Finding 499863 (2023-001)

Criteria: A nonfederal entity must meet the general procurement standards in 2 CFR section 200.320 relating to use of the micro-purchase method for procurements under $10,000, and section 180.220 relating to the prohibition of contracting with parties that are suspended or debarred if total annual transactions equal or are in excess of $25,000. Condition: Home Builders Care, Inc. does not have a policy or process to perform checks on suspension and debarment check for vendors they transact with and were unaware of this compliance requirement. In addition, Home Builders Care, Inc.'s procurement policy defines the micro-purchase threshold at $50,000 but does not qualify for raising this threshold from $10,000. As a result of this discrepancy, Home Builders Care, Inc. did not obtain price and rate quotations for two vendors from an adequate number of qualified sources to ensure the selection process was competitive. Cause: Home Builders Care, Inc. was not aware of the requirement to perform suspension and debarment checks. Also, Home Builders Care, Inc. was not aware of the requirements to be able to self-certify for an increased micro-purchase threshold to $50,000. Effect: There is a potential effect that Home Builders Care, Inc. could have utilized vendors that were suspended or debarred by the federal government. There is also a potential effect that Home Builders Care, Inc. could have utilized vendors that were not as competitive as others. Questioned Costs: None. Recommendation: We recommend that Home Builders Care, Inc. update its procurement policy as follows: (1) to state that the threshold for micro-purchases is $10,000; (2) to add wording relating to a required process to perform suspension and debarment checks on at least an annual basis; and (3) to add wording to describe the organization's process relating to purchases from Home Depot, Amazon, and other similar types of vendors. This description may, for example, state that for these types of vendors, at the time of purchase, organization personnel will perform online price checks prior to making purchases to ensure that the purchases are the most advantageous to the organization for price, quality and other factors considered. Views of responsible officials: Home Builders Care, Inc. concurs with the recommendation. See Corrective Action Plan.