Article 63: Procurement Grants: Under Exigent or Emergency Circumstances
(Category: procurement-compliance)
Article Summary
This article outlines the federal procurement rules found at 2 C.F.R. §§ 200.317 – 200.326 that govern non-competitive, "sole-source" contracting under exigent or emergency circumstances. FEMA defines an emergency as an active threat to life/safety requiring immediate action, while an exigency involves a need to prevent serious programmatic or financial harm where competitive delays would be unacceptable.
Non-competitive contracts are only valid for the duration of the actual emergency. Non-state entities must immediately begin a competitive bidding process while the emergency work is active, transitioning away from the sole-source contract as soon as conditions stabilize.
Five Key Takeaways for CTA FEMA Compliance
- Incorporate Appendix II Clauses in Sole-Source Files: Verify that emergency sole-source agreements contain every mandatory federal clause and anti-kickback provision listed in 2 CFR Part 200 Appendix II.
- Transition to Open Bidding Immediately: Initiate a standard, competitive procurement solicitation for identical services concurrently while an emergency contract is active.
- Execute a Cost Analysis for Emergency Awards: Conduct and document a formal independent cost or price analysis for any emergency contract expected to exceed the federal simplified acquisition threshold.
- Draft a Separate Justification per Procurement: Compile a standalone written justification for every non-competitive contract, explicitly identifying which of the four permitted circumstances in 2 CFR § 200.320 caused the exception.
- Observe Strict State versus Non-State Definitions: Adhere to state-level procurement laws if operating as a state instrumentality, while local municipalities and PNPs must follow the stricter non-state entity sole-source rules.
