600 KAR | Title 600 KAR — Transportation Cabinet

Chapter 3 Property Acquisition and Uniform Relocation

600 KAR 3:020 Grave relocation {#sec-600-kar-3-020 omnilex-key=us-ky-regs-official--title-600--600 KAR 3:020}

Section 1. Notification of Next-of-kin.

(1) The Transportation Cabinet shall make every effort to locate the next-of-kin of those interred in the cemetery to be relocated.

(2) If there are unidentified remains or if a next-of-kin cannot be located, the Transportation Cabinet shall publish its intention to relocate graves in the local newspapers. This public notice shall:

(a) Include the name and location of the cemetery to be relocated;

(b) Request assistance from anyone having knowledge of persons buried in the cemetery of their next-of-kin; and

(c) Be published once each week for a period of sixty (60) days in all local newspapers that are published at least weekly.

(3) If the next-of-kin cannot be located after these efforts, the Transportation Cabinet shall request authorization from the court of competent jurisdiction to relocate the grave.

Section 2. Location of Reinterment.

(1) Unless the next-of-kin prefers another location or it is economically unfeasible, the remains shall be relocated to the closest perpetually maintained public cemetery.

(2) If the next-of-kin selects a cemetery located in another county or out-of-state for the reinterment, he shall pay any additional cost incurred by the Transportation Cabinet.

Section 3. Reserved Spaces in the Cemetery.

(1) If a family has reserved space adjoining the deceased in the disinterment cemetery and requests a reserved space adjoining the deceased in the reinterment cemetery, this space shall be provided.

(2) The Transportation Cabinet shall attempt to honor other requests for reserved space in the reinterment cemetery from living persons with a reserved space in the disinterment cemetery.

Section 4. Disinterment-reinterment Permit. The Transportation Cabinet shall obtain the Disinterment-reinterment Permit required by 901 KAR 5:090.

Section 5. Contractor Eligibility.

(1) Only a person licensed as a funeral director under the provisions of KRS 316.090 shall be eligible to bid as a contractor on a Transportation Cabinet grave relocation project.

(2) The Transportation Cabinet shall maintain a list of licensed funeral directors wishing to bid on grave relocation projects.

(3) Annually, the cabinet shall advertise statewide for funeral directors interested in providing this service.

(4) All qualified respondents, as well as funeral directors who have actually relocated graves for the Transportation Cabinet, shall be placed on the list of licensed funeral directors wishing to bid on grave relocation projects.

(5) All interested funeral directors shall be required to provide proof of current licensing.

Section 6. Contract Procedures.

(1) The following funeral directors shall be notified of a specific grave relocation project:

(a) Those on the list of those interested in grave relocation who are located in the county or a county contiguous to the county of the grave relocation project; and

(b) Those who have requested to be notified of a grave relocation project within certain parameters if those parameters are met.

(2) Each notified funeral director shall be provided an opportunity to view the grave to be relocated and the reinterment site.

(3) If a funeral director expresses interest in the project, he shall be provided a bid proposal.

(4) All properly completed bid forms received prior to the bidding deadline shall be considered.

(5) A bid received or completed after the deadline shall not be considered.

(6) The contract shall be awarded to the lowest acceptable bid.

(7) If a funeral director contractor has a contract claim or requests relief from the Transportation Cabinet, the procedures set forth in 603 KAR 2:015 shall be followed.

Section 7. Memorial Service. If a brief memorial or religious service is requested by the deceased's next-of-kin, permission for the service shall be granted.

History

RELATES TO: KRS Chapters 176, 177, 381, 183.120
STATUTORY AUTHORITY: KRS 176.050, 177.020, 183.024
NECESSITY, FUNCTION, AND CONFORMITY: In the course of constructing or reconstructing transportation facilities, cemeteries or graves on occasion need to be relocated. This administrative regulation sets forth the provisions for relocation of cemeteries or graves from state-owned property.
History: 600 KAR 003:020. 16 Ky.R. 286; 536; eff. 10-4-1989; 20 Ky.R. 2672; eff. 5-18-1994; Crt eff. 2-11-2019; Crt eff. 12-5-2025.

600 KAR 3:030 Relocation or reconstruction of utility and rail facilities; recordkeeping and audit requirements {#sec-600-kar-3-030 omnilex-key=us-ky-regs-official--title-600--600 KAR 3:030}

Section 1. Utility's Eligible Costs.

(1) The eligible costs a utility incurs in participating in a highway construction project by providing relocation or reconstruction of its facility shall be governed by 23 C.F.R. 645.

(2) A cost not in compliance with 23 C.F.R. 645 shall be disallowed.

Section 2. Railroad's Eligible Costs.

(1) The eligible costs a railroad incurs in participating in a highway construction project by providing relocation, construction, or reconstruction of its facility or the elimination of a hazardous highway-rail crossing shall be governed by 23 C.F.R. 646 and 23 C.F.R. 140, Subpart I.

(2) A cost not in compliance with 23 C.F.R. 140, Subpart I or 23 C.F.R. 646 shall be disallowed.

Section 3. Financial Records of a Utility or Railroad.

(1) A railroad or utility shall provide the cabinet timely access to all financial and cost information necessary to verify the railroad's or utility's actual costs for the relocation, construction or reconstruction of its facilities directly associated with a cabinet project.

(2) A railroad or utility shall maintain payroll and time records for all employees for three (3) years from the final payment or until an audit has been performed, whichever is first.

(3) A utility or railroad which is required to relocate its facilities for a state-funded highway construction project shall maintain its records in accordance with the provisions of 48 C.F.R. 31.

(4) If a railroad or utility is notified by the Transportation Cabinet of a pending audit, the railroad or utility shall provide the following:

(a) Time sheets;

(b) Labor agreements;

(d) Equipment usage;

(e) Indirect cost analysis;

(f) Direct cost summary;

(g) Budgetary information;

(h) Betterment determination;

(i) Project-related employee expenses;

(j) Payroll register; and

(k) Cancelled payroll checks.

Section 4. Audit Standards. The Transportation Cabinet, if auditing a railroad or utility, shall abide by the accounting and auditing standards contained in the following:

(1) "Government Auditing Standards", 2003 Revision;

(2) "Codification of Statements on Auditing Standards, (Including Statements on Standards for Attestation Engagements)"; and

(3) "Original Pronouncements, Accounting Standards as of June 1, 2005, Volume I, Volume II, and Volume III".

Section 5. Audit Findings.

(1) Prior to the issuance of a final report, the auditor from the Transportation Cabinet shall present the preliminary findings and relevant work papers to the railroad or utility.

(2)

(a) A comment about or objection to the preliminary findings shall be submitted to the originating office within the Transportation Cabinet in writing within fifteen (15) calendar days of the railroad's or utility's receipt of the preliminary findings.

(b) A comment or objection shall be taken into consideration by the external audit staff prior to finalizing the report.

(3)

(a) If a railroad or utility disagrees with the results of a final report issued by the external audit staff, the railroad or utility may request a review by the External Audit Review Committee within thirty (30) calendar days of the date the final report is received by the utility or railroad.

(b) The request shall be in writing and clearly state the concern with the final report and the reason for the concern.

Section 6. External Audit Review Committee.

(1) The External Audit Review Committee shall consist of the following:

(a) The Executive Director of the Office of Budget and Fiscal Management, Chairperson;

(b) Deputy State Highway Engineer for Project Development; and

(2) A committee member may appoint a proxy to serve on this committee.

(3) The External Audit Review Committee may request the utility, railroad or the auditor to answer questions. The request shall state if a representative is to appear in person, by electronic communication, or in writing.

(4)

(a) If the railroad or utility is not satisfied with the decision of the Audit Review Committee, an appeal may be made to the Secretary of the Transportation Cabinet within thirty (30) calendar days of receipt of the committee's decision.

(b) An administrative hearing to hear the appeal shall be held pursuant to the provisions of KRS Chapter 13B.

Section 7. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Government Auditing Standards" by the Comptroller General of the United States, 2003 Revision;

(b) "Codification of Statements on Auditing Standards, (Including Statements on Standards for Attestation Engagements)", by the American Institute of Certified Public Accounts, Inc., copyright 2006; and

(c) "Original Pronouncements, Accounting Standards as of June 1, 2005, Volume I, Volume II, and Volume III" published by the Financial Accounting Standards Board.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Transportation Cabinet, Transportation Cabinet Office Building, External Audit Branch, 200 Mero Street, Frankfort, Kentucky 40622, Monday through Friday, 8 a.m. to 4:30 p.m.

History

RELATES TO: KRS 177.035, 177.170, 177.430(5), 179.265, 23 C.F.R. 140, 645, 646, 48 C.F.R. 31
STATUTORY AUTHORITY: KRS 177.430(5)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 177.430(5) authorizes the cabinet to promulgate administrative regulations relating to utilities on a turnpike project. This administrative regulation establishes the audit methodology to be used by a cabinet auditor for auditing reimbursable expenses incurred by a railroad or utility under an agreement with the Transportation Cabinet; establishes the requirements for keeping financial records; and requires all utilities and railroads contracting with the cabinet to comply with the federal regulations.
History: 25 Ky.R. 2235; 2598; 2881; eff. 6-1-1999; 33 Ky.R. 537; 1306; eff. 11-9-2006; Crt eff. 2-18-2019.

Chapter 4 Office of Minority Affairs

600 KAR 4:010 Certification of disadvantaged business enterprises {#sec-600-kar-4-010 omnilex-key=us-ky-regs-official--title-600--600 KAR 4:010}

Section 1. Definitions.

(1) "ACDBE" means an Airport Concession Disadvantaged Business Enterprise as defined by 49 C.F.R. 23.3.

(2) "Applicant" or "firm" means any corporation, partnership, sole proprietorship, or joint venture applying with the Transportation Cabinet for certification or continuation as a disadvantaged business enterprise.

(3) "Approval" means that the applicant has been determined by the DBE Certification Committee to comply with the disadvantaged business enterprise eligibility criteria as established in 49 C.F.R. Part 26, Subpart D and 49 C.F.R. Part 23.

(4) "Cabinet" means the Transportation Cabinet.

(5) "Certification" means the process used by the Transportation Cabinet to determine if an applicant complies with the disadvantaged business enterprise criteria established in 49 C.F.R. Part 26, Subpart D and 49 C.F.R. Part 23.

(6) "Denial" means the cabinet has determined that the applicant does not comply with the disadvantaged business enterprise eligibility criteria established in 49 C.F.R. Part 26, Subpart D and as required by this administrative regulation.

(7) "Department" or "DOT" means the United States Department of Transportation.

(8) "Disadvantaged business enterprise" or "DBE" is defined by 49 C.F.R. 26.5, Subpart D.

(9) "Notice" means a written or electronic notice from the Transportation Cabinet or Office for Civil Rights and Small Business Development delivered by certified mail to the business address listed on the application form.

(10) "On-site visit" means an interview conducted by the Office for Civil Rights and Small Business Development with principals of the firm at its primary place of business, reviewing business-related documents, and inspecting business facilities or equipment pursuant to 49 C.F.R. 26.83(c).

(11) "Program" is defined by 49 C.F.R. 26.5.

(12) "Removal" or "removed" means that a firm or business enterprise that has been certified by the cabinet as a disadvantaged business enterprise has been determined to be ineligible, and is no longer entitled to the rights and privileges of a firm or business that has been certified by the cabinet as a disadvantaged business enterprise.

(13) "Small Business Administration" or "SBA" is defined by 49 C.F.R. 26.5.

(14) "Small business concern" is defined by 49 C.F.R. 26.5.

(15) "Socially and economically disadvantaged individual" is defined by 49 C.F.R. 26.5.

(16) "Uniform Certification Application" or "UCA" is defined by 49 C.F.R. 26.

(17) "USDOT" means the United States Department of Transportation.

Section 2. Certification Committee.

(1) The cabinet shall establish and maintain a Certification Committee for the purpose of determining the eligibility of an applicant for certification as a DBE.

(2) The Certification Committee shall include:

(a) The following voting members:

Executive Director, Office of Project Development, or a proxy;
Director of the Division of Construction, or a proxy; and
Director of the Division of Construction Procurement, or a proxy; and

(b) The non-voting member, Manager of the Small Business Development Branch, or a proxy who shall chair the Certification Committee.

(3) The Kentucky administrator of the Federal Highway Administration or FHWA, or a proxy may attend Certification Committee meetings as a non-voting member.

Section 3. Advisory Panel.

(1) The cabinet shall establish a DBE Certification Advisory Panel whose members may be called upon as needed by the Certification Committee to provide technical counsel regarding a firm's eligibility.

(2) The DBE Certification Advisory Panel shall be comprised of representatives of the following cabinet divisions:

(a) Division of Contract Procurement;

(b) Division of Professional Services;

(d) Division of Audits;

(e) Division of Highway Safety;

(f) Division of Licensing; and

(g) Office of Legal Services.

Section 4. Certification Committee Procedures.

(1) Upon voting, a simple majority shall constitute a quorum. If only two (2) certification members vote and if they disagree rendering the vote a tie, the Executive Director of the Office for Civil Rights and Small Business Development, or the executive director's proxy, shall cast the tie breaking vote.

(2) A summary record of each DBE Certification Committee meeting shall be retained by the Office for Civil Rights and Small Business Development for at least three (3) years from the date of initial notice of certification.

(3) The completed applications, staff summaries, and recommendations shall be provided to the DBE Certification Committee members no less than five (5) business days in advance of the scheduled meeting in which the application is to be considered.

(4) The Certification Committee shall have the authority to remove a firm's eligibility for DBE certification as established in 49 C.F.R. 26.87.

Section 5. Applications for Certification.

(1) The UCA (Uniform Certification Application review process for approval of certification, and continuation of certification as a DBE, or ACDBE shall be conducted pursuant to 49 C.F.R. 26.83, 26.85, and 26.86.

(2) A UCA shall be approved by the Federal Highway Administration pursuant to Appendix F to 49 C.F.R. Part 26. A link to the electronic version of the application form shall be available on the Kentucky Transportation Cabinet Web site.

(3) The completed UCA shall be submitted electronically to the cabinet's Office for Civil Rights and Small Business.

(4) An incomplete UCA missing the required information or documentation shall not be processed until the documentation and information requirements are received by the Office for Civil Rights and Small Business Development.

(5) A UCA submitted by a firm having a principal business office registered in the Commonwealth of Kentucky shall be reviewed in accordance with 49 C.F.R. Parts 23 and 26, Subpart D.

(6) A UCA submitted by a firm whose primary office is registered in a state other than Kentucky shall be submitted for approval of DBE certification in Kentucky to the Office for Civil Rights and Small Business Development for review in accordance with 49 C.F.R. 23 and 49 C.F.R. 26.85.

(7) The Office for Civil Rights and Small Business Development shall conduct an on-site visit at the firm's primary place of business pursuant to 49 C.F.R. 26.83(c).

(8) An applicant for DBE, or ACDBE certification, or a certified DBE or ACDBE may withdraw without penalty from the DBE program prior to the Certification Committee making a decision regarding the application.

Section 6. Appeals.

(1) The appeal of a decision by the Certification Committee shall be emailed to DBEAppeals@dot.gov within forty-five (45) days of the date of the decision of the committee. The appeal shall include the denied certification notice and other pertinent information and provide a full and specific statement as to why the decision is erroneous, what significant fact was not considered, or what provisions of 49 C.F.R. Part 26 were not properly applied. USDOT shall not accept notices of intent or partial or otherwise non-compliant submissions.

(2) If there is a removal of certification, the removed firm shall have the option to appeal in writing in response to a removal notice letter or in the alternative, request an informal hearing. After the written appeal or informal hearing, the firm may appeal the final decision to the DBEAppeals@dot.gov within forty-five (45) days of the date of the decision pursuant to subsection (1) of this section.

(3) If an applicant or firm would like an alternate appeal process, they may elect to appeal final decisions under this section pursuant to KRS 13B.

(4) An applicant who is denied certification, or whose certification is removed by the committee, shall not reapply for DBE certification for six (6) months from the date of notice of the denial or removal.

History

RELATES TO: 49 C.F.R. Parts 23, 26, 15 U.S.C. 637 (a), (d), (m), Titles 23 U.S.C., 49 U.S.C., Pub. L. 114-94
STATUTORY AUTHORITY: KRS 174.080, 49 C.F.R. 26.3, 26.21
NECESSITY, FUNCTION, AND CONFORMITY: 49 C.F.R. 26.3 and 26.21 require that recipients of federal-aid highway funds authorized under Titles I and V of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), Titles 23 and 49 U.S.C., or Titles I, III, and V of the Transportation Equity Act for the 21st Century (TEA-21), and Fix America's Surface Transportation Act of 2015 (FAST), Pub. L. 114-94, from the United States Department of Transportation (USDOT) implement a program to ensure nondiscrimination in the award and administration of USDOT-assisted contracts in its highway financial assistance programs. The Kentucky Transportation Cabinet, as a recipient of these funds, is required by 49 C.F.R. 26.21 to have a program that requires the participation of disadvantaged, minority, and women-owned business enterprises in contracts financed in whole or in part with these funds. This administrative regulation establishes the requirements for certification of DBE firms pursuant to federal law.
History: 14 Ky.R. 1027; 1203; eff. 1-4-1988; 15 Ky.R. 534; eff. 10-4-1988; 17 Ky.R. 1540; eff. 12-4-1990; 19 Ky.R. 1130; 1532; eff. 1-4-1993; 20 Ky.R. 2892; 3194; eff. 5-23-1994; 21 Ky.R. 2521; eff. 6-1-1995; 22 Ky.R. 1362; 1621; 1835; eff. 4-5-1996; 24 Ky.R. 1559; 1880; eff. 2-19-1998; 30 Ky.R. 2233; 2459; eff. 6-21-2004; 44 Ky.R. 2272, 2501; eff. 7-6-2018; 49 Ky.R. 630, 1254; eff. 3-1-2023; 51 Ky.R. 549; eff. 2-26-2025.

Chapter 5 Nonpublic School Transportation

600 KAR 5:010 Transportation of nonpublic school students {#sec-600-kar-5-010 omnilex-key=us-ky-regs-official--title-600--600 KAR 5:010}

Section 1. Application for Funds.

(1) A fiscal court that provided financial support for the transportation of nonpublic school students in a school year pursuant to the provisions of KRS 158.115 may apply to the Transportation Cabinet for reimbursement of that financial support.

(2) By May 1 of a school year for which a fiscal court has authorized the expenditure of county funds pursuant to KRS 158.115, the fiscal court shall in writing notify the Transportation Cabinet, Office of the Secretary of its intention to apply for reimbursement. The notification shall include:

(a) The name of the person in the county who will serve as liaison on the application;

(b) A resolution from the fiscal court stating that the county provided funds in the school year for the transportation of nonpublic school students;

(c) A detailed statement of the method by which the funds were made available for the transportation of the nonpublic school students;

(d)

A copy of each contract the fiscal court entered into to provide the transportation services; or
If the fiscal court does not contract for the provision of transportation services with a bus company or a board of education, a copy of the legal notice requesting applications for supplementary funds from providers of transportation of nonpublic school students; and

(e) An estimate of the total amount of funds to be provided.

(3) The final application to the Transportation Cabinet shall:

(a) Be received by the Office of the Secretary by June 30 of the applicable school year;

(b) Include the amount of funds provided by the county for the transportation of nonpublic school students; and

(d) Include a copy of each application or invoice for payment and the supporting documentation from the transportation provider.

(4)

(a) The Transportation Cabinet shall:

Evaluate the applications received for compliance with the requirements established by this section; and
Divide the funds available in each fiscal year between applicants who comply with the requirements established by this section as provided by paragraphs (b) and (c) of this subsection.

(b) If the application amounts spent by the counties equal or total less than the amount appropriated by the General Assembly for that school year, the Transportation Cabinet shall authorize payment for each requested reimbursement amount.

(c) If the application amounts spent by the counties exceed the amount, the Transportation Cabinet shall prorate the amount appropriated by the General Assembly among the applicants as provided by Section 2 of this administrative regulation.

Section 2. Proration of Appropriated Funds. Funds shall be prorated, as required in Section 1(4)(c) of this administrative regulation, in the following method:

(1) The cabinet shall obtain the most recent figures at the time the application is received, and determine the total number of:

(a) Public school students transported; and

(b) Nonpublic school students who are eligible for transportation.

(2) The number of nonpublic school students in subsection (1) of this section, shall not include a student who:

(a) Attends a:

School on a military reservation; or
School that is fully federally funded; or

(b) Is taught at home.

(3) The cabinet shall determine the:

(a) State-wide average for the annual cost of the transportation of an individual student; and

(b) Amount of local funds expended or budgeted for the transportation of nonpublic school students.

(4) The maximum amount for which a county shall be eligible to apply shall be the lesser of the following:

(a) The sum of the total number of students established pursuant to subsections (1) and (2) of this section, multiplied by the sum established in subsection (3)(a) of this section; or

(b) The total funds actually expended by the county for transportation of nonpublic school students during the applicable school year.

(5) If it is necessary to prorate the appropriation for a specific fiscal year, the funds for each eligible applicant county shall be the sum of the funds appropriated by the General Assembly for that school year, multiplied by the county's application amount established by subsection (4) of this section, divided by the total number of eligible applications received.

History

RELATES TO: KRS 158.115, 1998 Ky. Acts ch. 615, Part I, subpart 87,d.
STATUTORY AUTHORITY: 1998 Ky. Acts ch. 615, Part I, subpart 87,d.
NECESSITY, FUNCTION, AND CONFORMITY: In 1998 Ky. Acts ch. 615, Part I, subpart 87,d., funds were appropriated for nonpublic school transportation for each fiscal year. This administrative regulation establishes conditions and procedures for the reimbursement to fiscal courts of financial support for the transportation of nonpublic school students.
History: 600 KAR 005:010. 21 Ky.R. 3098; 22 Ky.R. 302; eff. 10-3-95; 23 Ky.R. 3411; 3819; 4115; eff. 6-2-97; 25 Ky.R. 615; 1038; eff. 11-20-98; Crt eff. 12-4-2019; Crt eff. 12-5-2025.

600 KAR 6:010 Definitions for 600 KAR Chapter 6 {#sec-600-kar-6-010 omnilex-key=us-ky-regs-official--title-600--600 KAR 6:010}

Section 1. Definitions.

(1) "Award" means the presentation of an agreement or contract to a professional.

(2) "Cabinet" means the Kentucky Transportation Cabinet.

(3) "Change order" is defined in KRS 45A.030(2).

(4) "Competitive negotiation" means negotiations that meet the requirements established in KRS 45A.085.

(5) "Consultant" means a firm which has been selected to perform engineering or engineering-related services for the cabinet as the prime or top-ranked firm in accordance with 600 KAR 6:060.

(6) "Continuous professional liability policy" means professional liability insurance coverage which is maintained without a gap in coverage in order to become and to remain prequalified with the Transportation Cabinet.

(7) "Contract" is defined in KRS 45A.030(7).

(8) "Contract modification" is defined in KRS 45A.030(8).

(9) "Cost per unit of work" means a price based on a unit if the extent of work cannot be defined but a cost of the work per unit can be determined in advance with reasonable accuracy.

(10) "Cost plus a fixed fee" means a price based on the actual allowable cost of the work plus any preestablished fixed amount for operating margin.

(11) "DBE" means a disadvantaged business enterprise as defined and certified in accordance with the provisions of 600 KAR 4:010.

(12) "Direct salary" means the salary of a person directly involved with and chargeable to a specific project, e.g., engineering or draftsperson time spent on a project.

(13) "Discipline" means an engineering or related service area with responsibility falling to a specific user division.

(14) "Engineer" is defined by KRS 45A.800(2).

(15) "Engineering-related services" is defined by KRS 45A.800(7).

(16) "Firm" is defined by KRS 45A.800(8).

(17) "FHWA" means the Federal Highway Administration.

(18) "Lump sum" means a fixed price, including cost and operating margin, agreed upon between a consultant and cabinet for a group of tasks without a breakdown of individual values, i.e., a lot price.

(19) "Modification" means a formal revision to the terms of a contract.

(20) "Noncompetitive negotiation" means negotiations that meet the requirements established in KRS 45A.095.

(21) "Overhead costs" means an indirect cost that:

(a) Is not chargeable to a specific project; and

(b) Supports:

Personnel salaries;
Accounting;
General maintenance and repair;
Building rent;
Utilities;
Furniture; and
A similar cost related to conducting business.

(22) "Overhead submission packet" means a package of information containing a summary of the:

(a) Firm's overhead expense accounts;

(b) Direct and indirect labor; and

(23) "Pool" means a group of firms selected to provide engineering or engineering-related services.

(24) "Prequalification" means the evaluation of a professional:

(a) To determine if he or she is qualified to contract with the cabinet for engineering or engineering-related services; and

(b) By consideration of:

Financial capability;
Technical expertise;
Experience;
Past performance;
Management; and
Similar business factors.

(25) "Prequalification category" means a type of project for which engineering or engineering-related services are contracted.

(26) "Prime" or "top-ranked" means a consultant:

(a) Awarded a contract under 600 KAR 6:070; and

(b) Performing at least fifty (50) percent of the dollar value of the work for a project.

(27) "Principal" means an individual who:

(a) Owns directly or indirectly more than ten (10) percent of the voting interest in a consulting firm; or

(b) Serves as:

President;
Vice president;
Secretary;
Director; or
Another firm officer.

(28) "Project-specific professional liability insurance" means separate professional liability coverage which provides noncancelable coverage for the duration of a specific project and continuing through a discovery period after construction is complete.

(29) "Professional liability policy" means claims-made insurance coverage for engineering or engineering-related services which indemnifies a firm, a past or present partner, an officer, a director, a stockholder, or an employee while acting within the scope of firm duties, against the following:

(a) A negligent act;

(b) An error or omission in performing a professional service; or

(30) "Professional services" means specialized services performed by an individual or consultant of recognized technical competence.

(31) "Project" means an undertaking by the Transportation Cabinet as defined in KRS 45A.800(4).

(32) "Project manager" means the director of the user division or person designated by the user division director to oversee the performance of a consultant to perform contracted services on a project.

(33) "Proof of necessity" means the justification to employ an:

(a) Engineer;

(b) Architect;

(d) Attorney; or

(e) Other professional.

(34) "Proposal" means an offer made by a firm to the cabinet as a basis for negotiations for entering into a contract.

(35) "Salary additives" means an employer-paid fringe benefit, including:

(a) The employer portion of FICA;

(b) Health insurance;

(d) A state unemployment contribution; or

(e) A similar employee benefit.

(36) "Scope of work" means all services and actions required of the consultant by the contract.

(37) "Services" is defined in KRS 45A.030(24).

(38) "Six (6) year plan" means the document prepared by the Transportation Cabinet in accordance with the provisions of KRS 176.419 through 176.440.

(39) "Standard of care" means the ordinary and reasonable care required and established by expert testimony of what a reasonable and prudent professional would have done under the same or similar circumstances.

(40) "Subconsultant" means a second consultant contracted to a prime consultant for the performance of work contracted by the cabinet to the prime consultant.

(41) "Termination clause" means a contract clause which allows the cabinet to terminate, at its own discretion, the performance of work and to make settlement of the consultant's claims.

(42) "User division" is defined in KRS 45A.800(6).

(43) "Work unit" means an item on a list of tasks which are required to be accomplished by the consultant in order to satisfactorily complete the scope of work.

History

RELATES TO: KRS 45A.030, 45A.085, 45A.095, 45A.800-45A.835, 45A.838, 23 C.F.R. 172, 23 U.S.C. 112, 121
STATUTORY AUTHORITY: KRS 45A.838
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.838(1), (4), and (5) require the Transportation Cabinet to promulgate administrative regulations relating to the establishment and operation of professional service firm pools. This administrative regulation establishes the definitions for terms used in 600 KAR Chapter 6.
History: 22 Ky.R. 1403; eff. 4-5-1996; 24 Ky.R. 1373; 1689; eff. 2-19-1998; 25 Ky.R. 1952; 2559; eff. 5-4-1999; 33 Ky.R. 539; 1307; eff. 11-9-2006; Crt eff. 4-1-2019; Cert eff. 3-20-2026.

600 KAR 6:020 Transportation Cabinet employee responsibilities in the implementation of KRS 45A.800 to 45A.835 {#sec-600-kar-6-020 omnilex-key=us-ky-regs-official--title-600--600 KAR 6:020}

Section 1. Transportation Cabinet Employee Responsibilities. All cabinet personnel engaged in the procurement of engineering or related services or the implementation of the provisions of KRS 45A.800 to 45A.835 shall comply with the following:

(1) Consider the interests of the Commonwealth of Kentucky and the cabinet first when contracting for professional services;

(2) Request and accept assistance from other cabinet and state personnel as required without allowing it to impair the dignity and responsibility of the employee's position;

(3) Seek to obtain the maximum value for each dollar spent for professional services;

(4) Strive for honesty and truth in contracting;

(5) Denounce all forms of bribery or favors;

(6) Invite all firms to submit their qualifications for consideration by the cabinet;

(7) Assist other cabinet personnel in the contracting for professional services as necessary; and

(8) Comply with both the letter and the spirit of KRS 45A.340 and to the Cabinet's Official Order Number 94902 regarding conflict of interest. This official order is incorporated by reference in 600 KAR 6:060.

History

RELATES TO: KRS Chapter 11A, 45A.800-45A.835
STATUTORY AUTHORITY: KRS Chapter 11A, 45A.800-45A.835
NECESSITY, FUNCTION, AND CONFORMITY: This administrative regulation sets forth the responsibility of the Transportation Cabinet employees when establishing the need for, negotiation of, or contracting for professional engineering or related services or implementing the provisions of KRS 45A.800 to 45A.835.
History: 22 Ky.R. 1405; 1840; eff. 4-5-1996; Crt eff. 4-1-2019; Crt eff. 3-20-2026.

Section 1. Federal Regulatory Requirements.

(1) If a highway project is funded in part by federal-aid funds, the cabinet shall be regulated by Title 23 of the United States Code and by 23 C.F.R. 172 and 49 C.F.R. 18 in regard to the selection of a consultant.

(2) The cabinet shall submit justification and receive approval from the FHWA before using the noncompetitive negotiated method of contracting if federal-aid highway funds are used in the contract. A contract in which federal-aid highway funds may be awarded by noncompetitive negotiation shall be limited to contracts for which FHWA approval has been received if:

(a) The service is available only from a single source;

(b) There is an emergency which will not permit the time necessary to conduct competitive negotiations; or

History

RELATES TO: KRS 45A.800-45A.835, 23 C.F.R. 172, 49 C.F.R. 18
STATUTORY AUTHORITY: KRS 45A.807(2), 23 C.F.R. 172, 49 C.F.R. 18
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.807(2) requires the Transportation Cabinet to promulgate administrative regulations to implement the procurement of engineering services pursuant to KRS 45A.800 to 45A.835. This administrative regulation establishes the federal requirements to be followed by the Transportation Cabinet relating to contracts for engineering or engineering-related services.
History: 22 Ky.R. 1406; 1840; eff. 4-5-1996; 33 Ky.R. 542; 1309; eff. 11-9-2006; Crt eff. 4-1-2019; Crt eff. 3-20-2026.

Section 1. Application for Prequalification of Engineering or Engineering-Related Services.

(1) A firm applying for prequalification shall complete one (1) or more of the following forms as applicable to the categories for which prequalification is desired:

(a) Consulting Engineer and Related Services Prequalification Application, TC Form 40-1;

(b) Prequalification Requirements for Geotechnical Drilling Services, TC Form 66-209;

(d) Prequalification Requirements for Geotechnical Laboratory Testing Services, TC Form 66-211.

(2)

(a) A firm desiring to be considered for an award as a prime shall provide:

An original certificate of a continuous professional liability policy in an amount not less than $1,000,000 with the application established in subsection (1) of this section; and
Proof of current Kentucky workers compensation insurance coverage.

(b) A certificate of self-insurance shall not be accepted by the Transportation Cabinet.

(3) The completed prequalification form established in subsection (1) of this section and original certificate of a continuous professional liability policy shall be submitted to the Division of Professional Services, Transportation Cabinet Office Building, 200 Mero Street, Frankfort, Kentucky 40622.

(4) If a prequalified firm ceases to exist or ceases to provide engineering services as a prime, it shall continue to maintain a minimum of $1,000,000 in professional liability insurance for a project that was designed by the firm for two (2) years beyond the date the project was opened to traffic.

(5) In order to submit a proposal to the cabinet on a project, a firm shall file the proof of professional liability insurance required by subsection (2)(a) of this section.

Section 2. Evaluation of Applications for Prequalification.

(1) Each firm's qualifications for a requested prequalification category shall be reviewed by the offices or divisions within the cabinet that have expertise in the requested prequalification category.

(2) The Division of Professional Services shall review and maintain the original certificate of continuous professional liability policy for a firm desiring prequalification as a prime.

(3) The criteria for prequalification to be used by the user divisions and offices shall be the criteria established in the Procedures for Updating Prequalification for Engineering and Engineering-Related Services with the Department of Highways, located on the cabinet's Web site.

(4) The head of the user division or office shall notify the Division of Professional Services of its evaluation results.

(5)

(a) The Transportation Cabinet shall verify the financial and other information included in the application established in Section 1(1) of this administrative regulation from a firm if it is necessary to substantiate the information required by the prequalification criteria.

(b) Verification shall be accomplished in the same manner as an audit performed pursuant to 600 KAR 6:080.

(6)

(a) The Division of Professional Services shall notify each firm of the evaluation results involving that firm.

(b) If a firm is disapproved for a requested prequalification category or service, the firm shall be notified of the appeals procedure established in Section 6 of this administrative regulation.

Section 3. Annual Requalification.

(1) A prequalified firm shall annually submit the following to the Division of Professional Services on or prior to its anniversary date of prequalification:

(a) An Application for Prequalification for Engineering or Engineering-related Services with a qualification questionnaire pertaining to the categories for which requalification is desired; and

(b) An original certificate of continuous professional liability policy in an amount not less than $1,000,000.

(2) A firm that is a prime or subconsultant in the current year or during the previous calendar year shall submit an overhead submission package within five (5) months of the end of the firm's fiscal year.

(3) The overhead submission package shall include the business records established in paragraphs (a) through (g) of this subsection:

(a) Schedule of Indirect Costs;

(b) Schedule of Employees, Pay Rates, and Job Classifications;

(d) Detailed General Ledger for the fiscal year;

(e) Audited Financial Statement for the fiscal year or a financial statement certified as accurate by an officer of the company;

(f) Certification of final indirect costs; and

(g) AASHTO Internal Control Questionnaire for Consulting Engineers.

(4)

(a) In even calendar years, the annual application, Consulting Engineer and Related Services Prequalification Application, TC Form 40-1, shall include a completed set of the applicable qualification forms and a copy of the firm's current marketing brochure, if a brochure exists, for each functional area for which the firm is requesting prequalification.

(b) In lieu of Consulting Engineer and Related Services Prequalification Application, TC Form 40-1, in odd calendar years a firm may submit a letter that certifies that substantial changes have not occurred.

(c) If a substantial change has occurred, or if the firm is requesting prequalification for an additional area, the firm shall submit Consulting Engineer and Related Services Prequalification Application, TC Form 40-1.

(5) Failure to submit the applicable forms required in Section 1(1) of this administrative regulation or the original certificate of a continuous professional liability policy by the firm's renewal date shall cause the removal of the firm's prequalification status.

(6) The annual renewal application shall be evaluated in accordance with the requirements of Section 2 of this administrative regulation.

Section 4. Changes in Firm.

(1) A prequalified firm shall notify the Division of Professional Services of:

(a) A major change increasing or decreasing the firm's professional or financial qualifications, capabilities, or personnel; or

(b) A change in the:

Address of the firm;
Name of the firm;
Continuous professional liability policy on file with the Division of Professional Services; or
Firm's qualifications related to criteria established in Procedures for Updating Prequalification for Engineering and Engineering-Related Services with the Department of Highways.

(2) The user division or office shall review the updated information received from the firm and shall reclassify the firm with respect to types of work and capacity.

Section 5. Removal from List of Prequalified Firms.

(1) A firm may be removed from the list of prequalified firms by the Consultant Prequalification Committee for one (1) of the following reasons:

(a) Failure to submit Consulting Engineer and Related Services Prequalification Application, TC Form 40-1, on the firm's renewal date;

(b) Falsification of the firm's prequalification application as to its qualifications;

(d) Violation of the Executive Branch Ethics Law contained in KRS Chapter 11A;

(e) Falsification of the information provided to the Transportation Cabinet for audit purposes;

(f) Failure to have a current license from the Kentucky State Board of Licensure for Professional Engineers and Land Surveyors;

(g) Failure to notify the Transportation Cabinet within thirty (30) days of the loss of personnel that impacts the firm's prequalification or project management;

(h) Violation of the firm's certification that the firm's owner, principals or partners, or a family member having an interest of ten (10) percent or more in a business entity involved in the performance of the contract have not contributed more than the amount established in KRS 121.056(2) to the gubernatorial campaign of the current governor;

(i) Failure to maintain with the Division of Professional Services a current certificate of a continuous professional liability policy in an amount not less than $1,000,000;

(j) Failure to annually submit an up-to-date overhead submission package to the Division of Audit Services in accordance with Section 3(2) of this administrative regulation;

(k) Failure to perform on a project; or

(l) Failure to provide the information required by 600 KAR 6:080.

(2) The chairperson of the Consultant Prequalification Committee established in KRS 45A.825 shall notify the firm in writing of its proposed removal from the list of prequalified firms, the reason for the proposed removal, and the appeals procedure established in Section 6 of this administrative regulation.

Section 6. Appeal Procedure for Firms Not Prequalified or Removed from Prequalified List.

(1) The cabinet shall establish a permanent Consultant Prequalification Committee to evaluate the statements of qualifications of firms that appeal a disapproval rating or removal from the list of prequalified firms.

(2) The members of the Consultant Prequalification Committee shall be the following, or the member's designee:

(a) Director, Division of Professional Services, Chairperson;

(b) Director, Division of Traffic Operations;

(d) Director, Division of Structural Design;

(e) Director, Division of Materials;

(f) Director, Division of Planning;

(g) Director, Division of Environmental Analysis;

(h) Director, Division of Maintenance; and

(i) Director, Division of Construction.

(3) An appeal of the disapproval of a prequalification category shall be made as established in Section 2 of this administrative regulation.

(4) An appeal of the removal from the list of prequalified firms shall be made pursuant to Section 5 of this administrative regulation.

(5) An appeal shall be made in writing to the Chairperson of the Consultant Prequalification Committee within thirty (30) days of notification of the action of the Transportation Cabinet.

(6) The basis of the appeal and the relief sought shall be stated in the written communication to the chairperson.

(7)

(a) Within sixty (60) days from receipt of an appeal, the committee members or their designees shall review the appeal and make a decision regarding the appeal.

(b) If the firm agrees, the committee may delay its decision for an additional sixty (60) days while the committee meets with the firm to discuss the appeal.

(8) The committee shall notify the State Highway Engineer and the firm of its decision.

(9) If the firm's appeal is denied by the committee, the firm may appeal the decision within thirty (30) days of written notice relating to:

(a) Nonqualification to the State Highway Engineer; or

(b) Removal from the cabinet's list of prequalified firms to the Secretary of the Transportation Cabinet.

(10) The State Highway Engineer or Transportation Cabinet Secretary shall notify the firm of his or her decision within thirty (30) days. The decision of the State Highway Engineer or Transportation Cabinet Secretary shall be final.

Section 7. Conditional Prequalification.

(1) The user division, office, or Consultant Prequalification Committee may grant conditional prequalification if a firm:

(a) Has no direct highway or transportation experience but has identified personnel who have technical training, education, and other types of experience that may allow the firm to perform the required services; or

(b) Performed poorly on past projects for the cabinet or has been removed from the list of prequalified firms for performance-related reasons and has restructured itself to address the problems.

(2) After the firm has performed services for the cabinet in the category of work for which it was conditionally prequalified, it may request a prequalification determination from the committee. The request for a prequalification determination shall be in accordance with Section 1 of this administrative regulation.

(3) Denial of conditional prequalification of a firm to perform services for the cabinet shall not be appealed.

Section 8. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Consulting Engineer and Related Services Prequalification Application", TC 40-1, August, 2013;

(b) "Prequalification Requirements for Geotechnical Drilling Services", TC Form 66-209, January, 2014;

(d) "Prequalification Requirements for Geotechnical Laboratory Testing Services", TC 66-211, January, 2014;

(e) "AASHTO Internal Control Questionnaire for Consulting Engineers", 2012 edition, AASHTO Web site, http://audit.transportation.org/Documents/UAAG-3%20FINAL.pdf; and

(f) "Procedures for Updating Prequalification for Engineering and Engineering-Related Services with the Department of Highways", Transportation Cabinet Web site, http://transportation.ky.gov/Professional-Services/Documents/Prequalification,%20Criteria%20and%20Instructions.pdf, November 7, 2013

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Division of Professional Services, Transportation Cabinet Office Building, 200 Mero Street, Frankfort, Kentucky 40622, Monday through Friday, 8 a.m. to 4:30 p.m.

History

RELATES TO: KRS Chapter 11A, 45A.800-45A.838, 121.056(2), 23 C.F.R. 172, 49 C.F.R. 18, 23 U.S.C. 112(b)(2)
STATUTORY AUTHORITY: KRS 45A.807(2), 45A.838
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.807(2) requires the Transportation Cabinet to promulgate administrative regulations to implement its procurement of engineering or engineering-related services pursuant to KRS 45A.800 to 45A.838. KRS 45A.838 requires the cabinet to promulgate administrative regulations designating the type of project and a prequalified pool of firms established for each particular project. This administrative regulation establishes the procedure and standards for the prequalification of firms for engineering or engineering-related services while implementing the provisions of KRS 45A.800 to 45A.838.
History: 22 Ky.R. 1407; 1626; 1840; eff. 4-5-1996; 24 Ky.R. 1375; 1691; eff. 2-19-1998; 29 Ky.R. 1876; 2672; eff. 5-15-2003; 33 Ky.R. 544; 1309; eff. 11-9-2006; 40 Ky.R. 2355; eff. 7-1-2014; TAm eff. 1-5-2015; Crt eff. 4-1-2019; Crt eff. 3-20-2026.

Section 1. Preparation of a Procurement Bulletin.

(1) If the Transportation Cabinet has need of engineering or engineering-related services, it shall prepare a procurement bulletin announcing its intentions.

(2) A procurement bulletin prepared by the cabinet shall include a request for proposal for each project anticipated being contracted during a specified period of time. The request for proposal shall include the following:

(a) The general scope of the project as provided by the user division;

(b) A discussion of procedures to follow for submission of a proposal on the project;

(d) Any requirements for DBE utilization;

(e) Deadline for filing a response;

(f) The evaluation factors and their relative weights on which a response shall be evaluated by the Selection Committee;

(g) A timetable for the selection committee's meetings for the project;

(h) A list of all firms prequalified pursuant to 600 KAR 6:040 in each applicable category as of the date of the bulletin;

(i) A list of the firms prequalified pursuant to 600 KAR 6:040 and certified as a DBE as of the date of the bulletin;

(j) If established in advance by the State Highway Engineer, the maximum fee for consultant services for the project;

(k) If appropriate, the item numbers from the "six (6) year plan"; and

(l) The items required by KRS 45A.825(2)(b).

(3) A copy of the procurement bulletin shall be made available to each firm prequalified in a category to perform engineering or engineering-related services for the cabinet.

(4) The procurement bulletin may require the initial solicitation of a complete work price and qualification proposal.

(5) A procurement bulletin for statewide engineering or engineering-related services may specify that more than one (1) firm may be selected to provide the services requested in the bulletin.

(6)

(a) The user division or office shall recommend the evaluation factors and relative weights to the Transportation Cabinet Secretary. Unless unique or particularly complex circumstances exist, the evaluation factors shall be selected from the list established in this paragraph. The Transportation Cabinet Secretary, or designee, shall approve the evaluation factors and relative weighting placed on each of the factors that appear in a procurement bulletin for selection of a professional firm for engineering or engineering-related services. The evaluation factors shall include the:

Relative experience of professional personnel assigned to the project team with highway projects or projects on another mode of transportation or intermodal transportation projects for:

a. The Kentucky Transportation Cabinet; or

b. Federal, local or other state governmental agencies;

Capacity to comply with the project schedule;
Past record of performance on a project of similar type and complexity;
Project approach and proposed procedures to accomplish the services for the project;
Location where the work will be performed;
Special or unique expertise;
Special or unique equipment; and
Familiarity with geographic areas and resources.

(b) The weighting of each factor shall be published in the announcement for the specific project.

(7) In addition to publishing a procurement bulletin, the cabinet may place an advertisement of the cabinet's need for engineering or engineering-related services and availability of the procurement bulletin in two (2) newspapers of general, multicounty circulation and one (1) newspaper which has minorities as its targeted readership.

Section 2. Response to Procurement Bulletin.

(1) A prequalified firm responding to a procurement bulletin for engineering or engineering-related services shall submit to the Division of Program Performance the number of copies of a completed Response to Kentucky Transportation Cabinet's Announcement for Engineering and Engineering-related Services as specified in the procurement bulletin.

(2) A firm or proposed subconsultant that is not prequalified in the specified areas of prequalification prior to the response due date published in the announcement of the need for engineering or engineering-related services for a particular project, shall not be considered for selection.

(3)

(a) The Director, Division of Program Performance, or designee,, shall certify the list of firms that responded to the procurement bulletin in a timely manner to the appropriate Professional Engineering Services Selection Committee.

(b) A response received after the deadline shall be returned to the firm and shall not be listed for consideration to perform the project.

(c) A response received with fewer copies of the response than required by subsection (1)(a) of this section shall be returned to the firm and shall not be listed for consideration to perform the project.

(d) The list of responses to the procurement bulletin shall be confidential until the contract is negotiated and the Division of Program Performance or designee receives notification indicating that the LRC Government Contract Review Committee has received the contract and project information for review as set forth in 600 KAR 6:070.

Section 3. Incorporation by Reference.

(1) "Response to Kentucky Transportation Cabinet's Announcement for Engineering and Engineering-related Services", May 2006 edition, is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the division of Program Performance, 200 Mero Street, Frankfort, Kentucky 40622, Monday through Friday, 8 a.m. and 4:30 p.m.

History

RELATES TO: KRS 45A.800-45A.835, 23 C.F.R. 172, 23 U.S.C. sec. 112(b)(2)
STATUTORY AUTHORITY: KRS 45A.807(2), 23 U.S.C. sec. 112(b)(2), 23 C.F.R. 172(1)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.807(2) requires the Transportation Cabinet to promulgate administrative regulations to implement its procurement of engineering services pursuant to KRS 45A.800 to 45A.835. This administrative regulation establishes the procedure to be used by the Transportation Cabinet for issuing public notice of the need for engineering or engineering-related services in accordance with KRS 45A.800 to 45A.835.
History: 22 Ky.R. 1410; 1627; 1842; eff. 4-5-1996; 24 Ky.R. 2760; 25 Ky.R. 836; eff. 10-6-1998; 33 Ky.R. 546; 1311; eff. 11-9-2006; Crt eff. 4-1-2019; Crt eff. 3-20-2026.

Section 1. Establishing a Professional Engineering and Engineering-related Services Selection Committee.

(1) A Professional Engineering and Engineering-related Services Selection Committee shall be selected as set forth in KRS 45A.810(5) and (6).

(2)

(a) The Transportation Cabinet Secretary, or designee, shall annually request voluntary applications from the professional engineering staff in the cabinet for availability to serve in the pool of six (6) professional engineers required by KRS 45A.810(5)(a).

(b) The Transportation Cabinet Secretary, or designee, shall review all applications from which the secretary shall appoint six (6) professional engineers to serve in the pool for a period of one (1) year.

(d) A person serving on the Professional Engineering and Engineering-related Services Selection Committee from this pool shall not be eligible to serve on the same selection committee as a representative of a user division as specified by KRS 45A.810(5)(b).

(3)

(a) The director of the user division responsible for monitoring the professional services shall appoint two (2) professional engineers from either the user division or the same functional area from the highway district offices where the project is located in accordance with KRS 45A.810(5)(b).

(b) If the user division does not have two (2) professional engineering merit employees or if the services in the announcement are for nonengineering but related services, the director shall appoint two (2) employees who have familiarity and experience related to the services that are being contracted.

(d) If the cabinet is procuring engineering or engineering-related services in conjunction with another agency or governmental entity or state, that unit outside the cabinet may be designated as a co-user division and be eligible to appoint one (1) member of the selection committee.

(4) An employee of the cabinet shall not involuntarily serve as a member of a Professional Engineering and Engineering-related Services Selection Committee.

(5) Each member of a Professional Engineering and Engineering-related Services Selection Committee shall complete, sign, and return to the committee the following forms:

(a) Form TC 40-9E, Certification of Understanding of Restrictions for Members of Professional Engineering and Engineering-related Services Selection Committee;

(b) Form TC 40-6, "Ex Parte" Disclosure;

(d) Form TC 40-10, Certification of Conformity with Procurement Process.

(6)

(a) If the individual, randomly selected to serve on a selection committee in accordance with KRS 45A.810(5)(c), is an employee of a consulting firm, that consulting firm shall not be considered for a project which is reviewed by that selection committee.

(b) If a firm submitted a response under the circumstance identified in paragraph (a) of this subsection, the firm's response for that project shall be returned by the selection committee with a letter of explanation.

(7) After issuing approval to advertise for a consultant to perform engineering or engineering-related services, the secretary of the cabinet, or designee, shall establish a Professional Engineering and Engineering-related Services Selection Committee for each project.

(8) The Division of Program Performance shall provide each Professional Engineering and Engineering-related Services Selection Committee with the necessary administrative and technical support and office supplies.

(9)

(a) Each member of a Professional Engineering and Engineering-related Services Selection Committee shall comply with the Executive Branch Code of Ethics established in KRS Chapter 11A.

(b) Each member of a selection committee shall comply with the cabinet's Official Order Number 102295 regarding conflicts of interest.

Section 2. Operation of a Professional Engineering and Engineering-related Services Selection Committee.

(1)

(a) Meetings of a Professional Engineering and Engineering-related Services Selection Committee shall be called by the Division of Program Performance.

(b) The quorum for meetings shall be three (3) of the five (5) voting members. Each quorum shall include at least one (1) member appointed by the user division responsible for monitoring the professional services.

(2) Subsequent meetings.

(a) If needed, a subsequent meeting of a Professional Engineering and Engineering-related Services Selection Committee shall be called:

By the chairperson at a mutually convenient time; or
Upon a consensus of three (3) of the five (5) voting members of the selection committee.

(b) A motion or decision of the selection committee shall require a simple majority affirmative vote of all members present for passage.

(3)

(a) The Professional Engineering and Engineering-related Services Selection Committee shall give fair and impartial consideration to each response certified in accordance with KRS 45A.825(5).

(b) The selection committee shall utilize the evaluation factors and weights indicated in the announcement for each project to screen each certified firm response.

(c) Prior to the selection committee determining the three (3) most qualified firms, each voting selection committee member shall review all certified responses and preliminarily evaluate and numerically rate each firm using the weighted evaluation factors that appeared in the procurement bulletin.

(4) In an executive session pursuant to the requirements established in subsections (5) through (13) of this section, the selection committee shall determine the three (3) best qualified firms and develop a ranking of the three (3) by considering the weighted evaluation factors that appeared in the procurement bulletin.

(5)

(a) Each committee member shall list the three (3) firms he or she ranked highest.

(b) Each firm included in a list prepared by a committee member shall be placed on the short list of firms.

(6)

(a) All firms included on the short list shall be individually discussed by the committee with regard to their qualifications, the quality of their proposals, and the evaluation factors.

(b) Each committee member shall be given the opportunity to provide insight into the reasons for selecting or not selecting each firm for the project.

(7)

(a) Each firm remaining under consideration after the discussion period established in subsection (6) of this section shall be individually ranked by the committee members using secret ballots.

(b) A new listing of short-listed firms based on the composite rankings of the secret ballots shall be discussed by the selection committee.

(8) If at the end of the process established in subsection (7) of this section, more than three (3) firms remain under consideration, the process established in subsection (7) of this section shall be repeated until three (3) firms remain for consideration by the selection committee.

(9) Each of the three (3) firms identified in subsection (8) of this section shall be individually ranked by the committee members using secret ballots.

(10)

(a) Unless there is a tie between two (2) of the firms, the results of subsection (9) of this section shall determine the ranked order of the three (3) best qualified firms.

(b) If there is a tie ranking and if one of the firms has indicated that more of its work tasks will be performed in Kentucky, that firm shall be ranked higher than the other with which it had tied.

(c) If there is a tie ranking and if the work tasks to be performed in Kentucky are equal, the selection committee shall again perform the functions established in subsection (7) of this section until the tie is broken.

(11) If the selection committee elects, it may interview a responding firm to aid in its determination of the best qualified firm.

(12) For a selection committee review involving statewide services advertised in accordance with Section 1(5) of 600 KAR 6:050, the committee shall rank:

(a) The top three (3) firms; or

(b) If more than three (3) firms are specified in the procurement bulletin, the number of firms specified in the bulletin.

(13) The evaluations and ratings of the individual selection committee members shall be considered preliminary and confidential working documents and shall not be available to the public.

(14)

(a) The Chairperson of the Professional Engineering and Engineering-related Services Selection Committee shall notify the Director of the Division of Program Performance, or designee, of the firms determined by the committee to be the three (3) best qualified and the order of their ranking.

(b) The Division of Program Performance shall send the letters required in KRS 45A.825(7)(c).

(c) The Division of Program Performance shall immediately notify by letter the top-ranked firm of its selection for the advertised project.

Section 3. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Certification of Understanding of Restrictions for Members of Professional Engineering and Engineering-Related Services Selection Committee", Form TC 40-9E, effective April 2006;

(b) "Ex Parte" Disclosure, Form TC 40-6, effective September 1998;

(d) "Certification of Conformity with Procurement Process", Form TC 40-10, effective January 1997; and

(e) The Transportation Cabinet's Official Order Number 102295 regarding Conflict of Interest, June 15, 2004 edition.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Division of Program Performance, Transportation Cabinet Office Building, 200 Mero Street, Frankfort, Kentucky 40622, Monday through Friday, 8 a.m. to 4:30 p.m.

History

RELATES TO: KRS 45A.800-45A.835, 23 C.F.R. 172, 23 U.S.C. 112(b)(2)
STATUTORY AUTHORITY: KRS 45A.807(2), 23 C.F.R. 172(1), 23 U.S.C. 112(b)(2)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.807(2) requires the Transportation Cabinet to promulgate administrative regulations to implement its procurement of engineering services pursuant to KRS 45A.800 to 45A.835. This administrative regulation establishes the procedure to be used by the Transportation Cabinet when selecting engineering or engineering-related services while implementing the provisions of KRS 45A.800 to 45A.835.
History: 22 Ky.R. 1412; 1843; eff. 4-5-1996; 24 Ky.R. 2762; 25 Ky.R. 837; eff. 10-6-1998; 29 Ky.R. 1878; eff. 5-15-2003; 33 Ky.R. 548; 1312; eff. 11-9-2006; Crt eff. 4-1-2019; Crt eff. 3-20-2026.

Section 1. Project Types Utilizing Pooling of Engineering or Engineering-related Services.

(1) The following project types shall utilize a pool of firms to provide the engineering or engineering-related services:

(a) Transportation planning;

(b) Structure design;

(d) Traffic engineering;

(e) Environmental services;

(f) Geotechnical services;

(g) Bridge maintenance services;

(h) Construction engineering services;

(i) Multimodal;

(j) Road design; and

(k) Similar highway related services.

(2)

(a) The use of a consultant pool for a road design project shall be limited to ten (10) percent of the total number of road design projects advertised for engineering or engineering services in the prior fiscal year.

(b) The total design fees for road design projects shall not exceed $2,000,000 in a fiscal year.

Section 2. Procedures and Criteria for Qualifying and Selecting Pooled Firms.

(1) The cabinet shall notify a prequalified firm of the establishment of an individual pool by posting a procurement bulletin on the cabinet's Web page.

(2) To be considered for selection in a pool, a firm shall submit a completed "Response to Kentucky Transportation Cabinet's Announcement for Engineering and Related Services", which shall be received by the date listed on the advertised procurement bulletin.

(3) The remainder of the selection process shall proceed according to KRS 45A.800 through 45A.835.

Section 3. Project Assignment for Pool Firms.

(1)

(a) A selected firm shall be placed in the pool.

(b) A firm name shall be:

Randomly drawn from the pool; and
Listed in consecutive order.

(d) A firm shall not be offered an additional project until the remaining firms on the list have been offered a project.

(2) If a firm declines to accept a project, that firm shall not be eligible to accept another project until the remaining firms on the list have been offered a project.

(3) If a firm declines a project or does not respond to an invitation to perform services for a project within seven (7) working days of the dated notification letter, documentation shall be placed in the project files and the next firm on the list shall be offered the project.

Section 4. Projects Grouped by Geographic Area.

(1) The selection committee shall assign projects which are grouped based on geographical areas.

(2) The geographical area of the project shall be:

(a) Included in the advertisement for services; and

(b) Defined by the cabinet.

(3) The selection committee shall assign a selected firm to a geographical area.

Section 5. Incorporation by Reference.

(1) "Response to Kentucky Transportation Cabinet's Announcement for Engineering and Related Services ", May 2006, Edition is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Transportation Cabinet, Division of Program Performance, 200 Mero Street, Frankfort, Kentucky 40622, Monday through Friday, 8 a.m. to 4:30 p.m.

History

RELATES TO: KRS 45A.800-45A.835, 45A.838, 23 C.F.R. 172, 23 U.S.C. 112, 121, 304, 315
STATUTORY AUTHORITY: KRS 45A.838
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.838 requires the Transportation Cabinet to promulgate administrative regulations relating to the establishment and operation of a pool of firms to provide professional contract services. This administrative regulation establishes the procedure to be used by the Transportation Cabinet if pooling firms as it relates to engineering or engineering-related services.
History: 25 Ky.R. 2067; 2412; 2560; eff. 5-4-1999; 33 Ky.R. 551; 1314; eff. 11-9-2006; Crt eff. 4-1-2019; Crt eff. 3-20-2026.

Section 1. Methods of Contracting with Consultants.

(1) The following methods of contracting with a consultant shall be used:

(a) Lump sum;

(b) Cost plus a fixed fee;

(d) Cost per unit of work; or

(e) Other contract method approved by FHWA.

(2)

(a) If the cabinet chooses the lump sum method of contracting, the consultant shall present a statement to the Division of Program Performance showing the probable cost for the elements of work and the expected operating margin.

(b) This statement shall include a supported breakdown of the direct and indirect costs and subconsultant costs which the consultant expects to incur.

(c) The method of dividing the project into work units and the calculation of related time units shall be devised so that the estimate can be easily reviewed.

(d) The Division of Program Performance and the user division shall verify the following supporting documentation before recommending the contract for approval:

Reasonableness of the amount proposed and consideration of the degrees of risk and responsibility to be assumed by the consultant;
The extent, scope, complexity, character and duration of the required services;
Professional and financial investments to be required of the consultant;
The consultant's normally-expected return for services;
Conditions under which the consultant is expected to perform;
The cabinet's estimate of the appropriate amount for the services required; and
The cabinet's findings on the basis of experience and knowledge.

(3)

(a) If the cabinet chooses the cost plus a fixed fee method of contracting, an upper limit of payment of actual cost shall be established which shall not be exceeded without obtaining cabinet approval.

(b) During negotiations, the Division of Program Performance or other negotiation unit shall be responsible for establishing the upper limit along with the fixed fee to be paid to the consultant for the services required.

(c) The Division of Program Performance or other negotiation unit shall establish the fixed fee and an upper limit based on:

Past experience gained from negotiations of similar projects;
Judgment regarding scheduling;
Complexity of work; and
User division's estimate.

(4)

(a) If the cabinet chooses the specific rate of compensation method of contracting, the Division of Program Performance or other negotiation unit shall document the basis on which the amount specified as the upper limit or upset limit was established.

(b) The agreement shall contain provisions which permit adjustment to this upper limit if the consultant establishes, and the user division agrees, that there has been or is to be a significant change in the:

Scope, complexity or character of the services to be performed;
Conditions under which the work is required to be performed; or
Duration of the work if the change from the time period specified in the agreement for completion of the work warrants that adjustment.

(c) For a statewide agreement under which there is to be subsequent individual authorizations, the establishment of a maximum amount for the overall contract shall be submitted to the LRC's Government Contract Review Committee. A maximum amount shall be established for each of the individual authorizations which shall not exceed the maximum amount for the overall contract.

(5)

(a) If the cabinet is using the cost per unit of work method of compensation, the consultant shall be paid on the basis of units completed.

(b) Cost per unit contracting shall be appropriate for use if:

The extent of the work cannot be accurately figured; and
The cost of the work per unit can be determined with reasonable accuracy in advance.

(c) A proposal using this method of contracting shall be supported in the same manner as that indicated for the lump sum method used for consultants.

(6)

(a) For an individual acting as a consultant, the specific rates of compensation shall include the direct salary costs, salary additives, indirect costs and the net fee. The agreement of supporting data shall specifically identify these costs.

(b) Other direct costs may be included as an element of a specific rate or as independent cost items.

Section 2. Prenegotiation Procedures.

(1)

(a) A consultant selected pursuant to 600 KAR 6:060 shall meet with cabinet representatives in accordance with the schedule identified in the procurement bulletin issued pursuant to 600 KAR 6:050 to discuss in detail the scope of services to be provided by the consultant for the project.

(b) The Transportation Cabinet may require a consultant to obtain project-specific professional liability insurance for an unusual project.

A firm's audit may be reexamined to determine if a change in the overhead rate is needed; or
The consultants may jointly purchase the insurance if there is more than one (1) consultant involved in the project.

(2)

(a) After this prenegotiation meeting, the consultant shall submit the following to the cabinet:

Official minutes of the prenegotiation meeting; and
All required tasks and work units.

(b) The cabinet shall have the following options regarding the submittal:

Concur;
Modify and return the modification to the consultant; or
Reject and ask the consultant to evaluate and resubmit the work units.

(3) The consultant shall submit to the Division of Program Performance a fair and reasonable fee proposal which shall include the following:

(a) Personnel classifications and average wage rates for each classification as they appear in the audit and adjusted for work in the future years;

(b) Distribution of work by the personnel classifications;

(d) Subconsultants and fee proposals for each;

(e) Direct expenses not included in the overhead and subject to the limitations of subsections (5), and (6) of this section; and

(f) Person-hours to achieve the agreed upon task to achieve the scope of services that appear in the advertisement or procurement bulletin.

(4) After the Division of Program Performance requests a proposal and fee estimate from the consultant, the user division shall:

(a) Prepare an estimate of resources required to complete the project;

(b) Discuss the project with other divisions and request resource estimates from them as necessary; and

(c) Coordinate all of the resource estimates from other divisions to be used by the Division of Program Performance in negotiation of the contract; and

(d) Submit an independent person-hour estimate for each discipline in which the firm's fee proposal exceeds 500 person-hours.

(5) For contract negotiation purposes, travel expenses for a consultant employee or survey crew shall be limited to those incurred from an office in Kentucky or the border of Kentucky nearest the consultant's office.

(6) For contract negotiation purposes, direct expenses shall be limited to the following items and limits:

(a) Reimbursement rates for travel expenses related to mileage shall be the twelve-month average of reimbursement rates in accordance with the provisions of 200 KAR 2:006 beginning January 1st and ending December 31st;

(b) Printing of reports for distribution external to the Transportation Cabinet - estimated cost from the printer per document;

(d) Capital cost of money;

(e) Computer time, if accounted for as a direct charge, shall not exceed fifteen (15) dollars per hour; and

(f) Travel time for survey crew - travel time to and from a job site in hours multiplied by the survey crew wage rate multiplied by one and three-tenths (1.3) for salary additives.

Section 3. Contract Negotiations.

(1)

(a) The Division of Program Performance shall be the designated negotiating agent for the Department of Highways in the Cabinet.

(b) If engineering or engineering-related services are requested by user divisions within the cabinet but not in the Department of Highways, that user division shall designate the negotiating agent.

(2)

(a) The Division of Program Performance or other designated negotiation unit shall receive the proposal and fee estimate from the consultant.

The proposal submitted by the consultant shall include a breakdown of the estimated fee for performing the work and one (1) of the following:

a. A statement that the payment shall be based on the percentage of work completed; or

b. The proposed project milestones and corresponding maximum percentage payments.

The breakdown of the estimated fee shall include:

a. Direct salaries;

b. Overhead;

c. Other direct costs including cost of materials which are not included in the overhead;

d. Subconsultant costs;

e. Operating margin; and

f. Use of DBE firms.

(b) The Division of Program Performance or other designated negotiation unit shall analyze the proposal and may confer with others regarding the proposal as necessary. The proposal shall be used as a basis for further negotiation of the professional services agreement.

(c) Unreasonable or deliberately inflated proposals shall be rejected and may be cause for terminating negotiations in accordance with KRS 45A.825(9).

(3) If the contract which is being negotiated uses a method of compensation other than lump sum, the consultant shall use an accounting system which segregates and accumulates reasonable, allocable and allowable costs to be charged to a contract for an audit by the External Audit Branch.

(4)

(a) If a consultant intends to utilize the services of a subconsultant to perform any part of the work, at the time of negotiations the consultant shall submit a fee proposal for the amount of work to be subcontracted.

(b) The fee proposal shall be based on the audited overhead and wage rates for the subconsultant.

(c) A subconsultant shall be prequalified with the cabinet to perform the services to be subcontracted to it if the services are required to be prequalified.

(d) Prior approval from the Division of Program Performance or other negotiation unit shall be necessary.

(e) If a consultant desires to utilize a subconsultant to perform part of the work after a contract has been approved and notice has been given to begin work, the procedures set forth in Section 6 of this administrative regulation shall be followed.

(5) A consultant which is awarded a contract for engineering or engineering-related services with the cabinet shall perform at least fifty (50) percent of the dollar value of the work for the project unless otherwise approved by the Director of the Division of Program Performance, or designee.

(6)

(a) The operating margin allowed an engineering or engineering-related services consultant shall be allowed only on the negotiated direct labor and overhead costs regardless of the type of contract and shall not exceed the following:

For a lump sum contract, fifteen (15) percent of the total direct labor cost plus overhead costs for a contract, including all contract modifications up to and including $2,000,000 and ten (10) percent of the total direct labor cost plus overhead costs for a contract, including all contract modifications, for the amount in excess of $2,000,000. The subconsultant's fee negotiated as part of the contract shall not be counted against the first $2,000,000; or
For a unit price contract, fifteen (15) percent of the estimated unit cost at the time of execution of the contract.

(b) A cost plus fixed fee contract shall have a lump sum fee equal to ten (10) percent of the estimated cost at the time of the execution of the agreement.

(7) The Division of Program Performance or other negotiation unit shall compare the consultant's proposed fee with the cabinet's estimate to determine both the reasonableness of the fee and areas of substantial differences which may require further negotiation.

(8) The Division of Program Performance or other negotiation unit shall negotiate with the consultant to establish a reasonable fee and basis of payment, including incremental payments for completed work if appropriate, for the services to be performed under the contract.

(9)

(a) The consultant shall keep written documentation of each negotiation meeting and shall submit to the Division of Program Performance or other negotiation unit the following:

Minutes of negotiations;
As-negotiated fee;
As-negotiated person-hours;
Classification percentage distribution; and
Direct cost breakdowns.

(b) The public shall not be denied access to the items set forth in paragraph (a) of this subsection.

(10) After the Division of Program Performance or other negotiation unit has negotiated a contract, the head of the unit shall comply with the provisions of KRS 45A.825(10).

Section 4. Contract Preparation and Execution.

(1) The Division of Program Performance or other negotiation unit shall prepare an agreement or contract to cover the services to be provided, method and amount of payment, the time of completion and necessary special provisions.

(a) The agreement shall include by reference the General Provisions Attachment, unless the project is for a consultant structure inspection.

(b) If the project is for a consultant structure inspection, the agreement shall also include by reference the Division of Maintenance, Consultant Inspection Provisions.

(2) The contract and negotiation minutes shall be sent to the consultant for the signature of an authorized representative. All original documents shall be returned to the Division of Program Performance or other negotiation unit.

(3) The contract shall be reviewed and approved by the secretary of the cabinet.

(4) For each project that has received final approval for state or federal funding, the Division of Program Performance shall retain the following documents:

(a) A copy of the contract;

(b) The negotiated fee and person-hours;

(d) The cabinet's person-hour estimate;

(e) The minutes of the negotiation;

(f) The minutes of the predesign conference;

(g) A copy of the advertisement and announcement;

(h) The list of firms that responded to the announcement in a timely manner;

(i) The written approval from the secretary of the cabinet to engage a professional firm;

(j) The minutes of the Professional Engineering and Engineering-related Services Selection Committee;

(k) The memorandum from the Chairman of the Selection Committee stating the ranking of the three best-qualified firms by the Professional Engineering and Engineering-related Services Selection Committee; and

(l) The audit report of overhead and wage rates which was used to establish the fee.

(5) If FHWA does not approve the contract, the secretary of the cabinet, after discussion with the State Highway Engineer and staff, may decide to modify the contract, redefine the project, terminate the project or ask for reconsideration by the FHWA.

Section 5. Notice to Proceed and Payments.

(1)

(a) Before a notice of approval for payment can be issued, funds shall be encumbered by the cabinet.

(b) The funds for statewide contracts shall be encumbered on a project by project basis.

(2) After the Division of Program Performance or other negotiation unit receives notification indicating that the LRC Government Contract Review Committee has received the contract and project information for review, a notice to proceed shall be transmitted to the consultant indicating that it may commence work but it shall not bill for services until specifically authorized to do so. For projects requiring approval of a unit of the federal government, notice to proceed shall not be issued until the federal approval is obtained.

(3) If the LRC Government Contract Review Committee issues a notification of acceptance on a contract, the Division of Program Performance or other negotiation unit shall issue a letter to the consultant informing it that it may bill the cabinet for charges incurred while working on the project.

(4)

(a) If the LRC Government Contract Review Committee objects to the contract and the cabinet determines that the contract is to be canceled, the Division of Program Performance or other negotiation unit shall notify the consultant of the cancellation and shall take necessary steps to close the contract.

(b) If the cabinet determines that the contract is to be modified to comply with the concerns of the LRC Government Contract Review Committee, the Division of Program Performance or other negotiation unit shall notify the consultant of the necessary modifications and shall follow the contract modification procedures specified in Section 7 of this administrative regulation.

(c) If the cabinet determines that the contract is to be executed as submitted to the LRC Government Contract Review Committee, the Division of Program Performance or other negotiation unit shall issue a letter to the consultant informing it that it may bill the cabinet for charges incurred while working on the project.

Section 6. Contract Administration. All work performed under a professional services contract shall be subject to general supervision, direction, review and approval by the cabinet.

(1)

(a) A project manager shall be assigned to the project by the director or office head of the user division.

(b) The division director or office head may serve as the project manager.

(c) The project manager shall be responsible for coordinating all cabinet activities with the consultant and for providing necessary supervision through the duration of the contract. This coordination shall include the following:

Scheduling, monitoring and controlling the consultant's activities;
Reporting the status of these activities to the appropriate authority;
Periodically reviewing the work to determine if the work:

a. Is acceptable;

b. Is in accordance with the agreement for the particular project; and

c. Scope has changed to the point that it may require a supplemental agreement and increased or decreased compensation; and

Completing and processing the Consultant Monthly Report Form incorporated by reference in Section (9) of this administrative regulation.

(2)

(a) During the project, the consultant may subcontract with other firms to perform specialized services in a manner similar to Section 1(4) of this administrative regulation. The subconsultant shall be prequalified by the cabinet in accordance with the provisions of 600 KAR 6:040 if the services that are subcontracted are required to be prequalified.

(b) If the services to be performed by the subconsultant are subject to prequalification by the cabinet and were not previously identified in the original negotiation or subsequent contract modifications, the consultant shall submit a request for a fee adjustment for the person-hours to be performed by the subconsultant.

(c) If the subconsultant services are not subject to prequalification procedures and exceed $25,000, they shall be reviewed by the External Audit Branch for reasonableness of cost. For subcontracts equal to or less than $25,000, the Director of the Division of Program Performance or other negotiation unit, upon recommendation of the negotiator, may accept the rates and costs if they are reasonable and in line with past costs incurred for similar work.

Section 7. Contract Modifications.

(1) If it is determined by either the consultant or the cabinet that one (1) or more of the following conditions are acceptable and necessary, a contract modification for a fee or schedule adjustment may be requested:

(a) Change in termini or section;

(b) Addition of major phases of work to the negotiated scope of work;

(d) Modification of a major item, if in the original contract, the item is designated as a basis of the original negotiations and the conditions for a contract modification consideration are identified in the original contract;

(e) Delay by the cabinet as outlined in each contract;

(f) Use of a subconsultant for services previously identified to be done by the consultant or other subconsultant; or

(g) Availability of current audit established in accordance with 600 KAR 6:080.

(2) The request for a contract modification may be originated by the Division of Professional Services, user division, highway district office or the consultant.

(3)

(a) If the director or office head of the user division determines the change is appropriate, the user division shall advise the consultant in writing of the contemplated change in the scope, complexity, extent, character or duration of the original agreement.

(b) If additional or reduced compensation is justified, the user division shall request a revised proposal from the consultant.

(4) The contract modification shall be negotiated using the procedures set forth in Sections 1, 2, and 3 of this administrative regulation.

(5) The Division of Program Performance or other negotiation unit shall send the Contract Modification form TC 40-17 to the consultant for its approval.

(6) After approval by the cabinet, the contract modification, LRC's proof of necessity form and other supporting documentation shall be submitted to the LRC Government Contract Review Committee.

(7) For projects requiring FHWA oversight, the approved contract modification shall be sent to the Federal Highway Administration for approval.

(8) Funds shall be encumbered by the cabinet sufficient to pay for the approved contract modification.

(9) If a contract modification results in a fee negotiated for the contract modification in other than lump sum as a method of compensation, the consultant shall use an accounting system which segregates and accumulates allocable and allowable costs which are to be charged to the contract modification.

Section 8. Completion of Contract.

(1) Upon completion of the contract, the cabinet shall review the work performed to determine that it meets the terms and conditions of the contract and shall evaluate the consultant for future reference.

(2) The project manager or the director of the user division shall review the work performed by the consultant, including any progress and final reports, to determine that all terms and conditions of the contract have been met before processing the final voucher for payment or releasing the consultant.

(3) Before approving the final invoice for payment, the director of the user division or the project supervisor shall evaluate the consultant and prepare written documentation of the consultant's performance on the project.

(4) The user division shall send the consultant written documentation of the consultant's performance for the project. Copies of the documentation shall be placed in the contract file maintained by the Division of Program Performance and in the consultant's experience record file.

(5)

(a) If a consultant receives a below average rating, he may appeal, in writing, to the user division director within thirty (30) days of receiving the rating notification.

(b) The written notice of appeal shall specifically set forth the reasons why the consultant believes the below average rating is erroneous.

(d) At the conclusion of the appeal, if the performance evaluation is revised, the initial documentation of the below average rating shall be:

Removed from the file; and
Replaced with the revised performance documentation.

(6) The Director of the Division of Program Performance or head of other negotiation unit shall request the External Audit Branch to perform a final audit if appropriate. The audit shall determine the total allowable contract costs and the total dollars to be paid to the consultant. All contracts utilizing a cost plus fixed rate method of payment shall be audited.

(7) The user division shall forward the Federal Highway Administration a copy of all progress and final reports for federal-aid projects if required or requested by the FHWA.

Section 9. Cancellation of Contract.

(1) Each professional service contract shall include a provision for the termination of the agreement and shall allow for the cancellation of the contract by the cabinet with proper notice to the consultant.

(2) If the cabinet decides to cancel a professional services contract, the Division of Program Performance or other negotiation unit shall notify the consultant of the cancellation and of the reasons for the cancellation.

(3) The cabinet shall not be liable for payment of services past the effective date of cancellation of the contract as specified by the terms of the contract.

(4) The cabinet shall be liable for a demobilization fee equal to ten (10) percent of the remaining balance of the contract not to exceed $25,000, unless the contract is terminated due to criminal, fraudulent, or negligent behavior.

Section 10. Payments to Consultants. Before payment of a partial or final request for payment, the cabinet shall review the work of the consultant, including any progress or final reports, to ensure that the work for which the payment is to be made has been completed and that the terms and conditions of agreement have been satisfactorily followed.

(1) During the course of the project, progress billings shall be submitted by the consultant as agreed upon in the contract. The consultant shall submit an Engineer's Pay Estimate, TC 61-408 and a Consultant Monthly Report, Exhibit 200-02 as an invoice to the chief district engineer or director of the user division or to their designees.

(2) The chief district engineer or director of the user division or his designee shall review the Engineer's Pay Estimate and Consultant Monthly Report, verify that the work has been completed as described in the document, and sign both forms.

(3) If an Engineer's Pay Estimate is not needed to be submitted to the chief district engineer or director of the user division within a given month, the Consultant Monthly Report shall still be submitted.

(4) A final invoice and request for payment shall not be authorized until after all work has been reviewed and accepted or approved, including any final reports prepared by the consultant. All terms and conditions of the contract shall be satisfactorily met and the final audit shall be performed prior to processing the final payment.

Section 11. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Contract Modification", Form TC 40-17, September 1999 edition;

(b) "Engineer's Pay Estimate", Form TC 61-408, October 2002 edition;

(d) "General Provisions Attachment (Exhibit 15-06)", May 2003 edition; and

(e) Division of Maintenance Consultant Inspection Provisions, May 1993 edition.

(2) This material may be inspected copied, or obtained, subject to applicable copyright law, at the Transportation Cabinet, Division of Program Performance, 200 Mero Street, Frankfort, Kentucky 40622, 8 a.m. to 4:30 p.m.

History

RELATES TO: KRS 45A.800-45A.835, 45A.838, 23 C.F.R. 172, 23 U.S.C. 112, 121, 304, 315
STATUTORY AUTHORITY: KRS 45A.807(2), 45A.838
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.807(2) requires the Transportation Cabinet to promulgate administrative regulations to implement its procurement of engineering or engineering-related services pursuant to KRS 45A.800 to 45A.835. KRS 45A.838 requires the cabinet to promulgate administrative regulations to establish requirements for establishing and operating a pool of firms to provide professional contract services. This administrative regulation sets forth the procedure to be used by the Transportation Cabinet to select engineering or engineering-related services while implementing the provisions of KRS 45A.800 to 45A.835.
History: 22 Ky.R. 1414; 1628; 1844; eff. 4-5-1996; 24 Ky.R. 1378; 1693; eff. 2-19-1998; 25 Ky.R. 1954; 2413; 2561; eff. 5-4-1999; 29 Ky.R. 1881; 2489; 2884; eff. 6-3-2003; 33 Ky.R. 552; 1314; eff. 11-9-2006; Crt eff. 4-1-2019; Crt eff. 3-20-2026.

600 KAR 6:080 Financial records and audit or other engagement of firms {#sec-600-kar-6-080 omnilex-key=us-ky-regs-official--title-600--600 KAR 6:080}

Section 1. Definitions.

(1) "Common control" means a situation in which a related party has direct or indirect control over the management, operating, or financial policies of the related entity, and may exist by ownership, contract, or other methods even if a related party owns less than fifty (50) percent of the related entity.

(2) "Other engagement" means an examination, review, or agreed-upon procedures engagement or a compilation conducted in accordance with Government Auditing Standards available at the Government Accountability Office, www.gao.gov, or the standards issued by the American Institute of Certified Public Accountants, www.aicpa.org, including:

(a) Statements on Auditing Standards;

(b) Statements on Standards for Attestation Engagements; or

Section 2. Financial Records of Firms.

(1) A firm that has requested prequalification, been prequalified, or been selected to provide professional engineering or related services to the Transportation Cabinet shall maintain and allow the cabinet access to all books, records, and accounts related to the scope of the audit.

(2)

(a) A firm shall maintain financial records including payroll time records for all employees, including the firm's principals, in accordance with 48 C.F.R. Parts 30, 31, and Chapter 99.

(b) The financial records of a firm shall be retained and made available to the Transportation Cabinet for three (3) years after the end of the firm's fiscal year.

(c) For a post audit or other engagement, a firm that has worked on a cabinet project shall retain the financial records pertaining to the project for three (3) years following the date of the final payment from the cabinet.

(3)

(a) If a firm is notified by the Transportation Cabinet of a pending audit or other engagement, the firm shall send the information requested by the auditor by mail or electronic mail. minutes from the director or stockholder meetings, the firm shall allow the auditor to make a copy of books, records, and accounts related to the firm's operations if necessary for the audit or other engagement.

(b) With permission from the consultant, the auditor may:

Copy income tax returns or minutes from the director or stockholder meetings; or
Review the income tax returns or minutes from the director or stockholder meetings without removing them from the firm's premises.

Section 3. Recommended or Approved Indirect Cost Rate.

(1) If the cabinet has not audited the firm in the previous twelve (12) months, the last available recommended or approved indirect cost rate shall be used for determination of the fee specified in the contract with the understanding that a contract modification shall be processed if an audit or other engagement by the cabinet reveals substantial differences in overhead rates, wage rates, or direct project expenses.

(2) Annually, the External Audit Branch of the Transportation Cabinet shall perform a risk assessment and determine the number of audits or other engagements to be performed on lump sum contracts for which the final pay estimates have been submitted and paid.

Section 4. Standards and Regulations.

(1) The cabinet shall conduct an audit or other engagement pursuant to the following:

(a) Government Auditing Standards;

(b) 48 C.F.R. Part 31;

(d) 48 C.F.R. Chapter 99; or

(e) Uniform Audit and Accounting Guide.

(2) Common control shall be determined to exist if, in the relationship between a consultant firm and another company that is involved in real property renting, leasing arrangements, or joint ventures:

(a) A principal or person with management responsibilities or significant influence in the consultant firm:

Owns twenty (20) percent or more of the other company;
Is also a principal or person with management responsibilities or significant influence in the other company;
Has a family member whom he or she might control or influence because of the family relationship and who is a principal or has management responsibilities or significant influence in the other company; or
Has a family member who might control or influence him or her because of the family relationship and who is a principal in, or has management responsibilities or significant influence in, the other company; or

(b) The interrelationship that exists between business entities makes it appear that the same persons control or have significant influence in those businesses.

Section 5. Audit Findings.

(1)

(a) Prior to the issuance of a final audit report, the auditor shall present preliminary findings to the firm.

(b) A comment from the firm in response to the auditor's preliminary findings shall be submitted in writing within fifteen (15) calendar days of the firm's receipt of the preliminary findings.

(2)

(a) A firm shall have thirty (30) calendar days from the date the final report is received by the firm to request a review of the final report.

(b) The request for a review shall be in writing and clearly state all of the concerns with the final report and the reasons for the concerns.

(d)

The firm may submit a supplement to the request for review.
The supplement shall be submitted in writing within the thirty (30) calendar days established in paragraph (a) of this subsection.

(3) The External Audit Review Committee shall evaluate the request for review and the final report.

(4) The External Audit Review Committee shall consist of the following:

(a) Executive Director of the Office of Budget and Fiscal Management, Chair;

(b) Deputy State Highway Engineer for Project Development; and

(5) A committee member may appoint a proxy to serve on this committee.

(6) The External Audit Review Committee may request the firm or the auditor to answer questions in person, by electronic communication, or in writing.

(7)

(a) The firm shall have thirty (30) calendar days from its receipt of the committee's decision to appeal the decision to the Secretary of the Transportation Cabinet.

(b) An administrative hearing to hear the appeal shall be held pursuant to the provisions of KRS Chapter 13B.

Section 6. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Government Auditing Standards", Comptroller General of the United States, July, 2007; and

(b) "Uniform Audit and Accounting Guide", American Association of State Highway and Transportation Officials (AASHTO), 2010.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Division of Professional Services, External Audit Branch, Transportation Cabinet Building, 200 Mero Street, Frankfort, Kentucky 40622, Monday through Friday, 8;00 a.m. to 4:30 p.m.

(3) This material may also be obtained at the U.S. Government Printing Office, Superintendent of Documents, Mail Stop: SSOP, Washington, D.C. 20402-9328.

History

RELATES TO: KRS 45A.800-45A.835, 23 C.F.R. 172, 48 C.F.R. 30, 31, Chapter 99,23 U.S.C. 112(b)(2)
STATUTORY AUTHORITY: KRS 45A.807(2)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 45A.807(2) requires the Transportation Cabinet to promulgate administrative regulations to implement its procurement of engineering or engineering-related services pursuant to KRS 45A.800 to 45A.835. The U.S. Department of Transportation requires all engineering or engineering-related projects that it funds to be subject to the cost principles or accounting standards established in 48 C.F.R. 30, 31, and Chapter 99. This administrative regulation establishes the methodology to be used by a cabinet auditor for an engineering or engineering-related service agreement entered into by the cabinet pursuant to KRS 45A.800 to 45A.835; establishes the requirements for keeping financial records; and requires all firms contracting with or prequalified by the cabinet to comply with the federal regulations.
History: 600 KAR 006:080. 22 Ky.R. 1419; 1633; 1849; eff. 4-5-1996; 24 Ky.R. 2765; 25 Ky.R. 350; 839; eff. 10-6-1998; 29 Ky.R. 1885; 2494; 2888; eff. 6-3-2003; 33 Ky.R. 557; 1319; eff. 11-9-2006; 38 Ky.R. 1052; 1315; eff. 1-25-2012; Crt eff. 10-8-2018; Crt eff. 2-18-2019; Crt eff. 2-18-2019; Crt eff. 1-9-2026.

Title 600 KAR — Transportation Cabinet

Chapter 3 Property Acquisition and Uniform Relocation

600 KAR 3:020 Grave relocation {#sec-600-kar-3-020 omnilex-key=us-ky-regs-official--title-600--600 KAR 3:020}

600 KAR 3:030 Relocation or reconstruction of utility and rail facilities; recordkeeping and audit requirements {#sec-600-kar-3-030 omnilex-key=us-ky-regs-official--title-600--600 KAR 3:030}

Chapter 4 Office of Minority Affairs

600 KAR 4:010 Certification of disadvantaged business enterprises {#sec-600-kar-4-010 omnilex-key=us-ky-regs-official--title-600--600 KAR 4:010}

Chapter 5 Nonpublic School Transportation

600 KAR 5:010 Transportation of nonpublic school students {#sec-600-kar-5-010 omnilex-key=us-ky-regs-official--title-600--600 KAR 5:010}

Chapter 6 Professional Engineering and Related Services

600 KAR 6:010 Definitions for 600 KAR Chapter 6 {#sec-600-kar-6-010 omnilex-key=us-ky-regs-official--title-600--600 KAR 6:010}

600 KAR 6:020 Transportation Cabinet employee responsibilities in the implementation of KRS 45A.800 to 45A.835 {#sec-600-kar-6-020 omnilex-key=us-ky-regs-official--title-600--600 KAR 6:020}

600 KAR 6:030 Federal requirements for contracts for engineering or engineering-related services {#sec-600-kar-6-030 omnilex-key=us-ky-regs-official--title-600--600 KAR 6:030}

600 KAR 6:040 Prequalification of firms for engineering or engineering-related services {#sec-600-kar-6-040 omnilex-key=us-ky-regs-official--title-600--600 KAR 6:040}

600 KAR 6:050 Procurement bulletins and advertisement for selection of professional firms for engineering or engineering-related services {#sec-600-kar-6-050 omnilex-key=us-ky-regs-official--title-600--600 KAR 6:050}

600 KAR 6:060 Professional Engineering and Engineering-related Service Selection Committee {#sec-600-kar-6-060 omnilex-key=us-ky-regs-official--title-600--600 KAR 6:060}

600 KAR 6:065 Pooling of engineering or engineering-related services {#sec-600-kar-6-065 omnilex-key=us-ky-regs-official--title-600--600 KAR 6:065}

600 KAR 6:070 Contracting for engineering or engineering-related services {#sec-600-kar-6-070 omnilex-key=us-ky-regs-official--title-600--600 KAR 6:070}

600 KAR 6:080 Financial records and audit or other engagement of firms {#sec-600-kar-6-080 omnilex-key=us-ky-regs-official--title-600--600 KAR 6:080}

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