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  • Writer's pictureJillian Helding

Federal Procurement Rules: What the Uniform Guidance Says about Procurement Methods and Competitive Bidding

The procurement regulations governing Federal grants are full of potential pitfalls. For new grant recipients, the sheer number can feel overwhelming. Even experienced program administrators may find themselves struggling to stay up-to-date on current requirements, especially in the face of new legislation, new programs, or changes to existing rules.


To help keep your grant program compliant, we've put together a brief guide to two key sections of the Uniform Guidance (the primary set of regulations for Federal grants): Procurement Methods and Competitive Bidding. You can read the guide below, or download a PDF copy to share.


Businessman using virtual touchscreen presses word: PROCUREMENT.

PROCUREMENT SOLICITATIONS


The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations:


(1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. In competitive procurements, the description must not contain features which unduly restrict competition.

 

The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible.

 

When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a “brand name or equivalent” description may be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met by offers must be clearly stated.

 

(2) Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals.


PROCUREMENT METHODS


The non-Federal entity must have and use documented procurement procedures, consistent with the standards of 2 CFR 200.317 – 200.320 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award:


FORMAL METHODS

 

When the value of the procurement for property or services under a Federal financial assistance award exceeds the Simplified Acquisition Threshold (currently $250,000), or a lower threshold established by a non-Federal entity, formal procurement methods are required.

 

Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used.


Formal procurement methods include:

 

Sealed bids: Bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid is the lowest in price. This is the preferred method for construction procurement. For a detailed list of requirements, consult 2 CFR 200.320(b)(1).

 

Proposals: A fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. For a detailed list of requirements, consult 2 CFR 200.320(b)(2).

 

INFORMAL METHODS

 

When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required.

 

The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost.

 

Informal procurement methods include:

 

Micro-purchases: A purchase of supplies or services, the aggregate amount of which does not exceed the micro-purchase threshold (consult 48 CFR 2.101 “Micro purchase threshold” for amounts).

 

Small purchases: The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls.

 

NON-COMPETITIVE METHODS

 

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:

 

(a) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold;


(b) The item is available only from a single source;


(c) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation;


(d) 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


(e) After solicitation of a number of sources, competition is determined inadequate.


COMPETITIVE BIDDING


All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition* consistent with the standards of 2 CFR 200.319 and 200.320.


Some of the situations considered to be restrictive of competition include but are not limited to:


  • Placing unreasonable requirements on firms in order for them to qualify to do business;

  • Requiring unnecessary experience and excessive bonding;

  • Noncompetitive pricing practices between firms or between affiliated companies;

  • Noncompetitive contracts to consultants that are on retainer contracts;

  • Organizational conflicts of interest;

  • Specifying only a “brand name” product instead of allowing “an equal” product to be offered and describing the performance or other relevant requirements of the procurement; and

  • Any arbitrary action in the procurement process.

The non-Federal entity must also conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. Some architectural and engineering services may be exempt from this requirement.


In order to ensure objective contractor performance and eliminate unfair competitive advantage, 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.

 

*Unless the procurement meets the qualifications for the use of non-competitive methods, as described above.



Procurement Methods and Competitive Bidding
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Overwhelmed? The Vander Weele Group can help!


The Vander Weele Group provides turn-key oversight solutions for federal and state grant programs. We specialize in monitoring large-scale programs nationwide, combining grants monitoring expertise with industry-specific program experience. The firm offers traditional fiscal and compliance reviews, programmatic monitoring, risk assessments, internal control reviews, data analytics to detect fraud, best practice recommendations, and technical assistance for grantees.


To consult a grants oversight expert, call 773-929-3030 or email us at info@vanderweelegroup.com.


For more grants monitoring, oversight, and technical assistance resources, visit our Resource Library.


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