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Purchasing with Federal Grant Funds: Lloyd

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This presentation was delivered at NADO's 2018 Annual Training Conference, held in Charlotte, NC on October 13-16. For more information, visit: https://www.nado.org/events/2018-annual-training-conference/

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Purchasing with Federal Grant Funds: Lloyd

  1. 1. Purchasing with Federal Grant Funds—The Future is Now NADO Annual Training Conference October 15, 2018 Presented by Bob Lloyd 1
  2. 2. Procurement Standards • 2 CFR 200.317-326 • 2 CFR 200, Appendix II • “Skeletal” features • OMB’s influences --- OMB Circular A-102, Section ___.36 --- OMB Circular A-110, Sections ___.40-48 --- Federal Acquisition Regulation (FAR) (48 CFR) • BUT NOTE: The FAR does not apply to recipient and subrecipient procurements 2
  3. 3. Key Elements • Policy for states --- Broad reliance on ABA Model Procurement Code for State and Local Governments • Policy for others --- OMB deferral decision (Revision to 2 CFR 200 on 9/10/15 and COFAR FAQ’s) --- Congressional action on thresholds --- OMB Memorandum 18-18 (June 20, 2018) • Nature of a contract under a grant --- “Case by case determination” --- A “procurement relationship” --- Joining “a buyer and a seller” 3
  4. 4. Insert Federal Award Relationships Chart 4
  5. 5. Recipient and Subrecipient Responsibility • Reliance on its own organizational procedures • Privity of agreement • “Sole authority” --- Pre-award ----- Irregularities ----- Bid protests --- Post-award ----- Interpretation ----- Claims • Grantor agency involvement --- 2 CFR 200.324 5
  6. 6. Code of Conduct • Conflict of interest (2 CFR 200.318(c)) --- Familial --- Financial --- Organizational --- Possible supplemental federal agency procedures (2 CFR 200.112) --- Less than arms length leases (2 CFR 200.4XX) • Solicitation or acceptance of gratuities --- Organizational rules for items of nominal value • Disciplinary procedures • New disclosure procedures (2 CFR 200.113) 6
  7. 7. Acceptable Methods • Micro-purchase --- Purchases of less than $3,500 --- No need to solicit competition --- Davis-Bacon exception • Small purchase --- Purchases of less than $150K --- Role of recipient or subrecipient small purchase threshold --- Solicitation of quotations from an “adequate number of sources” • Competitive sealed bids --- Formal advertising --- Results in firm fixed price (lump sum or unit) --- Conditions required for use (2 CFR 200.320(c)(1)) --- Preferred for construction 7
  8. 8. Acceptable Methods • Competition negotiation --- Competition is expected --- Fixed price or cost type possible --- RFP must be publicized --- Solicitation identifies evaluation criteria and relative importance --- Written procedures required for technical evaluation --- Award to most advantageous officer with price and other identified factors considered --- Must be used for architect and engineering services and price cannot be used as a selection criterion (“Brooks Bill”) 8
  9. 9. Acceptable Methods • Non-competitive negotiation --- “Sole source” --- Acceptable justifications ----- Only available from a single source ----- Public exigency or emergency ----- Authorized by federal awarding agency ----- Inadequate competition --- “JOFOC” • Time and materials --- Use limited; no other contract type is suitable --- Ceiling price must be stated --- Recipient oversight required to assure contractor efficiency and cost control 9
  10. 10. Acquisition Planning • Decision to purchase --- Avoid unnecessary purchases --- Consideration of alternatives ----- Leases ----- Third party in-kind contributions ----- Federal excess and surplus property • The “procurement element” of the grant budget • SF 424A direct cost categories --- Travel --- Equipment --- Supplies --- Contractual (services) --- Construction --- Other 10
  11. 11. Acquisition Planning • Managing the “supply chain” --- Bundling --- Breaking out • Cooperative purchasing • Value engineering 11
  12. 12. Obtaining Competition • “Free and open” • “Cast a wide net” --- Offerors’ lists (including prequalified) --- Website --- Media --- FedBizOpps • Affirmative steps (2 CFR 200.321) to solicit: --- Minority Business Enterprises (MBE) --- Small Business Enterprises (SBE) --- Women-Owned Business Enterprises (WBE) --- Labor surplus area firms • Geographic preference prohibited • Impermissible restrictions on competition (2 CFR 200.319(a)) 12
  13. 13. Developing Solicitations • Contractor involvement prohibited • Components --- Procurement method --- Contract type ----- Fixed price ----- Cost type ------- Prohibited: cost plus percentage of cost --- Contract financing ----- Timing ----- Amounts 13
  14. 14. Developing Solicitations • Invitation for bids (IFB) --- Specifications --- “Brand name or equal” --- Salient features --- Award to the “lowest responsive responsible contractor” • Request for proposals (RFP) --- Statement of work (SOW) --- Deliverables --- Technical proposal instructions (TPI) --- Technical evaluation criteria (TEC) ----- Arithmatic or adjectival --- “Two step” procurement ----- “Best and final offers” (BAFO) • Special rules for audit procurement (2 CFR 200.509) 14
  15. 15. Source Evaluation • Responsiveness --- Timeliness --- Completeness --- Correctness • Responsibility --- Integrity --- Past performance --- Compliance with public policy --- Financial and technical resources • Application of evaluation criteria • Vetting --- www.SAM.gov (EPLS) --- 2 CFR 180 15
  16. 16. Source Evaluation • Cost or price analysis --- Required in all procurements above the Simplified Acquisition Threshold --- Required independent estimate prior to solicitation (e.g., grant budget) --- How was the offer solicited? --- Separate negotiation of profit (if costs are broken out) --- Uniform cost principles apply (Subpart E, 2 CFR 200) 16
  17. 17. Source Selection • Documentation --- Avoid “black box” purchasing • The “sound and complete” contract --- Offer --- Acceptance --- Legal content --- Consideration --- Jurisdiction --- Obligations --- Rights and remedies --- Severability • Required federal clauses --- 2 CFR 200, Appendix II 17
  18. 18. Contract Administration • 2 CFR 200.318(b) • Objectives: performance and compliance • Access to contractor and its records? • Avoidance of interference • What tools are available? --- Fixed price contracts --- Cost-type contracts 18
  19. 19. Contract Administration • Supplies and equipment --- Delivery --- Inspection --- Acceptance --- Payment ----- Retainage --- Warranties • Services and construction --- Oversight of work process --- Delivery --- Inspection --- Acceptance --- Payment --- Warranties 19
  20. 20. Procurement Records • 2 CFR 200.318(i) • “History of the procurement” --- Rationale for procurement method --- Rationale for selection of contract type --- Source evaluation and selection --- Basis for contract price • “An audit trail from the beginning” 20
  21. 21. Questions • Now • Later --- Bob Lloyd --- consultlloyd@aol.com --- Telephone: (864) 235-8680 --- Fax: (864) 235-1465 21

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