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Uniform Guidance Procurement - What is the Effect of the New Requirements?

Under the new requirements of the Uniform Guidance (UG), procurement standards were modified to implement stricter requirements to ensure full and open competition. Below is an overview of the new procurement standards and additional information to aid your organization when considering the effect of these new requirements.

Who does it apply to?
UG procurement requirements apply to any non-federal entity that charges goods and services to a federal award. They are not applicable to non-federal programs or the good and services included in an indirect cost pool (except for auditor selection). Auditor selection (per §200.509) requires that the auditee must follow the procurement standards in Subpart D. All procurement transactions must be conducted in a manner providing full and open competition.

When is this effective and is a grace period available?
The new procurement standards are applicable as of December 26, 2014, the date the new UG was effective. Due to the additional work necessary for an organization to revise its policies and procedures to conform to the new standard, a grace period election is available that would allow an organization to defer implementation of UG Sections §200.317 to §200.326. Per §200.110, non-federal organizations may continue to comply with the procurement standards in previous OMB guidance for two additional fiscal years after this part becomes effective. If a nonfederal organization chooses to use the previous procurement standards for an additional two fiscal years before adopting the procurement standards in this part, the non-federal organization must document this decision in their internal procurement policies. For June 30th year end organizations, the grace period would be effective through June 30, 2017. Organizations should consider the effects of these standards
and discuss if the deferral option would be beneficial. 

What procurement methods are allowed under the Uniform Guidance?
§200.320 states that a non-deferral organization must use one of the following methods of procurement:

Micro-Purchase Procedure
Acquisition that, in aggregate, does not exceed the micro-purchase threshold. The threshold is set by the Federal
Acquisition Regulation at 48 CFR Subpart 2.1 and is subject to change due to inflation adjustments. When practical,
micro-purchases can be distributed among qualified suppliers. Micro-purchases may be awarded without soliciting
competitive quotations if the non-federal organization considers the price to be reasonable.

Small Purchase Procedure
Applies when acquisition costs more than a micro-purchase but not greater than the Simplified Acquisition Threshold.
The Simplified Acquisition Threshold, similar to the micro-purchase threshold, is established by the Federal Acquisition
Regulation and is subject to change due to inflation adjustments. Prices and/or rates must be obtained from an
adequate number of qualified sources. The determination of what is considered an adequate number should be
identified in your written procedures and include a description of methods that can be used to obtain the quotes. COFAR
FAQ 200.320-1 provides examples of methods that can be used to obtain quotes.

 

The following methods may be used when acquisitions are in excess of the Simplified Acquisition Threshold:

Sealed Bid Procedure
Sealed bids are publicly solicited and a firm fixed price contract is awarded to the responsible bidder whose bid,
conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. In order for the
sealed bid procedure to be feasible, the following conditions should be present: (i) a complete, adequate, and realistic
specification or purchase description is available; (ii) two or more responsible bidders are willing and able to compete
effectively for the business; and (iii) the procurement lends itself to a firm fixed price contract and the selection of the
successful bidder can be made principally on the basis of price. If sealed bids are utilized, certain requirements apply.
Details related to these requirements can be found at §200.320(c)(2).

Competitive Proposals Procedures
The technique of competitive proposals is normally conducted with more than one source submitting an offer and either
a fixed price or cost-reimbursement type contract is awarded. It is generally used when conditions are not appropriate
for the use of sealed bids. If this method is used, certain requirements apply. Details related to these requirements can
be found at §200.320(d).

Non-Competitive Proposals Procedures
Procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and
may be used only when one or more of the following circumstances apply: (1) the item is available only from a single
source; (2) the public exigency or emergency for the requirement will not permit a delay resulting from competitive
solicitation; (3) the federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in
response to a written request from the non-federal organization; or (4) after solicitation of a number of sources,
competition is determined inadequate.

What records are required to be maintained?
The following records should be maintained for all procurements: (1) detailed history of procurement, (2) rationale for
method of procurement, (3) selection of contract type, (4) contractor selection or rejection, and (5) the basis for
contract price.

Contract costs and price considerations?
Every procurement action requires the organization to perform a cost or price analysis for amounts in excess of the
Simplified Acquisition Threshold. The method and degree of analysis is determined based on the facts surrounding the
procurement; however, the organization must make independent costs or price estimates before receiving bids and
proposals to assist with the analysis. Other considerations are necessary as well, including negotiations, allowable costs,
and other factors. More details regarding these matters can be found at §200.323.