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Section 3: Procurement of “Other” Goods and Services

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Overview

In some cases, the local government (LG) will need to purchase services or goods that are not for construction or professional services. Some examples include: transportation planning services for the development of a travel demand model; providers for management of a “shared ride” service; providers of a “motorist assistance” program; bicycles for a Congestion Mitigation and Air Quality project; and demographic data for a transportation corridor analysis. The LG must follow procurement procedures that have been pre-approved by TxDOT in order to get reimbursed for these services.

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Procurement Procedures

For the purchase of goods and services not related to construction or professional services, the LG will use its routine procurement procedures under the Texas Government Code. The Uniform Grant Management Standards (UGMS) summarizes the allowable procedures for federal- and state-funded projects and can be found on the Texas Secretary of State website. The LG must receive TxDOT pre-approval of its procurement procedure to assure reimbursement of the costs for the goods or services. TxDOT review and approval is to assure compliance with federal and state procurement requirements. Important guidance on this matter is included in the advance funding agreement (AFA). In the Master Advance Funding Agreement (MAFA), these are found in provisions 20 and 21. The standard MAFA template can be obtained on the TxDOT Local Government Projects Office website.

Provision 20 addresses reimbursement on federally funded projects and the provisions of 2 CFR Part 200, Subpart E apply. This circular contains cost principles that state the expenditures of federal funds for projects must be allocable, allowable and reasonable.

  1. A cost is “allocable” if the federal funds were spent on the project for which they were approved in accordance with the relative benefits received;
  2. A cost is “allowable” if it is necessary for the project and not a disallowed type of expense. Unallowable costs include costs for items such as entertainment, lobbying, alcoholic beverages and similar costs. A detailed listing of allowable and unallowable costs is found in the UGMS.
  3. A cost is “reasonable” if it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. If the LG has a question concerning the “reasonableness” of a cost, a contract specialist or legal counsel should be consulted.

Provision 21 cites the requirement to comply with 2 CFR 200.317-200.326 and 2 CFR 1201.317, which relate to federal procurement standards, and 2 CFR 200.313, which relates to federal property management standards.

If a LG receives federal or state funds for a specific project, the LG may not use those funds for other projects, even if the funds are left over from an approved, completed project. More information regarding project funding is contained in Chapter 2 of this Manual. Information detailing the project close-out process is contained in Chapter 10.

If the LG is hiring consultants and private contractors to perform services for the LG and requesting them to purchase other goods or services for which they seek reimbursement, the LG, its consultants and private contractors must also follow federal acquisition regulations in procuring the needed goods and services. As mentioned previously, the LG must also submit a Consultant Concurrence form to TxDOT prior to entering into a contract with a service provider.

Contractors and suppliers are not allowed to participate in federally funded projects if they are suspended or debarred. The contractor or supplier is required to certify as to its current eligibility status. Certification is also required of all prospective participants in lower-tier transactions. This includes subcontractors, material suppliers, vendors, etc. The state of Texas has similar requirements prohibiting contracts with debarred contractors. The LG is required to verify its prime contractors/suppliers and lower-tier providers are not debarred by the federal or state government prior to contract award. Additional information on debarment is provided in the Debarment Certification section of Chapter 7.

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