State departments of transportation (DOTs) have a wide range of policies and practices in place to guide management of their surface transportation debt programs. Despite these existing practices, agencies have to respond to a significant increase in the amount and types of financing being used to pay for transportation investments coupled with an increasingly complex regulatory environment for issuing and managing municipal debt. As a result, state DOTs are facing a number of challenges in administering and managing their debt programs. These challenges include the following:
· Implementing prudent and efficient financial management practices;
· Determining the appropriate debt tool to use to meet financing needs;
· Selecting the appropriate issuance method;
· Selecting qualified advisors including bond counsel, financial advisors, investment bankers, and trustees, among others;
· Maintaining an affordable level of debt; and
· Complying with post issuance requirements.
To overcome such challenges, state DOTs are looking for new approaches to build on and improve debt management policies and practices.
NCHRP Synthesis 513: Evolving Debt Finance Practices for Surface Transportation revealed that, while there is significant research on general debt management policies, practices, and debt affordability measures, there is limited literature on these topics as they relate specifically to transportation debt. State DOTs can benefit from a consolidated source of information and guidance on effective debt management policies and practices.
The objective of this study is to produce a guidebook and supporting material to help state DOTs develop and implement effective debt management policies and programs related to financing surface transportation facilities. The guidebook will focus on methods and procedures to improve the decision-making process for issuing debt while building effective policies and practices for overall debt program management. The primary audience for the guidebook will be state DOT financial managers, but it may also have relevance to elected officials, state DOT chief executive officers, and others providing technical assistance and oversight as it relates to state DOT financial management.
Proposers are asked to present a detailed research plan for accomplishing the project objective. Proposers are expected to describe research plans that can realistically be accomplished within the constraints of available funds and contract time, including an indication of how proposed research will make use of and build on available resources. Proposals must demonstrate in sufficient detail an understanding of the issues and a sound approach to meeting the research objective.
In response to the stated objective, the research plan should address a broad range of debt management issues affecting surface transportation, leading to preparation of a guidebook of creditable practices. It will be designed to assist state DOT personnel and decision makers improve their understanding of the use and management of debt in financing surface transportation improvements.
As a first step in developing the guidebook, the research plan should include an expanded literature review, building on work previously completed as part of the NCHRP Synthesis 513. Based on this review, the research team should consider the following questions in structuring the guidebook:
· What key factors need to be considered in developing debt issuance and management policies and practices? What parameters do the policies place on debt issuance practices and management?
· What areas of debt issuance and debt management are covered by the policies and practices?
· How are policies reviewed, adopted, and updated? What agencies are involved and what procedures are required for review, adoption, and update? How do involved agencies interact?
· How do state DOTs measure affordability when considering issuing debt, including Grant Anticipation Revenue Vehicles (GARVEEs)? How should state DOTs measure affordability?
· What analytical or management tools are being used in managing debt?
· How is compliance managed throughout the debt life cycle?
· Are there debt management practices that can be borrowed from other disciplines or agencies?
· What are the recommendations for future research related to capacity building and analytical or management tools?
The research plan should be divided into two phases, and each phase should be divided into tasks with a detailed description of the work proposed. The research plan should build in appropriate interim deliverables that include, at a minimum, a detailed annotated outline of the resources forming the basis of the research, and an interim report at the end of Phase I that describes work done in early tasks and provides an updated work plan for the remaining tasks to be accomplished in Phase II. Phase I should reflect no more than 50% of the overall scope of work and should address the initial and fundamental tasks contributing to the overall study outcome. NCHRP approval of the Phase I Interim Report is required before proceeding with Phase II.
The research plan should also build in appropriate checkpoints with the NCHRP project panel including, at a minimum, (1) a kick-off teleconference meeting to be held within 1 month of the contract’s execution date; (2) the face-to-face interim report review meeting to be held at the end of Phase I; and (3) at least two additional web-enabled teleconferences tied to NCHRP review and approval of any other interim deliverables as deemed appropriate.
Note: Travel and per diem costs for panel members attending the interim meeting will be paid by NCHRP.
Final deliverables will include at a minimum: (1) the guidebook and supporting material specified in the research objective; (2) a final report that documents the entire research effort; (3) an executive summary as a stand-alone document that outlines the research findings and recommendations; and (4) a presentation (e.g., a Microsoft® PowerPoint, video, etc.) aimed at decision makers that simply and concisely explains why the application of the guidebook is helpful and how it will be used. Final deliverables will also include a stand-alone technical memorandum entitled, “Implementation of Research Findings and Products.” See Special Note C.
A. Proposals should include a task-by-task breakdown of labor hours for each staff member as shown in Figure 4 in the brochure, "Information and Instructions for Preparing Proposals,"
(http://onlinepubs.trb.org/onlinepubs/crp/docs/ProposalPrep.pdf). Proposals also should include a breakdown of all costs (e.g., wages, indirect costs, travel, materials, and total) for each task using Figures 5 and 6 in the brochure. Please note that TRB Cooperative Research Program subawards (selected proposers are considered subawards to the National Academy of Sciences, the parent organization of TRB) must comply with 2 CFR 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. These requirements include a provision that proposers without a "federally" Negotiated Indirect Costs Rate Agreement (NICRA) shall be subject to a maximum allowable indirect rate of 10% of Modified Total Direct Costs. Modified Total Direct Costs include all salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each lower-tier subaward and subcontract. Modified Total Direct Costs exclude equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each lower-tier subaward and subcontract in excess of $25,000.
B. The NCHRP is a practical, applied research program that produces implementable products addressing problems faced by transportation practitioners and managers. The benefits of NCHRP research are realized only when the results are implemented in state DOTs and other agencies. Implementation of the research product must be considered throughout the process, from problem statement development to research contract and beyond completion of the research. Item 4(c), "Anticipated Research Results," must include the following: (a) the "product" expected from the research, (b) the audience or "market" for this product, (c) a realistic assessment of impediments to successful implementation, and (d) the institutions and individuals who might take leadership in deploying the research product. The project panel will develop and maintain an implementation plan throughout the life of the project. The research team will be expected to provide input to an implementation team consisting of panel members, AASHTO committee members, the NCHRP Implementation Coordinator, and others in order to meet the goals of NCHRP Active Implementation: Moving Research into Practice, available at http://onlinepubs.trb.org/onlinepubs/nchrp/docs/NCHRP_ActiveImplementation.pdf
C. The required technical memorandum to be delivered at the end of Phase II, titled “Implementation of Research Findings and Products,” should (a) provide recommendations on how to best put the research findings/products into practice; (b) identify possible institutions that might take leadership in applying the research findings/products; (c) identify issues affecting potential implementation of the findings/products and recommend possible actions to address these issues; and (d) recommend methods of identifying and measuring the impacts associated with implementation of the findings/products. Implementation of these recommendations is not part of the research project and, if warranted, details of these actions will be developed and implemented in future efforts.
D. Item 5 in the proposal, "Qualifications of the Research Team," must include a section labeled "Disclosure." Information relevant to the NCHRP's need to ensure objectivity and to be aware of possible sources of significant financial or organizational conflict of interest in conducting the research must be presented in this section of the proposal. For example, under certain conditions, ownership of the proposing agency, other organizational relationships, or proprietary rights and interests could be perceived as jeopardizing an objective approach to the research effort, and proposers are asked to disclose any such circumstances and to explain how they will be accounted for in this study. If there are no issues related to objectivity, this should be stated.
E. Proposals are evaluated by the NCHRP staff and project panels consisting of individuals collectively very knowledgeable in the problem area. Selection of an agency is made by the project panel considering the following factors: (1) the proposer's demonstrated understanding of the problem; (2) the merit of the proposed research approach and experiment design; (3) the experience, qualifications, and objectivity of the research team in the same or closely related problem area; (4) the plan for ensuring application of results; (5) the proposer's plan for participation by Disadvantaged Business Enterprises--small firms owned and controlled by minorities or women; and (6) the adequacy of the facilities.
Note: The proposer's plan for participation by Disadvantaged Business Enterprises should be incorporated in Item 12 of the proposal.
F. Copyrights - All data, written materials, computer software, graphic and photographic images, and other information prepared under the contract and the copyrights therein shall be owned by the National Academies of Sciences, Engineering, and Medicine. The contractor and subcontractors will be able to publish this material for non-commercial purposes, for internal use, or to further academic research or studies with permission from TRB Cooperative Research Programs. The contractor and subcontractors will not be allowed to sell the project material without prior approval by the National Academies of Sciences, Engineering, and Medicine. By signing a contract with the National Academy of Sciences, contractors accept legal responsibility for any copyright infringement that may exist in work done for TRB. Contractors are therefore responsible for obtaining all necessary permissions for use of copyrighted material in TRB's Cooperative Research Programs publications. For guidance on TRB's policies on using copyrighted material please consult Section 5.4, "Use of Copyrighted Material," in the Procedural Manual for Contractors.