Finance Federal Procurement
This document is intended to integrate purchasing procedures with additional requirements
applicable to purchases that are subject to the federal Uniform Guidance regulations. The
University maintains the following purchasing procedures in accordance with federal and state
laws: Uniform Guidance - 2 CFR 200.318-200.325, State of Ohio Revised Code, State of Ohio
Controlling Board and Efficiency and Affordability Task Force Mandate.
Responsibility for Purchasing
The University has outlined standard purchasing responsibility, methods of purchasing, price
quotations and bid requirements in the following policies and procedures along with their
accompanying administrative regulations or procedures:
Policy 55.030 Purchasing
Policy 55.007 Purchasing Competitive Bidding
Policy 55.074 Purchasing Card
Purchase Methods
When a request for purchase of goods, services or construction has been submitted and approved, the procurement method to be used will be determined based on the total cost of the purchase as outlined below. This procedure outlines how the cost thresholds for determining when the quote or formal bidding procedures that are required by state law as reflected in Policy 55.007 must be modified when making purchases for federally funded purposes to which the Uniform Guidance regulations apply, so as to comply with both state and federal requirements. Final determination of which purchasing procedures are to be applied is delegated to the University Finance department.
Micro-Purchases Not Requiring Quotes or Bidding (up to $50,000)
For purpose of this procedure, micro-purchase means a purchase of goods and services for use
in federally funded programs using simplified acquisition procedures, the aggregate amount of
the purchase which does not exceed a base amount of $50,000. The micro-purchase dollar
threshold is adjusted periodically by the federal government, and the threshold most recently
established and published in the M-18-18 OMB Statutory Changes was implemented from July
1, 2018 to November 12, 2018. Effective November 13, 2018 the University received approval
from the federal oversight agency, DHHS, to adjust the micro-purchase dollar threshold to
$50,000.
The micro-purchase method is used in order to expedite the completion of its lowest dollar small
purchase transactions and minimize the associated administrative burden and cost. This aligns
the University competitive bidding threshold (as required under the Ohio Revised Code section
125.05 and University policy 55.007 – Competitive Bidding) and the micro-purchase threshold at
$50,000. Procurement by micro-purchase is the acquisition of goods or services, the aggregate
dollar amount of which does not exceed the micro-purchase threshold.
To the extent practicable, the University distributes micro-purchases equitably among qualified
suppliers when the same or materially interchangeable products are identified and such suppliers
offer effectively equivalent rates, prices and other terms.
The Purchasing Office will be responsible to determine the equitable distribution of micro-
purchases. Micro-purchases may be awarded without soliciting competitive quotations if the
purchase price is considered to be reasonable. Reasonable means that sound business practices were followed and the purchase is comparable to market prices. Even if the cost of a purchase qualifies it as a micro-purchase, bidding or small purchase procedures may be used optionally when those procedures may result in cost savings.
Small Purchase Procedures ($50,000 or more for goods and services, $215,000 or more for
construction)
For purposes of this procedure, small purchase procedures are those relatively simple and
informal procurement methods for securing goods, services and construction in federally funded
programs. From July 1, 2018 to November 12, 2018 small purchase procedures required written
price or rate quotations obtained from at least three (3) qualified supply source and records of
quotes are maintained as attachments to the requisition. Purchases were awarded to the supplier
whose quote is most advantageous to the program, with price and other factors considered. This
requirement did not apply to purchases made from Preferred Suppliers regardless of the source of funds used to pay for the purchase, as those suppliers have already gone through the competitive bidding process and the University had determined pricing is reasonable under Federal
regulations. Effective November 13, 2018 the University received approval from the federal
oversight agency, DHHS, to adjust the micro-purchase dollar threshold to $50,000.
This aligns the University competitive bidding threshold (as required under the Ohio Revised
Code section 125.05 and University policy 55.007 – Competitive Bidding) and the micro-
purchase threshold at $50,000. The small purchase procedure is the same as the formal
competitive bidding procedure.
Formal Competitive Bidding ($50,000 or more for goods and services and $215,000 or more for
construction)
For purchases of goods and services at $50,000 or more and construction at $215,000 or more
requires competitive bids publicly solicited and awarded to the most responsive and responsible
proposal that provides the best overall value to the University.
The federal competitive bidding dollar threshold is adjusted periodically by the federal
government, and the threshold most recently established and published in the Federal Register
shall apply if other than $250,000. (48 CFR Subpart 2.1 and M-18-18).
Note: The federal formal competitive bidding threshold is higher than the requirements of the
State of Ohio; therefore, this regulation follows State law.
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. Any or all bids may be rejected if there is a sound documented reason.
Competitive Proposals
State law requires entities to solicit competitive bids for goods or services at a base amount of
$50,000 or more or construction at $215,000.
Federal regulations allow the use of competitive proposals as an alternative when formal bidding
would otherwise be required only to procure architectural and engineering services. Other types
of services for federally funded purposes to which the Uniform Guidance applies, professional or
otherwise, must be procured using competitive bidding when the cost would meet or exceed the
federal threshold for competitive bidding, $250,000.
Note: The federal formal competitive bidding threshold is higher than the requirements of the
State of Ohio; therefore, this regulation follows State law.
When permitted, the technique of competitive proposals is normally conducted with more than
one (1) source submitting an offer, and either a fixed price or cost-reimbursement type contract is
awarded. Competitors' qualifications are evaluated and the most qualified competitor is selected,
subject to negotiation of fair and reasonable compensation.
If this method is used, the following requirements apply:
- Requests for proposals must be publicized and identify all evaluation factors. Any response to publicized requests for proposals must be considered to the maximum extent practical.
- Proposals must be solicited from an adequate number of qualified supply sources.
- Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered.
Competitive proposals shall be evaluated by the selection team.
Contract/Price Analysis:
There is a cost or price analysis in connection with every procurement action in excess of
$215,000, including contract modifications. (2 CFR Sec. 200.323(a)).
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. An independent estimate prior to receiving bids or proposals is to be completed; which may include evaluation of similar prior purchases or another review process as
appropriate. (2 CFR Sec.200.323(a)).
When performing a cost analysis, the University negotiates profit as a separate element of the
price. To establish a fair and reasonable profit, consideration could include 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, or industry profit rates for similar
work. (2 CFR Sec. 200.323(b)).
Noncompetitive Proposals (Sole Sourcing)
Procurement by noncompetitive proposals means procurement through solicitation of a
proposal from only one (1) source and may be used only when one or more of the following
circumstances apply:
- The item is available only from a single source;
- The public exigency or emergency for the requirement will not permit a delay resulting from
competitive solicitation. An emergency exists whenever the time required to act in accordance with regular procedures would endanger life or property; - The federal awarding agency or pass-through entity expressly authorizes noncompetitive
proposals in response to a written request from the non-Federal entity; or - After solicitation of a number of sources, it is determined the competition is inadequate.
In addition to standard procurement policy and procedures, documentation is required for a
noncompetitive method, which may include written confirmation from the contractor as the sole
source of the item. Documentation will be maintained for sole source.
Purchasing Card (p-card)
The use of p-cards for permissible purchases by designated employees to improve the efficiency
of purchasing activities, reduce processing expenses, improve controls for small-dollar
purchases, and streamline contractor payment. P-card credit limits align with federal
procurement standards for single purchases.
P-cards may be used for purchases under federal programs. The use of p-cards is governed by
Policy 55.074 Purchasing Card.
Full and Open Competition
All procurement transactions must be conducted in a manner providing full and open
competition consistent with 2 CFR Sec. 200.319. In order to ensure objective contractor
performance and eliminate unfair competitive advantage, contractors that develop or draft
specifications, requirements, statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements. Some of the situations considered to
be restrictive of competition include but are not limited to:
- Placing unreasonable requirements on firms in order for them to qualify to do business.
- Requiring unnecessary experience and excessive bonding.
- Noncompetitive pricing practices between firms or between affiliated companies.
- Noncompetitive contracts to consultants that are on retainer contracts.
- Organizational conflicts of interest.
- Specifying only a “brand name” product instead of allowing “an equal” product to be offered
and describing the performance or other relevant requirements of the procurement. - Any arbitrary action in the procurement process.
Minority Businesses, Women’s Business Enterprises, Labor Surplus Area Firms
There are steps to assure that minority businesses, women’s business enterprises, and labor
surplus area firms are used when possible. Affirmative steps must include: (2 CFR Sec. 200.321)
- Placing qualified small and minority business and women’s business enterprises on
solicitation lists. - Assuring that small and minority businesses, and women’s business enterprises are solicited
whenever they are potential sources. - Dividing total purchasing requirements, when economically feasible, into smaller tasks or
quantities to permit maximum participation by small and minority business and women’s
business enterprises. - Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority businesses and women’s business enterprises.
- Using the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Minority Business Development Agency of the Department of Commerce.
- Requiring the prime contractor, if subcontracts are let, to take the affirmative steps listed
above.
Geographical Preferences Prohibited
Procurements must be conducted in a manner that prohibits the use of statutorily or
administratively imposed state, local, or tribal geographical preferences in the evaluation of bids
or proposals, except in those cases where applicable federal statutes expressly mandate or encourage geographic preference. When contracting for architectural and engineering (A/E)
services, geographic location may be a selection criterion provided its application leaves an
appropriate number of qualified firms, given the nature and size of the project, to compete for the
contract.
Prequalified (Preferred) Lists
There must be assurance that all prequalified (preferred) lists of persons, firms, or products
which are used in acquiring goods and services are current and include enough qualified sources
to ensure maximum open and free competition. Also, potential bidders must not be precluded
from qualifying during the solicitation period.
Solicitation Language
There must be assurance that all solicitations 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, provided the brand name specification is widely distributed or available across multiple distribution channels. The specific features of the named brand which must be met by offers must be clearly stated; and identify all
requirements which the solicitor must fulfill and all other factors to be used in evaluating bids or
proposals.
General Procurement Standards
Avoiding Acquisition of Unnecessary or Duplicative Items
The University must avoid the acquisition of unnecessary or duplicative items. Additionally,
consideration should be given to consolidating or breaking out procurements to obtain a more
economical purchase; and, where appropriate, an analysis must be made of leases versus
purchase alternatives, and any other appropriate analysis to determine the most economical
approach.
Use of Intergovernmental Agreements and Cooperative Purchasing
To foster greater economy and efficiency, the University enters into state and local
intergovernmental agreements where appropriate for cooperative purchasing or use of common
or shared goods and services.
When procuring supplies or services for federally funded purposes to which the Uniform
Guidance applies, there will be verification of the organization conducting the procurement
pursuant to such agreements complies with the applicable requirements and standards of the
Uniform Guidance as outlined in this procedure.
Use of Federal Excess and Surplus Property
The University considers the use of federal excess and surplus property in lieu of purchasing new
equipment and property whenever such use is feasible and reduces project costs.
Debarment and Suspension
The University awards 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.
The University may not subcontract with or award sub-grants to any person or company who is
debarred or suspended. The University verifies that the contractor is not excluded or disqualified.
(2 CFR Part 200, Appendix II, and 2 CFR Sec. 180.220 and 180.300).
The University will be responsible for verification of suspension or debarment from federal
projects at the time of purchase.
Maintenance of Procurement Records
The procurement records must be maintained to detail the history of all procurements. These
records will include, but are not necessarily limited to the following: rationale for the method of
procurement, selection of contract type, contractor selection or rejection, the basis for the
contract price (including a cost or price analysis), and verification that the contractor is not
suspended or debarred.
Time and Materials Contracts
Time and materials type contracts may be used only: (1) after a determination that no other
contract is suitable; and (2) if the contract includes a ceiling price that the contractor exceeds at
its own risk. Time and materials type contract means a contract whose cost is the sum of: the
actual costs of materials, and direct labor hours charged at fixed hourly rates that reflect wages,
general and administrative expenses, and profit.
Since this formula generates an open-ended contract price, a time-and-materials contract
provides no positive profit incentive to the contractor for cost control or labor efficiency.
Therefore, each contract must set a ceiling price that the contractor exceeds at its own risk.
Further, there must assert a high degree of oversight in order to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls.
Settlements of Issues Arising Out of Purchases
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 responsibility under
its contracts. Violations of law will be referred to the local, state, or federal authority having
proper jurisdiction.
Conflict of Interest Requirements
Standards of Conduct
In accordance with 2 C.F.R. §200.318(c)(1), the University maintains the following standards of
conduct covering conflicts of interest and governing the actions of its employees engaged in the
selection, award and administration of contracts.
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.
The officers, employees, and agents may neither solicit nor accept gratuities, favors, or anything
of monetary value from contractors or parties to subcontracts, unless the gift is an unsolicited
item of nominal value. Disciplinary actions would be defined and administered by Legal Affairs
per Policy 55.030 Purchasing and the laws of the State of Ohio.
Organizational Conflicts
The University cannot issue a purchase order or contract to a supplier where an organizational
conflict exists. Organizational conflicts of interest means that because of relationships with a
parent company, affiliate, or subsidiary organization, the University is unable or appears to be
unable to be impartial in conducting a procurement action involving a related organization per 2
C.F.R § 200.318(c)(2). Conflict of interest issues are referred to Legal Affairs and handled in
accordance with Ohio University policies/processes, State of Ohio law and any Federal
requirements.