Introduction to Procurement for Public Housing Authorities NonCompetitive Awards Unit 7

Learning Objectives Understand requirements for using noncompetitive procurement Understand the basic process for awarding contracts under the noncompetitive proposal method Understand the difference between emergencies and public exigencies Know when HUD approval is necessary for the award of noncompetitive procurement 2

Types of Proposals Competitive Proposals ▫The market supports adequate competition Noncompetitive Proposals ▫The market does not support competition  Sole Source  Emergency/Public Exigency  HUD Authorizes  Single Source 3

General Requirements Used when awards under small purchase procedures, sealed bids or competitive proposalsis not feasible and one of the following applies : 1.Item is available only from one (sole) source, 2.An emergency or public exigency exists, 3.HUD authorizes, or 4.After solicitation of a number of sources, competition is determined inadequate. 4

General Requirements Written justification as to the necessity of using this method completed prior to award A Cost Analysis must be performed in all cases! Since there are no other offerors, all technical and cost aspects may be negotiated with the sole provider. 5

Emergencies & Public Exigencies 24 CFR §85.36(d)(4)(i)(B) allows PHAs to categorize as either an emergency or a pubic exigency work items that… ▫Cannot be solicited in a competitive manner because time is of the essence! Public Exigency: An urgent condition affecting the PHA at large or community where the PHA is located, such as damage caused by a natural disaster or civil/political unrest 6 Emergency: An unforeseen or unpreventable event or occurrence which threatens the life, health and safety of the residents of the properties managed by the PHA

Emergencies & Public Exigencies Not discussed in Procurement Handbook Recommend PHA address both conditions in written Procurement Procedures Emergencies: ▫Section 11 of the Annual Contributions Contract allows PHAs to incur unbudgeted emergency expenditures from Operating Funds to eliminate serious hazards to life, health and safety ▫Addressed in sample Procurement Policy HUD approval to undertake action is not required ▫PHA must document use under the noncompetitive solicitation process. Otherwise, PHA must bid competitively. ▫Signed certification summarizing action 7

Issuing Noncompetitive Proposals Same basic process as for Competitive Proposals except the evaluation covers only the technical merits and price of the single competitor. Evaluation may be performed by Contracting Officer ▫If so, Executive Director should approve contract The Contracting Officer must certify that the entity is responsible at the time of contract award. Administer and manage per PHA’s procedures 8 Evaluate Proposal Perform Cost Analysis Obtain HUD approval, if applicable

Most frequently misused forms of Noncompetitive Procurements! Contract modifications outside the Statement of Work adding unrelated work items “Emergency” procurement actions that are not bona fide emergencies Sole source or single source procurements without HUD approval per §85.36(g)(2)(ii) 9

HUD approval requirements for Non-competitive Actions 10 Types of noncompetitive actions per §85.36(d)(4)(i) (2) Examples/Conditions (2) HUD review/approval if above established Simplified Acquisition Threshold per §85.36(g)(2)(ii) (See also Procurement Handbook section 12.2) 1. Item is available from one source (i.e., sole source procurements) → Example: PHA requests bid/offer from only one entity since there’s no competition in the open market HUD must approve since awarded without meeting competition requirements per §85.36(g)(2)(ii) 2. Emergency or Public Exigency situations do not allow use of competitive solicitations → Condition: PHA needs to mitigate condition since time is of the essence! No HUD approval required per ACC provisions 3. HUD authorizes use of noncompetitive proposals → Examples: (a)Use of brand name (b)Issuance of contract modifications which change scope of contract or increase contract amount by more than the Simplified Acquisition Threshold HUD must approve based on justified need since awarded without competition per §85.36(g)(2)(iii) and (v) 4. After issuance of solicitations, competition is determined inadequate (i.e., single source procurements) → Example: One bid/offer received in response to a competitive solicitation issued in the open market Even though PHA intended to meet competition, there’s none in the open market; therefore, HUD must approve per §85.36(g)(2)(ii)

Remember… Use when competitive process infeasible and one of the four conditions exists: ▫one source availability (sole source); ▫emergency/public exigency; ▫HUD-authorized; or ▫inadequate competition (single source) Provide written justification for use Always perform a Cost Analysis Obtain HUD approval except in the case of emergencies and public exigencies 11

References 24 CFR 85.36(d)(4) PHA Procurement Handbook REV 2 - Chapter 8 12