How to Become an ADA Paratransit Contractor in 2027: Rules, Testing, and Bids

Every public transit agency that runs fixed route buses or trains, other than commuter bus, commuter rail, and intercity rail, must also run paratransit for riders whose disability keeps them off those routes (49 CFR 37.121). Most of those trips are not driven by agency staff. Agencies hire private companies, and a NEMT company with accessible vans, trained drivers, and a dispatcher already has most of what the work needs.

How transit agencies contract out paratransit

The National Transit Database, where agencies report their service to the Federal Transit Administration (FTA), shows how much of this work contractors do. These are the ADA paratransit trips for 2024 from agencies that file full reports:

Who ran the trips (2024)	ADA paratransit trips	Share
The agency’s own staff	12.2 million	20%
Contractors with dedicated vehicles	45.0 million	72%
Taxi companies under contract	4.6 million	7%
Rideshare companies under contract	0.7 million	1%
Total	62.5 million	100%

Contracting reaches small and rural systems too. Of the 1,925 agencies that reported demand response service for 2024, 513 bought at least some of it from contractors, taxi companies, or rideshare companies, including 129 rural reporters.

The shapes the work takes

Kind of contract	What you do	Example from 2024 data
Main operating contract	Run drivers, vehicles, and often dispatch for all or part of the service	Access Services in Los Angeles County reported 2.8 million contractor-run ADA trips
Overflow or taxi-style trips	Carry trips next to the main operator, in your own vehicles, alongside your other work	Taxi providers carried 184,208 of the Kansas City Area Transportation Authority’s ADA trips, more than its dedicated contractor’s 82,131
Subcontract under the main operator	Cover a zone, a shift, or wheelchair trips for the prime contractor	The ADA rules that apply to the prime apply to you (49 CFR 37.23(d))
Rural or small city service	Run dial-a-ride or paratransit for a county or small transit system	129 rural reporters bought demand response service from contractors or taxi companies

Some large agencies use several kinds at once. These five did in 2024:

Agency (2024)	ADA trips by contractors	ADA trips by taxi providers
Access Services, Los Angeles County	2,804,375	1,363,089
Pace, suburban Chicago	2,556,900	405,105
Maryland Transit Administration	1,986,906	939,692
Orange County Transportation Authority, California	851,757	285,986
King County Metro, Seattle area	718,648	111,550

Pace also reported 253,050 ADA trips by rideshare companies.

Why agencies keep backup capacity

The ADA bars an agency from rationing paratransit. It may not cap trips, keep waiting lists, or show a pattern of substantial numbers of late pickups, trip denials, missed trips, or very long rides (49 CFR 37.131(f)). When the main operator runs short of drivers or vans, the agency still owes every eligible rider a trip. That is the opening for overflow providers.

The ADA rules you take on as a contractor

A private company that runs demand responsive service for a public agency must meet the ADA rules that would apply to the agency itself (49 CFR 37.23). DOT’s official interpretation calls this standing in the agency’s shoes. It reaches only the vehicles and service under the contract, so your Medicaid and private pay work keeps its own rules (Appendix D to part 37).

Rule	What it means for your drivers and dispatch	Citation
Origin to destination	The ride goes from where the rider starts to where they are going, not stop to stop	37.129(a)
Next-day service	The agency must take requests the day before and may book up to 14 days ahead	37.131(b)
Pickup time	The agency may move the pickup, but not more than one hour from the time the rider asked for	37.131(b)(2)
No trip purpose limits	Work, shopping, church, and medical trips all count the same	37.131(d)
Fares	No more than twice the full bus fare, and a personal care attendant rides free	37.131(c)
Companions	One companion rides along, plus the attendant. More ride when space allows.	37.123(f)
Lifts	A lift that fails in service is reported right away, and the van comes out of service before its next service day until it is fixed, with short exceptions when no spare exists	37.161, 37.163
Training	Staff are trained to proficiency to run the equipment safely and treat riders with respect	37.173
No-shows	Trips missed because of operator error never count against the rider	37.125(h)(1)

The lift rule is a good example of the shoes rule at work. The detailed lift checks in 37.163 are written for public agencies, but DOT’s interpretation says public agency service rules such as that one apply to a contractor for the contracted service. When there is no spare vehicle, the lift van may stay in service for no more than three days in areas over 50,000 people, or five days in smaller ones.

Your no-show records protect your riders and your contract. The agency may suspend a rider for a pattern of missed trips, but only after written notice and a chance to be heard, and it cannot count a trip your driver missed. Log arrival times, door knocks, and dispatch calls for every no-show. See how to reduce no-shows for the habits that help.

Requests your drivers will get

Agencies must handle rider requests to change a policy for a disability, called reasonable modifications (49 CFR 37.169). DOT’s Appendix E to part 37 gives examples of how to answer them:

Generally grant, unless it creates a direct threat	May be denied
Opening the building’s exterior door, if the van is not left unattended or out of sight for long	Help past the door and inside the building
Taking the rider’s arm over snow or ice, or helping a wheelchair up a steep driveway	Lifting the rider out of the wheelchair, except in an emergency
Picking up at the entrance the rider names, such as a hospital side door	Staying with a rider who cannot be left alone, which is attendant work
Help to the door on the way home when a dialysis rider is weak, even if they walked out alone	A ride with no other passengers, or a sedan instead of a van
A call 5 minutes before arrival	A specific driver
Letting a rider with diabetes eat or drink, or take medicine	Waiting outside a pharmacy on the way home, which the agency may offer but need not

Train drivers on the agency’s process. Pass any request they cannot settle on the spot to dispatch, and let the agency decide. For securement, service animals, oxygen, and refusals, see the ADA requirements guide and the wheelchair securement guide.

FTA drug and alcohol testing for contractors

FTA’s testing rule, 49 CFR part 655, covers agencies that receive federal grants under 49 U.S.C. 5307 (urbanized areas), 5309, or 5311 (rural areas), and any contractor of theirs (49 CFR 655.3). A contractor includes an informal, ongoing arrangement, not only a signed contract. Section 5310 grants, for seniors and people with disabilities, are not on that list. If your only transit work is for a 5310 program, ask the agency what testing its agreement requires. For how FTA testing fits beside broker and FMCSA testing, see NEMT driver drug testing.

Who is covered

Role	Covered by FTA testing?	Why (49 CFR 655.4)
Drivers of vans and sedans on contracted trips	Yes, even when driving empty	Operating a revenue service vehicle. A vehicle includes a van or automobile.
Dispatchers who control where vehicles go	Yes	Controlling dispatch or movement of a revenue service vehicle
Mechanics who work on those vehicles	Yes, with one exception	Maintenance contracted out by rural 5311 agencies, or by 5307 or 5309 agencies in areas under 200,000 people, is excluded
Reservation, billing, and office staff	No, unless they also drive or dispatch	Not on the list of safety-sensitive duties
Volunteer drivers	Only if they need a CDL or are paid more than their expenses	Covered employee definition

What your program needs

1. A policy statement. Your company’s governing board adopts it, and it lists what 49 CFR 655.15 requires: who answers questions, who is covered, what is prohibited, when tests happen, and the consequences. Give written notice to every covered employee (655.16). The drug and alcohol policy template has an FTA version.
2. Training. Every covered employee gets at least 60 minutes on the effects of drug use. Supervisors who make reasonable suspicion calls get 60 minutes on drugs and 60 on alcohol (655.14).
3. A negative test before the first trip. A driver may not perform covered work until a pre-employment drug test comes back verified negative. Retest anyone who has been off covered duty and out of the random pool for 90 days in a row (655.41).
4. Every required test. Pre-employment, post-accident, reasonable suspicion, random, return to duty, and follow-up, for marijuana, cocaine, opioids, amphetamines, and PCP (655.21).
5. Random tests at the current rate. For 2026, at least 50 percent of covered employees for drugs and 10 percent for alcohol, under FTA’s notice of January 15, 2026. Picks must be unannounced, spread through the year, and made at all hours your service runs. A consortium may pool you with other employers (655.45).
6. Records. Keep positive results, refusals, and referrals for 5 years, collection and training records for 2 years, and negative results for 1 year, in a secure place with controlled access (655.71).
7. Annual numbers. The agency files a yearly Management Information System report with FTA by March 15 when FTA asks, and it answers for the accuracy of your data. A company official must certify the report even when a third party administrator prepares it (655.72).

Two more rules catch new contractors. Covered employees may not use marijuana or the other tested drugs at any time (655.21(c)), and FTA’s rule overrides state and local laws that conflict with it (655.6), so a state marijuana law does not excuse a positive test. And if some drivers also fall under FMCSA testing, keep separate random pools or test everyone at the higher rate (655.45(k)). Keep broker-only drivers in their own non-DOT program.

The agency checks your program. It must ensure its contractors comply (655.81), and it certifies compliance to FTA every year. An agency or state that passes grant funds on to others can suspend a noncompliant contractor from federal transit funds (655.83).

How transit agencies buy paratransit service

Transit agencies that take federal grants must buy services through full and open competition (49 U.S.C. 5325). DOT applies the federal grant rules in 2 CFR part 200 to them (2 CFR 1201.1), and those rules set the buying method by contract size:

Contract size (September 2026)	How the agency buys	What you do
Up to $15,000, the federal micro-purchase threshold	May buy without quotes if the price is reasonable. An agency may self-certify a threshold up to $50,000.	Make sure the agency knows you exist
Up to $350,000, the simplified acquisition threshold, or the agency’s lower limit	Price or rate quotes from an adequate number of qualified sources	Get on the vendor list and answer every request for quotes
Above that threshold	Sealed bids (an invitation for bids) or proposals (a request for proposals), with public notice	Read the evaluation factors and their weights, then write to them

The thresholds come from 48 CFR 2.101 and 2 CFR 200.320. A state agency that runs transit, such as a state DOT, follows its own state’s purchasing rules instead, plus a few of these federal ones (2 CFR 200.317). In a request for proposals, the agency must list every evaluation factor and its relative importance, and it awards to the proposal most advantageous considering price and other factors.

A 2026 example: Access Services

Access Services runs ADA paratransit for Los Angeles County through regional contractors. It uses invitations for bids when requirements are clear, and requests for proposals when they are functional or unclear. In its April 27, 2026 board presentation, it set out how it would score proposals for its Northern region, where the current contract ends July 31, 2027:

What Access Services scores	Points
Cost proposal	20
Employee pay and benefits	20
Technical approach	15
Proposed staff	10
Paratransit operating experience	10
State-mandated bidding preference	10
Safety approach	5
Operating facility	5
Financial qualifications	5
Total	100

Price was only a fifth of the score, and driver pay counted as much. The timeline ran long: the schedule set proposals due August 25, 2026, a board decision in December 2026, and full service from August 1, 2027. The agency also listed limited competition and a shortage of operating yards as challenges, and said proposers would need subcontracting partnerships to meet demand. That is the kind of opening a small company can use.

Before any award, the agency must find you a responsible contractor. Federal transit law names four things it weighs: your integrity, your compliance with public policy, your past performance, and your financial and technical resources (49 U.S.C. 5325(j)). Build your proposal around those four.

Federal terms in the contract

Term	When it applies	What to check
Debarment and suspension	Contracts of $25,000 or more (2 CFR 180.220)	Your company and owners are not on the SAM.gov exclusions list. See SAM exclusions.
Anti-lobbying certification	Bids over $100,000	You certify that no federal money paid anyone to influence the award
Termination for cause and convenience	Contracts over $10,000	How the agency can end the contract early, and how you are paid if it does
Breach remedies	Contracts over the simplified acquisition threshold	Penalties and sanctions for breaking the contract terms
Covered telecommunications	Contracts paid with grant funds	The agency cannot use grant money to obtain covered equipment or services, such as Huawei or ZTE telecom gear, or Hytera, Hikvision, or Dahua equipment used for security. Check your radios and cameras.

These come from Appendix II to 2 CFR part 200, 2 CFR 180.220, and 2 CFR 200.216.

Small business and DBE programs

Grant rules tell agencies to put small, minority-owned, women-owned, and veteran-owned businesses on solicitation lists when possible, and to split large jobs where that lets them compete (2 CFR 200.321). Ask each agency to add you.

DOT’s Disadvantaged Business Enterprise (DBE) program also sets goals for work by certified small firms. Since October 3, 2025, and under a final rule effective September 25, 2026, no owner is presumed disadvantaged because of race or sex. Each owner shows disadvantage with a personal narrative and a personal net worth statement (49 CFR 26.67). You apply through your state’s Unified Certification Program (26.81). A certified firm can be attractive to a prime contractor with a DBE goal.

Workers on a contract you win from another company

Federal transit grants carry employee protections under 49 U.S.C. 5333(b). When one private transit bus service contractor replaces another through competitive bidding, the Department of Labor bases any decision on job assurances on its decision of September 21, 1994. Ask the agency what protective terms cover the current contractor’s workers before you price labor.

What agencies pay for contracted paratransit

The National Transit Database also reports cost. These are the medians for demand response service in agencies’ full 2024 reports, where ADA paratransit made up about 69 percent of trips. Cost here means the agency’s total operating expense for the service, divided by revenue hours or by trips. It is the agency’s whole cost, not the rate its contractor was paid.

Who ran the service (2024)	Agencies	Median cost per revenue hour	Median cost per trip
Contractors with dedicated vehicles	236	$105.19	$52.41
Taxi companies	51	$93.49	$35.45
Rideshare companies	18	$118.79	$25.55
The agency’s own staff	219	$116.02	$55.79

One contract’s pay and performance terms

Access Services’ April 27, 2026 board presentation also showed the proposed pay for the final option period of its Santa Clarita region contract, held by the City of Santa Clarita:

Pay item	July 1, 2026 to June 30, 2027
Fixed monthly payment	$54,673.98
Payment per trip	$55.80
Fuel payment per revenue hour, gasoline vehicles only	$13.78

Access Services also listed a fully loaded rate for each of its six regional providers for fiscal year 2026, from $51.77 in the Southern region to $91.06 in Antelope Valley. Santa Clarita’s was $67.04 that year, when its variable rate was $50.27 per trip. The pay comes with performance standards, which the board sees on a report card:

Measure	Standard
On-time performance	91 percent or better
Excessively late trips	0.10 percent or fewer
Excessively long trips	5 percent or fewer
Missed trips	0.75 percent or fewer
Trip denials	None
Average hold time for reservations	120 seconds or less
Complaints	4.0 or fewer per 1,000 trips
Preventable collisions	0.85 or fewer per 100,000 miles
Miles between major mechanical failures	50,000 or more

If you have never tracked your own numbers this way, start now. See improving on-time performance.

Pricing your bid

Use the national figures as a check on your price, not as the price. Each solicitation sets the pricing unit, such as a rate per revenue hour or per trip, and defines it. NTD counts revenue hours as time in service and reports deadhead time separately, so time driving to the first pickup and back to the garage may not be paid. Build it into your rate.

Then add every cost the contract creates:

• Drivers. Wages, benefits, and overtime, and any wage floor the contract or labor terms set. See NEMT driver pay.
• Vehicles. Payments, fuel, and maintenance if you supply the vans. None of this if the agency supplies them.
• Insurance. The limits in the solicitation. See NEMT insurance requirements.
• Testing program. Lab fees, a consortium or third party administrator, and supervisor training.
• Dispatch and reporting. Staff and the systems the agency requires for trip data.
• Deadhead. Empty miles and hours between trips. See deadhead miles.

How to become an ADA paratransit contractor, step by step

1. Find the agencies within reach. Search the National Transit Database for agencies near you that report demand response service, and note which ones use contractors, taxis, or rideshare.
2. Register as a vendor. Sign up on each agency’s procurement page or bid portal, and ask to be added to the lists for paratransit, dial-a-ride, and supplemental service.
3. Ask about overflow and subcontract work. Call the agency’s paratransit manager and the current prime contractor. Ask whether they add supplemental providers between contract terms.
4. Read the whole solicitation. Note who supplies vehicles, the dispatch and data systems, the on-time window, reporting, insurance, labor terms, and the evaluation weights. Acknowledge every addendum.
5. Build your FTA testing program before the start date. Every covered driver, dispatcher, and mechanic needs a verified negative pre-employment test before the first contracted trip.
6. Train to proficiency. Cover lifts, securement, reasonable modification requests, and rider respect, and log it. The driver training log keeps the record. See NEMT driver training.
7. Price from your costs. Use the table above as a check.
8. Write to the four responsibility factors. Show integrity, compliance, past performance from broker and facility work, and your finances and fleet.
9. Sign the federal certifications. Check SAM.gov exclusions for your company and every owner first.
10. Run the contract by the numbers. Report trips, hours, and miles the way the agency asks, because it reports them to the National Transit Database. Expect audits of your trip records and testing files.

For other public buyers of rides, see government NEMT contracts. For federal transit grants that pay for vans and rides, see NEMT grants.

Running paratransit next to your Medicaid trips

The two programs overlap in riders, not in rules. One person can qualify for ADA paratransit and for Medicaid rides, as the paratransit vs NEMT guide explains. Bill each trip only to the program that ordered it, and keep separate trip records, on-time reports, and testing pools for each.

Contract work can also change your fleet plans. Buying a van a short time before the contract starts and then using it on the contract is a sign it was bought in contemplation of the contract, so it must meet the agency’s accessibility rule (Appendix D to part 37). DOT’s interpretation also says a contractor running part of a demand response system does not always have to buy accessible vehicles, when the system as a whole already gives riders with disabilities equivalent service. Ask the agency in writing which rule applies before you buy.