§ 200.320 - Procurement methods.

§ 200.320 Methods of procurement to be followed.

The non-Federal entity must have

Procurement methods.

There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award.

(a) Informal procurement methods . When the for small purchases. These procurement methods expedite the completion of transactions, minimize administrative burdens, and reduce costs. Informal procurement methods may be used when the value of the procurement for property or services under a transaction under the Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or . Recipients and subrecipients may also establish a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT . Informal procurement methods include:

(1) Micro-purchases —

(i) Distribution. The acquisition of supplies or services, the aggregate dollar amount of which the procurement transaction does not exceed the micro-purchase threshold (See the definition of micro-purchase defined in § 200.1). To the maximum extent practicable, the non-Federal entity recipient or subrecipient should distribute micro-purchases equitably among qualified suppliers.

(ii) Micro-purchase awards. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity recipient or subrecipient considers the price to be reasonable based on research, experience, purchase history, or other information; and documents it files accordinglymaintains documents to support its conclusion. Purchase cards can may be used as a method of payment for micro-purchases if procedures are documented and approved by the non-Federal entity.

(iii) Micro-purchase thresholds. The non-Federal entity recipient or subrecipient is responsible for determining and documenting an appropriate micro-purchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures. The micro-purchase threshold used by the non-Federal entity recipient or subrecipient must be authorized or not prohibited under State, local, or tribal laws or regulations. Non-Federal entities The recipient or subrecipient may establish a threshold higher than the Federal threshold established in the Federal Acquisition Regulations (FAR) in accordance with paragraphs (a)(1)(iv) and (v) of this section.

(iv) Non-Federal entity Recipient or subrecipient increase to the micro-purchase threshold up to $50,000. Non-Federal entities The recipient or subrecipient may establish a threshold higher than the micro-purchase threshold identified in the FAR in accordance with the requirements of this section. The non-Federal entity recipient or subrecipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the Federal awarding agency or pass-through entity and auditors in accordance with § 200.334. The self-certification must include a justification, clear identification of the threshold, and supporting documentation of any of the following:

(A) A qualification as a low-risk auditee, in accordance with the criteria in § 200.520 for the most recent audit;

(B) An annual internal institutional risk assessment to identify, mitigate, and manage financial risks; or,

(C) For public institutions, a higher threshold is consistent with State law.

(v) Non-Federal entity Recipient or subrecipient increase to the micro-purchase threshold over $50,000. Micro-purchase thresholds higher than $50,000 must be approved by the cognizant agency for indirect costs. The non-federal entity recipient or subrecipient must submit a request with that includes the requirements included in paragraph (a)(1)(iv) of this section. The increased threshold is valid until there is a change in status in which the justification was approvedany factor that was relied on in the establishment and rationale of the threshold changes.

(2) Small purchases Simplified acquisitions —

(i) Small purchase Simplified acquisition procedures. The acquisition of property or services, the aggregate dollar amount of which the procurement transaction is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate . Unless specified by the non-Federal entityFederal agency, the recipient or subrecipient may exercise judgment in determining what number is adequate.

(ii) Simplified acquisition thresholds. The non-Federal entity recipient or subrecipient is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk, and its documented procurement procedures, which may be lower than, but must not exceed, the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations.

(b) Formal procurement methods. When Formal procurement methods are required when the value of the procurement for property or services transaction under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are requiredsimplified acquisition threshold of the recipient or subrecipient. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. are competitive and require public notice. The following formal methods of procurement are used for procurement of property or services transactions above the simplified acquisition threshold determined by the recipient or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriatesubrecipient in accordance with paragraph (a)(2)(ii) of this section:

(1) Sealed bids. A This is a procurement method in which bids are publicly solicited through an invitation and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid , conforming conforms with all the material terms and conditions of the invitation for bids, and is the lowest in price. The sealed bids procurement method is the preferred method for procuring construction , if the conditionsservices.

(i) In order for For sealed bidding to be feasible, the following conditions should be present:

(A) A complete, adequate, and realistic specification or purchase description is available;

(B) Two or more responsible bidders are have been identified as willing and able to compete effectively for the business; and

(C) The procurement lends itself to a firm-fixed-price contract, and the selection of the successful bidder can be made principally based on the basis of price.

(ii) If sealed bids are used, the following requirements apply:

(A) Bids must be solicited from an adequate number of qualified sources, providing them with sufficient response time prior to the date set for opening the bids, for local, and tribal . Unless specified by the Federal agency, the recipient or subrecipient may exercise judgment in determining what number is adequate. For local governments, the invitation for bids must be publicly advertised;.

(B) The invitation for bids , which will include any specifications and pertinent attachments, must define the items or services in order with specific information, including any required specifications, for the bidder to properly respond;

(C) All bids will be opened at the time and place prescribed in the invitation for bids, and for local and tribal . For local governments, the bids must be opened publicly;.

(D) A firm-fixed-price contract award will be made is awarded in writing to the lowest responsive bid and responsible bidder. Where When specified in bidding documentsthe invitation for bids, factors such as discounts, transportation cost, and life-cycle costs must be considered in determining which bid is the lowest. Payment discounts will must only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; andthe recipient or subrecipient determines they are a valid factor based on prior experience.

(E) Any or all bids may be rejected if there is a sound documented reason The recipient or subrecipient must document and provide a justification for all bids it rejects.

(2) Proposals. A This is a procurement method in which used when conditions are not appropriate for using sealed bids. This procurement method may result in either a fixed-price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. They are awarded in accordance with the following requirements:

(i) Requests for proposals must be publicized and identify require public notice, and all evaluation factors and their relative importance must be identified. Proposals must be solicited from an adequate number of qualified offerors. Any response to publicized requests for proposals must be considered to the maximum extent practical;

(ii) The non-Federal entity must have a written method for conducting technical evaluations of the proposals received and making selections;

multiple qualified entities. To the maximum extent practicable, any proposals submitted in response to the public notice must be considered.

(ii) The recipient or subrecipient must have written procedures for conducting technical evaluations and making selections.

(iii) Contracts must be awarded to the responsible offeror whose proposal is most advantageous to the non-Federal entity, with recipient or subrecipient considering price and other factors considered; and

(iv) The non-Federal entity recipient or subrecipient may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby the offeror's qualifications are evaluated, and the most qualified offeror is selected, subject to negotiation of fair and reasonable compensation. The method, where the price is not used as a selection factor, can only be used in procurement of to procure architectural/engineering (A/E) professional services. It cannot The method may not be used to purchase other types of services though provided by A/E firms that are a potential source to perform the proposed effort.

(c) Noncompetitive procurement. There are specific circumstances in which the recipient or subrecipient may use a noncompetitive procurement can be used. Noncompetitive procurement can method. The noncompetitive procurement method may only be awarded used if one or more of the following circumstances applyapplies:

(1) The acquisition of property or services, the aggregate dollar amount of which the procurement transaction does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section);

(2) The item is available only from procurement transaction can only be fulfilled by a single source;

(3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing providing public notice of a competitive solicitation;

(4) The Federal awarding recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entityprovides written approval; or

(5) After solicitation of a number of soliciting several sources, competition is determined inadequate.