FY2025 FEMA Procurement Policy Implementation Framework

1. Statutory Foundation and the FY2025 Regulatory Shift

This framework establishes the mandatory architectural requirements for all acquisitions funded by Federal Emergency Management Agency (FEMA) awards. Effective immediately, the July 2025 "Procurement Under Grants Policy Guide" (PUGPG) supersedes previous field manuals, formalizing a rigorous regulatory environment where compliance is a mandatory prerequisite for federal reimbursement. These standards, derived from 2 C.F.R. Part 200, are not mere administrative suggestions; they are the legal benchmarks against which every dollar of expenditure will be audited. Any deviation from these standards constitutes a material breach of the grant agreement, exposing the recipient to immediate OIG scrutiny and the high probability of cost disallowance.The applicability of these standards is governed by the legal status of the entity, as delineated in the table below. Note specifically that Indian Tribes, while allowed to use internal policies, are now subject to non-negotiable federal mandates under the FY2025 update.

Regulatory Applicability Matrix

Entity Type,Primary Regulatory Authority,Core Policy Requirement,Non-Negotiable Federal Mandates

States & Indian Tribes,2 C.F.R. § 200.317,Must follow their own documented procurement policies.,Must  comply with § 200.322 (Domestic Preferences) and § 200.327 (Required Contract Provisions).

Local Governments & Nonprofits,2 C.F.R. §§ 200.318 – 200.327,Must follow specific Federal Procurement Standards.,Full adherence to all PUGPG standards and procedures.

Critical Effective Dates and Retroactive Application  The FY2025 PUGPG governs all FEMA awards with a federal award date on or after  October 1, 2024 , and all Stafford Act disaster declarations issued on or after that date. Crucially, FEMA has issued a specific directive for  Hurricane Helene  declarations: to ensure regulatory uniformity, the October 1, 2024 revisions apply to all Hurricane Helene-related declarations, regardless of whether the specific declaration occurred before or after the October threshold.The "So What?" Factor: Fiscal Preservation  The accurate identification and application of the guide version corresponding to the award date is the primary defense against the recoupment of federal funds. In the context of Hurricane Helene, failing to apply the FY2025 standards to pre-October declarations—as now required by FEMA directive—will result in unallowable costs. Institutionalizing these standards is the only mechanism to ensure the preservation of disaster recovery capital.

2. Institutional Standards of Conduct and Ethical Safeguards

A recipient is legally compelled to conduct all procurement transactions in a manner that provides full and open competition. Written codes of conduct are the primary instrument for establishing an impartial procurement environment, shielding the entity from the legal liabilities of personal bias or undue contractor influence.Written Standards of Conduct (§ 200.318(c)(1))  Local governments and nonprofits must maintain rigorous written standards governing the actions of employees, officers, and—newly emphasized in the FY2025 update— board members . These standards must include:

• Absolute prohibitions against real or apparent conflicts of interest.
• Regulatory definitions of covered individuals (including the expansion to board members).
• Mandatory Disciplinary Actions:  Policies must explicitly detail the specific consequences for ethical violations, up to and including dismissal and legal referral.Gifts and Gratuities Policy  The solicitation or acceptance of gifts, gratuities, favors, or items of monetary value (including hospitality and travel) from contractors is strictly prohibited. Entities may implement a  "De Minimis" exception  for unsolicited items of "nominal value" only where the financial interest is not substantial. As a matter of risk management, legal counsel must define specific dollar thresholds for these exceptions to prevent "creeping" conflicts that attract OIG findings.Architecture of Prevention: The "Double Dipping" Prohibition (§ 200.319(b))  To prevent the creation of "biased ground rules," the FY2025 standards strictly prohibit "double dipping." This occurs when a contractor is engaged to develop the scope of work, specifications, or solicitation documents and subsequently attempts to bid on that same contract. This ensures that no contractor can gain an unfair competitive advantage by drafting requirements tailored to their own proprietary capabilities.This ethical infrastructure serves as the mandatory precursor to the broader Conflict of Interest architecture required for federal compliance.

3. Conflict of Interest Architecture: Real, Apparent, and Organizational

Proactive identification of conflicts in the acquisition process is a critical legal safeguard. Failure to disclose and remediate conflicts represents a high-risk area for fund recoupment.

1. Real Conflicts of Interest:  Triggered when a covered individual (employee, officer, board member, or immediate family/partner) has a financial interest in or receives a tangible personal benefit from a firm considered for a contract. Financial interest includes ownership of stock, real estate, or potential job offers.
2. Apparent Conflicts of Interest:  Occurs when a relationship creates the  appearance  of personal interest, even absent proven financial gain. For example, a purchasing officer awarding a contract to a former roommate creates an apparent conflict that constitutes a violation of federal standards.
3. Organizational Conflicts of Interest:  Arise when the recipient cannot remain impartial due to relationships with a parent, affiliate, or subsidiary. These include:
4. Impaired Objectivity:  A contractor evaluating their own work product under a different agreement.
5. Unequal Access to Information:  A contractor utilizing non-public information from one contract to gain a competitive advantage in another.
6. Biased Ground Rules:  A contractor drafting the specifications for a solicitation they intend to bid upon.Remediation and Recusal  "Recusal" is the required remediation strategy. Conflicted individuals must be removed from the selection, evaluation, and administration process. This process is not valid unless it is documented in writing and maintained within the permanent procurement file to withstand federal audit.These conflict protections are integral to the recipient's broader mandate of administrative oversight and fiscal responsibility.

4. Mandatory Oversight and Operational Responsibility

The recipient bears a non-delegable duty to monitor contractor performance. Oversight cannot be outsourced in a manner that absolves the recipient of the responsibility to ensure every federal dollar results in contractual performance.Maintenance of Oversight (§ 200.318(b))  Recipients must ensure contractors perform in accordance with all contract terms. If internal personnel are unqualified—particularly in specialized areas such as  debris monitoring —the entity is  obligated to acquire the necessary expertise . Reliance on unqualified staff for debris monitoring is a frequent trigger for OIG-mandated fund recoupment.Mandate:  Recipients must avoid acquiring unnecessary or duplicative items.

• Current Needs Only:  Procurements must be limited to the immediate scope of work.
• Prohibition on Future Use:  Federal funds may not be used for "stockpiling." For example, if a disaster declaration justifies the use of four generators, purchasing eight generators to have "extras" for future seasons is a violation of § 200.318(d) and constitutes an unallowable cost.Economic Approach and Price Analysis  The "Economic Approach" mandate requires recipients to break out procurements when it results in a more economical unit price. For instance, awarding separate contracts for vegetative debris versus construction debris can lower unit costs. Crucially, this decision must be documented in a formal  Price Analysis  (Chapter 8) to prove that the procurement strategy was the most cost-effective option available.Effective operational oversight ensures that the technical methodologies of procurement are applied with fiscal precision.

5. Procurement Methodologies and Competition Thresholds

Procurement methods are dictated by the  Simplified Acquisition Threshold (SAT) , currently set at  $250,000 .| Procurement Method | Threshold/Nature | Mandatory Competition Requirement || ------ | ------ | ------ || Micro-purchase | Under $10,000 | No quotes required if price is reasonable; must distribute among qualified suppliers. || Simplified Acquisition | $10,000 - $250,000 | Must obtain price/rate quotations from an adequate number of sources (FEMA strongly encourages  at least three ). || Sealed Bidding | Over $250,000 | Formal; firm-fixed-price; awarded to the lowest responsive/responsible bidder. || Proposals | Over $250,000 | Formal; used when price is not the sole factor; evaluation based on technical and cost factors. |

Restrictions to Competition  The following actions are prohibited as they limit full and open competition:

• Placing unreasonable requirements on firms (e.g., excessive bonding or unnecessary experience).
• Noncompetitive pricing practices or awarding contracts to contractors on retainer.
• Specifying "brand name only" without an "or equivalent" provision.
• Prequalified Lists:  If used, these lists must be  updated regularly  and remain  open to new bidders  during the solicitation period.New FY2025 Provision: U.S. Jobs Scoring (§ 200.319(f))  Recipients are now authorized to incorporate a scoring mechanism that rewards bidders committing to  U.S. jobs . Qualitative evaluation factors may include specific numbers and types of jobs created, as well as specific compensation and benefits packages offered.

6. Mandatory Contract Provisions and Compliance Checklists

The inclusion of  Appendix II  provisions is the final layer of institutional protection. Their absence creates a direct pathway for FEMA to determine that contract costs are ineligible for reimbursement.

Comprehensive Compliance Checklist

• Contracts >$10,000:  Termination for Cause and Convenience clauses.
• Contracts >$25,000:  Suspension and Debarment clauses (Verification via SAM.gov is mandatory).
• Contracts >$100,000:  Byrd Anti-Lobbying Amendment certifications and Contract Work Hours and Safety Standards Act clauses.
• Contracts >$150,000:  Clean Air Act and Federal Water Pollution Control Act clauses.
• Contracts >$250,000 (SAT):  Mandatory "Contract Remedies" clause.
• Construction >$2,000:  Davis-Bacon Act and Copeland Anti-Kickback Act clauses (Required  only  for specific programs:  EMPG, HSGP, NSGP, THSGP, PSGP, IPR, HHPD, Safeguarding Tomorrow RLF, and TSGP ).Domestic Preferences (§ 200.322) and Recovered Materials (§ 200.323)  All contracts for goods/products must include a "Domestic Preference" clause. "Recovered Materials" clauses are mandatory for state agencies and their political subdivisions; notably, this specific provision is not required for Indian Tribes or Nonprofits.The "So What?" for Legal Counsel  The absence of a "Remedies" clause in contracts exceeding the $250,000 SAT is a catastrophic but avoidable audit failure. Because FEMA is not a party to the contract, the recipient must have a documented legal mechanism to resolve breaches. Without this clause, the entire contract cost is at risk of being deemed ineligible, leading to the immediate loss of disaster recovery funding.Institutional adherence to this framework is the only method to ensure that procurement actions survive the rigors of federal audit and maintain the fiscal integrity of the recipient organization.

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This document outlines the procurement policies and standards for recipients and subrecipients of FEMA federal assistance grants.

Overview of FEMA Procurement Policy Guide

This document provides comprehensive guidance on the federal procurement standards applicable to FEMA award recipients and subrecipients, emphasizing fair, competitive, and compliant procurement practices for disaster-related and non-disaster grants.

Purpose and Scope of the Guide

The guide aims to clarify mandatory procurement requirements under FEMA grants, ensuring responsible and fair contracting practices aligned with federal standards.

• It supports FEMA staff and awardees in understanding and complying with the Federal Procurement Standards.
• It incorporates updates from the 2024 OMB revisions to 2 C.F.R. Part 200, effective October 1, 2024.
• Applies to FEMA awards issued on or after October 1, 2024, and disaster declarations from that date forward.
• Previous versions remain applicable for awards and declarations before this date.
• The guide emphasizes that adherence does not guarantee legal sufficiency or immunity from audits or investigations.

Types of FEMA Funding Programs

FEMA provides various grants supporting emergency preparedness, response, recovery, and mitigation efforts.

• Disaster Assistance Programs include Public Assistance, Fire Management Assistance Grant, and Individual Assistance.
• Hazard Mitigation Assistance funds long-term risk reduction measures like HMGP and FMA.
• Preparedness Programs enhance community and first responder capabilities, including AFG and Homeland Security grants.
• Funds are used to procure property and services through fair and competitive contracting.

Applicability of Federal Procurement Standards

The standards at 2 C.F.R. §§ 200.317 – 200.327 govern procurement for awards issued on or after October 1, 2024.

• Recipients and subrecipients must follow these standards to ensure proper use of federal funds.
• Previous standards apply to awards before October 1, 2024.
• Proper application of procurement rules is critical for full reimbursement and avoiding fund recoupment.
• FEMA monitors compliance through coordination with program offices and stakeholders.

Procurement Responsibilities and Definitions

Recipients and subrecipients often hire contractors for project execution, with FEMA determining eligibility and reimbursement.

• Contracts create legal relationships between recipients/subrecipients and contractors.
• A contract requires mutual assent, consideration, and no defenses like duress or fraud.
• Contracts can be fixed-price, cost-reimbursement, or time-and-materials, with specific characteristics and risk allocations.
• Contracts must align with federal, state, tribal, and local laws, and good commercial practices.
• FEMA’s role is to ensure procurement complies with standards, not to be a party to contracts.

Contract Types and Payment Structures

Contracts are categorized into fixed-price, cost-reimbursement, and T&M.

• Fixed-price contracts assign full performance cost risk to contractors; suitable for well-defined, commercial scope.
• Cost-reimbursement contracts reimburse allowable costs plus a fixed or incentive fee; suitable when scope is uncertain.
• Cost-plus-fixed-fee, cost-plus-incentive, and cost-plus-award-fee are variations; cost-plus-percentage of cost (CPPC) is prohibited for local governments and nonprofits.
• Contract payments are based on negotiated terms, with limits like ceiling prices for cost-reimbursement contracts.

Procurement by Recipient Type

Different standards apply based on whether the entity is a State, Indian Tribe, local government, or nonprofit.

• States include U.S. states, D.C., Puerto Rico, U.S. Virgin Islands, Guam, American Samoa, Northern Mariana Islands, and their agencies.
• Indian Tribes include recognized tribes, Alaska Native villages, and tribal corporations.
• Tribes must follow the same policies as non-federal funds but can apply tribal preferences under the Indian Self-Determination Act.
• Indian Tribes are not subject to the procurement of recovered materials provision applicable to states and subdivisions.

Special Considerations for Indian Tribes

Indian Tribes can serve as recipients or subrecipients and must comply with federal procurement standards.

• Tribal preferences are permissible if meeting requirements under the Indian Self-Determination and Education Assistance Act.
• They must document compliance with tribal preference policies and federal procurement rules.
• Recovered materials procurement provisions do not apply to Indian Tribes.
• Tribal ownership of enterprises must be at least 51% Indian-owned to qualify as Indian-owned economic enterprises.

Additional Procurement Guidance and Resources

The guide provides tools, external references, and resources to support compliant procurement.

• Includes links to federal procurement standards, OIG audit reports, FEMA grants, and specific program guides.
• Emphasizes the importance of responsible, fair, and transparent procurement practices.
• FEMA encourages feedback for future updates and emphasizes legal counsel consultation for procurement questions.

Indian Tribal Employment Preferences

This section explains the allowance of tribal preferences in employment and contracting for Indian Tribes under federal standards.

• Indian Tribes or businesses on or near reservations can apply tribal preferences in employment.
• This exception is an exception to Title VII of the Civil Rights Act of 1964.
• Preferences are often used in contracts awarded by Indian Tribes and comply with Federal Procurement Standards.
• Tribes must ensure costs are reasonable and documented under FEMA awards, even when applying preferences.
• Example: Indian Tribe of Y applied a preference percentage to Indian-owned enterprises for flood damage repairs; documentation met tribal procurement rules and was permissible under federal standards.

Federal Procurement Standards for Local Governments and Nonprofits

Guidelines for procurement processes to ensure compliance with federal standards when using FEMA funds.

• Local governments and nonprofits must follow 2 C.F.R. §§ 200.318 – 200.327.
• They must use their own documented procurement procedures reflecting applicable laws, provided they conform to federal standards.
• Procurement must ensure fair and reasonable pricing, supported by market research or documentation.
• For purchases over $25,000, organizations must verify contractors are not suspended or debarred via SAM.gov or certifications.
• Contracts over $250,000 require a remedies clause; over $10,000 require a termination clause; construction contracts over $2,000 require Davis-Bacon and Copeland Anti-Kickback clauses.
• Additional clauses may include rights to inventions, safety standards, environmental clauses, and domestic preferences.
• Contracts for goods over $25,000 must include a clause on covered telecommunications equipment.
• For purchases of goods, a domestic preference clause is required if applicable.
• Contracts involving employment of mechanics/laborers over $100,000 require a Contract Work Hours and Safety Standards Act clause.
• Contracts over $150,000 require Clean Air Act and Water Pollution Control Act clauses.
• For contracts over $100,000, Byrd Anti-Lobbying Certification is necessary.
• Record retention is three years from final expenditure, with specific documentation requirements.
• Procurement decisions must be documented, including rationale for method, contract type, contractor selection, and price.
• Recusal and disciplinary actions are required for conflicts of interest; recusal is acceptable to resolve conflicts.
• Organizations must avoid unnecessary or duplicative items, and consider breaking out procurements for cost efficiency.
• Lease vs. purchase analysis should be conducted to determine the most economical approach.
• Responsibility of contractors must be verified, including integrity, past performance, financial and technical resources, and compliance with public policy.
• Organizations must maintain detailed procurement records and be prepared for audits or reviews.
• Disputes and issues related to procurement are the responsibility of the local entity; FEMA does not assist in resolving protests unless federal law is involved.

Procurement Policies and Oversight Requirements

Organizations must establish and follow procurement policies that reflect applicable laws and ensure proper oversight.

• Must have documented procurement procedures aligned with state, local, tribal laws, and federal standards.
• Oversight must ensure contractors perform according to contract terms, with proper documentation.
• Written standards of conduct must address conflicts of interest and disciplinary actions.
• Policies must prohibit soliciting or accepting gifts from contractors.
• Conflicts of interest, real or apparent, must be identified and mitigated, including recusal when necessary.
• Organizational conflicts of interest must be avoided, especially when related to parent or affiliate organizations.
• Disciplinary actions for violations include dismissal or recusal.
• Need determination procedures should prevent unnecessary or duplicative procurement.
• Responsibility of contractors must be verified through integrity, past performance, financial, and technical assessments.
• All procurement decisions and rationale must be documented thoroughly.
• Organizations are responsible for settling contractual and administrative issues, including protests and disputes.
• FEMA does not assist in resolving procurement protests; entities must defend their decisions.

Full and Open Competition Requirements

This section emphasizes the importance of conducting procurement processes that ensure full and open competition to prevent favoritism, collusion, fraud, waste, and abuse.

• Federal Procurement Standards at 2 C.F.R. § 200.319 mandate full and open competition for federal awards.
• Full and open competition involves publicly soliciting complete requirements and allowing all responsible contractors to compete.
• Benefits include reasonable pricing and prevention of unethical practices.
• FEMA scrutinizes procurement failures to provide full and open competition, with noncompliance often leading to DHS OIG audit findings.
• Noncompetitive procurements are only allowed under specific circumstances outlined in 2 C.F.R. § 200.320(c).

Restrictions to Competition

This section identifies seven situations considered restrictive of competition that must be avoided by local governments and nonprofits.

• Unreasonable Requirements: Must not impose unnecessary qualification criteria, experience, or excessive bonding.
• Noncompetitive Pricing Practices: Bid rigging, bid suppression, complementary bidding, and bid rotation are prohibited.
• Noncompetitive Contracts to Contractors on Retainer: Awards cannot be made to contractors already on retainer for broad services not specified in the contract.
• Double Dipping: Contractors that draft solicitation documents must be excluded from competing for those requirements.
• Specifying Only a Brand Name Product: Restrictive unless justified and documented as necessary.
• Arbitrary Actions: Decisions must be based on facts and procedures, not individual discretion or prejudice.
• Written Procedures: Organizations must have documented procurement procedures to ensure fairness and compliance.

Methods of Procurement Overview

This section describes five procurement methods: micro-purchases, simplified acquisitions, sealed bids, proposals, and noncompetitive procurement, with distinctions between informal and formal procedures.

• Procurement must follow thresholds set by federal, state, or tribal law, with documentation required for compliance.
• Informal methods expedite small transactions, while formal methods are used for larger, more complex procurements.
• Organizations must maintain records, ensure responsible contractors, and avoid splitting procurements to bypass thresholds.

Micro-Purchases and Small Procurement

This section details procurement for transactions up to the micro-purchase threshold, currently $10,000 federally.

• Micro-purchase procedures include self-certification for thresholds up to $50,000, justified by low risk or higher state law thresholds.
• Micro-purchases can be awarded without competitive quotations if the price is reasonable.
• Prohibits splitting large procurements into smaller ones to avoid thresholds.
• Documentation must support the reasonableness of price and procurement history.

Simplified Acquisitions Process

This method applies to purchases up to $250,000 and emphasizes simplicity and speed.

• Use when the procurement value does not exceed the federal, state, or tribal thresholds.
• Requires obtaining at least three price or rate quotations.
• Contracts should be fixed-price or not-to-exceed cost-reimbursement.
• Organizations must document procurement rationale and ensure responsible contractors.
• Changes that cause contracts to exceed the threshold should be justified and documented.

Procurement by Sealed Bidding

A formal, competitive method suitable for well-defined requirements, primarily for construction.

• Used when specifications are complete, and multiple responsible bidders are available.
• Bids are publicly solicited through advertising, and the lowest responsible bid is awarded.
• Bids must be opened publicly, and documentation of the process is required.
• Contract must be fixed-price, and a cost or price analysis is performed for contracts over $250,000.

Procurement by Proposals

Used when contract award cannot be based solely on price, often for professional services.

• Suitable when requirements are less definitive, and technical capability or past performance is critical.
• Involves public notice and disclosure of evaluation factors.
• Allows for discussions with offerors and selection based on best value rather than lowest price.
• Organizations must solicit proposals from an adequate number of qualified sources.

Contract Provisions and Compliance

This section highlights the importance of including required federal contract provisions based on the contract value and type.

• Contracts over $250,000 must include remedies clauses; over $10,000 require termination clauses.
• Construction contracts over $2,000 must include Davis-Bacon and Copeland Anti-Kickback clauses.
• Funding agreements require specific clauses like rights to inventions.
• Contracts must include clauses on responsible use of telecommunications equipment, domestic preferences, and environmental standards.
• Additional provisions include clauses on labor standards, environmental compliance, debarment, and anti-lobbying certifications.

Evaluation and Documentation Standards

Organizations must maintain thorough records and documentation to ensure procurement transparency and compliance.

• Complete independent cost estimates for contracts over $250,000.
• Document rationale for contractor selection or rejection.
• Ensure procurement files include scope of work, sources solicited, bid responses, and contract modifications.
• Maintain records supporting price reasonableness and responsible contractor status.
• Proper documentation supports audits and compliance with federal standards.

Procurement Response and Evaluation Standards

This section outlines FEMA’s guidelines for proposal solicitation, evaluation, and award processes for local governments and nonprofits.

• Sufficient response time must be provided before proposal receipt deadlines.
• The number of sources depends on procurement circumstances, with FEMA encouraging at least three price or rate quotations when using proposals.
• Local entities must have a written method for technical evaluation and selection of proposals.
• Evaluation factors must be based solely on those specified in the solicitation; post-submission modifications are not allowed without re-opening the process.
• Contracts with options should be evaluated for any quantities or periods if FEMA plans to exercise those options.
• Contracts are awarded to responsible offerors whose proposals are most advantageous, considering price and other factors.

Architectural/Engineering Services Procurement

Proposal method is recommended for acquiring A/E professional services due to its qualifications-based approach.

• Price is not the sole factor; the method emphasizes qualifications.
• Use this procurement method when purchasing A/E services under FEMA awards.
• Refer to Chapter 12 of the guide for detailed procedures.

Proposal Evaluation Checklist

A tool to ensure compliance with federal standards during proposal procurement.

• Verify if an independent cost estimate was completed for contracts over $250,000.
• Confirm that a non-CPPC contract was used.
• Maintain detailed procurement records, including rationale, contractor selection, and contract modifications.
• Ensure the RFP clearly describes goods/services and evaluation factors, including price.
• Publicly advertise RFPs and solicit enough proposals for full competition.
• Conduct price or cost analysis for contracts exceeding $250,000.
• Outline bonding requirements for construction contracts over $250,000.
• Check for compliance with federal provisions such as remedies, termination clauses, Davis-Bacon, anti-kickback, rights to inventions, and environmental clauses.
• Include clauses on anti-lobbying, recovered materials, domestic preferences, and other federal requirements as applicable.

Noncompetitive Procurement Conditions

Details circumstances under which noncompetitive procurement is permitted, including sole-source, micro-purchases, emergencies, and exigencies.

• Micro-purchases are informal and do not require justification.
• Single-source procurement is allowed when only one source can fulfill the requirement, with documented rationale.
• Examples include real property, patents, restricted data, compatibility needs, and substantial duplication of costs.
• Emergency or exigency conditions may justify noncompetitive awards if immediate action is necessary.
• FEMA or pass-through approval is required for noncompetitive awards, with documentation and justification.
• Competition is considered inadequate when conditions outside the control of the entity limit competition, requiring justification.

Justification and Documentation for Noncompetitive Awards

Guidelines for justifying noncompetitive procurement.

• Identify applicable exception (single source, emergency, FEMA approval, inadequate competition).
• Provide a description of the product/service and dollar amount.
• Explain necessity due to public exigency or emergency, including specific circumstances.
• State contract duration and impact if unavailable.
• Document efforts to determine full competition was not feasible.
• Disclose conflicts of interest and efforts to identify them.
• Include any additional relevant information justifying the award.
• Each instance requires a separate justification.

Noncompetitive Procurement Checklist

A set of questions to verify compliance with federal standards for noncompetitive procurement.

• Confirm if the procurement meets one of the five exceptions.
• Ensure written justification is provided and records are maintained.
• Document contractor selection or rejection rationale.
• Verify if a T&M contract was used, with proper justification.
• Assess if the price is fair and reasonable through market research or analysis.
• Conduct cost or price analysis for contracts over $250,000.
• Ensure inclusion of required federal contract provisions and clauses, such as remedies, termination, Davis-Bacon, anti-kickback, rights to inventions, environmental, and other clauses.
• Confirm inclusion of clauses on recovered materials, domestic preferences, BABAA, and other applicable requirements.

Domestic Preferences and BABAA Compliance

FEMA promotes the use of U.S.-made goods and materials in procurements, especially for infrastructure projects.

• All awards made on or after Jan. 2, 2023, must comply with BABAA requirements.
• Projects must use U.S.-produced iron, steel, and manufactured products, with specific content thresholds.
• Cost of components must be greater than 55% of total for manufactured items.
• Construction materials must be manufactured in the U.S.
• Contracts must include provisions and self-certifications for compliance.
• FEMA may waive requirements if non-availability, public interest, or cost increase over 25% is demonstrated.
• The Buy American Act applies to direct procurements by federal agencies but not to subrecipients under FEMA grants.

Procurement of Recovered Materials

Procurement must prioritize items containing recovered materials, per EPA guidelines.

• Contracts exceeding $10,000 must procure items with the highest practicable recovered material content.
• States and local governments must establish affirmative procurement programs with specific elements.
• Vendors must certify the percentage of recovered materials used.
• Procurement of solid waste management services should maximize resource recovery.
• The requirements do not apply to Indian Tribes and nonprofits.
• EPA designates products made with recovered materials, influencing procurement standards.
• States and local governments must balance recovered material content with cost and availability considerations.

Contract Cost and Price Analysis

Local entities must perform and document cost or price analysis for all procurements above the Federal Simplified Acquisition Threshold.

• Price analysis involves evaluating total proposed prices without detailed cost breakdowns.
• Techniques include comparing offers, prior prices, market prices, and independent estimates.
• Cost analysis reviews individual cost elements and proposed profit.
• Cost-plus a percentage of cost contracts (CPPC) are prohibited.
• For contracts over $250,000, a detailed cost or price analysis is mandatory.
• Proper documentation ensures transparency and compliance with federal standards.

Federal Contracting Standards and Prohibitions

The document outlines federal rules and restrictions on procurement practices, including contract types, provisions, and compliance requirements.

• FEMA uses a four-part analysis to identify prohibited CPPC contracts, which incentivize cost increases for higher profits.
• CPPC contracts, including subcontracts under cost-reimbursement or price redetermination contracts, are generally prohibited, even with ceiling prices.
• An example highlights a non-compliant contract with a 15% markup on costs, which increases contractor profits as costs rise.
• Caution is advised for States and Indian Tribes using CPPC contracts, as they may lead to unreasonable costs, despite not being explicitly prohibited by federal standards.
• FEMA conducts pre- and post-award reviews to ensure procurement compliance, including technical specifications and procurement documents.
• Local governments and nonprofits can self-certify procurement systems or request FEMA reviews to exempt from pre-procurement review.
• FEMA monitors post-award procurement to ensure proper performance and compliance.
• Bonding requirements apply to construction contracts exceeding the Federal SAT, including bid guarantees, performance bonds, and payment bonds.
• Bonding is not required for non-construction contracts below the Federal SAT, but entities can impose their own requirements.
• Contract provisions must include remedies, termination clauses, Davis-Bacon and Copeland Acts, safety standards, rights to inventions, environmental compliance, suspension and debarment, anti-lobbying, recovered materials, and prohibitions on certain telecommunications equipment.
• Additional recommended provisions include access to records, changes/modifications, DHS logo use, legal compliance, and no federal obligation.
• Contracts over $150,000 must include provisions for environmental standards; over $25,000 for suspension and debarment.
• Contracts over $100,000 require anti-lobbying and bonding clauses.
• Recipients must include provisions for rights to inventions, Buy America, and compliance with federal laws.
• FEMA emphasizes the importance of proper contract language to ensure compliance and avoid noncompetitive awards.

Procurement Review and Certification Processes

FEMA oversees procurement through pre- and post-award reviews, and local entities can self-certify their systems to ensure compliance.

• FEMA or pass-through entities may conduct pre-award reviews of procurement specifications and documents, especially if standards are suspected to be non-compliant.
• Technical specifications must be available for review before solicitation or after, focusing on technical aspects.
• Procurement documents include RFPs, IFBs, and cost estimates, reviewed if procedures fail to meet standards or if contracts exceed the Federal SAT.
• Exemptions are available if entities demonstrate their procurement systems meet federal standards, either through FEMA review or self-certification.
• FEMA reviews procurement systems periodically, especially for high-dollar or regular third-party contracts.
• Post-award reviews monitor contract performance, compliance, and proper execution during close-out or audits.

Bonding Requirements for Construction Contracts

Bonding is mandatory for construction or facility improvement contracts exceeding the Federal SAT, with specific requirements for bid, performance, and payment bonds.

• Bid guarantees must be 5% of the bid price, ensuring bidders will not withdraw and will execute contracts if awarded.
• Performance and payment bonds are each required for 100% of the contract price, protecting against contractor default.
• Bonding is not required for non-construction contracts below the Federal SAT, but entities may impose their own requirements.
• FEMA or the pass-through entity can accept existing bonding policies if they adequately protect federal interests.

Contract Provisions and Language Requirements

Contracts must include specific provisions to ensure legal compliance, performance remedies, and federal oversight.

• Contracts over $10,000 must address termination for cause and convenience.
• Davis-Bacon and Copeland Acts apply to construction contracts over $2,000, requiring wage and safety standards.
• Contracts over $150,000 must include environmental compliance provisions.
• Over $25,000 contracts require suspension and debarment clauses.
• Contracts over $100,000 must contain anti-lobbying, bonding, and anti-fraud provisions.
• Additional FEMA-recommended provisions include access to records, modifications, DHS logo restrictions, and rights to inventions.
• Contracts should specify remedies for breach, rights to data, and compliance with federal laws and executive orders.

Advanced Procurement Considerations

Recipients and subrecipients should carefully manage complex procurement issues, including contract modifications, delivery methods, and joint or piggyback procurements.

• Cardinal changes are significant modifications outside the scope of the original contract, often noncompetitive.
• Contract scope and competition scope are evaluated case-by-case to prevent noncompliance.
• Design-bid-build and design-build are common procurement methods, with specific rules for each.
• Construction Manager at Risk (CMAR) requires careful consideration of price as a selection factor, especially when construction costs dominate.
• Cooperative purchasing, joint procurements, and piggybacking can improve efficiency but must comply with federal standards.
• Joint procurements between states, tribes, and local entities are encouraged but require adherence to all applicable procurement rules.
• Piggyback contracts are discouraged unless they meet strict criteria, including original compliance and scope alignment.
• Entities must document compliance when using cooperative purchasing programs or other arrangements to ensure federal reimbursement eligibility.

Overview of Federal Procurement Standards for Local Governments and Nonprofits

This document outlines federal procurement requirements, methods, and compliance standards for local governments and nonprofits engaging in cooperative purchasing, pre-disaster planning, mutual aid agreements, and handling noncompliance issues under FEMA grants.

Micro-Purchases and Simplified Acquisitions Procedures

Micro-purchases and simplified acquisitions are streamlined procurement methods for small transactions.

• Purchases at or below the Federal Simplified Acquisition Threshold (SAT) must comply with federal standards for micro-purchases or simplified acquisitions.
• For purchases above the SAT, sealed bids or proposals are required unless emergency circumstances justify noncompetitive methods.
• Sealed bidding and proposals involve public advertisement, solicitation from multiple suppliers, and awarding to the responsible, responsive firm with the lowest price or most advantageous proposal.
• Solicitations must clearly describe the scope of work and avoid overly restrictive requirements to ensure full and open competition.
• All federal procurement standards, including contract provisions and cost/price analyses, must be followed.
• Cooperative programs often do not establish binding agreements, leaving recipients responsible for procurement; vendors may be on prequalified lists, but solicitation must remain open to all interested vendors.
• When using prequalified lists, potential bidders cannot be precluded from qualifying during the solicitation period, and solicitations must be publicly issued.

Procurement Above the SAT via Cooperative Purchasing

Procurements exceeding the SAT through cooperative purchasing require adherence to federal standards for sealed bids or proposals.

• Noncompetitive procurement is permitted only under specific circumstances like emergencies.
• Purchases must be publicly advertised, and contracts awarded based on responsible, responsive firms with the lowest price or most advantageous proposal.
• Overly restrictive solicitation requirements risk noncompliance with full and open competition standards.
• Federal rules mandate inclusion of all required contract provisions and conducting cost or price analyses.
• Vendors on prequalified lists must be allowed to qualify during solicitation unless a specific exception applies.

Prequalified Lists and Emergency Preparedness

Prequalified lists help local governments and nonprofits prepare for disasters by maintaining current, sufficiently broad sources.

• Lists must include enough qualified sources to maximize competition.
• Potential bidders cannot be precluded from qualifying during the solicitation period.
• These lists are tools, not contracts, and must be used in conjunction with full compliance with federal procurement standards.
• When using prequalified lists, solicitations must be open to all interested vendors, not just those on the list.
• In emergencies, short-term noncompetitive contracts may be permissible if based on prequalified lists, but long-term contracts require competitive bidding.

Awarding Prepositioned Contracts Before Disasters

Prepositioned or advance contracts are awarded before disasters to enable rapid response.

• Contracts must be procured in compliance with applicable rules and scope must cover anticipated future work.
• Prices should be reasonable, and contractors verified as not suspended or debarred.
• Using prepositioned contracts for work outside original scope may be considered noncompetitive.
• If scope considerations are met, existing prepositioned contracts can be used for disaster-related repairs without out-of-scope modifications.
• Noncompliance with procurement standards when using prepositioned contracts can lead to noncompetitive awards.

Mutual Aid Agreements and Procurement Implications

Mutual aid agreements facilitate resource sharing among agencies during disasters.

• FEMA funds PA work when the requesting entity requests resources; the assisting entity is not directly funded.
• Contracts incidental to mutual aid, such as transportation, are generally not subject to federal procurement rules if they meet FEMA policies.
• Agreements that transfer rights to existing contracts (piggybacking) are treated as procurements and must follow federal standards.
• Proper documentation and compliance are essential to ensure eligibility and avoid noncompliance.

Purchasing Agents and Contract Oversight

Purchasing agents assist with procurement tasks but cannot replace the responsible entity’s oversight.

• Local governments and nonprofits must have procurement procedures allowing for the use of purchasing agents.
• Standards of conduct must address conflicts of interest.
• Purchasing agents cannot participate in contract award or administration if conflicts exist.
• The responsible entity must oversee contract performance and resolve disputes, claims, or protests.

Restrictions on Contracting for Certain Telecommunications Equipment

Federal funds cannot be used to purchase certain telecommunications equipment or services from prohibited entities.

• Section 889(b)(1) of the FY 2019 NDAA and 2 C.F.R. § 200.216 prohibit such expenditures for national security reasons.
• Contract provisions must include compliance with these restrictions.

Remedies for Procurement Noncompliance

FEMA can impose remedies for noncompliance with federal procurement standards.

• Remedies include withholding payments, disallowing costs, suspending or terminating awards, and initiating suspension or debarment.
• FEMA may also require additional reports, technical assistance, or modifications.
• Conditions may include payment restrictions, project monitoring, or technical assistance to address deficiencies.
• FEMA’s authority aims to ensure compliance and proper use of federal funds.

Appendix and Definitions

Provides acronyms, legal references, and key definitions related to federal procurement, including terms like “recipient,” “subrecipient,” “contract,” “cooperative agreement,” and “SAT.”

• Defines roles, procurement thresholds, and legal instruments relevant to FEMA-funded projects.
• Emphasizes the importance of compliance with federal rules to maintain eligibility and avoid penalties.

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