Finding Text
Under 2 CFR 200.318-326, non-federal entities must adhere to procurement
standards for purchases made with federal funds. Key requirements include:
- Full and Open Competition: Procurement transactions must be conducted to
ensure open competition and prevent practices that may unduly restrict
competition (2 CFR 200.319(a)).
- Documentation of Procurement History: Entities must maintain records that
detail the procurement history, including the rationale for the method of
procurement, selection of contract type, contractor selection or rejection, and the
basis for the contract price (2 CFR 200.318(i)).
- Use of Non-Competitive Procurement: Non-competitive procurement is only
allowed under limited circumstances, such as when the item is available from a
single source, there is a public emergency, or after solicitation of multiple
sources, competition is deemed inadequate (2 CFR 200.320(c)).The Organization incurred expenditures of approximately $620,000 for the
renovation of a community center using federal funds under the SLFRF program.
The Organization received two bids for the renovation project. However, full
documentation of the process was not maintained.
Cause: The Organization did not establish or follow sufficient internal controls to ensure
compliance with federal procurement requirements, including maintaining the
required documentation for procurement activities.
Possible effect: The lack of procurement documentation creates a significant risk that
noncompliant practices occurred, such as non-competitive procurement or
payments exceeding fair market value.