Procurement Policies under the Uniform Guidance

1. Procurement Policies under the Uniform Guidance U.S. Department of Education

2. Purpose and Use of this Presentation The Department of Education is providing this presentation to help its grantees understand the contents of the Uniform Guidance and should be viewed after or alongside of the regulations. It is not a substitute for reading the regulations. To get the most out of this presentation, view this as a notes page. The notes section of each slide provides information to supplement the points on the slide. To change to notes page: Go to View and click on Notes Page.

3. Learning Outcomes • Understand the key terms regarding the procurement standards • Locate the procurement standards in 2 CFR Part 200 • Understand basic concepts and how the UG impacts practices • Apply this knowledge administering your grant or subgrant • Ensure your procurement procedures comply with the UG • Document all project related activities—including procurement—to support decisions and allocation of funds • Be able to locate resources, tools, and contacts

4. Uniform Guidance Title 2 of the Code of Federal Regulations, Part 200 (2 CFR Part 200) Adopted by the Department of Education in 2 CFR Part 3474 Throughout this presentation, this symbol indicates a new or significantly changed item.

5. Authorities to consider when using 2 CFR Part 200 “This guidance does not change or modify any existing statute or guidance otherwise based on any existing statute.”

6. When does 2 CFR Part 200 start? Uniform Guidance (2 CFR Part 200) applies to: • New and Continuation grants awarded on or after December 26, 2014 Former regulations (EDGAR Part 74 or 80 and OMB circulars) apply to: • Grants awarded prior to December 26, 2014 See the Department’s FAQs for more information on implementation dates.

7. When does 2 CFR Part 200 start? * Award date or start of FY for formula grants; Assumes either continuation or new award will be made at the end of the one year period.

8. Relationships and Key Terms

9. Subrecipient or Contractor? The relationship, rather than the document title, is the basis for determining which requirements are applicable. • Subrecipient means a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal program (§200.93). • Contractormeans an entity that receives a contract as defined in 200.22 Contract (§200.23). • §200.330 explains the roles of subrecipients and contractors.

10. §200.88 Simplified acquisition threshold • The dollar amount below which a non-Federal entity may purchase property or services using small purchase methods • Set by the Federal Acquisition Regulation (FAR) (§200.88) • Equals $150,000--adjusted periodically for inflation

11. Locating Procurement Standards §200.317 - 326

12. §200.317 Procurement by states • A State must use the same procedures it uses to procure property and services under a Federal award as it uses for all other procurements using non-federal funds. • States will comply with §200.322 Procurement of recovered materials. • All other grantees and subgrantees must follow sections 200.318 through 200.326.

13. §200.318 General procurement standards Non-Federal entities must: • Use own documented procurement procedures, • Maintain oversight to ensure contractor compliance, and • Maintain written standards of conduct covering, conflicts of interest—real and or perceived—for staff engaged in the selection, awarding or the administration of a contract.

14. Conflicts of Interest – §200.318(c)(1) A conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of those parties, has a financial or other interest in or receives a tangible personal benefit from a firm considered for a contract.

15. Conflicts of Interest (ctd) • Non-Federal entities may set standards for situations in which the financial interest is not considered substantial or the gift is an unsolicited item of nominal value. • The standards of conduct must provide for disciplinary actions to be applied for violations of such standards. • Organizational conflicts of interests could be an issue that bares watching by ED staff.

16. Organizational Conflicts of Interest • Conflicts arise when a non-Federal entity is unable or appears to be unable to be impartial in conducting a procurement action involving a related organization. • Written standards of conduct must address organizational conflicts of interest. • Does not apply when related organization is a local government, state or Indian tribe.

17. Foster Economy and Efficiency • Avoid purchasing unnecessary or duplicative items; • Consider consolidating or breaking out procurements, and leasing vs purchasing alternatives; • Consider entering into intergovernmental agreements or inter-entity agreements for the procurement of common or shared goods and services; and • Use Federal surplus equipment and property.

18. Responsible Contractors §200.318(h) • The non-Federal entity must award contracts only to responsible contractors who are able to perform successfully under the terms and conditions the contract. • Consider: • Contractor integrity, compliance with public policy, • Record of past performance, financial & tech resources, and • Possible exclusions (See § 200.180—Suspension and Debarment).

19. Recordkeeping - §200.318(i) • The non-Federal entity must maintain records sufficient to detail the history of procurement. • Records include, but not 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.

20. §200.319 Competition • All procurement transactions must be conducted in a manner providing full and open competition. • Real or perceived unfair advantages must be avoided. • New change to address real or perceived unfair advantage impacts certain contractors.

21. Organizational Conflicts of Interest • Section 200.319(a) introduction provides that contractors that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements (this insider information is the very essence of organizational conflicts of interests).

22. Examples of Restricting Competition • Placing unreasonable requirements on firms to qualify, • Unnecessary experience and excessive bonding, • Noncompetitive pricing practices between firms, and • Specifying only a “brand name” product instead of allowing an equal product to be offered.

23. Allowable use of Brand Names • Provide a clear and accurate description of the technical requirements to be procured. • The description must not unduly restrict competition. • When impractical to otherwise describe the technical requirements, a “brand name or equivalent” description may be used as a means to define the procurement. • Specific features of the named brand that must be achieved are to be clearly stated.

24. §200.320 Methods of procurement to follow The non-Federal entity must use one of the following: • Micro-purchases, • Small purchase procedures, • Sealed bids, • Competitive proposals, or • Non-competitive proposals (severely limited).

25. §200.67 Micro-purchase • Micro-purchase means a purchase of supplies or services using simplified acquisition procedures, the aggregate amount of which does not exceed the micro-purchase threshold • As of October 1, 2015 the micro-purchase threshold will increase from $3,000 to $3,500 Per Section 200.320 (a), micro-purchases: • Must be distributed equitably among qualified suppliers. • May be awarded without soliciting quotations if the price is considered to be reasonable.

26. Small Purchase Procedures • Simple, informal methods for securing needed material that do not cost more than Simplified Acquisition Threshold ($150,000). • Price or rate quotations, when used, must be obtained from an adequate number of qualified sources.

27. Sealed Bids (Formal Advertising) • Bids are publicly solicited and a firm fixed price contract (lump sum or unit price) is awarded to the responsible bidder whose bid: • conforms with all the material terms and conditions and • is the lowest in price. • Preferred method for procuring construction

28. Competitive Proposals • Must use adequate number of sources, and either a fixed price or cost-reimbursement type contract is awarded. • Generally used when conditions are not appropriate for the use of sealed bids.

29. Noncompetitive Proposals (Sole Source) Solicitation of a proposal from only one source and may be used only when one or more of the following circumstances apply: • The item is available only from a single source; • An emergency or other exigency for the requirement will not permit a delay resulting from competitive solicitation;

30. Noncompetitive Proposals (Sole Source) • The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the non-Federal entity; and/or • After solicitation of a number of sources, competition is determined inadequate.

31. §200.323 Contract cost and price • If procurement exceeds the Simplified Acquisition Threshold, the non-Federal entity must perform a cost or price analysis. • The method and degree of analysis depends on the facts surrounding the particular procurement. • The non-Federal entity must make independent estimate before receiving of any bids or proposals.

32. Negotiating Profit • If there is no price competition or the procurement exceeds the simplified acquisition threshold, non-Federal entity must negotiate profit as a separate element of the price. • Fair and reasonable profit is an understood and allowable result of the successful completion of a contract.

33. Technical specifications review§200.324 • Grantees and subgrantees can request review by pass-through entity and Federal agency. • If there is an appearance of irregularitys, we can still look at it without a request. • All the standards for review of procurement procedures are found in § 200.324 (Be aware!).

34. §200.326 Contract Provisions • The non-Federal entity's contracts must contain the applicable provisions described in Appendix II to Part 200—Contract Provisions for non-Federal Entity Contracts Under Federal Awards. Federal agency or non-Federal entity may require additional provisions.