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The Ins and Outs of the New Procurement Standards Under OMB Uniform Guidance

If your organization receives federal grants, the procurement standards issued in the Uniform Guidance (UG), are in full effect now.

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If your organization receives federal grants, the procurement standards issued in the Uniform Guidance (UG), are in full effect now. The standard applies to all non-federal entities with a fiscal year beginning on or after December 31, 2017. 

There are many important updates to be aware of, most significantly, every non-federal entity receiving federal awards must maintain written documentation of the following:

  • procurement policies and procedures
  • conflict of interest policies
  • the basis for the contractor selection and price

Another requirement is that non-federal entities must take all necessary affirmative steps to assure that minority and women’s businesses and labor surplus area firms are used when possible.  Compliance with this requirement would include ensuring that these businesses are included in solicitations; dividing total requirements into smaller tasks, which could be divided amongst different businesses; and using services such as the Small Business Administration.

There are five allowable methods of procurement:

  1. Micro purchase: purchases $3,500 or less.  No competitive quotes are required, if management determines that the price is reasonable.  However, equitable distribution is encouraged when possible.
  2. Small purchases: purchases between $3,500 and $150,000.  Informal procedures are acceptable; however, quotes must be obtained from an “adequate number” of sources. Your written procurement procedures should define what is meant by “adequate.”
  3. Sealed bids: purchases greater than $150,000.  Sealed bids are commonly used for high-cost purchases of physical property, services or construction.  Formal solicitation of quotes is required, and the contract is awarded to the bidder who conforms to all material terms; price is a major determining factor.
  4. Competitive proposals: purchases greater than $150,000.  Formal solicitation by Request for Proposal (RFP) is required and selection is made with pre-determined evaluation methods including, but not primarily, best cost.  RFPs are used for high-cost services or products that require further evaluation, other than cost, to make a decision and will document specific details required for a project or service.  An RFP solicits proposed solutions and qualifications from multiple vendors.
  5. Sole Source: No quote or bid is required if unique and available from only one source or if there is no competition. The basis for considering and selecting the vendor must be documented.

Full details of the new procurement standards can be found at https://www.ecfr.gov.

This is a quick synopsis of the most important requirements.  Lindquist is available to assist in navigating the new UG Procurement Standards and in creating compliant policies and procedures.  

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