Sneak Preview: Knowing Rules Can Help Address Procurement Issues
(The following was excerpted from a recent Federal Grants Compliance Expert article.) Grant recipients and subrecipients should understand the procurement provisions in the uniform guidance (§§200.317-200.327), and consider various factors, ranging from recognizing who their funding agency is and what state and local laws may apply, when developing their internal written procurement policies and procedures, a financial assistance attorney told attendees at the recent National Grants Management Association’s Annual Grants Training conference.
During a session to discuss common grant procurement mistakes, Jayna Marie Rust, partner with Thompson Coburn LLP, explained how these concerns can be problematic for recipients and subrecipients, and suggested ways to avoid these mistakes and their potential risk to a grant program.
First, Rust mentioned that some nonfederal entities may not have — or have outdated — written procurement policies and procedures, as required in the uniform guidance in §200.317 for states and §200.318 for other recipients (see ¶444 in the Federal Grants Management Module). Along these lines, some recipients may have duplicated their policies and procedures straight from that of another entity without making specific adjustments that apply to their own circumstances, or they fail to update their procedures regularly to ensure they remain applicable. “If you do not have policies and procedures, or if they haven’t been updated, you likely will have audit findings … that can be problematic for the organization,” she said. “If you use a policies and procedures template, use it wisely. Make sure you know when it was created and last updated.”
Also, Rust encouraged recipients to be aware as to whether the template was designed to meet the requirements of a particular agency’s programs, and she noted, for example, that the Department of Education programs and Department of Agriculture grant programs have different requirements related to procurements. Recipients also should tailor their policies and procedures to ensure they follow state and local rules. Further, as the Office of Management and Budget prepares to revise the uniform guidance by the end of 2023, she recommended that all recipients review their policies and procedures next year to ensure they comply with these revisions. She also encouraged pass-through entities to evaluate their subrecipient announcements to ensure they include language that aligns with the pass-through’s current policies and procedures. “Typically, entities will update their policies and procedures annually, but you also want to update them when you get a new award, or an award from a different agency, to incorporate any other policies and procedures that you may need in your procurement manual,” Rust added.
Another common mistake is that some entities get confused by the requirements and purposes of invitations for bids (IFBs) and requests for proposals (RFPs), according to Rust (see ¶442 in the Federal Grants Management Module). IFBs, which also are known as sealed bid procurements, are those in which vendors submit sealed bids in response to a request to do so, and the award will go to the lowest price responsible bidder. In response to an RFP, vendors submit proposals, and the award is made to the offer that is most advantageous to the buyer, and price is not the only selection factor.
(The full version of this story has now been made available to all for a limited time here.)
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