Federal funds are often used by grantees to purchase equipment as a part of their funded program or project. Read about the new changes to funding rules
Federal funds are often used by grantees to purchase equipment as a part of their funded program or project. These purchases have always been governed by the Office of Management and Budget; the rules, however, by which items are procured using federal funding, have been modified in the new Uniform Grant Guidance. The revised Uniform Grant Guidance and DATA Act took effect for new grant awards appropriated after Dec. 26, 2014. (Is Uniform Grant Guidance and the DATA Act new to you? You can read more here: https://cfo.gov/cofar/)
How will the new Uniform Grant Guidance impact your work as you seek federal grant funds to support your future supply, equipment or contract purchases?
The first key item to understand is the shift in definition of “small purchases.” This includes purchases between $3,000 and $150,000. These purchases are defined as “simple and informal” by 2 CFR 200.320 (b). This means that these purchases do not require a cost and price analysis and require a lower threshold of competition for procurement.
The second key item to understand, if you are considering purchasing equipment with the support of federal funds, is that there are five allowable procurement methods outlined in the new Uniform Grant Guidance (section 200.320):
1 – Procurement by micro-purchases
2 – Procurement by small purchase procedures
3 – Procurement by sealed bids
4 – Procurement by competitive proposals
5 – Procurement by noncompetitive proposals
To further clarify, the situations under which the federal government will allow procurement by noncompetitive proposal, one or more of the following circumstances must apply:
The third key item to understand is whether or not potential vendors are able to play a role in drafting specifications for Requests for Proposals (RFPs). For non-federal entities, under the requirements in 2 CFR Part 200, the procurement method outlined is that a vendor who is a contractor involved in the development or drafting of specification requirements for an RFP has an organizational conflict of interest and would exclude such vendor from competing for the resulting procurements. In practice this requirement can feel limiting to potential grantees as they gather quotes and put together budgets for an application. However, each federal agency/department then has the right to establish contract competition flexibilities for certain procurements. For example, the Department of Education allows for a simple small purchase to select a “contractor that would provide data collection, data analysis, or evaluation services, or another essential service needed to meet a statutory, regulatory, or priority requirement related to the competition and contractor is identified in the application.” If you have questions about the role of potential vendors in supplying the detail you use to create your application draft budget, you should reach out the agency staff with the specific agency or department where you are planning to apply for federal funds.
Still looking for clarification about how the changes to the Uniform Grant Guidance impact your pre-application or post-award procurement policies and procedures? Then read further by following this link to the COFAR website’s frequently asked questions about the uniform grant guidance: https://cfo.gov/wp-content/uploads/2014/11/2014-11-26-Frequently-Asked-Questions.pdf Or, ask your GovGrantsHelp.com team for further clarification as well!
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