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 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:
- 200.319 Competition.
- 200.320 Methods of procurement to be followed.
- 200.321 Contracting with small and minority businesses, women's business enterprises, and labor surplus area firms.
- 200.322 Domestic preferences for procurements.
- 200.323 Procurement of recovered materials.
- 200.324 Contract cost and price.
- 200.325 Federal awarding agency or pass-through entity review.
- 200.326 Bonding requirements.
- 200.327 Contract provisions.
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?
- 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.
 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.