- Briefing Room
U.S. Department of Transportation
Federal Highway Administration
1200 New Jersey Avenue, SE
Washington, DC 20590
FHWA Order 4410.3A
|Processing Acquisition Projects Under SAFETEA-LU|
|Classification Code||Date||Office of Primary Interest|
|4410.3A||August 7, 2006||HAAM-1|
What is the purpose of this directive? This directive provides guidance on the procedures to be used in obligating funds through acquisition of projects undertaken by the Federal Highway Administration (FHWA) that are authorized under the Safe, Accountable, Flexible, Efficient, Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Public Law 109-59). The directive establishes a collaborative process for determining the most streamlined method for funding each project while maintaining the integrity of the acquisition process, and it also provides guidance on competition and matching requirements related to assistance agreements for these projects. This process does not apply to the formula grant Federal-aid program administered under Title 23, United States Code (U.S.C).
Does this directive cancel an existing directive? Yes. This directive cancels FHWA Order 4410.3, Processing Research Projects Under TEA-21 Section 5001, dated September 19, 2001.
What references were used in writing this directive?
SAFETEA-LU, Public Law 109-59, dated August 10, 2005.
31 U.S.C. 6301-6308, Federal Grant and Cooperative Agreement Act of 1977.
Title 48, Code of Federal Regulations (CFR), Chapter 1, Federal Acquisition Regulation (FAR).
49 CFR 19, Department of Transportation (DOT) codification of Office of Management and Budget (OMB) Circular A-110.
49 CFR 18.24, Matching or Cost Sharing.
DOT Order 4600.17A, Financial Assistance Management Requirements, dated May 9, 2000.
FHWA Order 4410.1, Grant and Cooperative Agreement Policies and Procedures, dated February 28, 1994.
What are the major definitions?
Procurement contract. This is the legal instrument used to reflect a relationship between the Federal Government and a party when the principal purpose of the transaction is the acquisition by purchase, lease, or barter of property or services for the direct benefit or use of the Federal Government, including situations in which the property or services are in turn provided to a third party. A procurement generally takes the form of a contract, though purchase orders are used for buys of $100,000 or less. A procurement contract is a mutually binding legal relationship obligating the seller to furnish supplies or services and the buyer (the FHWA) to pay for them under rules prescribed at 48 C.F.R. Chapter 1, FAR.
Assistance agreement. This is the legal instrument used to reflect a relationship between the Federal Government and a State, local government, or other recipient when the principal purpose is to transfer money, property or anything of value to the other party to the agreement in order to assist in accomplishing a public purpose of support or stimulation authorized by a Federal law. Assistance agreements are governed under rules prescribed at 49 CFR 19. Assistance instruments include:
(1) Grants. These are assistance agreements in which substantial involvement between FHWA and the recipient is not anticipated.
(2) Cooperative agreements. These are assistance agreements in which substantial involvement between FHWA and the recipient is anticipated.
What is the background concerning this directive?
Title V – RESEARCH, under SAFETEA-LU, contains the preponderance of direction and funding for the Research and Technology (R&T) program of the FHWA. However, additional specific authorizations are imbedded in other parts of SAFETEA-LU, which are equally covered by this directive.
Some of the funding authorized under Title V is available for use at the discretion of FHWA program managers, while the use of other funds are specifically directed by Congress either in SAFETEA-LU itself or in subsequent appropriations acts. In determining the appropriate method for accomplishing specific projects, including those specified by Congress, the FHWA must make a series of collaborative decisions based on the circumstances of each project. Included among these decisions is whether the project represents an FHWA acquisition of services or products, or whether it is financial assistance. Other considerations include competition requirements, matching funds, and the intended recipient.
How is it determined whether to use a procurement contract or an assistance agreement, and what are the responsibilities?
The Director of the Office of Acquisition Management (HAAM), after coordination with the appropriate program, budget, and legal offices, is responsible for determining whether the appropriate award instrument should be a procurement contract or an assistance agreement for a given requirement. See FHWA Order 4410.1, Section 10(d).
As a general rule, HAAM handles all procurement contracts for Washington Headquarters' offices. Assistance projects, whether discretionary or directed by Congress, shall be handled by HAAM if the award is competitive or if the recipient is other than a State.
If the recipient of a grant or cooperative agreement is a State, for which competition is not required, then the Federal-aid process may be used by a FHWA division office as a streamlined vehicle for getting the funds to the State.
If it is a procurement contract, what happens? If after appropriate coordination it is determined that a procurement contract is the appropriate legal instrument, HAAM will process the award in accordance with the requirements of the FAR and the associated Departmental and FHWA guidance and regulations.
If it is an assistance agreement, what issues must be addressed? If after appropriate coordination it is determined that an assistance agreement is the appropriate legal instrument, the issues of competition and matching requirements must be addressed.
(1) The Federal Grant and Cooperative Agreement Act of 1977 requires Federal agencies to obtain the maximum competition practicable in awarding grants and cooperative agreements whenever discretion is permitted in selecting recipients.
(2) Pursuant to DOT Order 4600.17A, Financial Assistance Management Requirements, competition is not required for assistance awards to units of State or local governments, and no sole source justification is required. However, the rationale for selecting a particular State or consortium of State recipients should be documented by the FHWA.
(1) Funds provided for assistance agreements under SAFETEA-LU may be subject to a requirement that the recipient share in the cost of the project, unless the Secretary of Transportation specifically waives the requirement with respect to a particular project or activity. Specific cost sharing direction is given under individual project descriptions described in SAFETEA-LU.
(2) Where cost sharing is required, recipients of assistance agreements are expected to cost-share either through providing matching funds, and/or by providing other "hard" or "soft" ("in-kind") cost sharing. Guidance on and a definition of "in-kind" cost sharing for State and local governments are described in 49 CFR 18.24. Guidance on "in-kind" cost sharing for educational institutions and other non-profit organizations is available in 49 CFR 19.23. The Secretary of Transportation has not delegated to FHWA the authority to waive, on a case-by-case basis, the matching requirements for assistance agreements.
(3) The FHWA Chief Counsel has issued a determination that matching requirements do not apply to procurement contracts.
How are the obligation of funds for research and other directed projects under SAFETEA-LU handled?
In order to ensure that the appropriate acquisition and Federal assistance processes are followed and the FHWA is in compliance with all applicable acquisition and Federal assistance laws and regulations, all FHWA Washington Headquarters' requests for projects authorized under SAFETEA-LU must be coordinated with the appropriate FHWA Washington Headquarters' program office and HAAM. This will be accomplished by one of the following methods.
(1) If an FHWA Washington Headquarters' office identifies a discretionary project to be funded under SAFETEA-LU that is not designated for a specific recipient, contractor, or geographic location, and there is no justification to award the project to a specific State department of transportation (State DOT), it shall be forwarded to HAAM for review and processing. HAAM will issue either a procurement contract or an assistance agreement, as appropriate, and ensure adequate competition as required by the laws and regulations governing contracts and assistance agreements.
(2) If an FHWA office determines that a discretionary project would best be performed by a State DOT or other government entity, even though no specific entity has been designated by legislation, the rationale for selecting a specific entity to conduct the research project must be documented (in two pages or less) and forwarded to HAAM for concurrence. Upon concurrence, HAAM will inform the program office to proceed with an award under the Federal-aid process.
(3) If a congressionally specified project using SAFETEA-LU funds expressly designates a State or city to be the recipient, a copy of the page(s) including the legislative language that contains the congressional specification and a copy of the cover sheet of the Public Law, Appropriations Bill, or Conference Report, must be forwarded to HAAM. Upon concurrence, HAAM will inform the program office to proceed with an award under the Federal-aid process.
(4) If a congressionally specified project using SAFETEA-LU funds expressly designates an educational institution, contractor, or geographic location to be the recipient, a copy of the page(s) including the legislative language that contains the congressional specification and a copy of the cover sheet of the Public Law, Appropriations Bill, or Conference Report, must be forwarded to HAAM. HAAM will issue either a procurement contract or an assistance agreement, as appropriate.
HAAM will generally obtain the advice of the FHWA Chief Counsel in interpreting the language applicable to paragraphs 9a(1) through 9a(4) above. Within 10 business days after receiving the above documentation, HAAM will review and provide its comments/concurrence on the proposed project. Following concurrence by the Chief Counsel, HAAM will either instruct the requesting office that it may proceed with an allocation of funds through the Federal-aid project process, or HAAM will undertake the acquisition, as applicable.
If an FHWA office identifies a research project to be funded under SAFETEA-LU, whether congressionally specified or discretionary, and the situation warrants additional guidance or discussion in terms of how the project should be handled, the office shall submit a brief (no more than two pages) summary to the Director, HAAM. He/she will consult with all interested parties, including, as appropriate, the Office of the Chief Financial Officer, the Chief Counsel, the applicable program office, and the cognizant field office that would be used for a particular project/activity, to recommend the most efficient and appropriate approach to accomplish the research project. Within 10 days after receiving a request for guidance, the Director, HAAM, will complete all necessary consultations and render a decision regarding the appropriate organizational entity to handle the project.
Requesting offices may appeal the decision of HAAM under paragraphs 9a(1) through 9a(4) and 9c to the FHWA Executive Director.
Where can I get additional information? For additional information, contact the Acquisition Policy and Analysis Division, HAAM, at (202) 366-4226.