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3.8 Procurement under Awards of Federal Assistance

Procurement Standards—General Guidance

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Adequate Competition
Noncompetitive Practices

States have their own regulations and should follow their same policies and procedures used for procurement with non-Federal funds.

  • The State must ensure that every purchase order or other contract utilizing Federal funding includes any clauses required by Federal statutes, executive orders, and related implementing regulations.

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Subrecipients of State award funding should follow the procurement requirements imposed upon them by the State.

Adequate Competition

As an award recipient or subrecipient, you must conduct all procurement transactions in an open, free, and fair competition. This requirement holds whether procurement transactions are negotiated or competitively bid, and without regard to dollar value. Please see the DOJ Guide to Procurement Procedures [PDF - 700 Kb] for more information.

  • The Uniform Administrative Requirements codified in Title 2 Code of Federal Regulations (CFR) Part 215 (U.S Department of Justice Title 28 CFR §66.36 [PDF - 160 Kb] and Title 28 CFR §70.44 [PDF - 136 Kb]) require competition on contract awards.
  • In your application, you should indicate that a competitive process will occur in which a contractor will be selected, but you may not name a specific contractor without competition.
  • A commercial organization that is ineligible to receive a direct award under a specific appropriation or program cannot be named as a sole source contractor in a grant application by an eligible applicant. The eligible applicant should indicate that a competitive process will occur in which a contractor will be selected, but a specific contractor cannot be named without competition. Under certain circumstances, however, this sole source rule can be waived when the applicant can document that there is only one contractor qualified or available to perform the function. These circumstances should be discussed with a program manager's direct supervisor and an Office of General Counsel representative.

A sole source procurement process may be used when you can document:

  • The item or service is available only from a single source;
  • A true public exigency or emergency exists; or
  • After competitive solicitation, competition is considered inadequate.

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For all sole source procurements in excess of $150,000, you must receive prior approval from the awarding agency.

You cannot award a sole source contract to an entity not eligible to be a direct recipient. For example, many grant program awards cannot be distributed to a commercial or for-profit organization as a sole source contractor if that organization is ineligible to receive a direct award under a specific appropriation or program.

Figure 13-1: Sole Source Justification Sample Outline
Paragraph Content
1 Brief description of program and the product or service being contracted.
2 Explanation of why it is necessary to contract non-competitively, including the following contractor qualities:
  1. Organizational expertise
  2. Management
  3. Knowledge of the program
  4. Responsiveness
  5. Expertise of personnel
3 Statement of when contractual coverage is required and, if dates are not met, what impact it will have on the program (for example, how long it would take another contractor to reach the same level of competence). Make sure to include the financial impact in dollars.
4 Outline of the unique qualities of the contractor.
5 Other points to “sell the case.”
6 Declaration that this action is in the “best interest” of the grantor agency and/or the Federal Government.
7 Conflict of Interest Review
Note: Time constraints will not be considered a factor if the award recipient has not sought competitive bids in a timely manner.

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Noncompetitive Practices

As an award recipient or subrecipient, you must have a documented process to check for organizational conflicts of interest with potential contractors.

  • You must have a process in place to ensure that contracts are not awarded to contractors or individuals on the Lists of Parties Excluded from Federal Procurement and Nonprocurement Programs. A review of potential contractors or individuals should be performed at the SAM website.
  • For a specific procurement, you must exclude from bidding or proposal submission any contractors who have been involved in development of the procurement. For example, you must not accept bids or proposals from contractors who have developed or drafted specifications, requirements, statements of work, and/or requests for proposals for the procurement.
  • If you would like an exemption from noncompetitive practices rules, you must submit a request in writing for approval prior to bidding the contract.

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Contracting Do’s

  1. You must compete contracts.
  2. You must prepare an Invitation for Bid (IFB)/Request for Proposal (RFP).
  3. You must maintain a bidder list.
  4. You must conduct interviews.
  5. You must obtain prior approval from your awarding agency.
  6. You must make documentation available to the awarding agency.

Contracting Don’t’s

  1. Don’t place unreasonable requirements on your contractor.
  2. Don’t require that your contractor have unnecessary experience.
  3. Don’t engage in noncompetitive pricing.
  4. Don’t engage in organizational conflicts of interest.
  5. Don’t place unreasonable time frames on your contractor.

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