Federal and State Grant Procurements. Procurement and Contracts Division

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Cecily Warner
6 years ago
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1. OBJECTIVE: The purpose of this is to provide guidance regarding the selection of contractors and the procurement of contracts funded by State and federal financial assistance.

1 1. OBJECTIVE: The purpose of this is to provide guidance regarding the selection of contractors and the procurement of contracts funded by State and federal financial assistance. This is also designed to implement the procurement requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200) adopted by the federal Office of Management and Budget. This does not apply to or govern the selection of subrecipients receiving subawards from the City which selections shall be governed by the laws, regulations, terms and conditions of the program from which the funds are received. 2. AUTHORITY: Section 7.202(B) of the City s Procurement Code (Chapter 7 of the City s Code of Ordinances); Policy and Procedure DIRECTION: This applies to those employees within the who procure goods, services, construction work, and/or professional architectural and engineering services for the City. In addition, this also applies to any other individuals who participate in a City procurement process or the administration of a City contract which is funded in whole or in part by State or federal financial assistance. Such persons may include, but are not limited to, representatives of the City department or division requesting the procurement activity or contract, selection committee members and technical advisors, solicitation specification writers, and City project managers overseeing administration of a contract and the provision of the goods or services acquired with State or federal financial assistance. 4. FUNCTIONS: A. Overview: The agreements under which the City receives State and federal financial assistance often contain their own unique terms and conditions regarding the expenditure of such funds. Accordingly, this is not intended to replace a thorough review of such agreements by a City department or division requesting a procurement or solicitation, but is designed to provide an overview of the basic rules that govern the expenditure of most State and federal financial assistance. Page 1

2 B. Conflict of Interest (2 CFR ): 1. Selection, Award, and Administration: City employees and agents engaged in the selection, award, and administration of contracts funded in part or in whole by State or federal financial assistance shall observe the highest ethical standards. In addition to the provisions of (a) the City s Procurement Code, (b) the City s Ethics Policy and Procedure 800.5, and (c) the conflict of interest and other ethics provisions contained in Policy and Procedure related to grants and other financial assistance, no employee, officer, or agent of the City may participate in the selection, award, or administration of a contract supported by State or federal financial assistance if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. Subject to the de minimis limits established by the City s Ethics Policy and Procedure 800.5, employees, officers, and agents of the City may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. Violations of these provisions may result in adverse employment action(s) and, in some cases, criminal penalties including imprisonment. 2. Organizational Conflicts of Interest in Federally Funded Procurements. An organizational conflict of interest exists where there is a relationship between a bidder or other potential contractor and the City which is equivalent to that of a parent company, affiliate, or subsidiary organization. In such cases, the entity having an organizational conflict of interest with the City should not be awarded a contract by the City without guidance and/or approval from the federal awarding agency. At a minimum, for quotes and formal solicitations, the entity having an organizational conflict of interest should not have participated in the preparation of the City s specifications for the quote or solicitation and should meet all material requirements applicable to other eligible respondents. C. City Procurement Code: Except as set forth in this or in the terms and conditions of a particular State or federal financial assistance agreement (or in any applicable rules and regulations of the awarding State or federal agency), procurements funded with State and federal financial assistance agreements shall be conducted utilizing the City s own procedures for procurements set forth in Chapter 7 of the City Code of Ordinances ( Procurement Code ). The provisions of the Procurement Code are supplemented by applicable implementing Policies and Procedures related thereto Page 2

3 adopted by City Council and directives issued by the City s Chief Procurement Officer, including but not limited to the Policies and Procedures of the Procurement and Contracts Division, through , and Policy and Procedure related to the management and administration of grants and other financial assistance. D. Procurement Standards - Federal Financial Assistance (2 CFR ): For procurements funded with federal financial assistance, the City must follow its own procedures provided that the City s procedures conform at a minimum to applicable federal law and federal regulations (see 2 CFR ). Where the City and federal law or regulations conflict or have different thresholds or standards for the same activity, the more restrictive standard shall apply. Set forth below are a list of the major differences between City Code (and/or Florida law) and the Uniform Administrative Requirements for federal awards (2 CFR Part 200): 1. Allowable Federal Procurement Methods (2 CFR ). Absent specific approval from the awarding federal agency (which may also be in the financial assistance agreement or funding agency program regulations), only the following five (5) methods of procurement may be used: a. Micro Purchase. Micro purchases are small purchases made without the need for competition where the purchase price does not exceed $3,000 in the aggregate (or $2,000 for construction services covered by the Davis-Bacon Act). Note: The more restrictive federal standard of $3,000 controls even though the City dollar threshold mandating more than one quote may be higher. b. Small Purchase Procedures (Quotes). Quotes are allowed for purchases under $100,000. Federal regulation requires an adequate number of quotes, but as guidance, it is recommended that a minimum of three (3) quotes should be obtained. A no-bid or no-response does not count as a quote for obtaining multiple competitive quotes. Note: The more restrictive City standard for quotes up to $100,000 applies even though federal regulation would allow quotes up to the federal Simplified Acquisition Threshold (currently $150,000). c. Sealed Bids. Subject to the requirement to publicly advertise the solicitation as set forth in sub-section 4.D.2 below, standard City bid procedures apply. d. Requests for Proposals; Requests for Qualifications. Subject to the requirement to publicly advertise the solicitation as set forth in sub-section 4.D.2 below, standard City procedures apply. Note: Under federal regulations, requests for qualifications in which price is not a selection factor may only be used for architectural, engineering, landscape architectural, and surveying services. Page 3

4 Federal and State Grant Procurements e. Non-Competitive Proposals. Non-competitive proposals are allowed only where (i) the item is available from only one source, (ii) public exigency (urgency) or emergency will not allow the delay for a competitive solicitation, (iii) the federal awarding agency approves a written request, or (iv) after solicitation of a number of sources, competition is not obtained. Note: It is recommended that the federal awarding agency be notified for approval any time the City intends to enter into a non-competitive contract. Advertisement (2 CFR ). Federally funded formal solicitations (i.e., bids, requests for proposals, and requests for qualifications) require specific public advertisement. A general advertisement to check the City s website for procurement information or opportunities is not sufficient. Local Preferences Prohibited (2 CFR ). The use of statutorily or administratively imposed state or local geographical preferences in the evaluation of bids or proposals is prohibited except where applicable federal statutes expressly mandate or encourage such a preference. Cost Plus a Percentage of Cost Method of Contracting Prohibited (2 CFR ). The cost plus a percentage of cost and percentage of construction cost methods of contracting may not be used. Time and Materials Method of Contracting Discouraged (2 CFR (j)(1)). The City may use time and material type contracts only after a determination that no other contract is suitable and if the contract includes a ceiling price that the contractor exceeds at its own risk. Bond Requirements. Notwithstanding Florida law or City practice, at a minimum for construction or facility improvement contracts or subcontracts exceeding the Simplified Acquisition Threshold (currently $150,000), the following requirements must be met: a. A bid guarantee from each bidder equivalent to five percent (5%) of the bid price. The bid guarantee must consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of the bid, execute such contractual documents as may be required within the time specified. b. A performance bond on the part of the contractor for 100 percent of the contract price. c. A payment bond on the part of the contractor for 100 percent of the contract price. E. Full and Open Competition Federal Financial Assistance (2 CFR ): Federal regulations regarding procurement transactions funded with federal financial assistance Page 4

5 require such transactions to be conducted in a manner that provides full and open competition. This means: 1. As provided in Section of the City s Procurement Code and 2 CFR (a), in order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, and invitations for bids or requests for proposals shall be excluded from competing for such procurements. 2. Solicitations shall incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The following situations are specifically listed in federal regulations as situations considered to be restrictive of competition and must be avoided: a. Placing unreasonable requirements on firms in order for them to qualify to do business; b. Requiring unnecessary experience and excessive bonding; c. Noncompetitive pricing practices between firms or between affiliated companies; d. Noncompetitive contracts to consultants that are on retainer contracts; e. Organizational conflicts of interest; f. Specifying only a brand name product instead of allowing an equal product to be offered and describing the performance or other relevant requirements of the procurement; and g. Any other arbitrary action in the procurement process. 3. The solicitation shall identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals. 4. When a Request for Proposals (RFP) method of solicitation is used, the RFP must identify all evaluation factors and their relative importance. The RFP solicitation shall contain in writing the method for conducting the technical evaluation and any other necessary evaluations of the proposals received. These evaluations may be conducted by the advisory committee appointed to review the proposals (or by a subcommittee thereof) or by a separate technical committee, as set forth in the RFP. F. Specification Review (2 CFR ): Prior to the procurement of any contract which is funded in part or in whole with federal assistance, the requesting department or division shall provide for a review of the proposed procurement to avoid the purchase of unnecessary or duplicative items. Consideration will be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach. Page 5

6 G. MBE/WBE Affirmative Steps Federal Financial Assistance (2 CFR ): Prior to the procurement of any contract which will be paid in part or in whole with federal financial assistance, the requesting City department or division shall review the federal financial assistance agreement to determine whether the awarding federal agency has adopted a Disadvantaged Business (DBE) Program or whether the City s Minority and Women Owned Business (MBE/WBE) Program is applicable. Once the applicable program is identified, the requesting department or division shall: 1. Provide a list of qualified small, and minority businesses and women's business enterprises to the to place on solicitation lists if such firms are not already signed up on the City s esupplier system to receive solicitation notices; 2. Assure that small and minority businesses, and women's business enterprises are solicited whenever they are potential sources; 3. Divide total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority businesses, and women's business enterprises; 4. Establish delivery schedules, where the requirement permits, which encourage participation by small and minority businesses, and women's business enterprises; 5. Use the services and assistance, as appropriate, of such organizations as the City s Minority Business Office, Small Business Administration, and the Minority Business Development Agency of the Department of Commerce; and 6. Require, the prime contractor, if subcontracts are to be let, to take the affirmative steps listed in subsections 1 through 5 above, as part of the solicitation specifications or the resulting contract. The requesting department or division should also take similar steps with respect to soliciting and obtaining participation by Veteran Business Enterprises. H. Resource Conservation and Recovery Act Federal Financial Assistance (2 CFR ): The United States Environmental Protection Agency (EPA) maintains a list of items which can be made with or use recovered (recycled) materials. See 40 CFR Part 247. For solicitations regarding the purchase or acquisition of those items for which guidelines have been adopted by the EPA, the requesting City department or division shall specify in its specifications the use of recovered materials and the highest percentage of recovered materials that reasonably may be required consistent with maintaining a satisfactory level of competition. Federal law does not require the procurement of goods that (i) are not reasonably available within a Page 6

7 reasonable amount of time, (ii) fail to meet reasonable performance standards, or (iii) are only available at an unreasonable price. Upon the conclusion of any contract requiring the use of recovered materials of an EPA listed item, the project manager from the requesting City department or division shall obtain a statement from the Contractor regarding the actual percentage of recovered materials utilized in the completion of the contract. These requirements apply to all contracts with EPA listed items in which the City procures a listed item in an amount exceeding $10,000 or which exceeded $10,000 in the preceding fiscal year. I. Contract Cost and Price Federal Financial Assistance (2 CFR ): Cost or Price Analysis. For solicitations funded with federal financial assistance, the requesting City department or division must perform a cost or price analysis in connection with every procurement action in excess of the federal Simplified Acquisition Threshold (currently $150,000) including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-federal entity must make independent estimates before receiving bids or proposals. Negotiation of Profit. The City must negotiate profit as a separate element of the price for each contract in which there is no price competition and in all cases where cost analysis is performed. To establish a fair and reasonable profit, consideration must be given to the complexity of the work to be performed, the risk borne by the contractor, the contractor s investment, the amount of subcontracting, the quality of its record of past performance, and industry profit rates in the surrounding geographical area for similar work. J. Award to Responsible Contractors (2 CFR ): In procuring contracts funded with federal financial assistance, the City may only award contracts to responsible contractors possessing the ability to perform successfully under the terms and conditions of the proposed procurement. In determining whether a contractor is responsible, consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. A contract may not be awarded to a party listed on the government-wide Excluded Parties List System in the System for Award Management (SAM) or to a party listed on the State of Florida's or City's suspended or debarred lists. K. Contract Provisions: The agreements under which the City receives State and federal financial assistance often contain terms and conditions which are required to be included in any solicitation or in any contracts resulting from a solicitation. Prior to issuing a solicitation or executing a contract funded with State or federal financial assistance, the requesting City department or division must provide the with any required State or federal terms and conditions that must be included in the solicitation and the contract. Page 7

8 Note: For solicitations utilizing federal financial assistance, at a minimum, the contract provisions specified in 2 CFR must be included in any resulting contract. L. Contract Oversight: The City department or division which requested a solicitation or contract be issued or entered into by the shall be primarily responsible for maintaining diligent oversight over the contract and the contractor to ensure that the contractor performs in accordance with the terms, conditions, and specifications of its contract or purchase order. Written notice shall be provided to the Procurement and Contracts Division of any situation in which a contractor is not performing in accordance with the terms, conditions, and specifications of its contract or purchase order for appropriate action by the, which action may be up to and include contract termination. M. Procurement File (2 CFR ): For contracts awarded which are funded in part or in whole by State or federal financial assistance, the project file shall contain the history of the procurement to include: 1. A copy of the solicitation and all addenda thereto, if any; 2. A copy of the publication or advertisement of the solicitation (if applicable); 3. Copies of the quotes, bids, proposals or responses received; 4. A copy of the Quote/Bid tabulation or selection committee meeting minutes; 5. A copy of the Council Agenda item approving the contract (if required); 6. A copy of the resulting contract and/or purchase order; 7. Copies of any required bonds and/or certificates of insurance; and 8. For federally funded procurements and contracts, the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 9. A screenshot or other documentation reflecting that the party awarded a contract was not listed on the government-wide Excluded Parties List System in the System for Award Management (SAM) or on the State of Florida's or City's suspended or debarred lists. 5. REFERENCES: For reference, attached to this is a copy of the federal Procurement Standards (2 CFR through , and Appendix II) of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200) adopted by the Office of Management and Budget. In the event of any conflict between standard City policy or Page 8

9 practice and the federal Procurement Standards, the federal Procurement Standards shall control for any procurement involving federal financial assistance. Page 9

Procurements by states General procurement standards.

Procurements by states General procurement standards. e-cfr data is current as of June 2, 2017 200.317 Procurements by states. When procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements