Third Party Contracting Guidance
Published Date: 1/16/2025
Notice
Summary
The Federal Transit Administration just dropped an updated guide for third-party contracts, replacing the old one with fresh rules and tips based on new laws. If you work with FTA funds or contracts, this affects you and kicks in on February 18, 2025. It’s designed to make managing contracts smoother and clearer, with no surprise costs but better clarity on what’s expected.
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Analyzed Economic Effects
8 provisions identified: 3 benefits, 3 costs, 2 mixed.
Updated FTA contracting rules take effect
The Federal Transit Administration published a new Third-Party Contracting Guidance Circular (C 4220.1G) that replaces C 4220.1F. The new circular becomes applicable on February 18, 2025 and incorporates recent statutory and regulatory changes including provisions from the Infrastructure Investment and Jobs Act and updates to 2 CFR and USDOT rules.
Micro-purchase threshold: $10,000 baseline; up to $50,000 by self-certification
The Federal micro-purchase threshold remains $10,000, but as of October 1, 2024 recipients may self-certify a higher micro-purchase threshold up to $50,000 in certain instances. The Circular discusses how recipients can document and apply that self-certification (see Chapter VI, Section 4).
Security for rolling stock tied to advance/progress payments
FTA affirms that it requires security for rolling stock procurements only when advance or progress payments are used. The Circular also notes recipients may require security in excess of FTA minimums and that recipients retain discretion on bonding and security terms.
SAM.gov registration not required to bid
The Circular clarifies that contractors are not required to be registered in SAM.gov to do business with FTA recipients. FTA also says checking SAM is strongly recommended but is only one of several methods recipients may use to verify exclusion (suspension/debarment) status.
Reverse auctions limited to at-or-below SAT purchases
FTA declined to expand the use of reverse auctions above the Simplified Acquisition Threshold (SAT). The Circular notes that sealed bidding is the required method for procurements above the SAT under 2 CFR 200.320(b)(1).
Geographic preference prohibition removed
The Circular reflects that the prohibition on geographic preferences in 2 CFR 200.319 has been removed. FTA explains current status of geographic preferences across procurement types and how recipients should read statutes and regulations together when considering geographic preferences.
DBE program rules and goals remain governed elsewhere
FTA declined to change DBE program requirements in the Circular and directs readers to 49 CFR part 26 and 2 CFR 200.321(b)(3) for specifics. The Circular notes recipients set their own DBE percentage goals based on local DBE availability, and FTA will separately update flow-down clause guidance on its website.
Force account limited to recipient's own workforce
FTA declined to expand the definition of Force Account to include contractor-performed activities. The Circular maintains that 'force account' work refers specifically to the recipient's own non-contracted workforce.
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