Uniform Guidance Procurement Requirements for NC Local Governments UNC School of Government Webinar Presentation April 24, 2018
Welcome! Norma Houston Lecturer in Public Law and Government UNC School of Government Sharon Edmundson, MPA, CPA Director, Fiscal Management Section State and Local Government Finance Division NC Department of State Treasurer James L. Burke, CPA, CMA Assistant Director, Fiscal Management Section State and Local Government Finance Division NC Department of State Treasurer
OVERVIEW
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
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”
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!
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
Why Is This Important? • DHS (FEMA) OIG audits Common Procurement Violations with FEMA PA: • 2009-2014: Disallowed $387m 1. Noncompetitive • 2015: contracting Disallowed $122m 2. Contract provisions • Noncompliance with federal procurement 3. M/WBE requirements requirements most 4. Cost-Plus contracts common reason for FEMA PA deobligation 5. Lack of documentation
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”)
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!!!
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
Additional Resources • Detailed comparison chart available on SOG website • Requirements summarized in Treasurer’s Memorandum #2018-06 www.ncpurchasing.unc.edu
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)
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
Procurement Methods – State Law Formal Bidding Formal Qualifications-Based $500,000 Bidding Cost of Contract Selection No Informal Method $90,000 Bidding Required Informal 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
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.
“Most Restrictive Rule” Purchase and Service Contracts Procedures: • Quotes from “adequate Contract Cost: number” of bidders $10,000- • M/WBE solicitation $90,000 • Award on fixed-price or not- to-exceed basis • Contract in writing with UG UG Small provisions Purchase Procedure • Award to LRRB • Document procedures
“Most Restrictive Rule” Purchase and Service Contracts Procedures: • Specs available to bidders • Formal advertising Contract Cost: • Sealed bids $90,000 and above • Public bid opening • Award to LRRB • Price analysis before bidding • M/WBE solicitation State formal • 2-bid minimum bidding and • Award on fixed-price basis UG Sealed Bid • Contract in writing with UG provisions • Document procedures
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
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