Finding Text
2 CFR § 3474.1 gives regulatory effect to the Department of Education for the Procurement Standards in 2 CFR §§ 200.318 - 200.327. The Procurement Standards require entities to have and use their own documented procurement procedures, consistent with applicable State and local laws and regulations and the standards of 2 CFR 200.318 - .327, for the acquisition of property or services required under a Federal award or subaward. A non-Federal entity must, in part:
1. Meet the general procurement standards in 2 CFR 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements.
2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR 200.319.
3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR 200.320(a)(1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history, or other information and documents it files accordingly (2 CFR 200.320(a)(1)(ii)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR 200.320(a)(2)(i)).
4. 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)(1); 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 five circumstances are met, in accordance with 2 CFR 200.320(c).
Additionally, Service Center Policy 6325 - Procurement indicates procurement of all supplies, materials, equipment, and services paid for from Federal funds or Educational Service Center matching funds shall be made in accordance with all applicable Federal, State, and local statutes and/or regulations, the terms and conditions of the Federal grant, Governing Board policies, and administrative procedures.The Service Center did not follow the federal procurement requirements and policy 6325 relating to procurement resulting in the following errors:
• For six of six tested expenditures that were subject to procurement, the Service Center could not produce support that these expenditures complied with federal procurement requirements and Service Center policy. Five of these expenditures were below the micro-purchase threshold in which the Service Center should have documented and maintained support that the price was reasonable. The remaining expenditure was a small purchase in which the Service Center should have documented and maintained price or rate quotations from an adequate number of qualified sources.
Failure to maintain the appropriate procurement documentation could lead to future findings, reduced federal funding and the requirement to repay the Ohio Department of Education.
The Service Center should ensure appropriate controls and compliance with federal requirements are maintained with documentation supporting the procurement types. Appropriate supporting documentation could include copies of internet searches or other documented research for micro-purchases and documentation for price or rate quotations from an adequate number of qualified sources for small purchases.