Procurement Standards Changes: What You Need to Know

In December of 2013, the United States Office of Management and Budget (OMB) issued comprehensive grant reform rules titled “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” (more commonly known as the Uniform Guidance or the SuperCircular). This guidance resulted in several areas of change for recipients of federal funds, one of the most significant being related to contract procurement. In fact, due to the magnitude of the change, the OMB initially allowed for a two-year grace period for implementation.

It was recently announced that this grace period has again been extended by the OMB. However, if you are electing to utilize the additional year of the grace period, you MUST document this in writing in your current procurement procedure. New procurement policies that conform to the Uniform Guidance requirements must be in place effective January 1, 2018, July 1, 2018 and October 1, 2018 for December, June, and September year ends, respectively. Here are a few highlights of these changes, as well as some steps you can take to prepare for the change.

General procurement standards (CFR 200.318):

1. Must use documented procurement procedures that conform to the Uniform Guidance standards.
2. Must maintain oversight to ensure that your contractors perform in accordance to the terms of their contracts. Must document oversight activities.
3. Must maintain written conflict of interest standards, real or perceived, over staff engaged in contracting activities (for example, disclose any family/business relationships).
4. Must maintain written records of procurement history (rationale for method, selection of contract type, contractor rejection/selection, basis for contract price).

What should you do?

1. Review your current procurement policy with your purchasing manager. Compare your policy to the standards listed above, and update it as necessary.
2. Familiarize yourself with the allowable methods of procurement specified by the Uniform Guidance, and include them in your updated procurement policy (see attached chart).
3. Update your current monitoring policy for subcontractors/subrecipients, or create a formal policy if you did not have one documented previously. Communicate this policy to your contractors to ensure their compliance with the applicable standards.
4. If you are electing to utilize the additional year of the grace period, you MUST document this in writing in your current procurement procedure.

Contact us for more information on this topic or for assistance with updating/creating and implementing your procurement policy.

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