Spending Federal Money Interesting Job Poem A Guide to Purchasing Under Uniform Guidance

Outline What is Uniform Guidance Purchasing methods Additional requirements Contracts, control, and cost principles

What is Uniform Guidance

What is the Uniform Guidance (UG)? Code of Federal Regulations: 2 CFR 200 OMB’s consolidation of circulars for costing, administration and audit of Federal awards Replaced 8 circulars Issued on December 26, 2013 Effective largely on December 26, 2014 Some extensions/delays Biggest change in Federal regulations in 50 years Applies to all aspects of grants management, not just procurement UG is still being interpreted and clarified Extended if documented to July 2017. If not this then Circular A-110

Goals of Uniform Guidance Ease administrative burden for Federal agencies and nonfederal entities Strengthen oversight to reduce the risk of waste, fraud and abuse.

Why Reduce Fraud, Waste and Abuse? $600 billion grant awards each year $100 billion improper payments each year. Over a three-year period: $180 million to 20,000 individuals who were dead $230 million to 14,000 fugitives or jailed felons OMB goal to recover $50 billion of improperly paid funds a year OMB recovered $47 billion in the first year of reform. Thompson Information Services

Where can I find it US Government Publishing Office www.ecfr.gov Electronic Code of Federal Regulations www.ecfr.gov Title 2 – Grants and Agreements Part 200

Overview of parts Subpart A – Acronyms & Definitions Subpart B – General Provisions Subpart C – Pre-Award Requirements Subpart D – Post-Award Requirements* Subpart E – Cost Principles* Subpart F – Audit Requirements 12 Appendices Appendix II – Contract Provisions*

Purchasing Methods

Thresholds Micropurchase - $3,500 (set by FAR) $2,000 – Construction $10,000 – Higher Ed and research organizations - NDAA Simplified Acquisition Threshold (SAT) - $150,000 What are your thresholds? NDAA – National Defense Authorization Act

The Procurement Claw

General Standards

Maintain written policies and standards of conduct Your written policy should detail, among other things: Thresholds and appropriate process for each of the five procurement methods How conflicts of interest involving employees engaged to select, award, and administer contracts will be governed How conflicts of interest involving parent entities, affiliates, and subsidiaries will be governed at the organizational level

Centralize purchasing operations Decentralization = greater challenge for compliance How centralized are you? Do you use SPO/DPO, P-Cards, other methods? Limits/thresholds

Five Methods of Procurement

Additional Requirements

Annoyances Orders that linger Inadequate or embarrassing specs Unwanted Commodities

Small, Minority, Women, Labor Surplus Use whenever possible Include on bid list Divide project into smaller pieces Establish delivery schedules which encourage participation Use SBA and MBDA Require Prime to take same steps with subs Does NOT say give preference SBA – Small Business Administration MBDA – Minority Business Development Agency – Department of Commerce Labor Surplus – Department of Labor – Unemployment is higher than average. – Garfield, San Juan, and Wayne

Geographical Preferences Prohibited from utilizing geographical preference Is that a worry here?

Recovered Materials Procurements over $10,000 Comply with section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act. contain the highest percentage of recovered materials practicable procuring solid waste management services in a manner that maximizes energy and resource recovery establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines

Negotiating Profit Must negotiate profit for sole source and procurements over SAT. Consider: complexity of the work to be performed the risk borne by the contractor the contractor's investment the amount of subcontracting the quality of its record of past performance industry profit rates in the surrounding geographical area for similar work

Independent Cost Estimate A cost or price analysis must be performed for all Purchases over the simplified acquisition threshold. Must include getting an independent estimate prior to receiving bids or proposals Ranges from a simple budgetary estimate to a complex estimate Does not imply that it is performed by someone other than the grantee. The Best Practices Procurement Manual (Federal Transit Administration), Section 5.2 - Cost and Price Analysis

System for Award Management (SAM) Must check SAM before engaging vendor Checking for suspension or disbarment If you engage a prohibited vendor, the federal awarding agency could refuse to reimburse your costs or request a return of previously awarded funds. https://www.sam.gov/

Record Keeping Must maintain records sufficient to detail the history of procurement. Includes rationale for the method of procurement selection of contract type contractor selection or rejection basis for the contract price. Must be kept for 3 years Equipment and real property – 3 years after disposition

Contracts, Control, and Cost principles

Terms and Conditions/Contract Provisions Must include applicable provisions: Equal opportunity employment Debarment Rights to inventions Construction over $2,000 - Davis-Bacon Act Over $10,000 - termination for cause and convenience Over $10,000 – Recovered materials/solid waste disposal act Over $100,000 – Byrd anti-lobbying act Mechanics and laborers over $100,000 – contract work hours and safety standards act Over $150,000 – Clean air act and federal water pollution act REQUIRED

Internal Controls Requires recipients to have strong internal controls What is the control structure at your organization?

Cost Principles/Commodities Review 55 cost principles Update internal policies and procedures to protect allowable costs

Catalogs “For three days after death, hair and fingernails continue to grow but phone calls taper off.” Johnny Carson “For years after you retire, your 401(k) will continue to vanish, but the company to whom you placed your very first order will continue to send you catalogs forever.”

Resources eCFR Part 200 (Electronic Code of Federal Regulations): http://www.ecfr.gov COFAR (Council on Financial Assistance Reform): https://cfo.gov/cofar/ COGR (Council on Governmental Relations): http://www.cogr.edu/ (Some resources only avail. to members) DOE (Department of Education): https://ed.gov/policy/fund/guid/uniform- guidance/index.html

Questions?