Use of Federal Funds to Acquire Common Goods and Services Through Statewide Contracts or Interagency Agreements

Number C-05-03

U.S. Department
of Transportation
Federal Transit


400 Seventh St. S.W.
Washington, D.C. 20590

Dear Colleague:

For some time, FTA grantees have sought a way to reconcile two requirements: the requirement to include prospective contract provisions in federally-assisted transit procurements and the common grant rule’s encouragement to use state and local intergovernmental agreements to economically purchase common goods and services. Perplexed by what might seem to be incompatible requirements, FTA grantees have been reluctant to take advantage of the often-superior pricing schedules found in statewide and other large, open-ended procurement vehicles.

FTA has taken a close look at its procurement policy and the common grant rule in an effort to identify a common-sense approach to reconcile this potential conflict. Effective immediately, grantees may use federal funds to acquire common goods and services through statewide contracts or interagency agreements, if all federally required clauses and certifications are incorporated into the individual purchase order or (other document used to commit transit agencies and other parties to these joint contracts).

There are, of course, practical limits on this process. Contracting officers responsible for the statewide contract or intergovernmental agreement, as well as the individual vendors involved, must agree to add these provisions to the transit purchase order; Buy America and other applicable certifications must precede any commitment of federal funds; and the grantee must establish that the product complies with all Federal regulations (including Buy America requirements) or that appropriate waivers have been obtained.

Only practical application of this new approach will reveal all the procedural and practical challenges that must be overcome. FTA will work closely with your procurement personnel and publicize successful applications of this policy initiative through the Best Practices Procurement Manual, training, and technical assistance forums as we learn together. I am confident that this collaboration will result in opening a viable, money-saving alternative for meeting transit procurement needs.


Jennifer L. Dorn