Finding Text
Finding 2023-004 – Material Weakness
AL No: 20.507
Federal Grantor: U.S. Department of Transportation, Federal Transit Administration, Federal Transit Formula
Grants - Direct Award.
Compliance Requirement: Procurement, Suspension and Debarment.
Condition: The District was unable to provide documentation that the procurement of the CNG tank
replacement project for five Orion buses exceeding the simplified acquisition threshold of $250,000 was
approved by the Board. There is documentation that an invitation for bid (IFB) was released for the project, but
only one bid was received and the District awarded the contract to the sole bidder. Missing documentation
includes support of the rationale to approve the contract absent evidence of full and open competition. The
District was also not able to provide the request for proposal for review.
Criteria: 2 CFR Part 200 Subpart E (Uniform Guidance) states the following:
Section 200.318(a) states that “The non-federal entity must have and use documented procurement
procedures, consistent with State, local, and tribal laws and regulations and the standards of this
section, for the acquisition of property or service required under a Federal award or subaward. The
non-Federal entity’s documented procurement procedures must conform to the procurement standards
identified in Sections 200.317 through 200.327.”
Section 200.318(i) states that “The non-Federal entity must maintain records sufficient to detail the
history of procurement. These records will include, but are not necessarily limited to, the following:
Rationale for the method of procurement, selection of contract type, contractor selection or rejection,
and the basis for the contract price.”
Section 200.320(c) states that “There are specific circumstances in which noncompetitive procurement
can be used. Noncompetitive procurement can only be awarded if one or more of the following
circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which
does not exceed the micro-purchase threshold…; (2) The item is available only from a single source;
(3) The public exigency or emergency for the retirement will not permit a delay resulting from
publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity
expressly authorizes a noncompetitive procurement in response to a written request from the non-
Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate.”
Section 200.324(a) states that “The non-Federal entity must perform a cost or price analysis in
connection with every procurement action in excess of the Simplified Acquisition Threshold including
contract modifications. The method and degree of analysis is dependent on the facts surrounding the
particular procurement situation, but as a starting point, the non-Federal entity must make independent
estimates before receiving bids or proposals.” Cause: Staff turnover at the District and the need for the project to be completed by a certain date to avoid the
buses losing certification led to the lack of adequate records being maintained.
Effect: The District was unable to prove it was in compliance with the Uniform Guidance regarding open
competition on procurements.
Context: The CNG tank replacement needed to be completed by a certain timeframe in order for the buses to
be operational, so not every step was documented. The awarded contract was signed on the date of a Board
meeting, but the Board minutes did not document that this contract was reviewed nor approved by the Board.
Recommendation: We recommend the District establish a procurement folder on its server with subfolders for
each individual procurement where documentation of each procurement is maintained, including advertising of
the procurement, requests for proposals, proposals received, analysis of reasons for selecting the winning bid,
executed contract, certifications by contractor if not part of proposal or executed contract, management report to
board recommending which bid should be approved, board resolution approving the winning bid and for
contracts under $250,000 a memo or form documenting bids received and reason for selecting the bid, including
reasons for not selecting the lowest bid if applicable. We also recommend training be provided to staff that
work on procurements of the requirements under Uniform Guidance Section 2 CFR 200.318 to 200.326.
View of Responsible Officials and Planned Corrective Action: Management’s response and planned
corrective action is included at the Corrective Action Plan end of this report.