Article 62: Contracts and Procurements
(Category: emergency-responses)
Article Summary
All contracts and procurements funded through the Public Assistance program must reflect a reasonable cost, be awarded through open competitive bidding, and comply with Federal, State, and local procurement standards.
FEMA recognizes four acceptable procurement methods:
- Small Purchase Procedures: An informal method for services/supplies under $100,000 using at least three price quotes.
- Sealed Bids: A formal, publicly advertised process; the preferred method for construction.
- Competitive Proposals: Contracts awarded based on contractor qualifications rather than price; used for architectural or engineering (A&E) services.
- Non-Competitive Proposals: Sole-source contracting, strictly limited to specific circumstances (e.g., inadequate competition or extreme emergency exigency).
Time and materials contracts are discouraged and capped at a maximum of 70 hours for immediate post-disaster stabilization. Cost-plus-a-percentage-of-cost contracts are strictly ineligible.
Five Key Takeaways for CTA FEMA Compliance
- Enforce the 70-Hour Limit on Time & Materials: Restrict T&M contracts strictly to the first 70 hours of operations, and ensure a "not-to-exceed" price ceiling is included.
- Prohibit Cost-Plus-Percentage Contracts: Never execute a contract where the contractor's profit is calculated as a percentage of construction costs, as FEMA disallows these.
- Secure Three Quotes for Small Purchases: Maintain written records of at least three independent vendor price quotes for any informal procurement under the small purchase threshold.
- Procure A&E Firms via Qualification Matrices: Use competitive proposal methods for A&E procurements, evaluating and ranking firms based on professional qualifications.
- Avoid Making Contracts Contingent on FEMA Funds: Do not make payments to a vendor contingent upon your agency's receipt of public assistance grants, as this is strongly discouraged.
