06-Best-practice-guide-for-procure.pdf

Best Practice Guide for Procuring Services, Supplies, and Equipment Under EPA Assistance Agreements Issue Date: November 2022

Contents Best Practice Guide for Procuring Services, Supplies, and Equipment Under EPA Assistance Agreements

Issue Date: November 2022

Introduction

Overview

Differences between procurement contracts and other financial transactions

Regulations Governing Procurement Contracts

Basic requirements for procurement system

Conflicts of Interest in Procurement

Disadvantaged Business Enterprise (DBE) opportunity

Competition

Purchasing Preferences

Contract types

Cost or price analysis

Limitations on consultant compensation

Software and other intellectual property

Debarment and Suspension

Supplies

Equipment

Unique Requirements for Construction Contracts

Single and EPA audit

Appendix A: Conducting a price and or cost analysis

Cost Analysis

Cost Review Findings

Documentation

Introduction.

As a recipient of EPA financial assistance agreement (grants and cooperative agreements), you will likely find it necessary to purchase or “procure” professional services, supplies or equipment, in order to complete the work under your EPA awards. EPA developed this Best Practice Guide (Guide) to help recipients other than states meet federal requirements contained in the Procurement Standards of the Uniform Grant Guidance (UGG) published at 2 CFR Part 200 when making such purchases.1 If you have questions regarding any of the matters addressed in this guidance EPA encourages you to contact your Grants Specialist.

As provided in 2 CFR 200.317, with limited exceptions, states follow the same policies and procedures they follow for procurements financed with non-Federal funds.2 This Guide should, however, be useful to state pass-through entities when monitoring subrecipient compliance with the UGG because the Procurement Standards “flow down” to subrecipients other than borrowers in EPA revolving loan fund capitalization grant programs.3

Overview:

This Guide describes the financial transactions covered by the competitive procurement requirements and other rules you must follow when awarding and administering EPA funded contracts. With very few exceptions, recipients must follow a competitive process when using EPA funds to purchase supplies, equipment and professional services in amounts that exceed their “micro-purchase” threshold.4 Other rules cover purchasing systems, conflicts of interest, cost and price analyses, required contract clauses, and bonding requirements for construction. This Guide also provides guidance on unique EPA limitations regarding expenditures for consulting services.

1 As provided at 2 CFR 200.110 “ . . . non-Federal entities may continue to comply with the procurement standards in previous OMB guidance [e.g. 2 CFR Part 215] for a total of three fiscal years after this part goes into effect. As such, the effective date for implementation of the procurement standards for non-Federal entities will start for fiscal years beginning on or after December 26, 2017.” Please refer to question .110-6 of OMB’s July 2017 Frequently Asked Questions for details.

2 States are subject to the requirements of the Build America, Buy America provisions of the Infrastructure Investment and Jobs Act (P.L. 117-58, §§70911-70917) and at 2 CFR 200.322 for domestic preferences for procurement and at 2 CFR 200.323 for Procurement of recovered materials and any contract clauses required by 2 CFR 200.327. All recipients, including states, must comply with EPA’s rules for disadvantaged business enterprises at 40 CFR Part 33 which supplement 2 CFR 200.221.

3 Pass-through entities, as defined at 2 CFR 200.1, are recipients who provide subawards to eligible subrecipients.

4 As provided in the definition of Micro-purchase threshold at 2 CFR 200.1, the amount of the general micro-purchase threshold for procurements made with Federal financial assistance is the same as the Micro-purchase threshold at 48 CFR 2.101 for direct Federal procurement. The current micro-purchase threshold is $10,000 although the threshold is subject to adjustment based on inflation. Some recipients may establish micro-purchase thresholds up to $50,000 subject to the requirements of 2 CFR 200.320(a)(1)(iv) or higher than $50,000 with the approval of their cognizant Federal agency for indirect costs as provided in 2 CFR 200.320(a)(1)(v).

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Differences between procurement contracts and other financial transactions.

It is very important to accurately characterize financial transactions you enter into with EPA funds. There are five basic ways to transfer funds to individuals, organizations, companies and government agencies to perform your EPA assistance agreements. The rules differ depending on the type of transaction. Information to help you accurately characterize financial transactions is provided below. EPA has also published detailed Frequent Questions (FQ) to further assist you in characterizing financial transactions at https://www.epa.gov/grants/grants-policy-issuance-gpi- 16-01-epa-subaward-policy-epa-assistance-agreement-recipients. Note that referring to a financial transaction as a “partnership” does not determine the proper characterization of the transaction or the rules that apply.

1. You may hire personnel or pay current employees to perform work under the assistance agreement.

a. An individual must be on your organization’s payroll (i.e., receive a W-2) for tax purposes to be considered an employee. Requirements for documenting the proper use of EPA funds to compensate employees are found at 2 CFR 200.430 (wages) and 2 CFR

200.431 (fringe benefits).

b. Consultants or “contract employees” such as outside experts or training instructors who typically receive IRS Form 1099 for tax records are not considered employees for the purposes of your EPA assistance agreement. They are contractors.

2. You may procure supplies, equipment or professional services from individuals or companies through procurement contracts. You must have a system in place for administering contracts, ensuring that there are no conflicts of interest, conducting cost or price analyses when required and including contract clauses required by the UGG. EPA also has unique requirements which limit the amount you may pay individual consultants in certain cases. These requirements are discussed in more detail below.

3. You may fund a program or project that carries out a public purpose through a subaward of financial assistance to an eligible organization. Subawards usually may be entered into without competition so differentiating between procurement contracts and subawards is particularly important.

a. A subaward may take any form. Even if you refer to it as a contract—it is the substance of the transaction that matters. The UGG provides guidance at 2 CFR 200.331 for determining whether a transaction is a subaward or procurement contract and at 2 CFR

200.332 for overseeing and managing subrecipients. EPA has supplemented the UGG guidance through EPA’s Subaward Policy (Appendix A) and FQs which are available at https://www.epa.gov/grants/grants-policy-issuance-gpi-16-01-epa-subaward-policy-epa-assistance-agreement-recipients. Transactions between recipients and for-profit firms or individual consultants are procurement contracts with very few exceptions. There also https://www.epa.gov/grants/grants-policy-issuance-gpi-16-01-epa-subaward-policy-epa-assistance-agreement-recipients https://www.epa.gov/grants/grants-policy-issuance-gpi-16-01-epa-subaward-policy-epa-assistance-agreement-recipients http://www.ecfr.gov/cgi-bin/text-idx?SID=13ba9427d76d0457687883925c3868e9&mc=true&node=se2.1.200_1430&rgn=div8 http://www.ecfr.gov/cgi-bin/text-idx?SID=13ba9427d76d0457687883925c3868e9&mc=true&node=se2.1.200_1431&rgn=div8 http://www.ecfr.gov/cgi-bin/text-idx?SID=13ba9427d76d0457687883925c3868e9&mc=true&node=se2.1.200_1431&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=a0abf6c295616b27e19789c8b59c00a2&mc=true&node=se2.1.200_1331&rgn=div8 https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=a0abf6c295616b27e19789c8b59c00a2&mc=true&r=SECTION&n=se2.1.200_1332 https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=a0abf6c295616b27e19789c8b59c00a2&mc=true&r=SECTION&n=se2.1.200_1332 https://www.epa.gov/grants/grants-policy-issuance-gpi-16-01-epa-subaward-policy-epa-assistance-agreement-recipients https://www.epa.gov/grants/grants-policy-issuance-gpi-16-01-epa-subaward-policy-epa-assistance-agreement-recipients may be situations in which you enter into a procurement contract with a non-profit organization for commercially available services such as accounting.

b. EPA generally considers transactions between recipients and Federal agencies, non- Federal units of government, institutions of higher education, and non-profit organizations to be subawards regardless of whether the instrument is referred to as a contract. Subrecipients must comply with the regulations on procurement in 2 CFR Part 200 when procuring services, supplies or equipment. Pass-through entities are responsible for ensuring that their subrecipients procure services, equipment and supplies in compliance with the UGG standards.

c. In certain situations, a recipient may use micro-purchases rather than subawards for efficiency reasons to provide small amounts of financial assistance to eligible subrecipients. Micro-purchase amounts generally do not exceed $10,000. EPA provides detailed guidance on this practice in the EPA Subaward Policy Frequent Questions.

Essentially, recipients may not use micro-purchase procedures to simply transfer funds to another non-Federal entity. The transaction must finance tangible work that will be performed in accordance with the terms of the micro-purchase agreement and be appropriately documented through invoices or similar accounting records. Recipients that are subject to the definition of Modified total direct costs in 2 CFR 200.1 when distributing indirect costs may not use micro-purchases in lieu of subawards when the amount of the micro-purchase exceeds $25,000 even if their authorized micro-purchase threshold is more than that amount.

The policy of allowing recipients to use micro-purchase procedures in lieu of subawards does not apply when a statute or regulation requires a pass-through entity to use subawards. For example, under section 6 of the Environmental Education Act recipients of pass-through funding must use 25% of the amount of the EPA grant for subawards of $5,000 or less. Micro-purchase procedures may not be used in these circumstances.

Additional information on micro-purchases is available in Section 2, Competition Thresholds, of the Competition chapter of this Guide.

4. You may transfer funds between agencies of the same unit of government under interagency service agreements or intergovernmental orders provided for at 2 CFR 200.417 or between departments of an Institution of Higher Education (IHE).

a. Transfers of funds between agencies of the same unit of government (e.g. state, tribal and local governments) are typically not procurement contracts for the purposes of the UGG unless state, tribal or local law provides otherwise. EPA also does not consider intragovernmental transfers to be subawards subject to the UGG’s management and monitoring requirements of 2 CFR 200.332 unless state, tribal or local law provides otherwise.

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b. Transfers of funds between departments of IHEs are typically not procurement contracts or subawards but are governed by the IHE’s internal accounting practices for federal funds.

c. Additional guidance on internal transfers is available in the FAQs for EPA’s Subaward Policy which is available at https://www.epa.gov/grants/grants-policy-issuance-gpi-16- 01-epa-subaward-policy-epa-assistance-agreement-recipients

5. You may support the participation of an individual in your EPA-funded program through the payment of stipends, travel allowances, and similar Participant support costs under 2 CFR 200.1 and 200.456. Additionally, as provided at 2 CFR 1500.1 and EPA Guidance on Participant Support Costs, you may also provide rebates, subsidies and similar financial incentives to encourage companies to participate in EPA funded programs that promote environmental stewardship. These transactions are neither procurement contracts nor subawards.

a. Examples of participant support costs for individual program beneficiaries include stipends paid to interns who are not employees of your organization, registration fees for community members attending conferences, and travel support for individuals who are not employees of your organization to enable them to participate in training, work groups, and research projects.

b. Examples of allowable rebates and subsidies include payments made to transportation companies or individual owner-operators of trucks to offset the costs of purchasing pollution control technologies as authorized by the Diesel Emissions Reduction Act or EPA’s annual appropriations acts. Other rebates and subsidies include incentives paid to farmers to adopt best management practices for control of non-point source water pollution authorized under section 319 of the Clean Water Act and payments made to businesses to install source reduction technologies as authorized by section 6605 of the Pollution Prevention Act.

c. You must have written prior EPA approval to pay participant support costs or to re-budget funds EPA has provided for participant support costs to other direct cost categories.

Regulations Governing Procurement Contracts.

The UGG Procurement Standards are at 2 CFR 200.317 through 200.327 of 2 CFR Part 200.

The standards for the allowability of professional service costs are found at 2 CFR 200.459.

Requirements for supplies are set forth at 2 CFR 200.314, and equipment is covered by 2 CFR

200.313. Additional information regarding the difference between equipment and supplies is provided below. What is important for the purposes of this guidance is that services, supplies and equipment must be purchased or leased in compliance with the UGG Procurement Standards. Additionally, EPA has regulations at 40 CFR Part 33 (discussed below) requiring that recipients make good faith efforts use Disadvantaged Business Enterprises (DBE).

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Some other EPA regulations may establish purchasing requirements that apply to certain programs. These regulations include those for Superfund Technical Assistance Grants (TAG) (40 CFR Part 35, Subpart M) and Superfund Cooperative (40 CFR Part 35, Subpart O). If you are a recipient of a TAG or Superfund Cooperative Agreement, review the applicable rule to ensure you comply with the specific requirements for your assistance agreement.

Basic requirements for procurement system.

The UGG’s Procurement Standards are designed to ensure that purchases are made at a reasonable price in a fair and openly competitive way. You must also document your procurement decisions in a manner that will ensure that the transactions have met Federal requirements. Many organizations that receive EPA financial assistance have their own procurement systems. If you have your own system that meets the minimum standards of the UGG, you may use that system. If your system and procurement requirements do not meet the UGG’s minimum requirements, you may amend the system or your procurement requirements to meet UGG requirements. In any event, you must conduct your procurements in accordance with the minimum UGG requirements even if your own procurement system has less stringent standards (e.g. for sole-source contracts).

The following sections of this guidance are based on and provide cross-references to the applicable regulations and can help ensure you have an adequate procurement system. These are minimum standards and your organization may establish more comprehensive procedures.

1. Your procurement procedures must be documented and comply with State, local or tribal laws and regulation as well as Federal laws and the UGG. 2 CFR 200.318(a).

2. You must oversee EPA-funded contracts to ensure contractors perform in accordance with the terms and conditions of the contract. 2 CFR 200.318(b)

3. You must avoid procuring unnecessary or duplicative items and procure economically by consolidating or breaking out items to obtain discounts. Leasing equipment rather than purchasing may be more economical as indicated in the discussion below on equipment. 2 CFR 200.318(d).

4. EPA encourages recipients to enter into intergovernmental or inter-entity agreements to competitively procure common goods and services. 2 CFR 200.318(e). For example, some states have contracts with environmental consultants that local governments may also use to acquire consulting services without further competition. Two or more recipients or subrecipients could also solicit offers for common services such as developing web sites or laboratory analysis and share the cost of the contract. Recipients should document how the costs are allocated, the competitive procedures used to select the contractor, and the basis for selecting the individual or firm awarded the contract.

5. Recipients should consider obtaining excess or surplus Federal personal property from the General Services Administration in lieu of purchasing new equipment. 2 CFR 200.318(f).

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Additional information on obtaining surplus property from GSA is available at https://www.gsa.gov/portal/content/104591

6. If you are carrying out a construction project, consider using “value engineering” clauses to reduce costs. 2 CFR 200.318(g) : “Value engineering is a systematic and creative analysis of each contract item or task to ensure that its essential function is provided at the overall lower cost” 48 CFR PART 48—VALUE ENGINEERING http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=774c132cd89f432a4396b976f68a0661&mc=true&n=pt48.1.48&r= PART&ty=HTML

7. Evaluate potential contractors’ performance histories, integrity records, and compliance with public policies and laws. 2 CFR 200.318(f). Additional information regarding how to find out if a contractor is eligible to participate in an EPA funded project is provided below under “Suspension and Debarment.”

8. Document the history of the procurement. Minimum record-keeping requirements include 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). EPA recommends that recipients develop detailed paper or electronic files for each procurement action above the micro-purchase threshold. These files should include documentation of:

a. Selection of contract type (e.g. fixed-price or cost reimbursement);

b. Independent estimate of the cost for the contract;

c. Solicitation of bids or offers and responses from potential contractors or sole-source justification;

d. Determination that the price is reasonable;

e. Final contract including any clauses required by 2 CFR 200.327 and Appendix II of the UGG;

f. Amendments to the contract and contract administration actions; and,

g. Good faith efforts to use DBEs.

More information on these basic procurement requirements is provided below. Additionally, as required by 2 CFR 200.302(b)(7) and 200.403 recipients must have written procedures for determining that costs are necessary, reasonable and allocable to the EPA assistance agreement.

Recipients should, for example, be able to document why an EPA-funded contract is necessary to carry out a particular provision of the scope of work for the agreement. Recipients must also have internal controls as required by 2 CFR 200.302(b)(4), including procedures to document that contracts were successfully performed (i.e., invoices showing goods and services delivered and accepted) and charges to the agreement for contractual services are accurate and documented.

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9. EPA is not a party to recipients’ contracts. The recipient alone is responsible for exercising sound business judgment in administering contracts and settling protests, disputes and contractor claims. Recipients must, however, refer violations of law to the appropriate local, state or Federal authority. 2 CFR 200.318(k).

Conflicts of Interest in Procurement.

1. Financial Conflicts of Interest. As provided at 2 CFR 200.318(c)(1):

No employee, officer, or agent [of a recipient] may participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. The officers, employees, and agents of the non-Federal entity may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts.

You must have written standards of conduct to implement these requirements. These standards may include exceptions when financial interests are not substantial / or unsolicited gifts are of nominal value (e.g. coffee mugs, baseball caps, pens and refrigerator magnets). However, recipients’ codes of conduct must include disciplinary actions for violations.

Note: EPA takes financial conflict of interest violations seriously as reflected in EPA’s Recipient Conflict of Interest Policy. The Agency may disallow costs for contracts tainted by conflicts of interest whether the recipient has adopted a code of conduct or not.

2. Organizational Conflicts of Interest. Recipients other than state, tribal or local governments must also maintain written standards of conduct addressing organizational conflicts of interest.

“Organizational conflicts of interest means that because of relationships with a parent company, affiliate, or subsidiary organization, the non-Federal entity is unable or appears to be unable to be impartial in conducting a procurement action involving a related organization.” 2 CFR 200.318(c)(2). An example of an organizational conflict of interest is a situation in which a nonprofit recipient procures services from a for-profit affiliate with EPA funds. Guidance on relationships that make two organizations affiliated is available at 2 CFR 180.905.

Disadvantaged Business Enterprise (DBE) opportunity.

Under 40 CFR 33.301, a recipient must make good faith efforts to contract with DBEs whenever procuring construction, equipment, services and supplies under an EPA financial assistance agreement. The good faith efforts are required methods to be used by all EPA recipients to ensure DBEs have the opportunity to compete for procurements funded by EPA financial assistance. The regulations at 40 CFR 33.501(a) require a recipient to document its methods used to adhere to the good faith efforts and retain the documentation in the recipient's records.

Recipient’s failure to retain proper documentation may constitute noncompliance and result in remedial action as described in 40 CFR 33.105. Examples of proper documentation include, but https://www.ecfr.gov/cgi-bin/text-idx?SID=b33602f1b6b0b793b22ea9f2e8246fcd&mc=true&node=se2.1.200_1318&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=0b5aa6a136fb726f01e5fa135dd480c8&mc=true&node=se2.1.200_1318&rgn=div8 https://www.epa.gov/grants/epas-financial-assistance-conflict-interest-policy https://www.epa.gov/grants/epas-financial-assistance-conflict-interest-policy https://www.ecfr.gov/cgi-bin/text-idx?SID=b33602f1b6b0b793b22ea9f2e8246fcd&mc=true&node=se2.1.200_1318&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=b33602f1b6b0b793b22ea9f2e8246fcd&mc=true&node=se2.1.200_1318&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=e25c2ff1549b4919fca5e786b95f486f&mc=true&node=se2.1.180_1905&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=556318c939f3dc66d22871387c69dab5&mc=true&node=se40.1.33_1301&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=645454e4f75fdfcda85086dec4f81785&mc=true&node=se40.1.33_1501&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=b1294a993c8f4960830634b534907663&mc=true&node=se40.1.33_1105&rgn=div8 are not limited to, email logs, phone logs, electronic searches and communication, handouts at conferences, flyers sent to DBEs or similar records. In addition, if one or more of the good faith efforts cannot be performed, EPA recommends that the circumstances that have precluded the efforts be documented and retained in the recipient's records.

In addition, Appendix A to 40 CFR Part 33 requires that each procurement contract signed by an EPA financial assistance agreement recipient include the following term and condition:

The contractor shall not discriminate on the basis of race, color, national origin or sex in the performance of this contract. The contractor shall carry out applicable requirements of 40 CFR part 33 in the award and administration of contracts awarded under EPA financial assistance agreements. Failure by the contractor to carry out these requirements is a material breach of this contract which may result in the termination of this contract or other legally available remedies.

EPA’s Office of Small and Disadvantaged Business Utilization (OSDBU) provides DBE resources and Training at https://www.epa.gov/resources-small-businesses. The competition requirements discussed below must take into consideration the recipient’s obligations under 40 CFR Part 33.

Competition.

1. You must, to the maximum extent practicable, ensure open and free competition in your purchasing. 2 CFR 200.319. Some situations that are indicators of unnecessarily restricted competition specified in the regulation include:

• Working with, using sample language or templates from, accepting free services from, or hiring any contractors to develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals for procurements if that contractor will be competing for the resultant contract in violation of 2 CFR 200.319(b).

• Imposing unreasonable requirements on firms in order for them to compete for your business.

• Requiring unnecessary experience and excessive bonding.

• Allowing noncompetitive pricing practices between firms or between affiliated companies.

• Making noncompetitive awards to consultants that are on retainer contracts.

• Permitting organizational conflicts of interest.

• Specifying only a brand name product instead of allowing an equal product to be offered and describing the performance of other relevant requirements of the procurement.

• Taking arbitrary actions that favor one firm over others.

a. Recipients may not use geographic preferences in conducting procurements even if those preferences are authorized by state, tribal or local law. A Federal statute must authorize the use of geographic preferences. However, for architectural and engineering https://www.ecfr.gov/cgi-bin/text-idx?SID=bd17c7c2afd7380f63bb91a28a42f98e&mc=true&node=ap40.1.33.0000_0nbspnbspnbsp.a&rgn=div9 https://www.epa.gov/resources-small-businesses https://www.ecfr.gov/cgi-bin/text-idx?SID=b2de337dcf6cbbdd43b74423c03ea1ca&mc=true&tpl=/ecfrbrowse/Title40/40cfr33_main_02.tpl https://www.ecfr.gov/cgi-bin/text-idx?SID=b2de337dcf6cbbdd43b74423c03ea1ca&mc=true&tpl=/ecfrbrowse/Title40/40cfr33_main_02.tpl https://www.ecfr.gov/cgi-bin/text-idx?SID=65b526907afdb32bb7313dfa53471021&mc=true&node=se2.1.200_1319&rgn=div8

(A/E) services, location may be a selection factor provided there are an adequate number of firms to compete for the contract. 2 CFR 200.319(c).

b. Under the Indian Self-Determination and Education and Assistance Act (ISDEAA), as amended, 25 U.S.C 450-458ddd-2 tribal recipients may give preference to Indian organizations and to Indian-owned economic enterprises when awarding procurement contracts under EPA assistance agreements.5 EPA does not interpret the ISDEAA to, in and of itself, authorize sole source procurements with Indian organizations and Indian-owned economic enterprises. However, tribal recipients may give preference to these entities when developing lists for soliciting bids and proposals.

c. Your written procedures for competitive procurements must ensure that solicitations clearly and accurately describe technical requirements, qualitative factors, and minimum standards while avoiding detailed product specifications that restrict competition. You may use “brand name or equivalent” for supplies and equipment only if it is impractical or too costly to develop clear and accurate technical specifications. Recipients must disclose evaluation factors to offerors. 2 CFR 200.319(d).

d. Recipients may use pre-qualified bidders lists only if the lists are periodically updated, take DBE considerations into account, and include enough sources (at least 3) to ensure maximum open and free competition and sources may qualify during the solicitation period. 2 CFR 200.319(e).

2. Competition Thresholds.

a. As authorized by 2 CFR 200.320(a)(1), recipients may purchase goods and services that do not cost more than the Micro-purchase threshold described at 2 CFR 200.1 (currently set at $10,000 for most recipients) without competition provided purchases are equitably distributed among suppliers to the extent practicable, taking DBE considerations into account, and the price is reasonable.

(1) The micro-purchase threshold is periodically adjusted for inflation or statutory changes and the most current threshold can generally be found at Federal Acquisition Regulation (FAR) at 48 CFR 2.101.

(2) Some recipients may establish micro-purchase thresholds up to $50,000 subject to the requirements of 2 CFR 200.320(a)(1)(iv) or higher than $50,000 with the approval of their cognizant Federal agency for indirect costs as provided in 2 CFR 200.320(a)(1)(v).

(3) Micro-purchases are appropriate where market forces ensure that prices are competitive (e.g. supplies).

(4) Recipients may not make a series of purchases in a relatively short time frame from the same source (particularly for professional services) in amounts at or less than the micro-purchase threshold or less to avoid competition as that practice

5 Indian Organizations and Indian-owned economic organizations are defined at 25 U.S.C. 1452.

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Auditors may properly question compliance with the UGG Procurement Standards in these circumstances. Recipients should make a good faith estimate of the amount of contractual services or products necessary to perform a particular activity over the life of the assistance agreement and estimate the amount of the contract accordingly.

b. For purchases that cost more than the micro-purchase threshold but less than the Simplified acquisition threshold described at 2 CFR 200.1 (currently set at $250,000), recipients may use 2 CFR 200.320(a)(2) small purchase procedures and solicit offers from an adequate number of sources, taking DBE considerations into account, without formally advertising or otherwise publicizing the contracting opportunity.

(1) The simplified acquisition threshold is generally found in the FAR at 48 CFR 2.101, and is periodically adjusted for inflation and statutory changes.

(2) EPA’s position is that recipients must obtain documented prices or quotes (e.g. by email or price list searches) from at least 3 three qualified sources to meet this requirement although recipients may establish procurement procedures that require solicitations from more sources.

(3) You need not select the lowest priced item or service if it does not meet your requirements or you can otherwise demonstrate that the goods or services available at a higher price offer the best value. You must, however, justify a decision to purchase at the higher price and ensure that the vendor charges similarly situated customers the same price as it is offering to you and document that decision in the procurement file.

(4) You do not need to obtain bid or performance bonds for purchases in amounts less than the simplified acquisition threshold.

c. Procurements in excess of the simplified acquisition threshold are subject to the formal competitive requirements of 2 CFR 200.319 and 2 CFR 200.320(b). There are two types of formal procurements: sealed bids and competitive proposals.

(1) Sealed bidding is appropriate when precise specifications can be developed and a firm fixed-priced contract will be awarded to the responsive bidder based principally on price. The sealed bid approach to competitive procurements is typically only used for construction projects, purchases of equipment widely available in the commercial marketplace, and procurement of supplies in bulk.

(a) Recipients must solicit bids from an adequate number of potential contractors, taking DBE considerations into account.

(b) Tribal and local government recipients must publicly advertise the contracting opportunity. Other recipients may use web site announcements, pre-qualified or general bidders lists that comply with 2 CFR 200.319(e), or similar means to solicit bids.

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(c) The solicitation would need to remain open at least 30 days as provided in 40 CFR 33.301(b) and the recipient should make the U.S.

Small Business administration and the U.S. Minority Business Development Agency aware of the solicitation per 40 CFR 33.301(d).

(d) Detailed requirements for sealed bidding are set forth at 2 CFR 200.320(b)(1) If you do not intend to award the contract to the lowest bidder, contact EPA’s Grant Specialist to determine if EPA approval is required under 2 CFR 200.325(b)(4).

(2) Procurement by competitive proposals is appropriate when conditions for sealed bidding are not met and the recipient will award either a firm fixed-price or cost-reimbursement contract. This technique is typically used for acquisition of services where the offerors’ qualifications or technical approaches may be more important than price considerations.

(a) Requests for proposals (RFP) must be publicized and identify evaluation factors. Publication techniques include website announcements, pre-qualified or general offeror lists that comply with 2 CFR 200.319(e), or similar transparent means to solicit proposals.

(b) The RFP would need to remain open at least 30 days as provided in 40 CFR 33.301(b) and the recipient should make the U.S. Small Business administration and the U.S. Minority Business Development Agency aware of the solicitation per 40 CFR 33.301(d).

(c) Recipients must have a written method for conducting technical evaluations.

(d) Detailed requirements for procurement by competitive proposals are set forth at 2 CFR 200.320(b)(2)

(e) Note that as authorized by 2 CFR 200.320(b)(2)(iv) recipients may use qualification based competitive selection techniques for Architecture and Engineering services where price is not a selection factor provided the recipient negotiates fair and reasonable compensation with the A/E firm.

Note that EPA’s position is that the “qualifications based” procurement procedures described in 2 CFR 200.320(b)(2)(iv) may be used when acquiring services that can only be provided by a licensed A/E firm such as when state or local law requires that a licensed A/E firm prepare technical specifications for a construction project. As stated in the regulation: “The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms that are a potential source to perform the proposed effort.”

d. Recipients may request that the EPA review their procurement systems for compliance with the UGG Procurement Standards and thus obtain an exemption from pre-https://www.ecfr.gov/cgi-bin/text-idx?SID=b2de337dcf6cbbdd43b74423c03ea1ca&mc=true&node=se40.1.33_1301&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=b2de337dcf6cbbdd43b74423c03ea1ca&mc=true&node=se40.1.33_1301&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=48379f32c111893247915ebaad5ed115&mc=true&node=se2.1.200_1320&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=48379f32c111893247915ebaad5ed115&mc=true&node=se2.1.200_1320&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=450e29533ace4d261f66350f76ab9f65&mc=true&node=se2.1.200_1325&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=8814cf270b4bc3f4ea9d23d53977e942&mc=true&node=se2.1.200_1319&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=8814cf270b4bc3f4ea9d23d53977e942&mc=true&node=se2.1.200_1319&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=b2de337dcf6cbbdd43b74423c03ea1ca&mc=true&node=se40.1.33_1301&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=b2de337dcf6cbbdd43b74423c03ea1ca&mc=true&node=se40.1.33_1301&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=b2de337dcf6cbbdd43b74423c03ea1ca&mc=true&node=se40.1.33_1301&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=43f6d3fe622c1da28d97a1f079e2c10a&mc=true&node=se2.1.200_1320&rgn=div8 https://www.ecfr.gov/cgi-bin/text-idx?SID=43f6d3fe622c1da28d97a1f079e2c10a&mc=true&node=se2.1.200_1320&rgn=div8 procurement reviews by EPA. 2 CFR 200.325(c). Otherwise, EPA may require that you submit procurement documents for purchases in excess of the Simplified Acquisition Threshold to EPA for clearance prior to or after conducting a competition. 2 CFR 200.325(b).

3. Long-term contracts.

a. Recipients may enter into competitively awarded long-term (generally not to exceed five years) contracts for professional services or equipment leases that include options for periodic renewals. If the long-term contract precedes the EPA assistance agreement, recipients may use that contract if it was procured competitively consistent with Federal financial assistance regulations (including DBE considerations) in effect at the time. The use of such contracts in EPA assistance agreements does not constitute sole source procurement since the original contract was competed.

b. Long-term contracts that were awarded without competition may not meet EPA’s minimum requirements for compliance with the UGG Procurement Standards.

Additionally, out of scope modifications to contracts in amounts that exceed the Simplified Acquisition Threshold are subject to EPA approval as provided at 2 CFR 200.325(b)(5).

4. Sole-Source Contracts.

a. Sole-source contracts in excess of the micro-purchase threshold should be rare.

Potential justifications are described at 200.320(c) and include such factors as only one source has the goods or is able to perform the service, an emergency, EPA approval, or after soliciting a number of sources the recipient reasonably decided competition was inadequate.

b. EPA’s general policy is to require competition in accordance with 2 CFR 200.319 and 2 CFR 200.320 for commercially available items (including consulting services). EPA recommends that recipients consult with EPA prior to making sole source procurements.

Situations in which EPA may approve sole source contracts are generally limited to those in which a patent, copyright, or equipment maintenance agreement with the manufacturer are in place; the service or product demonstrates that an item is available from only one firm; or there is an emergency (e.g. a natural disaster) that precludes competitive contracting. Recipients who procure sole source contracts without EPA approval do so at their own risk.

c. EPA staff may not suggest, recommend or direct recipients to hire particular firms or individuals.

d. EPA does not require recipients to identify contractors in proposals. The fact that a recipient has named a contractor in its proposal as a “partner” or otherwise does not in and of itself justify a sole-source award. If, at any time, EPA finds that a sole-source contract does not comply with EPA’s interpretation of the UGG, EPA may disallow all or part of the cost of the contract as provided at 2 CFR 200.339.

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Purchasing Preferences.

1. a. Build America, Buy America. The Build America, Buy America (BABA) provisions of the Infrastructure Investment and Jobs Act (IIJA) (P.L. 117-58, §§70911-70917) apply to EPA funding obligated after May 14, 2022, for EPA funded infrastructure projects. None of the EPA funding subject to BABA may be used for a project of infrastructure unless all iron and steel, manufactured products, and construction materials that are consumed in, incorporated into, or affixed to an infrastructure project are produced in the United States. The BABA preference requirement applies to an entire infrastructure project, even if it is funded by both Federal and non-Federal funds. Additional information on BABA compliance is available in EPA’s “Build America, Buy America” (link) General Term and Condition.

1. b. Uniform Grant Guidance. Domestic Preference requirements for EPA financial assistance…