Assurance Services • Published 2/15/2019 New Federal Procurement Standards are Here

After three years of delay and anticipation, the effective date of the federal procurement standards has come and gone. These new standards will likely receive some attention from your auditors when auditing federal grants and programs.

The procurement standards, established through 2CFR part 200 (.317-.326), are effective for non-federal entities with fiscal years which began on or after December 26, 2017.  These regulations place certain requirements on entities purchasing property, materials, supplies and services under a federal award and those requirements may cause your organization to procure such items differently than in the past, and may be different than purchasing requirements under state bid laws.

 

Under the federal regulations set forth in 2 CFR part 200 (.317-326) a non-federal entity must:

1. Use their own documented policies and procedures which reflect state and local laws, provided they conform to 2 CFR part 200.
2. Provide oversight of a contractor’s performance, maintain written standards of conduct for employees involved in contracting, award contracts only to responsible contractors, and maintain records to document the history of procurement.
3. Conduct all procurement transactions in a manner providing for full and open competition.
4. Use the micro-purchase and small acquisition methods when applicable criteria (as amended) are met.

Micro-purchases – below $10,000	No solicitation of prices or quotes needed.
Small Acquisition – between $10,000 and $250,000	Competitive quotes or pricing must be obtained from an adequate number of vendors.

5. For acquisitions over the simplified threshold, use of one of the three allowed methods: sealed bid, competitive proposals, or non-competitive bid depending on circumstances (sole source) of the procurement and applicability under the regulations.
6. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications.
7. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326.

 

If your organization receives federal awards and has not implemented the necessary changes to your procurement policies to address the above requirements, your audit report may list findings related to your federal grants and programs. If you have questions or concerns about this or other complex federal regulations, please contact us.