The financial assistance provided through the PA Program is subject to the federal procurement under grant standards under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards found at 2 C.F.R. §§ 200.317-326.
As a condition of receiving reimbursement for contractor costs relating to FEMA’s federal assistance program, an NFE must comply with all applicable federal laws, regulations, and executive orders. Each NFE (Applicant) is responsible for managing and administering its federal awards in compliance with the applicable requirements, including but not limited to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards codified at 2 C.F.R. Part 200 (Uniform Rules), which DHS adopted at 2 C.F.R. § 3002.10. Specifically, the regulations at 2 C.F.R. §§ 200.317-326 set forth the procurement standards that NFEs must follow when using FEMA financial assistance to conduct procurements of real property, goods, or services.
Failure to follow the Uniform Rules found in 2 C.F.R. Part 200 when procuring and selecting contractors places PA applicants at risk of not receiving full reimbursement for associated disaster costs
The federal procurement under grant standards are relatively brief. They only address certain, limited procurement concepts and do not focus on all possible procurement issues. Where the federal procurement under grant standards do not address a specific procurement issue, a non-state entity must abide by the applicable local, state, and/or Tribal procurement standards or regulations – whichever applies to the particular non-state entity.
However, where a difference exists between a federal procurement standard and a local, state, and/or Tribal procurement standard or regulation, the non-state entity must apply the rule(s) that allow for compliance with all applicable layers.
Non-state entities are at risk of not receiving or keeping full reimbursement for associated disaster costs if they fail to comply with the mandatory general procurement under grant standards.
Documentation A non-state entity should also include the following documentation in its procurement file, as appropriate:
A non-state entity must document its rational for the method of procurement used for each contract (i.e., micro-purchase procedures, small purchase procedures, the sealed bidding method, the competitive proposal method or the noncompetitive proposal method). If utilizing the noncompetitive proposal method, the non-state entity must justify why this method was necessary. The Uniform Guidance breaks down the procurement process into five purchasing methods.
Micro-purchases are the simplest and most informal of the procurement methods. Here are the main points:
Purchases under the simplified acquisition rules (were $150,000 NOW $250,000) the process is still relatively simple and there are not extensive bidding requirements.
A non-state entity wishing to purchase supplies or services by small purchase should not exceed the simplified acquisition threshold, or the comparable state/local/Tribal threshold, whichever is lowest. In other words, a non-state entity must follow the most restrictive small purchase rules.
Contracts resulting from small purchase procedures should be fixed price or not-to-exceed cost-reimbursement contracts with assurances that the scope of work can be completed for less than the simplified acquisition threshold.
Purchases over was $150,000 NOW $250,000. the process gets more complicated and formalized.
The sealed bid method is the preferred method for procuring construction services and is appropriate when the following conditions are present:
Documentation If using the Sealed Bidding method of procurement, the non-state entity must document the procurement history.127 They may also reject any or all bids if there is a sound documented reason. The regulations do not provide guidance regarding what that entails, but some of the circumstances under which a non-state entity may reject an individual bid include but are not limited to:
As like the sealed bid method, competitive proposals mean more requirements and documentation.
Competitive proposals are an acceptable method of procurement when:
The solicitation document used is often known as a request for proposals (RFP). Although generally not used for actual construction, alteration, or repair to real property, the competitive proposal method is most often used for professional services related to construction projects. These services include program management, construction management, feasibility studies, preliminary engineering, design, architectural, engineering, surveying, mapping, and related services. The competitive proposals method of procurement is appropriate when the following conditions are present:
The non-state entity cannot base the contract award exclusively on price or price-related factors due to the nature or the service or property to be acquired;
Documentation - Written Method of Evaluation The non-state entity must have a written method for conducting their technical evaluations of the proposals received and for selecting offerors.135
▪ When evaluating proposals, FEMA expects the non-state entity to consider all evaluation factors specified in its solicitation documents and evaluate offers only on the evaluation factors included in the solicitation documents.
Award The contract will be awarded to the responsible contractor whose proposal is most advantageous to the program with price and other factors considered.
Sometimes because of the uniqueness of the goods or services or the immediacy of the need, competition is NOT as open as required in the normal procurement process. In these cases, the sole-source method must be followed.
There are exceptions to methods such as certain unique circumstances or a public emergency.
Regardless of the size of the purchase, these 5 characteristics must be still be met:
Public Emergency or Exigency
A non-state entity may be able to use the emergency or exigency exception to full and open competition if it determines that a public exigency or emergency will not permit a delay resulting from competitive solicitation.141 The non-state entity may use its own judgment in determining whether this condition has been met but must document its rationale in the procurement record.
When referring to procurement activity, FEMA defines both exigency and emergency as situations that demand immediate aid or action. The differences between the two situations are outlined below:
Use of the public exigency or emergency exception is only permissible during the actual exigent or emergency circumstances. Exigent or emergency circumstances will vary for each incident, and therefore, it is difficult to determine in advance or assign a particular time frame when noncompetitive procurements may be warranted. Exigent or emergency circumstances may exist for two days, two weeks, two months, or even longer in some cases.
Non-state entities must ensure that work performed under the noncompetitively procured contracts is specifically related to the exigent or emergency circumstance in effect at the time of procurement. Importantly, because the exception to competitive procurement is available only while the exigent or emergency circumstances exist, applicants should, upon awarding a noncompetitive contract, immediately begin the process of competitively procuring similar goods and services to transition to the competitively procured contracts as soon as the actual exigent or emergency circumstances cease to exist.
Determination that a Public Health Emergency Exists. As a result of confirmed cases of 2019 Novel Coronavirus (2019-nCoV), on this date and after consultation with public health officials as necessary, I, Alex M. Azar II, Secretary of Health and Human Services, pursuant to the authority vested in me under section 319 of the Public Health Service Act, do hereby determine that a public health emergency exists and has existed since January 27, 2020, nationwide. 01/31/2020 Date /s/Alex M. Azar II
FEMA Guidance on Procurement for COVID-19.
Federal disaster assistance grants are subject to the federal grant regulations at 2 C.F.R. Part 200, including the procurement requirements found within §§ 200.317-326. These regulations generally require competitive procurement of significant contracts unless"the public exigency or emergency for the requirement will not permit delay resulting from competitive solicitation." On March 17, 2020, FEMA issued guidance confirming that exigent and emergency circumstances currently exist. FEMA outlines, however, the minimum requirements that still apply in the accompanying Fact Sheet (both the memo and fact sheet are available here).
Every year, recovering communities lose millions of dollars because of failure to comply with federal procurement regulations. Avoid common mistakes by checking out the available resources to help you follow the rules for each step of the procurement process. You must follow federal procurement under grants rules when using federal disaster grants for contracted work. Failure to follow these procurement rules may result in the loss of funding. The federal procurement rules are listed in 2 C.F.R. §§ 200.317- 200.326.
Links Below Open in New Tab. Navigate Back to Site Using Browser Back Button
Procurement Process & Protocol Resources
Socioeconomic Contracting Resources
PDAT has put together a series of webinar modules on the rules for procurement under grants. There are eight (8) modules in this series. This webinar series covers the procurement standards under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (also known as the “Uniform Rules”), which are codified at Title 2 of the Code of Federal Regulations, sections 200.317 through 200.326 (2 C.F.R. §§ 200.317-.326). These blocks of instruction will familiarize you with the procurement standards imposed by Federal regulations on recipients and subrecipients when procuring services and property with funding from any of the Stafford Act grant programs, specifically as interpreted by and applied to the Public Assistance Program. We recommend watching these modules in order if you have not received this training before. If you have received any or all of this training before, these modules can be watched in any order as a refresher.
This block of instruction is the first in the series. This module, Module 1, will focus on the general procurement under grants information, including why PDAT and this webinar series were created; common terms you’ll see throughout the series; FEMA’s primary grant law, which is the Stafford Act; and the roles of various Federal and non-Federal entities in the procurement under grants process.
This block of instruction is the second in the series. This module, Module 2, will focus on the overarching procurement under grants rule applicable to states, including state agencies, instrumentality of the state, and territories, but not local governments.
This block of instruction is the third in the series. Modules 3A-3D discuss the rules that only apply to local governments, tribes, and nonprofits, sometimes collectively referred to as non-Federal Entities (NFEs) other than states. This particular module, Module 3A, will focus on the general procurement standards applicable to NFEs other than states.
This block of instruction is the fourth in the series. Modules 3A-3D discuss the rules that only apply to local governments, tribes, and nonprofits, sometimes collectively referred to as non-Federal Entities (NFEs) other than states. This particular module, Module 3B, will focus on the rules related to competition and procurement methods that apply to NFEs other than states.
This block of instruction is the fifth in the series. Modules 3A-3D discuss the rules that apply only to local governments, tribes, and nonprofits, sometimes collectively referred to as non-Federal Entities (NFEs) other than states. This particular module, Module 3C, will focus on the rules related to socioeconomic contracting as well as cost and price that apply to NFEs other than states.
This block of instruction is the sixth in the series. Modules 3A-3D discuss the rules that apply only to local governments, tribes, and nonprofits, sometimes collectively referred to as non-Federal Entities (NFEs) other than states. This particular module, Module 3D, will focus on the rules related to pre-procurement document review and bonding requirements that apply to NFEs other than states.
This block of instruction is the seventh in the series. This particular module, Module 4, discusses rules that either apply to just state and local governments or instead to all non-Federal entities (NFEs). State and local governments must comply with the rule on procurement of recovered materials while all NFEs (i.e., states, local governments, tribes, and nonprofits) must comply with the rule regarding required contract provisions.
This block of instruction is the eighth and last in the series. This particular module, Module 5, summarizes the key differences between the current procurement standards and the previous procurement standards. For emergency and major disaster declarations issued on or after December 26, 2014, the procurement rules for all non-Federal Entities (NFEs) are located at 2 C.F.R. §§ 200.317-.326. For emergency and major disaster declarations issued before December 26, 2014, the rules for states, local governments, and tribes were located at 44 C.F.R. § 13.36, and the rules for nonprofits were located at 2 C.F.R. §§ 215.40-.48.