Finding No.: 2025-007 – Procurement and Suspension and Debarment Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.027 Special Education Cluster (IDEA) Federal Award No.: H027A230013, H027A240013 Criteria or specific requirement (including statutory, regulatory or other citation) #1: 2 CFR 200.318(i) Procurement Records states: “The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price.” 2 CFR 200.320 provides for three types of procurement methods, namely: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures. Per GDOE SOP 200-031, Competitive Selection Procedures for Services – Request for Proposals (RFP), the RFP method is generally used for procurement method for professional thresholds above the simplified acquisition threshold limit of $250,000. 2 GAR division §6101 (4)(c)(5)(a) states “Upon the agreement of the parties, the quantity of supplies or services or both specified in this contract may be increased by a maximum of ten percent (10%) provided: (i) the unit prices will remain the same (except for any price adjustments otherwise applicable); and (ii) the Procurement Officer makes a written determination that such an increase will either be more economical than awarding another contract or that it would not be practical to award another contract” In accordance with 2 CFR 180.300, entities that enter into covered transactions must verify that the person with whom they intend to do business is not excluded or disqualified by: a) Checking SAM.gov Exclusions; or b) Collecting a certification from that person; or c) Adding a clause or condition to the covered transaction with that person. According to 2 CFR 180.220(b)(1), a procurement transaction is considered a covered transaction if the contract amount is expected to equal or exceed $25,000. Condition #1: The procurement method used by GDOE related to Purchase Order (PO) No. 20250241 amounting to $245,245 is not compliant for the following reasons: a. GDOE entered into two separate procurements using simplified acquisition method (i.e., Request for Quote) for similar professional services in PO 20250241 dated April 3, 2025 originally amounting $245,245 and PO 20241777 dated September 16, 2024 amounting to $181,035. Combined, the amount would have required the use of an RFP which is a competitive selection procedure. b. GDOE completed the procurement for PO No. 20250241 on March 25, 2025, which is a date subsequent to the start date of the service period covering October 1, 2024 to September 30, 2025. c. The PO was modified on September 4, 2025 increasing the contract price from $245,245 to $269,770 (or 10%) of the original amount. There is no written determination that such an increase will either be more economical than awarding another contract or that it would not be practical to award another contract. Condition #2: For the following procurement transactions, GDOE did not verify whether a person or a vendor is excluded or disqualified pursuant to the requirements of 2 CFR 180.300 prior to entering into covered transactions: Purchase Order # Purchase Order Amount FY25 Expenditure 20250241 $269,770 $269,548 20250133 150,291 29,357 20250756 137,133 119,264 20250090 76,760 41,124 20251079 43,816 43,816 20250102 34,981 34,981 $712,751 $538,090 Cause #1: The end user believes that a separate procurement for similar services is allowable if the funding source of such procurement is different. Cause #2: GDOE’s policies and procedures only require a review of excluded parties in SAM.gov for competitive selection procedures covering contracts exceeding $250,000. However, this is only performed for new vendors during the vendor registration or creation process and not on per covered transaction basis. In addition, GDOE’s policies do not specify how the performance of the vendor review should be documented, hence, there was no trail whether such was actually performed. Effect or Potential Effect: GDOE is in noncompliance with the applicable procurement and suspension and debarment requirements compliance requirements. Questioned Costs: $538,090. The questioned costs relate to the FY25 expenditures of procurement transactions where the required verification before entering into covered transaction was not performed. Per auditors’ verification, the vendors with whom GDOE transacted business with are not suspended or debarred as of September 30, 2025. Context #1: We identified 58 procurement transactions during the year totaling $716,896. We tested 14 procurement transactions totaling $461,614. The samples were statistically valid. Of 14 procurement transactions tested, one procurement transaction (or 7%) is not compliant with federal requirements due to inappropriate procurement method used. Context #2: We identified and tested all 6 procurement transactions subject to suspension and debarment compliance requirements during the year totaling $538,090. The samples were statistically valid. For all 6 (or 100%) procurement transactions tested, the required verification before entering into covered transaction was not performed. Identification as a repeat finding, if applicable: 2024-007 Recommendation: GDOE should revisit its procurement policies and ensure all required provisions stated in the Compliance Supplement are covered, including the explicit requirement under 2 GAR division §6101 (4)(c)(5)(a). GDOE should establish formal policy requiring verification and retaining documentation of procedures performed, to verify that the person in a covered transaction with whom they intend to do business is not excluded or disqualified. View of Responsible Officials: GDOE agrees with the finding and provides details in its Corrective Action Plan.