1. You Got a Grant, Now How Do You Spend It? Let’s Talk Procurement
Grants Management Track National Homeland Security Conference
Victoria Roth
Attorney Advisor
FEMA Office of Chief Counsel
July 12, 2018

2. Rules of the Road
Please ask questions as they arise during the presentation— there is no need to wait until the end to ask them
This presentation (including slides & oral information conveyed) provides general information about the procurement requirements applicable to FEMA grants
This presentation is not intended to be, nor should it be considered as, legal advice
You should not act or rely on information contained in our presentation (written or oral) without seeking the advice of your own attorney

3. Agenda Purpose Importance of Rules Background on Procurement Rules
Overarching Questions
Prior Rules
Current Rules
Discussion of Rules
Common Issues

4. Purpose Of Presentation: Of Rules:
Provide a broad overview of Federal procurement standards applicable to recipients and subrecipients when they procure goods or services under FEMA grants
Explain why these rules are important
Of Rules:
More than about obtaining the lowest price
Purpose also includes the furtherance of other objectives (e.g., full & open competition; socioeconomic inclusion; prevent favoritism, collusion, fraud, waste & abuse)

5. Importance of Rules Newsroom DHS OIG audits of FEMA grants
Consequences
Enforcement actions, such as loss of funding

6. Background: Overarching Questions
What does “Uniform Rules,” “Super Circular,” or “Omni Circular” mean?
What do these rules cover?
What does “procurement under grants” mean?
Where do these rules come from and where can I find them?
Have these rules changed over the years?

7. Background: Government-Wide Grants Rules
3 Main Categories
Administrative Requirements (incl. Procurement Standards)
AKA “Grants Management Common Rule” (prior rules)
AKA “Uniform Administrative Requirements” (current rules)
Cost Principles
Audit Requirements
Prior Rules: Scattered Across Circulars & Regulations
Current Rules: Mostly in 2 C.F.R. pt. 200
Grant Applications
Financial Management
Property Standards
Reporting & Monitoring
Procurement Standards
Closeout

8. Background: Prior Rules (Disasters/Grants Issued Before Dec. 26, 2014)
OMB Circular/Regulation
Description
A-21 & 2 C.F.R. pt. 220
Cost Principles for IHEs
A-50
Audit Follow-Up
A-87 & 2 C.F.R. pt. 225
Cost Principles for State/Local/Tribal Gov’ts
A-89
Federal Domestic Assistance Program Info
A-102 & 44 C.F.R. pt. 13 (for FEMA)
Grant Mgmt Common Rule for State/Local/Tribal Gov’ts
A-110 & 2 C.F.R. pt. 215
Grant Mgmt Common Rule for IHEs, Hospitals & PNPs
A-122 & 2 C.F.R. pt. 230
Cost Principles for Nonprofits
A-133
Single Audits
Procurement:
44 C.F.R.§
Procurement:
2 C.F.R. §§

9. Background: Prior Locations for Grant Management Common Rule

10. Background: Current Rules (Disasters/Grants Issued on/after Dec
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
Located at 2 C.F.R. pt. 200
Some agencies adopted them as is, including DHS
Some agencies obtained exceptions & have slightly modified versions
Supersede most prior circulars/ rules
Grace Period
New OMB Exemptions

11. Summary of Procurement Standards
States
(state agencies, instrumentalities of the state, and territories)
Other Non-Federal Entities
(local governments, tribal governments, IHE, hospitals, and other nonprofit organizations)
2 C.F.R. §
2 C.F.R. §§ through
Synopsis:
(1) Must follow same policies and procedures it uses for procurements from its non-Federal funds;
(2) Comply with § (procurement of recovered materials); and
(3) Include any clauses required by § (contract provisions)
(1) Must follow its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations; and
(2) Provided that the procurements conform to applicable federal law and the standards identified in 2 C.F.R. §§ through
Note: “State” – means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and any agency or instrumentality thereof exclusive of local governments.

12. Interplay Between Federal Rules & State/Local/Tribal Rules
The Federal procurement standards address only a small portion of the procurement rules that possibly apply to a procurement
If the Federal procurement standards do not address nor prohibit a concept, it is generally not a Federal requirement
Sometimes the narrowest rule is Federal, sometimes it’s state, local, or tribal
Federal Procurement Standards
State Procurement Standards
Local Procurement Standards
If the rules overlap, however, the local, tribal, or nonprofit must follow the rule that allows them to be in compliance with all applicable layers (often referred to as following the most restrictive standard)
It does NOT mean following only one set of standards instead of another—some Federal standards may be more restrictive than state/local/tribal, and some may be less restrictive

13. Interplay Between Federal Rules & State/Local/Tribal Rules Cont’d
Recipients and subrecipients cannot waive the Federal procurement requirements
Even if a state waives state procurement standards or a local government waives local procurement standards, recipients and subrecipients must still comply with the applicable Federal procurement standards found at 2 C.F.R. §§ when using grant funds.

14. Overview of Standards
The procurement standards can be broken down into the following categories:
General procurement standards (2 C.F.R. § )
Competition (2 C.F.R. § )
Methods of procurement (2 C.F.R. § )
Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms (2 C.F.R. § )
Procurement of recovered materials (2 C.F.R. § )
Contract cost and price (2 C.F.R. § )
Awarding agency and pass-through entity review (2 C.F.R. § )
Bonding requirements (2 C.F.R. § )
Contract provisions (2 C.F.R. § and Appendix II)

15. Common Issues: Noncompetitive Procurements
Piggybacking (2 C.F.R.§ (a))
Awarding to contractors that drafted solicitation documents (2 C.F.R.§ (a))
Using noncompetitive pre-existing or retainer contracts (2 C.F.R.§ (a))
Making out-of-scope changes to existing contracts (2 C.F.R.§ (a))
Using prohibited local geographic preference (2 C.F.R.§ (b)
Continuing to use sole source contract after exigency/emergency ended (2 C.F.R.§ (f)(2))

16. Other Common Issues
Using state supply schedules/cooperative purchasing agreements that do not comply with rules applicable to non-State entities (i.e., 2 C.F.R. §§ )
Hiring suspended/debarred contractors (2 C.F.R. §§ , (h))
Insufficient documentation (2 C.F.R.§ (i))
Failing to include ceiling price in time & materials contracts (2 C.F.R.§ (j))
Not conducting a cost or price analysis above the simplified acquisition threshold (2 C.F.R.§ (a))
Using prohibited cost-plus-percentage-of-cost contracts (2 C.F.R.§ (d))
Failing to take affirmative socioeconomic steps (2 C.F.R.§ )
Not including required contract provisions (2 C.F.R.§ & App. II)

17. Questions?