Insights: Article

Procurement Standards Update

By Kurt Schlicker

March 27, 2018

For all governmental, nonprofit and nonprofit health care entities that receive federal funding, the deferred period allowed under Uniform Guidance has either ended or is very near. If you recall, the Uniform Guidance procurement standards were allowed to be deferred for three fiscal years after December 26, 2014. As such, the effective date for implementation will start for fiscal years beginning Jan. 1, 2018, and later.

Many of you may have already started updating your policies or are in the process of doing so. As you continue to develop and refine your policies, refer to the recap below, which provides an overview of the essential key items that your procurement policy must entail.

  • The entity must have a written conflict of interest policy specific to procurement selection, including policies for disciplinary actions for violations.
  • The entity must have documented procedures which reflect applicable state and local laws, provided they conform to federal standards. Some key standards include:
    • Avoid acquisition of duplicative items.
    • Promote cost-effective methods.
    • Contracts must only be awarded to responsible parties.
    • Records must be maintained that detail the history of procurement, including (but not limited to) contractor integrity, compliance with public policy, record of past performance, financial and technical resources, and suspension and debarment.
    • Procurement actions must provide for full and open competition.
  • The policy should address the procurement threshold and approval and documentation requirements. Methods of procurement are determined by new thresholds:
    • Micro-purchase (maximum limit of $3,500) – May be awarded without solicitation as long as deemed reasonable.
    • Small purchases (maximum limit of $150,000) – Quotes must be obtained from an adequate number of sources.
    • Sealed bids ( >$150,000 or lower if set by policy) – Follow competitive bidding laws and regulations.
    • Competitive proposals ( >$150,000 or lower if set by policy) – Follow policies, with the idea being full and open competition (similar to sealed bids).
    • Non-competitive proposals are allowable if the item is only available from a single source, it is a public emergency, the granting agency has authorized the non-competitive purchase, or after solicitation from a number of sources, competition was determined inadequate.
  • Required federal contract provisions are explicitly stated in Appendix II to 2 CFR Part 200.

Review Your Procurement Policies
The above requirements apply not only to the costs reimbursed by the federal program, but also to any costs claimed to meet matching requirements. We encourage you to do a thorough review of the general procurement standards in 2 CFR Part 200 (§200.317 - §200.326) and ensure your entity’s procurement policies are updated to reflect the provisions under Uniform Guidance. For entities subject to Single Audit requirements, testing will be required to ensure that purchases are made in accordance with the procurement policy provisions the entity adopts. If you have any questions or concerns regarding the requirements, please contact an Eide Bailly team member for assistance.

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