Q = Question; A = Answer
A. Grantees may not modify their own contracts after award to include Federal clauses and so make them eligible for procuring goods and services with Federal funds. Grantees may, however, modify their State GSA-type contracts to add Federal clauses when they issue orders against those State contracts.
The rationale for this distinction is that, in a State GSA-type contract, the purchase order is the transit community's initial work on the contract - much as any purchase off of the Federal GSA IT schedule will be when a grantee chooses to use this Federal contract. In other cases (like transit agency A buying off transit B's contract), the transit-unique rules are in place and known from the beginning. There is no expressed intent in the common grant rule (as with state schedules) to balance the rules against each other, and it would imply that a transit agency could essentially wash away most federal rules by laundering federal funds through another transit agency. In short, the integrity of the system would be threatened by extending the after-the-fact option beyond schedule-type purchases. Please note that the existing guidance in the Best Practices Procurement Manual (BPPM) on "piggybacking" does not distinguish between state GSA-type contracts and transit agency contracts with respect to adding Federal clauses after the fact. The BPPM will be changed to reflect the distinctions discussed above. (Revised: August 21, 2009)