FTA Oversight Procedures - Federal Transit Administration - U.S. ...

selection of project delivery method, such that the likelihood of success is optimized. A companion
operational procedure, OP‐40, additionally contains provisions designed to discover, analyze, and
suggest approaches toward project delivery methods and contracting strategies that will ultimately
assist in the delivering the most successful project.
The fundamental principles involved in the OP‐35 contractual risk review is that risks should be
allocated among the parties in proportion to their ability to manage the risks and absorb the
consequences; that any transfer of risk to a third party is done so on an equitable basis of
compensation given for risk accepted; and that risk remaining with the Grantee is fully recognized
and an effective risk response plan has been developed.
The Grantee’s project delivery methods and contracting plans, including its proposed terms and
Conditions, should offer a holistic approach to ensuring that all forms of third party compensation,
especially non‐competitive, negotiated compensation, is aligned with the principles above and
actively supports successful implementation of the project.
3.0 OBJECTIVES
FTA’s programmatic objective in the delivery of OP‐35 products is to obtain the PMOC’s
recommendations as to the minimum contingency balances required to ensure completion of the
Federally assisted project, as well as obtain characterizations and recommendations of
contractually‐allocated risks. These products deliver inputs critical to the development of OP‐40
project strategy products that in turn support FTA’s achievement of its enterprise objectives.
4.0 REFERENCES
The statutes, regulations, policies, guidance documents and circulars in OP 01 Administrative
Conditions and Requirements apply.
5.0 PROJECT SPONSOR SUBMITTALS
The PMOC shall obtain appropriate documentation to adequately investigate the project and
complete the work described herein; such documentation may include the Project Cost Estimate,
FFGA Baseline Cost Estimate (BCE) line items, project schedules, management plans, contracting
plans, and other documentation as required.
6.0 SCOPE OF WORK
Subject to the issuance of individual work orders, FTA may require the PMOC to perform the
following subtasks as part of the products or services delivered under this guidance.
Such work orders may reconfigure parts of the subtask deliverables, add sub deliverables, or
otherwise accommodate development of project strategies inclusive of contingency management
baselines, periodic reviews or “refreshments”, specialized quantitative capacity modeling or
assessments, surveillance reporting and trends analyses.
The requirement for contingency in the Grantee project may change as project implementation
proceeds and information becomes available. Therefore, throughout the project lifetime, such work
OP 35 Project Contingency and Contract Package Review
Revision 0, June 2008
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