Private Sector Competition in Microtransit Act

This Act may be cited as the Private Sector Competition in Microtransit Act.

Congress finds that fostering competition and innovation in microtransit services benefits the public by improving efficiency, service quality, and options for transportation users.

The purpose of this Act is to promote private sector engagement in microtransit services funded by Federal grants to State or local governments.

No State or local government shall be eligible to receive Federal funds to be used for microtransit services unless the recipient contracts out the provision of such services to private sector entities through a competitive procurement process.

The competitive procurement process required under subsection (a) shall—

(A) adhere to fair and transparent procedures; and

(B) allows private sector companies to submit bids for the provision of microtransit services.

The criteria for selection under such process shall prioritize—

(A) efficiency;

(B) cost-effectiveness; and

(C) overall quality of service.

In selection a private sector company under such process, a State or local government shall prioritize small or disadvantaged businesses.

All competitive procurement processes under this subsection shall give preference to any award to local operators able to meet the needs of the State or local government.

Upon request by a State or local government, the Secretary of Transportation may waive the local requirement under paragraph (4) to allow the State or local government to enter into a contract with an operator not located in the jurisdiction of the State or local government.

A contract awarded to a vendor in under this section—

(A) may not be solely for providing software or technology capabilities;

(B) shall be for operation of the microtransit services; and

(C) may only be awarded to entities with a proven history of directly providing microtransit services.

Each State and local government that receives Federal funds to provide microtransit services shall certify to the Secretary of Transportation that such State or local government has contracted out the provision of such services to private sector entities in accordance with this Act.

The Secretary of Transportation shall submit to Congress an annual report detailing the extent to which State and local governments have complied with the requirements of section 4, including information on the competitive procurement process and outcomes.

If the Secretary of Transportation finds that a State or local government is in violation of the provisions outlined in section 4, the Secretary of Transportation shall notify the State or local government of the noncompliance and provide a reasonable period of time for corrective action.

In the event of continued noncompliance after such period, the Secretary may suspend or withhold Federal funds allocated for microtransit services until such time as the government demonstrates compliance with this Act.

In this Act, the term microtransit means a flexible, on-demand public transportation option that uses smaller vehicles, such as vans or shuttles, to transport passengers along dynamic or fixed routes within a specific service area.

The Secretary of Transportation may issue such rules and regulations as are necessary to implement this Act.

This Act shall take effect 180 days after the date of enactment of this Act.