperiodandissubject $`  toadjustmentbasedonanauditofactualcostsincurredforthatperiod.%L!4(#4(# SE(  <DL!XX4XE  -XX4X X!-S  SB݌̌0XX4XXX4X0    H)0 4 IfthecognizantFederalorStateagencyforaconsultantisbehindschedulein W'$ # finalizingauditsandthelatestacceptedauditofindirectcostrateslagsbythree C(!$ orfouryears,thegranteemayuseanotheragencysauditifitwasconductedin /)!% accordancewiththeFARanditsfindingswereundisputed.Ifanaudithasbeen *"& performedbyaprivatefirminaccordancewithFARPart31andisundisputed, +#' thatauditcouldalsobeused.Iftherearenoauditsavailableunderthese +$( assumedparameterswherethecognizantagencyisthreeorfouryearsbehind, ,%) thegranteemayconductitsownauditinaccordancewithFARprinciplesto -&* determinetheactualoverheadrates.Otherwise,thelastauditperformedbythe .'+  cognizantFederalorStateagencywouldbeused./p(,4(#4(# SE(  <DL!XX4XE  -XX4X X!-S  dS4݌̌0XX4XXX4X0  ! ! ](885"3"  d  3P2  I  )3  0 4   Granteesmaynotuseanegotiatedoverheadrateprocedureinlieuofusingthe  actualundisputedandacceptedauditbyacognizantFederalorState   governmentalagency.Thereasonisthatpricenegotiationsontheindirectcost   rateoranycomponentthereofcanbeviewedasanadministrativeordefacto   ceilingprohibitedby49U.S.C.5325(b).Nevertheless,theStatehastheright   andobligationtonegotiateafairandreasonabletotalpriceforthecontract.   Anycomponentoftheprice,excepttheindirectcostrate,maybenegotiated.3P݌ t4(#4(# Ќ  SE(  <DL!XX4XE  -XX4X X!-Sȵ  SȵU݌̌0XX4XXX4X0   _( 88]  J)0 4 FTAhaselectedtofollowtheprovisionsofFHWAinitsimplementationof L  TEA21contractingrequirementsforarchitectengineerservices.FTAisnot k8  boundbytheFHWArule,however,andmaypermitexceptionsincompelling W$  andunusualcircumstances.C 4(#4(#  4 ` X!XX4XY4      &    3 ffԌ̌        BestPractices ffԌ   Ќ    '/'ThebasicapproachusedtoselectAEcontractorsusingBrooksActproceduresmakesuseof  StatementsofQualifications.Thisbasicapproachisoutlinedbelow.  J  ` 24XXfh4h    XXXXXX8` 2&  J"  J"V ffɻԌ̌  XXXXXXXXXfXXXXfXXXf   J  L 24XXf44h4h    XXXXXX8L 2JN  StatementsofQualificationsProcessJN ffԌ  Ќ  XXXXXXXXXfXXXXfXXXf   'J ConsultantResourceFile 󀄀Granteesmaywishtomaintainaconsultantresourcefilewiththe \ namesofAEfirmsandtheirrespectivedisciplines,personnelresources,corporateexperience, L etc.ThisfilewouldprovideaninitialmailinglistforissuanceofarequestforContractSpecific k8 StatementsofQualifications.Theinitiallistofpotentialofferorsthatagranteemightmaintain W$ wouldbesupplementedbyapublicannouncementoftheproject,callingforinterestedAEfirms C torespondtoaquestionnairefromthegranteeidentifyingthefirmsbasicexperienceand / personnelresources.ForanexampleofaquestionnaireusedbytheFederalGovernmentto   identifypotentialAEfirmswhowouldthenbesolicitedtosubmittheircontractspecific ! qualifications,seetheFederalStandardForm330(SF330),ArchitectEngineerQualifications.L   L      40       ! TheSF330,Part2,istheFederalequivalentofaconsultantresourcefile.Thisquestionnaire " willprovidethefollowingtypesofinformationabouteachofthefirmsbranchoffices: #  | E( ` <DL! ` X!E $   t(88_"" | ,K.4 <DL! ` X!K  H+ 4 <DL!4X!H2 3   4   Thelocationofthecompanysofficesandapointofcontactwithineachoffice.w݌ %p! Ќ ,- ` X!4X!- |  | H+ 4 <DL! ` X!HӀ""  ,E.4 <DL!X!E  H+ 4 <DL!4X!H2 3   4   Thenumberofpersonnelbydiscipline(e.g.,architects,civilengineers,geologists, {'H # surveyors,soilsengineers,etc.).݌ g(4!$ Ќ ,' X!4X!'    ?( ` <DL!X!? S) "% ""  ,H.4 <DL! ` X!H  H+ 4 <DL!4X!H2 3   4   Summaryofprofessionalservicesfeesreceivedforeachofthelastfiveyears.g݌ ?* #& Ќ ,* ` X!4X!*   B( ` <DL! ` X!B  ++#'  3 ""  ,H.4 <DL! ` X!H  H+ 4 <DL!4X!H2 3   4   Profileoffirmsprojectexperienceforlastfiveyears.Thequestionnairelistsover  100differenttypesofprojectcodes(airports,tunnels,towers,gassystems,etc.)݌   Ќ ,* ` X!4X!*    E+ 4 <DL! ` X!E""  ,E.4 <DL!X!E  H+ 4 <DL!4X!H2 3   4   Summaryofannualaverageprofessionalservicesrevenuesforlastthreeyears   showingtotalsforFederalandNonFederalwork.݌   Ќ ,' X!4X!'    ?( ` <DL!X!?      ,H.4 <DL! ` X!H  ,   T  NotethattheSF330,Part2,doesnotasktheAEfirmtoidentifyspecificpersonnelor  t approachesthatitwouldproposetouseforthespecificprojectthatthegranteeis ` advertising.Projectspecificinformationwouldcomelaterinastatementof Contract L  SpecificQualifications(SF330,Part1)discussedbelow.T݌ k8  Ќ  - ` X!4X!-  F E+ 4 <DL! ` X!E PublicAnnouncements AgenciesmustpublicizerequirementsforA&Eservicesinaccordance C  withStatelaw.Thesenoticescouldbeplacedinlocalnewspapersandinpublicationssuchas 3  PassengerTransport,EngineeringNewsRecord,DodgeReport,etc.Thesenoticesshould   describetheAgency'srequirementsandthecriteriatobeusedintheevaluationofAE    qualificationstatements.ThepublicannouncementswouldadviseinterestedAEfirmstosubmit  expressionsofinteresttotheprocurementoffice.Theseexpressionsofinterestmaytakethe  formofaquestionnaireregardingtheAEfirmsbasicresourcesandcorporateexperience,along  thelinesoftheSF330,Part2,usedbytheFederalGovernment.Fromtheseexpressionsof  interest,andthelistoffirmsidentifiedintheconsultantresourcefile,thegranteecanthensolicit t ProjectSpecificQualificationStatementsfromprospectiveAEfirmsthatthegranteejudgesto ` havethebasiccapabilitiestoperformtheproject. L     g  g݌̌   PreproposalConference !Preproposalconferencesaregenerallyusedinmorecomplex W$ acquisitionsasameansofbriefingprospectiveofferorsastotheprojectrequirementsaswellas G theagenciesselectioncriteria.Thisallowsthefirmstobetterunderstandtheagencysobjectives 3 andaskpertinentquestionsthatwillhelptheminpreparingtheirproposalsorprojectspecific   qualificationstatements(seebelow).Forfurtherguidanceonpreproposalconferences,see  ! Section4.3.2.4PreBidandPreProposalConferences. !     {  {݌̌   RequestforContract/ProjectSpecificQualificationStatements 󀄀InterestedAEfirmswould # berequiredtosubmittheirProjectSpecificQualificationStatementstotheprocurementoffice. $  Foranexampleofaquestionnaireusedtosolicitprojectspecificqualifications,seetheFederal %x! StandardForm330(SF330),Part1,ContractSpecificQualifications.L   Land      41      ׀TheSF330,Part1, &d" goesbeyondthegeneralinformationrequestedintheSF330,Part2.Part1asksthefirmto 'P # identify(1)theproposedprojectteam,showingallfirmsandtheirrolesintheproject,(2)an o(  S>>݌ .'+ Ќ$ X!  X!$  ""  ,E.4 <DL!X!E  H+  <DL!4X!H+?2 3   4   Potentialliability(e.g.,thirdpartyliability)oftheAEfirmbasedonthenatureofthe 3 project,+?@݌  Ќ ,* X! X!*   S?(  <DL!X!?  ?% <DL! X!?S@A  S@AA݌   Ќ$ X!  X!$  ""  ,E.4 <DL!X!E  H+  <DL!4X!HUB2 3   4   ݀Priorperformancerecordofthefirm,UB+C݌   Ќ ,* X! X!*   S?(  <DL!X!?  ?% <DL! X!?SD  SDD݌   Ќ$ X!  X!$  ""  ,E.4 <DL!X!E  H+  <DL!4X!H,E2 3   4   Degreeofcontractorinvestment,asitmaycontributetomoreefficientand   economicalcontractperformance.,EF݌   Ќ ,* X! X!*   S?(  <DL!X!?  B(` ` <DL! X!BSHG  SHGG݌  t Ќ' X!` ` X!'  S?(  <DL!X!?    SqH  ProfitonChangeOrders!ItiscommonpracticeintheconstructionindustryforAEfirmsto ` requestincreasesintheircontractfees/profitbasedonthepercentageincreaseinthecostofthe L  constructioncontract.Granteesshouldavoidthispracticeeventhoughitiscommonplaceinthe k8  constructionindustry.AEcontractorsprofitsshouldbebasedontheirworkeffortandshould W$  neverbenegotiatedonapredeterminedpercentagebasisofacostincreaseinthecontractwhose C  costtheAEfirmisaffectingbyitsdesigns.Granteesareprohibitedfromanytypeofcostplus /  percentofcostcontracting.(SeeBPPMSection2.4.3.5CostPlusPercentageofCost   Contracts(CPPC).SqHH݌   Ќ' X! X!'  S?(  <DL!X!?  SL  SLM݌̌' X! X!'  S?(  <DL!X!?  SM  AERoleinConstructionChangeOrders,ClaimsandLitigation !TheAEfirmcanprovide  assistancetotheagencyintheevaluationofchangestotheconstructioncontract,whetherthe  changesoriginatewiththeagencyorwiththeconstructioncontractor.Whenchangesare  suggestedbytheconstructioncontractor,theymustbeevaluated,beforetheyareadopted,asto t theirtotalsystemimpactontheproject,andtheAEisinthebestpositiontodothis.TheAE ` canalsoprepareacostestimateofthechangedworkthatthegranteecanusetoevaluatethe L constructioncontractorspriceproposalforthechange,andtheAEcanassistthegranteein k8 negotiationsasatechnicalresourceifthegranteesodesires.TheAEalsohasaroletoplayin W$ theevaluationofclaimssubmittedbytheconstructioncontractor,althoughinthiscasetheAEs C participationissomewhatdefensive.Forexample,theAEmaybecalledintodefenditsdesigns / orspecifications,orthetimetheAEtooktoreviewandapprovetheconstructioncontractors   documentation,andinthiscasetheAEseffortsmaynotbereimbursableunderthetermsofthe ! AEscontractwiththeagency.Thesamewouldholdtrueforissuesthatgotolitigation"the ! AEshouldberequiredtodefenditsdesignsandspecificationswithoutadditionalchargetothe " agency.Granteeswoulddowelltomakethisasubjectforan advanceunderstandingintheir # AEcontracts,sothatwhenclaimsandlitigationoccur,thepartieswillunderstandtheir $  respectiveobligations.Iftheclaimsorlitigationarecausedbytheagencysactions,however, %p! andarenotduetotheAEsworkproductsoractions,thentheAEcanexpecttobereimbursed &\" bytheagencyforitseffortsindefendingtheclaimandassistingtheagencyinthelitigation.SMM݌ {'H # Ќ  ' X! X!'  S?(  <DL!X!?  S&W  S&WW݌̌' X! X!'  B+ 4 <DL!X!B ABAModelProcurementCode(MPC) TheAmericanBarAssociation'sModelProcurement S) "% CodeSection5501,ArchitectEngineerandLandSurveyingServices , containsacomprehensive C*#& andveryworthwhilepresentationofprocurementproceduresusingStatementsofQualifications 3+$' fortheawardofAEcontracts. TheMPCcoverstheentirespectrumofeventsleadingtoa ,$( contractaward,withdetailed recommendationsfortheprocuringAgencytofollow.  -%)     Z  ZZ݌̌    .'+ FederalProcedures 󀄀TheFederalGovernmentproceduresforprocuringArchitectEngineer 3 servicesmaybefoundinFAR36.6,ArchitectEngineerServices. #  AEContractProvisions    %    %\  %\8\݌̌    Designwithinfundinglimitations 󀄀YoumaywishtoincludeaclauserequiringtheAEfirmto   designtheprojectsothattheconstructioncostsdonotexceedyourbudget,anamountthatwould   bestatedintheAEcontractasa designtocostrequirement.Ifthepriceofferedbythelow  | bidderinyourconstructionIFBexceedsthestatedlimitintheAEcontract,theAEfirmshould h beresponsibletoredesigntheprojectatnoincreaseinthepriceoftheAEcontract.Ifthehigher T  thananticipatedconstructioncostisduetoreasonsbeyondthecontroloftheAEfirm,suchas s@  anunexpectedincreaseinthecostofcertainmaterials,thentheAEfirmshouldnotbeobligated _,  toredesigntheprojectatitsownexpense.Likewise,ifthegranteehasrequiredfeaturesinthe K  facilitythatcontributetothebidsbeinginexcessofthebudget,thenachangeordertothese 7  requirementsmaybeinorder,andthistoowouldbesomethingbeyondtheAEfirmsabilityto #  control,thusrelievingtheAEfromredesignresponsibility.Granteeswillneed,therefore,to   examinetheelementsoftheconstructioncontractorsbidtoseewhythebidpriceexceedsthe   designtocostamountthattheAEwasattemptingtoachieve.Anexampleofacontract  clauseusedbyonetransitagencyfollows:  %        %b  DesignWithinFundingLimitationsL  L]c      43      %bc݌ x Ќ     ,E.4 <DL!X!E    Od  dOdd݌̌  ,* X!4X!*   ?( <DL!X!?dA.  Thecontractorshallaccomplishthedesignservicesrequiredunderthiscontractsoas P topermittheawardfortheconstructionoftheproposedfacilityatapricethatdoes o< notexceedtheestimatedconstructioncontractpriceassetforthinparagraph(C) [( below.Whenbidsorproposalsfortheconstructioncontractarereceivedthatexceed G theestimatedprice,theAgencyshallanalyzethereasonsfortheexcessiveprices 3 and,ifappropriate,theContractorshallperformsuchredesignandotherservicesas   arenecessarytopermitcontractawardwithinthefundinglimitation.These  ! additionalservicesshallbeperformedatnoincreaseinthepriceofthiscontract. ! However,theContractorshallnotberequiredtoperformsuchadditionalservicesat " nocosttotheAgencyiftheunfavorablebids,orproposalsaretheresultof # conditionsbeyondtheitsreasonablecontrol. $    E+ 4 <DL!  X!EӁdS?(  <DL!X!?   B( <DL! X!BSj  dB.  TheContractorwillpromptlyadvisetheDirectorofPurchasingifitfindsthatthe &`" projectbeingdesignedwillexceedorislikelytoexceedthefundinglimitationsand 'L # itisunabletodesignausablefacilitywithintheselimitations.Uponreceiptofsuch k(8!$ informationtheDirectorofPurchasingwillreviewtheContractor'srevisedestimate W)$"% ofconstructioncost.TheAgencymay,ifitdeterminesthattheestimatedSjBk݌  C*#& Ќ  ' X!  X!'  _  constructioncostcontractpricesetforthinthiscontractissolowthatawardofa 3 constructioncontractnotinexcessofsuchestimateisimprobable,authorizea  changeinscopeormaterialsasrequiredtoreducetheestimatedconstructioncostto   anamountwithintheestimatedconstructioncontractpricesetforthinparagraph_(C)_   below.     B+ 4 <DL!X!BӁ  ?( <DL!X!?C.  Theestimatedconstructioncontractpricefortheprojectdescribedinthiscontractis   $_____________.  t   E+ 4 <DL!  X!EӁ Designerrorsordeficiencies 󀄀IftheAEfirm'sdesigns,drawingsorspecificationscontain L  errorsordeficiencies,theAEfirmshouldberequiredtocorrectthematnoincreaseinpriceto o<  thegrantee.Whenerrorsarediscoveredduringconstruction,AEsaregenerallyliablefor [(  correctionofthedrawingsattheirowncost,andforthedifferencebetweenwhatthe correct G  constructionwillcost(asachangeorderissuedtotheconstructioncontractor)andwhatitwould 3  havecostintheoriginalcontracthadthedrawingsbeencorrect.Thisincludesanytearoutthat   needstobedone,etc.    StatelicensinglawsalsoresultinmanymultistateAEsthataresetupasshellcompaniesto  holdlicensesindifferentstates.Agenciesshouldobtainaperformanceguaranteefromtheparent  companyinthesesituations.      u  uu݌̌   AEInsurance !AgenciesshouldrequireAEstohaveGeneralLiabilityaswellasErrorsand ` Omissionsinsurance.WhenAEsproposetobeselfinsured,agenciesmustlookcarefullyatthe P adequacyofthefirmsassetsbeforeacceptingthisselfinsuranceapproach.Seealso_BPPM_ o< Section6.6!Insurance. [(  _( 08tJ8 6.6INSURANCE  3 *eddxdd x(#(#e,xdd +   ! !  REQUIREMENT  o!< H49_CFR_ԀPart19.31prescribesinsurancerequirementsforgranteeswhoareinstitutionsof " highereducation,hospitals,andothernonprofitorganizations: # 'r XX!'0 r Section19.31InsuranceCoverage.Recipientsshall,ataminimum,providethe %! equivalentinsurancecoverageforrealpropertyandequipmentacquiredwithFederal &l" fundsasprovidedtopropertyownedbytherecipient.Federallyownedpropertyneednot 'X # beinsuredunlessrequiredbythetermsandconditionsoftheaward.w(D!$r"r" TheMasterAgreement,FTA_MA(12),_ԀSection20prescribesinsurancerequirementsforall O*#& grantees: ;+$' 0 r a.MinimumRequirements.Ataminimum,theRecipientagreestocomplywiththe -%) insurancerequirementsnormallyimposedbyitsStateandlocalgovernments.-&*r"r"  .'+ 0 r b.FloodHazards.Totheextentapplicable,theRecipientagreestocomplywiththe d floodinsurancepurchaserequirementsofsection102(a)oftheFloodDisasterProtection P Actof1973,42U.S.C.Section4012a(a),withrespecttoanyProjectactivityinvolving o < constructionoracquisitionhavinganinsurablecostof$10,000ormore..$"[ (r"r" dH   . DISCUSSION  { H  TheMasterAgreementprescribesarequirementthatgranteesdeterminewhattheir S  individualStatesrequireintermsofinsuranceforconstructionprojects,andthatgrantees ?  ensurethattheirStateinsurancerequirements,ifany,arereflectedinthirdpartycontracts. +  Thecustomaryapproachforinsuringagainstrisksassociatedwithworkunderthirdparty   contractsistorequirecontractorstopurchaseandmaintaininsurancecoverageswhichthe   granteespecifieswithinthetermsandconditionsofthethirdpartycontract.Theseterms   andconditionswouldspecifythetypeofinsurancerequired,suchasworkerscompensation,   builder'srisk,generalliability,railroadprotectiveinsurance,automobile,errorsand   omissions,etc.,aswellastheamountofthevariouscoveragesrequired.    44         Under49_CFR_Ԁ19.31,institutionsofhighereducation,hospitals,andothernonprofit \ organizationsarerequiredtoinsurerealpropertyandequipment,whichhasbeen {H acquiredwithFederalfunds,tothesamedegree,ifany,theyinsuretheirownpropertyand g4 equipment.This_CFR_Ԁrequirementpertainstopropertywhichhasbeenprocuredand S  acceptedbythegrantee,andforwhichtitlehasvestedinthegrantee.Thistypeof ?  insurancewouldbedesignedtoinsureagainstdamageorlosstothepropertyitself,andthe + granteewouldprocurethisinsurancedirectlyfromaninsurancecompanyorthroughan  insurancebroker,aspartofitsannualinsuranceprogramforthegrantee'spropertyand  operations.  BestPractices    &  b     b  WrapUpPoliciesbP hi8Ԍ "l Ќ      '$  Constructionprojects󀄀Thetraditionalmethodofinsuringtheparticipantsonlargeconstruction w$D projectshasbeenforeachparty(projectowner,contractorsandsubcontractors)topurchase c%0  insuranceindependentlytoprotectthemselvesfromfinanciallosses.Incontrastwiththe O&! traditionalmethod,projectownerscanelecttopurchaseawrapupinsurancepolicythatwill ;' " coverallthepartiesinvolvedintheproject.Overthepastdecade,wrapupinsurancehas '( # becomeincreasinglypopularbecauseofthepotentialforcostsavings.In1998,forexample, )!$ wrapupinsurancecoveredabout300constructionprojectsnationwide. )"%   %      %  %Q݌̌      +$' _Granteesmaywanttoconsidersometypeofwrapupprogramfortheirlargerconstruction 3 projects(thoseover$10M).Theseprogramsarealsoknownasownercontrolledinsurance  programs(OCIP).Awrapuporownercontrolledinsuranceprogramisoneinwhichthe   TransitAgencyprocuresaninsuranceprogramcoveringallcontractorsandsubcontractorswho   willbeworkingonalargeconstructionprojectorafamilyofrelatedconstructionprojects.   Typicalinsurancecoveragewouldprovidefor:workerscompensation,generalliability,and"all   riskscourseofconstruction"(sometimesreferredtoasbuilder'srisk).Thispolicyisusually   purchasedthroughtheservicesofaninsurancebroker,whomayhavebeenselectedthrougha  t competitiveRFP.Asconstructioncontractsareawardedoverthetermofthepolicyperiod,the ` namesofthecontractorsandallsubcontractorsareaddedtothepolicyasnamedinsureds. L  %    %{  %{݌̌    l` Thisapproachhasbeenusedwithexcellentresults.L   L@CFR  c   45       Amongtheadvantagesnotedare: W$   1-(),-./(#p0_"3"  -4 Xr X-  32#3  0 4   TheAgencyknowsforsurethatitscontractors/subcontractorshaveadequate 3  insurancecoverage.3݌ 4(#4(# Ќ    "3"    32#3  0 4   ForWorkersCompensationinsurancetherewillbepremiumdiscountsbecauseofthe  sizeofthepolicy.Whentheinsuranceisboughtasone,coordinatedpolicy,rather0@(""all0@("(#(#  thanprocuredpiecemealthroughtheindividualcontractorsandsubcontractors,there  willbepremiumdiscounts.Thebiggerthepolicy,thebiggerthediscount.Other  premiumsavingplansmaybeavailablethroughawrapupprogram.Notethatthe t constructioncontractorsareinformedintheInvitationForBid(IFB)provisionswhat ` insurancetheAgencyisproviding,thuspermittingthecontractorstorequestcredits L fromtheirinsurancecompaniesforthatproject.Thecreditstotheirpremiumscan k8 thenbepassedalongtotheagencyintermsoflowerbidprices.3V݌W$4(#4(# Ќ  %    B%  <DL4 XB%  %݌̌    1-(),-./(#pp1-(),-./"3"  *, X X*  3ǚ2#3  0 4   Newerandsmallerconstructioncontractorsmayhaveadifficulttimegetting / insurance.ThisisespeciallytrueforsmallcontractorsandsomeDisadvantaged   BusinessEnterprises(DBE's).AwrapupprogramcanenhancetheAgency'sDBE ! participation,aswellastheoverallcompetitiveenvironmentforitsconstruction ! projects,byenablingmorecontractorstocompeteforthework.3ǚ*݌"4(#4(# Ќ  "3"    32#3  0 4   Incaseswherethereisalossanditisnotclearwhichconstructioncontractoror $  subcontractorisatfault,theinjuredpartydoesnothavetoprovewhichcompany %p! causedtheloss,onlythatalosshasoccurred,andsomeoneinthegroupwas &\" responsible.Thisgreatlyreducesthecostofsettlementofclaims,withobvious {'H # benefitstotheinjuredparties.3Ý݌g(4!$4(#4(# Ќ     4  `  "3"    322#3  0 4   Byhavingoneinsurancecompany,therewillbeoneinsurer'ssafetyengineerwith ?* #& completeauthorityovertheentirejob,thusprovidingbettercoordinationofsafety ++#' issues.32k݌,$(4(#4(# Ќ    .  X, X.  -&* GAOStudyofWrapUp󀄀In1999theU.S.GeneralAccountingOffice(GAO)completeda 3 studyofsixmajortransitandhighwayprojectsusingwrapupinsurance.L   LӢgto     46      Theseprojects  includedseveraldesignbuildprojectsfinancedbyFTAandFHWA.Thepurposeofthereport   wastoidentifytheadvantagesanddisadvantagesofwrapupinsuranceovertraditionalinsurance   andthefactorsthatcanaffectthebroaderuseofwrapupinsurance.   GAOfoundanumberofadvantagesanddisadvantagesinusingwrapupinsurance.Their   researchfindingsincludedthefollowing:  t  X<%4 4 <DL X<Majoradvantagesincludesavingsfrombuyinginsurance inbulk,eliminating L  duplicationincoverage,handlingclaimsmoreefficiently,reducingpotentiallitigation, k8  andenhancingworkplacesafety.Accordingtoinsuranceindustryofficials,wrapup W$  insurancecansaveprojectownersupto50percentonthecostoftraditionalinsurance, C  orfrom1to3percentofaprojectsconstructioncost,dependingonitssize.The /  potentialdisadvantagesofwrapupinsuranceincluderequiringprojectownerstoinvest   moretimeandresourcesinadministration.Projectownersmusthireadditional   personnelorpaytocontractoutthemanagementofwrapupinsurance.Inaddition,  Projectownerscouldalsohavetopaylargepremiumsatthebeginningoftheproject.  However,transportationofficialssaidthesecostswerereasonable.    Anumberoffactorscanaffectthebroaderuseofwrapupinsurance.Perhapsthemost p significantbarriersarestatesystemsforworkerscompensationthat,insomestates, \ effectivelypreventwrapupinsurancebygreatlyreducingitspotentialcostsavings. {H Anotherlimitationisthataprojectmustbesufficientlylarge,orcontainatleasta g4 sufficientamountoflaborcosts,tomakewrapupinsurancefinanciallyviable.Finally, S  somecontractorsdislikewrapupinsurancebecauseitreducesacontractorsprofits ?  frominsurancerebates. +    X<( 4 <DL44X<TypesofWrapUpInsurancePlansTwotypesofplansareavailabletoprojectowners.Oneis ! topayaflatpremium(alsoknownasaguaranteedcostplan).Withthisplan,premiumsremain ! fixedforthetermofthepolicyevenifahighamountofclaimsispaidout.Thistypeofplanis " commonforsmallandmediumsizedbusinesses.Thesecondtypeofplanisknownasaloss # sensitiveplan.Herethepremiumsdependonthepolicyholdersclaimsthatareactuallypaid $  (called losses).Alosssensitiveplanreturnsarefundforlowlossesandchargesadditional %l! premiumsforhighlosses,thusgivingtheowneranincentivetomaximizesafeoperations.Five &X" ofthesixmajorprojectsstudiedbyGAOusedlosssensitiveplans,andalluseddeductiblelimits w'D # tolowertheirinsurancecosts.L   Lgto     47       c(0!$   O)"% CostSavings󀄀ThesixprojectsstudiedbyGAOallclaimedcostsavingsasaresultofusing  wrapupinsurance.Savingsclaimedrangedfrom$2.9millionto$265million.L   Lgto     48      Contributingto   thesesavingswerefewerinjuriesresultingfromcentralizedsafetyprograms,aswellasusing   bulkbuyingpower,avoidingduplicateinsurancecoverage,usingmoreefficientwaystoprocess   claims,andreducinglitigation.L   Lagto     49             CentralizedSafetyPrograms󀄀Undertraditionalinsurance,eachcontractoranditsinsurance  t companymaybeinvolvedwithsafetybuttypicallythereisnocoordinatedsafetyprogram.Each ` contractorandsubcontractorisconcernedonlyfortheirsegmentofthework,andthedegreeof L  emphasisplacedonsafetywillvaryfromcontractortocontractor.Additionally,someofthese k8  contractorsmaybepoorlymonitoredbytheirinsurancecompaniesatthejobsite.Incontrast,on W$  projectsinsuredunderwrapuppolicies,theresponsibilityforsafetywillbecentralizedinone C  safetyteam(includingoneinsurancecompany)thatoverseesallaspectsofsafetyatajobsite, /  withjurisdictionoverallcontractorsandsubcontractors.Itisimprovedsafety,resultinginfewer   injuries,thatproducesmuchofthepotentialsavingsfromwrapupinsurance.Whenloss   sensitiveplansareused,theparticipantshaveacompellingfinancialinteresttokeepinjuriestoa  minimumsoastorealizeinsurancerebates.AllsixprojectsstudiedbyGAOclaimedreduced  injuriesasthemainbasisfortheirinsurancecostsavings.L   Luran  F   50        %    %S  %Sz݌̌   StateInsuranceRegulations!Becausethreefourthsofthetotalinsurancecostonaconstruction p projectcanbeforworkerscompensation,removingitfromtheprojectownerscontrol \ effectivelyeliminatesmostofthecostsavingsderivedfromwrapupinsurance.L   ݀ Luran  L   LZuran  Z   51      Andthisis {H whathappensinsomestatesthatrequirecontractorstousethestatefundforworkers g4 compensationastheprimaryinsurancevehicleforconstructionprojects.L   Luran      52      Somestates,suchas S  MichiganandOhio,requireownerstoobtainpriorapprovalforwrapupinsurancefromthestate ?  insuranceregulator.Michiganalsoestablishesaminimumprojectcostof$65milliontobe  + eligibleforwrapupinsurance.Oregonlimitswrapuptoprojectsof$100millionandwillnot 3 allow rollingdifferentprojects(combiningseveralprojects)underoneinsuranceprogram.      DevelopingInsuranceCostInformation!InthesixprojectsstudiedbyGAO,ownersdeveloped   costinformationfortraditionalvs.wrapupinsurancebyoneofthreemethods:(1)obtainingtwo   bids!onewithinsuranceincluded(traditionalmethod)andonewithinsuranceexcluded(wrap   upmethod),(2)removinginsurancecostsfromexistingcontracts,or(3)relyingonbrokers   estimatesoftraditionalinsurance.  t     HelpingSmallandDisadvantagedBusinesses!Byprovidinginsurancecoveragetoall L  contractors,includingsmallanddisadvantagedbusinesses,ownerscanoftenimprovethedegree k8  ofparticipationbythesebusinesseswhentheyusewrapupinsurance.Forexample,accordingto W$  GAO,theChicagoTransitAuthority(CTA)achievedabout30percentparticipationbyDBEsin C  their1994GreenLineRehabilitationProject. /    %      %  %݌̌     PotentialProblemsWithWrapUp󀄀Granteesmustbecautiousaboutcontractorswithpoorsafety   recordsandhighinsurancecosts.Theycanpresentaproblemwhenthegranteeisusingan  ownercontrolledinsuranceprogram.GranteesusinganOCIPshouldspecifyintheirsolicitation  documents(IFBs,RFPs)thatthebidderspastperformancewithrespecttosafetymatterswill  beconsideredaspartofthegranteesdeterminationofcontractor responsibility.SeeSection  5.1ResponsibilityofContractor. p   Megaprojects󀄀Onmegaprojects,granteesshouldconsultwithindividualswhohavehad {H workingexperiencewithsuchprojectsbecausetheremaybeopportunitiesforinnovative g4 techniques.Suchprojectslendthemselvestocreativenegotiationswiththeinsurancecompanies. S  FTAregionalpersonnelwithsuchexperiencemaybeconsulted.L   Luran     53       ?    EquipmentandSupplies󀄀Equipmentcontractorswouldtypicallyfurnishtheirowninsurance   coveragefortheproductstheyfurnish,exceptthatforinstallationofheavyequipment,thewrap ! uppolicycouldapplytotheinstallationwork.Itwouldbeprudenttodosomemarketresearch ! beforeestablishingtheinsurancelimitsthatyourequirethesupplierstohaveinordertobidon " yourrequirement.Ifthelimitsaretoolarge,itmayrestrictcompetition.Bycallingthepotential # biddersinadvance,youcandeterminewhatinsurancelimitsarereasonabletostipulateinyour $  IFBorRFP. %l!   %      %y  %y݌̌     Hazardousmaterials󀄀Whenyourprojectrequiresthecontractortoworkwithpollutantsorany w'D # typeofhazardousmaterials(suchasasbestos,wasteoilproducts,partscleaners,etc.,)besureto c(0!$ haveyourinsurancespecialistandyourenvironmentalsafetyofficerreviewallofthe O)"% contractor'spoliciesverycarefullytodetermineifthereareanyexclusionsinanyofthepolicies_  ;*#& forthetypeofmaterialinvolved.Ifthereisanyquestioninanyofthepolicies,besuretohave 3 thecontractorobtainariderfromhisinsurancecompanyremovingtheexclusion.      ArchitectEngineerServices 󀄀ItisthecustomarypracticeofArchitectEngineerfirmstobuy   errorsandomissionsinsurancetoprotectagainstdesignerrorswhichtheymaymakeinthe   courseoftheirdesignwork.However,theremaybesituationswherethecostofinsurancefora   particularprojectisveryhigh.Thiscouldoccur,forexample,whentheAEfirmisdesigning   elementsofasystem,suchasarapidrailsystem,whichwillcarrylargenumbersofpassengers.  x Thissituationcarrieswithitthepotentialforveryhighliabilityintheeventofanaccidentcaused d byafaultydesignofasystemelement.Insomecases,likethese,Agencieshavedecidedto P  indemnifytheirAEfirmagainstliabilityarisingfromdesignerrorsoromissions.Whenthis o<  approachisfollowed,theAEfirmdoesnotincurtheveryhighcostoferrorsandomissions [(  insurance,whichwouldhavebeenpassedalongtotheAgencyasadirectcostontheircontract. G  ThemoneythussavedbytheAgencyinnothavingtopayforinsurancecouldthenbedeposited 3  inaspecialselfinsurancefundfromwhichfutureclaims,ifany,wouldbepaid.Ifthereareno   accidentsandclaims,theAgencywillrealizesomeextraordinarysavings.MARTAelectedto    usethisindemnificationapproachwithitsprimaryengineeringconsultingcontractor,andthe  resultingsavingswereabout$300,000annually.Anydecisiontoadoptthisapproachisamajor  one,andobviouslyentailsanelementofrisktotheAgency.Itshouldbepointedoutthatin  manystatesitisagainstpublicpolicyforonepartytoindemnifyanotheragainstthatpartysown  negligence.Underthesecircumstances,thetypeofindemnitydescribedwouldbeillegal. t  6.7ARTWORK  L *l7:ddxdd x(#(#l,xdd +  W$W$  REQUIREMENT   HRequirementsrelatedtotheprocurementofartworkintransitprojectsmaybefoundinthe ; followingdocuments: '  0 l a.FTACircular9400.1ADesignandArtinTransitProjects,datedJune1995.!l"l" 0 l b.49_CFR_ԀSection18.34 Copyrights.)#l"l" dH  ) DISCUSSION %  FTACircular9400.1AprovidesFTApolicyandguidancefortheincorporationofdesign ' " andartintotransitprojectsfundedbyFTA.   54      ׀Someofthemoreimportantissuesinthis (!# Circularconcern: )t"$ ', XX'  1.0 4 Theeligibilityofdesignandartaseligiblecostsandguidanceforthe +L$& incorporationofqualitydesignandartintotransitprojectsfundedbytheFTA.k,8%'4(#4(#   C.') 0  2.04(#(#Flexibleguidelinesfortheamounttobespentonartwork;e.g.,costsshouldbeat 3 leastonehalfof1%ofconstructioncosts,butshouldnotexceed5%of  constructioncosts,dependingonthescaleoftheproject.Fundsspentonthe   artworkshouldbeadequatetohaveanimpact. 4(#4(#   3.0 4 Theencouragementofartiststointeractwiththecommunity(residentsand   businesses)onproject. 4(#4(#   4.0 4 TheCircularhascertainspecificrecommendationsfortheprocurementofart:`4(#4(#   0 4 a.0` 4(#4(#Theselectionprocessshouldconsideruseofavarietyofartiststhatare k8  capableofworkingontheproject,W$ ` (#` (#   0 4 b.0` 4(#4(#Selectionofartistsshouldbebyapanelofartanddesignprofessionals,such /  asartadministrators,artists,curators,andarchitects, ` (#` (#   0 4 c.0` 4(#4(#Thecommunitysurroundingthefuturefacilityshouldparticipateinthe  selectionprocessthismayincludealllevelsofparticipation,including  generatingideasfortheproject,supplyinginformation,attendingpanel  meetings,andbeingvotingmembersofthepanel.` (#` (#   5.0 4 Criteriaforevaluationspecificworksofartforcommissioning.Thesewould \ include:{H4(#4(# 0   4 a.0` (#(#qualityofartofdesign,S ` (#` (#   0 4 b.0` 4(#4(#impactonmasstransitcustomers,+` (#` (# 0   4 c.0` (#(#connectiontositeand/oradjacentcommunity;artthatrelates,informor ! substancetothecultures,people,naturalorbuiltsurroundings,orhistoryof ! theareainwhichtheprojectislocated,"` (#` (#   0 4 d.0` 4(#4(#appropriatenessforsite,includingsafetyandscale,$ ` (#` (#   0 4 e.0` 4(#4(#durabilityofmaterials,&X"` (#` (#   0 4 f.0` 4(#4(#resistancetovandalism,andc(0!$` (#` (#   0 4 g.0` 4(#4(#minimummaintenance. ;*#&` (#` (# + X, XT+ BestPractices  ,$( Thesizeandnatureoftheprojectmayaffectthechoiceofprocedurestobefollowed.The -&* guidanceheremaybemostrelevantfortheprocurementofmajorartintransitprojects,andisin  .'+ facttakenfromtheexperiencesofseveraltransitagenciesthathaveprocuredorareinthe 3 processofprocuringsignificantartworkfortheirtransitprojects.  GranteesshouldalsobefamiliarwiththetencasestudiesthatFTAhaspublishedonitswebsite   detailingthe lessonslearnedfromagenciesthatfacedadiversityofproblemsandchallengesin   bringingtheirartintransitprojectstoasuccessfulconclusion.   55          A.MaintaininganArtistRegistry   t ManyStatesandtheU.S.GeneralServicesAdministration(GSA)maintainanArtistsRegistry. L  TheGSAhasdevelopedthe GSANationalArtistsRegistry,whichisadatabaseofseveral k8  thousandcontemporaryAmericanartistsofallcareerlevels,media,andstyles.Thisregistryis W$  usedtosolicitexpressionsofinterestfromartistswhosepriorworkisofthetypethatGSAis C  interestedinconsideringfortheircurrentproject. /  TheLosAngelesCountyMetropolitanTransportationAuthority(MTA)maintainsamailinglist   databaseofprofessionalartistswhoareinterestedinworkingonMTAprograms.Inclusionon  themailinglistisopentoallprofessionalartistsonanongoingbasis.Artistsaresolicitedfrom  thismailingdatabaseforexpressionsofinterestviaopenCallforArtists.  ItmustbepointedoutthatsomeArtistsRegistriesrequirethesubmissionofslidesand p statementsofqualificationsbyartists.Theyrequireconsiderabletimeandresourcestomaintain, \ andunlessacceptanceintotheregistryisjuried,thenumberofunqualifiedorinappropriate {H artistsmayexpandtothepointofrenderingtheregistryoflittleornovalue.Artistswillwantto g4 updatetheirslidesperiodically,andthehandling,storage,databaseentryandreturnmailingmay S  beprohibitiveforallbutthelargestprograms. ?   AmorepracticalapproachformostgranteeorganizationswillbetocontacttheirStatesArts   Councilandotherorganizationsthatmaintainmailinglistsofpublicartists.Examplesofthese ! otherorganizationswouldincludeothertransitagenciesthathavebeenactiveinpublicartwork ! programs_   56      _ԀandorganizationssuchasForecastPublicArtworksat4 fO  5  www.forecastart.org6O  7 Ԁand " PublicArtNetwork(PAN)at4 O  5  www.americansforthearts.org.6O  7 ԀThisapproachwillprovidethe # granteewithanextensivelistofartistsatminimalexpensetothegrantee,andisamuchmore $  practicalapproachforthosegranteesthathave onetimeartworkprojectsandlimitedstaffing %l! tomaintainanexpensiveArtistsRegistryormailingdatabase. &X"   c(0!$ B.The CallForArtists  3 The callforartistscanbepublishedfornationalcoverageinpublicationssuchasPublicArt   Review,SculptureMagazine,ArtInAmerica,_ArtNews_,and_ArtForum_,andregionalperiodicals   suchas,NewArtExaminer,_ArtPapers_,and_ArtWeek_aswellaslocalnewspapers.However,the   experiencesofseveralagenciesinadvertisinghavenotbeencompletelysatisfactoryasfaras   reachingprospectiveartists.Afarmoresuccessfulapproachhasbeentodevelopthenamesand   addressesoftheartiststobesolicitedandsendthemanoticeofthecommissionopportunities  t and RequestforExpressionofInterest(RFI)letter.Forexample,SoutheasternPennsylvania ` TransportationAuthority(SEPTA)hiredanartconsultantwhoculledalistofcandidateartists L  fromvariousartfoundations.OtheragencieshaveusedtheirStateArtsCouncilasaresourcefor k8  listingsofartistsnamesandaddresses.Asalreadydiscussed,somehavegonetotheexpenseof W$  maintainingArtistsRegistriesandmailingdatabasestoidentifycandidateswhoarecontacted C  directlybymail. /  Applicantsarenormallyaskedtoprovideresumes,slidesofpastwork,copiesofpublished   reviews/articlesabouttheirwork,andperhapsavideotapeofseveralminutes_lenght_.Artistsmay  alsoberequiredtostateintheircoverletterswhytheyareinterestedincreatingartworkforthe  projectbeingadvertisedandwhytheirworkisapplicabletoanoutdoortransitenvironment.   C.PublicizingtheProjectsArtBudget  p Ithasbeenthepracticeofalmostallagencies,includingtheU.S.GSA,topublishtheagencys {H budgetfortheartprojectatthetimethe callforartistsisreleasedand/orthenoticesaresentto g4 candidateartistssolicitingtheirinterestintheproject.Thereasoningbehindthepracticeisto S  informtheartistsoftherelativemagnitudeoftheprojectandtoestablishanevaluationand ?  selectionprocessthatwillbebasedona bestvalueforthemoneytypeofdecision,insteadof + themoretraditionalproc_urement_Ԁapproachofdeterminingthelowestpriceproposalthatwill   produceanartworkthatmeetsapredeterminedspecification.Inotherwords,agencieswantthe ! verybestproductthatcanbeobtainedwiththefundsavailableforart,andthereisgenerallyno ! motivationtoreducetheartworkmonetaryinvestmentbyselectingartconceptsthatareless " costlybutalsomaybeartisticallyandaestheticallylessrewardingtotheagencyandthe # community. $   Anexampleofabudgetthatwaspublishedwitha CalltoArtistsbytheMetropolitanCouncil, &X" Minneapolis,MNisshowninAppendixB.18_Hiawatha_ԀLinePublicArt&DesignBudget. w'D # TheCalltoArtistslistedsixteencommissionopportunities,fourofwhichwere DesignOnly c(0!$ commissions,whiletwelveotherswerelistedas Design,Fabrication,andInstallation O)"% commissions.Theworkinvolvedinthevariousphasesofthesecommissionswasdescribedin ;*#& theCalltoArtists,andtheamountofthecommissionallocatedforeachphasewasasshownin '+#' AppendixB.18.Notethateverycommissionincludedthecompletionofdesignsandthe ,$( preparationofconstructiondrawingswithinthescopeoftheinitialcontractaward.Theinitial ,%) contractsdidnot,however,includetheFabricationandInstallationPhases.Theagencys -&* decisiontoinvolveanyparticularartistintheFabricationand/orInstallationPhasewastobe  .'+ _madeatthecompletionoftheDesignPhase,andwastoberelatedtosuchconsiderationsasthe 3 artworkdesign,theartistsinterestininvolvementintheFabricationandInstallationPhase,and  theagenciessinterestinretainingtheartistsinvolvementinthosefollowonphases.The   involvementofanyparticularartistsintheFabricationandInstallationphasecouldvaryfromthe   completefabricationandinstallationoftheartwork,fabricationandinstallationofcertain   elementsoftheartworkcoordinatedwiththeinstallationofotherelementsbytheprojects   Design/Builder,oversightoffabricationandinstallationbytheprojectsDesign/Builder,orinan   unusualsituation,noinvolvementatall.Becausethinvolvementoftheartistmightvaryinth  t FabricationandInstallationPhase,thecommissionamountassociatedwiththisFabricationand ` InstallationPhasewasestimatedasamaximumamountinthepublishedbudget.Theactual L  amountofanyfabricationandinstallationcommissionwastobedeterminedbynegotiations k8  betweentheagencyandtheartistattheconclusionoftheDesignPhasedependingontheartists W$  degreeofinvolvement.   57       C   D.TheSelectionProcess    Timing󀄀Oneofthemostimportantlessonslearnedfromthosewhoprocureartworkisthatthe  artistshouldbeselectedandonboardataveryearlydateinthedesignprocess,preferablyatthe  inceptionofthedesignprocessasmembersofthedesignteam.Startingtheartistearlywiththe  ArchitectEngineerfirmthatwilldothedesignworkenablestheartisttohavemaximum  opportunitiesfortheartwork.Ifyouwaituntilthefacilityisdesignedalready,orvirtually p designed,youlimitwhattheartistcando.Thisisamajorconsideration.Inordertoaffordthe \ artisttheopportunitytocollaboratewiththeA/Efirmduringthedesignconceptphase,theartist {H selectionprocessshouldbeginwellbeforetheA/Econtractisawarded. g4 MethodsofSelectingArtists󀄀Therearetwobasicapproachesthathavebeenusedtoselect ?  artists.Oneinvolvestheselectionofa shortlistofcandidatesfromwhomcompetitive + proposalsaresolicitedandevaluated.Theseproposalswouldtypicallycallforthesubmissionof   designconcepts,modelsand/orrenderings,costproposals,etc.).Theotherapproachisonein ! whichtheevaluationisdesignedtoselecttheartistinsteadofselectingthebestartworkconcept !  asinthecompetitiveproposalmethod.Thismethodwouldproducea shortlistofthemost " qualifiedcandidatesbasedonartistsresumes,slidesofpreviousartworkproducts,videotapes, # theartistsexpectedhourlyremuneration,etc.Interviewsareconductedwiththeshortlist $  candidates.Selectionthenfollowstheinterviews.Thelatterapproachdoesnotinvolvethe %l! submissionofdesignconceptsfortheprojectbeingadvertisedthepreparationofdesigns &X" comesafterartistselection.Nordoesthisapproachcallforartiststosubmittheestimatedprices w'D # oftheirartworkbecausethearthasnotyetbeendesigned.Itdoes,however,callfortheartiststo c(0!$ submittheirproposedhourlyratesofremuneration,whichfulfillstherequirementofFTA O)"% Circular4220.1Ethatcostbeafactorintheselectionprocess.Notethatcostmayinfactbethe  ;*#& leastimportantfactorifthegranteesochooses,butitmustbeconsideredintheselectionprocess. 3 Adiscussionofthesetwoapproachesfollows.  ReviewofQualificationstoDeterminea ShortListofCandidates󀄀Havingissuedthe callfor   artistsandreceivedlettersofinterestfromcandidateartists,mostagencies(withparticipationof   anartistselectionpanel)useaqualificationsbasedprocesstonarrowdownthecandidatestoa    shortlistoffourtosevencandidates.Thisprocessofdevelopingtheshortlistwouldtypically   bebasedontheartistspastwork.Resumesandslidesoftheartistspreviousworkwould  t normallybereviewed(byaselectionpanel)atthisstageoftheevaluationprocess.Artistswould ` notnormallyberequiredtosubmita technicalproposaloftheirconceptualdesignsforthe L  projectatthisstage. k8  SelectionafterInterviews󀄀Havingdetermined shortlistofcandidateartists,agencies C  approachestodeterminethatactualwinningartistmayvary.Whentheprojectisjustbeginning /  andtheartistswillbeworkingwiththeA/Efirmtodevelopdesignconcepts,thetypical   approachhasbeentofurnishtheshortlistedartistswiththecommunityprofileandinvitethem   tobeinterviewedbytheselectionpanel.Thewinningartististhenselectedonthebasisoftheir  pastworkandtheinterviewprocess.Anexampleoftheartistselectioncriteriawhichmightbe  usedinthistypeofscenariowouldbeasfollows:  "3"  0  3`#2#3  0` (#(#  Aestheticqualityofpreviouslycompletedartprojectsandcommissions.3`##݌p` (#` (# Ќ  "3"  0  3r$2#3  0` (#(#  Applicabilityandsuitabilityofpastworktothespecificcommissionopportunities {H beingadvertisedbythegrantee.3r$$݌g4` (#` (# Ќ  "3"  0  3%2#3  0` (#(#  Appropriatenessofpreviouslycompletedartworkstotheirsites,includingsafety ?  andscale.3%%݌+` (#` (# Ќ  "3"  0  3'2#3  0` (#(#  Durabilityandsuitabilityofmaterials,resistancetovandalismandaminimumof ! maintenancerequirements.3':'݌!` (#` (# Ќ  0  "3"  3W(2#3  0` (#(#  Experienceworkingwiththepublicandneighborhoodcommunities.3W((݌#` (#` (# Ќ  0   (#(# SolicitingCompetitiveProposals󀄀Whentheprojectforwhichtheartisbeingp_rocured_Ԁhas %l! alreadybeendesignedand/orbuilt,someagenciesinvitealloftheshortlistedartiststosubmit &X" proposalsfortheproject.However,someagencieshaverequiredproposalsevenwhentheartist w'D # selectionprocessisoccurringearlyintheprogram,beforetheA/Efirmhasdoneanydesign. c(0!$ Whenproposalsaresolicited,andfollowingthesubmissionandevaluationoftheseproposals, O)"% interviewsarethenscheduledwithallofthecandidateswheretheartistsmaypresenttheir ;*#& proposalsandtheagencysselectionpanelmayaskquestionoftheartists.Artistsmaybecalled '+#' upontopresentarenderingoftheirproposedartwork(amodelordrawingsorwritten ,$( descriptions),acostproposal,andsamplesoftheactualproposedmaterialtobeused.Thecost ,%) proposal(budget)wouldincludecostsfordesign,fabrication,sitepreparationandinstallation, -&* insurance,etc.Sincetheconceptualdesignsareprobablythemostvaluablecontributionthatthe  .'+ artistswillmake,agencieshaveoftenfeltitequitabletocompensatetheartistsforthis 3 conceptualdesignwork,andtheywillestablishauniformamountofmoneytobepaidtoeach  artistforhis/herworkindevelopingtheproposal.Forexample,SEPTAsprocurementof   artworkfortheFrankfordTransportationCenterincludeda designstipendof$2,500toeachof   thesemifinalistartiststhatwereaskedtoprovidedetailedproposalsaspartofthefinal   competition.Thisdesignstipendof$2,500forthesemifinalistswasadequatetogenerate   significantinterestfromnationallyacclaimedartists.   58         Thisapproachofrequiringcompetitiveproposalsisnotwithoutitsproblems.Thefirst ` significantproblemwillbehowtoinvolvethecommunityduringtheprocessofproposal L  (conceptualdesign)development.Communityinvolvementisoneofthemostimportantaspects k8  ofthedesignprocessandFTACircular9400.1Anotesitassuch.Itmaybedifficultfor W$  communityrepresentativestodealobjectivelyandinteractwiththecompetingartistsdesignsif C  competitiveproposalsarerequired.Experiencehasshownthatinvolvementofcommunity /  representativesatthisstageproducesproblemsinhavingtodealwithanumberofcompeting   artistsanddesigns,andtoreconciledifferencesofpreferencewithgranteepersonnelresponsible   forartistselection.Itmaybeeasierandperhapsmoreconstructiveforcommunity  representativestoworkwithoneartistwhohasbeenselectedbythegranteepriortoconceptual  designdevelopment,andthenserveasamajorcontributortotheprocessofdesigndevelopment.  Thisaffordsthecommunityadesigndevelopmentroleduringconceptualdesignworkratheran  afterthefactrolewithseveralartistswhosedesignconceptshavealreadybeenformulated. p Anotherconsiderationistheadequacyofthedesignstipend.Willthestipendyouragencycan \ affordtopayanumberofartistsbeadequatetocompensatethemforresearch,travel,community {H discussions,conceptualdesignwork,models,renderings,etc.?Consideralsowhethertherather g4 smallstipendandlimitedtimegiventothecompetingartistswillproducethebestpossible S  designconceptsforyourproject,orwhetheryouragencywouldbebetterservedwithselecting ?  anartistbasedonthequalityandsuitabilityofhis/herpastworkforyourapplication,andgiving + thisartistmoreresourcesandtimetoproducethebestdesignconceptaftercollaborationwith   communityrepresentatives. !  E.ContractingWiththeSelectedArtistforDesignandFabricationoftheArt  " DirectContractVs.SubcontractwiththeA/EFirm󀄀Mostagencieswillnormallyawardaprime $  contracttotheartist,althoughsomehaveassignedtheresponsibilityofcontractingwiththeartist %l! totheA/Efirmthatisdoingthefacilitydesign. &X" TypeofContract󀄀Becauseofpotentialproblemswithunsuitableaccountingsystemforcost c(0!$ reimbursementcontracts,granteeswouldbeadvisedtoconsidercontracttypesforartworkthat  O)"% donotrequiretheauditingofincurredcosts.Usingafixedpricecontractwiththeartistwould 3 usuallybepreferabletoacosttypecontract.  DeterminingaFairandReasonableContractPrice󀄀Whennegotiatingacontractpricewiththe   selectedartist,acostproposalshouldbesolicited,evaluatedandnegotiatedaswithany   procurementforprofessionalservices;e.g.,acontractwithanarchitecttodesignafacility.Itis   recommendedthatthegranteeconsiderwhetheritisadvisabletocontractinitiallyforthedesign   phaseoftheworkandpostponenegotiationsofthecost/priceforfabricationandinstallationuntil  t thedesigniscompletedandapproved.Thisphasedapproachwouldthenallowtheartistto ` solicitbidsorproposalsfromfabricatorsandinstallersbasedonafinaldesignandspecifications L  forfabricationandinstallation.Thephasedapproachwillavoidtheproblemoftryingto k8  prematurelyguesswhatthefabricationandinstallationcostswillbepriortocompletionofthe W$  design.Aphasedapproachwillalsoallowthegranteeandartisttonegotiatedfixedprice C  contractsforthedesignphaseandthenforthefabrication/installationphase.Thisinturnwill /  avoidthepitfallsinherentincostreimbursementcontractingwithanartistthatprobablydoesnot   haveacostaccountingsysteminplacethatissuitableforacosttypecontract.Seethe   paragraph,FabricationCosts,below.  Experiencewithartworkprojectswouldindicatethatthedesignphaseoftheprojectcouldbe  anywherebetween10%and20%ofthetotalprojectbudget.Forlargerprojectsthedesignphase  costsshouldrepresentthelowerendoftherange(about10%oftheprojectbudget).Smaller p projectsmayhavealargerpercentage(upto20%)oftheprojectcostdevotedtodesignactivities. \ Theprimaryreasonforthisisthatthecostsofdoingcommunityresearch,includingthetravel {H expensesassociatedwiththisresearchanddiscussionswithcommunityrepresentatives,will g4 representalargerfractionofthet_otal_Ԁbudgetforsmallerprojectsthanlargerones.Thisisnotto S  suggestthathedesignphasecontractbenegotiatedasapercentofthetotalprojectbudget,only ?  thatgranteesmaywishtoapplythesehistorical_percents_Ԁasa sanitycheckwhenevaluatingthe + artistscostproposalforthedesignphase.Designbudgetpercentagesmayalsobeimpactedby   theartistsnational/internationalprominenceandrecognition.Historicalexperiencewith ! architecturalfeesforavarietyofconstructionprojectsmayprovetoillustratethepointbeing ! madehere.Typicalfeesforthemostartistictypeofbuildingprojectshavebeentabulatedbythe " R.S.MeansCompany,andthefeepercentagesrangefromahighof16%oftotalprojectcostsfor # thesmallerprojects($100K)toalowof8.3%forthehighestdollarvalueprojects(over $  $50M).    59      ׀ %l! DetermininganHourlyRateofCompensationThehourlyrateofcompensationfortheartist w'D # shouldbeproposedbytheartistinhis/hercostproposal(alongwiththeothernecessarycost c(0!$ elements),andevaluatedbythegranteeforreasonableness.Thegranteewouldbeadvisedto  O)"% evaluatetheartistscompensationonotherprojects,aswellaswhatartistsworkingonsimilar 3 sizepublicartprojectshaverecentlyandhistoricallybeenpaidbyotherowners.Theobjectiveis  todetermineafairandreasonablerateofcompensationfortheexpertiseofferedbythat   particularartist,whichwillbeanimportantpartoftheoverallcontractpriceforthedesignphase.   Determiningafairandreasonablehourlyrateofcompensationfortheartistmayalsobe   extremelyhelpfulifforanyreasonthegranteedecidestoterminatetheartistscontractforthe   convenienceofthegrantee.Intheeventofatermination,thegranteeandtheartistwillhaveto  t negotiatetheamounttobepaidtheartistforhis/hereffortsuptothepointoftermination. ` Havingalreadynegotiatedanhourlyrateofcompensationaspartofthecontractnegotiationsto L  determineapriceforthedesignphasecontract,thepartieswillthenhaveanequitablebasisto k8  determinetheamounttobepaidfortheartistsseffortspriortothetermination. W$  PaymentProvisionsDesignPhase󀄀Experiencehasshownthattheremaybeproblemswith /  usingstandard progresspaymentclauseswherepaymentsaremadeatregularintervalsbased   upontheartists progresstowardscompletionoftheartworkdesign.Measuringprogressonan   artworkcontractmayprovethebeaverysubjectiveexerciseandonethatcausesproblemsfor  theagencyandtheartist.Apreferableapproachwouldbetousea milestonepayments  approachwherecontractuallyspecifieddollarpaymentsaretobemadeforachievementof  specifiedmilestones.  FabricationCostWhentheartististobecontractuallyresponsibleforfabricatingtheartwork, \ thetypicalscenariowillinvolveasubcontractorthatwilldotheactualfabricationwork.Itis {H veryimportantthattheartistberequiredtofurnishcrediblecostandpriceinformationregarding g4 fabricationoftheartworksothatarealisticcontractpricecanbenegotiatedwiththeartist. S  Granteess_hould_Ԁnotrelyon _guestimates_fromtheartistwhenthecontractpriceisbeing ?  negotiated.Therehasbeenatendencytousetheartistsowncostestimatesforfabrication + insteadofrequiringtheartisttoobtainrealisticcost/priceproposalsfromfabricators.Thisin   turnhasledtosomesignificantcostoverrunswhentherealfabricationcostbecomesknownasa ! resultofbidsobtainedlaterbytheartist.Thistendstohappenwhenthagencyscontractwith ! theartistisacostreimbursementorTimeandMaterialtypeofcontract.Owingtothe " uncertaintiesinfabricationcosts,agenciesmaywanttocontractin phasesfortheartwork # project,wherethefirstphaseisforworkuptosubmissionandagencyapprovaloftheartists $  design,andasecondphaseforfabricationandinstallationsupportbytheartist.Thissecond %l! phasewouldbepricedusingcompetitivebidsfromfabricatorsfollowingagencyapprovalofthe &X" artistsdetaileddesigns. w'D # IntellectualPropertyRights󀄀Ownershipofdataandcopyrightsmaybenegotiatedbythe O)"% granteeandtheartistunderanartsintransitprocurementprovidedthattheFederalinterestsare ;*#& protected.49_CFR_Ԁ18.34Copyrights,requiresthegranteetoincludeaclauseintheartwork '+#' contractthatprovidesFTAaroyaltyfree,nonexclusive,andirrevocablelicensetoreproduce, ,$( publishorotherwiseuse,andtoauthorizeotherstouse,forFederalGovernmentpurposes,the ,%) copyrightdevelopedunderthegrant. -&*   .'+ GranteeswillwanttoinvolvetheirChiefCounselindraftingandnegotiatingthespecific  provisionsrelatedtorightsintheArtworkandartworkdesignconceptdevelopedunderthe   contractduetostipulationsfoundinFederalandStatelawsgoverningartistrights.Someofthe   moreimportantissuesthathavebeenaddressed(butnotnecessarilyresolvedasstated)bythose   procuringartworkhaveincludedthefollowing:   RIGHTSINARTWORKDESIGNANDARTISTS_SUBMITTALS_  t ', XX'  1.0 4 Copyright:Artistsrightsinalldrawings,documents,studiesdevelopedbyartistas L  wellastheartworkitself.k8 4(#4(#   2.0 4 LicenseforFTA:Toreproduce,publishorauthorizeotherstouseforFederal C  Governmentpurposes,inaccordancewith49_CFR_ԀSection18.34Copyrights./ 4(#4(#   3.0 4 Rightofgranteetoreproduce(suchasphotographsandprints):Fornoncommercial   purposes(educational,publicrelations,artpromotional,etc.)theArtwork_submittals_  andArtworkDesign.4(#4(#   4.0 4 Rightofgranteetodistributereproductions:Tothepublicbygift,saleorother  transferofownership.p4(#4(#   5.0 4 RightofgranteetoincorporatetheArtworkDesignintoanytrademarksorservice {H marks.g44(#4(#   6.0 4 Granteerightsforcommercialuses:Tobenegotiatedwiththeartistandthetermsto ?  beestablishedinaseparatewrittenagreement.+4(#4(#   7.0 4 ArtworkDesignnottobeduplicatedbyartistwithoutgranteeswrittenconsent.!4(#4(#   8.0 4 TerminationofArtistsRights:Artistsrightsterminatewithdeathof,Artistanddo " notextendtoArtistsheirs,successorsorassigns.#4(#4(# + X, Xa+RIGHTSINTHEARTWORK %l! ', XX'  1.0 4 Ownership:Titletopasstothegranteeuponinstallationandfinalacceptanceof w'D # Artwork.Granteetohaverighttodonate,transfer,orselltheArtwork,oranyportion c(0!$ thereof.O)"%4(#4(#   2.0 4 Display:GranteetohaveexclusiverighttopubliclydisplaytheArtworkandtoloan '+#' theArtworktoothersforpurposeofpublicdisplay.,$(4(#4(#   3.0 4 ReproductionsandAdaptations:Granteetohavelicensetoreproduce(e.g., -&* photographsandprints)andthreedimensionalreproductionsfornoncommercial .'+ purposes(educational,publicrelations,artpromotional,etc.)Examplesofsuch /(, reproductionsfornoncommercialpurposesmightinclude:books,slides,postcards, 3 posters,teeshirts,mugsandcalendars;reproductionsinartmagazines,artbooks,0@! .'+0@!(#(#  newspapers,videos,filmandothervisualmediaofwhateverkind;reproductionsinor   onworldwidewebsites,internetsitesandotherelectronicmedia;and   reproductionsforadvertisingpurposes.ReproductionstocontainacredittotheArtist   andacopyrightnotice. 4(#4(#   4.0 4 CommercialUsesbyGrantee:Reproductionsforcommercialusesareonlytobe  t madewiththemutualconsentoftheparties;e.g.,useoftheArtworkasbackground ` foradvertisements,publications,movies,television,videoandothertypesof L  productionsorentertainmentmedia.k8 4(#4(#   5.0 4 ArtistCredit:AllreferencesandallreproductionsoradaptationsoftheArtworkwill C  credittheArtworktotheArtistunlessArtistsrequeststothecontrary./ 4(#4(#   6.0 4 ArtistsCommitments:ArtworkDesignnottobeduplicatedbyartistwithout   granteeswrittenconsent.4(#4(#   7.0 4 FutureRemoval,RelocationorModification:Granteetohaverighttoremovethe  Artworkfromthesiteandrelocatetoanothersite.4(#4(#   8.0 4 RepairsandRestoration:Grantee,afterconsultationwithArtist,shallhavetherightto \ determinewhenandifrepairsandrestorationsareneeded.Ifgranteemakesrepairsor {H restorationnotapprovedbyArtist,Artistshallhavetherighttoseveritsassociation g4 withtheArtwork.S 4(#4(#   9.0 4 TerminationofArtistsRights:Artistsrightsterminatewithdeathofartistanddonot + extendtoArtistsheirs,successorsorassigns. 4(#4(# + X, Xh+$` XX$ r 10.0 4 NoticeofClaims:Artisttogivegranteewrittennoticepriortoassertinganyclaim ! pertainingtotheartwork,andthegranteeshallhavenotlessthan90daysfromthe " dateofreceiptofclaimtocureanysuchclaim.#4(#4(#  r 11.0 4 TherightofgranteetoincorporatetheArtworkintoanytrademarkorservicemarksto %l! beutilizedbythegranteeandtoregisterthesameinaccordancewithstateorlocal &X" law.w'D #4(#4(#  F.ContractingforInstallationoftheArtwork  O)"% Manytimestheinstallationworkwillbeoutsidetheartistsrealmofexpertise,especiallyfor '+#' workinvolvingconstructionservices.MuchartworkinstallationwillberegulatedbytheDavis ,$( BaconActwagerequirements.Forexample,modificationstorealproperty,suchasthe ,%) installationofmuralsonbuildingwalls,willrequireDavisBaconwagedeterminations. -&* AgenciesmaywishtocontacttheirregionalDepartmentofLabor(DOL)officeforassistancein  .'+ determiningtheapplicabilityoftheDavisBaconActtotheirartworkprojects.Ithasbeenthe 3 usualpracticetoinstalltheartworkunderaconstructioncontractcompetitivelybid.For  example,theartworkinstallationmaybepartofthemainconstructioncontractfortheproject.   Whenthisisdone,theartistsservicesareusuallyobtainedtoserveintheroleofaconsultantto   theagencyortheA/Efirmthathasresponsibilityforconstructionoversight.