procuring goods and services with federal education grant funds webinar presentation september 13,...
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Procuring Goods and Services With Federal Education Grant Funds
Webinar PresentationSeptember 13, 2010
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Introduction
What Will I Learn During This Webinar?
Refresher on Education Department General Administrative Regulations (EDGAR) procurement requirements
Commonly identified procurement weaknesses and deficiencies
Procurement best practices
Treatment of American Recovery and Reinvestment Act (ARRA) Funds
Procurement processes and procedures for grantees and subgrantees using ARRA funds generally follow the same guidelines, rules and regulations that apply to other ED grants.
Treatment of ARRA Funds- ARRA Procurement Regulations
ARRA Division A, Subtitle D – Additional Accountability and Transparency Requirements
SEC. 1554 - Special Contracting Provisions.
To the maximum extent possible, contracts funded under this Act shall be awarded as fixed-price contracts through the use of competitive procedures. A summary of any contract awarded with such funds that is not fixed-price and not awarded using competitive procedures shall be posted in a special section of the website established in section 1526.
Treatment of ARRA Funds- ARRA Procurement Regulations (cont’d.)
ARRA Division A, Title XVI – General Provisions – This Act
Sec. 1604 – Limit on Funds
Sec. 1605 – Buy American – Use of American Iron, Steel, and Manufactured Goods
Sec. 1606 – Wage Rate Requirements
Treatment of ARRA Funds- Increased Single Auditor (A-133) Scrutiny
ARRA awards considered high risk under A-133 will receive greater scrutiny.
New ARRA expenditures may push subrecipients over the $500,000 A-133 audit expenditure threshold.
Key Procurement Guidance/Regulations
• EDGAR (Education Department General Administration Regulations) Part 74 -Administration of Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations
(Authority: 20 U.S.C. 3474; Circular A-110) • EDGAR Part 80 – Uniform Administrative Requirements for
Grants and Cooperative Agreements to State and Local Governments(Authority: 20 U.S.C. 3474; Circular A-102)
EDGAR Part 74.40 thru 74.48 **Snapshot** EDGAR Part 80.36
• Higher Education Institutions, Hospitals, and Other Non-Profit Organizations:
-Recipient Responsibilities
-Codes of Conduct
-Competition
-Procurement Procedures
-Cost/Price Analysis
-Procurement Records
-Contract Administration
-Contract Provisions
• States: Follow same policies and procedures in accordance with state law for procurements with non-Federal funds. All contracts/orders will include any clauses required by Federal statute and executive orders.
• Other Grantees/Subgrantees:-Develop Policies and Procedures-Maintain Effective Contract Administrative System-Identify Conflicts of Interest-Conduct Pre-solicitation Reviews-Encourage Economy and Efficiency-Use of Excess Property-Use of Value Engineering-Determining Contractor Responsibility-Maintain Contract Award Decision Documentation-Limited Use of T&M Contracts-Settling Contractual Matters-Develop Protest Procedures
• -Ensuring Competition-Utilize Various Procurement Methods-Contracting with Small Businesses-Performing Cost/Price Analysis-Making Procurements Available for Agency Review-Bonding Requirements-Inclusion of EDGAR Provisions-Contracting with Faith-Based Organizations
Procurement Standards
Procurement Requirements
Procurement Standards/
Requirements
Procurement Standards/Requirements -
Develop Procurement Policies and Procedures – EDGAR Part 80.36(b)
State/Local laws Federal law and EDGAR Standards
Agency Procurement Policy and Procedures
Procurement Standards/Requirements -
Develop Procurement Policies and Procedures – EDGAR Part 74.44
Written procedures to address: Unnecessary purchasing, performing lease v. buy analysis, and
requirements for soliciting goods and services. Small business participation. The various types of procurement instruments appropriate for
the purchase and in promoting the grant program. Determining contractor responsibility to include checking
‘Excluded Parties List’ for debarred and suspended vendors. Making pre-award documents available for agency review. Allowing for contracting with faith-based organizations.
Procurement Standards/Requirements- Contract Administration
Maintain an Effective Contract Administration System
Ensures ability to determine contractor conformance with terms and conditions of contract.
Ensures ability to evaluate contractor performance.
Ensures ability to document if contractor met terms and conditions of contract.
Procurement Standards/Requirements -Code of Conduct/Identifying Conflicts of
Interest
Written code of conduct governing procurement personnel.
No participation in procurements if/whenconflicts of interest are known.
No soliciting or acceptance of gratuities, favors, or anything of monetary value from contractors or subcontractors.
Procurement Standards/Requirements -
Determining Contractor Responsibility
Grantees and subgrantees are to make contracts only with vendors who have the potential ability to perform successfully under the proposed procurement. Consideration shall be given to:
Contractor integrityCompliance with public policyRecord of past performanceFinancial and technical resourcesDebarment and Suspension
Procurement Standards/Requirements -
Maintain Contract Award Decision Documentation
Provides the history of the procurement. Examples of procurement documents to maintain in the record:
Rationale for method of procurementSelection of contract typeBasis of Contractor selection or rejectionBasis of contract price
Procurement Standards/Requirements-
Competition Highlights: All procurement transactions will provide for full and open
competition to the maximum extent practicable.
Agencies shall not place unreasonable requirements on firms in order to qualify.
Awards are made that are responsive to the solicitation and is
most advantageous to the recipient, price, quality, and other factors considered.
Procurement Standards/Requirements -Competition (cont’d)
Procurement Methods
Cost analysis – the review and evaluation of each element of an offeror’s proposal to determine reasonableness, allocability, and allowability.
Grantees and subgrantees must perform a cost or price analysis for all procurement actions.
The method and degree of analysis will depend on the procurement.
A cost analysis must be performed when the offeror is required to submit a detailed cost proposal.
(
Procurement Standards/Requirements-
Cost and Price Analysis Cost analysis is the review and evaluation of each element of an offeror’s
proposal to determine reasonableness, allocability, and allowability.
A cost analysis must be performed:
- for all procurement actions.
-when the offeror is required to submit a detailed cost proposal.
-for all sole source contracts.
-when adequate price competition is lacking.
The method and degree of analysis will depend on the procurement.
Common Procurement WeaknessesAudit/Review Sources
ED/Office of Inspector General (OIG)Government Accountability Office (GAO)A-133 Single AuditsED Program Monitoring
What are Some Common Procurement Weaknesses?
Lack of Contract File Documentation Lack of ApprovalsFailure to Follow Existing Procurement
ProcedureSplit Purchases Lack of Competition in Small Purchase
ProcurementsUnauthorized Commitments to Vendors
Common Procurement Weaknesses-
Lack of Contract File Documentation
Examples:
Missing Determinations and FindingsUndocumented procurement backgroundNo evidence of competitionNo evidence of a cost and price analysis
Common Procurement Weaknesses-
Lack of Approvals
Examples : 2nd level review and approval on negotiation
/business clearance memoranda
Legal sufficiency reviews
Approval from city councils
Approvals of sole-source contracting
Common Procurement Weaknesses-
Failure to Follow Existing Procurement Procedure
Examples: Instances of failure to produce evidence of full and open
competition.
Failure to provide evidence of proposal evaluations.
Lack of evidence that the list of debarment, suspension, and ineligibility was reviewed.
Common Procurement Weaknesses Failure to Follow Existing Procurement Procedure -
Debarment and Suspension
Grantees and subgrantees must not make any award or
permit any award (subgrant or contract) at any tier to any party which is debarred or suspended or is otherwise excluded from or ineligible for participation in Federal Assistance programs under Executive Order 12549, “Debarment and Suspension.”
(Reference: EDGAR Part 80.35 – ‘Subawards to debarred and suspended parties’. For complete information on debarment and suspension, see EDGAR Part 85 – “GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)”.)
Common Procurement Weaknesses- Failure to Follow Existing Procurement Procedure-
Debarment and Suspension (cont’d)
Typically, grantees fail to document that vendors were checked against the ‘Excluded Parties List’.
Grantees could inadvertently contract with, or make subawards to, parties that are suspended or debarred from doing business with the Federal government.
Common Procurement Weaknesses-
Split Purchases
Segregating a single purchase into multiple transactions in order to avoid competition thresholds or single purchasing limits.
Example: Purchasing 2 computers from same vendor at same time, rather than 1 consolidated purchase, to avoidsmall purchase competition threshold.
Common Procurement Weaknesses-
Lack of Competition in Small Purchase Procurements
Documented evidence of oral quotations or written quotations missing from
the record
Effective Procurement System An effective procurement system delivers on a timely
basis the best value product or service to the customer, while maintaining the public’s trust and fulfilling public policy objectives.
Grantees and subgrantees should have procurement systems grounded in a law that promotes transparency, accountability, and competition, and helps to ensure effective management and oversight and sustained leadership.
Elements of an Effective Procurement System -
TransparencyA comprehensive, uniform procurement law that
provides for central management of the procurement system to implement policies.
Concisely written policies and procedures provide agencies, procurement staff, and vendors with a clear and consistent view on how procurements should take place.
Elements of an Effective Procurement System
Transparency - Policies and Processes
Promote the basic principles that govern how the agency will perform the procurement function.
Clearly define the roles and responsibilities of agency staff involved in the procurement process and empowers them to work together to procure desired goods and services.
Sets expectations that stakeholders will strategically plan acquisitions and proactively manage the acquisition process.
Elements of an Effective Procurement System Transparency -Policies and Processes -
Strategic Acquisition PlanningAcquisition planning and strategy development
support an agency’s mission rather than focus on the needs of individual units/transactions.
Involves anticipating future needs, devising contracting programs to meet these needs, and arranging for the acquisition to promote competition and use of necessary resources.
Elements of an Effective Procurement System -
AccountabilityClear lines of procurement responsibility,
authority, and oversight. Recommended that agencies have a central
procurement authority with full-time sole, direct responsibility for the agency’s procurement program. (Also see: Organizational Alignment and Leadership.)
Adequate internal controls within the procurement process.
Elements of an Effective Procurement System Accountability- Adequate Internal Controls
Well-defined and documented procurement processes reduce the exposure to risk and improve the financial health of an agency.
Agencies should be able to demonstrate effective internal processes surrounding financial controls, reporting, and control activities of the procurement processes.
Agencies should routinely assess the effectiveness of internal controls over the agency procurement function and activities.
Elements of an Effective Procurement System -
Integrity
Public confidence earned by avoiding any conflicts of interest, maintaining impartiality, avoiding preferential treatment for any group or individual, and dealing fairly and in good faith with all parties.
Elements of an Effective Procurement System -
Competition
Maximizing the use of competition ensures that entities receive the best value in terms of quality and price from the commercial marketplace.
Sole source contracting should only be used under narrowly defined conditions (e.g., only 1 source capable or during a declared emergency).
Lack of planning is not a reason to restrict competition.
Elements of an Effective Procurement System -
Organization Alignment and Leadership
Procurement Well-Positioned in Agency Hierarchy
The appropriate placement of the procurement function in an agency’s organization ensures that the procurement function meets the agency’s overall missions and needs.
Ideally, a central procurement office that is placed at a high level ensures effective direction, coordination, and control over procurement spending.
Elements of an Effective Procurement System -
Human Capital Management Trained Procurement Workforce
Contracting Personnel Technical Personnel (Contracting
officer representatives (COR) and points of contact)
Elements of an Effective Procurement System –
Human Capital Management –Trained Procurement WorkforceWhat Do I Need to Know?
Examples:
Understanding Procurement Laws and Agency Procurement Policy and Procedures
Importance of Internal Controls to include Segregation of Duties
Ethics in Acquisition
Performing Administration, Monitoring, and Oversight
Writing Performance-Based Statements of Work
Elements of an Effective Procurement System –
Knowledge and Information Management
Technologies and tools that help managers and staff make well-informed acquisition decisions.
Elements of an Effective Procurement System
Knowledge and Information Management -Integrated Procurement Data System
Centrally manages and oversees agency procurement activities.
Provides credible, reliable, and timely data about goods and services acquired and the methods used to acquire them.
Provides visibility in spending.
Automates and streamlines the procurement process.
Elements of an Effective Procurement System Knowledge and Information Management -
Spend Analysis Spend Analysis answers basic questions about how much is
being spent and where dollars are going.
Component to taking a strategic approach to procurement.
Provides agencies knowledge on spending activity on goods and services to leverage buying, save money, and improve performance.
Data is continually analyzed and used to make corporate-wide acquisition decisions.
References/Resources• EDGAR http://www2.ed.gov/policy/fund/reg/edgarReg/edgar.html • Government Accountability Office Reportshttp://www.gao.gov/new.items/d05218g.pdfhttp://www.gao.gov/products/GAO-02-230http://www.gao.gov/products/GAO-04-870http://www.gao.gov/products/GAO-06-577http://www.gao.gov/products/GAO-07-159• Office of Management and Budget OMB Circular A-133 - http://www.whitehouse.gov/sites/default/files/omb/assets/a133/a133_revised_2007.pdfOMB Circular A-133 Compliance Supplement 2010 - http://www.whitehouse.gov/omb/circulars/a133_compliance_supplement_2010OMB Circular A-133 Compliance Supplement 2009 – http://www.whitehouse.gov/omb/circulars_a133_compliance_09toc/March 2009, Compliance Supplement “Other OMB Circular A-133 Advisories Appendix VII --
American Recovery and Reinvestment Act” http://www.whitehouse.gov/sites/default/files/omb/assets/a133_compliance/app_7.pdf
May 2008, “Conducting Acquisition Assessments under A-123” http://www.whitehouse.gov/sites/default/files/omb/assets/omb/procurement/memo/a123_guidelines.pdf
References/Resources (cont’d)
• GSA Excluded Parties List Systemhttp://www/epls/gov/
• Federal Acquisition Regulations (FAR) - Ratification of Unauthorized Commitments https://www.acquisition.gov/far/current/html/Subpart%201_6.html#wp1050927
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