Federal Grants Procurement Policy

Responsible Office or Person: Business Office

Issued: July 1, 2018

Scope

This Procurement Policy for Federal Grants applies to all expenditures of funds received through federal grants, whether those funds come directly from a Federal agency or through an intermediary, known as a “pass-through entity.” This Policy does not govern expenditure of funds received from other sources (e.g. research foundations, alumni donations, etc.). While reference may be made from time to time simply to “procurement transactions,” this Policy applies only to such transactions funded with federal funds.
 

Policy Statement

Federal law imposes particular requirements on the use of federal grants. This Procurement Policy is designed to ensure that Carroll University (“Carroll”) complies with those requirements. Individual federal grants may contain further requirements that are unique to those grants and in addition to the requirements of this Policy. It is therefore important for Principal Investigators to work closely with the Business Office and the Grants and Research Office to ensure compliance with the requirements of each grant.

 

This policy is consistent with Final Guidance issued by the Federal Office of Management and Budget on December 26, 2013 and effective as of December 26, 2014, amended by Implementing Statutory Changes to the Micro-Purchase and the Simplified Acquisition Thresholds for Financial Assistance dated June 18, 2018. Additionally, pursuant to the September 10, 2015, update from the Office of Management and Budget (OMB), the University has elected to adopt these new standards as of July 1, 2018.

General Procurement Standards (Section 200.318)

A.    Ethics and Conflicts of Interest (200.318(c)(1)  

Carroll employees involved in expenditure of federal grant funds must avoid any actual or apparent conflict of interest. Employees may not derive any personal financial or other benefit from any contract or transaction using federal grant funds. This prohibition includes parents, children (biological, foster, and/or adopted) and siblings, as such close relationships could give rise to an appearance of conflict. In addition, contractors or consultants who draft bid specifications or requests for proposal on Carroll’s behalf are thereby disqualified from bidding on those opportunities. While contractors or consultants are not automatically disqualified from other opportunities, care must be taken to ensure that their work for the University does not give them unfair advantage over competitors.

Carroll employees may not accept kickbacks, rebates, gratuities or other gifts or tokens of appreciation from vendors paid through federal grants. Rebates and discounts to Carroll are permitted provided they 1) comply with all applicable law, 2) provide a direct benefit to Carroll, 3) result from an arm’s-length negotiation, which is fully documented in the file, and, 4) are consistent with vendor’s standard pricing or discounting policies.

Failure to comply with these requirements may result in disciplinary action, including termination of employment.

The individual schools and departments of Carroll may not bid on contracts offered by other schools or departments if such bidding would create an actual or apparent conflict of interest, create an appearance of favoritism or interfere with free and open competition with bidders from outside the University.

To avoid conflict or the appearance of conflict, contractors or consultants and affiliates who prepare specifications, statements of work or other material portions of requests for proposal are excluded from bidding on the underlying work.

Suspected or observed violations of this Policy shall be reported to the Office of Academic Affairs. Carroll strictly prohibits retaliation of any type or nature against anyone for making such reports in good faith. Immediately report any observed or suspected retaliation to the Office of Academic Affairs and/or to Human Resources as appropriate.

B.    General Requirements ((200.318 (d-g)

The following requirements are applicable to all procurement transactions, regardless of size.

Procurement transactions shall be conducted in a lawful and ethical manner.

Unnecessary/duplicative purchases are not permitted (and are not reimbursable expenses).

In collaboration with the Business Office, Principal Investigators are responsible to ensure contractor performance in accordance with their contracts or purchase orders.

Whenever possible:

       Consider leasing versus purchasing;

       Enter into agreements to share common goods or services with other educational institutions, non-profit organizations or governmental entities;

       Use Federal excess or surplus property in lieu of new purchases;

       Consider breaking purchases into smaller consignments, or consolidating purchases, if doing so will produce lower pricing or greater value.

Competition (Section 200.319)

All procurement transactions must be conducted in a manner providing full and open competition. Federal grant regulations set aside preferences required by state or local law, unless the grant or applicable Federal law expressly mandate or encourage observance of such preferences. Federal preemption does not apply, however, to state licensing laws.

In order to ensure objective contractor performance and eliminate unfair competitive advantage, contracts that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements. Situations considered to be restrictive of competitions include but are not limited to:

       Placing unreasonable requirements on firms in order form them to qualify to do business;

       Requiring unnecessary experience and excessive bonding;

       Noncompetitive pricing practices between firms or between affiliated companies;

       Noncompetitive contracts to consultants that are on retainer contracts;

       Organizational conflicts of interest;

       Specifying only a “brand name” product instead of allowing “an equal” product;

       Any arbitrary action in the procurement process.

To further ensure free and open competition, all solicitations shall:

       Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Features or requirements that unduly restrict competition are not permitted. “Brand name or equivalent” descriptions may be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand to be met by offers must be clearly stated; and

       Identify all requirements and all factors to be used in evaluating bids.

       Ensure that all prequalified lists of persons, firms, or products used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. No potential bidder shall be barred from submitting during the proposal period.

 

Methods of Procurement (Section 200.320)

Purchasing Guidelines
 
Method Aggregate Dollar Amt. Notes 1: Notes 2:
Micro-Purchase Not to exceed $10,000 ($2,000 in the case of acquisitions for construction subject to
the Davis-Bacon Act).
No quotations required if price is reasonable. To extent practicable, distribute equitably among qualified suppliers.
Small Purchase $10,001 to $250,000 Rate quotations from
an adequate number of qualified sources.
No cost or price analysis required.
Sealed Bid Over $250,000 Primarily constructions projects, firm fixed
price contract.
Price is a major factor, formal process for bidding
Competitive Proposals Over $250,000 Fixed price or cost reimbursement RFP with evaluation methods for an adequate number of
qualified sources.
Sole Source Any dollar amount No competition must be authorized by agency (or pass-
through entity).
Unique or public emergency.
 
Micro Purchases (Less than $10,000)
 
Purchases under $10,000 are typically standardized goods or services available from many sources. Such purchases do not require competitive bidding or detailed documentation.
Whenever practicable, micro purchases should be distributed equitably among qualified suppliers. The threshold for micro purchases is $2,000 in the case of acquisitions for construction subject to the Davis-Bacon Act.
 
Small Purchases – Over $10,000 but Less Than the “Simplified Acquisition Threshold: (Currently $250,000)
 
Purchases larger than $10,000, but less than the Simplified Acquisition Threshold, require additional research and documentation. At minimum, written quotations should be obtained from at least two competing sources.
 
There is no requirement that contracts be awarded solely on the basis of price (i.e. to the lowest bidder).
 
Procurement by Sealed Bids
 
Sealed bids are publicly solicited requests for bids or proposals at a fixed contract price. The contracts are awarded to the bidder whose bid conforms in all material respects to the specified requirements and offers the lowest price. Sealed bids are the preferred method for procuring construction contracts if the following conditions apply:  
If sealed bids are used, the following requirements apply:  
Procurement by Competitive Proposals
 
Competitive proposals are used when more than one source is submitting an offer, and either a fixed price or cost-reimbursement contract is awarded. It is generally used when conditions are appropriate for the use of sealed bids. When this method is used the following conditions apply:  
Sole Source Procurement
 
“Sole source” or non-competitive procurement may be used only when one or more of the following circumstances apply:  
 

Contracting with Small and Minority Businesses, Women’s Business Enterprises, and Labor Surplus Area Firms (Section 200.321)

Carroll shall take all necessary affirmative steps to assure that minority businesses, women's business enterprises, and labor surplus area firms are used when possible. Affirmative steps include, at minimum:

Contract Cost and Price (Section 200.323)

In those instances in which no price competition exists, the supplier’s profit shall be negotiated as a separate line item. To establish a fair and reasonable profit, consider the: Construction contracts may not be awarded based on a “cost plus” pricing method. The fee payable under the contract must be expressed in dollars to be paid, and not as a percentage of any cost component. In addition, value engineering should be applied to all construction contracts.
 
Contracts shall be awarded only to providers of known integrity and ability to fulfill the contract requirements. Each project manager must maintain records detailing the history of all procurements. At a minimum, these records will disclose the rationale for the: Time and material contracts may be used only after a determination that no other contract is suitable and the contract includes a ceiling price that the contractor exceeds at its own risk.
 

Federal Awarding Agency or Pass-Through Entity Review (Section 200.324)

Records of all procurement transactions, and all relevant supporting documents, shall be available upon request to the federal granting agency or the pass-through agency responsible for the funds provided to Carroll.
 

Bonding requirements (Section 300.325)

Unless the granting agency has made a separate determination accepting Carroll’s bonding policy, all contracts for construction or facility improvement contracts or subcontracts exceeding the Simplified Acquisition Threshold shall meet the following requirements:

Mandatory Contract Provisions for Non-Federal Entities (Section 200.326, Appendix II to Part 200 – Contract Provisions for non-Federal Entity Contracts Under Federal Awards

Each grant may require that contracts funded by that grant contain certain provisions that apply only to that grant. To ensure compliance, Carroll uses contract forms provided by the Federal Demonstration Partnership for all sub-awards and contracts. No other contract forms may be used without the advance, written consent of the Office of Academic Affairs.
 
Required terms are found in Federal Demonstration Partnership templates.
 

Consequences of Noncompliance

Noncompliance can result in a variety of adverse consequences for Carroll, including: Noncompliance with this policy can have a variety of adverse consequences for Carroll, including loss of access to federal funding (including student loan funding). Therefore failure to comply with these policies and procedures may result in disciplinary action, including termination of employment. In addition, violation of Federal requirements may expose an individual to civil and criminal prosecution
 
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