10.3 - Federal Procurement Standards Policy

Conflicts of Interest

No employee, officer, Board member, or agent of the University will 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 one of the persons listed below has a financial or other interest in or a tangible personal benefit from a firm considered for a contract:

• An employee, officer, Board member, or agent involved in making the award.
• His/her relative (including father, mother, son, daughter, brother, sister, uncle, aunt, first cousin, nephew, niece, husband, wife, father-in-law, mother-in-law, son-in-law, daughter- in-law, brother-in-law, sister-in-law, stepfather, stepmother, stepson, stepdaughter, stepbrother, stepsister, half-brother, or half-sister).
• His/her partner; or
• An organization which employs or is negotiating to employ or has an arrangement concerning prospective employment of any of the above.

   

  No officer, employee, Board member, or agent of the University shall solicit any gifts. No officer, employee, Board member, or agent of the University shall accept, directly or indirectly, any gifts, compensation, gratuities, favors, or other items of value from any contractor, potential contractor, or party to any subcontract, and shall not knowingly use confidential information for actual or anticipated personal gain. An officer, employee, Board member, or agent of the University who accepts a gift, gratuity, favor, etc. shall be subject to disciplinary action. Vendors or bidders who offer a gift, gratuity, favor, etc. may be declared irresponsible bidders and may be debarred from bidding.

   

  The University will not procure with a parent company, affiliate, or subsidiary organization, due to the real or apparent conflict of interest resulting from the relationship.

   

  General Procurement Standards under Federal Awards

  Procurements associated with Federal awards are subject to the following:

  1. The University will avoid acquisition of unnecessary or duplicative items. Consideration will be given to consolidating or breaking out procurements to obtain a more economical purchase. The University will not divide large transactions into several smaller transactions for the purpose of avoiding any standard procurement procedures.
  2. Where appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach.
  3. The University will award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.
  4. The University is responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but are not limited to, source evaluation, protests, disputes, and claims. These standards do not relieve the University of any contractual responsibilities under its contracts. Violations of law will be referred to the local, state, or federal authority having proper jurisdiction.
  5. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services, the University may enter into agreements appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements.

   

  Procurement Records

  The University will maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following:

   

  1. Rationale for the method of procurement (if not self-evident).
  2. Rationale of contract pricing arrangement (also if not self-evident).
  3. Reason for accepting or rejecting the bids or offers.
  4. Basis for the contract price.
  5. A copy of the contract documents awarded or issued.
  6. Basis for contract modifications.
  7. Related contract administration actions.

   

  The University will make available, upon request by the Federal awarding agency or pass-through entity, technical specifications on proposed procurements where the Federal awarding agency or pass-through entity believes such review is needed to ensure that the item or service specified is the one being proposed for acquisition.

   

  The University will make available upon request, for the Federal awarding agency or pass-through entity, pre-procurement review, procurement documents, such as requests for proposals or invitations for bids, or independent cost estimates.

   

  Competition under Federal Awards

  All procurement transactions for the acquisition of property or services required under a Federal award shall be conducted in a manner to provide, to the maximum extent practical, open and free competition and must be consistent with the standards as outlined in §200.319 and §200.320.

   

  Contractors that develop or draft specifications, requirements, statements of work, and invitations for bids or requests for proposal must be excluded from competing for such procurements. Some other examples of situations considered to be restrictive of competition include but are not limited to:

   

  1. Placing unreasonable requirements on firms in order for them to qualify to do business,
  2. Requiring unnecessary experience and excessive bonding,
  3. Noncompetitive pricing practices between firms or between affiliated companies,
  4. Noncompetitive awards to consultants that are on retainer contracts,
  5. Organizational conflicts of interest,
  6. Specifying only a brand name product instead of allowing an equal product to be offered and describing the performance of other relevant requirements of the procurement, and
  7. Any arbitrary action in the procurement process.

   

  The University must conduct procurements in a manner that prohibits the use of administratively imposed state or local geographical preference in the evaluation of bids or proposals except in cases where applicable Federal statutes expressly mandate or encourage geographic preference, or state licensing law.

   

  All solicitations will incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a “brand name or equivalent” description may be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met by offers must be clearly stated. All solicitations will also identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals.

   

  All prequalified lists of persons, firms, or products which are used in acquiring goods and services will be current and include enough qualified sources to ensure maximum open and free competition. Potential bidders will not be precluded from qualifying during the solicitation period.

   

  Methods of Procurement

  The University will use one of the following methods of procurement:

   

  Informal Procurement Methods

  When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold ($250,000), formal procurement methods are not required. The University may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the simplified acquisition threshold include:

  1. Micro-purchases (<= $10,000).
• Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed $10,000.
• To the maximum extent practicable, The University will distribute micro-purchases equitably among qualified suppliers.
• Micro-purchases may be awarded without soliciting competitive price or rate quotations if the University considers the price to be reasonable. Reasonableness is based on research, experience, purchase history or other information, including comparing the price to past purchases; comparing price to other online or available prices; and/or requesting prices from more than one vendor. Price reasonableness should be documented accordingly.
• Purchase cards can be used for micro-purchases if procedures are documented and approved by the University.

   

  1. Small purchases ($10,001 - $250,000).
• Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold.
• If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources, as determined by The University for the procurement.
• Prices may be obtained in written, verbal or online search methods.

   

  Formal procurement methods. (> $250,000)

  When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold ($250,000), formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with §200.319 or paragraph §200.320(c). The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold when The University determines to be appropriate:

   

  1. Sealed bids
• Procurement by sealed bids is when bids are publicly solicited and a firm fixed price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming to all the material terms and conditions of the invitation for bids, is the lowest in price.
• In order for sealed bidding to be feasible, the following conditions will be present:
  1. A complete, adequate, and realistic specification or purchase description is available.
  2. Two or more responsible bidders are willing and able to compete effectively for the business.
  3. The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price.
• If sealed bids are used, the following requirements apply:
  1. Bids must be solicited from an adequate number of qualified sources, providing them sufficient response time prior to the date set for opening the bids.
  2. The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond.
  3. All bids will be opened at the time and place prescribed in the invitation for bids.
  4. A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of.
  5. Any or all bids may be rejected if there is a sound documented reason.

   

  1. Proposals
• Procurement method in which either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. They are awarded in accordance with the following requirements:
  1. Requests for proposals must be publicized and identify all evaluation factors and their relative importance.
  2. Proposals must be solicited from an adequate number of qualified offerors.
  3. Any response to publicized requests for proposals must be considered to the maximum extent practical.
  4. The University must have a written method for conducting technical evaluations of the proposals received and making selections.
  5. Contracts must be awarded to the responsible offeror whose proposal is most advantageous to The University, with price and other factors considered
• The University may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby offeror’s qualifications are evaluated, and the most qualified offeror is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms that are a potential source to perform the proposed effort.

   

  Noncompetitive proposals (>$10,000).

• There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement only be awarded if one or more of the following circumstances apply:

1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold.
2. The item is available only from a single source.
3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation.
4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the University.
5. After solicitation of a number of sources, competition is determined inadequate.

Contract Cost and Price

The University will perform a cost or price analysis for every procurement action in excess of $250,000, including contract modifications. A cost analysis generally means evaluating the separate cost elements that make up the total price, while a price analysis means evaluating the total price, without looking at the individual cost elements. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the University will make independent estimates before receiving bids or proposals. In order to arrive at an independent estimate of price, the University will review similar price data from colleagues, online searches, and other research.  The price estimate will be documented and saved with the procurement file.

Where applicable, the University will negotiate profit as a separate element of the price for each contract in which there is no price competition, and in all cases where cost analysis is performed. To establish a fair and reasonable profit, consideration will be given to the complexity of the work to be performed, the risk borne by the contractor, the contractor’s investment, the amount of subcontracting, the quality of its record of past performance, and industry profit rates in the surrounding geographical area for similar work.

Costs or prices based on estimated costs for contracts under the Federal award are allowable only to the extent that costs incurred, or cost estimates included in negotiated prices would be allowable for the University under Subpart E – Cost Principles-of the Uniform Administrative Guidance 2 CFR Part 200.

For construction projects of sufficient size, the University may use value engineering clauses in contracts to offer reasonable opportunities for cost reductions. Value engineering is a systematic and creative analysis of each contract item or task to ensure that its essential function is provided at the overall lower cost.

The cost plus a percentage of cost method of pricing will not be allowed by the University.

Domestic preferences for procurement

As appropriate and to the extent consistent with law, the University will, to the greatest extent practicable under a Federal award, provide a preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States (including but not limited to iron, aluminum, steel, cement, and other manufactured products).

For purposes of this section:

1. ‘‘Produced in the United States’’ means, for iron and steel products, that all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.
2. ‘‘Manufactured products’’ means items and construction materials composed in whole or in part of non-ferrous metals such as aluminum; plastics and polymer-based products such as polyvinyl chloride pipe; aggregates such as concrete; glass, including optical fiber; and lumber.

Contracting with Small and Minority Businesses, Women’s Business Enterprises, and Labor Surplus Area Firms

The University will take all necessary affirmative steps to assure that minority businesses, women's business enterprises, and labor surplus area firms are used when possible. Affirmative steps must include:

1. Placing qualified small and minority businesses and women's business enterprises on solicitation lists
2. Assuring that small and minority businesses, and women's business enterprises are solicited whenever they are potential sources.
3. Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority businesses, and women's business enterprises.
4. Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority businesses, and women's business enterprises.
5. Using the services and assistance of such organizations as the Small Business Administration and the Minority Business Development Agency of the Department of Commerce including websites such as http://www.sba8a.com/ and https://www.doleta.gov/programs/lsa.cfm.
6. Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps.

Consultants and Contractors

Before a service provider can be engaged as a consultant, or independent contractor, approval and contracting procedures must be followed prior to the start of any work or performance of services. For professional services agreements charged to grants, all professional services agreements need to be reviewed to ensure that the service provided falls within provisions of the funding agency. Consideration and evaluation will be given to in‐house capabilities of personnel prior to contracting consultants and contractors.

Subrecipient and Contractor Determinations

The University will make a case-by-case determination whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. In determining whether an agreement between the University and another non-Federal entity casts the latter as a subrecipient or a contractor, the substance of the relationship is more important than the form of agreement. The University will use judgment in classifying each agreement as a subaward or a procurement contract.

Suspension and Debarment

The University verifies that all vendors with a contract of $25,000 or greater, and all subrecipients with whom the University intends to do business is not excluded or disqualified in accordance with 2 C.F.R. Part 200, Appendix II (1) and 2 C.F.R. §§ 180.220 and 180.300.  A search shall be performed on the General Services Administration Excluded Parties List System (EPLS) (http://sam.gov), and any state or local exclusion lists, if applicable. Results of the screenings should be printed and placed in the procurement record.

Provisions Included in all Contracts

It is the policy of the University to include all of the following provisions, as applicable, in all contracts (including small purchases) with contractors and subawards with subrecipients:

1. Remedies: All contracts for more than the simplified acquisition threshold (which is the inflation adjusted amount determined by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) as authorized by 41 U.S.C. 1908), must address administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms, and provide for such sanctions and penalties as appropriate.

    

2. Termination: All contracts in excess of $10,000 shall contain suitable provisions for termination by the University, including the manner by which termination shall be affected and the basis for settlement. In addition, such contracts shall describe the conditions under which the contract may be terminated for default as well as conditions where the contract may be terminated due to circumstances beyond the control of the contractor.

    

3. Equal Employment Opportunity: Except as otherwise provided under 41 CFR Part 60, all contracts that meet the definition of “federally assisted construction contract” in 41 CFR Part 60-1.3 must include the equal opportunity clause provided under 41 CFR 60-1.4(b), in accordance with Executive Order 11246, “Equal Employment Opportunity” (30 FR 12319, 12935, 3 CFR Part, 1964-1965 Comp., p. 339), as amended by Executive Order 11375, “Amending Executive Order 11246 Relating to Equal Employment Opportunity,” and implementing regulations at 41 CFR part 60, “Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor.”

    

4. Davis-Bacon Act, as amended (40 U.S.C. 3141-3148): When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The University must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The University must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland “Anti-Kickback” Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, “Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States”). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The University must report all suspected or reported violations to the Federal awarding agency.

    

5. Contract Work Hours and Safety Standards Act (40 U.S.C. 3701-3708): [Where applicable] All contracts awarded by the University excess of $100,000 for contracts that involve the employment of mechanics or laborers shall include a provision for compliance with 40 U.S.C. 3702 and 3704, as supplemented by Department of Labor regulations (29 CFR part 5). Under 40 U.S.C. 3702 of the Act, each contractor must be required to compute the wages of every mechanic and laborer on the basis of a standard work week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than one and a half times the basic rate of pay for all hours worked in excess of 40 hours in the work week. The requirements of 40 U.S.C. 3704 are applicable to construction work and provide that no laborer or mechanic must be required to work in surroundings or under working conditions which are unsanitary, hazardous, or dangerous. These requirements do not apply to the purchases of supplies, materials, or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.

    

6. Rights to Inventions Made Under a Contract or Agreement: Contracts or agreements for the performance of experimental, developmental, or research work shall provide for the rights of the Federal Government and the University in any resulting invention in accordance with 37 CFR part 401, "Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements," and any implementing regulations issued by the awarding agency.

    

7. Clean Air Act (42 U.S.C. 7401-7671q and the Federal Water Pollution Control Act (33 U.S.C. 1251 -1387), as amended: Contracts and subawards of amounts in excess of $150,000 shall contain a provision that requires the recipient to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act, as amended (33 U.S.C. 1251 et seq.). Violations shall be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency (EPA).

    

8. Debarment and Suspension (E.O.s 12549 and 12689): For all contracts, the University shall obtain from the contractor a certification that neither the contractor nor any of its principal employees are listed on the Excluded Parties List System in SAM.

    

9. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352): For all contracts or Subawards of $100,000 or more, the University shall obtain from the contractor or sub-grantee a certification that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award covered by 31 U.S.C. 1352. Likewise, since each tier provides such certifications to the tier above it, the University shall provide such certifications in all situations in which it acts as a sub-recipient of a sub-grant of $100,000 or more.

    

10. Buy American Act (41 U.S.C. §§ 8301-8305): [Where applicable] For all contracts for the construction, alteration, or repair of any public building or public work in the United States that includes acquisition of steel, iron and manufactured goods, the University shall obtain from the contractor a certification confirming that the contractor has not been convicted of violating the Buy American Act, 41 U.S.C. §§ 8301-8305.  A clause will also be included that the contractor’s acquisition of steel, iron, and manufactured goods, with funding provided through the contract, is subject to the requirements set forth in the Buy American Act, 41 U.S.C. §§ 8301-8305, if applicable.

     

11. Drug-Free Workplace (49 CFR Part 32): For all contracts, the University shall obtain from the contractor a certification that it complies with Government-wide Requirements for Drug-Free Workplace (Grants), 49 C.F.R. Part 32.

     

12. Domestic preferences for procurements. As appropriate and to the extent consistent with law, contractor will, to the greatest extent practicable, provide a preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States (including but not limited to iron, aluminum, steel, cement, and other manufactured products).