FTA recently revised its rules regarding contract limits. What contracts are eligible for exemption from the five-year contract limitation?
A. The five-year contract term limitation for FTA-funded contracts, including “revenue contracts,” awarded by grant recipients has been rescinded. Revenue contracts are those that utilize FTA-funded real estate, equipment and facilities to generate revenue. With this rescission, grant recipients no longer need to obtain FTA approval for contract terms exceeding five years. Please note, however, that contracts for rolling stock and replacement parts are still limited to not more than five years, as required by statute. (49 United States Code Section 5326(b)) Grantees are expected to continue to be judicious in establishing and extending their contract terms. Good procurement practice dictates that grantees enter into contract terms no longer than minimally necessary to accomplish the purpose of the contract.
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