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Financial Capacity Assessments and Financial Assessments for New Starts and Small Starts projects

Solicitation Number: FTA-13-0238
Agency: Department of Transportation
Office: Federal Transit Administration (FTA)
Location: Federal Transit Administration HQ
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FTA-13-0238
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Sources Sought
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Added: Apr 03, 2013 3:04 pm
   

This sources sought is for market research and planning purposes only (THIS IS NOT A SOLICITATION); it is not to be construed as a commitment by the Government. A contract may not be awarded as a result of this sources sought. The Department of Transportation (DOT), Federal Transit Administration (FTA), on behalf of Federal Transit Administration, Office of Planning and Environment, through this sources sought the FTA is gathering source information on who could provide services to conduct Financial Capacity Assessments and Financial Assessments for New Starts and Small Starts projects. The capability package for this sources sought/market research  is not a solicitation, a request for proposal, or request quote, but rather specific, detailed information regarding the company's existing experience in relation to the areas specified in the requirements stated below. Respondents who simply submit a standard brochure of its company capabilities may not qualify.


Background and Purpose 


The Moving Ahead for Progress in the 21st Century (MAP-21) stipulates that the Secretary of Transportation must make a number of determinations before a grant or loan can be made for the construction of any project seeking Section 5309 New Starts funds.  These determinations require that the planning process generate credible information on project costs, ridership, financing, and environmental impacts.   49 U.S.C. Chapter 53 Section 5309 contains criteria for determining whether New Start projects are eligible for funding. The Office of Planning and Environment (TPE) assesses New Starts projects to verify that requirements for eligibility for New Starts funding have been met. 


 


TPE assesses individual projects to insure that: a) the project meets the New Starts project justification criteria; b) the project is supported by an acceptable degree of local financial commitment, including evidence of stable and dependable funding sources to construct, maintain, and operate the current system and proposed new service; and, c) that any proposed project considered for Section 5309 New Starts funds has meet all requirements for National Environmental Protection Act (NEPA) processes and environmental documentation and that impacts are properly assessed, documented, and mitigated.  FTA uses this information to recommend Section 5309 New Starts funds for the projects with the greatest merit.


 Scope and Objectives 


The purpose of this procurement is to obtain contractor support to conduct detailed Financial Capacity Assessments (FCAs) and Financial Assessments (FA) for projects seeking Section 5309 New Starts and Small Starts funds.  FCAs and FAs entail a review of the financial condition and capacity of the sponsoring agency considering a New Starts investment, and the level and stability of local financial commitment towards the project.  The FCA and FA also considers the grantee's system-wide financial capacity, assessing future operations and infrastructure maintenance needs, as well as requirements to replace capital assets on a regular basis.


 


For all tasks, the contractor shall assist FTA in providing transit finance technical assistance to the project sponsor with regards to identified deficiencies and provide the associated procedural guidance.  These tasks enable the Office of Planning and Environment to meet the requirements of MAP-21 to provide oversight of planning for New Starts and Small Starts transit projects.


 


Tasks


Task 1:  Financial Capacity Assessment


FTA intends to perform FCAs on New Starts projects at the end of Engineering as an input to FTA's decision on whether to allow the project to receive an FFGA (Full Funding Grant Agreement).  This assessment is referred to as the "5309 New Starts FCA report" and includes evaluation and rating of the project against the New Starts financial criteria. 


 


The FCA report is to be conducted in accordance with FTA's Guide for Conducting Financial Capacity Assessments.  The contractor will review documents submitted by the grantee to determine compliance with FTA's Guidance for Transit Financial Plans (http://www.fta.dot.gov/documents/Guidance_for_Transit_Financial_Plans.pdf) and the Financial Planning for Transit chapter of FTA's Procedures and Technical Methods for Transit Project Planning  (http://www.fta.dot.gov/12304_2396.html).  In addition, the contractor shall utilize FTA's Financial Contractor Guidelines and Standards (http://www.fta.dot.gov/documents/tpeNewStarts_20070600_guidelinesForFinancialAssessment.pdf) to prepare a New Starts financial rating for the project. 


 


The contractor shall determine whether the grantee has the financial capacity to:



  • deliver its non-Federal Share of funding;

  • operate and maintain its existing transit services, including meeting capital rehabilitation and replacement requirements; and

  • complete project construction by the revenue operations date, including an analysis of the cash flow and timing of receipt of funds.


 


At a minimum, the FCA must address the following:



  • financial condition and capacity of the sponsoring agency, including the reliability of the funding partners;

  • the grantee's future revenues, commitments, contingencies, liabilities and associated risks;

  • the grantee's financial capability to operate the existing system before and after the major investment project;

  • the grantee's capability to fund the project along with other capital requirements while continuing to operate and maintain its existing transit system; and

  • the adequacy of the project sponsor's financial plan, including the reliability and internal consistency of budgeting and planning processes.


 


The FCA includes the following analyses:



  • Review the appropriate financial documents in accordance with FTA Guidelines;


•·         Review the grantee's financial planning model and assess the adequacy of the methodology;


•·         Analyze capital and operating budgets for evidence of a stable and reliable revenue base to support the project.  Evaluate the potential for significant commitments, contingencies and conditions that may lead to unforeseen cost increases;


•·         Review the Transportation Improvement Program (TIP) to ensure it accurately reflects the project cost and proposed funding sources;


•·         Review the reasonableness of revenue projections and underlying assumptions.  This will include a review of key economic indicators typically used in the community.  Emphasis will be placed on the driving variables associated with the revenue sources that will support existing operations, the New Starts project, and other capital requirements;


•·         Review the project sponsor's bond program.  Review any outstanding bonds and plans for future financings.  Verify the reasonableness of the assumptions and the grantee's capacity for servicing the debt;


•·         Assess the status of funds in the financial plan;


•·         Review funding partner participation and disclose any issues or risks affecting the funding;


•·         Perform sensitivity testing to assess the impact of risks faced by the grantee;


•·         Identifying any risks to the financial plan and the reasonableness of any risk mitigations offered by the Sponsor. 


 


 


The FCA includes the following steps:


Desk Review


The FCA contractor will begin data gathering with a visit to the FTA regional office, generally referred to as a desk review.  The contractor shall interview FTA staff in the regional office and the New Starts team members at FTA headquarters to gain an understanding of the grantee.  In addition, background data should be obtained from FTA files including:


•·         Previous financial assessments of the grantee/project;


•·         Previous FMO findings;


•·         Audit reports, if available, including General Accounting Office or Office of the Inspector General audits;


•·         Electronic and paper correspondence between FTA and the grantee;


•·         Project Management Oversight (PMO) quarterly reports;


•·         NTD data; and


•·         Grant records as necessary.


 


Grantee Site Visit


After completion of the desk review, a site visit of the project sponsor should be conducted in accordance with FTA's Guide for Conducting Financial Capacity Assessments.  During the site visit, the contractor shall:


•·         Establish and transmit the agenda;


•·         Hold an entrance conference to instruct the grantee on the FCA process;


•·         Hold technical discussions with grantee staff as appropriate;


•·         Gather information/documentation to inform contractor; and


•·         Hold an exit conference including a discussion of next steps, establish points of contact, etc.


 


Prepare Draft FCA report


After analyzing the information obtained from the desk review and grantee site visit, the contractor shall prepare a draft FCA report for FTA (including the New Starts rating).  The financial plan, sensitivity analysis and stress scenarios should be included as attachments to the report. 


Prepare Final FCA report


Prepare a final FCA report for FTA incorporating feedback and edits from FTA.


 


Meetings/Conferences


•·         Contractor shall meet with FTA Headquarters, the FTA Regional Office, and the Program Management Oversight Contractor (PMOC) at the start of the effort and at any other time as necessary;


•·         Contractor shall coordinate questions and difficulties with the FTA Headquarters and Regional Office;


•·         Contractor may be requested to participate in FTA meetings and teleconferences on short notice.


 


Task 2: Financial Capacity Assessment Refreshes


The FCA contractor continues to follow the project throughout its life cycle after issuing the initial FCA.  Additional reports are sometimes required prior to award of the FFGA if the financial plan changes, and in some cases after construction has begun if issues arise.  For mega-projects (those with a capital cost of more than $1 billion), annual refreshed reports are required.  Hence, the contractor performs ongoing monitoring after completion of the initial FCA report.


 


Task 3: Financial Assessments for Engineering Approval and Annual Report on New and Small Starts


 


FTA approval to initiate Engineering is a requirement that occurs upon completion of Project Development.  Engineering approval may occur at any time during the year.  Financial assessments for Engineering approval usually require collection, organization and analysis of data substantiating the project sponsor's local financial commitment and financial capacity to undertake the proposed New Starts or Small Starts project.  Considerable discussion and other assistance may be required with the project sponsor to ensure the accuracy and completeness of the financial plan submission.   The same report is done for the Annual Report (see below for annual refreshes once initial report is completed). 


 


 


•1.       The contractor shall conduct financial assessments of projects seeking FTA approval to initiate the Engineering phase, ensuring that financial data is commensurate with the conceptual engineering developed at this stage.  The contractor shall examine both capital and operating financial data, as well as underlying planning assumptions, pertaining to the proposed New Starts project and the entire transit system.  FTA may authorize a contractor site visit for the assessment. 


 


•2.       The contractor shall review the financial plan and cash flow statement submitted by the project sponsor and its financial partners for compliance with the Guidance for Transit Financial Plans and the Financial Contractor Guidelines and Standards provided by FTA.  The contractor shall prepare a financial assessment that provides FTA with a determination of the project sponsor's local financial commitment.   The assessment shall consider the reasonableness of the proposed financial plan, the reasonableness of project sponsor's plan to secure funding commitments, the project sponsor's capacity to incur the proposed level of financing, and the internal consistency of the financial and planning assumptions. Under special circumstances, FTA may request that the financial analysis include a capital market analysis and/or development of various stress tests.  The contractor shall independently verify all supporting documentation


 


•3.       The contractor shall submit a draft project assessment for FTA review that includes recommendations for corrective action.  The contractor shall also submit a final project assessment incorporating FTA's comments and responding to FTA's questions or concerns.   FTA may schedule a meeting with the contractor to discuss findings and results.


 


•4.       This type of financial assessment may also serve as the FTA annual evaluation of New Starts projects, contingent upon task schedule, as described previously.


 


•5.       The contractor shall participate in meetings for oversight technical coordination: (1) to discuss schedules, plans, activities and requirements prior to initiating the annual evaluation of New Starts projects; (2) to review and discuss draft assessments with TPE staff; (3) to provide feedback on the annual evaluation process; and (4) as otherwise determined by FTA.  Travel for these purposes will be authorized separately, as needed.


 


Task 4: Financial Assessment Refreshes for Annual New Starts and Small Starts Report


 


The FTA annual New Starts evaluation is conducted in Summer/Fall of each year for all projects in either the PD or Engineering stage of development.  Projects evaluated for Engineering within approximately three (3) months prior to the annual evaluation will not be reevaluated, unless determined to be warranted by FTA.  Usually, multiples of these assessments are assigned at a time, and require approximately 3-4 week review periods concurrently. Therefore, the ability to staff multiple projects concurrently is important.  In addition to verifying of previous review's accuracy, the following should be included:  



•1.       The contractor shall identify and verify any changes made to the financial plan or with the project sponsor's financial status/condition if a previous assessment was performed.  The contractor shall assess and report the implications of these changes. 


 


•2.       The contractor shall submit an updated project assessment for FTA review that includes recommendations for corrective action.  The contractor shall also submit a final project assessment incorporating FTA's comments and responding to FTA's questions or concerns.   FTA may schedule a meeting with the contractor to discuss findings and results.


 


•3.       The contractor shall participate in meetings for oversight technical coordination: (1) to discuss schedules, plans, activities and requirements prior to initiating the annual evaluation of New Starts projects; (2) to review and discuss draft assessments with TPE staff; (3) to provide feedback on the annual evaluation process; and (4) as otherwise determined by FTA.  Travel for these purposes will be authorized




Task 5: Core Capacity Financial Analysis



This financial review and rating is very similar to the Financial Assessment for entry to Engineering described above.   However, the process will not be focused on new capital projects, but rather on updating existing capacity and services.  This rating will require review of current operations and the improvements the project expects to make.  Asset reviews and a determination of a State of Good Repair (SOGR) compliance will be essential.  In addition, the contractor shall utilize FTA's Financial Contractor Guidelines and Standards (http://www.fta.dot.gov/documents/tpeNewStarts_20070600_guidelinesForFinancialAssessment.pdf) to prepare a New Starts financial rating for the project.  We expect to only assign these reports on an as needed basis. 




Task 6: Special Assignments as Needed


The contractor may be asked to provide assistance on special assignments in connection with the New Starts program.  This may include, but is not limited to, technical assistance to grantees, development of informational materials related to the FCA process, updating FCA tools and guidance, program summary reports, etc.


 


The following technical assistance tasks are additional requirements that may be assigned by FTA as needed.  TPE will provide the contractor notification if and when assignment of an additional task is to be made.  Additional task assignments are not guaranteed.


 


 


6.1 The contractor shall conduct detailed financial assessments for selected cities and designated metropolitan areas in which complex or multiple new starts projects are proposed.  FTA will require no more than 5 of these assessments per year, to be distributed among participating contractors. The financial assessment will determine whether the shared resources of regional participants are sufficient to undertake the collection of New Starts projects being proposed.  Data collected will be analyzed to determine the probable range and degree of major transit investments that can be undertaken given regional fiscal constraints, local financial commitment, and institutional arrangements.  Site visit(s) may be required.  Specific instructions will be provided with each assignment under this Task Order.


 


6.2 The contractor shall review previous financial assessments of affected new starts projects, financial plans submitted by regional transportation providers and other participants, project/system management materials, and other data collected.  This financial assessment will provide a comprehensive examination of financing strategies to undertake complex or multiple major transit investments, regional capacity to incur debt, institutional relationships, and transportation network impacts of transportation financing partnerships, especially as they impact the local transit system(s).  The contractor shall address specific issues of the selected city/sponsor or metropolitan area identified by FTA.


 


6.3 The contractor shall submit a draft financial assessment for FTA review and comment for each assigned city or metropolitan area.  A final financial assessment shall be submitted incorporating FTA's comments and responding to FTA's questions or concerns.


  


6.4 The contractor shall provide technical assistance to FTA to correct systemic or recurring programmatic deficiencies identified with financial compliance reviews in areas such as financial planning, program guidance, technical procedures, and cost methodology.  Assignments under this Task Order will describe in detail the technical assistance required, specific instructions and formats, deliverables and schedule.  Examples of this task are:


 


•·         Development/refinement of financial evaluation measures and standards used in FTA's New Starts program;


•·         Development of technical guidance for transit properties pertaining to required financial methodologies;


•·         Analysis of capital and/or operating cost methodologies of a project sponsor;


•·         Development of deficiency correction materials for use in FTA's New Starts program;


•·         Presentation of outreach and training efforts to ensure program deficiency corrections; and


•·         Expanding on recommendations and findings from previous reviews and providing iterative reviews of revised materials submitted by grantees as corrective actions.


 


6.5 The contractor shall ensure that program criteria, parameters and measures are practicable and developed based upon professional judgment and program requirements.


 


Personnel Requirements


 


Managing Director: Responsible for all aspect of resources allocation and management, task deliverable, quality control, and task performance requirements.  Participation and full knowledge of projects is expected for interactions with FTA and the project sponsor. Ability to manage multiple projects at a time in time constrained situations. 


 


Job Qualification: Bachelors degree or Masters Degree in business and/or finance with at least 10 years (with a MBA) or 15 years (with Bachelors) experience in the planning, development, or evaluation of transportation capital project financial plans.  Experience in transit is highly preferred.   Demonstrate analytical capabilities and clear writing skills.  Responsible for interaction with transit agencies and project sponsors on technical issues, providing analytical report and assistance to senior government officials on related issues.


 


 Sr. Financial Analyst:  Provides specific experience in transportation financial forecasting and evaluation, transportation planning, complex funding source analysis, capital and O&M cost analysis, and research activities. Responsible for all aspect of resources allocation, budget development, task deliverable, quality control, and task performance requirements. 


 


Job Qualification: Bachelors degree or Masters Degree in business and/or finance with at least 10 years (with a MBA) or 15 years (with Bachelors) experience in the planning, development, or evaluation of transportation capital project financial plans.  Experience in transit is highly preferred.   Demonstrate significant experience with the key characteristics of transit financial plans and their development, including the development of financial forecasts and the models associated with them.  The ability to analyze crucial variables/assumptions in a financial model and run sensitivity analyses to determine effects is key.  Demonstrate analytical capabilities and clear writing skills.  Responsible for interaction with transit agencies and project sponsors on technical issues, providing analytical report and assistance to senior government officials on related issues.  Record of time/resource management and meeting deadlines is essential.


Financial Analyst: Assist in data review, data compilation, financial model development and evaluation.  Provides assistance in transportation financial forecasting and evaluation, transportation planning, complex funding source analysis, capital and O&M cost analysis, and research activities.


 


Job Qualification: Bachelors degree in finance, transportation or planning with experience in the planning, development, or evaluation of transportation capital project financial plans.  Experience in transit is preferred.   Record of effective time/resource management and meeting deadlines is essential. 
 


All social economic categories will be accepted. If an award is made in the future the anticipated NAICS code is 541611 which would be designated for this procurement, but interested parties are encouraged to submit a more suitable NAICS Code along with their capability packages. The capability package should contain the following information: your company's name, point of contact (POC), address, phone number, DUNS number, your business size under the above NAICS code or your suggested NAICS code(small business or large business), if you are considered a small business identify your small business social economic category (for example: Small Business (SB), Small Disadvantage Business (SDB), HUBZone), if you are on the GSA schedule list your GSA contract # and schedule, and your capability statement. Capability package must not exceed 12 pages and must be submitted electronically.  All of the requested information should be sent to the POC Alexander.Miller@dot.gov by 2:00 pm EST on April 18, 2013.

Added: Nov 12, 2013 7:08 pm
This sources sought has resulted in a request for proposal (RFP). The RFP package can be found under solicitation number: DTFT6014R00001.
:
1200 New Jersey Avenue, SE
Washington, District of Columbia 20590
:
Alexander Miller
Phone: 2023665217