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FHWA Contracting Guidance For Right-Of-Way Service Contracts

On November 2, 1994, a memorandum was issued by Anthony R. Kane clarifying that a State is to use its own procedure for procurement of goods and services, including right-of-way services, in accordance with 49 CFR 18.36(a):

When procuring property and services under a grant, a State will follow the same policies and procedures it uses for procurements from its non-Federal funds. The State will ensure that every purchase order or other contract includes any clauses required by Federal statutes and executive orders and their implementing regulations.

49 CFR 18.36(a) allows States to determine the contracting method. FHWA is committed to affording States the maximum flexibility allowed by the regulation. We do not believe it is necessary to revise the delegation of authority on this matter, as it has been given to the States (and LPAs) through the Departmental regulation. This delegation is consistent with our Agency philosophy for program administration.

States are allowed to use various contracting methods, such as:

Issuance of 49 CFR Part 18 superceded previous FHWA guidance for Local Public Agencies (LPAs) procurement procedures. Mr. Kane's memorandum clarified that 49 CFR 18.37(a) requires the State to administer sub-grants to local governments in accordance with the State's own procedures. Local government subgrantees (LPAs and MPOs) are to follow procurement procedures specified by the State. In keeping with the State's overall responsibility to administer sub-grants, a State can allow a local agency to follow its own procedure, if found to be acceptable under State law and procedures. Purchase orders and contracts must include any clause required by Federal statutes and executive orders, and their implementing regulations.

One of the contracting methods allowed, the qualifications based negotiation, also known as procurement under the Brooks Act or A/E procurement, has been the subject of many recent discussions with right-of-way contractors. Qualifications based negotiation was used and widely accepted prior to 1972. Congress enacted the Brooks Act to clarify the legality of this procurement method. The Act provided the legal basis to use qualifications based negotiation for Federal procurement. Many States enacted similar laws (called mini-Brooks Acts) to provide a similar purpose, but with their own interpretations and/or limitations. There is nothing in the legislative testimony regarding intent to limit its use to only one profession. Nothing in the history suggests an attempt to mandate the use of this method for any purpose or profession.

The legislative history of the Brooks Act clarifies that this method of procurement is cost competitive and that its use protects the interests of taxpayers. It points out the need to look at overall or total costs to the taxpayer, including costs associated with loss of quality. It addresses the benefits to be gained by discussing alternate methods of delivery and new concepts during the qualifying stage.

Most States have laws that set the parameters for State procurement. The use of qualifications based procurement for right of way services is acceptable if a State's own procurement procedures allow such selection criteria.

Many States that are prohibited from using qualifications based procurement have found they can use the two step process that combines qualifications based negotiation with competitive bids. It qualifies as a competitive negotiation method. The first phase starts with a request for proposals. Discussions regarding qualifications, staffing, scheduling, delivery of a quality product, and work experience occur during the first phase. Often, three to five of the most qualified contractors are selected and are asked to submit a bid. The second step, the bidding process, qualifies this method as a competitive negotiation procurement.

Contractor/FHWA Training
A cooperative agreement between FHWA and the International Right-of-Way Association was signed in 1999 which provides expanded training opportunities for States, LPAs and consultants.

Apprentices and trainees are compatible with quality service. We encourage States and contractors to train new personnel in the right-of-way services field and include these personnel on contracts. In fact, we seek arrangements for FHWA right-of-way Professional Development Program participants to complete developmental assignments with right-of-way service contractors.

Updated: 09/05/2014
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