Finding Text
Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must
follow the procurement standards set out at 2 CFR 200.317 - 200.327. They must use their own documented
procurement procedures, which reflect applicable State and local laws and regulations, provided that the
procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR Part 200.
A non-Federal entity must:
(1) Conduct all procurement transactions in a manner providing full and open competition, in accordance with
2 CFR 200.319.
(2) For acquisitions exceeding the simplified acquisition threshold, the non-Federal entity must use one of the
following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR
200.320(b); the competitive proposals method under the conditions specified in 2 CFR 200.320(b)(2); or
the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or
more of four circumstances are met, in accordance with 2 CFR 200.320(c).
31 CFR 19 gives regulatory effect to the Department of Treasury for 2 CFR Section 180.305 which states that Non-
Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that
are suspended or debarred or whose principals are suspended or debarred, unless the Federal agency responsible for
the transaction grants an exception under 2 CFR Section 180.135. “Covered transactions” include nonprocurement
or procurement transactions at the primary tier, between a Federal agency and a person; or at the lower tier, between
a participant in a covered transaction and another person. Procurement contracts for goods and services awarded
under a nonprocurement transaction (e.g., grant or cooperative agreement) are covered transactions if the contracts
are expected to equal or exceed $25,000 or meet certain other specified criteria outlined in 2 CFR § 180.220s. All
nonprocurement transactions (i.e. subawards to subrecipients), irrespective of award amount, are considered covered
transactions, unless listed in the exemptions in 2 CFR § 180.215.When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity
must verify that the entity, as defined in 2 CFR 180.995 and agency adopting regulations, is not suspended or
debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by:
(1) checking the System for Award Management (Sam.gov),
(2) collecting a certification from the entity, or
(3) adding a clause or condition to the covered transaction with that entity (2 CFR 180.300).
For one contract exceeding the simplified acquisition threshold, the County used the noncompetitive proposals
method however, none of the four required circumstances applied.
The County did not have the proper internal controls in place to verify that all entities, with whom the County had
entered into covered transactions, had not been suspended or debarred. Due to the deficient internal control
structure, the required verification was not completed for 22 out of 27 covered transactions in the Coronavirus State
and Local Fiscal Recovery Funds during Fiscal Year 2023. These covered transactions had a payment to a vendor of
equal or greater than $25,000 and there was no evidence the County checked the SAM exclusions, collected a
certification from the entity, or added a clause or condition to the covered transaction with the vendor.
Failing to have the appropriate internal controls in place may result in procurement requirements not being met and suspended or debarred vendors receiving federal funds. The County should implement procedures to ensure federal procurement requirements are being met. Prior to contracting with vendors that will be paid with federal funds, the County should verify the vendor is not suspended or debarred by checking the SAM exclusions, collecting a certification from the vendor, or adding a clause or condition to the covered transaction with the vendor.