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What is Active Under Contract? All the important guidelines you need to know

For the United States Department of Transportation, railroads are considered “active under contract” if they have been awarded a grant from the federal government and have begun to put in motion their plans for modernization or development. As a result, private/public partnerships cannot be formed until the railroad has received a federal grant. From this point on, all efforts these companies make to build infrastructure must be done independently without help from other organizations.

Beginning stages

This type of protection was created at the beginning stages of privatization within USA’s transportation sector in order to protect both government grants and customer interests during privatization. In order for a company to gain this status, it must show that it is actively working towards improving its services.

In 1994, the Federal Railroad Administration (FRA) determined that railroads were eligible for this status after they notified the agency of their intent to build a high speed system. In order to receive this designation, bidders must meet certain requirements.

 For example, in order to be active under contract, a rail company must show that it has started preliminary engineering work and/or feasibility studies for its project. They also must have applied to FRA’s Office of Grants and Research for a grant in order to fund these improvements in infrastructure. The third requirement is that in order for a bid or request from another organization to include that railroad as part of its plan, the carrier must give written from the federal government.

Federal grant

As of December 2013, any railroad that has received a federal grant can be considered to have active infrastructure under contract. Some examples are the Kansas City Southern Railway company and Ferromex Rail Company. Kansas City Southern is an example of a private/public partnership within the United States Transportation sector because it is privately owned but also works closely with public entities.

How can railroad companies be considered active under contract?

Railroads are considered to have active infrastructure under contract when they have already received a federal grant. This allows them to work independently on improving or developing projects without help from other organizations or departments.

What is the purpose of this type of protection?

The intention behind giving railroads the status of “active under contract” is to protect both government grants and customer interests during privatization. By making sure that private companies begin their projects after receiving federal funds, it protects the government’s investment while also ensuring that investments actually take place in order to improve services.

What happens if a company does not receive a federal grant?

If a company begins building its project without having received a grant from the federal government, it is only eligible for bankruptcy protection and cannot receive either state or federal funds. If a company has not started construction but is applying to the FRA’s Office of Grants and Research for a grant, then that can be considered proof that they intend to start development in the near future.

Does this designation only pertain to private companies?

No, public organizations can also be considered active under contract. In order for a carrier to be able to work independently on its projects, it needs the status of “active under contract.” However, sometimes public and private carriers can form partnerships in order to avoid duplication of effort and gain efficiency.

Kansas City Southern Railway and Ferromex Rail Company are two examples of companies within USA’s Transportation sector that have active railroads under contract. These companies have already received grants from the federal government and began working towards their project before seeking any outside help. This ensures that the government’s investment is not at risk, and it also ensures that the project will take place because there are no outside entities involved in developing it.

IFTEA

The Intermodal Freight Transportation Efficiency Act (IFTEA), which gave railroads the status of “active under contract” after they notified their intent to construct a high-speed system to federal authorities. In order to receive this designation, these companies must meet certain requirements. For example, in order for a proposal from another organization to include them as part of its plan, the company must give written notification from the federal government.

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 What is IFTEA?

The Intermodal Freight Transportation Efficiency Act (IFTEA) was passed in 1998. This act gave railroads the status of “active under contract” if they notified their intent to construct high-speed systems to federal authorities. In order for a proposal from another organization to include them as part of its plan, the company must give written notification from the federal government.

What are some requirements for being active under contract?

For a railroad to have active railroads under contract, it must meet certain requirements such as: giving written notification and receiving funding or grants before starting construction. Furthermore, it cannot be involved with most outside proposals unless there is prior approval from the Federal Railroad Administration (FRA).

What happens if a company does not receive prior approval?

If a company begins building its project without having received FRA’s prior approval, then that railroad is only eligible for bankruptcy protection and cannot be involved with any outside proposals

What are some examples of active railroads under FRA’s jurisdiction?

Kansas City Southern Railway and Ferromex Rail Company are examples of companies within USA’s Transportation sector that have active railroads under contract. These companies received grants from the federal government and began working towards their projects before seeking any outside help. Furthermore, they cannot be involved with most proposals unless there is prior approval from FRA.

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