NEPN/NSBA Code: DJ-R
Administrative Procedure: Federal Procurement Manual
This Federal Procurement Manual governs the procurement and purchase of property, goods, and services using any federal award,1in whole or in part, that is subject to the Uniform Grant Guidance, codified at 2 CFR Part 200.
To the extent necessary or convenient, the Superintendent or his or her designee, shall implement further written measures to ensure compliance with these procedures and any applicable federal laws and rules, including any applicable provisions of the Uniform Grant Guidance and the federal award terms and conditions. Any such written measures shall be made part of this manual. In addition, the Superintendent or his or her designee, should review and update this manual at least every five years, on a cycle roughly corresponding with the five-year Federal review of the Uniform Grant Guidance as provided in 2 CFR § 200.109.
A. OVERVIEW
The School Committee expects all procurements of property, goods, or services made by the school unit using federal awards to be consistent with sound business practices and applicable federal laws and rules, including the Uniform Grant Guidance.
These administrative procedures, in combination with the school unit’s written policies— including but not limited to Policy DJ (Bidding/Purchasing) and Policy DJH (Purchasing and Contracting: Procurement Staff Code of Conduct)—are intended to comply with the federal requirement that the school unit must (1) use its own documented procurement procedures consistent with applicable federal, state, and local laws and regulations and, more specifically, conform to the procurement standards identified in 2 CFR §§ 200.317 through 200.327; and (2) maintain written standards of conduct covering conflicts of interest—real and perceived—for staff engaged in the selection, awarding, or administration of a contract. (2 CFR § 200.318(a), (c).)
The Superintendent or his or her designee, acting singly, (the “Purchasing Agent”) shall be responsible for implementing these administrative procedures and shall have direction and control over the purchasing of property, goods, and services for the school unit using federal funds.
Wherever these administrative procedures are inconsistent with applicable federal laws and rules, or the terms and conditions of a federal award, the provisions of the applicable federal laws, rules, or award terms and conditions shall control.
1 A “federal award” is any federal financial assistance (including cost-reimbursement contracts) that a school unit receives either directly from a federal agency or indirectly from a pass-through entity such as the State education department. See 2 CFR § 200.1. Most, but not all, federal awards received by the school unit are subject to the Uniform Grant Guidance. To confirm whether a federal award is subject to the Uniform Grant Guidance, review the terms and conditions of the applicable grant agreement or cooperative agreement and the applicability provisions of the Uniform Grant Guidance, codified at 2 CFR § 200.101.
B. GENERAL PROCUREMENT PROCEDURES
1. Full and Open Competition. All procurements must be conducted in a manner that provides full and open competition. Real or perceived unfair advantages will be avoided. Accordingly, the school unit will not (i) place unreasonable requirements on firms or vendors to qualify for a procurement, (ii) require unnecessary experience or use excessive bonding, (iii) use noncompetitive pricing practices between firms or affiliated companies, (iv) allow organizational conflicts of interest, (v) specify a “brand name” product without allowing firms or vendors to offer an equal alternate product, or (vi) allow any arbitrary action in the procurement process. To ensure objective contractor performance and eliminate unfair competitive advantage, firms or vendors that develop or draft specifications, requirements, statements of work, invitations for bids, or requests for proposals must be excluded from competing for such procurements. (2 CFR § 200.319(a), (b).)
2. Responsible Contractors. The school unit must award contracts only to responsible contractors who are able to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. (2 CFR § 200.318(h).)
3. Oversight of Contractors. The school unit must maintain a contract administration and oversight system to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. (2 CFR § 200.318(b).)
4. Fostering Economy and Efficiency. The school unit must avoid purchasing unnecessary or duplicative items. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase, and to using federal surplus equipment and property. Where appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach. To foster greater economy and efficiency, consideration should also be given to: (i) entering into state and local intergovernmental agreements or inter entity agreements where appropriate for procurement or use of common or shared goods and services, (ii) using federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs, and (iii) using value engineering clauses in contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions. (2 CFR § 200.318(d)-(g).)
5. Geographic Preferences Prohibited; Domestic Preferences for U.S. Goods, Products, or Materials Encouraged. The school unit must conduct procurements so as to prohibit the use of statutorily or administratively imposed state or local geographic preferences in the evaluation of bids or proposals, except (i) where applicable federal statutes expressly mandate or encourage geographic preference or (ii) when contracting for architectural and engineering (A/E) services, so long as its application leaves an appropriate number of qualified firms to compete for the contract given the nature and size of the project. As appropriate and to the extent consistent with law, the school unit should, to the greatest extent practicable under a federal award, provide a preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States (including but not limited to iron, aluminum, steel, cement, and other manufactured products). The requirements of this section must be included in all subawards, including all contracts and purchase orders for work or products under a Federal award. For purposes of this section, “produced in the United States” means, for iron and steel products, that all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States. For purposes of this section, “manufactured products” means items and construction materials composed in whole or in part of non-ferrous metals such as aluminum; plastics and polymer-based products such as polyvinyl chloride pipe; aggregates such as concrete; glass, including optical fiber; and lumber. (2 CFR §§ 200.319(c), 200.322.)
6. Clear and Accurate Technical Requirements. The school unit must have written procedures for procurement transactions that incorporate a clear and accurate description of the technical requirements for the goods or services to be procured, identify all requirements which offerors must fulfill, and identify all other factors to be used in evaluating solicitations. Technical descriptions (i) must not, in competitive procurements, contain features which unduly restrict competition; (ii) may include a statement of the qualitative nature of the goods or services to be procured; (iii) when necessary, must set forth those minimum essential characteristics and standards to which goods or services must conform if they are to satisfy their intended use; (iv) should avoid detailed product specifications if possible; and (v) may use a brand name or equivalent description as a means to define performance or other salient requirements of procurement when it is impractical or uneconomical to make a clear and accurate description of the technical requirements (the specific features of the named brand which must be met by offerors must be clearly stated). (2 CFR § 200.319(d).)
7. Prequalified Contractor Lists. The school unit must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. The school unit must not preclude potential bidders from qualifying during the solicitation period. (2 CFR § 200.319(e).)
8. Procurement of Items Made with Recovered Materials. The school unit must comply with Section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act. The requirements of Section 6002 include procuring certain items designated in guidelines of the Environmental Protection Agency (EPA) at 40 CFR part 247, Subpart B that contain the highest percentage of recovered materials, as long as the item is available at a reasonable price and within a reasonable time, and a satisfactory level of competition is maintained. This applies when the school unit purchases $10,000 or more worth of a designated item during a fiscal year, or where the cost of such items or of functionally equivalent items purchased during the preceding fiscal year was $10,000 or more. Section 6002 also requires procuring solid waste management services in a manner that maximizes energy and resource recovery, and establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines. (2 CFR § 200.323; 40 CFR § 247.2(a)(1).)
C. PROCUREMENT METHODS AND THRESHOLDS
1. Methods of Procurement. The school unit must use one of the following five methods of procuring goods or services: micro-purchases, small purchases, sealed bids, competitive proposals (a.k.a. requests for proposals), and non-competitive proposals (a.k.a. sole source procurement). (2 CFR § 200.320.)
a. Micro-purchases (less than $10,000 as of November 12, 2020). Micro-purchases up to the federal micro-purchase threshold ($10,000 as of November 12, 2020)2 may be made without soliciting competitive quotations if the Purchasing Agent considers the price to be reasonable based on research, experience, purchase history, or other information and documents. To the maximum extent practicable, the Purchasing Agent must distribute micro-purchases equitably among qualified suppliers, vendors, or firms. (2 CFR §§ 200.67, 200.320(a)(1).)
On an annual basis, a school unit may establish a micro-purchase threshold higher than the federal micro-purchase threshold, up to $50,000. The school unit must maintain documentation, which must be made available to the federal awarding agency and auditors in accordance with 2 CFR § 200.334. The self-certification must include a justification, clear identification of the threshold, and supporting documentation of any of the following: (i) a qualification as a low-risk auditee, in accordance with the criteria in 2 CFR § 200.520 for the most recent audit; (ii) an annual internal institutional risk assessment to identify, mitigate, and manage financial risks; or (iii) for public institutions, a higher threshold consistent with state law. (2 CFR § 320(a)(1)(iv).
2 For procurements utilizing federal funds obtained prior to November 12, 2020, the micro-purchase threshold is $3,500. The threshold is subject to adjustment every five years in the Federal Acquisition Regulations.
b. Small Purchases ($250,000 or less as of November 12, 2020). Small purchases up to the federal simplified acquisition threshold ($250,000 as of November 12, 2020)3
c. Sealed Bids (over $250,000 as of November 12, 2020). For purchases in excess of the federal simplified acquisition threshold ($250,000 as of November 12, 2020) sealed bidding is used if (i) a complete, adequate, and realistic specification or purchase description is available; (ii) two or more responsible bidders are willing and able to complete effectively for the business; and (iii) the procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price. This is the preferred method for procuring construction. If sealed bids are used, the following requirements apply:
• Bids must be solicited from an adequate number of qualified sources, providing them sufficient response time prior to the date set for opening the bids;
• The invitation for bids must be publicly advertised;
• The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond;
• All bids will be opened at the time and place prescribed in the invitation for bids and the bids must be opened publicly;
• A firm fixed price (lump sum or unit price) contract award will be made in writing to the lowest responsive and responsible bidder whose bid conforms to all material terms and conditions of the invitation to bid. Where specified in bidding documents, factors such as discounts, transportation costs, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and
• Any or all bids may be rejected if there is a sound documented reason. (2 CFR §§ 200.88, 200.320(b)(1).)
d. Requests for Proposals (over $250,000 as of November 12, 2020). For purchases in excess of the simplified acquisition threshold ($250,000 as of November 12, 2020), this procurement method is used when conditions are not appropriate for the use of sealed bids. Typically, a request for proposals (“RFP”) seeks proposals that are evaluated qualitatively such that price is not the primary evaluation criterion. Contracts may be awarded on either a fixed price or cost-reimbursement basis. If this procurement method is used, the following requirements apply:
• RFPs must be publicized and identify all evaluation factors and their relative importance. Any response to an RFP must be considered to the maximum extent practical;
• The RFP must identify the method to be used by the school unit for conducting technical evaluations of the proposals received and making selections;
• Proposals must be solicited from an adequate number of qualified offerors; and
• The Purchasing Agent must award a contract to the responsible offeror whose proposal is most advantageous to the school unit, with price and other factors considered; however, any and all proposals may be rejected if there is a sound documented reason.
3 For procurements utilizing federal funds obtained prior to November 12, 2020, the simplified acquisition threshold is $150,000. The threshold is subject to adjustment every five years in the Federal Acquisition Regulations (“FAR”). The school unit is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk, and its documented procurement procedures; however, in no circumstances can this threshold exceed the dollar value established in the FAR (48 CFR part 2, subpart 2.1) for the simplified acquisition threshold. The school unit should determine if local government laws on purchasing apply. (2 CFR § 200.1 – see definition of “simplified acquisition threshold.”) maybe made using simple, informal procurement methods and without requiring sealed bids. For any such purchases, the Purchasing Agent must obtain price or rate quotes from an adequate number of qualified vendors or firms (preferably, from at least three qualified vendors or firms). The Purchasing Agent shall document any price or rate quotes received, whether written or oral. (2 CFR §§ 200.88, 200.320(a(2).)
The Purchasing Agent may use competitive proposal procedures for qualifications based procurement of architectural/engineering (A/E) professional services whereby competitors’ qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, may only be used in procurement of A/E professional services. It cannot be used to purchase other types of services even if A/E firms are a potential source to perform the proposed effort. (2 CFR § 200.320(b)(2).)
e. Non-Competitive Proposals (Sole Source); Emergencies. Procurements may be made through a non-competitive process (i.e., through the solicitation of a proposal from only one source) only when one or more of the following circumstances apply:
• The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see Section C.1.a, above);
• The item is available only from a single source;
• A public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation;
• The federal awarding agency or pass-through entity expressly authorizes non-competitive proposals in response to a written request from the school unit; or
• After solicitation of a number of sources, competition is determined inadequate. The Purchasing Agent must document the basis for the sole source procurement by documenting the basis for any exigency or emergency, obtaining express authorization from the federal awarding agency or pass-through entity, or demonstrating a good faith effort on the part of the school unit to solicit proposals from a number of sources. (2 CFR §§ 200.320(c), 200.324(b)(2).)
2. Purchases over $25,000. For purchases exceeding $25,000, prior to contracting with a vendor, the Purchasing Agent shall use the System for Award Management (SAM) to search for the vendor by name, tax identification number, or another characteristic to make sure that the vendor has not been suspended or debarred from performing federally funded work. (2 CFR §§ 200.206(d), 180.220.)
3. Purchases over the Simplified Acquisition Threshold ($250,000 as of November 12, 2020). The following additional procedures apply to purchases exceeding the simplified acquisition threshold:
a. Cost/Price Analysis.
(i) The Purchasing Agent must perform a cost or price analysis in connection with every procurement in excess of the simplified acquisition threshold, including contract modifications. The method and degree of analysis depends on the facts surrou
