New Uniform Guidance Procurement Standards to Go Into EffectJune 11, 2018
After a three year delay, the new Uniform Guidance Procurement Standards go into effect for fiscal years beginning on or after December 26, 2017. Click here to view the Code of Federal Regulations (CFR) procurement standards. Relevant sections are 200.318 to 200.326. The Uniform Guidance Procurement Standards were part of the original Super Circular that went into effect in 2015, but due to the significant changes included within this section, entities were given an additional three years to comply with the requirements. Federal regulations on purchasing and procurement require a documented, detailed set of practices focused on full and open vendor competition to maximize cost effectiveness.
Specifically, organizations will have to comply with CFR Sections 200.318 to 200.326.
1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements.
2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319.
3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) and (b). Under the micro-purchase method, the aggregate dollar amount does not exceed $3,500 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). Note exceptions described in subsequent sections for the provisions under the 2017 and 2018 National Defense Authorization Act.
4. For acquisitions exceeding the simplified acquisition threshold, the non-Federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(c); the competitive proposals April 2018 Compliance Requirements Compliance Supplement 3.2-I-2 method under the conditions specified in 2 CFR section 200.320(d); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(f).
5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(d)).
6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.”
As a result of these changes, organizations will need to review their current systems, processes and documentation procedures surrounding procurement in order to avoid future non-compliance and potential audit findings. If your organization has delayed implementation of these standards, you will need to ensure that internal documents reflect this decision. An entity with a fiscal year ending on December 31 will be required to implement the Uniform Guidance procurement standards beginning on January 1, 2018 and be in compliance for their December 31, 2018 year end audit. An entity with a fiscal year ending on June 30 will be required to implement the Uniform Guidance procurement standards on July 1, 2018 and be in compliance for their June 30, 2019 year end audit.
Click here for additional guidance from the 2018 Federal Compliance Supplement >>