What is the update to FTAs five-year contract term limitation?
A. The long-standing five-year contract term limitation for FTA-funded contracts, including “revenue contracts,” awarded by grant recipients was rescinded in 2002 by a Dear Colleague Letter. With this policy change, grant recipients no longer need to obtain FTA approval for contract terms exceeding five years. Grantees are expected to continue to be judicious in establishing and extending their contract terms. Good procurement practice dictates that grantees enter into contract terms no longer than minimally necessary to accomplish the purpose of the contract. Please note, however, that contracts for rolling stock and rolling stock replacement parts are still limited to not more than five years, pursuant to 49 U.S.C. ยง 5325(e)(1).
