Finding Text
2 CFR 3474.1 provides that the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this section gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE, except as otherwise noted in that section. Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200. A nonfederal entity must: 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 (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). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR 200.324(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR 200.324(d)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR 200.327. These provisions are described in Appendix II to 2 CFR Part 200, ?Contract Provisions for Non-Federal Entity Contracts Under Federal Awards. Black River Local School District Board Policy DJF-R ? Purchasing Procedures indicates the following methods of procurement will be used for all purchases of goods and services made with federal funds: 1. Micro-purchases are purchases up to $10,000 and may be made in accordance with District purchasing procedures when the costs are reasonable. To the extent practicable, these purchases are distributed equitably among qualified suppliers. 2. Small purchase are purchases between $10,000 and $250,000. Prior to authorizing the purchase, the District will try to obtain price rates or quotations from a minimum of three vendors or providers. The District will obtain these price rates or quotations by written quotes. 3. Sealed bid procedures are used for firm fixed price contracts over $250,000 and is used as the preferred method for construction projects. Bids are solicited from an adequate number of known suppliers, which cannot be less than two responsible bidders. The District will solicit bids by posting bids using at least one public posting source. The contract will be awarded to the lowest responsive and responsible bidder. 4. Competitive proposals are used for all purchases over $250,000 for which sealed bids are not appropriate and must be used for architectural or engineering services. Contracts entered into for competitive proposals may be fixed-price or cost reimbursement. The District will publicize a request for proposal by advertising through the local paper or using a procurement source. The District will evaluate proposals in order to award the contract to the most advantageous proposal when considering cost and other factors. The District will evaluate proposals by checklist and compare. 5. Sole source procurement is used only when the goods or services are only available from a single source; a public exigency or emergency exists; there is inadequate competition and the applicable pass through entity approves this method. Lack of proper internal controls over Federal Grants management led to the District expending the following amounts without using the proper procurement method: Education Stabilization Fund - Elementary and Secondary School Emergency Relief (ESSER II) Fund, AL #84.425D ? $33,000 was paid to a vendor for electrical work related to a HVAC project; however, the District could not provide documentation to support the required price quotations were obtained from a minimum of three vendors. ? $350,000 was paid to a vendor for a HVAC project; however, the District could not provide documentation to support sealed bids were solicited and received, and the contract awarded to the lowest responsive and responsible bidder. ? $226,752 was paid to a vendor for a HVAC project; however, the District could not provide documentation to support the required price quotations were obtained from a minimum of three vendors. Education Stabilization Fund - American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund, AL #84.425U ? $1,898,392 was paid to a vendor for the design and build of kindergarten and high school classrooms; however, the District could not provide documentation to support sealed bids were solicited and received and the contract awarded to the lowest responsive and responsible bidder. Without proper controls over procurement, there is an increased risk that the District is not in compliance with applicable federal regulations. Noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. The District should review the procurement requirements specified above and ensure the proper procurement method is used. The District should also maintain adequate documentation to detail the history of procurement.