Procurement methods
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Procurement methods

Competitive procurement

Full and open competition: When using federal or state funds to purchase goods or services, the procurement shall be conducted in a manner that provides full and open competition.

To ensure full and open competition, it is recommended to avoid the following situations:

  • Developing or drafting specifications, requirements, statements of work, or invitations for bids or requests for proposals that excludes viable contractors.
  • Placing unreasonable requirements on firms in order for them to qualify to do business.
  • Requiring unnecessary experience and excessive bonding.
  • Non-competitive pricing practices between firms or between affiliated companies.
  • Non-competitive contracts to consultants that are on retainer contracts.
  • Organizational conflicts of interest.
  • Specifying only a “brand name” product rather than allowing “an equal” product to be offered and describing the performance or other relevant requirements of the procurement.
  • Any arbitrary action in the procurement process.

A competitive procurement method is the preferred method of procuring goods or services because it ensures a fair and neutral bid evaluation process.  Types of competitive procurements are:

  • Invitation for Bid (IFB): IFB’s are publicly solicited and request vendors to submit proposals for the good or service described in the procurement. Generally, in these scenarios, the winning bidder is the lowest bidder.
  • Request for Proposal (RFP): RFP’s are publicly solicited and used by subrecipients to outline their commitment to purchasing a good or service from a vendor who offers the best value. The solicitation shall include a description of evaluation factors that indicates each factor’s importance to the project. The chosen vendor may be selected based on their overall score, as well as price and other factors, if needed.
  • Request for Qualifications (RFQ): RFQ’s are used to locate the most qualified vendor to complete a task. In these situations, the subrecipient is requesting a vendor’s credentials to verify they are the best fit for a project. This method is often used when seeking professional services, such as architects and engineers. Additionally, in these solicitations, geographical preference can be a selection criteria factor as well. 

Non-competitive procurement/sole source

This type of procurement is allowable when supplies or services are only available from one responsible source and no other supplies or services will satisfy its requirements. Additionally, when a contractor’s existing contract is modified beyond its original scope, the subrecipient must justify the change.

This type of procurement may be used only when one or more of the following circumstances apply:

  • The item is available only from a sole single source.
  • The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation.
  • FTA or the pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the recipient.
  • Competition is determined inadequate after solicitation from a number of sources.

For more information, see the FTA Third-Party Contracting Guidance Circular.

Other methods: cooperative agreements and joint procurements

  • Joint Procurement: These situations occur when several subrecipients pool their resources and issue a joint RFP or IFB.  The purpose is to receive better pricing by combining the buying power of several subrecipients seeking to purchase similar items. This method is usually used when purchasing fleet or equipment.
  • State Cooperative Agreement: These agreements are negotiated at the state level; where a state uses its resources to acquire goods and services at a better rate than a subrecipient or a group of subrecipients could negotiate. These agreements are available from all states, but the subrecipient is required to verify that the co-op complies with all local, state, and federal procurement regulations and guidelines before entering into an agreement.
    • Texas SmartBuy: Visit TxSmartBuy if you are interested in purchasing fleet for your agency. Additionally, if a model or option you are searching for is not available on SmartBuy, contact your assign public transportation coordinator for further instructions.