By Lena Parks 

As a result of an update to the Office of Management and Budget (OMB) Uniform Grant Guidance, your not-for-profit is responsible for having formal documentation of your procurement standards, which reflect applicable federal, state, and local laws by the first day of your fiscal year beginning in 2018.

Updated OMB Uniform Grant Guidance Standards
The procurement standards apply to goods and services charged to federal awards. An overview of the procurement methods are as follows:

1. Procurement by micro-purchases – Procurement by micro-purchase is the acquisition of supplies or services, where the aggregate dollar amount does not exceed $3,000 (or $2,000 in the case of acquisitions for construction subject to the Davis-Bacon Act). Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable.

2. Procurement by small purchase procedures – Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold (currently $150,000). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. The standards do not define how many quotations constitute an “adequate number”; this will be a matter of judgment.

3. For purchases exceeding the Simplified Acquisition Threshold, one of the following methods must be used:

a.) Procurement by sealed bids – The sealed bid method is the preferred method for procuring construction contracts. Bids are publicly solicited and a firm-fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming to all the material terms and conditions of the invitation for bids, is the lowest in price.

b.) Procurement by competitive proposals – The competitive proposal method is generally used when conditions are not appropriate for the use of sealed bids. The technique of competitive proposals is normally conducted with more than one source submitting an offer, and either a fixed-price or cost-reimbursement type contract is awarded. It is generally used when conditions are not appropriate for the use of sealed bids. A new requirement under this method is that the non-Federal entity must have a written method for conducting technical evaluations of the proposals received and for selecting recipients.

c.) Procurement by noncompetitive proposals – Procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source. The grants reform clarified this may be used only when one or more of the following circumstances apply:

  1. The item is available only from a single source.
  2. The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation.
  3. The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the non-Federal entity.
  4. After solicitation of a number of sources, competition is determined inadequate.

Complying with New Standards
Complying with these new standards may seem overwhelming but not impossible. It’s critical for non-profit organizations to begin this process as soon as possible so they have time to strategically execute changes they may need to implement. Contact a Barnes Wendling non-profit advisor if you have any questions about your particular situation or how to navigate these new standards.