RGCI - Procurement Standards under 2 CFR 200 for Federal Grants and Cooperative Agreements

2 Code of Federal Regulations (CFR) 200 lays out the Procurement Standards (i.e., purchasing system requirements) in section 317 to 327. 2 CFR 200.317 (Procurement by States) requires State Governments making purchases under Federal awards to use the same policies and procedures it uses for placing purchases when it spends State funds. 2 CFR 200.318 (General Procurement Standards) relates to non-Federal entities[1] other than State Governments. This section requires the non-Federal entity to have and use documented procurement procedures, consistent with laws and regulations and conform to the procurement standards identified in §§ 200.317 through 200.327.

What is Required in these Procurement Standards?

The Procurement Standards include:

  • Oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.
  • Written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts.
  • Impartial conduct of procurement actions involving a related organization.
  • Avoiding acquisition of unnecessary or duplicative items.
  • Fostering economy, efficiency, and promote cost-effective use of shared services across the Federal Government and the non-Federal entity.
  • Encouraging use of Federal excess and surplus property.
  • Encouraging use of value engineering clauses in contracts for construction projects to offer reasonable opportunities for cost reductions.
  • Awarding contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement.
  • Maintaining records sufficient to detail the history of procurement.
  • Using a time-and-materials type contract only after a determination that no other contract is suitable, including a ceiling price that the contractor exceeds at its own risk, and provide a higher degree of oversight of the contractor.
  • Being responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements.

And that only gets us through 2 CFR 200.318 general requirements.

What Else is There?

The Procurement Standards have entire sections addressing each of the following areas:

What’s in § 200.327 Contract Provisions?

One would hope that this section provides the contractual language to be used in your purchase orders – if only that were the case. 2 CFR 200.327 simply reference to Appendix II listing the following provisions:

  • Contracts for more than the simplified acquisition threshold 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.
  • Contracts over $10,000 must address termination for cause and for convenience.
  • Equal Employment Opportunity.
  • Davis-Bacon Act.
  • Contract Work Hours and Safety Standards Act.
  • Rights to Inventions Made Under a Contract or Agreement.
  • Clean Air Act and the Federal Water Pollution Control Act.
  • Debarment and Suspension.
  • Byrd Anti-Lobbying Amendment.
  • Procurement of recovered materials.
  • Prohibition on certain telecommunications and video surveillance services or equipment.
  • Domestic preferences for procurements.

None of these required provisions come with specific contractual language to be included in your purchase order. Even reviewing your Federal award or subaward is not likely to be helpful as most Grants and Cooperative Agreements simply state that the recipient or subrecipient are required to comply with all requirements in 2 CFR 200. Note: A little trade secret – the Federal Acquisition Regulations (FAR) Part 52 provides specific contract clauses addressing most of these provisions. Copy and paste the wording – then adjust a few words to fit the 2 CFR 200 terminology. Trying to create a new wheel is a thankless task.

How Can Redstone GCI Help?

Redstone GCI can assist organizations with grants and cooperative agreements to ensure compliance with 2 CFR 200.317-327, Procurement Standards by:

  • Providing a Procurement Manual template.
  • Assisting in drafting or reviewing policies and procedures.
  • Providing templates for procurement file documentation requirements.
  • Providing a checklist to help ensure all requirements are addressed.
  • Providing training to your staff on procurement policies, regulations, or documentation.
  • Performing assessments of your policies and procedures (2 CFR 200.325(c)(2) self-certify its procurement system).

Redstone GCI is available to assist contractor’s in developing accounting policies and procedures, checklists, accounting support, and reviews of invoices, government reports for compliance with 2 CFR 200. Redstone GCI assists contractors throughout the U.S. and internationally with understanding the Government’s expectations in applying the 2 CFR 200 Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Grants.

[1] 2 CFR 200.1 “Non Federal entity (NFE)” means a State, local government, Indian tribe, Institution of Higher Education (IHE), or nonprofit organization that carries out a Federal award as a recipient or subrecipient.

Written by John C. Shire, CPA

John C. Shire, CPA John is a Director with Redstone Government Consulting, Inc. providing government contract consulting services to our clients primarily related to the DFARS business systems, CAS Disclosure Statements, and DCAA/DCMA compliance preparation, advisory, and defense. Prior to joining Redstone Government Consulting, John served in a number of capacities with DCAA/DCMA for more than 30 years. Upon his retirement, he was based in Texas as an SES-level Corporate Audit Director for DCAA, managing a staff of 300 auditors at one of the largest DOD programs. Professional Experience John began his career in the late 80s working in the Clearwater, FL audit office and over the next three decades he progressed through a number of positions within both DCAA and DCMA with career highlights as DCAA Program Manager at Ft. Belvoir, Chief of Technical Programs Division, Deputy Assistant Director-Policy, Director of the DCMA Cost and Pricing Center, the SES-level Lockheed Martin Corporate Audit Director, and Director of Integrity and Quality Assurance. John’s three decades of experience in performing and leading DCAA auditors and DCMA reviewers provides a wealth of expertise to our clients. John’s role, not only in the performance of audits, but also in the development of audit policy affords him unique insights into the defense of audit findings and the linkage of audit program steps to the underlying regulatory framework. He is an expert in FAR, DFARS, and other agency acquisition regulation, as well as a subject matter expert in the Cost Accounting Standards having reviewed and provided audit feedback on many of the largest and most complex cost accounting practices during his tenure with the DCAA. John’s tenure with DCAA and DCMA came at a critical time during each agency’s history where a number of changes were occurring such as the response to the ICS backlog, development of audit approaches to the DFARS Business Systems and implementation of new audit initiatives as a result of Congressional oversight through the NDAA process. John’s leadership at the DCMA Cost & Pricing center saw oversight of all major DOD pricing actions, leadership of should cost review teams, the Commercial Pricing group and many other areas of strategic value to our clients. His involvement in these and other Agency initiatives is of great value to our clients due to his in depth understanding of DCAA and DCMA’s internal policy directives. Education John holds a Master of Business Administration and a B.A. in Accounting from the University of South Florida. Certifications Certified Information Systems Auditor State of Alabama Certified Public Accountant

About Redstone GCI

Redstone GCI is a consulting firm focused on fulfilling the needs of government contractors in all areas of compliance. With a singular mission to help contractors through the multiple layers of “red tape,” we allow contractors to focus on what they do best – support their mission with the U.S. Government. We are home to a group of consultants made up of GovCon industry professionals, CPAs, attorneys, and retired government audit and acquisition professionals.

Our focus and knowledge of audit and compliance functions administered by DCAA and DCMA will always be at the heart of what we do. However, for the past decade, we’ve strategically grown to support other areas of the government contractor back-office with that same level of focus and expertise. We’ve added expertise in contracts management, subcontract administration, proposal pricing, various software systems, HR and employment law, property administration, manufacturing, data analytics/reporting, Grant specialists, M&A, and many other areas. When we see a trend in the needs of contractors, we act to ensure we can provide the best expertise in the market to fulfill those needs.

One thing our clients can be certain of is that with the Redstone GCI Team in your corner, there is no problem too big and no issue too technical for our team to tackle.

Topics: Compliant Accounting Infrastructure, Government Regulations, Grants & Cooperative Agreements (2 CFR 200)