Finding 37217 (2022-003)

2 CFR ? 3474.1 gives regulatory effect to the Department of Education for 2 CFR ? 200.319 (a) which states, in part, all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and ? 200.320. ? 2 CFR ? 3474.1 gives regulatory effect to the Department of Education for 2 CFR ? 200.320 (b) which states, in part, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with ? 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: 1. the sealed bid method if the acquisition meets the criteria in 2 CFR ? 200.320(b)(1); 2. the competitive proposals method under the conditions specified in 2 CFR ? 200.320(b)(2); 3. noncompetitive proposals method but only when one or more of five circumstances are met 2 CFR ? 200.320(c). 2 CFR ? 3474.1 gives regulatory effect to the Department of Education for 48 CFR part 2, subpart 2.1 which states, in part, the simplified acquisition threshold means $250,000. In fiscal year 2021, the District entered into a contract, including amendments, of $1,307,788 with PlugSmart for the replacement of rooftop units on district facilities. This contract was paid from the Education Stabilization Fund (ESSER II) AL# 84.425D federal grant in fiscal year 2022. The contract amount exceeded the simplified acquisition threshold of $250,000, which required the contract to use one of the procurement methods noted above. The District did not use any of the formal procurement methods before awarding the contract. The district did not contact the Ohio Department of Education for Sole Sourcing this contract. Failure to follow proper procurement methods may result in findings and the loss of federal funding. The District should follow the federal procurement requirements for all contracts exceeding the thresholds.