Procurement Under Grants Federal Requirements for Recipients and Subrecipients of Public Assistance Funding COVID-19 Support FEMA Procurement Disaster Assistance Team (PDAT)
2 Game Plan You will: Hot Topics We’ll Discuss: • Sole-sourcing under • Gain general knowledge of the E&E procurement rules • Additional requirements • Increase your awareness of risk under E&E areas • Use of pre-existing • Learn about available tools & contracts during E&E resources
3 Kickoff: Uniform Rules 317 Procurements by States 318 General Procurement Standards $ Reasonable 319 Competition Cost 320 Procurement Methods Objectives 321 Socioeconomic Contracting 322 Recovered Materials 323 Contract Cost or Price Other Policy 2 C.F.R. §§ 200.317 – 326 Goals 324 Review of Procurements 325 Bonding Requirements 326 Contract Provisions 3/30/2020
4 Rules that Apply to States Replay Are You a State Applicable Rules State must : Entity? Any State of the United States • Follow State procurement 317 Procurements by States policies and District of Columbia • procedures 318 General Procurement Standards US Territories: • 319 Competition Commonwealth of Puerto Rico • 320 Procurement Methods U.S. Virgin Islands • Guam 321 • Socio-Economic Contracting American Samoa • 322 Recovered Materials Recovered Materials • Commonwealth of the Northern Mariana 323 Contract Cost or Price Islands 324 Review of Procurements Contract Provisions State Agency • 325 Bonding Requirements State Instrumentality • 326 Contract Provisions
5 Rules that Apply to Non-State Entities Applicable Rules Are You a Non-State Entity? Must follow own Local Governments • procurement policies Procurements by States 317 and procedures Tribal Governments • 318 General Procurement Standards 319 Competition Institutions of Higher Education • 320 Procurement Methods Hospitals • 321 Must follow state Socioeconomic Contracting or Tribal Law Houses of Worship 322 • Recovered Materials 323 Contract Cost or Price Other Private Non-Profit • 324 Review of Procurements Organizations Must follow federal 325 Bonding Requirements procurement standards (318-326) 326 Contract Provisions
6 Full & Open Competition: Fair Playing Field • Key principle of procurement rules • All qualified and responsible sources are eligible to compete without restrictions • Cast the net broadly to reach fair $ and reasonable pricing from the most qualified contractor • Prevents favoritism, fraud, waste, and abuse 319 Competition
7 Methods of Procurement Sole Micro- Small Sealed Competitive Sourcing Purchase Purchase Bidding Proposals Usually Over No Up to Usually Over Up to $250K Threshold $10K $250K $250K Independent Estimates are required before receiving bids or proposals Price/Cost Analysis is required for procurements over $250K 320 Procurement Methods
Sole-Source Procurement Under E&E 8 Replay Situations that demand If using sole sourcing immediate aid or action due to emergency or exigency, you must : Emergency Exigency Justify with documentation Need to alleviate a threat to Need to avoid, prevent or Use only during the period of actual life, public health or safety, or alleviate serious harm or exigent or emergency circumstances improved property injury, financial or otherwise $ Transition to a competitive method as soon as period ends
Sole-Sourcing Under E&E for COVID-19 9 FEMA Issues For the duration of • E&E Memo the current federal Nationwide Public Health Public Health Emergency Emergency, the Emergency Declaration ongoing COVID-19 The exception is applicable to contracts entered into or used Begins (HHS) for COVID-19 pandemic qualifies on or after January 27, 2020 as an E&E circumstance Non-st at e entities • may sole-source under that exception St at e entities have to Jan. 27, • March 13 March 17 2020 follow their own state procurement rules
10 Procurement Under E&E for COVID-19 FEMA Fact Sheet If sole-sourcing under the E&E exception, non-state entities MUST: Use only during the period of actual Public Health • Emergency (HHS) Document and provide justification for the use of • the exception (list of suggested elements for justification provided) Conduct a cost or price analysis if applicable • Follow bonding requirements if applicable • March 16, 2020
11 Procurement Under E&E for COVID-19 FEMA Fact Sheet If sole-sourcing under the E&E exception, non-state entities MUST: Include required contract clauses • Follow T&M contract requirements if applicable • NOT enter into CPPC contracts. They are • prohibited! Award contract to a responsible contractor • Follow documentation, oversight, conflict of • interest requirements March 16, 2020
12 Cost or Price Analysis 1 2 3 Cost or price analysis is Price Analysis: Profit must be required if your • Simpler negotiated procurement is over • Examination of proposed price • As a separate $250K as a whole element of price for contracts with no price competition Cost Analysis: Goal: • More complex • Always when doing Determine if the price is • Evaluation of cost analysis separate fair & reasonable cost elements 323 Contract Cost or Price
13 Bonding Requirements Applicability There Must Be: • A bid guarantee from each bidder • Construction or facility equivalent to 5% of the bid price improvement contracts or subcontracts above $250K • A performance bond on the part of the contractor for 100% of the contract price • Must not unduly restrict competition • A payment bond on the part of the contractor for 100% of the contract price 325 Bonding Requirements
14 Contract Language: Provisions Applicable to PA Required: Recommended: Legal/contractual/administrative Contract Changes • • remedies for breach of contract Access to Records • Very Frequent Termination for cause or • DHS Seal, Logo, and Flags • convenience Compliance with Federal Law, • Equal Employment Opportunity • Regulations and Executive Contract Work Hours and Safety Orders • Standards Act No Obligation by Federal • Clean Air Act and Federal Water Government • Pollution Control Act Program Fraud and False or • Debarment and Suspension Fraudulent Statements or • Online Provisions Template Is Related Acts Byrd Anti-Lobbying Amendment • Available at: www.fema.gov/procurement- Procurement of Recovered • disaster-assistance-team Materials 326 contract Provisions
15 Warning: You Cannot Limit Access to Records! • Applies to contracts entered into after August 1, 2017 • FEMA cannot reimburse applicants for contract expenses where the contract prohibits the FEMA Administrator or U.S. Comptroller General from auditing or reviewing all aspects related to the contract. • DO NOT include such a provision in contracts
16 Rules by Contract Type: Time & Materials $ T&M Contract Cost: Applicability: Limitations: • When not possible to A ceiling price , that the • Actual cost of initially estimate extent or contractor exceeds at own materials risk, must be established duration of work Must maintain high degree • • Use only after of oversight to avoid determining that no unneeded cost over-runs Direct labor hours other contract is Use only until the scope • charged at fixed suitable hourly rates of work becomes clear 318 General Proc. Standards
Cost Plus a Percentage of Cost Contracts 17 Are Prohibited! How to Spot a CPPC Contract: Why Using CPPC Payment is at a predetermined rate • Contracts Is Prohibited: This rate is applied to actual • performance costs There is no incentive to • control costs Contractor's entitlement is • uncertain at the time of contracting The contractor has a • Rate increases with increased • financial interest in increasing the cost of performance costs performance Very Frequent 323 Contract Cost or Price
18 Must Award Only to Responsible Contractors Able to perform successfully under the procurement’s terms and conditions Must not have been Evidence of integrity debarred or suspended Has been compliant with public policy Must not be listed on Has a good record of exclusions at past performance www.sam.gov Has adequate financial and technical resources 318 General Proc. Standards
19 Other Basic Rules of Engagement Encouraged Standards Mandatory Standards 1. Contractor Oversight 1. Use of Federal Excess and Surplus Property 2. Necessity 2. Value Engineering Contracts 3. Code of Conduct 3. Intergovernmental Agreements 4. Conflict of Interest 5. Gifts 6. Responsible Contractors Only 7. Records 8. Settlement of Issues 318 General Proc. Standards
20 Records: Document, Document, Document! Rationale for the Method Sole Sourcing under E&E of Procurement Selection of Contract Time & Materials Contract Type Justification Must maintain Search at www.SAM.gov records sufficient to Selection of Contractor detail the history of Independent Estimate; Cost or Price Analysis; Quotations the procurement Basis for Contract Price Very Frequent 318 General Proc. Standards
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