2 CFR 200 Procurement Principles Research Administrator Monthly Forum May 2018 Presented by: Michael Ritz, CIA,CPA Research Compliance Officer Office of Research and Project Administration

Background 2 CFR 200 prescribes procurement requirements historically associated with state and local governments More proscriptive than prior regulations (OMB A-110) Research institutions requested reconsideration of the requirements Effective date was deferred twice, with pending effective date of July 1, 2018 Appears the original 2 CFR 200 requirements will be applicable to us

Background 200.318 General Procurement Standards 200.319 Competition 200.320 Methods of procurement to be followed 200.321 Contracting with small and minority businesses, women’s business enterprises 200.323 Contract cost and price 200.324 Federal awarding agency or pass-through entity review

Today’s Objectives Familiarize you with: Procurement Standards Expectations Document Competitive Bid Policy – Sponsored Funds Supplier Price Justification and Conflict Information Form – Sponsored Funds

Principle of Fiduciary Care Procurement Standards Expectations Document Section A: General Procurement (200.318) Principle of Fiduciary Care Utilize established Corporate Purchasing mechanisms to procure goods and services for sponsored projects Ensure fulfillment of ordered goods and performance of services in accordance with the terms, conditions and specifications of the contracts and purchase orders prior to approving payment Avoid unnecessary or duplicative purchases

Procurement Standards Expectations Document Section A: General Procurement (200.318) Consolidate procurements where possible Where appropriate, seek or perform lease-versus-purchase analysis Attempt to use surplus property in lieu of purchasing new equipment and property Apply due diligence so contracts are awarded only to contractors who can successfully perform (e.g., involve Corporate Purchasing)

Principle of Best Price and Lack of Bias Procurement Standards Expectations Document Section B: Competition (200.319) Principle of Best Price and Lack of Bias Full and open competition Prohibit geographical preferences

Principle of Larger Transactions Requiring More Diligence Procurement Standards Expectations Document Section C: Procurement Methods (200.320) Principle of Larger Transactions Requiring More Diligence Micro Purchases Simplified Acquisition Threshold Competitive Proposal Threshold

Procurement Standards Expectations Document Section C: Procurement Methods (200.320) Micro-purchases Individual transactions < $3,500 Distribute equitably among qualified suppliers No need for solicitation of competitive quotations if price is deemed to be reasonable

Procurement Standards Expectations Document Section C: Procurement Methods (200.320) Simplified Acquisitions Individual transactions $3,500 to $149,999 Price or rate quotations must be obtained from an adequate number of qualified suppliers

Procurement Standards Expectations Document Section C: Procurement Methods (200.320) Competitive Proposals Individual transactions $150,000 or greater Formal proposal process Always collaborate with Corporate Purchasing

Procurement Standards Expectations Document Section C: Procurement Methods (200.320) Lack of Competition Only one source responds; OR One of the conditions provided in 2 CFR 200 applies Justification of fairness and reasonableness of price is needed, including a breakdown of cost components

Competitive Bid Policy – Sponsored Funds Objective Competitive sourcing requirements are dependent upon the size of the purchase Guidelines Bids must be obtained SSPJCI Form (sponsored funds) Conflicts of Interest Confidentiality of Bids/Quotations/Proposals

Competitive Bid Policy – Sponsored Funds Micro Purchases (<$3,500) One quote/proposal Simplified Acquisition Threshold ($3,500 - $149,999) Multiple written quotes Competitive Procurement Process ($150,000 +) Multiple written, formalized, non-sealed bids *The use of a competitive bid and negotiated agreement on behalf of the University satisfies the bid requirements for all three categories above.

Micro Purchases Ensure price is fair and reasonable Complete the SSPJCI Form

Simplified Acquisition Threshold When goods/services have standard and easily compared specifications, employ the Request for Quote (RFQ) process. Written quotes on supplier’s letterhead (verbal bids not acceptable) If all factors are equal, lowest priced supplier should be awarded the contract. Complete the SSPJCI Form

Competitive Procurement Process Formal proposal process required Work with Corporate Purchasing once a Scope of Work or a requirements document has been drafted Complete the SSPJCI Form Identification of qualified suppliers is a key component Suppliers Previously Contracted RFI/Supplier Pre-Qualification Bid Evaluation Method Grid

What if there is lack of price competition? A single bid is submitted Document the justification of the fair and reasonable criteria for the price e.g.: In-house estimates e.g.: Price for same or similar items Alternatively, cancel the formal bid process and negotiate the contract price with the sole bidder Cost breakdown required Cost analysis required Final resolution to be reviewed and approved by Corporate Purchasing

What if there is a single/sole source? (Formal proposal process deemed not feasible) Can only be awarded under certain specific instances (refer to policy) Documentation of price reasonableness is needed

Sponsored Funds Supplier Price Justification Conflict Information (SSPJCI) Form

SSPJCI Form Section A Written Quotes, Proposals, Competitive Bids Section B Non-Competitive/Low Bid Not Selected Section C Cost/Price Analysis Section D Conflict of Interest Information Section E Minority and Small Business Information

SSPJCI Form What are the requirements that I need to know? Sponsored Funds (FAO=GR) Goods and Services Purchase Requisition Amount Requirements $0 - $3,499 One written quote/proposal Sponsored Funds Supplier Price Justification Conflict Information Form (SSPJCI) - Section C- E   $3,500 - $149,999 Multiple (2) written quotes Sponsored Funds Supplier Price Justification Conflict Information Form (SSPJCI)- Section B-E $150,000 and greater Multiple (3) written formalized bids through a competitive bid process (i.e. Request for Proposal (RFP)/Request for Quotation (RFQ) Sponsored Funds Supplier Price Justification Conflict Information Form (SSPJCI) - Sections A-E

SPJCI Form Where do I find it? How do I complete it? The Sponsored Supplier Price Justification Conflict Information Form (SSPJCI) is located on the Purchasing Website in the Forms Bank. https://www.urmc.rochester.edu/purchasing/forms-bank.cfm How do I complete it? The form is a 5-page PDF fillable form that can be filled out on-line. The departmental requestor must complete the SSPJCI Form. The next several screens will provide additional detail in filling out the form. Please note that incomplete forms will be returned and will delay your request. What are the next steps after completing it? Upon completing the SSPJCI Form and obtaining appropriate signatures based on the University Signature Authority Policy, 312 Requisition: Submit it along with your 312 requisition and other supporting documentation (i.e. quote, Independent Contractor Forms, Contracts etc.) to Purchasing by fax at 273-1241, intramural mail at Box 278901 or email Helpdesk_Purchasing@urmc.Rochester.edu Pcard Transaction: Upload the completed form with your Pcard Transaction. F4 Payment Request: Submit it along with your F4 Payment Request Form to Accounts Payable, Box 278958

SSPJCI Form Requested By: Date: Phone: Req#: Vendor: Section A: Identify the person who is requesting the supply, equipment or service. Phone: Identify the phone number of the person requesting the supply, equipment or service. Section A: Competitive bids are required for purchases of $150,000 and greater. Work with Purchasing to assist with the competitive bid process. To support the selection of the supplier, please indicate the supplier name and total quoted price. Attach the quote and identify if the supplier is a small business. Note: Purchases between $3,500 - $149,999 multiple written quotes are required. Date: Enter the date you are completing the form Req#: Enter the 312 requisition that will accompany this completed form. Vendor: Enter the name of the supplier you would like to contract with. Note: Purchasing may change the supplier based on contracts currently in place.

SSPJCI Form Section B – Required for All Purchases > $3,499: . Section B – Required for All Purchases > $3,499: Identify by checking the appropriate box if the selection is based on the following including the reason. Non-Competitive Low Bid Not Selected Additional detailed explanation can be included to support your selection with the form.

SSPJCI Form Section C – Cost/Price Analysis – Required for All Purchases (312, Pcard and F4: Select all that support the determination that the purchase is fair and reasonable.

SSPJCI Form Section D – Required for All Purchases: If there is a conflict, please identify name and title of the individual affiliated with the conflict. In addition, identify the process utilized to manage it. A person, with signature authority based on University Signature Policy to commit funds for the department and can certify the information is correct, is required to sign the SPJCI Form. Section D – Required for All Purchases: Conflict of Interest Information: Identify if there is a conflict of interest with this transaction. Check “No Conflict of Interest if one does not exist. If a conflict exists, the University’s Sr. VP of Administration and Finance or their designee, must approve the purchase.

SSPJCI Form Section E – Minority and Small Business Information – Required for All Purchases Identify, based on the categories listed, the number of suppliers solicited and the reason they were not selected based on the designated key. An authorized department representative (FAO Manager, Cost Center Manager and/or Department Head) is required to sign to certify the awareness of the University’s Competitive Bid Requirements in support of Federal Guidelines and confirm that small and/or minority businesses were solicited wherever there were potential sources. Additional comments can be identified to support the information provided.

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