Q = Question; A = Answer
A. The FAR micropurchase threshold was raised from $2,500 to $3,000 in 2006. Purchases under $3,000 are considered micropurchases and are exempt from the requirement to obtain competitive quotes or process a sole source justification (FAR 13.202). (Revised: September 4, 2009)
A. We would advise the requisitioner that splitting procurements to avoid competition is prohibited. If the requisitioner requires the same supplier's item for this follow-on procurement (e.g., for reasons of standardization, etc.), then we would process this as a new "sole source" procurement (not as a change order). You should document the file to establish why this procurement was not foreseen when the original requisition was processed, and obtain the necessary agency approvals for executing a sole source award. If, however, the agency can accept a different vendor's materials, then you should compete this requirement using small purchase procedures (with a limited number of quotes) instead of processing it as a non-competitive micro-purchase. (Revised: September 4, 2009)
A. The Federal Dollar ($) threshold for awarding contracts/purchase orders without competitive quotes is $3,000 and below. If you are using Federal funds (FTA grants), you may award contracts non-competitively up to $3,000. However, you must document the file as to how you determined the price to be reasonable. You should check your local procurement regulations since your local requirements may be different than the federal requirements. See FTA Circular 4220.1F Chapter VI, Micro-Purchases. (Posted: December 2009)
3. METHODS OF PROCUREMENT......
a. Micro-Purchases. Consistent with the Federal Acquisition Regulation (FAR), FTA considers micro-purchases to be those purchases of 3,000 or less.
(But then states)
(1) When Appropriate. If permitted by State and local law, the recipient may acquire property and services valued at less than $3,000 without obtaining competitive quotations.
The two subparagraphs appear inconsistent. Is a purchase of exactly $3,000 a micro-purchase or not?
A. The inconsistency in the FTA Circular has been corrected in the April 14, 2009 revision. The corrected version defines micro-purchases as those of $3,000 or less. (Posted: January 2010)
A. The FTA Best Practices Procurement Manual (BPPM) discussed Micro-purchases in section 4.1. The micro-purchase procedures apply to individual purchases of $3,000 or less. The dollar threshold does not apply to all purchases made from a particular vendor during a calendar year. However, purchases must not be split to avoid the requirement for competition. To the extent feasible, we would advise that the user departments of the items being purchased be required to prepare an annual procurement plan estimating their annual requirements for the micro-purchase type items allowing the procurement office to issue a competitive solicitation leading to the award of indefinite - quantity - indefinite - delivery (IDIQ) type contracts to one (or more) vendors at firm prices for a reasonable period of time, which may be one year (depending on the stability of prices for the items being procured). If you are successful in consolidating your agency micro-purchases, it should lead to better pricing and a better utilization of your procurement staff by reducing the number of procurements being processed. (Posted: March 2010)
A. FTA Circular 4220.1F, Chapter VI 3 a. states that procurements of $3000 and less need not be competitively awarded - that is, you do not need competitive quotes. You must, however, document the file to state that the price being paid is fair and reasonable and the basis for the determination. Be sure to check your state and local regulations as well, as they may require competitive quotes at lesser dollar values. (Posted: June 2010)
A. FTA Circular 4220.1F, Chapter VI 3 a. states that procurements of $3000 and less need not be competitively awarded - that is, you do not need competitive quotes.
You must, however, document the file to state that the price being paid is fair and reasonable and the basis for the determination. Be sure to check your state and local regulations as well, as they may require competitive quotes at lesser dollar values. The FTA Circular is available online. (Posted: September, 2010)
A. An independent cost estimate is not required for micro-purchases. A determination of price reasonableness is, however, required. See FTA Circular 4220.1F, paragraph 3.a. (2) (c), which states, "The only documentation required for micro-purchases is a determination that the price is fair and reasonable." (Posted: November, 2010)
A. FTA requires grantees to document the file for a micro-purchase that the price being paid is fair and reasonable. The buyer must affirmatively state that he/she has determined the price is reasonable based on such facts as recent agency purchases, prices published by vendors in catalogues, prices offered by local stores, etc. The existence of two quotes does not satisfy the FTA requirement that the buyer make an affirmative determination in the file that the price being paid is known to be reasonable. The existence of a second higher price quote does not in itself demonstrate that the lower price is reasonable. What would demonstrate that fact would be sales of the item at that price to the general public.(Posted: December, 2011)
A. FTA Circular 4220.1F defines micro-purchases as those valued at $3000 or less (FTA Circular 4220.1F, Chapter VI, paragraph 3.a.). This is the current FTA threshold. If your State is using a lower value for micro-purchases you must follow the State regulations, as FTA requires grantees to comply with both Federal and State regulations where possible (FTA Circular 4220.1F, Chapter II, paragraph 4). (Posted: August, 2013)
A. We assume from your question that the work ordered under the purchase order for the initial repairs is being or has been completed, and additional repairs are now seen as necessary. If the cost of the additional repairs is below the micro-purchase threshold of $3,000 we would suggest that you could award another purchase order for the additional repairs under the micro-purchase procedures; i.e., without having to obtain competitive quotes. If the estimated cost exceeds $3,000 for the additional work, you will have to solicit competitive quotes for that work. (Posted: November, 2013)
Background Information: Sound Transit is constructing light rail projects that take several years to complete and over those years there can be numerous micro-purchases under the project dating back to perhaps the beginning of the project.
A. FTA policy regarding micro-purchases may be found in FTA Circular 4220.1F, Chapter VI, paragraph 3.a.
FTA does not allow grantees to divide or reduce the size of a procurement merely to come within the micro-purchase limit. It should be a standard operating procedure to review the purchase activity periodically (at least annually) to determine what the anticipated needs might be and to aggregate those quantities under an competitive solicitation, perhaps using an indefinite quantity/indefinite delivery type of solicitation and contract where the solicitation provides estimated annual quantities to prospective vendors. Orders would then be issued under the contract as specific needs arise. This approach might well produce better pricing than a number of micro-purchases.
FTA has no specific timeframe to determine if a particular micro-purchase is proper, given other purchases of the same item over time. However, repetitive purchases of the same item or items within close proximity of each other may raise questions. As stated earlier, FTA would expect the agency to conduct some type of procurement planning of its operational needs and structure the best procurement approach given its expected needs over the foreseeable future.
As to documenting why the purchase is being charged to a particular project, the Circular does not require this documentation but it may be helpful if a question should ever arise as to why the items were charged to that project. (Posted: January, 2015)