Frequently Asked Questions
Is there a preferable organizational structure for the procurement function from an independence or authority standpoint?
The FTA policy relating to how grantees are organized is contained in FTA Circular 4220.1F, Chapter 1, paragraph 5, “FTA’S ROLE”: “FTA does not substitute its judgment for that of its recipients by making third party contract decisions for its recipients. FTA’s role in third party procurements complies with the principles of Executive Order No. 13132, “Federalism,” August 4, 1999, 5 U.S.C. Section 601 note. The Executive Order directs Federal agencies to refrain from substituting their judgment for that of their State recipients unless the matter is primarily a Federal concern and, to the maximum extent feasible, to permit the States to establish their own standards rather than impose national standards.”
FTA intends to rely primarily on grantees’ self-certifications that their procurement system meets FTA requirements to support the required finding that a grantee has the technical capacity to comply with Federal procurement requirements. FTA will monitor compliance as part of its routine oversight responsibilities. If FTA becomes aware of circumstances that might invalidate a grantee’s self-certification, FTA will investigate and recommend appropriate measures to correct whatever deficiency may exist. FTA oversight would be focused first on accountability; assuring that procurement authority was identified and specifically assigned to individuals. Limitations on procurement authority should be stated in the assignment as well as the ability or inability to delegate the authority. Both facets of the question (independence and authority of the procurement function) relate to the question of adequate systems of internal controls. Good internal controls are essential to achieving the proper conduct of the Agency’s business with full accountability for available resources and with safeguards against waste, fraud and abuse. The internal control principle of separation of duties provides that key duties and responsibilities should be separated among individuals. This normally translates to a requirement that a user organization not be responsible for the procurement of its needed resources. It is preferable to establish an independent procurement organization, reporting to a high level within the agency that is not a direct user or customer of the procurement office. If procurement authority is delegated outside this organization it is done with requirements for oversight, reporting, and training clearly established. The Best Practices Procurement Manual, Chapter 2, Section 2.1, Organization of Procurement Function, contains excellent guidance on this subject. (Revised: August 17, 2009)