Are purchase cards allowed by FTA?
There is no FTA prohibition on the use of purchase cards. FTA Circular 4220.1F states that grantees shall use their own procurement procedures provided that the procurements conform to applicable Federal law, including the requirements and standards identified in the circular. Since micro-purchases ($2500 or less) are exempt from the requirements of publicizing and obtaining competitive quotes, they are well suited to the use of purchase cards. Purchase cards offer a number of advantages over the traditional purchasing methods of issuing individual purchase orders or blanket purchase orders, but they also present new challenges, especially in the area of internal controls and the equitable distribution of the agency’s business. If the use of purchase cards is delegated to an office outside of the procurement office, it should be accompanied by standards, training, and review requirements to prevent waste, fraud or abuse. For additional discussion and a case study example, grantees are encouraged to review the Best Practices Procurement Manual, Section 4.1.1 and Appendix B.5 regarding the BART Purchase Card System. (Revised: May 2010)
The City of Tucson is requesting information and/or guidance that establish any restrictions or parameters on pCard (procurement card) uses on FTA funded projects. The City of Tucson has a pCard program and wherever possible, due to the efficiencies and transaction savings, the City uses pCard in all expenditures possible. As we look at FTA funded acquisitions, we need to determine if there is anything in the Circular that would preclude the use of this payment mechanism or any limitations that we should be aware of. Your guidance on this matter is appreciated.
FTA has no specific requirements in their Procurement Circular 4220.1F concerning grantee use of P Cards. However, the requirements prescribed for procurements in general will apply to P Cards. For example, if the purchase is at or below the micro-purchase threshold of $3,000, there must be documentation that the buyer determined the price to be fair and reasonable (though competition is not required). For other requirements concerning micro-purchases, see Chapter VI. 3. a. at: http://www.fta.dot.gov/FTA_Circular_4220_Third_Party_Contracting_Guidance_-_7-1-10.pdf
FTA will also expect the grantee to have adequate internal controls to prevent fraud or abuse; e.g., there must be a timely periodic review of all purchases by the buyer's manager to ensure the need for the purchase; that purchases are not being split to avoid competition; that purchases are being equitably distributed among local vendors; etc.
(Posted: February, 2011)