2024-03044. Award Management Requirements Circular (C 5010.1) Proposed Updates

AGENCY:

Federal Transit Administration (FTA), Department of Transportation (DOT).

ACTION:

Notice of availability of proposed circular updates and request for comments.

SUMMARY:

The Federal Transit Administration (FTA) is seeking public comment on proposed updates to FTA's Award Management Requirements circular (C 5010.1). The proposed updates combine requirements applicable to all FTA financial assistance awards (referred to as “cross-cutting” requirements) and, when final, will supersede parts of three separate FTA circulars (the proposed “Grant Programs for Urbanized Areas”, “Formula Grants for Rural Areas” (C 9040.1G), and “Enhanced Mobility of Seniors and Individuals with Disabilities” (C 9070.1G)). The proposed updates also reflect changes made by the Fixing America's Surface Transportation (FAST) Act; the Infrastructure Investment and Jobs Act (IIJA), also known as the Bipartisan Infrastructure Law (BIL)); the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; and other updates to FTA policies and procedures.

DATES:

Comments must be submitted by April 15, 2024. Late-filed comments will be considered to the extent practicable.

ADDRESSES:

Please submit your comments by only one of the following methods, identifying your submission by docket number FTA–2024–0003. All electronic submissions must be made to the U.S. Government electronic site at https://www.regulations.gov/​.

(1) Federal eRulemaking Portal: Go to https://www.regulations.gov/​ and follow the online instructions for submitting comments.

(2) Mail: Docket Management Facility: U.S. Department of Transportation, 1200 New Jersey Avenue SE, West Building, Ground Floor, Room W12–140, Washington, DC 20590–0001.

(3) Hand Delivery or Courier: West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE, between 9 a.m. and 5 p.m. Eastern time, Monday through Friday, except Federal holidays.

(4) Fax: [phone].

Instructions: You must include the agency name (Federal Transit Administration) and Docket number (FTA–2024–003 for this notice at the beginning of your comments. Submit two copies of your comments if you submit them by mail. For confirmation that FTA received your comments, include a self-addressed stamped postcard. Note that all comments received will be posted without change to https://www.regulations.gov/​ including any personal information provided and will be available to internet users. For information on DOT's compliance with the Privacy Act, please visit https://www.transportation.gov/​privacy.

Docket: For access to the docket to read background documents and comments received, go to https://www.regulations.gov/​ at any time or to the U.S. Department of Transportation, 1200 New Jersey Ave. SE, Docket Operations, M–30, West Building Ground Floor, Room W12–140, Washington, DC 20590 between 9 a.m. and 5 p.m. Eastern Time, Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

For award management questions, Latrina Trotman, Office of Program Management, Federal Transit Administration, 1200 New Jersey Ave. SE, Room E46–301, Washington, DC 20590, phone: [phone], or email, [e-mail]. For legal questions, Jerry Stenquist, Office of Chief Counsel, same address, Room E56–314, phone: [phone], or email, [e-mail].

SUPPLEMENTARY INFORMATION:

Table of Contents:

I. Overview

II. Chapter-by-Chapter Analysis

A. Chapter I—Introduction and Background

B. Chapter II—Circular, FTA Programs, and Grants Management Overview

C. Chapter III—Award Development and Administration

D. Chapter IV—Property Administration and Award Management

E. Chapter V—FTA Oversight

F. Chapter VI—Financial Management

G. Appendices

I. Overview

FTA proposes an update to its Award Management Requirements Circular (C 5010.1). The proposed circular updates summarize FTA and Federal-wide administrative requirements for financial assistance awards while consolidating pre-existing cross-cutting guidance from previous FTA program circulars and reducing duplicative information repeated in separate circulars. The proposed circular updates also incorporate provisions of the Fixing America's Surface Transportation (FAST) Act, the Infrastructure Investment and Jobs Act (IIJA), and new or updated administrative requirements from 2 CFR parts 200 and 1201. Additionally, the updates clarify existing policy issues as interpreted and applied by FTA. Furthermore, the circular includes updated FTA policy regarding real property status reporting, the incidental use of FTA-funded project property, and transfer of real property to third party entities for affordable housing. The proposed circular updates also increase the use of graphics, tables, and weblinks to improve clarity. A copy of the proposed updated circular will be placed in the docket, and posted on FTA's Proposed Circulars web page ( https://www.transit.dot.gov/​regulations-and-guidance/​fta-circulars/​proposed-circulars).

II. Chapter-by-Chapter Analysis

A. Chapter I—Introduction and Background

Due to the consolidation of three program circulars, definitions and program descriptions were compared and revised for consistency with proposed revisions and updates to the following FTA circulars: the proposed “Grant Programs for Urbanized Areas”, “Formula Grants for Rural Areas” (C 9040.1G), and “Enhanced Mobility of Seniors and Individuals with Disabilities” (C 9070.1G). FTA proposes to amend the definitions section for consistency, clarification, and to reflect changes to statute and other authorities. Specifically, FTA has updated the following terms:

• “Amendment” has been added for consistency with the three program circulars.
• “Capital Asset” is modified for consistency with 2 CFR 200.1.
• “Concurrent Non-Project Activities” has been removed and requirements have been relocated to the body of the circular.
• “Excess Real Property Inventory and Utilization Plan” has been removed as information is required in the revised Real Property Status Report.
• “Facilities” has been updated to add fixed guideways.
• “Federal Interest” has been updated to better align with FTA and Federal regulations, including in cases where fair market value determinations are not readily discernable.
• “Incidental Use” has been updated to align with FTA and Federal requirements to ensure that recipients maintain satisfactory continuing control over FTA funded property.
• “National Environmental Policy Act” has been updated to clarify the role in FTA funded projects. Requirements have been moved to the body of the circular.
• “Operating Expenses” has been updated to clarify the differentiation from capital expenses.
• “Pre-award Authority” has been updated to clarify the process in which announcements and notifications occur.
• “Program of Projects” has been updated to align with changes made in other FTA circulars.
• “Real Property” has been modified for consistency with 2 CFR 200.1.
• “Real Property Inventory” has been renamed the Real Property Status Report and has been updated to reflect the revised requirements of 2 CFR 200.330.

• “Remaining Federal Interest for Dispositions Before the End of the Useful Life of Project Property” has been deleted and requirements have been relocated to the body of the circular.

• “Remaining Federal Interest in Federally Assisted Property” has been deleted and requirements have been relocated to the body of the circular.
• “Rolling Stock Repowering” has been updated and requirements have been moved to the body of the circular.
• “Satisfactory Continuing Control” has been updated to more closely align with FTA and Federal requirements for the use of, and Federal interest in, project property.
• “Shared Use” has been updated for clarity and differentiation from “incidental use” as defined in the circular. Requirements have been relocated to the body of the circular.
• “Unobligated Balance” has been updated to provide concept clarifications. Methodology and reporting requirements have been relocated to the body of the circular.
• “Urbanized Area” has been updated to reflect changes in designation by the Census Bureau, which no longer utilizes “Urbanized Area” but “Urban Area” (UZA), as defined by the Secretary of Commerce.
• “Useful Life” clarifies applicability to real property and other capital assets. Because useful life depends on depreciation and estimated time in use, expected minimum useful life changes according to the type of asset in question. Furthermore, “Useful Life” has been updated to clarify the relationship between the measurement of property use and federal financial interest in project property. The revised definition also distinguishes from the “useful life benchmark” concept utilized by the Transit Asset Management (TAM) System.

In addition, FTA proposes updates to the list of abbreviations and acronyms provided in the circular to better reflect agency standards for references and text additions found elsewhere in the body of the circular.

B. Chapter II—Circular, FTA Programs, and Grants Management

Chapter II of the proposed circular updates provide an overview of the requirements and procedures for the management of all applicable FTA programs authorized under 49 U.S.C. Chapter 53. Additionally, this chapter provides an overview of the government-wide requirements applicable to FTA awards. This chapter's updates reflect statutory and regulatory requirements enacted since the issuance of previous versions of this circular. Major updates in this chapter include:

• Updating the list of FTA programs to which the circular will apply. This includes the addition of program descriptions for the Rural Transportation Assistance Program (RTAP) (Section 5311(b)(3)) and the Intercity Bus Program (Section 5311(f)) as well as the removal of program descriptions of programs that are no longer active.
• Updating the roles and responsibilities of the recipient to clarify the necessary timing of funding drawdown requests.
• Updating FTA's coordination of triennial and state management reviews and substantial involvement in cooperative agreements.
• Disadvantaged Business Enterprise (DBE) program goals and requirements located throughout the circular.
• Adding descriptions of the Build America, Buy America Act (BABA) domestic preference requirements, which apply in addition to FTA's longstanding Buy America statute.
• Amending the “Buy America Domestic Preference” subsection to reflect updates made by 2 CFR part 184 implementing the Build America, Buy America Act (BABA), primarily affecting FTA-funded infrastructure projects by adding domestic preferences for construction materials and additional procedures related to Buy America waivers.
• Within the “Design and Construction of Facilities” subsection, distinguishing FTA's Project and Construction Management Guidelines from the Construction Project Management Handbook.
• Adding a subsection entitled “Title VI Equity Analysis for Facilities” to better inform recipients of the requirement to conduct such analyses.
• A subsection on project signage has been added to address FTA's project signage preferences for FTA assisted projects. This subsection includes guidelines for displaying agency logos, incorporating text, placement of signage, and associated costs, among other signage guidance.

C. Chapter III—Award Development and Administration

This chapter describes the requirements for administering an award made by FTA. Chapter III is reorganized to include both pre-award and post-award administrative requirements. The Chapter's updates consolidate established cross-cutting requirements as well as those based on newly enacted statute or regulation. Major updates within this chapter include:

• An award lifecycle graphic provides an overview of the major phases of an award.
• Updates to the “Metropolitan and Statewide Planning Requirements” incorporating information from the relevant program circulars and the Statewide Transportation Improvement Plan (STIP) and Transportation Improvement Plan (TIP) processes.
• Updates to the “Multiple Designated Recipients in Large UZAs” subsection more accurately reflecting FTA expectations for coordination among local officials.
• Expansion of the “Force Account” subsection to include additional explanation of the FTA approval process.
• Reorganization of the “Certifications and Assurances” subsection by general capacities, standard assurances, and certification procedures.
• Expansion of the “Application Process” subsection clarifying the requisite structure of award budgets in the Transit Award Management System (TrAMS).
• Updates to the “Reporting Requirements for Post Award Administration” subsection to include planning reports for multiple activities, projects, and awards.
• An expansion of the guidance on the “Federal Financial Report (FFR)” subsection to include the reporting of approved Indirect Cost Rate Proposals or Cost Allocation Plans.
• Updates to the “Budget Revision” subsection consolidating the requirements and procedures for revising award budgets.
• Clarification regarding an award's period of performance and related eligibilities of costs incurred after the award end date.
• Updates to the subsection on “Changes to Discretionary Awards or Earmarks” highlighting the necessity of the competitive process and pre-award negotiations.
• Updates to the Adjustments to the “Federal Share of Costs” subsection clarifying that recipients are required to refund any costs FTA disallows during or after the award closeout process.
• Broadening of, and change to, the “Disposition of Equipment and Supplies” subsection to the “Disposition of Property” subsection.
• Relocation of property disposition procedures to Chapter IV.

D. Chapter IV—Property Administration and Award Management

Chapter IV of the proposed circular updates reorganize and update the award management requirements regarding real property and equipment administration. This chapter provides guidance on the acquisition, management, use, and disposition of FTA assisted property, including facilities purchased or constructed, and rolling stock, other equipment, and supplies procured under an FTA award. The updated requirements are in accordance with 2 CFR part 200, authorizing and appropriating legislation, and other Federal property requirements. In addition, much of the content within the chapter has been reorganized and consolidated. Some of the major changes include:

• A reorganization and consolidation of the real property and equipment requirements into separate sections.
• An overview of Transit Asset Management (TAM) regulations that impact FTA assisted property has been moved under the General heading of Chapter IV.
• Updates to the “Appraisal Review of Real Estate” subsection to clarify the requirements and FTA expectations for a technical analysis and review of appraisal reports. Additional guidance has been made regarding the qualifications of review appraisers and FTA concurrence requirements. For Major Capital projects, FTA is proposing to reduce submission requirements for projects with an approved Real Estate Acquisition Management Plan.
• Updates to concurrence requirements for incidental uses of project property within the subsections “Property Management for Real Property” and “Incidental Use for Non-Transit Uses of FTA Assisted Real Property”, including specifying of circumstances in which a recipient must notify or seek concurrence from FTA in advance of its incidental uses of project property.
• Retitling of the “Real Property Inventory” subsection to “Real Property Status Report” and updating the subsection to reflect the current requirements in 2 CFR 200.330 that recipients must submit a real property status report to FTA every three years. FTA proposes the minimum elements of such reports. Additionally, FTA proposes in its policy that these recipients shall generally submit these reports to FTA as part of the triennial or state management review process. The Real Property reporting requirements apply to all FTA assisted real property held by a recipient, regardless of the date real property was acquired or improved. Any recipient not subject to a Triennial or State Management Review should discuss the timing of the report submissions with their regional office.
• A new subsection, “Transfers for Affordable Housing”, which incorporates a new disposition option added in 49 U.S.C. 5334(h)(1)(B) that allows a recipient to dispose of an asset with no repayment to the Federal Government if it will be used for a transit-oriented development that includes a minimum amount of affordable housing, as a percentage of the total floor area.
• Updates to the subsection “Incidental use for Equipment and Supplies (including Rolling Stock)”, specifying the circumstances in which a recipient must notify and seek concurrence from FTA in advance of its incidental uses of project property.
• Updates to the subsection “Leases” clarifying the eligibility of Federal funding of capital lease payments as distinguished from payments for operating leases, including the removal of cost analyses as a prerequisite for payment eligibility as repealed by the FAST Act.
• Updates to the “Management of Federally Assisted Property” subsection for equipment and rolling stock with more clearly defined requirements for equipment records.
• Updates to the “Maintenance and Warranty” subsection for equipment and rolling stock to clarify the requirement for recipients to develop and implement maintenance procedures for FTA funded equipment.
• Updates to the “Disposition of Equipment and Supplies” subsection to clarify reimbursement requirements to resolve FTA's remaining share.
• Addition of a subsection “Vehicle Components (Including Converted Vehicles) at End of Minimum Useful Life” outlining requirements governing the retention and disposition of vehicle components after disposition of the vehicle. In the event that a recipient disposes of a vehicle but retains vehicle components, recipients must treat the component the same as other Federally funded equipment, including maintaining records identifying the retained vehicle components in its equipment inventory until disposition of the retained components. FTA continues to retain a Federal interest in any vehicle components retained or repurposed by the recipient. The Federal interest will continue to be proportional to the Federal share of participation in the vehicle acquisition. The remaining components must be valued at the time of removal from the vehicle.
• Updates to the subsection “Insurance Proceeds for Equipment and Rolling Stock” including clarifications for applying or repaying insurance proceeds for equipment or rolling stock with an FTA interest.
• Updates to the subsection “Disposition or Use of Assets for Other Than Purposes of the Award after the End of Their Useful Life” setting forth the requirements in 49 U.S.C. 5334(h) for retaining, using, and disposing of property with a fair market value of more or less than $5,000.

E. Chapter V—FTA Oversight

This chapter provides an overview of the FTA framework for evaluating recipient adherence to program and administrative requirements through a comprehensive oversight program. FTA determines compliance through self-certification, oversight review, audits, and site visits. Major updates include:

• Reorganization of the subsection “Financial Management” to clarify major types of financial management oversight reviews.

F. Chapter VI—Financial Management

This chapter discusses requirements for the use and management of Federal assistance. Chapter VI changes include a reorganization and updates to information on non-Federal share of awards, indirect costs, program income, and single audits. Significant updates include:

• The subsection “Non-Federal Share” has been updated to clarify what FTA considers an amount over the required match and a reference added to 2 CFR 200.306.
• The subsection “Transportation Development Credits under Additional Sources of Non-Federal Share” has been reorganized to clarify requirements for the use of, and the process for, determining the availability of such credits.
• The subsection “In-Kind Contributions of Real Property under Additional Sources of Non-Federal Share” has been updated to clarify requirements governing the applicability of an FTA interest when real property is used as local match.
• The subsection “Indirect Costs” has been reorganized and updated with additional information explaining the eligibility of indirect costs for FTA reimbursement.
• The subsection “Cognizant Federal Agency under Indirect Costs” has been updated with additional information regarding FTA's determination of the cognizant agency receiving FTA assistance. This determination is based on appendix V of 2 CFR part 200.

• The subsection on “Plans and Proposals under Indirect Costs” has been updated with clarifications regarding FTA approval requirements for Cost Allocation Plans or Indirect Cost Rate Proposals as well as for the election of the de minimis indirect cost rate.

• The subsection on “Single Audits” has been updated with additional information on the resolution of audit findings, including provisions for FTA technical advice and counsel.

G. Appendices

FTA proposes revisions to the organization of the various appendices in this circular and the three program circulars it would supersede upon becoming final. Appendices have been moved, relabeled, updated, or removed. The revised structure of the appendices and an overview of major updates is included below:

• Appendix A: Required Prerequisite Documentation

○ This appendix was added to capture guidance for key documents recipients must certify before receiving awards.

• Appendix B: Award Development

○ This appendix was added as a compilation of guidance previously provided across the program circulars. Appendix B is designed to provide instruction for preparing an FTA application, developing an award budget, and information regarding an approved award budget. The appendix covers topics during the pre-application stage, at application submission, for developing an award budget, executing award approvals, a recommended application checklist, and examples related to award management.

• Appendix C: Post-Award Modification

○ This appendix was added as a compilation of guidance previously provided across the program circulars. Appendix C has clarifications for common post-award changes. Post-award changes are primarily made through a revision to the award budget, an “administrative” amendment, or an amendment. The appendix provides enhanced guidance on the requirements for prior approval from FTA and more information on when either a budget revision, administrative amendment, or amendment is appropriate.

• Appendix D: Real Estate Acquisition Management Plan

○ The updates include minor reorganization of information to clarify elements of a Real Estate Acquisition Management Plan.

• Appendix F: Rolling Stock Status Report

○ Updates have been made to the list of elements included in the Rolling Stock Status Report to better align with requirements listed in the body of Chapter IV. FTA proposes minor edits to reflect changes made to the subsection “Replacements at the End of the Minimum Useful Life.”

• Appendix G: Equipment Disposition Scenarios

○ The appendix has been added to consolidate the equipment disposition scenarios previously provided within the body of this circular and the circulars that would be superseded by this circular.

• Appendix H: Cost Allocation Plans

○ Clarifications have been made to the Submission Requirements subsection to incorporate 2 CFR part 200 reference.

○ A section “Cost Allocation Plan Review and Approval” has been added which consolidates the requirements for recipients to submit their Cost Allocation Plan for review and approval.

• Appendix I: Indirect Cost Rate Proposals

○ Clarifying edits have been made throughout to enhance guidance surrounding the requirements for preparation, submission, and FTA approval of Indirect Cost Rate Proposals.

○ References to applicable 2 CFR part 200 requirements have been incorporated.

○ Cost Allocation Plan information has been moved incorporated into Appendix H.

Closing

After a review and consideration of the comments provided on the updates proposed, FTA will publish the updated Award Management Requirements circular (C 5010.1) on its website. On October 5, 2023, the Office of Management and Budget (OMB) published a notice of proposed rulemaking (NPRM) in the Federal Register to revise 2 CFR part 200 and other OMB guidance for grants and agreements (88 FR 69390). FTA intends to incorporate any changes in 2 CFR part 200 to the extent OMB issues the final rule before FTA publishes the updated circular.

Nuria I. Fernandez,

Administrator.