Third-Party Contracts for Fixed-Route Bus Operations and Maintenance: Performance Metrics (2023)
Chapter: Appendix A - Definitions of Contractual Relationships Terms
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Suggested Citation:
"Appendix A - Definitions of Contractual Relationships Terms." National Academies of Sciences, Engineering, and Medicine. 2023. Third-Party Contracts for Fixed-Route Bus Operations and Maintenance: Performance Metrics. Washington, DC: The National Academies Press.
doi: 10.17226/27074.
APPENDIX A
Definitions of Contractual Relationships Terms
Table A-1 contains definitions of the terms used in NTD’s Contractual Relationships form and is shown in Table 7.
Table A-1. Definitions of terms used in NTD’s Contractual Relationships form.
| Contractual Relationship Characteristic | Definition |
|---|---|
| Type of Contract | Describes how the contractual relationship was established between the transit agency and the contractor. |
| Competitively Bid Contract | The contract was procured through a competitive process by which proposing contractors were evaluated based on their proposal. Competitive procurements could include sealed bids, requests for proposals, and two-step procurements. |
| Negotiated Contract or Agreement | The contract was not competitive—that is, the contractor did not have to complete it to win the right to provide the transit service. A negotiated contract most often occurs when transit agencies contract with other public agencies. |
| Primary Payment Structure1 | Describes the contract’s terms for how the transit agency pays the contractor. |
| The Agency Pays the Contractor a Negotiated Fixed Rate Per Unit of Service | In this structure, the contract establishes a fixed rate per unit of service (e.g., a cost per revenue mile) that the transit agency pays for the outsourced service. The rate may change over time or under different levels of service. |
| The Agency Reimburses the Contractor’s Net Operating Expenses, Based on Approved Budget | In this structure, the transit agency pays the contractor based on the actual costs incurred by the contractor. This structure usually has an established not-to-exceed value that represents the upper limit in payment. |
| Fares Retained by | Describes which entity keeps the fares collected. |
| Agency | The transit agency keeps the fares, as collected and passed on to the transit agency by the contractor. |
| Contractor | The contractor retains the fares and may or may not deduct the fare revenue from its invoicing (depending on the contract terms). |
| Provision of Capital Assets | Describes which entity provides capital assets like revenue vehicles and facilities. |
| Agency Supplies Vehicles to Contractor | The transit agency procures the revenue vehicles and allows the contractor to use the vehicles for the provision of transit service. |
| Agency Provides Maintenance Facility to Contractor | The transit agency constructs/procures the maintenance facilities and allows the contractor to use the facilities for the maintenance of revenue vehicles. |
| Other Public Assets Provided | The transit agency may also provide other capital assets beyond vehicles and maintenance facilities. |
Source: The National Transit Database Reporting Policy Manual (FTA 2021) as well as team expertise.
Note:1In the NTD form, this field is labeled “Primary Feature.”
Suggested Citation:
"Appendix A - Definitions of Contractual Relationships Terms." National Academies of Sciences, Engineering, and Medicine. 2023. Third-Party Contracts for Fixed-Route Bus Operations and Maintenance: Performance Metrics. Washington, DC: The National Academies Press.
doi: 10.17226/27074.
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