Q. We are exploring purchasing various software program projects that will probably require end user licenses. Can end user licenses be paid for with federal capital funds?
A. The cost of licensing software is an allowable cost under FTA grants. The Best Practices Procurement Manual (BPPM) discusses leases in Section 1.3.3.7 - Equipment Leases. Although the title of this section refers to equipment leases, the requirements discussed there would pertain equally to computer software leases.
We would note that leases are considered "third party contracts" within the meaning of FTA Circular 4220.1E, so that the requirements of the Circular apply to such procurements. This would require that your agency solicit competitive proposals for the software unless you can determine and document that a sole source contract is required, in which case you will need to process the action through those agency management officials who can approve of sole source contracts. We would also note that FTA Circular 4220.1E, paragraph 7.d, requires a lease versus purchase analysis to determine the most economical approach.
Q. We had purchased scheduling software using capital funding. Is training related to using this software an allowable capital expenditure?
A.. Initial training of agency personnel would normally be an expected part of any new software acquisition process, and thus an allowable capital expense. To be sure that FTA raises no questions, however, you should ask your regional grant manager for an interpretation. It might be that FTA would make a distinction between initial training of agency personnel and follow-on training of new personnel over a period of time (which could be construed as an operating expense and not eligible for capital funding).
Q. What are the requirements when purchasing computer software with Federal dollars?
A. The FTA Procurement Circular 4220.1E requirements apply to grantee procurements of computer software and hardware. If you have specific issues or problems in applying the Circular to a particular procurement, you may contact us for help.
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