DOT 4600.17A

1. PURPOSE. This Appendix provides departmental guidance

2. BACKGROUND. Section 6301 of 31 U.S.C. provides standards that agencies are required to use in selecting among contracts, grants or cooperative agreements. The intent is to prescribe uniform criteria to assist agencies in distinguishing differences between the legal instruments based on the Federal purpose in the relationship. It does not convey new authority to make assistance awards independent of agency program legislation.
   A contract is used when the principal purpose of a transaction is to acquire property and services for direct DOT use.  A grant or a cooperative agreement is used when the principal purpose is to transfer funds or resources to assist recipients in acquiring property or services to carry out a public purpose of support or stimulation.  Generally, grants are used where there is less specific Federal supervision and oversight of project activities.  Cooperative agreements are used when there is substantial involvement by the granting agency in grant project activities.
   Often, funds are provided for direct DOT use which are in turn provided to a third party.  The choice of instruments in this type of transaction depends solely on the purpose of the transaction.  If the intent is to acquire property or services to carry out a DOT program function, a contract is required.  If the intent is to assist the recipient to carry out its functions, a grant or cooperative agreement is appropriate.

3. REQUIRED ACTIONS. Each operating administration or secretarial office that awards contracts, grants, or cooperative agreements shall:
   • Determine whether there exists substantive authority to award a grant or cooperative agreement.  If such authority exists, determine whether the principal purpose of a transaction is to acquire property and services for direct DOT benefit or use, or to transfer funds to assist recipients in accomplishing public purposes.

   • Award and administer each of the legal instruments in accordance with the appropriate directives.
     1. Contracts will be awarded and administered in accordance with the provisions of the Federal Acquisition Regulation (FAR), the Transportation Acquisition Regulation (TAR), the Transportation Acquisition Manual (TAM), and other DOT directives covering contracting activities.

     2. Grants and cooperative agreements with units of State and local governments will be awarded and administered in accordance with OMB Circular A-102 and 49 CFR part 18.

     3. Grants and cooperative agreements with universities, hospitals, and other nonprofit organizations will be awarded and administered in accordance with OMB Circular A-110 and 49 CFR part 19.

     4. Grants and cooperative agreements with for-profit organizations will be awarded and administered in accordance with applicable program procedures. The use of 49 CFR part 19 is encouraged.

   • Obtain the maximum competition practicable in awarding grants or cooperative agreements whenever discretion is permitted in selecting recipients.
     1. Grant program announcements must include, at a minimum, a Federal point of contact, information on eligibility requirements, application procedures, proposal evaluation criteria, special award selection factors (if any), and terms and conditions of the awards.

     2. The public must be provided with an advanced notice in the Federal Register, or other appropriate means, of intended funding priorities for all discretionary assistance programs or projects, unless funding priorities are established by statute.  Whenever time permits, the public shall be provided an opportunity to comment on intended funding priorities.

     3. Selection of all discretionary projects shall include an explanation of how the projects were selected based on the funding priorities established.  Decisions not to fund projects with the highest priority shall be documented.

     4. All discretionary project selections must be reviewed by a policy official.

   • Unless congressionally directed or when awards are made to State or local governments, when competition has not been sought, a justification shall be prepared.  The justification shall include the basis for not competing the award and a rationale for selecting the grantee.  Justifications must be approved by the operating administration's Administrator or Secretarial Officer or a designee.  Suggested guidelines for levels of approval are contained in the FAR subpart 6.304 and the TAM subpart 1206.304.

   • As required by Section 316 of the Federal Property and Administrative Services Act of 1949, as amended, 41 U.S.C. ' 266, new awards for research, development, test or evaluation must be based on merit-based selection procedures.  This section provides that a provision of law may not be construed as requiring a new grant to be awarded to a specified non-Federal government entity unless that provision of law specifically refers to Section 316, identifies the specific entity involved, and states that the award is required by law in contravention of the policy set forth in Section 316.