AIP Handbook: Chapter 3
Chapter 3. What projects can be funded?
Section 1. List of 16 Requirements for Project Funding.
3-1. List of 16 Requirements for Project Funding.
A project must meet the 16 general requirements listed in Table 3-1 in order for the ADO to consider it for AIP funding. The ADO must not approve projects that do not meet these requirements. The remaining sections of this chapter discuss each of these 16 general requirements in greater detail.
| The general requirements are… | As found in… |
|---|---|
| a. Is the project eligible? | Section 2 |
| b. Is the project justified? | Section 3 |
| c. Is the project on airport property (with good title)? | Section 4 |
| d. Is the project on the FAA approved airport layout plan? | Section 5 |
| e. Has the sponsor satisfied the intergovernmental review and airport user consultation requirements? | Section 6 |
| f. Has the FAA completed an environmental finding for the project? | Section 7 |
| g. Will the project result in a usable unit of work? | Section 8 |
| h. Will the project be planned, designed, and/or constructed to FAA standards? | Section 9 |
| i. Has the project been procured correctly? | Section 10 |
| j. Are the project costs allowable? | Section 11 |
| k. Are the project costs necessary to accomplish the project (Allowable Rule #1)? | Section 12 |
| l. Were the project costs incurred after the grant was executed (Allowable Rule #2)? | Section 13 |
| m. Are the project costs reasonable (Allowable Rule #3)? | Section 14 |
| n. Is this the only federal grant containing these project costs (Allowable Rule #4)? | Section 15 |
| o. Are the project costs within the allowable federal share (Allowable Rule #5)? | Section 16 |
| p. Can the project be completed without unreasonable delay? | Section 17 |
Section 2. Project Eligible.
3-2. The Act Establishes the General Types of Eligible Projects.
The Act identifies the general types of projects that may be funded with AIP, which are airport planning, airport development, noise compatibility planning, and noise compatibility projects (see 49 USC § 48103).
Only these types of projects are eligible and can be funded. The Federal Appropriations Law prohibits the ADO from funding ineligible projects (as discussed in Paragraph 1-10). If this Handbook does not list a project as eligible, the ADO must receive an eligibility determination from APP-500 in order to proceed with the project. This effort will maintain consistency on a national basis.
However, just because a project is eligible under the Act, it does not mean that the ADO can fund the project. The project must meet the other requirements further outlined in this chapter.
3-3. Project Requirement Tables (in the Appendices by Project Type).
The tables in the appendices contain project specific requirements for projects that are eligible under the Act. These tables have been broken out into the appendices for ease of use. ADOs must not use these appendices independently. They must also apply the 16 general project requirements outlined in this chapter to determine if a project can be funded with AIP.
3-4. Prohibited Project and Unallowable Cost Tables.
Appendix C contains tables that the ADO can use to help determine if the FAA has previously identified a project or cost to be ineligible or unallowable.
3-5. Only Specific Equipment is Eligible under the Act.
49 USC § 47102(3) lists the specific pieces of equipment eligible under AIP. No other pieces of equipment (including associated computer hardware or software for the equipment) are eligible unless AAS-1 has made a written determination that the equipment will contribute significantly to airport safety or security.
3-6. Eligibility of Maintenance, Rehabilitation, Reconstruction, and Replacement Projects.
These concepts cause much confusion. The goal for all of the actions above is to obtain a functioning unit as the final outcome. What differentiates these concepts is the level of effort and the resulting change in useful life. As the work effort for a category increases, the question of whether the work belongs in the category surfaces (for example, determining when timely maintenance is actually rehabilitation.) As a result, the conclusion of which category the project falls into rests with the specific circumstances. Table 3-2 explains the differences between these concepts and Table 3-3 provides eligibility examples.
| Item | Explanation | Eligibility |
|---|---|---|
| a. Maintenance (including minor repair) | Maintenance includes any regular or recurring work necessary to preserve existing airport facilities in good condition, any work involved in the care or cleaning of existing airport facilities, and any incidental or minor repair work on existing airport facilities. Minor repair is a stopgap measure taken by a sponsor to keep a facility operational until the sponsor can complete a rehabilitation, reconstruction, or replacement project. Replacing individual parts and mending portions of a facility are considered minor repair. |
Maintenance work is not airport development as defined in the Act. Therefore, it is not eligible for AIP funding except for one specific situation. 49 USC § 47102(3)(H) provides the exception for routine runway, taxiway, or apron pavement maintenance at nonhub primary airports and nonprimary airports. The eligibility of maintenance under 49 USC § 47102(3)(H) is limited to pavement maintenance of runways, taxiways and aprons for nonhub primary airports and nonprimary airports. Typical runway, taxiway, or apron maintenance includes routine cleaning, filling, and or sealing of longitudinal and transverse cracks; grading pavement edges; maintaining pavement drainage systems; patching pavement; and remarking pavement areas. |
| b. Rehabilitation | Rehabilitation is a more comprehensive restoration of an original functionality that results in a piece of pavement, piece of equipment, or building with a useful life of at least 10 years, or half of the useful life per Table 3-7, whichever is less. This approach deals with the facility or item as a whole and is more far-reaching than the minor repair discussed under maintenance. | Rehabilitation is generally eligible (but must still be justified). |
| c. Reconstruction | Reconstruction is a complete restoration of an original functionality that results in a virtually new piece of pavement, piece of equipment, or building with a use life as listed in Table 3-7. | Reconstruction is generally eligible (but must still be justified). |
| d. Replacement (including replacement of damaged equipment) | Replacement is building a complete new facility or replacing a whole new piece of equipment that has reached the end of its useful life. | Replacement is generally eligible (but must still be justified) provided; (1) The facilities or equipment was destroyed, become obsolete, worn out, or otherwise deemed inoperable through no fault of the sponsor under normal use. An example of this may be replacement of EMAS panels that were destroyed by an aircraft, only if the sponsor can prove that there is no other avenue, such as insurance, for funding the replacement. (2) The sponsor has determined that there are no other avenues for replacement (such as through insurance or by another federal agency responsible for such disasters). |
| The following project of… | Is considered… | And is… |
|---|---|---|
| a. Applying a herbicide on cracks in asphalt pavement | Maintenance | Not eligible at any airport |
| b. Changing fluid on a scheduled basis to keep a vehicle’s engine and parts functional | Maintenance | Not eligible at any airport |
| c. Mowing the airfield grass | Maintenance | Not eligible at any airport |
| d. Sweeping airfield pavement | Maintenance | Not eligible at any airport |
| e. Re-topping trees for approach protection if this work was previously completed in an AIP grant | Maintenance | Not eligible at any airport |
| f. Replacing airfield light bulbs | Maintenance | Not eligible at any airport |
| g. Replacing runway lighting fixtures due to snow plow damage | Maintenance | Not eligible at any airport |
| h. Replacing a component of an existing eligible equipment or system. Examples include replacement of a regulator for an airfield lighting circuit; replacement of a transmission in an Aircraft Rescue and Firefighting (ARFF) truck; and replacement of a sensor for an AWOS system. | Maintenance | Not eligible at any airport |
| i. Replacing carpeting (or other flooring, such as tiles or terrazzo), painting, wall coverings, doors or ceiling tiles in a terminal not required as a result of an eligible terminal project | Maintenance | Not eligible at any airport |
| j. Replacing public-use seating (including fixed tables and counters) in a terminal that is bolted or affixed to the terminal wall or floor, if the replacement is not associated with a larger terminal project. | Maintenance | Not eligible at any airport |
| k. Replacing small sections of roofing in terminals and airport buildings | Maintenance | Not eligible at any airport |
| l. Replacing faded sign panels | Maintenance or incidental costs, depending on the situation | See Paragraph J-3 for details. |
| m. Minor work or repair on a turf or aggregate runway | Maintenance | Eligible at a nonhub primary airports or nonprimary airport (subject to adequate justification) |
| n. Performing spall repair, crack sealing, or repair of a small portion of the total taxiway, runway or apron pavement | Maintenance | Eligible at a nonhub primary airports or nonprimary airport (subject to adequate justification) |
| o. Applying seal coats or slurry seal, or resealing of joints for a major portion of a taxiway, runway or apron pavement | Rehabilitation | Eligible at any airport (subject to adequate justification) |
| p. Rehabilitation of a turf or aggregate runway | Rehabilitation | Eligible at any airport (subject to adequate justification) |
| q. Replacing panels and replacing all joint seal material on concrete pavement to obtain at least 10 years of useful life | Rehabilitation | Eligible at any airport (subject to adequate justification) |
| r. Milling and repaving an apron to obtain at least 10 years of useful life | Rehabilitation | Eligible at any airport (subject to adequate justification) |
| s. Completely renovating the terminal restrooms | Rehabilitation | Eligible at any airport (subject to adequate justification) |
| t. Performing lid rehabilitation for Engineered Material Arresting System (EMAS) blocks installed with AIP funds prior to fiscal year 2007 (after fiscal year 2007, the manufacturer began fully encasing the blocks, eliminating the need for lid replacement) | Rehabilitation | Eligible at any airport (subject to adequate justification) |
| u. Bringing a runway down to its subgrade and completely repaving it | Reconstruction | Eligible at any airport (subject to adequate justification) |
| v. Replacement of sign panels required by a change in airfield geometry or new sign panel specifications | Replacement | Eligible at any airport (subject to adequate justification) |
| w. Purchasing an ARFF vehicle to replace one paid for with AIP funding | Replacement | Eligible at any airport (subject to adequate justification) |
| x. Replacement of damaged Engineered Material Arresting System (EMAS) panels that were damaged by an aircraft and the sponsor can prove that there is no other avenue for funding the replacement, such as the aircraft owner’s or sponsor’s insurance | Replacement | Eligible at any airport (subject to adequate justification) |
| y. Replacement of terminal escalators | Replacement | Eligible at any airport (subject to adequate justification) |
3-7. Difference between AIP and Passenger Facility Charge (PFC) Eligibility.
While closely related, there are differences between project eligibility between AIP and the PFC program. These differences are discussed in the current version of FAA Order 5500.1, Passenger Facility Charge.
Section 3. Project Justified.
3-8. Three Basic Tests for Project Justification.
The ADO must apply the three basic tests in Table 3-4 to determine if a project is justified. The ADO must not fund projects or project elements that are not justified based on the following three tests. Table 3-5 contains examples where one or more of the following tests are not met.
| The three basic tests to determine if a project is justified are… |
|---|
| a. The Project Advances an AIP Policy. The ADO must verify that the project advances at least one of the AIP policies contained in 49 USC § 47101. The basic goals and objectives in these policies include airport safety, airport security, airport capacity, meeting an FAA standard, preserving airport infrastructure through reconstruction or rehabilitation, protecting and enhancing the environment, minimizing aircraft noise impacts, and airport planning. AIP funds must not be used for a project that does not specifically advance one of the AIP policies. |
| b. There is an Actual Need. Per FAA policy, the ADO must determine if there is an actual need for the project at the airport within the next five years (per the definition near-term development per the current version of Advisory Circular 150/5070-6, Airport Master Plans). This includes all subcomponents of the project. |
| c. The Project Scope is Appropriate. The ADO must determine that only the elements that are required to obtain the full benefit of the project are included in the project scope. Any elements that do not meet these criteria must stand on their own separate merit and justification. The current version of FAA Order 5100.39, Airports Capital Improvement Plan, discusses this concept in further detail in the discussions on overall development objective. |
| For the following situation… | Is not justified because… |
|---|---|
| a. A sponsor has a runway shown on their ALP and would like to build it to increase capacity. However, the airport already has adequate capacity and will continue to have adequate capacity in the foreseeable future. | This project does not advance an AIP policy. The actual need does not exist. |
| b. A sponsor would like to build a runway extension to attract a new class of aircraft or for marketing purposes. In this case, the need is speculative and not based on documented future need. | The actual need does not exist. |
| c. A sponsor would like include dorm rooms and day rooms in an ARFF building expansion for an airport with a class of certification that does not require 24/7 ARFF personnel. | This project scope is not appropriate. |
| d. A sponsor would like to replace its existing asphalt pavement with concrete even though the pavement section has existing useful life. | The actual need does not exist. |
3-9. Justification Requirements for Safety and Security Projects.
Safety and security projects are not automatically justified. In all cases, the ADO must review these projects to determine if the project meets the eligibility and justification requirements outlined in this Handbook. Safety and security projects that require additional review by the ADO include, but are not limited to, those listed in Table 3-6.
| Examples of proposals that require additional ADO review for eligibility and justification… |
|---|
| a. A proposal that addresses a14 CFR part 139 violation |
| b. A written recommendation by a 14 CFR part 139 certification inspector |
| c. A proposed runway incursion prevention measure |
| d. A Runway Safety Action Team recommendation |
| e. An item included in an Airport Emergency Plan |
| f. An item included in an Airport Certification Manual |
| g. An item included in a wildlife hazard assessment (or associated wildlife hazard management plan) or wildlife hazard site visit (or associated written sponsor adoption of the site visit recommendations). |
| h. An item included in an airport’s approved 49 CFR part 1542 security program (typically eligible security projects are included in Appendix L and Appendix N and the commonly requested security projects that have been determined ineligible are included in Appendix C). |
3-10. Justification Requirements for Unclassified Airport Projects.
Very-low activity nonprimary airports that are not classified as National, Regional, Local, or Basic airports in the latest edition of the FAA Asset or the latest NPIAS report are designated as unclassified airports. Because these airports are low-activity, the only projects for which these airports are justified are: projects to rehabilitate the airport’s existing primary runway pavement at a frequency not to exceed 10 years; a one-time project to remove obstructions from each end of the primary runway; and runway maintenance projects allowed per 49 USC § 47102(3)(H).
Other projects, including those needed to correct design standards issues, may be considered by the ADO in limited cases where extraordinary justification exists. The ADO must not program these types of projects unless the project has received pre-approval by APP-500. APP-500 provides the current pre-approval process for each fiscal year in an internal Regional Guidance Implementation Memo.
3-11. The Use of Critical Aircraft for Justification.
For some projects, the ADO must determine if a project is justified based on the applicable critical aircraft for the project. More than one critical aircraft may control the design of any specific airport’s different facility features, such as runway length, strength of paved areas or lateral separations in airfield layout. The ADO must use the current version of Advisory Circular 150/5000-17, Critical Aircraft and Regular Use Determination, to determine the critical aircraft for specific projects and airport types. For funding purposes, it is APP-500 policy that the annual operations requirement for critical aircraft must not include military or federally-owned aircraft.
The ADO has the option to determine that a project is justified based on existing activity at the airport or activity that is projected to be at the airport within the next five years. The ADO has the option to require the sponsor to submit letters of support from airport users if the justification is based on projected activity. The letter must describe the airport user’s plans or anticipated activity by the most demanding airplane, or critical aircraft.
3-12. Useful Life Test for Equipment and Facilities.
The useful life of the facility or equipment being rehabilitated, reconstructed or replaced must have been met in order for the project to be funded. The exception is when the ADO has determined that the rehabilitation, reconstruction, or replacement is necessary for safety reasons. Table 3-7 provides a list of minimum useful lives.
Although the minimum useful life of facility, equipment or vehicles may have been met, this does not automatically mean that the rehabilitation, reconstruction or replacement of the item is needed. Simply meeting the minimum useful life does not justify replacing the item if the facility, equipment, or vehicle is performing as intended.
| Project Type | Useful Life |
|---|---|
| a. All construction projects (unless listed separately below) | 20 years |
| b. All equipment and vehicles (unless listed separately below) | 10 years |
| c. Pavement rehabilitation (not reconstruction, which is 20 years) | 10 years |
| d. Asphalt seal coat, slurry seal, and joint sealing | 3 years |
| e. Concrete joint replacement | 7 years |
| f. Airfield lighting and signage | 10 years |
| g. ARFF vehicles | 15 years |
| h. ARFF structural gear (firefighting suits), which has less heat insulation than proximity gear (per the National Fire Protection Association 1971 Standard on Protective Ensembles for Structural Fire Fighting and Proximity Fire Fighting) | 7 years |
| i. ARFF proximity gear (firefighting suits), which is also referred to as slicks, bunker, or turn out gear (per the National Fire Protection Association 1971 Standard on Protective Ensembles for Structural Fire Fighting and Proximity Fire Fighting) | 5 years |
| j. NAVAIDs and Weather Reporting Equipment | 15 years |
| k. Buildings | 40 years |
| l. Land | Unlimited |
| m. Loading Bridges | 20 years |
| n. Fencing | 20 years |
3-13. Benefit-Cost Analysis (BCA) for NAVAIDs and Weather Reporting Equipment.
If a BCA is required for a NAVAID or weather reporting equipment, this requirement is listed in the appendices for that specific project. The ADO must contact APP-500 for the latest tools and procedures for this process.
3-14. BCAs for Capacity Projects Using Discretionary Funds.
A BCA is a tool to determine if a project’s benefits outweigh its costs. If the ADO is considering funding a capacity project with AIP discretionary funding, 49 USC § 47115(d) requires that the FAA review a BCA. It is FAA policy that, as of October 28, 2011, a BCA is only required if the sponsor is requesting more than $10 million in discretionary funding over the life of the project. This is a key change to the detailed BCA preparation guidance contained in the document titled FAA Airport Benefit-Cost Analysis Guidance (see Appendix B for link). A few of the more important highlights from this document are included below.
a. Capacity Project Definition. This definition is included in Appendix A. Except for the two types of projects listed in Table 3-8, it is FAA policy that the ADO must obtain a joint APP-400 and APP-510 concurrence on whether the project is considered capacity and therefore requires a BCA.
| For the following project… | A BCA is… |
|---|---|
| a. Construct a new airport that is not replacing an existing airport of any type or obligation status. | Required. By definition, the airport will create capacity where none currently exists. |
| b. Rehabilitate/reconstruct eligible airfield infrastructure with no increase to the original functionality. | Typically Not Required, although the FAA may require a BCA. Although the FAA Airport Benefit-Cost Analysis Guidance (see Appendix B for link) requires that the FAA make this determination on a case by case basis, the FAA has determined that these projects are cost beneficial and typically do not require a separate BCA. |
b. Associated Work. When preparing the BCA, the sponsor must include all of the development items directly associated with the capacity project in the BCA. The sponsor cannot pull out pieces of the associated work, even if the sponsor believes the associated work is not capacity related, without the express approval of the FAA.
c. Estimates of Future AIP Funding. Since the BCA must occur before the project is planned in detail, the financial analysis may be incomplete, or not detailed enough to identify all the funding sources for the project. A sponsor may be uncertain about its future entitlement funds and is unable to predict accurately the discretionary funds needed to fund the project. In cases like these, the sponsor and the FAA must jointly agree on a reasonable amount of discretionary funding, given the best information available at the time.
d. BCA Process. The BCA process, per FAA policy, is outlined in Table 3-9.
| The BCA process steps include… |
|---|
| a. ADO Notification to Regional Office and APP-500. ADOs must notify the regional office and APP-500 promptly when the ADO determines that a sponsor will be submitting a BCA in the near future. Preliminary information provided to APP-500 must include a general description of the project, the estimated cost, and the project’s justification. |
| b. APP-500 Guidance to Regional Office and ADO. Based on the project, APP-500 will indicate whether a BCA is required and provide the ADO and regional office with the appropriate review method, internal coordination, appropriate samples, and other necessary information. |
| c. Sponsor Preparation of BCA. Sponsors must use FAA Airport Benefit-Cost Analysis Guidance (see Appendix B for link) when preparing a BCA for a capacity project. |
| d. Sponsor Submittal. Sponsors must submit one hard copy and one electronic copy of the BCA to the ADO. Sponsor must submit BCAs far enough in advance of any requested grants or LOI offers in order to avoid potential delays in funding decisions. |
| e. FAA Determination. In most cases, APP-500 will prepare the official FAA determination, which may include internal coordination with other FAA offices, and forward a copy of the official determination to the ADO and regional office. |
| f. ADO Notification to Sponsor. The ADO will send the official FAA determination to the sponsor and will place a copy in the grant file. |
3-15. BCAs for All Other Projects.
The FAA also reserves the option to require a BCA for any AIP funded project, regardless of project type, funding type, or funding amount.
Section 4. Project on Airport Property (with Good Title).
3-16. On-Airport Property Requirements.
As a general rule, projects must be located on airport property (to which the sponsor holds good title). Per FAA policy, off-airport projects are limited to those listed in Table 3-10. As discussed in Table 2-9, leasing from a private entity does not meet the requirements for good title.
| Eligible off-airport projects are limited to… | And the sponsor, at a minimum, must have… |
|---|---|
| a. Removal of obstructions. | An easement or verification of adequate land use controls (such as ordinances or zoning) that would prohibit the obstruction from reoccurring. Easements must be shown on the Exhibit A (property inventory map). The reason the ADO must not issue a grant to remove the obstruction without an easement or land use control is because the obstruction removal needs to be a permanent solution. |
| b. Marking or Lighting obstructions. | An easement or a written agreement. If the sponsor executes an easement, the easement must be shown on the Exhibit A (property inventory map). If the sponsor wants to use a written agreement, the ADO has the option to contact APP-400 to ensure that the written agreement is adequate. The agreement must also transfer the responsibility of maintaining the development to the property owner once the project is complete. |
| c. Outfall drainage ditches. | An easement. The easement must be shown on the Exhibit A (property inventory map). |
| d. Relocation of roads and utilities constituting airport obstructions or to allow eligible airport development. | A written agreement.The sponsor must have a formal written agreement with the property owner that allows the work to be done. The agreement must also transfer the responsibility of maintaining the development to the property owner once the project is complete. |
| e. Installation or relocation of NAVAIDs. | An easement. The easement must be shown on the Exhibit A (property inventory map). |
| f. Construction or installation of eligible utilities. | An easement. The easement must be shown on the Exhibit A (property inventory map). |
| g. Airport waste-water treatment plants. | An easement. The easement must be shown on the Exhibit A (property inventory map). |
| h. Noise soundproofing projects. | A written agreement (property improvements). The sponsor must have a formal written agreement with the property owner that allows the work to be done. The agreement must also transfer the responsibility of maintaining the development to the property owner once the project is complete. |
| i. Noise implementation projects requiring placement of sponsor owned equipment (such as installation of noise monitors). | An easement. The easement must be shown on the Exhibit A (property inventory map). |
| j. Environmental mitigation measures required as a condition of environmental approval for property improvements (such as wetlands replacement). | A written agreement. The sponsor must have a formal written agreement with the property owner that allows the work to be done. The agreement must also transfer the responsibility of maintaining the development to the property owner once the project is complete. |
| k. Environmental mitigation measures required as a condition of environmental approval for placement of sponsor owned equipment (such as installation of noise monitors). | A written agreement. The sponsor must have a formal written agreement with the property owner that allows the work to be done. The agreement must also outline who is responsible for maintaining the project when it has been completed. |
| l. Regional Aircraft Rescue and Firefighting Training Facility | A written agreement. The sponsor must have formal written agreement with the property owner that allows the work to be done. The agreement must also outline who is responsible for maintaining the project when it has been completed. |
Section 5. Project on Airport Layout Plan.
3-17. Airport Layout Plan Requirement.
49 USC § 47107(a)(16) requires that the sponsor must maintain a current airport layout plan (ALP). It also prohibits the sponsor from altering the airport unless the ADO has determined that the project will not adversely affect the safety, utility, and efficiency of the airport. Per FAA policy, the ADO must not program a project that needs to be added to an FAA approved ALP until the sponsor submits a revised ALP and it receives FAA approval.
Therefore, for projects not shown on the approved ALP that are expected to have a significant impact on aeronautical or airport operations, the ADO must advise the sponsor to complete an ALP Update for FAA review and approval.
For projects not shown on the approved ALP that are not expected to have a significant impact on aeronautical or airport operations, the ADO may allow the sponsor to revise their ALP by submitting an aeronautical study. If the aeronautical study does not result in an objection from the FAA, the ADO may accept the ALP revision by issuing a letter to the sponsor that includes a reference of the aeronautical study determination number in the approval letter. If the aeronautical study results in an objection from the FAA, then the sponsor must revise the scope of the project as necessary to address the objection, and submit another aeronautical study. The ADO must not program the grant until an acceptable aeronautical study is complete. In addition, the ADO must then require the sponsor to submit a revised ALP as a condition of closing the grant.
In limited cases where directed by APP-500, the ADO may program the project without the above ALP or aeronautical study approval; however the ADO must complete the required determination prior to issuing the grant per 49 USC § 47107(a)(16)(C).
The methods presented under this section do not preclude or satisfy the sponsor’s requirement to conduct an environmental review of the project.
Section 6. Intergovernmental Review and Airport User Consultation Complete.
3-18. Intergovernmental Review.
The current version of FAA Order 1200.21, Intergovernmental Review of FAA Programs and Activities contain intergovernmental review requirements for AIP projects. This satisfies the requirement in 49 USC § 47106(a)(1) that the project be consistent with plans (existing at the time the ADO issues the grant offer) of public agencies around the airport.
Sponsors are required to coordinate projects through the appropriate state contact for projects listed in Table 3-11. The state contact information is available on the Intergovernmental Review page of the Office of Management and Budget (OMB) website (see Appendix B for link). Table 3-12 contains key requirements.
| The sponsor must coordinate projects through the appropriate state contact for… |
|---|
| a. Projects that significantly affect state or local governments beyond airport boundaries. |
| b. Projects specifically requested under a state’s review process. |
| c. Projects at a medium or large hub airport that involve the siting of the airport location, a new runway or a major runway extension. In this case, 49 USC § 47106(c)(1)(A) requires that the sponsor must also provide airport layout plan amendments (and an associated master plan) upon request by the relevant Metropolitan Planning Organization (MPO). |
| Some of the key requirements are… |
|---|
| a. Sponsor Notification. The regional office is responsible for informing new sponsors of the required intergovernmental project review process per the current version of FAA Order 1200.21, Intergovernmental Review of FAA Programs and Activities, however the regional office may delegate this to the ADO. The ADO must also notify all affected sponsors when a federal change is made to the review process. |
| b. Review Timeline. It normally takes state and local agencies 60 days to complete their review. The sponsor must not submit a grant application before this coordination is complete. The ADO must not issue a grant before the 60 day review period is over. |
| c. Early Project Review. If an interagency review was completed in the environmental or planning stage of the project, it normally will not need to be repeated during the implementation stage unless the scope of work has changed, substantial new information has become available, or significant time has passed. |
| d. Process Changes. The ADO must forward formal changes in a state’s intergovernmental project review process to the Department of Transportation (DOT) Assistant Secretary for Administration. All affected DOT offices must implement the process changes submitted by the state within 90 days of receipt from the state. |
| e. Establishment of State Process. States, in consultation with local elected officials, have the option to establish their own process for reviewing and commenting on federal programs and activities. |
| f. Treatment of Comments. The ADO has the option to accept the comments, reach a mutually agreeable solution with the state or local agency, or reject the comments. While the ADO is not required to accept comments or discuss another solution, the ADO has the option to provide a written explanation of the final decision as a courtesy to the single point of contact at the state. The explanation should be provided at a minimum of 15 days before beginning work on a project. If no single point of contact for the state exists, the ADO has the option to send the written explanation to the parties that initially provided comments. When 49 USC § 47106(c)(1)(A) is triggered, the ADO must send the MPO a written explanation of the final decision. When the ADO provides a written explanation of the final decision to a state or MPO, the ADO must also send an informational copy to the DOT Assistant Secretary for Administration. |
3-19. Consultation with Airport Users.
Per 49 USC § 47105(a)(2), a sponsor must consult with the airport users that will be affected by the project. The consultation process does not require users to provide input or agree with the proposal. Other consultation requirements are included in Table 3-13.
| Requirements per FAA policy include… |
|---|
| a. The affected parties must be given a reasonable opportunity to provide input to proposals for airport development. |
| b. The consultation must take place prior to submittal of the grant application. Since consultation is part of planning project, separate pre-grant consultation is not required. |
| c. The consultation must include all project considerations that bear on the decision to proceed and which impact users’ charges or operations. |
| d. At a minimum, the consultation must cover the general nature of the development proposed, its estimated cost, and its estimated start and stop dates. |
Section 7. FAA Environmental Finding Complete.
3-20. Environmental Finding Requirements.
Per 49 USC§ 47106(c), any airport project funded with AIP funds requires an environmental finding (Categorical Exclusion, Finding of No Significant Impact, or Record of Decision) prior to initial grant programming. The requirements for environmental analysis and findings are included in the current version of FAA Order 5050.4, National Environmental Policy Act (NEPA) Implementing Instructions for Airport Projects.
Per FAA policy, the ADO must not program a project until the environmental finding is complete.
Section 8. Usable Unit of Work Obtained.
3-21. Usable Unit Requirements (and Phased Project Conditions).
AIP grants that are given must result in a complete project. Partial construction or incomplete acquisition does not result in a complete project and therefore is not a usable unit of work. The required usable unit of work by project type is included in the project requirement appendices for that project.
There is one exception to this, and it is often referred to as a phased project. The FAA may issue a grant for a portion of a project when conditions in Table 3-14 are met.
Examples of acceptable and unacceptable grant descriptions are listed in Table 3-15.
| The project must meet all of the following requirements… |
|---|
| a. The ADO must include a special condition in the grant that requires the sponsor to complete a safe, useful, and usable unit of development that is, per 49 CFR 47106(a)(4), completed in a reasonable timeframe. |
| b. The grant description must clearly define the specific portion of the work being done in the grant, not the work that will be completed in all of the phases. The ADO can accomplish this by referencing the dimensions of the work or the specific contracts being funded. |
| c. Where the grant is for reimbursement of work, the requirements that the grant describe the work specifically in each phase must be met. |
| The description is… | For the following grant description for a multi-phase terminal building project… |
|---|---|
| a. Unacceptable. | Construct Terminal (Phase 1 -Building) Construct Terminal (Phase 2 -Building) Construct Terminal (Phase 3 -Building) Construct Terminal (Phase 4 -Building) Construct Terminal (Phase 5 -Building) Construct Terminal (Phase 6 -Building) |
| b. Acceptable. | Construct Terminal (Phase 1 -Site work) Construct Terminal (Phase 2 -Building-Foundation) Construct Terminal (Phase 3 -Building –Structure) Construct Terminal (Phase 4 -Building -Electrical, HVAC, Plumbing) Construct Terminal (Phase 5 -Building -Finishes, Interior and Exterior) Construct Terminal (Phase 6 -Building) -Passenger Boarding Bridges) |
Section 9. FAA Standards Met.
3-22. Mandatory FAA Standards.
a. General Requirement.
Per 49 USC § 47105(b)(3), a project must be planned, designed and constructed in accordance with current FAA standards unless the FAA has approved a modification to the standard for the specific project. Mandatory FAA standards include airport design, construction, and equipment standards and specifications.
b. Safe Approaches for Runway Projects (Clear Approaches).
The FAA has interpreted 49 USC § 47105(b)(3) to mean that safe approaches are part of the FAA standards that must be met for runway projects. Per FAA policy, the ADO must not fund the rehabilitation, construction, or extension of any section of a runway that the ADO has determined will not be usable due to unsafe approaches using the latest version of Advisory Circular 150/5300-13, Airport Design.
c. List of Advisory Circulars.
The FAA standards consist of the current version of the advisory circulars listed in the document titled Current FAA Advisory Circulars Required for Use in AIP Funded and PFC Approved Projects. This list, which is available online (see Appendix B for link), is published to comply with Grant Assurance 34, regulations, published guidance, and FAA policy.
d. Timing of Advisory Circulars.
If an FAA standard changes while a project is in progress, the sponsor must contact the ADO to determine whether the new standard must be met. Generally:
(1) If a project has not been bid, it is the sponsor’s responsibility to ensure that the finished design meets the latest published standard, unless the ADO and the sponsor agree that the latest published standard does not have to be included.
(2) If the project has been bid, the ADO will not normally require the sponsor to meet the revised standard. The ADO has the option to require the sponsor to meet the revised standard when:
(a) The requirements can be easily incorporated.
(b) The ADO has determined that the old standard will negatively impact the airport.
(c) The ADO and sponsor mutually agree to include the new standard.
e. Other Standards.
The ADO may incorporate other standards into a project as a special condition in the grant agreement. These standards then become mandatory by their inclusion in the grant. The automated AIP system contains the currently available special conditions.
3-23. Modification to FAA Standards (or Specifications).
Where the FAA has published specifications for specific items, it is FAA policy that sponsors must use the specifications as written, with no changes from the specifications, except where explicitly allowed in the specification.
The sponsor must obtain an FAA modification to standards approval for any change that is not specifically allowed, no matter how minor it may seem to the sponsor. This is necessary to ensure an acceptable level of safety, capacity, efficiency, utility or access. Additionally, the FAA review will ensure the proposed modification will not unduly limit competition, eliminate FAA approved vendors, compromise statutory or regulatory requirements, or negatively impact the project.
For AIP funding purposes, some modifications to FAA standards (such as those examples in Table 3-16) will not be considered because they violate 2 CFR part 200 or deviate from FAA design standards. The ADO or AAS-100 must not approve such requests for AIP funded projects. However, in the event of a pre-existing nonstandard airfield configuration, AIP funds may only be used to rehabilitate or reconstruct the affected airfield element if FAA has formally approved a modification to standards or the airfield element is brought up to standards.
The current version of FAA Order 5300.1, Modifications to Agency Airport Design, Construction, and Equipment Standards contains the requirements for modification to standards.
| Examples include… |
|---|
| a. For cost saving only without regard to level of performance and safety as provided by FAA standards. |
| b. Standardization of equipment type. |
| c. Local preference. |
| d. Airfield lighting circuits that are not 6.6 amperes per current FAA standards. |
3-24. Standards that Exceed those of the FAA.
FAA policy is that if the project meets the FAA standards, then the public need has been fully met. Therefore a project that is designed or built to a more rigorous standard is considered to exceed FAA standards. Except in limited circumstances for select projects as outlined in Table 3-17, the ADO must not fund work exceeding FAA standards with AIP.
The ADO also has the option of allowing the sponsor to pay for the cost to exceed the FAA standards if the procurement requirements in Paragraph 3-39 are met for inclusion of ineligible and/or non-AIP work in a contract. Funding examples are provided in Table 3-18.
Per FAA policy, sponsors must obtain written ADO concurrence prior to either to designing or bidding AIP funded projects that will include work that exceeds FAA standards. The ADO must put a copy of their determination in the grant file.
Per FAA policy, if the ADO allows the sponsor to pay for the added cost of a project or equipment, the sponsor is not allowed to use the bid process to determine the non-AIP costs.
| The limited circumstances include… |
|---|
| a. Meeting a Local Standard. 49 USC § 47110(b)(1) gives the ADO the option to consider funding a cost if the cost is necessary to allow the project to proceed. Therefore if there is added cost to meet a local permitting standard, the ADO has the option to consider funding the added cost. |
| b. Rehabilitating an Airfield Facility (or Piece of Equipment). The ADO has the option of funding a project to rehabilitate (not reconstruct) an airfield facility (or piece of equipment) that exceeds FAA standards if the project meets the following criteria. (1) The project component is normally an eligible cost. (2) The sponsor has demonstrated a continuing need for the existing facility or equipment. This can either be based on past aeronautical activity or use, or to accommodate the aircraft of a current tenant based at the airport. (3) The ADO has determined that the added cost is reasonable compared to the benefit being obtained. The ADO has the option to request a life cycle cost analysis, benefit-cost analysis, or other applicable analysis to support this determination. Sponsor guidance on life cycle cost analysis is discussed in Paragraph U-13 and sponsor guidance on benefit-cost analysis is contained in the document titled FAA Airport Benefit-Cost Analysis Guidance (see Appendix B for link). |
| If a sponsor requests… | If the requirements of Table 3-17 have been met, the ADO has the option to… |
|---|---|
| a. A project to construct a parallel taxiway at 400 feet from the runway when the FAA standard (based on the critical aircraft and approach minimums) is 300 feet based. The extra costs for normal site preparation and pavement construction (there are no large extra expenses). In this case, no cost analysis would be required because the FAA has already determined that the long term benefit of locating the taxiway far outweighs the potential cost of relocating the taxiway in the future. This applies regardless of whether the airport shows the need for the 400 feet within the 20 year planning period. | Fund the added cost with AIP. |
| b. A project for reconstruction of a runway to a width wider or length longer than required by the critical aircraft. Because the project is reconstruction, it is considered similar to construction of a new runway. | Allow the sponsor to pay for the added cost if the procurement requirements in Paragraph 3-42 are met for inclusion of ineligible and/or non-AIP work in a contract. |
| c. A project for rehabilitation or overlay of a runway or taxiway to a width wider or length longer than required by the current critical aircraft. | Fund all or a portion of the added cost with AIP. |
| d. A project for construction of a 75 foot wide taxiway when the justified width is 50 feet. This project is designed for a critical aircraft that will not be met for five or more years. | Allow the sponsor to pay for the added cost if the procurement requirements in Paragraph 3-42 are met for inclusion of ineligible and/or non-AIP work in a contract. |
| e. A project for construction of a 75 foot wide taxiway when the justified width is 50 feet. This project is designed for a critical aircraft that the ADO has determined will be met within five years. | Fund the added cost with AIP. |
| f. An apron construction project that includes fire hydrant installation that is required to receive a building permit determined that the cost of the fire hydrant installation is necessary to allow the project to proceed. | Fund the added cost with AIP. |
| g. A project that has an extended warranty period of 36 months, and the FAA standard is 12 months. | Allow the sponsor to pay for the added cost if the procurement requirements in Paragraph 3-42 are met for inclusion of ineligible and/or non-AIP work in a contract. |
| h. A project to rehabilitate an ARFF building that includes a weight training room that requires the ventilation system in the building be replaced. The weight training room is not required by FAA standards. The ADO has determined the weight training room and the ventilation system are ineligible costs. | Allow the sponsor to pay for the added cost if the procurement requirements in Paragraph 3-42 are met for inclusion of ineligible and/or non-AIP work in a contract. |
| i. A project to rehabilitate an ARFF vehicle that is larger than required by 14 CFR part 139 index. The ADO has determined that rehabilitation of the larger ARFF vehicle is less expensive than acquiring a new vehicle that is correctly sized. | Fund the added cost with AIP. |
| j. A project to remove obstructions, including land acquisition, to meet the clearance requirements for an approach category that is greater than the aircraft category (for example clearing to C standards where the airport is designated as a B-II airport on its ALP for the entire planning period.) | Allow the sponsor to pay for the additional costs, including the costs of the land acquisition. AIP cannot be used for the additional land or clearing because the work is not necessary. |
3-25. Eligibility Differences between the Handbook and the Advisory Circulars.
Advisory circulars are written to cover a broad range of airport design, construction, and equipment standards. There are recommendations in many advisory circulars that exceed what is justified under AIP. However, just because an item is discussed in an advisory circular, this does not make it eligible or justified. This Handbook, not the advisory circular, provides the guidance for determining eligibility and justification for any project that is AIP funded.
3-26. Approval and Use of State Standards.
Per 49 USC § 47105(c), a sponsor may request to use state standards for nonprimary airport development that are different from FAA standards. Per 49 USC § 47114(d)(5), a sponsor may also request to use state highway construction and material specifications for full strength airfield pavement construction at a nonprimary airport. The requirements for these two uses of state standards are different, and are discussed in detail in the current version of Advisory Circular 150/5100-13, Development of State Standards for Nonprimary Airports.
In order for the ADO issue grants using any type of state standards on a project in the grant, the requirements in Table 3-19 must be met.
| In order for an ADO to permit the use of state standards on an AIP funded project, the following requirements must be met… |
|---|
| a. Modification to Standard Approved. AAS-1 must have approved the modification to standards according to the current version of FAA Order 5300.1, Modifications to Agency Airport Design Construction and Equipment Standards prior to the ADO issuing the grant. The ADO must put a copy of the written determination (or a reference to the location of the electronic determination) in the grant file. |
| b. Advisory Circular Requirements Met. The sponsor’s request for use of the modification to standards must comply with all requirements contained in the current version of Advisory Circular 150/5100-13, Development of State Standards for Nonprimary Airports. |
| c. Additional Restriction #1 for Airfield Pavement Built Using State Highway Specifications Met. Per 49 USC § 47114(d)(5)(A), the runway cannot currently be greater than 5,000 feet or currently be serving aircraft that are greater than 60,000 pounds gross weight. (1) For those airports where all runways meet the 5,000 feet or less criteria, the sponsor may consider the use of state highway standards for all eligible airfield pavement. (2) For those airports with multiple runways, some of which exceed the 5,000-runway length limitation, the sponsor may only consider the use of state highway standards for airfield pavement exclusively serving a runway with a length of 5,000 feet or less and for apron and taxilanes that only serve aircraft less than 60,000 pounds gross weight. |
| d. Additional Restriction #2 for Airfield Pavement Built Using State Highway Specifications Met. Per 49 USC § 47114(d)(5)(A), the life of the pavement must not be less than the life of the pavement built using FAA standards. However, for funding purposes, AIP can only be used to fund to the life required by the FAA standards, which is 20 years. |
| e. Additional Restriction #3 for Airfield Pavement Built Using State Highway Specifications Met. Per 49 USC § 47114(d)(5)(B), the ADO must not issue another AIP grant to rehabilitate or reconstruct the airfield pavement for a period of 10 years after the pavement construction is completed. The only exception to this requirement is if AAS-1 has determined rehabilitation or reconstruction is required for safety reasons. |
| f. Additional Restriction #4 for Airfield Pavement Built Using State Highway Specifications Met. Because 49 USC § 47114(d)(5)(A) limits the runway length and aircraft weight, the airport layout plan must not show a future extension (in the 20 year planning period) that will result in a runway greater than 5,000 feet or serve aircraft that are greater than 60,000 pounds gross weight. |
3-27. Projects with No FAA Standard.
Some eligible projects have no corresponding FAA standards, procedures, policy, plans, and/or specification.
The ADO must contact APP-520 for assistance on project eligibility and AAS-100/300 to obtain the FAA standards and requirements for the project. Until the FAA standard is published, APP-520 will provide eligibility of these projects and AAS-100/300 will provide the standards to which the project must be constructed on a case-by-case basis.
In some cases, the FAA has specifically adopted the standards of another federal agency or of an industry group. The ADO can obtain a current list of these adopted standards from AAS-100/300 and APP-520.
3-28. ADO Review of Plans and Specifications.
Sponsors must prepare plans and specifications to meet FAA standards as discussed in this section of the Handbook. In addition, sponsors are required to prepare an engineer’s report that contains the information in Table 3-20. The ADO must follow the FAA policy for reviewing plans and specifications outlined in the latest version of the Implementation Plan for FAA Review of Construction Plans and Specifications for AIP Funded Projects memorandum issued by AAS-1.
If the ADO reviews the plans and specifications and engineer’s report, the ADO is not required to issue an approval. Instead, the ADO has the option to provide comments to the sponsor. In reviewing the plans and specifications and engineer’s report, the ADO also has the option to request input from affected FAA lines of business. If the ADO provides a written response, the ADO must file a copy of the response (or a reference to the location of the electronic determination) in the grant file. The ADO must not fund any project the ADO has determined does not meet FAA standards.
The FAA’s review of a sponsor’s plans or specifications is for the benefit of the FAA. This review is not intended to relieve the sponsor of their responsibility to fully comply with AIP requirements and does not represent approval of the plans or specifications.
In addition, sponsor certification of plans and specifications does not relieve the sponsor of the requirement to obtain prior FAA approval for modifications to standards or to notify the ADO of any limitations to competition within the project.
| Engineer’s reports must include… |
|---|
| a. Design Computations. The report must include a summary of the design computations used in the design of major development items. The sponsor is required to include pavement design information by either submitting FAA Form 5100-1, Airport Pavement Design or by submitting the first page of this form with the FAARFIELD design results. A summary of computations and a description of the method used to conduct the drainage design must be presented. Earthwork cross-sections and mathematical calculations for designs are not required to be included in the design report unless requested by the ADO. |
| b. Selections of Design Materials and Equipment and Proposed Modifications to Standards. The engineer’s choices and recommended modifications will, in most cases, be influenced by service records for comparable construction and by cost comparisons. The report must include concise statements and cost comparisons that justify selections made and the proposed modifications to standards proposed in the project. The current version of FAA Order 5300.1, Approval Level for Modification of Agency Airport Design and Construction Standards, provides additional information on modifications to design and construction standards. |
| c. Sole-Source, Proprietary, or other Competition-Limiting Specifications or Design Elements. The report must list all such items, including the reason for the limitation, impacts of limiting competition, and the benefits to the federal government for the proposal. |
| d. Other Elements. The report must outline related project work elements to be done without AIP assistance, including details on how the work is to be accomplished, and how it relates to the AIP work. Work to be done by utility companies must be described in sufficient detail to verify adequate funding for the work. |
| e. Support Data. The report must also include supporting data and itemized project cost estimates with source information. Any unique circumstances that may influence adjustments of existing project cost estimates must be explained. |
Section 10. Project Procured Correctly.
3-29. Importance of 49 CFR § 18.36 (2 CFR 200 Subpart D, Procurement Standards).
Sponsors must follow 49 CFR § 18.36 (2 CFR 200 Subpart D, Procurement Standards) when making procurements under an AIP grant. This regulation contains the policies and procedures for AIP project actions such as construction, equipment purchases, and selection for professional services. If a sponsor fails to meet any of the procurement requirements for their AIP funded project, it may result in the ADO determining a normally allowable cost to be unallowable.
3-30. Sponsor Procurement Requirements.
The sponsor, not the ADO, is responsible for meeting all procurement requirements. The sponsor establishes, enforces, and administers the contract agreements and is responsible for all contractual matters, including evaluation and award of contract, resolution of claims and disputes, and settlement of litigation issues. The ADO is not a party to the contracts that a sponsor executes under an AIP grant.
Per 49 CFR § 18.36(b)(11) (2 CFR § 200.318(k)), the ADO cannot substitute their judgment for the sponsor unless the matter is primarily a federal concern. However, the ADO still has a defined role in procurement oversight per 49 CFR § 18.36 (2 CFR 200 Subpart D, Procurement Standards) as further defined in this chapter.
Sponsor procurement requirements are discussed in more detail in Appendix U.
3-31. Summary Table of Mandatory/Optional ADO Procurement Review.
There are only certain situations where the ADO is required by 49 CFR § 18.36 (2 CFR 200 Subpart D, Procurement Standards) to review the sponsor’s procurement process. Otherwise, 49 CFR § 18.36(g)(3)(ii) (2 CFR § 200.324(c)(2)) allows the ADO to accept sponsor certification that the sponsor is following 49 CFR § 18.36 (2 CFR 200 Subpart D, Procurement Standards). This certification is included in the grant assurances signed by the sponsor and therefore, no additional action is required by the ADO.
There are also certain situations where FAA policy or legislation requires the ADO to review the sponsor’s procurement process. Table 3-21 contains a summary of the mandatory and optional ADO procurement review responsibilities. The ADO always has the option of reviewing any sponsor procurement documents and systems at any time during the grant process.
| For the following situation… | ADO review is… | The associated 49 CFR § 18.36 (2 CFR 200 Subpart D, Procurement Standards) general reference is… | And the requirements are in Paragraph… |
|---|---|---|---|
| a. Bid Protests and Appeals. | Mandatory (but limited in nature) | 2 CFR § 200.318(k) | P3-32 |
| b. Procurement Protests and Appeals after the Contract Award. | Mandatory (but limited in nature) | 2 CFR § 200.318(k) | P3-33 |
| c. Bonding that Does Not Meet the Minimum Requirements. | Mandatory (or can rely on sponsor’s written assurance) | 2 CFR § 200.325 | P3-34 |
| d. Noncompetitive Proposals (Including Sole Source and Inadequate Number of Qualified Sources). | Mandatory | 2 CFR § 200.320(f) | P3-35 |
| e. Limited Noncompetitive Proposal Situations (ALCMS Modifications, One Manufacturer, Sponsor Preferred, Prohibited LED Lighting). | Mandatory (for prohibited LED Lighting the notification review is mandatory and review of the procurement documents is optional) | 2 CFR § 200.320(f) (N/A for prohibited LED lighting) |
P3-36 |
| f. Change Orders, Supplemental Agreements, and Contract Modifications. | Mandatory (but not required until the ADO is issuing an amendment or closing the grant) | 2 CFR § 200.320(f) | P3-37 |
| g. Contract Clauses and Contract Provisions Required for AIP Grants. | Optional (ADO responsibility is limited to notifying new sponsors of requirements) | 2 CFR § 200.326 | P3-38 |
| h. Contracts Containing Ineligible and/or Non-AIP Funded Work. | Mandatory | N/A | P3-39 |
| i. Contracts Containing Requirements that May Reduce the Number of Potential Bidders. | Mandatory | 2 CFR § 200.319 | P3-40 |
| j. Contracts Containing Work that Exceeds FAA Standards. | Optional (ADO responsibility is limited to notifying new sponsors of requirements) | N/A | P3-41 |
| k. Consultant Contracts (Qualifications Based with Negotiated Price). | Optional with Sponsor Certification (unless sponsor deviates from requirements, then mandatory | 2 CFR § 200.320(d) | P3-42 |
| l. Design-Build and Construction Manager-atRisk Contracts. | Mandatory | 2 CFR § 200.320(d) | P3-43 |
| m. Engineering Materials Arrestor System (EMAS). | Mandatory | 2 CFR § 200.320(d) | P3-44 |
| n. Bid Alternates (Including Life Cycle Cost Analysis Alternates) and Bid Additives. | Optional with Sponsor Certification | 2 CFR § 200.320(c) | P3-45 |
| o. Bidding Asphalt and Concrete Alternates. | Optional with Sponsor Certification | 2 CFR § 200.320(c) | P3-46 |
| p. Buy American Requirements | Mandatory (if a waiver is required) | N/A | P3-47 |
| q. DOT Office of Inspector General (OIG) Notification of Potential Procurement/Bid Improprieties. | Mandatory | N/A | P3-48 |
| r. Escalator Clauses | Mandatory | N/A | P3-49 |
| s. Plans and Specifications Review. | As required in “Plans and Specifications Review Implementation Memorandum” published by FAA Office of Airport Safety and Standards. | 2 CFR § 200.324(a) | P3-50 |
| t. Pre-award Review of Contracts. | Optional with Sponsor Certification | 2 CFR § 200.324(b) | P3-51 |
| u. Sponsor’s Procurement System. | Optional with Sponsor Certification | 2 CFR § 200.324(c) | P3-52 |
| v. Force Account Work. | Mandatory | N/A | P3-53 |
| w. Value Engineering. | Mandatory | 2 CFR § 200.318(g) | P3-54 |
| x. Indefinite Delivery (Task Orders) Extensions for Construction Services. | Mandatory | N/A | P3-55 |
| y. Indefinite Delivery (Task Orders) Extensions for Consultant Services. | Mandatory | N/A | P3-56 |
| z. Suspension or Debarment of Persons or Companies. | Optional with Sponsor Certification (mandatory if a problem is identified) | 2 CFR part 180 and 2 CFR part 1200 |
P3-57 |
3-32. Bid Protests and Appeals.
The sponsor requirements for bid protests and appeals is contained in 49 CFR § 18.36(b)(12) (2 CFR § 200.318(k)) (see Paragraph U-9). Table 3-22 contains the ADO specific review requirements. Many bid protests result from a sponsor’s improper modification of project specifications or solicitation package to include a sponsor’s preference. In those situations, the ADO must not rely on the sponsor to resolve the protest, but must treat the protest as a federal concern. Table 3-23 contains additional requirements for bid protests that are a federal concern.
| The following applies… |
|---|
| a. Protest Sent Directly to the FAA by the Protester. If a protest is sent directly to the FAA, the FAA must send a copy of the protest to the sponsor per FAA policy. The ADO must notify the protester that the protest has been forwarded to the sponsor and they must deal directly with the sponsor. In addition, the ADO must request the sponsor to send a copy of the sponsor’s protest procedures to the ADO. Per 2 CFR § 200.318(k), the sponsor is responsible for handling bid complaints and protests. The ADO’s review responsibility at this point is limited to a cursory review of the protest to determine if there is a Federal concern and establishing that the sponsor has protest procedures in place. If there is a Federal concern, the ADO must notify the sponsor and request the sponsor immediately send a copy of the sponsor’s proposed resolution. The ADO must not issue AIP funding until the ADO is satisfied the sponsor resolved the issue and correctly addressed any Federal concerns. |
| b. Copies of Protests Sent to the ADO by the Sponsor. After the sponsor’s mandatory and timely submittal of the bid protests and a copy of the sponsor protest procedures to the ADO, the ADO’s review responsibility at this point is limited to scanning the protest to determine if there is a federal concern and establishing that the sponsor has protest procedures in place. |
| c. Protests that are a Federal Concern. 49 CFR § 18.36(b)(11) (2 CFR § 200.318(k)) cautions that the federal agencies (the ADO) not substitute their judgment for that of the sponsor unless the matter is a federal concern. If there is a federal concern, the ADO must notify the sponsor and request a resolution. The ADO must not issue AIP funding until the ADO is convinced the sponsor resolved the issue and correctly addressed any federal concerns. |
| d. Cancelation of Prior Approval or Sponsor Certification. The ADO approval of the plans and specification or acceptance of the sponsor’s certification is automatically canceled by the receipt of the bid protest. |
| e. Restrictions on AIP Funding Pending Resolution. The ADO must not issue AIP funding until the ADO has received the sponsor’s written notification of how the issue was resolved and the ADO is satisfied the sponsor resolved the issue and correctly addressed any federal concerns. By issuing the associated grant, the ADO is documenting their determination that the bid protest has been resolved. |
| f. Protester Appeals. Per 49 CFR § 18.36(b)(12) (2 CFR § 200.318(k)), a protester may pursue a protest with the federal agency after exhausting all administrative remedies with the sponsor. By this point, the ADO should have already scanned the protest to determine if there was a federal concern and established if the sponsor has protest procedures in place. The ADO has the option to respond to the protester, but is not required to by 49 CFR § 18.36 (2 CFR 200 Subpart D, Procurement Standards). |
| The following applies… |
|---|
| a. Determining a Federal Concern. Federal concerns include violation of Federal law or regulations. It includes allegations that the project plans or specifications have been altered to give preference to a manufacturer, to exclude a product, or otherwise limit competition. This is because limiting competition may violate 2 CFR § 200.319. Modification of specifications without receiving an FAA Modification of Standards is also a Federal concern. |
| b. Copies of Redlined Specifications and Solicitation Package Sent to the ADO by the Sponsor. The sponsor must send the ADO a copy of the as-bid specifications and the complete solicitation package, detailing where changes to the FAA standard specification have been made and which aspects of the solicitation are being protested. |
| c. Protests that Must Be Forwarded. If the bid protest involves another FAA line of business, such as the FAA Office of Civil Rights, the ADO must forward all documentation regarding the protest to the affected office. The ADO must notify the sponsor of the transfer and must advise the sponsor that the ADO will not issue AIP funding until the issue is resolved. |
| d. Cancelation or Rebidding a Project. If the ADO determines that the protest was a result of improper modification of the specifications or an otherwise defective solicitation package, the ADO must advise the sponsor that additional costs incurred fixing the package and soliciting the project are not eligible for reimbursement. |
| e. Documenting ADO Actions. Where the bid protest is a Federal concern, the ADO must document steps in the grant file that the ADO takes to ensure that the sponsor properly resolves the protest. |
3-33. Procurement Protests and Appeals after the Contract Award.
The ADO review requirements for protest and appeals that occur after the contract is awarded is the same as the requirements for bid protests and appeals in Paragraph 3-32. However, since the project may already be under grant, the ADO must notify the sponsor that the sponsor must not request payments for the disputed costs.
3-34. Bonding that Does Not Meet the Minimum Requirements.
The sponsor requirements for bonding are contained in 2 CFR § 200.325 (see Paragraph U-23). Table 3-24 contains the ADO specific review requirements for bonding that does not meet the minimum requirements in 2 CFR § 200.325.
| For… | The following applies… |
|---|---|
| a. Bonding that Does Not Meet the Minimum Requirements. | The ADO is allowed to rely on the sponsor’s written assurance that the federal interests are adequately protected under the proposed bonding method. As long as the ADO has not issued a written negative determination, it is implicitly implied that the ADO has issued a favorable determination for all future procurement actions using the proposed bonding method. |
| b. Combined Payment and Performance Bonds. | The ADO is allowed to rely on the sponsor’s written assurance that the federal interests are adequately protected under the combined payment and performance bonding proposal. As long as the ADO has not issued a written negative determination, it is implicitly implied that the ADO has issued a favorable determination for all future procurement actions using the proposed bonding method. |
3-35. Noncompetitive Proposals (Including Sole Source and Inadequate Number of Qualified Sources).
Sponsors are only allowed to use a noncompetitive procurement process for the limited circumstances outlined in 2 CFR § 200.320(f) (see Paragraph U-18). Some special noncompetitive proposal situations and their associated requirements are included in Paragraph 3-36.
Per FAA policy, the ADO must not issue a grant that includes noncompetitive proposals unless the ADO has reviewed the proposal and concurs that the requirements of 2 CFR § 200.320(f) have been met (see Paragraph U-18). The exception is for change orders, supplemental agreements, and contract modifications, which are discussed in Paragraph 5-35.
Except as otherwise noted in this section, the ADO has the option to document their concurrence either by notifying the sponsor in writing (with a copy to the grant file) or issuing the grant.
3-36. Limited Noncompetitive Proposal Situations (ALCMS Modifications, One Manufacturer, Sponsor Preferred, Prohibited LED Lighting).
Some limited noncompetitive proposal situations and their associated requirements are included in Table 3-25. These requirements are in addition to those in Paragraph 3-35.
| For the following limited noncompetitive situation… | The following applies… |
|---|---|
| a. Airfield Lighting Control and Monitoring System (ALCMS) Modifications | (1) Only for ALCMS Modifications. The following requirements only apply to ALCMS modifications. Sponsors must competitively procure new ALCMS installations. (2) Separation into a Noncompetitive Procurement. There are very specific requirements to separate the procurement into a separate noncompetitive procurement. Theses sponsor procurement requirements are contained in Paragraph U-18. (3) ADO Review of Sponsor Notification. The ADO must review the sponsor notification to verify if all of the requirements in Paragraph U-18 have been met. It is not necessary for the ADO to acknowledge the sponsor’s notification. (4) Filing of Sponsor Notification. The ADO must keep a copy of the sponsor’s notification and any ADO acknowledgement in the grant file. (5) Equipment and/or Installation Eligibility. The eligibility for the purchase and/or installation of this equipment is contained in Paragraph 3-93. |
| b. Certified Airfield Lighting Equipment with Only One Manufacturer | (1) Separation into a Noncompetitive Procurement. There are very specific requirements to separate the procurement into a separate noncompetitive procurement. Theses sponsor procurement requirements are contained in Paragraph U-18. (2) ADO Review of Sponsor Notification. The ADO must review the sponsor notification to verify if all of the requirements in Paragraph U-18 have been met. It is not necessary for the ADO to acknowledge the sponsor’s notification. (3) Filing of Sponsor Notification. The ADO must keep a copy of the sponsor’s notification and any ADO acknowledgement in the grant file. (4) Equipment and/or Installation Eligibility. The eligibility for the purchase and/or installation of this equipment is contained in Paragraph 3-93. |
| c. Sponsor Preferred Airfield Lighting Equipment | (1) Separation into a Noncompetitive Procurement. There are very specific requirements to separate the procurement into a separate noncompetitive procurement. Theses sponsor procurement requirements are contained in Paragraph U-18. (2) ADO Review of Sponsor Notification. The ADO must review the sponsor notification to verify if all of the requirements in Paragraph U-18 have been met. It is not necessary for the ADO to acknowledge the sponsor’s notification. (3) Filing of Sponsor Notification. The ADO must keep a copy of the sponsor’s notification and any ADO acknowledgement in the grant file. (4) Installation Eligibility. The eligibility for the purchase and/or installation of this equipment is contained in Paragraph 3-93. (5) Not Force Account. The ADO must not consider this situation as equivalent to sponsor force account or donated materials. (6) Cannot be Used for Sponsor’s Share. Sponsors are prohibited from using the costs of sponsor-preferred airfield lighting equipment as part of the sponsor’s share of a grant. (7) Limited to Airfield Lighting Equipment. By FAA policy, the use of AIP for certain costs associated with the use of non-AIP funded sponsor furnished equipment is limited to a sponsor’s preferred airfield lighting manufacturer’s equipment. |
| d. Certified Airfield Light Emitting Diode (LED) Lighting Equipment that is Prohibited from AIP Funding | (1) Prohibited Equipment. The list of LED lighting that is prohibited from AIP funding is included in Paragraph C-2. (2) ADO Review of Sponsor Notification. The ADO must review the sponsor notification to verify separation of prohibited LED lighting procurement from AIP funded procurement per Paragraph U-7. It is not necessary for the ADO to acknowledge the sponsor’s notification. (3) Filing of Sponsor Notification. The ADO must keep a copy of the sponsor’s notification and any ADO acknowledgement in the grant file. (4) ADO Review of Sponsor Procurement Documents. The ADO has the option to review the sponsor’s procurement documents on AIP funded projects to validate that the sponsor has separated AIP funded procurement and prohibited LED lighting procurement. (5) Equipment and/or Installation Eligibility. The eligibility for the purchase and/or installation of this equipment is contained in Paragraph 3-93. |
3-37. Change Orders, Supplemental Agreements, and Contract Modifications.
The requirements for change orders, supplemental agreements, and contract modifications are contained in Paragraph 5-35.
3-38. Contract Clauses and Contract Provisions Required for AIP Grants.
The sponsor requirements for AIP required contract clauses and provisions are contained in Appendix II of 2 CFR part 200 (as referenced in 2 CFR § 200.326) as well as other regulations and statutes (see Paragraph U-24). The ADO responsibility is limited to making sure that new sponsors are aware of these requirements.
3-39. Contracts Containing Ineligible and/or Non-AIP Funded Work (Including Proration).
The sponsor requirements for contracts containing ineligible and/or non-AIP funded work (including how to determine the low bidder) are contained in Paragraph U-12. Table 3-26 contains the ADO specific review requirements.
| For… | The following applies… |
|---|---|
| a. Contracts Containing Ineligible Work or Work not Funded with AIP | It is FAA policy that a sponsor must not combine ineligible work and/or non-AIP funded work within the same contract unless the sponsor provides a compelling reason documenting that it is in the federal governments best interest to the ADO and the ADO has concurred with the sponsor’s request in writing. Examples of situations that may be in the best interest of the federal government are included in Table 3-27. The FAA does not consider the fact that including ineligible of non-AIP funded work is at no additional cost to the federal government to be a benefit to the federal government. |
| b. ADO Concurrence | In order to concur with the sponsor’s request, the ADO must determine that including the work is in the best interest of the Federal government, and that this will not result in an increase to the cost of the AIP funded work and that the cost of ineligible and/or non-AIP funded work can be easily identified. This is because 2 CFR § 200.302(a) requires that the ADO know what was paid for under the grant. The ADO must put a copy of their determination in the grant file. If the field of potential bidders will be reduced by the inclusion of the ineligible or non-AIP funded work, this may reduce competition and affect the cost. Therefore, the ADO cannot conclusively determine that there will be no increase in cost. Paragraph 3-40 includes examples of where potential bidders may be reduced. |
| c. ADO Determination of Federal Participation | The ineligible and/or non-AIP funded work must be clearly separated from the AIP funded work. This is the preferred method for the ADO to determine federal participation. If the ADO determines the ineligible and/or non-AIP funded cannot be feasibly separated from the AIP funded work, the ADO can prorate the work to determine federal participation. Example of Prorating: A project will extend an off-airport drainage box culvert through the airport. This box culvert will also serve the neighborhood adjacent to the airport. The airfield runoff is 25 acres and the neighborhood runoff is 75 acres. The eligible Federal participation would be one fourth (25 acres divided by 100 acres) of the total cost to extend the culvert through the airport (including associated design, inspection, etc.). |
| Examples include… |
|---|
| a. The inclusion of ineligible and or non-AIP work will result in an overall reduction in the amount of construction workers and vehicles on the airfield. This is of benefit to the FAA because it reduces the potential risk of runway incursions. |
| b. The inclusion of ineligible and or non-AIP work will result in the runway being closed for construction for a significantly shorter period of time. This is of benefit to the FAA because it maintains system capacity. |
| c. The inclusion of a significant amount of non-AIP pavement will reduce the overall unit cost of the pavement, thus reducing the AIP project costs. |
| d. The inclusion of the ineligible portion of a hydrant fueling system in an AIP funded apron project that includes hydrant fueling pits will allow a functioning fueling system to be completed. |
3-40. Contracts Containing Requirements that May Reduce the Number of Potential Bidders.
Per 2 CFR § 200.319, sponsor solicitations of AIP funded projects must not unduly restrict competition. It is FAA policy that a sponsor must not include requirements that reduce the number of potential bidders unless the sponsor must provide a compelling reason to the ADO and the ADO has concurred with the sponsor’s request in writing. Table 3-28 contains examples where the number of potential bidders may be reduced.
| Examples include… |
|---|
| a. A project that has a warranty requirement to store spare parts in a manufacturer’s warehouse within 15 miles of the airport that has been in operation for at least one year. |
| b. A project specifying highway compliant snow removal equipment. |
| c. An ARFF vehicle that is required to be equipped with specialized extraction equipment that is only available as standard equipment on one manufacturer’s vehicles. |
| d. A requirement for equipment to support remote maintenance monitoring. |
3-41. Contracts Containing Work that Exceeds FAA Standards.
It is FAA policy that a sponsor must not include work that exceeds FAA standards in a contract unless the sponsor provides a compelling reason to the ADO and the ADO has concurred with the sponsor’s request in writing. The requirements for ADO concurrence (as well as the associated funding rules) are contained in Paragraph 3-24.
3-42. Consultant Contracts (Qualifications Based with Negotiated Price).
The sponsor requirements for competitive proposals (which includes consultant contracts) are contained in 49 CFR § 18.36(d)(3) (2 CFR § 200.320(d) Procurement by competitive proposals.) (see Paragraph U-16). The current version of Advisory Circular 150/5100-14, Architectural, Engineering, and Planning Consultant Services for Airport Grant Projects, provides sponsor requirements for consulting contracts, including the unique contract methods listed in Table 3-29.
The ADO review of procurement of these types of proposals is optional if the sponsor has submitted the associated sponsor certification.
However, if the sponsor is proposing to deviate from the sponsor procurement requirements per the above Advisory Circular, the ADO must not issue the associated grant unless the ADO has reviewed the contract and concurs with the deviations. The ADO has the option to document their concurrence either by notifying the sponsor in writing (with a copy to the grant file) or issuing the grant.
| Some unique contract methods include… |
|---|
| a. Retainers |
| b. Cost-plus-a-fixed-fee |
| c. Cost-plus-a-percentage-of-cost (note that is prohibited by 2 CFR § 200.323(d) and must not be used) |
| d. Indefinite delivery (also called task orders and work authorizations) |
3-43. Design-Build and Construction Manager-at-Risk Contracts.
The sponsor procurement requirements for these types of competitive proposals are contained in Paragraph U-16.
Mandatory ADO pre-review and concurrence with the sponsor’s use of design-build proposal for AIP funded projects is based on requirements found in 49 USC § 47142(a)(2). ADO pre-review and concurrence is also required by FAA policy for any AIP-funded project where construction manager at risk or other competitive proposal methods that involve selection based on factors other than price are proposed.
In order for the ADO to concur with the proposal, the ADO must be satisfied that the requirements of 2 CFR § 200.320(d) have been met (see Paragraph U-16) prior to the sponsor awarding the contract.
The ADO documents their concurrence by issuing the grant.
3-44. Engineering Materials Arrestor System (EMAS).
Prior to April 2012, there was only one manufacturer whose product met the requirements of the current version of Advisory Circular 150/5220-22, Engineered Materials Arresting Systems (EMAS) for Aircraft Overruns. As of the date of Change 1 of this Handbook, two manufacturers meet these requirements. Therefore, the sponsor must currently procure the EMAS project under the competitive proposal procurement method per 2 CFR § 200.320(d) as discussed in Paragraph U-16. If only one manufacturer responds to the Request for Information (RFI), then the sponsor may proceed with noncompetitive procurement per 2 CFR § 200.320(f).
The competitive proposal procurement process for EMAS is outlined in Table 3-30. The ADO has the option to contact AAS-100 or APP-500 for assistance.
For existing EMAS, if the Sponsor and ADO concur that an existing bed must be replaced, then the procurement requirements for new EMAS installation apply. The sponsor must follow the competitive procurement process to select the vendor.
If the ADO determines that a bed must be retrofitted, the sponsor must determine whether the bed can only be modified or retrofitted by the original vendor, and whether the cost benefit of replacing the bed outweighs the cost benefit of retrofit.
| An RSA project with EMAS will typically follow the following steps… |
|---|
| a. Frequently, the EMAS installation is only a part of a larger Runway Safety Area (RSA) project. Therefore, the EMAS design is incorporated into the overall project. The EMAS Request for Proposal (RFP) will require that the selected EMAS vendor work with the overall RSA design consultant to incorporate the specific features of the selected EMAS into the overall RSA project. |
| b. The sponsor conceptually considers EMAS during the planning and environmental phase of the RSA project, and selects a RSA design consultant (RSA designer). |
| c. The sponsor and RSA designer identify the requirement for EMAS. The requirements will include the proposed RSA limits, the limits of the EMAS footprint, any navigational aids within the RSA and nearby, and any unique surrounding elements that may be adversely affected by the size of the EMAS bed exceeding a certain height, length or width. |
| d. The sponsor issues a Request for Information (RFI) to obtain conceptual designs from EMAS vendors. The RFI is issued solely for informational purposes and is not a solicitation. Similarly, responses to RFI’s are not offers from the EMAS vendors. |
| e. The sponsor prepares the preliminary design and a Request for Proposal (RFP) that is used to select the EMAS vendor. |
| f. The sponsor coordinates the RFP package with the ADO. |
| g. After receiving ADO concurrence with the RFP package, sponsor completes the RFP process, and selects an EMAS vendor. |
| h. Prior to the sponsor’s final selection and award, the ADO has the option to review the sponsor’s evaluation and rating. |
| i. The sponsor, RSA designer, general contractor and EMAS vendor complete the RSA design and construction. |
3-45. Bid Alternates (Including Life Cycle Cost Analysis Alternates) and Bid Additives.
The sponsor requirements for contracts containing bid alternates (including the use of life cycle cost analysis) and additives are contained in Paragraph U-15. The ADO has the option to request and review the bid package to ensure that the sponsor has correctly established how the award will be made within the bid package (commonly referred to as the basis for award). Otherwise, the ADO has the option to accept sponsor certification.
The ADO has the option to document their determination either by notifying the sponsor in writing (with a copy to the grant file) or issuing the grant.
3-46. Bidding Asphalt and Concrete Alternates.
Bidding of both asphalt and concrete options is an example of the use of bid alternates, therefore, the requirements in Paragraph 3-45 apply.
A sponsor has the option to design and bid both asphalt and concrete alternatives for a project. However, only one design is normally allowable (the selected option). Design costs of the nonselected option are limited to the lesser of 1) the difference in the bid schedule amounts between the selected and non-selected low bidders and 2) the non-selected option design costs. The design contract must clearly delineate the design costs of the two alternatives.
If the life cycle cost analysis and selection of the pavement structure is conducted at the conceptual 30 percent design stage, the above funding restrictions on the design do not apply.
3-47. Buy American Requirements.
The Buy American Preferences under 49 USC § 50101 require that all steel and manufactured goods used in AIP funded projects are produced in the United States. Detailed sponsor and ADO requirements are included in Appendix X.
3-48. DOT Office of Inspector General (OIG) Notification of Potential Procurement/Bid Improprieties.
The ADO must contact the OIG through the DOT OIG hotline (see Appendix B for link) if they suspect any of the activities listed in Table 3-31 on an AIP project. As of January 2015, the ADO is no longer required to notify OIG in every instance where there are insufficient bidders, only where the ADO suspects inappropriate activity.
Insufficient bidders were previously defined as either a) five or fewer bidders on a construction project where the low bid was greater than the engineer’s estimate and the bid was $500,000 or more or b) there was only a single bidder on a construction contract and the bid was $250,000 or more. This former notification requirement had been implemented based on a 1983 OIG finding and a subsequent meeting between the OIG and the FAA Office of Airports. The 1983 values were adjusted for inflation by the FAA.
The ADO can find more discussion on contract fraud in a paper called Suggestions for the Detection and Prevention of Construction Contract Bid Rigging (see Appendix B for link).
| ADO must contact the OIG if they suspect any of the following on an AIP project... |
|---|
| a. Contract and Grant Fraud |
| b. Environmental, Health, and Safety Violations |
| c. Computer Crimes |
| d. Product Substitution and Suspect/Counterfeit Parts |
| e. Bribery, Kickbacks, and Gratuities |
| f. False Statements and False Claims |
| g. Conflicts of Interest and Ethics Violations |
| h. Travel Fraud |
| i. Theft or Abuse of Government Property |
| j. Violation(s) of Criminal Law and/or the Civil False Claims Act in Connection with a Federal Contract |
| k. Other Violations of Federal Laws and Regulations |
The above requirement was originally implemented based on a 1983 OIG finding and a subsequent meeting between the OIG and the FAA Office of Airports (the 1983 values have been adjusted for inflation by the FAA). The ADO can find definitions and more discussion on bid rigging, collusion, and unbalanced bidding in a paper called Suggestions for the Detection and Prevention of Construction Contract Bid Rigging (see Appendix B for link).
3-49. Escalator Clauses.
Per FAA policy, the FAA will not fund any costs in a contract that are subject to an escalator clause unless specifically approved by APP-1. Generally, APP-1 has not approved AIP funding for escalator clauses because AIP project grant amendments are limited by 49 USC § 47108(b)(3) and because the construction projects are usually of short duration.
Per FAA policy, sponsors must send their request to the ADO and obtain written APP-1 approval before awarding contracts containing an escalator clause (see Paragraph U-21).
If APP-1 does not approve the sponsor’s request, the ADO has the option of allowing the sponsor to keep the escalator clause in the contract as a non-AIP funded work item provided that the requirements in Paragraph 3-39 are met.
The ADO must provide a copy of the written determination to the sponsor and place a copy in the grant file.
3-50. Plans and Specifications Review.
Per 2 CFR § 200.324(a), the ADO has the option to review the sponsor’s technical specifications (including plans and specifications, engineer’s report, and any other items within the procurement package) at any time during the process. However, the FAA policy on ADO review is discussed further in Paragraph 3-28.
3-51. Pre-award Review of Contracts.
2 CFR § 200.324(b) gives the ADO the option to conduct a pre-award review for the situations contained in Table 3-32. Otherwise, the ADO has the option to accept sponsor certification.
It is FAA policy that sponsors notify the ADO when any of these situations exist. If the ADO conducts the review, the ADO has the option to provide the sponsor with a written response containing the ADO finding. If the ADO provides a written response, the ADO must file a copy of the response in the grant file.
| Situations include… |
|---|
| a. A sponsor’s procurement procedures or operation fails to comply with the procurement standards in 2 CFR §§ 200.317-200.326. |
| b. The procurement is expected to exceed the simplified acquisition threshold (provided in Table U-7) and is to be awarded without competition, or only one bid or offer is received in response to a solicitation. |
| c. The procurement, which is expected to exceed the simplified acquisition threshold (provided in Table U-7), specifies a brand name product. |
| d. The proposed award is more than the simplified acquisition threshold (provided in Table U-7) and is to be awarded to other than the apparent low bidder under a sealed bid procurement. |
| e. A proposed contract modification changes the scope of a contract or increases the contract amount by more than the simplified acquisition threshold (provided in Table U-7). Note that although the ADO is not required to conduct a pre-award review, the ADO must conduct a review prior to the grant being amended or closed as discussed in Paragraph 5-35. |
3-52. Sponsor’s Procurement System.
Per 2 CFR § 200.324(c) (see Paragraph U-22), the ADO must review a sponsor’s procurement system unless the sponsor has submitted a sponsor certification that the system meets the requirements of 2 CFR §§ 200.317-200.326.
If the ADO must conduct a review, the ADO has the option to provide the sponsor with a written response containing the ADO findings and/or keep a copy available for future reference.
3-53. Force Account Work.
Sponsor force account work is planning, engineering, or construction work done by the sponsor’s employees. Unlike other such work, it is done without the benefit of a construction or consultant contract obtained through the normal procurement process rules in 2 CFR §§ 200.317-200.326. Force account work is allowable per 2 CFR part 200 Subpart E (OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments).
Per FAA policy, in order for the sponsor to use force account work, the sponsor must request the use of force account work in writing and the ADO must have approved the request in advance of the grant offer. In addition, it is in the best interest of the sponsor to obtain ADO approval prior to the sponsor starting the work to ensure that the work is allowable. The sponsor’s written request must meet the requirements in Table 3-33.
Per FAA policy, the sponsor must provide the ADO with detailed documentation of all force account costs incurred as outlined in Table 3-34. In addition, the sponsor must follow the additional requirements in Table 3-35. The ADO must provide a copy of the written determination to the sponsor and place a copy in the grant file.
The ADO must not approve the use of force account for environmental work if the FAA is responsible for performing or procuring the work per the current version of FAA Order 5050.4, National Environmental Policy Act (NEPA) Implementing Instructions for Airport Projects.
| Sponsors must include the following in their written request… |
|---|
| a. Project Scope. The sponsor must provide adequate details showing the nature and extent of the work to be performed using force account. |
| b. Justification. The sponsor must provide justification for doing the work by force account rather than by contract. The sponsor must clearly show that the benefits, including benefits to the Federal government, of using force account override the Federal policy of competitive bidding or negotiated contracts. |
| c. Personnel Qualifications. The sponsor must provide information on the ability of their personnel to perform the force account work. |
| d. Detailed Cost Estimate. The sponsor must provide estimate of costs, including wage rates, nonsalary expenses, indirect costs, and comparison of costs between the sponsor’s force account and normal procurement methods. |
| e. Sponsor’s Resources. The sponsor must provide information on sponsor’s resources (labor, material, equipment, and financing) and workload as they affect capacity to do the work, date by which the work will be complete, or dates within which the work will take place. Enough funds must be available to the sponsor to carry payrolls and any necessary purchases of materials and rental equipment. |
| f. Cost Analysis. The sponsor must prepare a cost analysis per 2 CFR § 200.323 (see Paragraph U-21) and submit a copy to the ADO. The cost analysis can be used by the ADO to determine is the costs are reasonable. |
| Sponsors must document actual costs as follows… |
|---|
| a. Personnel. Because sponsor employees often work on multiple projects, or on activities outside the project in the AIP grant, sponsors must submit timesheets (or a suitable report from an automated payroll accounting system) to the ADO to support these salaries and wages. A sponsor must base their charges upon actual payroll information documented under their agency’s generally accepted practice. This payroll information must be reviewed and approved by the sponsor’s responsible official. The timesheets must properly document all of the hours worked by the employees, regardless if they were on the AIP project or not. These above requirements are discussed in more detail in 2 CFR § 200.430 (Attachment B, Paragraph 8, of OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments). The expense must be directly related to the AIP project. Arbitrary or prorated costs are not allowable. |
| b. Equipment. Equipment rental rates applicable to the construction on force account development vary widely. It is recommended that sponsors use the U.S. Army Corps of Engineers Construction Equipment Ownership and Operating Expense Schedule (EP-1110-1-8) to determine the equipment rates. The purchase price of equipment bought by the sponsor for use on a force account project is not allowable, only this calculated rental and operating rate. |
| c. Supplies and Material. All supplies and materials must follow the procurement requirements in 2 CFR §§ 200.317-200.326 (see Appendix U) and the sponsor must keep records to document these costs. |
| Other requirements include… |
|---|
| a. Reporting. Construction and project reporting requirements are the same as those under a traditional contract. |
| b. FAA Standards. Force account work must meet the same engineering and construction standards that are required under a traditional contract. |
| c. Labor Standards. Cost of labor and supervision must be in accordance with state and local standards. |
| d. Insurance. It is the sponsor’s responsibility to comply with state and local insurance requirements. |
| e. Project Changes. The sponsor must obtain prior ADO approval to change the scope of the force account work. Sponsors must make these requests in writing. |
3-54. Value Engineering.
Value engineering is the systematic application of recognized techniques that identify the function of a project or service and provide the best function reliably at lowest overall cost.
2 CFR § 200.318(g) encourages sponsors to use value engineering. The sponsor requirements for value engineering are contained in Paragraph U-10, which, by FAA policy, is required for new primary airports. In addition, ADOs have the option to require sponsors to use value engineering for unusually complex projects of greater than average costs (or require cost-benefit studies, present worth analysis, the study of alternatives, tactical planning, or other forms of technical evaluation).
The ADO must have concurred in writing with the use and scope of services for the value engineering prior to the work commencing. The ADO must place a copy of the concurrence in the grant file.
ADO’s are cautioned that significant advance preparation may be needed to comply with the current version of Advisory Circular 150/5300-15, Use of Value Engineering for Engineering and Design of Airport Grant Projects.
3-55. Indefinite Delivery (Task Orders) Extensions for Construction Services.
Per FAA policy, a sponsor may not extend a task order contract for construction services beyond a one-year duration (without re-advertising the contract) unless the ADO concurs with this action. This is because AIP funded construction must be based on current Davis-Bacon wage rates, which are updated at least on a yearly basis.
For the ADO to concur with the extension, the sponsor must provide compelling justification and the ADO must be able to agree that the economic conditions and wage rates and project costs have remained unchanged. Per FAA policy, the ADO must not concur with more than four extensions to the same task orders.
3-56. Indefinite Delivery (Task Orders) Extensions for Consultant Services.
The sponsor must define the proposed projects, services, and estimated schedule as part of the procurement process. The sponsor must limit the procurement to those projects and services that can reasonably be started within five years of the final procurement selection. Per FAA policy, a sponsor may not extend a task order contract for consultant services beyond a total overall contract duration (without re-advertising the contract) of more than five years. This time limitation has been established so that competition is not unduly restricted. Unless otherwise approved in writing by the ADO, the sponsor must not add additional projects or services to the contract.
3-57. Suspension or Debarment of Persons or Companies.
Suspension and debarment are actions that a Federal agency takes to prohibit certain person or company from bidding on projects, receiving contracts or grants, or participating in federally funded contracts or grants. If a person or company is suspended or debarred by a Federal agency, the suspension or debarment extends to all Federal programs and procurement.
Suspension and debarment applies to contractors and subcontractors at any level, including suppliers, fee appraisers, inspectors, real estate agents, consultants, architects, engineers, and attorneys. It also applies to any others that are associated with the suspended or debarred person or company.
Additional information on suspension and debarment is available on the FHWA Construction Program Guide/Suspension and Debarment and the current version of DOT Order 4200.5, Suspension and Debarment, and Ineligibly Procedures. These are based on 2 CFR part 180 and 2 CFR part 1200. Note APP-500 is the Suspension and Debarment Official for AIP.
Paragraph U-5 contains the requirements sponsors must follow regarding persons or companies that have been excluded from working on AIP funded projects. Table 3-36 contains the ADO requirements.
| For the following… | The ADO requirements include… |
|---|---|
| a. The sponsor is awarding a contract. | Per FAA policy, the ADO has the option to accept sponsor certification that the sponsor did the appropriate checks to assure that contracts or subcontracts are not awarded to suspended, debarred, or excluded firms or individual. Per FAA policy, the ADO also has the option to request additional information from the sponsor so the ADO can conduct a more thorough review. If the ADO believes the sponsor requirements were met, no further action or documentation by the ADO is required. If the sponsor requirements were not met, the ADO must contact their regional contact in the FAA Office of the Chief Counsel – Airports and Environmental Law Division (AGC-600) to determine the course of action. |
| b. A person or company currently working on an AIP project is suspended or debarred. | If the ADO becomes aware of this situation, per FAA policy, the ADO must contact their regional contact in AGC-600 to determine the course of action. |
| c. It appears that a person or company might need to be suspended or debarred. | If the ADO becomes aware of this situation, per FAA policy, the ADO must contact their regional contact in AGC-600 to determine the course of action. |
Section 11. Cost Allowable.
3-58. Allowable Cost Legislation and Policy.
The documents listed in Table 3-37 provide guidance to the ADO on how to determine what costs are allowable and necessary within AIP funded projects.
49 USC § 47110(b) contains the five basic requirements that must be met for an ADO to determine that a cost is allowable. These five basic requirements are discussed in further detail in the following sections, as listed in Table 3-38.
In addition, the FAA has made a number of policy decisions on specific project cost items, which are discussed in further detail in the rest of this section.
| The resources include… |
|---|
| a. The Act. 49 USC § 47110(b) contains the basic five requirements that must be met for an ADO to determine that a cost is allowable. |
| b. 2 CFR part 200 Subpart E (OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments). 2 CFR part 200 Subpart E (OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments) provides the principles that the ADO must use to determine if a cost is allowable for AIP funded projects. |
| c. The Single Audit Act of 1984. The Single Audit Act of 1984, Public Law 98-502 (as amended in 1996, Public Law 104-156, as amended and recodified at 31 USC § 7501 et seq.) is implemented by 2 CFR part 200 Subpart F (OMB Circular A-133, Audits of State, Local Governments, and Nonprofit Organizations). Although it is not this document’s primary purpose, the Single Audit Act of 1984 provides valuable information about how to make allowable cost determinations. |
| For the following basic requirement… | The requirements are in… |
|---|---|
| a. Costs Necessary (Allowable Cost Rule #1). | Section 12 |
| b. Costs Incurred after Grant Executed (Allowable Cost Rule #2). | Section 13 |
| c. Costs Reasonable (Allowable Cost Rule #3). | Section 14 |
| d. Costs Not in Another Federal Grant (Allowable Cost Rule #4). | Section 15 |
| e. Costs within Federal Share (Allowable Cost Rule #5). | Section 16 |
3-59. Unallowable Cost Table.
Appendix C contains tables that the ADO can use to help determine if the FAA has previously identified a project or cost to be ineligible or unallowable.
3-60. Administrative Costs.
The ADO may determine that administrative costs are allowable direct charges to a grant if the administrative costs are required to carry out the grant project. Examples of common administrative costs and their requirements are included in Table 3-39.
Administrative costs must not include planning, engineering, or construction work and are therefore not considered force account work. Administrative costs may include work done by a sponsor or by another entity, such as an attorney. Administrative costs must be supported by vouchers, receipts, personnel activity reports, or other verifiable documentation. Administrative costs must not represent a pro-rated allocation of time or expenses.
By FAA policy, a line item for estimated administrative costs can be included in the grant application if the sponsor cannot accurately calculate the total administrative costs. However, these estimated administrative costs must not exceed 2% of the grant amount or $10,000, whichever is less.
Once a grant is issued, the payment requests for administrative costs must represent actual costs and must be supported by appropriate documentation. Claims may not represent an estimated, allocated, or prorated cost.
| For the following example… | The following requirements apply… |
|---|---|
| a. Sponsor Employee Time. The cost for a sponsor’s employee’s time directly related to administrative tasks that are required to complete an AIP project The cost for a sponsor’s employee’s time includes the employee hourly salary; and costs related to the hourly rate such as Medicare, Social Security, federal/state/local taxes, and Indirect Cost rate, if applicable. |
(1) The ADO must determine that the work that is going to be accomplished by the sponsor’s employees is required to carry out the AIP project. This is required because 49 USC § 47110(b) limits reimbursement to costs that are, “necessarily incurred in carrying out the project in compliance with the grant agreement,” and establishes that costs must be “reasonable in amount”. (2) The sponsor must have a time tracking system in place that tracks all hours that its employees work. (3) Because sponsor employees often work on multiple projects, or on activities outside the project in the AIP grant, sponsors must submit timesheets (or a suitable report from an automated payroll accounting system) to the ADO. (4) The timesheets must properly document all of the hours worked by the employees, regardless if they were on the AIP project or not. (5) A sponsor must base their charges upon actual payroll information documented under their agency’s generally accepted practice. This payroll information must be reviewed and approved by the sponsor’s responsible official. (6) A copy of the sponsor’s responsible official’s written approval must be provided to the ADO. (7) These above requirements are discussed in more detail in 2 CFR § 200.430 (Attachment B, Paragraph 8, of OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments). (8) The expense must be directly required by and related to the AIP project. These are normally limited to project specific costs such as preparation of an independent fee estimate, legal review of a construction contract, and submission of FAA required project reports. Costs that are not directly related, or are prorated, are not allowable. (9) Costs to administer the AIP program are not allowable. |
| b. Overhead Costs. Anything more than direct employee’s time. These normally consist of support services such as accounting, billing, building rent, and utilities that cannot be attributed to one specific project or activity. |
(1) These are considered indirect costs, which are discussed in Paragraph 3-61. |
| c. Sponsor Employee Expenses (such as tolls, mileage, and parking). |
(1) The expense must be reasonable, be directly related to the AIP project, and be supported by a receipt or voucher. |
| d. Legal Fees. | (1) The expense must be reasonable, be directly related to the AIP project, and be supported by an invoice. |
| e. Independent Fee Estimates. | (1) The expense must be reasonable, be directly related to the AIP project, and be supported by an invoice. |
| f. Newspaper Advertisements / Announcements in Publications. | (1) The expense must be reasonable, be directly related to the AIP project, and be supported by an invoice. |
| g. Audit Fees. | (1) The expense must be reasonable, be directly related to an AIP project (in this grant or in a prior grant), and be supported by an invoice. (2) The audit must be required by, and performed in accordance with, the Single Audit Act, as implemented by 2 CFR part 200, Subpart F (OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations). (3) If the audit includes other Federal programs beyond AIP, the costs are prorated to include only the AIP portion. (4) It is the opinion of the FAA that sponsors that are issued subgrants under a state block grant are responsible for obtaining the single audit and for the payment of the audit costs. Therefore, the request for reimbursement of these costs is tied to the subgrant. |
3-61. Indirect Costs.
The FAA’s policy allows a sponsor’s indirect costs to be charged to the sponsor’s employee’s hourly salary for time working on an AIP grant if the indirect cost rate (IDC) was calculated based on the requirements in Table 3-40. The FAA policy allows indirect costs to be applied only to the direct wages and salaries of a sponsor’s employees (not to other project costs).
| The following requirements apply… |
|---|
| a. Indirect or Overhead Costs. Costs incurred by a sponsor for other than employee’s direct time. Allowable items of cost that make up indirect costs may include costs for support services such as accounting, billing, building rent, and utilities that cannot be attributed to one specific project or activity can be allocated via federally-sanctioned formula to the grant. |
| b. Indirect Cost Rate Calculation. Indirect or overhead costs are potentially allowable only if the sponsor meets one of the following two criteria for calculation of the indirect cost rate. (1) The sponsor has a Cost Allocation Plan approved by the cognizant Federal agency. In addition, the sponsor has and an executed indirect cost rate agreement developed in accordance with 2 CFR part 200 Subpart E (OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments). These two documents are needed by the ADO to determine what percentage of the costs, if any, can be allocated to of modified total direct cost (MTDC). (2) If a sponsor does not have a Cost Allocation Plan, the sponsor has the option to charge a de minimis rate of 10% of modified total direct cost (MTDC) per 2 CFR § 200.414(f). |
| c. Modified Total Direct Cost (MTDC). Per FAA policy, the allowable MTDC is the cost for a sponsor’s employee’s time directly related to administrative tasks that are required to complete an AIP project The cost for a sponsor’s employee’s time includes the employee hourly salary; and costs related to the hourly rate such as Medicare, Social Security, federal/state/local taxes. |
| d. Cognizant Federal Agency. The cognizant agency of the federal government that must approve or disapprove the Cost Allocation Plan. This agency is generally the federal agency that has the greatest dollar involvement with a given sponsor. The ADO must contact APP-500 if it ADO has a question regarding whether the FAA is the cognizant agency for a sponsor. For the most part, the FAA is the cognizant agency for airport authorities. The Federal Highway Administration is the cognizant agency for many state departments of transportation and in that role, negotiates the indirect cost rate on behalf of the FAA. |
| e. FAA Determinations. For those sponsors for which the FAA is the cognizant agency, responsibility for approving or disapproving cost allocation plans and negotiating and executing the indirect cost rate agreement is delegated to the regional division manager. The ADO has the responsibility for review of the cost allocation plan, for signature by the regional division manager, and must use the following documents to make their recommendation: (1) 2 CFR part 200 Subpart E (OMB Circular A-87. Cost Principles for State, Local and Indian Tribal Governments). (2) ASMB C-10. Cost Principles and Procedures for Establishing Cost Allocation Plans and Indirect Cost Rates for Agreements with the Federal Government (developed by the United States Department of Health and Human Services and dated April 8, 1997). (3) Financial Assistance Guidance Manual. This DOT guidance, dated March 2009, replaces DOT Order 4600.17A, Financial Assistance Management Requirements. |
| f. Application of Rate. The rate approved under the cost allocation plan (also referred to as the indirect cost allocation plan rate, or ICAP rate) is applied only to the costs associated with sponsor’s employees’ hourly rate, inclusive of employer paid costs, such as Medicare, Social Security, and federal, state, and local taxes. For example, if the employee earns $10/hour (including employer paid taxes or benefits) and the rate is 14%, the allowable overhead is $10/hour multiplied by 14%. |
| g. Indirect Cost Rate Documentation. Sponsors that intend to claim reimbursement for indirect costs must include a signed copy of the approved indirect cost rate and the indirect cost proposal for the grant year in the grant application. |
3-62. Architectural Enhancements Costs.
It is FAA policy to support projects that contribute to the architectural and cultural heritage of local communities. In accordance with this policy, sponsors are encouraged in their early planning procedures to use design, art, and architecture to reflect local customs and history of the community or other cultural emphasis as long as this can be accomplished without impairing function, safety, and efficiency of the facility.
Architectural treatment of the inside and outside of buildings to reflect local custom, style, or cultural attitudes is an allowable cost. The work must be architectural in nature (it cannot be for the sole purpose of aesthetic enhancement) and must be in an area accessible by the public. Allowability examples for architectural treatments is contained in Table 3-41.
| The cost to… | Is… |
|---|---|
| a. Apply an adobe finish on the exterior and public interior walls of a terminal in the Southwest. | Allowable. |
| b. Acquire and install terrazzo floors (depicting local scenes) in a non-public area of the terminal. | Not Allowable. The type of work is allowable, but because it is not in a public area, it is unallowable. |
| c. Purchase and install a free standing sculpture in the terminal. | Not Allowable. This is a work of art for the sole purpose of aesthetic enhancement. It is not an architectural treatment. |
3-63. Benefit-Cost Analysis (BCA) Costs.
Per FAA policy, the costs incurred to prepare a BCA are only allowable as a grant formulation cost for the specific project (not as a stand-alone grant). In addition, these costs cannot be reimbursed until after the BCA shows that the project is justified.
3-64. Construction Costs.
Construction costs are only allowable if they are necessary to complete the project according to the plans and specifications.
3-65. Construction Project Signs Costs.
Project signs at an airport construction sites are not required, but if erected may be an eligible cost if the construction includes at least $200,000 of federal funds and will be underway for at least three months. The allowable cost of the sign is limited to $1,000. The sign must contain a brief description of the project and the following statement: Part of the funding for this project is being provided by a grant from the Airport Improvement Program, which is administered by the Federal Aviation Administration and financed through the Airport and Airway Trust Fund.
3-66. Computer Software and Data Subscription Costs.
The ADO may approve sponsor requests, on a case-by-case basis, to include a specifically allocated portion of the costs of software acquisition, licensing and/or subscription. The ADO may only approve the portion of the cost that is directly attributable to a specific, FAA-approved AIP project, only for the duration of the approved AIP project, and only for the entity that is actually doing the work for which the software is required.
These costs may include customized commercially available software, but only if the customized software becomes public domain and the sponsor makes it available to any user without cost beyond handling costs.
It is anticipated that the costs of this software will normally be incurred by the sponsor’s consultant because the consultant is performing the technical work. The cost for sponsor acquisition of software is not allowable unless it is approved by the ADO for force account work (see Paragraph 3-53).
The costs of ongoing data subscription services, such as those needed for a noise monitoring program, are not allowable. The sponsor is also responsible for the costs of any ongoing vendor service costs that may be needed to access FAA surveillance tracking data.
3-67. Disadvantaged Business Enterprise (DBE) Plan Updates.
The requirement for a sponsor to have a DBE plan is discussed in Paragraph 5-9. A sponsor is required to update their overall DBE program goals within this plan every three years. The cost for this DBE plan update is eligible as project formulation costs in the sponsor’s first AIP grant after the update. A sponsor with multiple airports is only required to have one DBE plan (which covers its airports). Therefore, the sponsor is allowed to apply the cost to update the plan to a grant at any of the airports it owns.
The cost to set the project specific DBE goal is also an eligible project formulation cost for that project.
3-68. Drainage Costs.
The drainage improvements are allowable to the extent the work serves eligible areas and facilities. If the drainage improvement will serve both eligible and ineligible areas/facilities, the allowable cost is limited to prorated share for the eligible portion. The ADO will determine the method of proration. Table 3-42 contains a proration example. In addition, the requirements for including ineligible or non-AIP funded work in the contract in Paragraph 3-39 must be met.
Drainage projects are eligible as stand-alone projects as discussed in Appendix D.
| For the following situation… | The allowable prorated amount would be… |
|---|---|
| a. A project will extend an off-airport drainage box culvert through the airport. This box culvert will also serve the neighborhood adjacent to the airport. The airfield runoff is 20 acres and the neighborhood runoff is 100 acres. | One fifth of the total cost to extend the culvert through the airport (including associated design, inspection, etc.). |
3-69. Duct Bank Costs for Ineligible Facilities.
Normally, the cost to install, modify, or enlarge duct banks to support an existing or future ineligible facility is not allowable. There is one exception. These costs are allowable as part of an AIP funded pavement project only if the ADO has determined that they will reduce the need to disturb the AIP funded pavement at a later date.
The acquisition and installation cost of the ineligible utilities and equipment remains unallowable.
3-70. Energy Efficiency (Green/Sustainable) Improvement Costs.
Per 49 USC § 47110(b)(7), the costs to improve the energy efficiency of a building, sometimes referred to as green or sustainable improvements, are allowable. Energy efficiency improvement costs must meet the criteria in Table 3-43.
Note that the requirements for a project for improving the energy efficiency of airport power sources are discussed in Chapter 6, Section 7.
| In order for an energy efficiency improvement cost to be allowable… |
|---|
| a. The cost must be incurred on a measure to improve the efficiency of an airport building (such as a measure designed to meet one or more of the criteria for being considered a high-performance green building as set forth under section 401(13) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17061(13))). |
| b. Any increases in initial project costs must be offset by expected savings over the life cycle of the project. The sponsor must follow the published FAA guidance for calculating the life cycle cost. |
| c. For building projects, the cost must be incurred on an otherwise eligible and justified airport building project (improving energy efficiency cannot be the justification). A project to improve a building’s energy efficiency is not eligible as a stand-alone project. |
| d. The cost must only include costs which are necessary for the project, such as those for design, construction, testing, and inspection (not for obtaining LEED or similar certification or credits – which is not a necessary cost of the project). |
| e. For a building which contains eligible and ineligible areas, all costs associated with the measure (such as design, construction, testing, and inspection) must be prorated accordingly. In addition, the requirements for including ineligible or non-AIP funded work in the contract in Paragraph 3-39 must be met. |
| f. The sponsor must submit the initial project costs, the expected savings over the life of the project, the life cycle cost calculations, and the proration calculations (for building contains eligible and ineligible areas) to the ADO. |
| g. The costs to redesign or to modify ongoing construction to incorporate energy efficiency measures into the project are only allowable to the extent that the previously incurred design costs are removed from the AIP-funded project. |
3-71. Engineering and Architectural (A/E) Costs.
Engineering and architectural costs are only allowable if they are necessary to complete an AIP eligible project. If only part of the project is eligible, the engineering and architectural costs are limited to the prorated eligible amount. Table 3-44 provides examples of some engineering and architectural costs that may be necessary for an AIP project.
| Some examples include costs to… |
|---|
| a. Prepare plans and specifications (stand-alone design grants are discussed in Appendix D) |
| b. Establish and report on project specific DBE goals |
| c. Conduct initial field investigations |
| d. Conduct preliminary design |
| e. Conduct testing |
| f. Prepare construction management plans and the final test and quality control reports required for projects with pavement costs of $500,000 or more |
| g. Provide engineering cost estimates |
| h. Prepare bid documents |
| i. Evaluate bid proposals |
| j. Conduct construction inspection |
| k. Provide technical consulting services |
| l. Surveying and data collection (see Paragraph 3-77 for guidance on Geographic Information System (GIS) data collection) |
3-72. Environmental Finding Costs.
Environmental finding costs are only allowable if they are necessary to complete the project per the current version of FAA Order 5050.4, National Environmental Policy Act (NEPA) Implementing Instructions for Airport Projects.
3-73. Equipment Leasing (instead of Purchase) Costs.
The Act only allows eligible equipment to be purchased, not leased. The exception is when equipment is leased for temporary use to complete an AIP eligible project (either by a contractor or through ADO approved sponsor force account).
In the case of lease/purchase agreements, only the purchase portion of the arrangement is an allowable AIP cost, and the ADO cannot issue the grant for the equipment until after the sponsor executes the option to purchase the equipment.
3-74. Facility Impeding an AIP Development Project – Costs to Rebuild or Relocate in Another Location.
The definition of allowable costs is expenses necessary to complete the project (49 USC § 47110 (b)). Normally, only demolition of facilities impeding an AIP development project is considered necessary.
However, there are situations where the cost of rebuilding an impacted facility (or paying to physically relocate it to another location) is an allowable cost. This depends on the ownership and type of the impacted facility. Table 3-45 provides detailed guidance and Table 3-46 provides examples.
For purposes of eligibility, impeding an AIP development project means physical interference with the AIP funded development project. It does not include rebuilding or relocating the facility to mitigate inconveniences to the facility.
In addition, if a facility is eligible for AIP funds, the ADO must also determine that there is no reasonable alternative and the sponsor is not knowingly impacting the facility to justify the participation of AIP funding. By issuing the grant, the ADO is documenting their determination.
| If the impacted facility is… | The cost to rebuild or relocate the facility in a new location is… |
|---|---|
| a. FAA-owned NAVAID or federally owned (other than FAA owned NAVAID) and is on airport property. | Allowable only if all of the following criteria are met: (1) The ADO has determined: (a) The new building or piece of equipment is the same size and function of the original; (b) It is not feasible to relocate the original facility or equipment; and (c) The allowable cost to construct a new facility to existing construction standards per 49 USC § 47110(b)(1) does not exceed the cost of relocation of the existing facility. (2) If the facility is FAA-owned, the ADO must complete all required coordination with FAA Technical Operations (AJW). As part of the coordination, if AJW determines that the facility is no longer required, it is not eligible for relocation with AIP. It may be eligible to be demolished as an obstruction. Sponsors are advised to consider this possibility during the planning process. (3) If the ADO determines that the relocation of the facility is feasible: (a) The allowable costs are limited to the relocation costs, the site preparation, and utility installation at the new location. (b) AIP participation must not include refurbishing, enhancing or upgrading the impacted facility. (4) For FAA facilities, the relocation costs or costs of a new building or piece of equipment must demonstrate a passing (greater than 1.0) benefit-cost ratio. |
| b. Not sponsor or federally owned and is on airport property. | Not allowable (Rebuild). AIP cannot be used to rebuild the facility in a new location (this is the responsibility of the owner). Allowable (Purchase). AIP can be used to purchase the facility at market value. The costs associated with its demolition and removal are also allowable, minus any salvage value. Allowable (Relocate). The relocation of the structure or facility to another location on the airport in lieu of purchase is eligible up to the market value of the facility. Nominal incidental costs of the relocation (such as extinguishing a lease) may be included |
| c. Not sponsor or federally owned and is off airport property. | Allowable. Detailed guidance on allowable costs is provided in the current version of Advisory Circular 150/5100-17, Land Acquisition and Relocation Assistance for Airport Improvement Program Assisted Projects. Unless otherwise specified in this advisory circular, relocated facilities (such as roads or utilities) must have an equivalent type and functionality as the existing facility. |
| d. Sponsor-owned, is on airport, and is an AIP eligible standalone project. | Allowable if the new facility is justified in the same way as if it were a standalone project. In other words, if the impacted facility is eligible and justified under AIP regardless of the impacting project, it is allowable to rebuild the facility in another location to the current size justified. Although obstruction removal is an eligible stand-alone project, the facility is only eligible for demolition. The ADO must follow the same funding rules for the demolition that exist for the associated development project. In addition, the cost to rebuild the facility in a new location must follow the funding rules (and any other AIP requirements) that would exist if this were a stand-alone project. |
| e. Sponsor-owned, is on airport, is not an AIP eligible standalone project, and is required by an FAA change to FAA design standards per 49 USC § 47110(d). | Allowable only if all of the following criteria are met: (1) This is not a change in category of FAA design standard for the airport due to increased traffic or other circumstances. Rather, this is a change in the actual physical dimension that is required for an airport to meet FAA design standards. (2) APP-500 has advised the ADO and regional offices that a change has been made to FAA design standards that may trigger the provisions of 49 USC § 47110(d). Advisory circulars contain both FAA design standards and recommendations. This provision only applies to changes in FAA design standards, not updated or new recommendations. (3) The ADO determines that the relocation or replacement is required due to a change in the FAA design standards that were published after February 14, 2012 (the date of enactment of FAA Modernization and Reform Act of 2012, Public Law 112-95). (4) The ADO determines that the change is beyond the control of the airport sponsor. (5) The ADO determines that the new FAA design standard clearly infringes on the sponsor’s facility. (6) Only passenger entitlements, state apportionment, or nonprimary entitlements are used. (7) If the facility is replaced (rather than relocated), the new facility must have an equivalent type and functionality as the existing facility. (8) The change must not be simply a sponsor’s preferred alternative. For example, a change in FAA design standards requires reconfiguration of an apron and the sponsor’s preferred alternative impacts a sponsorowned hangar. If the ADO determines that there are other design alternatives that will not impact a sponsor-owned hangar (whether or not those are the sponsor’s preferred alternative), the cost to rebuild is not allowable. (9) The ADO must also determine that there is no other reasonable way to avoid rebuilding the facility and that the sponsor is not trying to knowingly impact a facility so that AIP funds can be used to rebuild it. |
| f. Sponsor-owned, is on airport, is not required by a change to FAA design standards, and is not an AIP eligible stand-alone project | Not allowable. The only costs that are allowable are the removal or demolition of the facility (minus salvage value) and lease extinguishments in very rare cases. Extinguishment of leases without termination clauses may invoke relocation requirements per 49 CFR § 24.2(9). Extinguishment of non-terminal building leases for leases executed before the date of Change 1 of this Handbook that do not have a termination clause are allowable. For leases executed after the date of Change 1 of this Handbook or that have a termination clause, costs to extinguish the lease are not allowable. For tenant-owned improvements within a sponsor owned terminal, the demolition of the tenant improvements is the only allowable cost. The reason that the cost to rebuild the impacted tenant space is not allowable is because the sponsor has control of airport development and is therefore responsible if a tenant area is in the way of new development. The sponsor also has the option to physically move the facility to another location on the airport up to, but not exceeding, the demolition costs of the facility. |
| For the following impacted facility… | The following costs are allowable… |
|---|---|
| a. An FAA-owned air traffic control tower with a cab that accommodates six controller positions. The existing structure cannot be dismantled and relocated. | The costs to rebuild the cab based on the current square foot per controller standards needed to accommodate six controller positions up to the cost of relocating the existing facility. Even though this may result in a larger cab, this cost is allowable because the facility has to be built to the same functionality. However, if the FAA Air Traffic Organization (ATO) wants to upgrade the facility above the current functionality, the ATO is allowed to pay for the increase in cost. (This combination of AIP and ATO funding is allowable.) Note that all air traffic control tower relocations must be sited through the Airport Facilities Terminal Integration Laboratory (AFTIL) based on the current version of FAA Order 6480.4, Air Traffic Control Tower Siting Process. |
| b. An existing FAA-owned approach lighting system equipment shelter. The ADO has determined that the shelter can be relocated. ATO wants to take the opportunity to also refurbish the interior electrical system of the shelter. | The cost to relocate the equipment shelter. ATO is responsible for any upgrades to the shelter as a separate project. |
| c. An existing FAA-owned Visual Approach Slope Indicator (VASI). ATO proposes that the ADO pay to replace the VASI with a precision approach path indicator (PAPI). The ADO has determined that it is feasible to relocate the existing VASI. | The cost to relocate the VASI or the cost to install the new ATO-provided precision approach path indicator PAPI (up to but not exceeding the cost of the VASI relocation cost). If a new ATO-provided PAPI is installed, any cost above the VASI relocation cost (per engineering estimates) must be paid for directly by ATO. (This combination of AIP and ATO funding is allowable.) The sponsor must obtain the PAPI from ATO through a reimbursable agreement. This is because the PAPI may not be supported by ATO if the sponsor uses the normal procurement process. |
| d. An existing FAA-owned VASI. ATO proposes that the ADO pay to replace the visual approach slope indicators (VASI) with a precision approach path indicator (PAPI). The ADO has determined that it is not feasible to relocate the existing VASI. | The cost to purchase and install a new PAPI. Even though the PAPI is an upgrade, because the FAA no longer purchases and installs VASIs, a PAPI is the only option to provide equivalent functionality and is therefore allowable. The sponsor must obtain the PAPI from ATO through a reimbursable agreement. This is because the PAPI may not be supported by ATO if the sponsor uses the normal procurement process. |
| e. An airport administration office in the sponsor-owned terminal. | The cost to demolish the office area. The terminal is airport owned and the airport administration office is not AIP eligible, therefore rebuilding the office in a new location is not allowable. |
| f. A passenger holding area at a nonexclusive use gate in the sponsorowned terminal. | The cost to demolish the passenger holding area and rebuild it in another location. The costs can include an area up to the size the ADO would consider eligible if it were a stand-alone project. |
| g. A sponsor-owned T-Hangar at a GA airport. The ADO has determined that the AIP project impacting the THangar could be located elsewhere on the airport. | The cost to demolish the T-Hangar. The sponsor is choosing to unnecessarily impact the THangar, so the cost to rebuild the T-Hangar in another location is unnecessary and is not allowable. |
| h. A sponsor-owned T-Hangar at a GA airport. The ADO has determined that the AIP project impacting the THangar could not be located elsewhere on the airport and that the sponsor is not trying to knowingly impact the building so that AIP funds can be used to rebuild it. | The cost to demolish the T-Hangar and rebuild (or relocate) it in a new location up to the size and specifications the ADO would consider to be eligible if it were a stand-alone project. However, since this is a revenue-producing aeronautical support facility, only non-primary entitlements can be used to rebuild the T-Hangar. In addition, the sponsor is restricted from using all but non-primary entitlements for that fiscal year as well as the next two fiscal years. |
| i. An ARFF building. The existing building does not meet the current construction standards for earthquake protection, nor, based on the ADOs calculations, is it big enough to address the existing 14 CFR part 139 requirements. The ADO has also determined that there is no other reasonable way to avoid rebuilding the facility and that the sponsor is not trying to knowingly impact the building so that AIP funds can be used to rebuild it. | The costs to demolish the ARFF building, rebuild it in a new location, enlarge it to meet the 14 CFR part 139 requirements, and bring it up to the current construction standards for earthquake protection. |
| j. A sponsor-owned T-Hangar at a primary airport that is directly impacted by a change in FAA design standards. The ADO has determined that the only reason the T-Hangar must be relocated is due to a change in FAA dimensional design standards issued after February 14, 2012. Note that a change in an FAA recommended design practice is not a change in FAA design standard. | The cost to demolish the T-Hangar and rebuild (or relocate) it in a new location if all of the other requirements in Table 3-45 for this type of project have been met. |
3-75. Flight Check.
If a flight check is required by the FAA to commission an AIP-funded NAVAID, the cost of one flight check under a reimbursable agreement with the FAA, and the associated costs for the contractor to participate, is allowable. In the instance that FAA cancels a flight check and the sponsor incurs costs from having the contractor on site for the flight check, these costs may also be allowable. However, the cost for failed flight checks are not allowable.
3-76. Force Account Costs.
Sponsor force account work is planning, engineering, or construction work done by the sponsor’s employees. These costs are only allowable if they are necessary to complete the project and have been approved by the ADO as discussed in Paragraph 3-53.
3-77. Geographic Information System (GIS) Data Collection.
GIS data collection is an allowable costs if it meets the requirements in Table 3-47. The Airports GIS surveying and data collection efforts that allowed surveying beyond that allowed in the table are no longer in effect.
| For GIS work within the following type of project… | The following restrictions apply… |
|---|---|
| a. AIP funded development. | (1) The scope of the field survey, data collection, and uploading to the Airports GIS program must be directly required by the AIP funded development project. (2) The costs must be limited to that required to complete the AIP funded development project. (3) The field survey, data collection, and uploading to the Airports GIS program is in accordance with FAA surveying standards. |
| b. AIP funded planning. | (1) Because a planning study is expected to result in an FAA-approved airport layout plan that reflects future conditions for the entire airport, the scope of the grant may include Airports GIS-compliant surveying for the entire airport consistent with the FAA’s established surveying standards for Airports GIS— regardless of whether the airport sponsor chooses to characterize the planning study as a master plan or master plan update, or some other type of planning study. (2) In extraordinary circumstances, a planning study may be conducted in phases, in which case it is permissible to include the full-airport survey work in a Phase 1 planning grant—i.e., a grant whose scope does not include the final master plan or ALP documents. However, in such cases, the grant must include a special condition (the automated AIP system contains the current available special conditions). (3) State or metropolitan system planning studies are used to study the performance and interaction of an entire aviation system in a specific geographic area. As such, AIP-funded system planning grants may not generally include whole-airport surveys unless specifically approved by APP400 and APP-500. (4) The field survey, data collection, and uploading to the Airports GIS program must be in accordance with FAA surveying standards. |
3-78. Heated Airfield Pavement.
The cost of a heating system for airfield pavement, as defined in the current version of Advisory Circular 150/5370-17, Airside Use of Heated Pavement Systems, is eligible under AIP. However, the sponsor must justify the costs with a positive benefit-cost analysis. In addition, the ADO must remove the pavement from subsequent snow removal calculations when determining AIP eligible snow removal equipment.
3-79. Historic Building Costs.
If a structure is being impacted as part of an eligible AIP project (including land acquisition and noise mitigation) and the structure is on (or eligible for listing on) the National Register, as amended, the associated costs required by Section 106 of the National Historic Preservation Act of 1966, Public Law 89-665 (codified as amended at 16 USC § 470h-2) are allowable.
3-80. Hydrant Fuel Lines and Pit Costs.
The incidental cost of installing aircraft fuel lines and pits as part of an aircraft apron project is an allowable cost. Per FAA policy, the costs must be prorated to include only the portion of the lines and pits physically under the AIP funded apron project. These costs are allowable because they will reduce the need to disturb the AIP funded apron at a later date. The requirements for including ineligible or non-AIP funded work in the contract in Paragraph 3-39 must be met.
3-81. Land Acquisition Costs.
It is FAA policy that costs associated with a land acquisition (such as appraisals, legal fees, etc.) are not allowable until after the sponsor has submitted evidence satisfactory to the ADO that the sponsor will obtain good title to the land. Typical examples of this evidence are a binding purchase agreement that will convey good title, evidence of a condemnation deposit, a condemnation award, or a court settlement. Until the sponsor meets this requirement, there is no guarantee that the land acquisition will be completed. Therefore, while the ADO may issue a grant for land acquisition before the sponsor submits satisfactory evidence that good title will be acquired, sponsors must not submit payment requests until these conditions are met.
Some of the common allowable land costs and their associated restrictions are listed in Table 3-48. All of these costs need to be necessary and reasonable in amount. The ADO must only fund cost allowed under 49 CFR part 24 and may contact APP-400 for assistance.
| For the following cost… | The following restrictions apply… |
|---|---|
| a. Appraisals | One appraisal of each property to be acquired is allowed unless the ADO concurs that a second, full appraisal is justified. Generally, a property with potential fair market value over $500,000 may require a second appraisal. Complex appraisal assignments may also require two appraisals to ensure adequate market research and analysis is secured to support appraised values. The sponsor must ensure all appraisal reports to establish the just compensation offer to the property owner are reviewed by qualified review appraiser and approved as required under 49 CFR part 24. |
| b. Title Evidence | The reasonable and necessary cost of title evidence (title search and acquisition closing procedures to ensure marketable clear title to property is conveyed to the airport) is allowable. The sponsor’s attorney must certify to ADO that good title has been acquired and may rely on title insurance (title company commitment of insurance of marketable title), or title abstract or an attorney’s certificate of title. Per FAA policy, AIP reimbursement of the title insurance costs must not exceed $1000 per parcel. |
| c. Exhibit A Update | Per FAA policy, the sponsor is required to maintain a current Exhibit A (property inventory map). The cost to update the Exhibit A is both a required and an allowable cost in a land project. An airport property map is not a substitute for an Exhibit A. |
| d. Condemnation Awards | The ADO may accept the cost of land or property interest established by the courts in a condemnation proceeding as a reasonable cost, even though it is above current appraised value. Reasonable attorney fees, delay interest, and acceptable incidental expenses included in a court award to land owners in a condemnation action are allowable costs. If the sponsor and their legal counsel determine that the award was excessive or unreasonable, they must evaluate whether to appeal the award. The sponsor and their legal counsel are encouraged to appeal an unfavorable award if there is good reason to believe that the amount of the award will be significantly reduced on appeal or retrial. |
| e. Relocation Assistance Costs | Relocation assistance and eligible payment requirements are described in 49 CFR part 24. These are required both for all FAA assisted projects and programs where acquisition or relocation is required or contemplated, and for projects to reimburse the sponsor for prior acquisition or relocation. The cost incurred by the sponsor to meet the requirements of 49 CFR part 24 is allowable. Examples include, but are not limited to: (1) Moving expenses. (2) Reestablishment expenses. (3) Replacement housing payments. (4) Related non-residential expenses. (5) Rent supplements. (6) Down payments. (7) Mortgage interest differentials or mortgage buy downs. (8) Incidental expenses in connection with the acquisition of replacement housing. (9) Advisory services. (10) Preparation of feasibility studies and relocation plans. |
| f. Appraisal (Highest and Best Use) for Acquisition of an Airport not in the NPIAS | The acquisition of a private airport by a public sponsor will normally include acquiring all of the airport property, including improvements. The appraised highest and best use of the land may either be continued airport use, or market development of the land to a more valuable land use, but not a mix of the two. The ADO must contact APP-400 for additional guidance on the appraisal requirements for the acquisition of a private owned airport. |
| g. Facilities on AIP Acquired Land | When land is acquired using AIP funding and there are existing facilities on the land, the ADO must determine if the cost for these facilities is allowable. Table 3-49 provides the allowability requirements the ADO must use to make these allowability determinations. |
| If the facility will be … | Then the cost of acquiring the facility is… |
|---|---|
| a. Demolished | Allowable. |
| b. Used for an AIP eligible purpose (such as a general aviation terminal) | Allowable up to the justified size or use of the AIP eligible purpose (all other project and project related funding requirements apply). |
| c. Demolished at a later date (not to exceed three years) | Allowable. The sponsor may use the structure for any incidental purposes it deems desirable provided it does not interfere with the purpose of the airport. However, any revenue at fair rental value received during the period between acquisition and demolition of the structure constitutes airport revenue and is to be used according to grant assurances. If a decision is ultimately made not to demolish the structure, then the ADO must contact ACO-100 to determine the next course of action. |
| d. Used for a purpose that is not AIP eligible (such as administrative offices) | Not Allowable. |
| e. Relocated from its present site | Partially Allowable. This cost is only allowable up to the lesser of the relocation costs or the demolition costs. |
3-82. Legal Fees and Settlement Costs.
Legal fees and settlement costs are allowable if the ADO has determined that all of the criteria in Table 3-50 have been met. The ADO has the option to request the assistance of their regional legal counsel in making these determinations. The ADO also has the option to request the assistance of APP-400 for environmental or land related legal fees and settlement costs.
The ADO cannot find associated administrative expenses or consultant fees to be allowable if the ADO has determined that the legal fees or settlement costs are unallowable.
The ADO has the option to either implicitly concur with the legal fees and/or settlement costs by issuing the grant or make a written determination. In either case, the ADO must place the documentation used to support this determination in the grant file.
| All of the following criteria must be met for the costs to be allowable… |
|---|
| a. The legal fees and/or settlement costs are a necessary part of the project or are needed to avoid shutdown of the project. Examples include legal costs to file the title at the courthouse, legal costs to review contracts before they are signed by the sponsor, and settlement costs required by a court finding to avoid a project being shut down. |
| b. The costs are not associated with defending a specification or Federal provisions. This is because the cost to defend a Federal provisions or specification is not a necessary part of the project and is not needed to avoid shutdown of the project. |
| c. The costs are reasonable. |
| d. The costs are documented in an invoice. |
| e. The costs can be paid for within the existing grant (or any proposed amendment). A separate grant cannot be issued if the costs are more than the amendment limit. |
| f. If the total legal fees and/or settlement costs within the grant (and any proposed amendments) will exceed $100,000, the ADO has provided their recommendation up through the regional office and APP-500 to APP-1, and APP-1 has provided written concurrence. |
| g. The ADO has determined that costs are not due to negligence on the part of the sponsor or consultant (including bidding defective plans or improper payments) and the sponsor did not violate contract provisions. |
| h. The ADO has determined that the costs are not associated with the recoveries of improper payments. Under 49 USC § 47110(b)(1), all costs paid with AIP funds must be necessary to carry out the project. It is the sponsor’s responsibility to recover improper payments without using AIP funding to carry out the work effort. |
| i. The sponsor has exhausted all other avenues available to pay for the costs or resolve the issue. |
3-83. Lighted X’s and Other Runway Closure Markings Costs.
The cost for a contractor to furnish runway closure markings during a project is an allowable cost. However, a sponsor cannot require the contractor to purchase lighted X’s and then turn it over to the airport as part of the project. If a sponsor would like to acquire a lighted X, they must request this as a separate AIP project and justify the need to the ADO (see Appendix J).
3-84. Nonroad Diesel Engines.
In 2004, EPA issued a final rule adopting Tier 4 emission standards for nonroad diesel engines. The Tier 4 standards (40 CFR part 1039), are intended to reduce harmful emissions and to improve air quality. The EPA required all manufacturers to be fully compliant with the first model year after December 31, 2014. The standards include a hardship provision (40 CFR part 1039.635) that would delay compliance with Tier 4 emission standards for up to two model years from the 2014 date for small-volume manufacturers (40 CFR part 1068.250). What this means is that in certain cases, a manufacturer may provide a Tier 3 engine in a Tier 4 proposal.
A sponsor has the option to bid only the Tier 4 standards for nonroad diesel engines, which will only allow Tier 4 engines to be bid, or to allow the Tier 4 hardship program engines, which will allow Tier 3 or Tier 4 engines.
3-85. Normally Unallowable Costs that are Necessary to Carry Out the Project.
The ADO has the option of finding a normally unallowable cost allowable if the associated project cannot proceed without it. However, the ADO also has the option to require the sponsor to pay for these costs. Examples of these types of costs are included in Table 3-51. If no precedent for these costs exists, the ADO must consult APP-500.
| Some examples include… |
|---|
| a. Planting trees that are required as an environmental mitigation measure in an FAA approved environmental finding. Landscaping is normally an unallowable cost, but in this case it would be allowable. |
| b. Fire hydrant installation required to obtain a local building permit for an apron project. Otherwise, fire hydrants are not a necessary for an apron project and would not be allowable. |
3-86. Project Formulation Costs.
Project formulation costs must be directly related to the project. These are costs that are normally incurred before the project starts and would not have been incurred otherwise. Table 3-52 contains some examples of project formulation costs.
Indirect costs for project formulation must not be approved except as allowed in Paragraph 3-61.
| Some examples include… |
|---|
| a. Field surveys |
| b. Soil borings |
| c. Plans and specifications (if not a stand-alone design grant) |
| d. Project related airport layout plan revisions |
| e. Land acquisition |
| f. Aeronautical studies |
| g. Grant administrative expenses for the projects in the grant |
| h. Benefit-cost analyses |
| i. Safety risk management (SRM) analysis for the specific project |
| j. Environmental studies (if not a stand-alone environmental study grant) |
| k. Land appraisals and review appraisals, title examination, and relocation plans |
| l. Construction and equipment procurement costs such as bid advertisement |
| m. Disadvantaged Business Enterprise (DBE) plan updates and project specific DBE goal formulation |
3-87. Reimbursable Agreements with Other Federal Agencies.
The cost for reimbursable agreements between the sponsor and a Federal agency is allowable if the cost is necessary for the project and the other Federal agencies statutes allow this action. For instance, 49 USC § 106(l)(6) allows the FAA to enter into reimbursable agreements in order to carry out the functions of the FAA. An example of this is a reimbursable agreement between a sponsor and the FAA Air Traffic Organization (ATO) for the purpose of having the ATO relocate an FAA-owned navigational aid that is required by an AIP funded project (as allowed under 49 USC § 44502(a)(2)).
3-88. Safety Management System (SMS) and Safety Risk Management (SRM) Costs.
An SMS manual and implementation plan covers a wide range of projects and operations at a specific airport. The requirements an ADO must follow to issue a grant for an SMS manual and implementation plan are contained in Appendix E.
In addition, the sponsor may be required to participate in an SRM panel for specific projects or operations. If the specific project is one that will be funded by AIP, then certain costs are potentially allowable per Table 3-53.
| The following are allowable SRM costs… |
|---|
| a. SRM Panel Costs. SRM panel costs are only allowable if they are specifically for the project in the grant and are required and conducted per the current version of FAA Order 5200.11, FAA Airports (ARP) Safety Management System. Allowable costs are limited to the reasonable costs of a consultant to support the SRM, including the costs to obtain a third party facilitator, prepare presentations, and provide meeting notes. The costs for airport employees, tenants, or FAA employees are not allowable. |
| b. SRM Project Costs. The recommendations from an SRM panel are not automatically eligible or justified. The reason is that many SRM panel recommendations will be operational or involve work that is funded under another Federal program. The ADO must review these recommendations on a case by case basis to determine if the recommendation is a project or project cost that meets the eligibility and justification requirements outlined in this Handbook. The ADO may determine that the recommendation is either a stand-alone project or is an allowable cost under another eligible and justified project. |
3-89. Secondary Electrical Power Supply Costs.
The primary electrical power supply is an allowable cost for any eligible project as outlined in Paragraph 3-97. In extremely limited circumstances the ADO also has the option to find the cost for a secondary, or redundant, power supply allowable.
The ADO may find a secondary power supply allowable if the primary power supply for the eligible areas/facilities of the airport is extremely unreliable due to any of the reasons listed in Table 3-54.
The secondary power supply must be in the form of an electrical service provided by a power company. Generators are not considered secondary electrical power supplies under this paragraph. (Generators are discussed in Appendix M.)
| Reasons include… |
|---|
| a. An extensive, documented, history of cable cuts. |
| b. Extraordinary meteorological conditions. |
| c. An extensive, documented, record of commercial utility interruptions. |
3-90. Seismic Standards.
On June 14, 1993, the DOT published a final rule, 49 CFR part 41 implementing the provisions of Executive Order 12699, Seismic Safety of Federal and Federally-Assisted or Regulated New Building Construction, effective July 14, 1993. The result of the final rule is that that any building constructed with AIP funds must be designed and constructed in accordance with seismic standards of 49 CFR § 41.120. Therefore, the costs to include required seismic standards in an AIP project are allowable.
3-91. Site Preparation Costs for Ineligible Work.
a. Prorating Ineligible Site Preparation Costs. In some cases, a sponsor may determine that it is beneficial to undertake site preparation for both eligible and ineligible development through one construction contract. The sponsor cannot include this ineligible site preparation work unless the sponsor has obtained approval from the ADO in advance (see Paragraph 3-39 for the rules regarding ADO approval of contracts containing ineligible costs).
b. Funding Incidental Site Preparation Costs. There is only one situation where site preparation for ineligible facilities is allowable. This situation is when clearing, grading, grubbing, or related work for an eligible AIP project inadvertently overlaps the site preparation area for an ineligible facility. Examples are included in Table 3-55.
| For the following situation… | The extra site preparation costs are… |
|---|---|
| a. A project to improve a runway safety area overlaps the grading work needed for an FAA-owned approach lighting system. | Allowable. This is because the sites overlap. |
| b. A project to build an eligible apron is adjacent to the proposed site for an exclusive use maintenance facility. The sponsor has requested minor site preparation for the maintenance facility be included in the apron project. | Not allowable. The sites do not overlap. |
3-92. Spare Part Costs.
FAA policy allows sponsors to acquire spare parts in very limited circumstances. The cost for spare part is allowable if the criteria in Table 3-56 can be met.
| All of the following criteria must be met… |
|---|
| a. The spare parts are for eligible airport visual aids listed in the current version of Advisory Circular 150/5340-26, Maintenance of Airport Visual Aid Facilities. |
| b. The spare parts are included in the same grant that installs the airport visual aid. |
| c. The cost of the spare parts does not exceed 10% of the total cost of the airport visual aid. |
| d. The total cost for the spare parts does not exceed $10,000. |
| e. The spare parts are minor components of the airport visual aid. |
| f. The sponsor can replace the spare parts using their own staff. |
| g. The ADO believes the sponsor will be able to store or accurately account for the spare parts inventory. |
3-93. Sponsor Furnished Materials or Supplies.
The sponsor requirements for using sponsor furnished materials or supplies within an AIP funded project are contained in Paragraph U-3.
The ADOs ability to concur with the use of sponsor furnished materials or supplies and use AIP funding on these items (and/or associated installation) depends on whether the material or supplies have been procured per 2 CFR §§ 200.317-200.326 (see Appendix U) and meet all of the requirements shown in Table 3-57. The ADO has the option of relying on the sponsor’s written statement regarding the sponsor’s ability to meet these requirements. The ADO also has the option of requiring the sponsor to provide additional support documentation.
The ADO must provide a copy of the written determination (including the approval of force account work, if applicable) to the sponsor and place a copy in the grant file. As discussed in Paragraph 4-12, per 2 CFR § 200.434 (Paragraph 12 in Attachment B of OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments), sponsors are prohibited from using sponsor furnished materials or supplies against the sponsor’s share of a grant, unless approved as part of force account work.
| If the sponsor furnished materials or supplies… | The following can be funded with AIP… | Examples that potentially meet these requirements include… |
|---|---|---|
| a. Meets all of the following: (1) Meets the procurement requirements of 2 CFR §§ 200.317-200.326. (2) Meets all required Federal contract provisions for equipment procurement, including Buy American. (3) Meets all applicable FAA technical standards for material or supply. (4) Is approved by the ADO for force account work (see Paragraph 3-53). |
The materials or supplies and the associated installation, testing and inspection of the equipment are AIP eligible (provided all AIP requirements are met). | ALCMS modifications. Certified airfield lighting equipment with only one manufacturer. |
| b. Only meets the applicable FAA technical standards for material or supply. | Installation, testing, and inspection only (the cost of the materials or supplies is not eligible). | Sponsor preferred airfield lighting equipment. Sponsor preferred access control cameras. |
| c. Does not meet all applicable FAA technical standards for material or supply. | Neither the materials or supplies nor the associated installation testing, and inspection (all ineligible). In addition the materials may not be used on the project. |
Materials or supplies with unapproved modifications to FAA standards. |
| d. Are prohibited from Federal funding (even if it meets FAA technical standards). | The equipment, installation testing, and inspection (and any other associated cost) are not eligible. Installation of cans and conduit are allowable as part of an AIP funded pavement project only if the ADO has determined that they will reduce the need to disturb the AIP funded pavement at a later date. |
Certified airfield light emitting diode (LED) lighting equipment that is prohibited from AIP funding. |
3-94. Temporary Construction Costs.
If the ADO makes a determination that uninterrupted operation of the airport is necessary and that such operation could not be continued without temporary construction, costs of temporary construction are allowable even though a portion of the work cannot be salvaged. The costs of the temporary construction must be determined by the ADO to be both necessary and reasonable. Costs that are unreasonable are not allowable and the ADO has the option of requiring the sponsor to use lesser cost alternatives if these alternatives meet the project need. In general, temporary construction that includes new airfield pavement such as a temporary visual runway or a runway extension is unallowable without extraordinary and significant justification. The ADO must coordinate with, and obtain APP-400 and APP-500 approval, to include new airfield pavements as temporary construction measures.
Examples of allowable temporary construction are included in Table 3-58.
Temporary construction often results in pavement, facilities, or NAVAIDs that may have value to the airport once the construction is complete. The ADO has the option to concur with a sponsor’s request to keep the temporary improvement in place (or relocate it to another location on the airport). However, relocation, rehabilitation, maintenance, and/or replacement of the improvement is not automatically justified for AIP funding unless the improvement would have been eligible and justified as a stand-alone project.
For items that have salvage value, such as NAVAIDs, the sponsor must follow the disposal requirements outlined in Paragraph 5-67. In addition, the ADO has the option of requiring the sponsor (normally through a special condition in the grant agreement) to transfer the item to an airport that is eligible for the item. The automated AIP system contains the current available special conditions.
| Some examples include… |
|---|
| a. Temporary measures required to protect air and water quality. |
| b. The acquisition and installation of interim non-Federal NAVAIDs if the ADO determines they are necessary to provide visual or instrument capability during an extended period of time during the construction of the AIP project. |
| c. The acquisition and installation of interim Federal NAVAIDs if the FAA Air Traffic Organization (ATO) determines they are necessary to provide visual or instrument capability during an extended period of time during the construction of the AIP project. These costs are normally included in the reimbursable agreement between the ATO and the sponsor. |
| d. Construction of a haul road to avoid runway and/or taxiway crossings. |
| e. Measures to designate a taxiway as temporary runway in accordance with the current version of FAA Order 7110.19, Designation Taxiways as Temporary Runways. |
| f. An interim terminal facility if there is no other reasonable way to accomplish the project. The interim facilities must be only that necessary to keep the operations in motion. The facilities must only be built for this interim use. Costs to develop the facility into a follow on use are not allowable. |
3-95. Thermoplastic Markings.
The FAA standard specifications allow a sponsor to select and use thermoplastic markings instead of paint for airfield markings. However, as of the publication date of this Handbook, thermoplastic materials cost more than paint, both on a first cost and a life cycle cost basis (based on a life cycle for paint of approximately 3 years and thermoplastic markings of up to 7 years). In order to determine that the use of thermoplastic markings meet the statutory requirement for reasonable costs, the sponsor must provide a life cycle cost comparison that demonstrates that the costs are reasonable and verification that there are more than one manufacturer of thermoplastic markings. The ADO must retain a copy of the sponsor’s successful life cycle cost analysis in the grant file.
3-96. Used Equipment Costs.
The acquisition of used equipment is allowable provided it meets FAA specifications and has an acceptable useful life based on the proposed purchase price.
The GSAXcess program is an excellent source for free used equipment. The GSAXcess website and the current version of Advisory Circular 150/5150-2, Federal Surplus Personal Property for Public Airport Purposes, are good resources for a sponsor to learn more about this program.
3-97. Utility Costs.
The installation, improvement, reconstruction, or repair of water, gas, and electric (primary power supply only) is allowable to the extent the work serves eligible areas and facilities and the utility is an allowable cost for the facility. For instance, gas, water, and electric are needed for a terminal building, whereas only electric is needed for a general aviation aircraft storage hangar.
If the utility installation will serve both eligible and ineligible areas/facilities, the allowable cost is limited to prorated share for the eligible portion. The ADO will determine the method of proration. Table 3-59 contains an example of prorated utility costs. If the utility work is required for the AIP portion of the airport, as well as for other non-AIP portions of the airport, the ADO can presume that the determination of the best interest of the Federal government required in Paragraph 3-39 has been met. However, the other requirements for including ineligible or nonAIP funded work in the contract in Paragraph 3-39 must be met.
Per FAA policy, utility projects are not eligible as stand-alone projects.
| For the following situation… | The allowable prorated amount would be… |
|---|---|
| A project to run electrical lines to a T-Hangar area also contains an ineligible office building. The T-Hangars are estimated to use 2/3 of the electrical load and the ineligible office building will use the remainder. | Two thirds of the total cost of the electrical line installation (including associated design, inspection, etc.). |
3-98. Value Engineering.
The cost for value engineering is allowable if all of the sponsor requirements in Paragraph U-10 and the ADO requirements in Paragraph 3-54 are met.
Section 12. Costs Necessary (Allowable Cost Rule #1).
3-99. Requirements for Costs to be Necessary.
Per 49 USC § 47110(b)(1), the ADO must only approve costs that are directly necessary to accomplish the project. All other costs are considered unallowable.
Section 13. Costs Incurred after Grant Executed (Allowable Cost Rule #2).
3-100. Rules for Reimbursing Project Costs Prior to the Grant (or LOI) Execution Date.
Unless specifically allowed in the Act, 49 USC § 47110(b)(2) requires that all project costs must be incurred after the grant execution date. Table 3-60 list the entire set of rules regarding when project costs can be incurred in relationship the grant execution date, the type of funding, and the type of project.
| For… | The following rules apply… |
|---|---|
| a. Allowable costs using any or all of the following types of funds: • Passenger Entitlement • Cargo Entitlement • Nonprimary Entitlements |
Per 49 USC § 47110(b)(2)(C), project costs must have been incurred after 9/30/1996. All allowable costs after this date may be reimbursed with these types of funds, regardless of whether they were incurred before the grant was executed as long as all other applicable AIP requirements have been met. |
| b. Allowable costs using any or all of the following types of funds: • Discretionary • State Apportionment (including Insular) • Alaska Supplemental |
Per 49 USC § 47110(b)(2)(A), project costs must have been incurred after the grant execution date. The only exception for these three types of funding are (these exceptions are statutory and are the only exceptions allowed): (1) 14 CFR part 150 Projects. Per 49 USC § 47110(b)(2)(B), if the project is specifically contained in an FAA approved 14 CFR part 150 program (including schools and medical buildings), all of the project costs can be reimbursed. If a school or medical building is being mitigated outside an FAA approved 14 CFR part 150 program, it cannot be reimbursed. (2) Project Formulation (Development Projects). Per 49 USC § 47110(c), project formulation costs must be directly related to the project. These are costs that are normally incurred before the project starts and would not have been incurred otherwise. Examples of allowable project formulation costs are included in Paragraph 3-86. Per FAA policy, only land acquisition may be reimbursed under a stand-alone grant. (3) Project Formulation (Planning Projects). Per 49 USC § 47110(c), costs necessary and directly incurred in developing the work scope of a planning project can be reimbursed. (4) Land Acquisition. Per 49 USC § 47110(c), land acquisition is considered a project formulation cost and can therefore be reimbursed with all types of funding. The sponsor must have purchased the land after May 13, 1946. Per FAA policy, land acquisition may be reimbursed under a stand-alone grant for land acquisition. (5) Letters of Intent. Per 49 USC § 47110(e), all costs incurred after the LOI execution date, and only project formulation costs incurred before the LOI execution date, may also be reimbursed with any type of funding. (6) Design-Build Projects. The FAA believes that under 49 USC § 47142(b), the design and construction costs may be reimbursed with these types of funds if this contracting method is approved in advance by the ADO and all other applicable AIP requirements have been met. ADO approval is not a commitment of funds. Approval in advance by the ADO does not guarantee that the project will be considered or given priority for discretionary by the ADO. Therefore, the sponsor must have an alternative funding source available to fund the project without discretionary funding. (7) Certain MAP Projects. Per 49 USC § 47118(f)(2), the FAA has the option to use discretionary to reimburse approved MAP projects if the sponsor incurred the costs during fiscal years 2003 and 2004. (8) Climate-Related Conditions. In very limited circumstances, 49 USC § 47110(b)(2)(D) provides the FAA with the option to allow reimbursement for a project if the project meets all of the conditions in Table 3-61 through Table 3-66. |
| The sponsor acknowledges that it assumes all risk by… |
|---|
| Sponsor Assumes All Risk. The sponsor must include a statement in the request for FAA acknowledgement of its request to be considered for reimbursement that includes the following sponsor assumption of risk: “Because the FAA cannot guarantee the availability of any types of AIP funding on the project, the sponsor must be prepared to complete the project using other sources of funds even if the sponsor meets all of the requirements for discretionary reimbursement. There are no circumstances under which the sponsor can infer that the project will be funded with discretionary funds.” |
| The ADO has determined that the sponsor has met all of the following legislative requirements… |
|---|
| a. Per 49 USC § 47110(b)(2)(D), construction of the project must have started in the same fiscal year as execution of the grant agreement. A construction project for which construction started in a prior fiscal year cannot be reimbursed with discretionary funding. |
| b. Per 49 USC § 47110(b)(2)(D)(i), the airport must be in an area that experiences a shortened construction season due to climatic conditions, which the FAA has determined to mean cold weather. To make this determination, the FAA reviewed reports from the American Association of State Highway and Transportation Officials (AASHTO) and the Federal Highway Administration on construction impacts due to weather and found that shortened construction season was understood to be related to work such as earthwork that is shut down or suspended during the winter cold weather. |
| c. Per 49 USC § 47110(b)(2)(D)(ii), all other applicable AIP requirements have been met. |
| d. Per 49 USC § 47110(b)(2)(D)(iii), the sponsor must notify the Airports District Office or regional office (ADO) in advance of starting the work of the sponsor’s intent to request discretionary funding for this project. The sponsor must complete FAA Form 5100-142, Sponsor Request for FAA Acknowledgement for Cold Weather Early Start, at least 30 calendar days prior to issuing a Notice to Proceed. The ADO must forward the sponsor’s request to APP-500 for processing. |
| e. Per 49 USC § 47110(b)(2)(D)(iv), the sponsor must have an alternative funding source available to fund the project. Because the sponsor has agreed to fully fund the complete project if AIP discretionary funding is not provided, the sponsor’s alternative funding plan may include AIP future year entitlement funding or Passenger Facility Charge funding. If the sponsor’s alternative funding plan does include future AIP entitlement funding which then impacts other future project requests, the sponsor will need to consider other options of funding those future projects. |
| f. Per 49 USC § 47110(b)(2)(D)(v), the sponsor’s decision to proceed with the project in advance of execution of the grant agreement does not raise the priority assigned to the project by the FAA. |
| g. Per 49 USC § 47120, the FAA will give lower priority to discretionary project requests if the sponsor is using its entitlement funds for projects that have a lower priority than the projects for which discretionary funds are being requested. Therefore, this cold weather provision cannot be requested in a year when the sponsor is using its entitlement funds on a lower priority project. |
| The requirements that APP-500 will consider are… |
|---|
| a. The request is not due to short-term disruptions. Short-term disruptions that prevent construction from occurring, including but not limited to rain, wind, tropical weather, fog, snowfall, ice, or high temperatures do not satisfy the requirement of a shortened construction season due to climatic conditions. This is because construction project specifications, including the FAA standard specifications, include provisions for inclement weather and temporary shutdowns. |
| b. The request is not due to operational considerations. Operational or coordination considerations, such as the desire to reopen before winter, to allow planned construction sequencing, or to meet a particular aeronautical chart publication date do not satisfy the requirement of a shortened construction season due to climatic conditions. |
| c. The request is for a project that may be impacted. The FAA has generally identified paving projects or pavement rehabilitation projects as those that are most likely to be impacted by a shortened construction season due to climatic conditions. In reviewing the request, APP-500 will consider the type of construction included in the project, the duration of the construction activities that may be impacted by a shortened construction season and the date by when the sponsor indicates that construction must begin to avoid impacts of a shortened construction season. |
| d. The airport is in an impacted area. Generally, the APP-500 will consider issuing an acknowledgement if there is at least one month in the average calendar year with an average high temperature below 40 degrees Fahrenheit and specific construction activities required for the project would be impacted by the cold temperatures. |
| e. An early start may be justified. The sponsor has demonstrated that the project requires an early start in order to fit the construction schedule into the construction season by providing the length of the construction project, date by which construction must begin in order to avoid being negatively impacted by cold weather conditions. (1) For example, this provision would not likely be justified for a 90-day paving project where the ADO anticipates that a grant could be issued in May. (2) The ADO may determine that this provision is justified for a 180-day paving project and grants are not expected to be able to be issued until July. |
| The sponsor’s alternative funding plan includes… |
|---|
| a. The sponsor may include future year entitlements in the alternative funding plan. However, if the sponsor’s Capital Improvement Program (CIP) previously identified projects that the sponsor planned to fund with those entitlements, the sponsor must revise their CIP accordingly. |
| b. If the sponsor proposes using future year entitlements, in those future years, the requested reimbursement may impact the sponsor’s ability to fund other projects that year with discretionary funds, based on the requirement to fund the highest priority projects first with the sponsor’s entitlement funds. |
| c. If the sponsor has started construction and discretionary funding is not provided in the year in which the construction started, the project is ineligible for discretionary funding in this, or future years. |
| d. For phased projects, the requirements of this PGL must be applied individually to each phase or grant request. Funding of one phase of a phased project under this PGL does not establish eligibility for funding either prior or subsequent phases. |
| The requirements are… |
|---|
| a. The sponsor must submit the written request to the ADO before contract award and before issuing Notice to Proceed to the selected contractor. |
| b. The sponsor must allow at least 30 calendar days following the submittal of a complete and accurate submittal to the ADO to receive a determination from APP-500. |
| c. Upon receipt of a sponsor’s request for consideration, the ADO must review the request for completeness. If the request is incomplete, the ADO must return the request to the sponsor for correction. If the request is complete, the ADO must forward the request to APP-500. The ADO must submit the completed sponsor request, with ADO Staff Recommendation to APP-500 within nine business days of receiving the sponsor request. |
| The requirements are… |
|---|
| a. APP-500 will notify the ADO whether or not the proposed project can be considered for reimbursement based on climate related conditions. |
| b. After APP-500 notifies the ADO whether or not the proposed project can be considered under this limited exception, the ADO must advise the sponsor of the determination. The ADO notification to the sponsor may be in writing or by e-mail. The determination is solely a determination as to whether the sponsor has met the necessary requirements for the FAA to be able to consider AIP discretionary funding subsequent to contract award or NTP, and does not in any way represent an actual commitment of discretionary funds. |
| c. APP-500 will attempt to respond to a sponsor’s request within 30 days after receipt of the request. However, only actual receipt by a sponsor of an APP-500 determination that the project will be acknowledged by the FAA as having been requested for consideration for discretionary funding for a Cold Weather Construction Project constitutes FAA acknowledgement. The sponsor cannot consider lack of a response within 30 days is the equivalent of APP-500 acknowledgement. |
Section 14. Costs Reasonable (Allowable Cost Rule #3).
3-101. Sponsor Requirements.
Per 2 CFR § 200.323(a), sponsors must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold (provided in Table U-7). However, the ADO must determine that costs are reasonable to comply with 49 USC § 47110(b)(3). Therefore, all noncompetitive procurement actions (including change orders, supplemental agreements, and contract modifications) require a cost or price analysis regardless of cost. Table 3-67 lists the type of analysis that the sponsor must perform and the documents the sponsor must submit for various procurement scenarios. Paragraph U-21 contains guidance to sponsors on how to perform price and cost analyses. The requirements for change orders, supplemental agreements, and contract modifications are contained in Paragraph 5-35.
| For the following… | The sponsor must perform a… | And the sponsor must submit all of the following… |
|---|---|---|
| a. Land and easement acquisition | Cost Analysis | (1) Appraisals and review appraisals. (2) A statement signed by the sponsor that the cost analysis was performed that includes the sponsor’s recommendation that the FAA accept the statement and analysis as evidence of cost reasonableness. (3) Negotiated agreements amount. (4) Copy of the signed negotiated agreement only if requested by the ADO. (5) Any other support documentation requested by the ADO |
| b. Equipment acquisition and construction where there is adequate competition (two or more bidders by sealed bids) | Price Analysis (if the cost is in excess of the Simplified Acquisition Threshold (provided in Table U-7)) | (1) Engineer’s estimate. (2) A written statement signed by the sponsor that the cost is reasonable. If a price analysis is required, the sponsor must include in this statement that a price analysis was performed. (3) Bid tabulations. (4) Copy of the signed contract only if requested by the ADO. (5) Any other support documentation requested by the ADO. |
| c. Equipment acquisition and construction where there is not adequate competition (one bidder, sole source, design/build, small purchase, construction manager-at-risk, etc.) | Cost Analysis | (1) Engineer’s estimate. (2) A statement signed by the sponsor that the cost analysis was performed that includes the sponsor’s recommendation that the FAA accept the statement and analysis as evidence of cost reasonableness. (3) Bid tabulation (one bidder), proposal (sole source, design/build, construction manager-at-risk), or winning quote (small purchase). (4) Copy of the signed contract (or full set of quotes for small purchase) only if requested by the ADO. (5) Any other support documentation requested by the ADO. |
| d. Negotiated professional services (such as consultant costs or contract modifications to a professional services contract) | Cost Analysis | (1) Independent fee estimate. (2) A statement signed by the sponsor that the cost analysis was performed that includes the sponsor’s recommendation that the FAA accept the statement and analysis as evidence of cost reasonableness. (3) Amount of contract. (4) Copy of the signed contract only if requested by the ADO. (5) Any other support documentation requested by the ADO. |
| e. Non-negotiated services (such as newspaper advertisements and rental of facilities for a public hearing) | Price Analysis (if the cost is in excess of the Simplified Acquisition Threshold (provided in Table U-7)) | (1) Advertised pricing. (2) A written statement signed by the sponsor that the cost is reasonable. If a price analysis is required, the sponsor must include in this statement that a price analysis was performed. (3) Quote for services (or sponsor’s estimate based on advertised price). (4) Any other support documentation requested by the ADO. |
| f. Non-negotiated service based on law or regulation (such as utility work by the utility company or a reimbursable agreement with the FAA Air Traffic Organization (ATO)) | Price Analysis (if the cost is in excess of the Simplified Acquisition Threshold (provided in Table U-7)) | (1) A written statement signed by the sponsor that the cost is reasonable. If a price analysis is required, the sponsor must include in this statement that a price analysis was performed. (2) Quote or signed contract. (3) Any other support documentation requested by the ADO. |
| g. Sponsor force account planning, engineering or construction | Cost Analysis | (1) All of the documentation required in Paragraph 3-53. |
3-102. ADO Review Requirements.
In order to fund a project or make payment on a grant, 49 USC § 47110(b)(3) requires a cost reasonableness determination. Per FAA policy, the ADO, not the sponsor, makes the determination that the project costs are reasonable. This reasonableness determination is not an action that is covered by sponsor certification.
In order for the ADO to make a cost reasonableness determination, the ADO must review the documents submitted by the sponsor per Paragraph 3-101.
3-103. Documentation of ADO Determination.
Table 3-68 contains the documentation requirements for ADO cost reasonableness determinations. If an ADO determines that any of the costs are unreasonable, the ADO has the option to document this in writing to the sponsor and/or the grant file, however, this documentation is not mandatory.
| For the following… | The ADO must document its determination by… |
|---|---|
| a. Grants not based on estimates. | If the ADO finds the documentation acceptable, the ADO may issue the grant. By issuing the grant, the ADO is documenting that they have found the costs to be reasonable. In the specific instance of a state block grant that is not based on estimates, the ADO may rely on the state’s signature of the grant application as documentation that the state has found all costs to be reasonable. |
| b. Grants based on estimates. | In the rare instance that an ADO issues a grant or part of a grant based on estimates, the ADO must make the cost reasonableness determination before the sponsor receives a grant payment for the work. In this instance, the ADO must document their cost reasonableness determination in writing and place a copy in the grant file. In the specific instance of a state block grant that is based on estimates, the ADO may rely on the state’s request for a grant payment for the work as documentation that the state has found all costs to be reasonable. |
| c. Change Orders, Supplemental Agreements, and Contract Modifications. | Following the process outlined in Paragraph 5-35. |
Section 15. Costs Not in Another Federal Grant (Allowable Cost Rule #4).
3-104. Requirement for Costs to Not be in Another Federal Grant.
Per 49 USC § 47110(b)(4), the cost must not be incurred in a project for airport development or airport planning for which other Federal assistance has been granted. Per FAA policy, AIP must not be used for a project cost that has already been covered in another Federal grant. In other words, the costs must not be paid for by the Federal government more than once, and may not cause the Federal share percentage of the project to exceed the Federal share allowed in 49 USC § 47109. Note that this requirement does not prohibit another Federal agency from providing funding to a sponsor to be used for the local share if that Federal agency permits its funds to be used for local share.
Section 16. Costs within Federal Share (Allowable Cost Rule #5).
3-105. Allowable Federal Share Requirement.
Per 49 USC § 47110(b)(5), the total allowable Federal costs cannot exceed the maximum Federal cost that is in the grant agreement (except as allowed within the amendment rules per, Section 7 of Chapter 5).
Section 17. No Unreasonable Delay in Completion.
3-106. Requirement for No Unreasonable Delay in Project Completion.
Per 49 USC § 47106(a)(4), the ADO cannot issue a grant to a project if the ADO is aware of circumstances that will unreasonably delay project completion. For instance, the ADO might delay putting a project under grant if there are runway closure timing issues that have not been adequately worked out with the airlines.