Procurement Under Uniform Guidance

Transcription

1 Procurement Under Uniform Guidance September 21, 2018

2 Presenters Manju Patnaik, CPA Professional Standards Technical Manager Manju is a technical audit manager with 13 years of experience serving our public sector clients in accounting, auditing, and management consulting. Manju is AICPA Certified Single Audit Specialist and serves as the central technical resource for Plante Moran s Single Audit compliance and related technical information. She develops technical training and federal compliance audit programs for firm wide use, and helps to ensure compliance and conformity with both the audit and compliance standards. A few years ago the firm created a six member Uniform Guidance Implementation team of which Manju is a member. She has been involved with educating our clients and staff on the new guidance by having one-on-one meetings with clients, creating training content and presenting at internal and external training events and publishing articles. To this day, Manju continues to provide implementation assistance to clients and engagements teams dealing with continuing issues with Uniform Guidance.

3 Overview Uniform Guidance Effective Dates Procurement MUSTS under UG UG Procurement Standards Procurement Methods Implementation Considerations 3

4 Uniform Guidance Effective Dates 4

5 Uniform Guidance - Effective Dates Federal agencies implement the requirements to be effective December 26, 2014 Audit requirements apply to audits of fiscal years beginning on or after December 26, 2014, so fiscal year ends: December 31, 2015 June 30, 2016 September 30, 2016 Administrative requirements and cost principles apply to new awards and to additional funding (funding increments) to existing awards made after December 26,

6 Procurement Exception Procurement Grace period option delays applicability of UG sections to Three full fiscal years after December 26, 2014 December 31 year ends go live 1/1/2018 June 30 th year ends go live 7/1/2018 September 30 th year ends go live 10/1/2018 Entities MUST document decision to delay OMB has indicated it is expecting this last extension to be the final grace period 6

7 What Do UG Procurement Requirements Apply to? Goods and services charged to: nonfederal program Indirect cost pool federal award Source: COFAR FAQ

8 Procurement MUSTS Under UG 8

9 Must vs Should Must used throughout Part 200 of UG to indicate mandatory requirements Should Best practices recommended approaches 9

10 The UG Procurement Musts JUST SOME EXAMPLES UG general procurement standards Full and open competition UG procurement methods Cost or Price analysis Contract provisions 10

11 UG Procurement Standards 11

12 Uniform Guidance Procurement Standards 12

13 UG Procurement Standards ( ) Written Procedures Competition Methods of procurement Procurement Records Standards of conduct Contract price Adequate oversight 13

14 UG Procurement Standards Written Procedures( ) Non-federal entity must use its own documented procurement procedures provided that they conform to applicable federal law and UG requirement Must reflect applicable state, local and tribal laws and regulations 14

15 UG Procurement Standards Written Standards of Conduct( ) Must maintain written standards of conduct covering conflicts of interest (individual employee level as well as organizational level) Policies must include principles for avoiding potential conflicts of interest and must provide for disciplinary actions to be applied for violations. 15

16 UG Procurement Standards Procurement Records( ) OLD OMG Circular A-102 For procurements > small acquisition threshold: Basis for contractor selection Justification for lack of competition Basis for award cost or price NEW 2 CFR For all procurements: Detail history of the procurement [different for each procurement method] Rationale for method of procurement Selection of contract type Contractor selection or rejection Basis for contract price 16

17 Competition Must conduct in a manner providing full and open competition No longer to the maximum extent practical as under A- 110 Contractors who develop or draft specs, SOW, RFPs are prohibited from competing for such work Geographical preferences disallowed 17

18 Competition Written procedures for procurement transactions. Procurements must ensure all solicitations: Contain clear and accurate description of requirements Identify requirements and all other factors to be used in evaluating bids 18

19 Competition What to include in written procurement procedures (not all inclusive): How organization will maintain oversight for contractors performance How to avoid acquisition of unnecessary or duplicative items How to make more economical purchases Lease versus buy analysis Consolidation of procurements Use of federal excess or surplus property Award guidelines and considerations Type of contracts allowed Documentation required 19

20 UG Procurement Methods 20

21 UG Procurement Methods Method Dollar Threshold Micro-purchase Small purchase procedure Not-to-exceed micro-purchase threshold Originally, this threshold was $3,500. OMB Memorandum M changed this threshold to $10,000 effective 6/20/2018) Greater than micro-purchase, not-to-exceed Simplified Acquisition Threshold (SAT) The SAT originally was at $150,000. OMB Memorandum M changed this threshold to $250,000, effective 6/20/2018. Sealed bid Competitive proposal Noncompetitive proposal Greater than SAT Greater than SAT Greater than micro-purchase 21

22 UG Procurement Methods Micro-purchases Mircro-purchases - new! Not to exceed $3,500 for fiscal year 2017 and $10,000 starting 6/20/2018 Distribute micro-purchases equitably (to the extent practicable) Price must be reasonable No price quotations are necessary Micro-purchase threshold set by Federal Acquisition Regulation (FAR) at 48 CFR Subpart 2.1 When practicable, distribute micro-purchases among qualified suppliers COFAR FAQ provides examples of distributing micropurchases 22

23 UG Procurement Methods Small Purchase Procedures Acquisition cost more than micro-purchase but not greater than Simplified Acquisition Threshold ( SAT ) Simplified Acquisition Threshold established by FAR at 48 CFR Subpart 2.0 and in accordance with 41 USC 1908 Subject to change $150,000 for fiscal year 2017 and $250,000 starting 6/20/2018 Price or rate quotations must be obtained from an adequate number of qualified sources Written procurement procedures to define number and methods of obtaining quotes 23

24 UG Procurement Methods Sealed Bid Procedure Procurement greater than SAT Firm, fixed price contract Lowest responsible bidder with conforming bid Preferred method for procuring construction with conditions for use outlined at (c)(1) UG outlines detailed requirements that apply to sealed bids: Solicited from adequate number of known suppliers Publicly advertised Invitation to bids and opening the bids 24

25 UG Procurement Methods Competitive Proposals Procurements greater than SAT Expanded competitive procedures from OMB Circular A-102 Generally used when sealed bids cannot be done UG outlines detailed requirements that apply to competitive procurements: Requirement for requests for proposal (RFPs) Adequate number of qualified sources Written method for conducting technical evaluations and for selecting recipients Qualifications-based procurement (Architectural/Engineering professional services) 25

26 UG Procurement Methods Non-competitive Proposals Non-competitive proposals must meet one of the following conditions to comply ( (f)): Single source Emergency Written approval Competition inadequate after soliciting proposals 26

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28 Contract cost and price Cost or price analysis required on all procurements in excess of $150,000 (fiscal year 2017) and $250,000 (starting 6/20/2018) Non-federal entity must make independent estimates before receiving bids or proposals 28

29 Contract Types Not allowed ( (d)) Cost plus a percentage of cost Cost plus a percentage of construction Allowable Cost reimbursement contracts ( ) Fixed price contracts ( ) Time and material type contract ( (j)(2)) Only if no other contract type is feasible Must establish a ceiling 29

30 Contract provisions Appendix II to Part 200 Contains required contract provisions for non-federal entity contracts under federal awards, including: EEO Davis Bacon Termination for cause and for convenience Debarment and Suspension Byrd Anti-Lobbying 30

31 Implementation Considerations 31

32 Implementation Considerations Identify implementation team and timeline Take an inventory of the procurement MUSTS under UG Identify updates to the procurement policy Determine how all procurements under grants and contracts can be captured Standard contract updates to conform with Appendix 2 of UG Changes to duties of personnel 32

33 Implementation Considerations Recognizing internal controls at the same time as identifying new policies/procedures Centralized vs. decentralized procurement Training procurement process owners Monitoring procurement after new policies have been established Identifying conflicts of interest (individual employee level and organizational level) Deciding on disciplinary procedures for conflicts violations Addressing what adequate number of sources means for the organization 33

34 Implementation Considerations (specific to OMB Memorandum M-18-18) During the original adoption of UG procurement standards, were specific amounts included within the procurement policy, or was reference to the UG sections or amounts as adjusted referenced? If specific amounts were referenced, the procurement policy will need to be updated to take advantage of the changes. If this change is inconsistent with other procurement policies within the organization, the organization must decide how the policy will be enacted. Remember local ordinances in place may limit full utilization of changes. If the organization has chosen not to fully adopt the change and maintain a lower threshold, then the organization is not required to use these thresholds but cannot exceed them. 34

35 Questions? 35