19/08/2024 | News release | Distributed by Public on 19/08/2024 17:14
When your entity receives federal funds, any purchases you make with federal funds, whether goods or services, must adhere to the Uniform Guidance rules outlined in the Code of Federal Regulations (CFR), specifically 2 CFR Part 200. These rules are designed to ensure procurement processes are conducted in a fair, transparent and economical manner.
Below are the key principles and procedures you must follow to remain in compliance:
Your procurement policies and procedures must be documented as they relate to the purchase of property or services using federal money. In addition, you must maintain detailed records of all procurement decisions and transactions to demonstrate compliance with the Uniform Guidance. This includes the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.
All procurement transactions must be conducted in a manner that promotes full and open competition. This means avoiding unnecessary restrictions on competition, such as noncompetitive pricing practices or unjustified, brand-specific requirements.
Implement measures to prevent conflicts of interest specifically in the procurement process. This includes avoiding any potential personal (officers or employees of the entity) or organizational (parent, subsidiary or affiliate of the entity) financial or other benefits from procurement actions. You may document situations where the financial interest is determined to be inconsequential. However, you must outline the disciplinary actions to be applied for any violations.
The Uniform Guidance specifies several methods of procurement, depending on if the entity can use informal or formal methods. Informal methods can be used to expedite the purchase of items generally under the simplified acquisition threshold, at or below $250,000. Otherwise, you must use formal methods. Informal methods include procedures for micro-purchases (generally under $50,000), and are limited to research, experience and purchase history, as well as procedures for small purchases, where quotes are obtained from a reasonable number of sources. In contrast, formal methods include sealed bids, competitive proposals and non-competitive proposals.
Regardless of the method, your entity must follow specific conditions and requirements as outlined in the Uniform Guidance. There are also steps to take to ensure you are prioritizing contracting with small and minority businesses, women's business enterprises and labor surplus area firms, in addition to domestic preferences for procurement.
Perform a cost or price analysis in connection with every procurement action, including contract modifications. The extent of the analysis depends on the circumstances surrounding the procurement but is necessary to ensure reasonable and allowable costs.
Ensure contracts are awarded only to responsible contractors who have the ability to perform successfully under the terms and conditions of the proposed procurement.
Monitor contractors to ensure they perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.
Complying with these rules not only helps ensure the lawful and efficient use of federal funds, but also supports the integrity and accountability of the procurement process.
Contact Marie Brilmyer or a member of your service team to discuss this topic further.
Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law with your professional advisers.