The Federal Transit Administration (FTA) recently required a local transit authority to return over $900,000 in federal grant funds that were used to pay an A/E firm for the design of a new facility.
The Lackawanna County (NY) Transit Authority must return the full federal grant applied to the hiring of an A/E firm to perform design services for a proposed intermodal transportation center.
The reason for this action? The local authority did not comply with applicable federal laws and regulations in the selection and contracting with this A/E. Failure to follow required Brooks Act procurement caused the design services to be not eligible for federal funding under the “common grant rule”, which forms one of the baseline grant rules applicable to recipients of federal funds.
Federal Grant rules, as specified by various laws and regulations make it very clear that if federal funds are used in the procurement of A/E services, federal law, including QBS (Brooks Act) and contracting and payments (FAR) must follow federal rules.
This action is long overdue, and hopefully will be the start of a trend that ends with all recipients of federal funds following the established best practices incorporated in federal procurement of A/E services.
Fair and open procurement, and fair contract terms for A/E firms have for many been often been a challenge at the state and local level.
Hopefully this “message” of the risks of not following fair contracting processes will spread to many other agencies with questionable contracting practices.
In this instance, FTA asked for the money back from the local transit authority, without any penalty or refund from the A/E.
Bill Fanning
Director of Research
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