Completed project applications must be received no later than December 31, 2010 at 4:00 PM.

Ohio Department of Transportation Small and Disadvantaged Businesses Diesel Emissions Reduction Grant (DERG) Program For Diesel Powered Equipment Replacement, Repower, Retrofit, and Anti-Idle Projects Program Announcement ODOT Small and Disadvantaged Businesses DERG Program The State of Ohio Department of Transportation is accepting applications from small and/or disadvantaged Ohio business enterprises, prequalified to conduct business with ODOT, to provide funding for projects that will reduce transportation sector diesel engine emissions. Eligible project types include the replacement, repower, retrofit or idle reduction applications for diesel powered over-the-road vehicles and non-road construction vehicles/equipment working on highway (United States Code Title 23) construction projects. Note: Due to unique requirements of the type of federal funding used to support this program, small and/or disadvantaged businesses will need to coordinate their project applications with a Public Agency, consistent with to Ohio Revised Code Section 5501.03(d). See Public Private Partnerships section, below. PROJECT APPLICATIONS To apply for the ODOT Small and Disadvantaged Businesses DERG Program project funding applicants are directed to complete the attached DERG Project Application and return the completed application to: Small and Disadvantaged Businesses DERG Program MPO Program Manager ODOT Office of Systems Planning and Program Management 1980 West Broad Street Columbus, Ohio 43223 Completed project applications must be received no later than December 31, 2010 at 4:00 PM. PROGRAM FUNDING The ODOT DERG Program is financed with $5,000,000 in Federal Congestion Mitigation and Air Quality (CMAQ) funding that is available to Ohio through the Federal Highway Administration (FHWA). Prospective project applicants are encouraged to review FHWA s CMAQ Program Guidelines at: www.fhwa.dot.gov/environment/cmaqpgs/cmaq08gd.pdf 1

PROGRAM ELIGIBILITY REQUIREMENTS Key CMAQ Program eligibility requirements for prospective project applicants to review are as follow: CMAQ projects are funded on a reimbursement basis, meaning project sponsors initially provide non-federal funding to cover incurred eligible project costs and then request reimbursement from ODOT for incurred costs. ODOT will reimburse eligible incurred project costs up to a fixed approved project amount. CMAQ funds will be made available for approved projects at eighty percent (80%) of the total approved project cost. The project sponsor will be required to provide twenty percent (20%) in matching funds. CMAQ funding is available only for transportation projects located in US EPA designated air quality areas (CMAQ Guidelines Section VI). See the attached map identifying eligible Ohio CMAQ project geography. CMAQ funded projects must result in a reduction of transportation sector emissions (CMAQ Guidelines Section VII.A.3). A quantitative analysis of a project s emissions reduction potential is required. Emission reductions data is required for oxides of nitrogen (NOx) and direct particulate matter (PM) pollutants, recorded in kilograms/day. Project applicants may provide their own emission reduction analyses or ODOT will assist applicants in preparing the required emission reduction calculations. Eligible diesel engine emission reduction project types are defined in the CMAQ Guidelines Section VII.D.12. Replacement vehicles/machinery purchased under the CMAQ Program must be used for the same or similar purpose as the retired equipment. Project sponsors owning vehicles or equipment financed through the DERG program will be required to maintain a vehicle utilization log demonstrating that the equipment is being operated, at least 60% of the time in Ohio CMAQ eligible counties, for the useful life of the vehicles or equipment. The engine blocks from existing vehicles or equipment, replaced or repowered with CMAQ funding, must be permanently destroyed, such that they cannot put back into service or shipped to an original equipment manufacturer (OEM) authorized remanufacturing center, for remanufacturing. The OEM remanufacturing process must be able to document that removed engine cores do not re-enter service with their current emission standards. PUBLIC-PRIVATE-PARTNERSHIPS A unique aspect of using federal CMAQ funding to finance private enterprise sponsored transportation projects is that projects must be advanced and implemented through a Public- Private-Partnership (PPP). Public-Private-Partnerships are defined in Section VII.C of the CMAQ Guidelines. A PPP is a legal, written agreement between a Public Agency and a Private Entity project sponsor specifying the roles and responsibilities of the participating parties. For the ODOT DERG Program, ODOT will enter into a Local Let Project Agreement (LPA) with the respective Public Agencies. The LPA Agreement establishes the Public Agency as the fiduciary agent for the project funding and defines the Public Agency s responsibilities for conducting a competitive bidding process to award the project to an eligible vendor. 2

See the attached sample PPP Agreement template. Each ODOT DERG Project application must be accompanied by an executed PPP Agreement. INELIGIBLE PROGRAM COSTS ODOT DERG Program costs do not include, and may not be limited to: Work done or purchases made prior to official notice of project funding approval or for costs incurred for work or purchases not included in the approved project costs; Public Agency or Private entity project administrative costs; Any costs incurred in preparing project applications; Any project required by any law or other agreement is ineligible for DERG funding; and Force account labor associated with equipment installation. DERG PROGRAM PROJECT FUNDING THRESHOLD The maximum funding request for an ODOT DERG Program project is $500,000. DERG PROGRAM PROJECT TYPES Vehicle Replacement - Vehicle or equipment replacement involves permanently removing an old vehicle or piece of equipment from service, and replacing it with a new vehicle or piece of equipment with improved emission characteristics. Because diesel powered vehicles and equipment tend to have a long life span, and in the past decade the federal government has implemented increasingly stringent emission standards for both on-road and non-road diesel equipment, upgrading to new model year diesel equipment has a significant air quality benefit. CMAQ Program eligibility requires that the replacement vehicle/machinery must be used for the same or similar purpose as the retired equipment. Additionally, the engine blocks from the retired vehicles/equipment must be permanently removed from service, in Ohio CMAQ Program eligible air quality areas. Options for removing engine blocks from service are permanently destroy the block so that it cannot be sold or reused or to ship the block to an OEM authorized remanufacturing center for remanufacturing. Project sponsors will be required to document and certify the disposition the retired engine blocks such that they are not returned to service with service with their original emission standards. Note, FHWA will not participate in the full replacement cost of private entity vehicles. FHWA will only participate in the vehicle component costs associated with reduced emissions. These components are typically the engine and engine management software. Approved reimbursement costs for private entity replacement vehicles will be based on a fixed percentage of the total vehicle cost divided by the calculated costs of the vehicle s emissions related components, based on project applicant supplied documentation. The FHWA, Ohio Division Office will approve the resulting project funding percentage. 3

Eligible expenses for reimbursement for replacements under this program include: A percentage, as agreed by FHWA, of the total vehicle/equipment invoice price, less any scrap value of the retired vehicles/equipment. The percentage of the replacement vehicle/equipment costs FHWA will participate in will be determined by dividing the total vehicle/equipment invoice cost by the costs of the engine and engine management system components; Costs to remove and dispose of fluids in the retired vehicle/equipment less any payments received for reuse of such fluids; and Other costs directly related to the project, subject to prior approval. Equipment Repower - An equipment repower involves removing the engine from an existing vehicle or piece of equipment and replacing it with a new, rebuilt, or remanufactured engine (including clean natural gas or propane repowers), with improved emissions characteristics. Because new engines meet more stringent emission standards than older engines, a repower can provide a significant air quality benefit without the cost of replacing an entire piece of machinery. Eligible rebuilt or remanufactured engines must use OEM components only and must be purchased from an OEM or its authorized dealers or distributors. The retired engines must be permanently removed from service, in Ohio CMAQ Program eligible air quality areas. Options for removing engine blocks from service are to permanently destroy the block so that it cannot be sold or reused or to ship the block to an OEM authorized remanufacturing center for remanufacturing. Project sponsors will be required to document and certify the disposition the retired engine blocks such that they are not returned to service with service with their original emission standards. Eligible expenses for reimbursement for repower under this program include: Invoice cost of new engine including delivery charges less the replaced engine s core or scrap value; Invoice cost of additional equipment that must be installed with the new engine; Costs to remove and dispose of hazardous fluids less any payments received for reuse of such fluids; Installation costs if installed by an outside vendor; Reengineering costs by an outside vendor, if the vehicle or equipment must be modified for the new engine to fit; and Other costs directly related to the project, subject to prior approval. 4

Equipment Retrofit - An equipment retrofit involves installation of an emissionreduction application on an existing vehicle or piece of equipment. To be eligible for funding, retrofit technologies must be verified by US EPA or CARB as agreed to by US EPA. Current available Retrofit applications include, but are not limited to: Closed Crankcase Filtration Systems (CCF) Diesel Oxidation Catalysts (DOC) Diesel Particulate Filters (DPF) OTHER (OTH) retrofit technology verified by USEPA or the CARB Eligible expenses for reimbursement for retrofits under this program include: Invoice cost of retrofit kit or add-on device including delivery charges; Invoice cost of additional equipment that must be installed; Installation costs if installed by an authorized outside vendor; Reengineering costs by an outside vendor, if the vehicle or equipment must be modified for the retrofit less any scrap or resale value; and Other costs directly related to the project, subject to prior approval. Anti-Idle Equipment - Anti-idle equipment consists of installation of idle reduction technologies on an existing vehicle or piece of equipment in order to reduce emissions. Current available technologies include, but are not limited to: Auxiliary power units (APU) Battery powered HVAC units (BP HVAC) Direct fired heater/ bunk heater unit (DFH) Energy recovery systems (ERS Eligible expenses for reimbursement for anti-idle equipment under this program include: Invoice cost of anti-idle kit or add-on device including delivery charges; Installation costs if installed by an authorized outside vendor; Reengineering costs by an outside vendor, if the vehicle or equipment must be modified for the anti-idle technology; and Other costs directly related to the project, subject to prior approval. PROSPECTIVE DERG PROGRAM PROJECT APPLICANTS The Small and Disadvantaged Businesses DERG Program is established in response to a provision included in the Ohio 2009-2010 Biennial Budget Legislation. The legislative language establishing this program directed that it provide assistance to small businesses and disadvantaged business enterprises. Responding to this legislative provision, prospective DERG Program Small Business and/or DBE project applicants will be defined consistent with the size standards embodied in 49 CFR 26.65, as follows: 26.65 What rules govern business size determinations? a. To be an eligible DBE, a firm (including its affiliates) must be an existing small business, as defined by Small Business Administration (SBA) standards. 5

You must apply current SBA business size standard(s) found in 13 CFR part 121 appropriate to the type(s) of work the firm seeks to perform in DOT-assisted contracts. b. Even if it meets the requirements of paragraph (a) of this section, a firm is not an eligible DBE in any Federal fiscal year if the firm (including its affiliates) has had average annual gross receipts, as defined by SBA regulations (see 13 CFR 121.402), over the firm's previous three fiscal years, in excess of $16.6 million. The Secretary adjusts this amount for inflation from time to time. Prospective DERG Program small business and/or DBE project applicants must also be prequalified to conduct business with ODOT through the ODOT Office of Contracts. See: www.dot.state.oh.us/divisions/contractadmin/contracts/pages/prequalification.aspx. APPROVED PROJECTS CONTRACTING All Small and Disadvantaged Businesses DERG Program projects approved for funding will be advertized and awarded consistent with federal competitive bidding requirements (23 CFR 635 and applicable Ohio Revise Code regulation governing the local public sponsor). Project awards will be contracted consistent with ODOT s Local Let contracting provisions. The Local Let program policies and procedures are available for review at: www.dot.state.oh.us/divisions/transsysdev/programmgt/projects/pages/localletproceduresanddocuments.aspx. Because federal CMAQ funding for private entity projects can only be advanced via a Public Private Partnership, ODOT s Local Let project funding agreement will be executed with the affected public agency. The public agency will serve as the fiduciary agency for the project funding. The public agency will also conduct the competitive bidding procedures for the private entity. PROJECT SELECTION Project selection for Small and Disadvantaged Businesses DERG Program will be accomplished by a committee comprised of staff from ODOD, OEPA, and ODOT and a representative from the Ohio Association of Regional Councils. The primary project selection criteria will be based a rank ordering of the projects costs divided by the projects emission reductions. Secondary criteria will include promoting project geographic funding diversity and for projects in Ohio MPO areas, a recommendations from the MPO regarding regional project priorities. Due to the competitive nature of this selection process, not all eligible projects applications will be approved for funding. 6

Project Sponsor Address Ohio Department of Transportation Small and Disadvantaged Businesses Diesel Emissions Reduction Grant (DERG) Program Project Application Project Applicant Contact Information Phone Number Authorized Official Project Manager Phone Number Title Title Email Is the project sponsor a Small Business per 49 CFR 26.25 size definition? (yes/no) Is the project sponsor a DBE per 49 CFR 26.25? (yes/no) Is the project sponsor prequalified with ODOT? (yes/no) Public Partnership Agency Address Authorized Official Phone Number Title Email Funding Request Total Project Cost $ Less Any Project Core/Scrap Value - $ Revised Total Project Cost $ 80% Federal Funds Request $ 20% Matching Funds $ Source for 20% Matching Funds ***Attach an itemized vendor estimate for the proposed project. Note, the vendor s estimate does not constitute a commitment to award the project to this vendor. DERG projects will be awarded consistent with federal and/or local government competitive bidding procedures. 1

Replacement Repower Project Scope Select Project Type Retro-fit Anti-Idle Application Provide a detailed narrative description of the Project Proposal. Identify the number of existing diesel powered vehicles/equipment include in the project. Discuss the specific replacement/repower/retro-fit/anti-idle application proposed for the vehicles/equipment. Identify the Ohio CMAQ eligible counties the vehicles/equipment will operate within. Discuss the proposed project s consistency with the FHWA CMAQ guidance. 2

Existing Diesel Powered Vehicles/Equipment Scheduled for DERG Project Replacement/Repower/Retro-fit/Anti-idle Manufacturer Type Model Year VIN/Equipment # Vehicle Aver. Miles/Day or Equipment Aver. Idle Hours/Day Project Applicant Signature Typed Name Title Date Public Partnership Agency Typed Name Title Date Signature 3