Demolition/Abatement Constracts (Folders 1-2)

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Chapter 4: Methods of Selection http://u~~n~~.Ra.dot.go~~~fta~librarviadmin~BPPmanisect 40.htm micro-purchases at the grantee level, you must always be mindful of the "equitabty distribute" requirement and the prohibition against splitting procurements.g The latter requirement is one you already deal with at all levels of your procurement processes. However, a significant requirement is to meet the documentation requirement of the FTA -- a determination that the price is fair and reasonable and how this determination was derived. Equitable Distribution - How will you equitably distribute your purchases among local suppliers? Do you have an automated purchasing and materials management system in place that allows you to track purchases by line item and vendor the item was purchased from? If so, and if you have multiple vendors for that item or service, you can alternate among those vendors. Do you have blanket purchase agreements in place with multiple vendors for multiple products which were established as a competitive process? If so, micro-purchases could be made from those vendors, again on a rotating basis. It is a good practice to keep records on dollar amounts awarded during the year to assist in monitoring distribution. Bid Splitting - How wilt you monitor procurements so that requirements are not being split to avoid another procurement method? You may have a system in place now that allows you to monitor any tendency to split requirements over your small purchase maximum into small purchases. Micro-purchasing would be an additional method of procurement addressed in your procedures and training within your agency. If you have an automated system which records individual procurements, that system may have to be reviewed periodically to analyze the procurement patterns for a particular product or service. Many times, you simply rely on your buyer or contracting officer to monitor not only bid splitting but also equitable distribution. Fair and Reasonable Determination - How do you document your determination that the price is fair and reasonable and the basis for that determination? You may want to prepare some "boilerplate" determinations for signature that address specific ways you buy products or services. You may want to say that based upon a telephone quote from John Doe Company for the widget and comparing that price with a price paid 6 months ago for the same widget, it is fair and reasonable -- you would fill in the blanks in your form, sign it, and file in the procurement file. Alternatively, you may use an e~cisting form such as a buyer's tabulation that is filed. You may want to have another form th~,t indicates the procurement is being made from an existing Blanket Purchase Agreement for which competition was obtained. You may want to prepare a forrn that addresses sales items -- you are buying this widget from X Company based upon an advertisement that the widget normally sells for $35 each and is on sale for $29.50 and this is fair and reasonable. Finally, you may want to have a form that simply addresses a standard commercial item -- the price is fair and reasonable because it is a standard commercial item sold in the open marketplace.9 In implementing this requirement at the Federal level, the regulations recognize the paperwork cost of verifying the reasonableness of price may more than offset the potential savings. The price is also essentially assumed to be reasonable unless the contracting officer suspects or has information to indicate that the price may not be reasonable (higher than recent price paid or has personal knowledge of price for the supply or service), or a supply or service is being purchased for which there is not comparable pricing information readily available.lo Other Federal Precedent - In response to requests from its own field offices for more guidance, the Federal Government recently revised its regulations dealing with direct Federal micropurchases. Because these changes give more flexibility to procuring agencies, you might want to review these provisions as you consider policies and guidance for your agency's micropurchases. ~--1 Among the changes were: ' the Government-wide commercial purchase card is the preferred means (but not the only means) to purchase and pay for micro-purchases;l? i of 45 O 1/10/97 13:09:21