Uniform Guidance for Federal Awards

The Federal Office of Management and Budget (OMB) has issued Uniform Guidance for Federal Awards (2 CFR Part 200) requiring that the following procurement methods be followed when purchasing goods and/or services with federally awarded grant funds.

Methods of procurement to be followed

There are five (5) types of purchase methods that can be used. They are:

1.  Procurement by micro-purchase — the acquisition of supplies or services, the aggregate dollar amount of which does not exceed $15,000. This type of purchase may be awarded without soliciting competitive quotations if the price is considered to be reasonable.

Equitable spend distribution among qualified vendors is required, to the extent practicable. This requirement may be waived if there is evidence of an already existing, competitively bid contract with a particular vendor.

2.  Procurement by small purchase procedures — the acquisition of supplies, services, or other property that cost between $15,001 and $350,000 (the Simplified Acquisition Threshold). Under this method, price or rate quotations must be obtained from an adequate number of qualified sources.

3.  Procurement by sealed bids (formal advertising) — the acquisition of supplies or services that are greater than $350,000. Bids are publicly solicited and a firm fixed-price contract is awarded to the bidder whose bid, conforming with all the material terms and conditions of the invitation for bid, is the lowest in price. Sealed bidding is the preferred method for construction contracts. The following requirements will also apply:

  • Bids must be solicited from an adequate number of known suppliers (minimum of two); they must be provided with sufficient response time prior to the date set for opening the bids; and the invitation for bids must be publicly advertised;
  • The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond;
  • All bids will be opened at the time and place prescribed in the invitation for bids;
  • A firm fixed-price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest;
  • Any and all bids may be rejected if there is a sound, documented reason.

4.  Procurement by competitive proposals — competitive proposals are normally conducted with more than one source submitting an offer, and either a fixed-price or cost-reimbursement type contract is awarded. This method is generally used when conditions are not appropriate for the use of sealed bids. If this method is used, the following requirements apply:

  • Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Any response to publicized requests for proposals must be considered to the maximum extent practical;
  • Proposals must be solicited from an adequate number of qualified sources (minimum of two);
  • There must be a written method for conducting technical evaluations of the proposals received and for selecting recipients;
  • Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered.

5.  Procurement by noncompetitive proposals — this method is procurement through solicitation of a proposal from only one source and may be used only when one or more of the following circumstances apply:

  • The item is available only from a single source;
  • The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation;
  • The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the non-Federal entity; or
  • After solicitation of a number of sources, competition is determined inadequate.
Purchase Method
Purchase Value
Specifications
Micro-Purchase Up to $15,000 No competitive quotes/bids required

Price must be considered reasonable

To the extent practicable, purchases must be distributed equitably among qualified vendors
Small Purchase (Simplified Acquisition Threshold) $15,001 to $350,00 Price or rate quotations required from an adequate number of qualified sources

Informal quotes/bids via email are acceptable
Sealed Bids Greater than $350,000 Complete, adequate, and realistic specifications required (statement of work)

Two (2) or more responsible bidders willing and able to compete effectively for the business

Preferred method for construction contracts

Firm fixed-price contract results

Selection of successful bidder made principally on the basis of price
Competitive Proposals Greater than $350,000 Used when sealed bidding is not appropriate

Absence of a complete, adequate, and realistic specification (statement of work)

Two (2) or more qualified sources

Written method for conducting evaluations required

Contract awarded to the responsible firm whose proposal is most advantageous to the program, price and other factors considered
Noncompetitive Proposal (Sole Source) Any value, under limited circumstances Item is available only from a single source

Public exigency or emergency will not permit a delay resulting from competitive solicitation

Noncompetitive authorization received in writing from the Federal awarding agency or pass-through entity

After solicitation of a number of sources, competition is determined inadequate