Treasury, Introduction to Procurement Requirements for Tribal Entities.
Summary
A Treasury Office of Capital Access slide deck, "Procurement Overview for Participating Tribes," on buying goods and services with federal financial assistance. It defines recipients and subrecipients under 2 CFR 200.1 and walks through the competition tiers: a $10,000 micro-purchase threshold and a $250,000 simplified acquisition threshold, with independent estimates required before bids and a price or cost analysis for procurements over $250,000. Noncompetitive (sole source) procurement under 2 CFR 200.320(c) is permitted in only five circumstances, such as an item available from a single source or prior approval by the federal agency, and many procurement rules continue to apply in emergencies. Cost Plus Percentage of Cost contracts are prohibited.
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“Treasury, Introduction to Procurement Requirements for Tribal Entities.”
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OFFICE OF CAPITAL ACCESS
Procurement Overview for
Participating Tribes
Objectives
1. Understand federal financial assistance procurement
requirements
2. Be able to identify and apply competition requirements for
procurement using federal financial assistance
3. Learn about exceptions to competitive procurement
requirements
2
Importance of Procurement Requirements
Recipients and Goods and Services
Federal Government
Subrecipients Providers
• Helps ensure federal award • Ensures all stakeholders • Helps ensure federal award
dollars are used to advance have a shared dollars are used to advance
the intended award understanding or the intended award
purpose requirements purpose
• Promotes securing • Benefits providers because • Provides procurement
competitive prices for standards for acquiring
the requirements promote
services to implement the goods and services for
equity implementation of federal
award
• Mitigates conflicts of awards
• Prioritizes equity when
purchasing goods and interest • Advances equity
services • Promotes transparency
• Mitigates conflicts of • Minimizes likelihood of
interest fraud, waste, and abuse of
• Ensures stakeholders have federal awards
a shared understanding or
requirements
3
Key Definitions (2 CFR 200.1)
Recipient
An entity (e.g., state, local government, tribal government, non-profit) that receives
Federal financial assistance directly from a Federal awarding agency to carry out an
activity under a Federal program. The term does not include subrecipients, or individuals
that are participants or beneficiaries of the award. Recipients may also be pass-through
entities.
Subrecipient
An entity that receives a subaward from a recipient or pass-through entity to carry out
part of a federal award. The term subrecipient does not include a beneficiary or
participant. A subrecipient may also be a recipient of other Federal awards directly from
a Federal awarding agency.
4
Key Definitions (2 CFR 200.1) cont.
Pass-Through Entity
Pass-through entity means a recipient or subrecipient that provides a subaward to a
subrecipient (including lower tier subrecipients) to carry out part of a Federal program.
The authority of the pass-through entity flows through the subaward agreement between
the pass-through entity and subrecipient.
Contractor
An entity that receives a contract from a recipient or subrecipient for the purpose of
obtaining goods and services to implement a Federal award.
Beneficiary
Entities that benefit from a recipient or subrecipient’s actions to carry out an activity
under an award.*
* Extrapolated from the definition of grant which states that grants are not used to “acquire property or services for the
Federal agency or pass-through entity's direct benefit or use.”
5
Subrecipient and Contractor Determinations
2 CFR 200.331 states that “a pass-through entity is responsible for making case-by-case
determinations to determine whether the entity receiving federal funds is a subrecipient
or a contractor.”
Subrecipients (§200.331(a)) Contractors (§200.331(b))
A subaward is for the purpose of carrying out a A contract is for the purpose of obtaining
portion of the Federal award and creates a goods and services for the recipient’s use and
Federal financial assistance relationship with a creates a procurement relationship with a
subrecipient. contractor.
6
Subrecipient and Contractor Determinations cont.
Subrecipients (§200.331(a)) Contractors (§200.331(b))
Characteristics which support the classification Characteristics that support a procurement
of the entity as a subrecipient include, but are relationship between the recipient or
not limited to, when the entity: subrecipient and a contractor include, but are
(1) Determines who is eligible to receive what not limited to, when the contractor:
Federal assistance; (1) Provides the goods and services within
(2) Has its performance measured in relation normal business operations;
to whether the objectives of a Federal (2) Provides similar goods or services to many
program were met; different purchasers;
(3) Has responsibility for programmatic (3) Normally operates in a competitive
decision-making; environment;
(4) Is responsible for adherence to applicable (4) Provides goods or services that are
Federal program requirements specified in ancillary to the implementation of a
the Federal award; and Federal program; and
(5) Implements a program for a public purpose (5) Is not subject to compliance requirements
specified in authorizing statute, as opposed of a Federal program as a result of the
to providing goods or services for the agreement. However, similar requirements
benefit of the pass-through entity. may apply for other reasons.
7
Overview of Uniform Guidance Procurement
Requirements
Section Title
§200.317 Procurements by states
§200.318 General procurement standards
§200.319 Competition
§200.320 Methods of procurement to be followed
Contracting with small and minority businesses,
§200.321 women’s business enterprises, and labor surplus
area firms
§200.322 Domestic preferences for procurements
§200.323 Procurement of recovered materials
2 CFR §§200.317 – .327 §200.324 Contract cost and price
§200.325 Federal awarding agency or pass-through entity
review
§200.326 Bonding requirements
§200.327 Contract provisions
8
Procurement Requirements for State Entities
Are You a State Entity? Applicable Requirements
• Any State of the United States Section Title
• District of Columbia §200.317 Procurements by states
• US Territories: §200.318
Commonwealth of Puerto
Rico §200.319
U.S. Virgin Islands §200.320
Guam Contracting with small and minority businesses,
American Samoa §200.321 women’s business enterprises, and labor surplus
Commonwealth of the area firms
Northern Mariana Islands §200.322 Domestic preferences for procurements
• State Agency §200.323 Procurement of recovered materials
• State Instrumentality
§200.324
§200.325
§200.326
§200.327 Contract provisions
9
Non-State Entities and Procurement Requirements
Are You a Non-State Entity? Section Title
• Local Governments
§200.317
• Tribal Governments
• Hospitals (some) §200.318 General procurement standards
• Institutions of Higher §200.319 Competition
Education (some) §200.320 Methods of procurement to be followed
• Other Private Non-Profit
Organizations Contracting with small and minority businesses,
§200.321 women’s business enterprises, and labor surplus
area firms
§200.322 Domestic preferences for procurements
Applicable Requirements
§200.323 Procurement of recovered materials
• Entity’s own procurement
policies and procedures §200.324 Contract cost and price
§200.325 Federal awarding agency or pass-through entity
• State and Tribal laws review
§200.326 Bonding requirements
§200.327 Contract provisions
10
Full and Open Competition: A Fair Playing Field
Full and Open competition:
• Is a key principle of the
procurement standards
• Permits all qualified and
responsible vendors who are
eligible to compete without
restrictions
• Casts the net broadly to reach
fair and reasonable pricing
from the most qualified $
contractor
• Prevents favoritism, fraud,
waste, and abuse
11
Practices that Restrict Competitive Procurement 2 CFR §200.319(b)
Examples of situations that may restrict competition include, but are not limited to:
1. Requiring unnecessary experience and excessive bonding requirements
2. Specifying a “brand name” product instead of allowing “an equal” product to be
offered and describing the performance or other relevant requirements of the
procurement
3. Placing unreasonable requirements on firms in order for them to qualify to do business
4. Noncompetitive pricing practices
5. Organizational conflicts of interest
6. Noncompetitive contracts to contractors on retainer contracts
7. Any arbitrary action in the procurement process
12
Procurement Methods 2 CFR §200.320
Micro- Small Sealed Sole
Proposals Sourcing
Purchase Purchase Bidding
Up to Up to Usually Over Usually Over
$10,000 $250,000 $250,000 $250,000 Dependent on
Circumstances
• Independent Estimates are
required before receiving
bids or proposals
• Price or Cost Analysis is
required for procurements
over $250,000
13
Noncompetitive Procurement (Sole Source) 2 CFR §200.320(c)
Noncompetitive procurement is only permitted in one of the following five (5) circumstances:
(c)(2) Item only available (c)(4) Prior Approval by
from a single (sole) source Federal Agencies
(c)(1) Procurement value (c)(3) Public emergency (c)(5) Inadequate
below the Micro- or exigency exception competition
purchase Threshold applies
14
Contract Provision Requirements (2 CFR §200.327 and
Appendix II)
Contract provisions are required for both State and non-State entities to protect the interests
of recipients, subrecipients, goods and services providers, and the Federal Government
Contract provisions in 2 CFR Part 200, Appendix II include, but are not limited to:
• Addressing termination of the contract for cause and for convenience
• Equal Employment Opportunity (EEO)
• Davis-Bacon Act (i.e., labor requirements for construction contracts)
• Byrd Anti-Lobbying Amendment
• Debarment and Suspension
• Prohibition on certain telecommunications (See 2 CFR §200.216)
• Domestic preference for procurements (See 2 CFR §200.322)
• Recovered Materials (See 2 CFR §200.323)
15
Best Practice: Document, Document, Document
When using the Emergency and Exigency procurement exception document and maintain
the records on the following in sufficient to detail to provide the history of the procurement:
• Rationale for the Method of Procurement – Justification for sole sourcing
• Selection of Contract Type – Justification for contract type
• Selection of Contractor – Contractor search performed at www.SAM.gov
• Basis for Contract Price – Independent estimate; cost or price analysis; quotations
16
Procurement Take-Aways
• State and Non-State Entities follow different procurement requirements
• There are different requirements depending on the cost to procure goods or services (e.g.,
$10,000 micro-purchase threshold, $250,000 simplified acquisition threshold)
• Certain circumstances permit exceptions to competitive procurement
• Pursuant to 2 CFR 200.320(c), many procurement rules continue to apply under
emergency and exigent circumstances
17
Questions?
18
Appendix: Procurement and Emergency and Exigency
Noncompetitive Procurement in Emergency and Exigent
Situations 2 CFR §200.320(c)(3)
Situations that demand
immediate aid or action
Emergency Exigency
Need to alleviate a threat to life, Need to avoid, prevent or
public health or safety, or alleviate serious harm or injury,
improved property financial or otherwise
$
20
State Entity Emergency and Exigency Requirements
When using noncompetitive procurement due to an emergency or exigency, state entities
must:
• Follow state procurement policies and procedures
• Follow procurement of recovered materials requirements (See 2 CFR §200.323)
• Include required contract provisions
State entities and their contractors must comply with section 6002 of the Solid Waste
Disposal Act. Requirements include:
• Only procuring items designated in EPA guidelines that contain the highest percentage
of recovered materials practicable
• Procuring solid waste management services in a manner that maximizes energy and
resource recovery
• Establishing program for procuring recovered materials identified in the EPA guidelines
21
Non-State Entity Emergency and Exigency Requirements
When using noncompetitive procurement due to an emergency or exigency, non-state
entities must:
• Use only during the period of actual exigent or emergency circumstances
• Document and provide justification for the use of the exception
• Award contract to a responsible contractor
• Include required contract clauses
• Follow documentation, oversight, and conflict of interest requirements
• Not enter into Cost Plus Percentage of Cost (CPPC) contracts. They are prohibited!
If applicable, Non-State Entities must:
• Conduct a cost or price analysis
• Follow bonding requirements
• Follow time and materials (T&M) contract requirements
22
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