tiffany r. winters, esq. [email protected] brustein & manasevit, pllc fall forum 2014 brustein...

Tiffany R. Winters, [email protected]

Brustein & Manasevit, PLLCFall Forum 2014

Brustein & Manasevit, PLLC

Micro Purchases, Sole Sourcing and Property Management

Changes

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Procurement Applies to Contracts! UGG- 200.330 (Contracts v. Grants)

Brustein & Manasevit, PLLC 2

Procurement Standards

UGG- 200.317Still provides flexibility for States; all other nonfederal

entities follow policies and procedures under Section 200.318-200.326.

UGG- 200.318All nonfederal entities must have documented

procurement procedures which reflect applicable Federal, State, and local laws and regulations.


SEPARATE PROCEDURES WON’T WORK.

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The Steps

1. What do you need?2. How can you buy it?

3. What do you have to do once you have it?


Types of Property

Capital assetsComputing devicesEquipment

Special purpose equipment

Intangible propertyPropertyReal PropertySupplies


Property Classifications (cont.)

UGG- 200.12Capital assets

Tangible or intangible assets use in operations having a useful life of more than one year… Includes: Land, buildings, equipment, intellectual

property, software, construction, etc. UGG- 200.20Computing devices

Machines used to acquire, store, analyze, process, public data and other information electronically.

Includes accessories for printing, transmitting and receiving or storing electronic information.


Property Classifications (cont.)UGG- 200.59Intangible Property

Property having no physical existence, such as trademarks, copyrights, patents, etc. See also UGG 200.315.

UGG- 200.81Property

Real property or personal property.



UGG- 200.78Personal Property

Property other than real property. May be tangible or intangible.

UGG- 200.85Real Property

Land and land improvements, structures and appurtenances thereto, but excludes moveable machinery and equipment. See also UGG 200.311.


Property Classifications (cont.)UGG- 200.94Supplies

Anything that is not equipment is considered supplies. A computing device is a supply if the acquisition cost is less than

$5000 regardless of the length of its useful life.


What if I don’t know whether it’s allowable?

UGG- 200.407Prior Written Approval•In order to avoid subsequent disallowance:

–Non-Federal entity may seek prior written approval of cognizant agency (for indirect cost rate) or Federal awarding agency in advance of the incurrence of special or unusual costs


PURCHASING/ PROCUREMENT


Open Competition

UGG- 200.319(a)•All procurement transactions must be conducted with full and open competition.

– Must have protest procedures to handle disputes

•To eliminate unfair advantage, contractors that develop or draft specifications, requirements, statement of work, and invitations for bids or RFPs must be excluded from competing for such procurements.


Open Competition (cont.)

UGG- 200.319(a)Situations that restrict competition:

Unreasonable requirements on vendors to qualify to do business Requiring unnecessary experience or excessive bonding Noncompetitive pricing practices Noncompetitive awards to consultants on retainer Organizational conflicts of interest Specifying a brand name Any arbitrary action in the procurement process


Open Competition (cont.)

UGG- 200.319(b)No In-State or Local Preferences.Must conduct procurements in a matter that prohibits the use of statutorily or administratively imposed state or local geographical preferences in the evaluation of bids or proposals, except where applicable Federal statutes expressly manage or encourage geographical preference.

Does not preempt state licensing laws. Exception: architectural and engineering services


But I Have a Vendor!


Sole Sourcing Should Be Limited!

UGG- 200.320(f)•Noncompetitive Proposals

– Procurement through solicitation of a proposal from only one source and may be used ONLY when one or more of the following circumstances apply:

1. The item is available only from a single source; 2. The public emergency for the requirement will not permit a delay

resulting from competitive solicitation; 3. The Federal awarding agency or pass-through entity expressly

authorizes noncompetitive proposals in response to written requires from nonfederal entity; or

4. After soliciting a number of sources, competition is determined inadequate.


THERE ARE SPECIFIC TYPES OF PROCUREMENT THAT MUST BE

FOLLOWED.


How to Select Your Vendor

UGG- 200.320Methods of Procurement•Micro-purchase•Small purchase procedures•Competitive sealed bids•Competitive proposals•Noncompetitive proposals


Contact Cost and PriceUGG- 200.323

•Must perform a cost or price analysis for costs in excess of the simplified acquisition threshold ($150,000)•Cost analysis generally means evaluating the separate cost elements that make up the total price (including profit)•Price analysis generally means evaluating the total price


Micro-PurchaseUGG- 200.320(a)

•Acquisition of supplies and services under $3,000 or less.

–$2,000 for acquisitions for construction subject to the Davis-Bacon Act.

•May be awarded without soliciting competitive quotations if nonfederal entity considers the cost reasonable. •To the extent practicable must distribute micro-purchases equitably among qualified suppliers.


Small Purchase Procedures

UGG- 200.320(b)•Goods or services that costs less than The Simplified Acquisition Threshold ($150,000 under 200.88)

– Organization may set lower threshold

•Must obtain price or rate quotes from an adequate number of qualified sources•“Relatively simply and informal”


Competitive Sealed Bids

UGG- 200.320(c)•Bids are publically solicited. •Appropriate when:

– A complete, adequate and realistic specification or description of good or service is available;

– Two or more responsible bidders are willing and able to compete effectively for the business

– Selection of vendor can be made principally based on price and it’s a firm fixed price contract.


Competitive Sealed Bids (cont.)• Sealed bids must:

– Provide sufficient time to submit bids;– Include all specifications so bidder can properly respond; and– Be publicly opened at time and place announced in invitation for bids

• Any and all bids may be rejected if there is a sound documented reason.

• Award is made to the lowest responsive and responsible bidder.


Competitive ProposalsUGG- 200.320(d)

•Award contract to responsible vendor whose proposal is mostadvantageous to the program, considering price and other factors.•Generally used when sealed bid is not appropriate.


Competitive Proposals (cont.)

• Request for proposal (RFP) must be publicized and identify all evaluation factors and their relative importance identified.

• Proposals must be solicited from an adequate number of sources.

• Must have method for evaluating proposals and selecting the vendor.

• Contracts must be awarded to the responsible vendor whose proposal is most advantageous to the program, considering price and other factors.


Noncompetitive Proposals

Noncompetitive contract raises “red

flags”•Ensure persuasive and adequate documentation to facilitate audit


WATCH FOR CONFLICT OF INTERESTS


Conflicts of Interest UGG- 200.112 and 200.318(c)•Must maintain written standard of conduct, including conflict of interest policy.•A conflict of interest arises when any of the following has a financial or other interest in the firm selected for award:

–Employee, officer or agent,–Any member of that person’s immediate family,–That person’s partner, or–An organization which employs, or is about to employ,

any of the above or has a financial interest in the firm selected for award.


Gratuities

UGG- 200.318(c)(1)•Officers, employees, and agents of the non-Federal entity must neither solicit nor accept gratuities, favors, or anything or monetary value from contractors or parties to subcontract. •However. the non-Federal entities may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. •The standards must provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the non-Federal entity.


Organizational Conflicts of Interest

UGG- 200.318(c)(2)If the non-federal entity has a parent, affiliate, or subsidiary organization that is not a state or local government the entity must also maintain written standards of conduct covering organization conflicts of interest!


Duty to Report Conflicts

UGG- 200.112 and 200.113

Must disclose in writing any potential conflict in accordance with applicable Federal awarding agency policy. Must disclosure in a timely manner in writing all violations of Federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the Federal award.


THE CONTRACTING PROCESS

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Suspension and Debarment


Cannot contract with vendor who has been suspended or debarred http://www.sam.gov

Must Review Contracts over $25,000Appendix II(I)

Contract Administration

UGG- 200.318

•Nonfederal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of the contract


Contract Provisions

UGG- 200.326•Appendix II includes required provisions (many same as previous requirements)

– Administrative, contractual, legal remedies

– Termination for cause or convenience

– Equal Employment Opportunity requirements

– Davis-Bacon Act

– Etc., all as applicable.


INVENTORY


Equipment Standards

UGG- 200.313(b)•States must use, manage and dispose of equipment acquired under a Federal award in accordance with State laws and procedures.

•Other non-Federal entities must follow 200.313(c) through (e).


Equipment Standards (cont.)

UGG- 200.313(c)

•Must have adequate controls in place to account for equipment. •Cannot “encumber” the property without approval. •Must be used by the program or project for which it was acquired as long as needed (whether supported by Federal funds).•When no longer needed may be used by other activities in accordance with priority:

• Activities funded by the same Federal awarding agency• Activities funded by other Federal awarding agencies.


Equipment Standards (cont.)UGG- 200.313(c)

•Must make equipment available to use on other projects or programs provided that such use will not interfere with the work on the projects or program for which it was originally acquired.

•When grantee acquiring replacement equipment, the equipment to be replaced may be used as a “trade-in” without recourse to federal agency


Inventory Management System

UGG- 200.313(d)

•Property records– Description, serial number or other ID, title info, acquisition date, cost,

percent of federal participation, location, use and condition, and ultimate disposition

•Physical inventory– At least every two years

•Control system to prevent loss, damage, theft – All incident must be investigated


What about computing devices?

UGG- 200.302(b)(4)

•Internal Controls: Regardless of cost, grantee must maintain effective control and “safeguard all assets and assure that they are used solely for authorized purposes.”


Disposition of Equipment

UGG- 200.313(e)

•When equipment is no longer needed, the nonfederal entity must request disposition instructions from the federal awarding agency if required by the terms of the grant.

–Over $5,000 – pay federal share (explained in UGG)–Under $5,000 – no accountability


Disposition of Supplies

UGG- 200.314

•If there is a residual inventory of unused supplies exceeding $5,000 in total aggregate value upon termination or completion of the project or program and the supplies are not needed for any other federal award, must compensate the federal government for its share.


RECORDS


Procurement Records

UGG- 200.318(i)

•Must maintain records sufficient to detail the history of procurement.•These records will include, but are not limited to:

–Rationale for method of procurement;–Selection of contract type;–Contractor selection or rejection; and–Basis for the contract price.


Methods for Collection, Transmission and Storage of Information

UGG- 200.335 •When original records are electronic and cannot be altered, there is no need to create and retain paper copies. •When original records are paper, electronic versions may be substituted through the use of duplication or other forms of electronic media provided they:

– Are subject to periodic quality control reviews, – Provide reasonable safeguards against alteration; and – Remain readable.


Good News?

– COFAR FAQs: One year grace period for procurement!!

– Must document whether you are incompliance with the old or newstandard.


~ Legal Disclaimer ~


• This presentation is intended solely to provide general information and does not constitute legal advice or a legal service. This presentation does not create a client-lawyer

relationship with Brustein & Manasevit, PLLC and, therefore, carries none of the protections under the D.C. Rules of

Professional Conduct. Attendance at this presentation, a later review of any printed or electronic materials, or any follow-up questions or communications arising out of this presentation

with any attorney at Brustein & Manasevit, PLLC does not create an attorney-client relationship with Brustein &

Manasevit, PLLC. You should not take any action based upon any information in this presentation without first consulting

legal counsel familiar with your particular circumstances.

tiffany r. winters, esq. [email protected] brustein & manasevit, pllc fall forum 2014 brustein...

Documents

personal property property

property classifications

intellectual property

real property land

grants brustein manasevit

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