Purchasing Policies Manual

VII. FEDERAL PROCUREMENT


Policy Title: Procurement Requirements When Spending Federal Money
Policy Number: 7.1
Effective: July 1, 2018
Latest Revision: N/A

This policy provides users with an overview of the procurement process requirements when spending Federal money per Code of Federal Regulations §§200.317 through 200.326.

Conflict of Interest

No employee, officer, or agent of the university may participate in the selection, award, or administration of a contract supported by a Federal award if that employee, officer, or agent has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of the immediate family, a partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract.  An employee, officer, or agent has an apparent conflict of interest if the circumstances are such that a reasonable person would conclude that the employee, officer, or agent has a conflict of interest.  Also, the officers, employees, and agents of the university may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts.  Substantial civil and criminal penalties may result to the UA employee from failure to comply with the conflict of interest laws.

Unnecessary or Duplicative Items

Individuals should consider whether goods and/or services to be purchased are already available at the university, from other ABOR Universities, from state surplus property, or from a Federal source, including the Federal Surplus Personal Property Donation Program, GSAXcess®.  Users can work with Purchasing to determine if the requirement should be consolidated or broken out for economy, if the needed items can be leased rather than purchased, and if the needed items can be purchased through an existing competitively bid contract.

Competition

All procurement transactions must be conducted in a manner providing full and open competition.  In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements.

Some of the situations considered to be restrictive of competition include but are not limited to:

  1. Placing unreasonable requirements on firms in order for them to qualify to do business.
  2. Requiring unnecessary experience.
  3. Noncompetitive pricing practices between firms or between affiliated companies.
  4. Noncompetitive contracts to consultants that are on retainer contracts.
  5. Organizational conflicts of interest, such as noncompetitively buying from a university affiliate.
  6. Specifying only a "brand name" product instead of allowing "an equal" product to be offered and describing the performance or other relevant requirements that would make a competing product an equal.
  7. Any arbitrary action in the procurement process.

Identification of the Requirement or Outcome

Department staff must develop a clear and accurate description of the technical requirements for the material, product, or service to be procured, or the outcome to be achieved.  Such description must not, in competitive procurements, contain features which unduly restrict competition.  The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use.  Detailed product specifications should be avoided if at all possible.  When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a "brand name or equivalent" description may be used as a means to define the performance or other salient requirements of procurement.  The specific features of the named brand which must be met by offers must be clearly stated; and all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals must be identified.

Technical Evaluation

As a part of the process to evaluate proposals received under a competitive solicitation, department staff will compare the technical and/or performance characteristics of the goods and/or services offered against the requirements of the solicitation.  The results of this technical evaluation will be documented in writing and will include the technical and/or performance reasons for recommending an award to the apparently successful proposer and for rejecting an award for each of the other proposers.  This technical evaluation will be submitted to the Buyer and will be a part of the procurement file.  As there is a wide variation of potential and/or performance specifications, no form is available for technical evaluations.

Methods of Procurement and Dollar Limits

The Federal Procurement Standards have different processes and dollar limits than non-Federal procurements. 

  1. Micro-Purchase.  The current Micro-Purchase dollar limit is $10,000.  Micro-Purchases may be made by department staff using one of the university's small dollar purchase programs without soliciting competitive quotations if the price is considered to be reasonable.  Department staff should make an effort to distribute Micro-Purchases equitably among qualified suppliers, including small and diversity businesses.
  2. Purchases between $10,000 and $100,000.  These transactions are initiated through the Kuali Financial System and require processing through Procurement & Contracting Services. Informal competitive quotations are required.
  3. Purchases between $100,000 and the Simplified Acquisition Threshold, currently $250,000. These transactions are initiated through the Kuali Financial System and require processing through Procurement & Contracting Services. Formal competitive solicitation in accordance with ABOR requirements is required.
  4. Purchases above the upper limit of the Simplified Acquisition Threshold, currently $250,000.  These transactions are initiated through the Kuali Financial System and require processing through Procurement & Contracting Services.  A formal competitive solicitation in accordance with ABOR and Federal Requirements is required. An independent cost estimate is required prior to the solicitation. In addition, these transactions require Procurement & Contracting Services to complete a cost or price analysis, and to negotiate profit as a separate element of price.
  5. Purchases through Non-Competitive Proposals (sole source transactions) in any dollar amount in excess of $250,000.  These transactions require specific justification from the department, and are subject to additional scrutiny.  Procurement & Contracting Services is also required to complete a cost or price analysis, and to negotiate profit as a separate element of price.

Acquisitions over the $10,000 micro-purchase threshold that are purchased on non-sponsored accounts may not be transferred to federal sponsored projects at a later date due to the additional Federal purchasing requirements required at the time of purchase. The transfer would only be allowable if the Federal purchasing requirements were followed at the time of acquisition. 

Contracting with Diversity Businesses

Purchasing will take all necessary affirmative steps to assure that minority businesses, women's business enterprises, and labor surplus area firms are used when possible.

Procurement of Recovered Materials

The university will give preference for items designated in guidelines of the Environmental Protection Agency at 40 CFR part 247 that contains the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition.  The Federal Procurement Standards require the purchase of products with the highest percentage of recovered materials where the purchase price exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeds $10,000.  The commodities currently covered in these guidelines are paper, vehicle supplies, some construction materials, transportation supplies, recreation supplies, landscaping supplies, non-paper office supplies, some office furniture, and products containing recovered steel, glass, wood and plastic.

Contract Provisions

Procurement contracts funded with Federal money must contain the following provisions:

  1. Contracts for more than the Simplified Acquisition Threshold, currently $250,000, must address administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms, and provide for such sanctions and penalties as appropriate.  These remedies will be specific to each contract.  They will include what happens if the contractor misses deadlines, and if the product or solution provided is inadequate.
  2. All contracts in excess of $10,000 must address termination for cause and for convenience by the non-Federal entity including the manner by which it will be effected and the basis for settlement. 
  3. All contracts in excess of $250,000 must contain a provision that requires the contractor to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401-7671q) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251-1387).  Violations must be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency (EPA).
  4. Contractors that apply or bid for an award exceeding $100,000 must file the required Byrd anti-lobbying certification, and obtain these certifications from any subcontractors.  Each contractor and subcontractor tier must also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award.

Feedback on Supplier Performance

It is assumed that all suppliers will successfully perform.  Department staff should forward any concerns about a supplier's performance to the applicable buyer in Purchasing.  The university may use past unsuccessful performance as a basis for not making an award to a supplier.

Procurement File

The procurement file should contain documentation of, and the rationale behind, all of the decisions above.  These include the rational for determining that the needed items had to be purchased, for selecting the method of procurement, for awarding to the successful supplier, for not awarding to each of the unsuccessful suppliers, any technical analyses, the required cost or price analysis, the negotiation and amount of profit, and feedback received on the contractor's performance.


Policy Title: Federal Pre-Award Certifications
Policy Number: 7.2 (Previously 4.7)
Effective: November 1998
Latest Revision: December 2011

Federal Acquisition Regulations (FAR) require the University to obtain certain pre-award certifications from the vendor selected for a purchase order award when the source of funding is either a Sponsored Projects grant or contract. These applicable FAR certifications will normally be obtained from the vendor through the normal proposal/bid solicitation process. In the event of a Sole Source procurement where a formal solicitation may not be issued, the sole source vendor must complete the applicable pre-award certifications as required by FAR before a purchase order award can be made by the University. The FAR certifications to be obtained, the applicable FAR provisions, and related dollar thresholds are as follows:

  • Certification Regarding Debarment, Suspension, Proposed Debarment, and Other Responsibility Matters – FAR 52-209-5 and A-110, Appendix A.8. [required for grants and contracts >$30,000]
  • Certification and Disclosure Regarding Payments to Influence Certain Federal Transactions (Anti-Lobbying) – FAR 52-203-11 and A-110, Appendix A.7. [required for grants and contracts >$150,000]