Frequent Sources of Procurement Non-Compliance Issues

Federal Procurement Standards. The federal procurement standards applicable to federal awards can be found at Title 2 of the Code of Federal Regulations, Part 200, Sections 200.317 through 200.326 (2 C.F.R. §§ 200.317-200.326).

1.Time & Materials Contracts. T&M contracts can be used for a reasonable amount of time when (1) no other contract type is suitable; and (2) the contract includes a ceiling that the contractor exceeds at its own risk. Non-federal entities must also maintain a high degree of oversight (§ 200.318(j)).

2. Cost-Plus-Percentage-of-Cost Contracts. These are contracts where the contractor’s profit is based on a percentage of the underlying project costs actually incurred. Such contracts are explicitly prohibited by the Federal procurement standards and ineligible for 3. FEMA grant funding (§ 200.323(d)).

3. Piggybacking. Adopting a pre-existing contract solicited and awarded by another entity is referred to as “piggybacking.” Non-state applicants considering piggybacking should closely examine whether use of another jurisdiction’s contract would violate the federal procurement standards, as often these contracts do not contain required assignability clauses, are improper in scope, or were not procured in compliance with the federal procurement standards (§ 200.319).

4. Geographic Preferences. Non-state applicants must conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or proposals (§ 200.323(b)).

5. Awarding to Contractors that Drafted Solicitation Documents. Non-state applicants must prohibit contractors that develop or draft specifications, requirements, statements of work, invitations for bid or requests for proposal from competing for and being awarded the subsequent contract for that work (§ 200.323(a)).

6. Suspended or Debarred Contractors. Non-state applicants may not award a contract to a suspended or debarred contractor, nor may any prime contractor award to a suspended or debarred subcontractor. Check the database at www.sam.gov prior to awarding the contract (§§ 200.213, 200.318(h)).

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