Uniform Guidance

Uniform Guidance Procurement Standards

Effective July 1, 2018

Major Changes in the Uniform Guidance Affecting Purchases on Federal Funds

The Office of Management and Budget (OMB) has combined many federal circulars into a single guidance document (known as Uniform Guidance (UG) or 2 CFR 200) that may be used by all federal agencies. These new regulations became effective December 26, 2014 for all guidance except for purchasing.  The purchasing changes become effective on July 1, 2018.  Funding agency policy should still be reviewed for their specific requirements.

Procurement guidance is specifically located in sections 200.317-200.326. This guidance focuses on increased competition and transparency in the procurement process.

Goals of Uniform Guidance

UG significantly reforms federal grant making to focus resources on improving performance and outcomes. The intent is to reduce administrative burdens for grant applicants and recipients and reduce the risk of waste, fraud, and abuse.

There are five general procurement standards that cover the purchase of property, supplies, and services under the Uniform Guidance:

  1. The organization must maintain written policies and procedures for procurement covering the methods available under these regulations.
  2. Costs must be reasonable and necessary.
  3. The organization must provide for full and open competition.
  4. The organization must maintain written standards of conduct covering internal and external conflicts of interest.
  5. The organization must maintain documentation addressing cost and price analysis and vendor selections where applicable based on the method of procurement used.

As UMBC follows State requirements, changes to procurement practice should be minimal under UG, except for additional documentation requirements for sole source contracts.

Five available methods of procurement

  1. Micro-purchase Threshold (MPT)
    There are no changes from current practices for purchasing goods under $25,000* as UMBC has received approval to match the current State threshold for micro-purchases.  The University must distribute micro-purchases equitably among qualified suppliers.  Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity (UMBC) considers the price to be reasonable.
  2. Small purchases: Between $25,001 and $250,000
    For this category, rate quotes must be obtained from an “adequate” number of qualified sources.  Three sources will be considered to have met this requirement.  Quotes may be obtained from suppliers or from public websites and included as backup documentation for the purchase.
  3. Sealed bids: $250,001 and above
    In this category, the lowest responsive and responsible bidder for the fixed price contract should be awarded.  Bids shall be publicly solicited from an adequate number of known suppliers, which shall be a minimum of two or more qualified bidders. This is the preferred method for procuring construction for Federal grants.
  4. Competitive proposals: $250,001 and above
    This category is used for either a fixed price or cost reimbursement contract when sealed bids are not appropriate. Requests for proposals shall be publicized with all evaluation factors identified, including their relative importance. Proposals must be solicited from an adequate number of qualified sources.  The most advantageous proposal is awarded after consideration of price and other factors.  A written policy shall be in place for conducting technical evaluations of proposals and selecting the recipient.
  5. Sole Source Procurement
    UG has limited the use of sole sources to four distinct justifications:
    1.   Product/service is only available from a single source;
    2.   The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation;
    3.   Federal Awarding Agency Authorization: the awarding agency specifically authorizes a non-competitive procurement after a written request from the Non-federal entity; and
    4.   Inadequate competition after solicitation of multiple sources.

These changes will result in increased scrutiny for all sole source justifications.  The most significant change to the sole source section of UG is that “continuity of research” is no longer an acceptable justification for sole source approval.

Additionally, every sole source will require a price/cost justification and will require the University to negotiate profit with the vendors for those sole sources.  Examples of methods of providing this justification include:

  • documenting cost analysis efforts;
  • documenting market research;
  • including screenshots, emails, or catalog prices;
  • documenting pricing information obtained from colleagues at peer institutions who have purchased the same or similar items; and
  • documenting prices of similar items.

Consulting Services on Sponsored Program Awards

  • Modification to existing consulting agreements under existing grants do not have to be re-sole sourced. The UG will apply to new consultants and new awards and competitive renewals as of July 1, 2018.
  • Naming and including information on the consultant in the grant proposal will no longer be sufficient justification, by itself, for a sole source under the UG.

Conflict of Interest Policy

As part of the OMB’s Uniform Guidance, there are new requirements for conflicts of interest within a procurement action and how the University must handle these conflicts. The regulation states: “No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract.”

UMBC faculty and staff are also subject to the Maryland Public Ethics Law, which includes similar requirements for conflicts of interest. As a result, there will be an increased disclosure of documentation for potential committee members on solicitations.  Sole source justifications may require further evidence or statements assuring no financial relationship exists with potential vendors.