Uniform Guidance Procurement Requirements for NC Local Governments Norma Houston NC State Treasurer’s Conference June 26, 2018 OVERVIEW 1
What is the Uniform Guidance? • Rules that set uniform standards for the award and expenditure of federal financial assistance (grants and loans) • UG supersedes previous rules/OMB Circulars (ex: A- 102, A-133) • UG codified at 2 C.F.R. Part 200 • Procurement standards codified at 2 C.F.R. Subpart D ( §§ 200.317-326) What is the Uniform Guidance? Administrative Requirements Cost Principles • Pre-award (Subpart C) (Subpart E) • Post-Award (Subpart D) Definitions (Subpart A) Audit Requirements (Subpart F) General Provisions Uniform (Subpart B) Guidance 2 C.F.R. Part 200 2
What is the Uniform Guidance? Post-Award Requirements (Subpart D) 1. Financial and Program Management Standards 2. Property Standards 3. Procurement Standards 4. Performance and Financial Monitoring and Reporting 5. Record Retention and Access 6. Remedies for Noncompliance 7. Closeout 8. Post-closeout adjustment and continuing responsibilities 9. Collection of Amounts Due Who Does the UG Apply To? “ Non-federal entities ” that receive federal financial assistance – states, nonprofits, Indian Tribes, universities and colleges, and local governments City and County School District Public Authority and Special District Council of Government Any other “political subdivision” 3
Who Does the UG Apply To? Recipients and all subrecipients are covered Federal agency State Agency State allocates funds to UG applies agency Local Government Local Government Local UG applies Government expends the funds Local Government allocates funds to UG applies Nonprofit subrecipient Which Programs are Covered? • UG applies to most (but not all) categories of federal financial assistance programs • Not all federal programs are covered • Not all parts of the UG apply to all categories of covered funds ASSUME THE UG APPLIES UNLESS THE GRANTOR AGENCY ADVISES OTHERWISE - CHECK WITH YOUR GRANTOR AGENCY! 4
When Does the UG Become Effective? Grace period for implementing new requirements ends on your first FYE after 12/25/2017 Example: If your fiscal year ends 6/30/2018, UG requirements apply 7/1/2018 Why Is This Important? Noncompliance with state and federal requirements has serious consequences 5
TOP 10 GENERAL UG PROCUREMENT STANDARDS General UG Procurement Standards 1. Oversight 2. Necessity Maintain oversight to ensure Avoid unnecessary/duplicative contractors perform according supplies and services; limit to terms, conditions, and acquisitions to what is specifications of contract necessary to perform the scope of work (no “stockpiling”) 6
General UG Procurement Standards 3. Standards of Conduct 4. Conflicts of Interest • Written policy governing • Cannot be involved in conflicts of interest and contracting process if you performance of employees have a real or apparent engaged in contracting conflict of interest • Must disclose conflicts in • Must address conflicts of writing to federal grantor interest and gifts agency • Must include disciplinary action for violations 5. Gifts • Cannot solicit or accept gifts or favors from contractors or subcontractors General UG Procurement Standards 6. Award to Responsible 7. Records Contractors Maintain records detailing the • Award contracts only to procurement process, including documentation of: responsible contractors; • Rationale for method of adhere to the lowest responsive, responsible procurement used bidder standard of award • Contract type • Contractor selection process • Cannot award to federally • Basis for contract price debarred bidder DOCUMENT EVERYTHING!!! Put the contract in writing!!! 7
General UG Procurement Standards 8. Time and Materials & 9. Settlement of Issues Cost-Plus Contracts The local government, not the federal government, is solely Generally not allowed. responsible for settling all contract disputes and claims. Federal government will not become involved in or defend contract claims. General UG Procurement Standards 10. Full and Open Competition • Procurement process must be • Geographic preferences “full and open competition” prohibited consistent with state and • “Brand - name” specifications federal bidding requirements without equal alternatives • Designers/contractors who prohibited help develop specs cannot bid • Pre-positioned competitively on the contract bid contracts are permitted 8
TOP 10 DIFFERENCES BETWEEN UG PROCUREMENT REQUIREMENTS AND STATE LAW Which Rules Do You Follow? “The non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. ” - 2 CFR § 200.318(a) 9
Major UG/State Differences 1. Bid Thresholds 6. Bidding Exceptions 2. Bidding Requirements 7. Written Policies & Documentation 3. Service Contracts 8. Contract Provisions 4. Minority Solicitation 9. Conflicts of Interest Requirements 5. Time & Materials / 10. Procurement by non- Cost-Plus Contracts profits 1. BID THRESHOLDS 2. BIDDING REQUIREMENTS 3. SERVICE CONTRACTS 10
Procurement Methods – State Law Formal Bidding Formal Qualifications-Based $500,000 Bidding Cost of Contract Selection No Informal Method $90,000 Bidding Informal Required Bidding $30,000 No Method No Method $0 Everything Else * Purchase Construction Mini-Brooks Act Type of Contract * Optional: May use request for proposals for service contracts or information technology purchases or services. Procurement Methods – UG Sealed Competitive Competitive Sealed Proposals Proposals Bid Bid* (RFP) (RFP) Competitive Proposals: Cost of contract Simplified Qualifications- Acquisition Based Selection Threshold (Currently $250,000 ) Small Micro- Small Purchase Small Purchase Purchase Purchase Threshold (Currently $10,000 ) Micro Purchase Micro Purchase Micro Purchase $0 Purchase Architectural/ Construction* Service Engineering Type of contract Services NEW UG THRESHOLDS! * Sealed bid is p referred method for construction; may use competitive proposals when sealed bidding not appropriate 11
Which Set of Rules Do I Follow? • Follow the “Most Restrictive Rule” • If rules are different but neither is more restrictive than the other, follow federal rules • Even when generally following federal rules, some specific state requirements may still apply . . . . . . . and vice versa Purchase AND Service Contracts Competitive Sealed Proposals Bid (RFP) Formal Formal Bidding Bidding Cost of Contract + Sealed Bid $250,000 $90,000 Informal Small Purchase Small Purchase Bidding $30,000 No Method $10,000 Micro Purchase Micro Purchase $0 State UG Most Restrictive NEW UG Even when generally following federal rules, some specific state THRESHOLDS! requirements may still apply and vice versa. 12
Construction and Repair Contracts Formal Sealed Competitive Formal Bidding Proposals Bid* Bidding + Sealed Bid (RFP) $500,000 Cost of Contract Sealed Bid Informal $250,000 Bidding Small Small Purchase $30,000 Purchase No Method $10,000 Micro Purchase Micro Purchase $0 Most Restrictive State UG Even when generally following federal rules, some specific state NEW UG requirements may still apply and vice versa. THRESHOLDS! *Some grantor agencies may require sealed bid for all construction Competitive Proposal Method Available for contracts costing $250,000 and above when conditions not appropriate for sealed bid method Examples: • Service contracts • Innovative IT goods and services • Alternative construction delivery methods (CMR, DB) Don’t use for purchase and construction contracts in formal bidding range (state bidding requirements more restrictive) 13
4. MINORITY SOLICITATION REQUIREMENTS HUB Participation • Is a goal , not a quota • Focuses on opportunity to compete for contracts • Lowest responsive, responsible bidder standard still applies • Non-discrimination in contract award still applies 14
HUB - Follow UG AND State Law UG (M/WBE) State (HUB) Applies to All Contracts Local government engages in regardless of type above outreach efforts for all micro-purchase building construction threshold ($3,500) contracts costing $30,000 and above Requires 6 specific Require bidders to engage in solicitation steps (UG steps similar to state good faith efforts for all HUB good faith efforts) building construction contracts costing $300,000 and above UG M/WBE Requirements 1. Put M/WBEs on bidders 4. Where feasible, establish list delivery schedules to accommodate M/WBEs 2. Include M/WBEs in bid 5. Use services of SBA, US solicitations Dept. of Commerce 3. Where feasible, divide Minority Development project into smaller Agency, and other similar contracts to encourage agencies (NC HUB Office) M/WBEs participation 6. Require prime contractors to comply with steps 1-5 above 15
5. TIME & MATERIALS / COST-PLUS CONTRACTS This One’s Easy . . . • Contracts must be for a fixed-price (lump sum, not-to- exceed, etc.) • Cost-plus contracts are not allowed • Time & Materials may be allowed in exigent circumstances within limited time frame and contract includes not-to- exceed limit 16
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