Page images
PDF
EPUB

ineligible for participation in Federal assistance programs under Executive Order 12549, “Debarment and Suspension."

ing statutes. Such transfers shall be subject to the following standards:

(1) The property shall be identified in the grant or otherwise made known to the grantee in writing.

(2) The Federal awarding agency shall issue disposition instruction within 120 calendar days after the end of the Federal support of the project for which it was acquired. If the Federal awarding agency fails to issue disposition instructions within the 120 calendar-day period the grantee shall follow 8 602.32(e).

(3) When title to equipment is transferred, the grantee shall be paid an amount calculated by applying the percentage of participation in the purchase to the current fair market value of the property.

8 602.36 Procurement.

(a) States. When procuring property and services under a grant, a State will follow the same policies and procedures it uses for procurements from its nonFederal funds. The State will ensure that every purchase order or other contract includes any clauses required by Federal statutes and executive orders and their implementing regulations. Other grantees and subgrantees will follow paragraphs (b) through (1) in

8 602.33 Supplies.

(a) Title. Title to supplies acquired under a grant or subgrant will vest, upon acquisition, in the grantee or subgrantee respectively.

(b) Disposition. If there is a residual inventory of unused supplies exceeding $5,000 in total aggregate fair market value upon termination or completion of the award, and if the supplies are not needed for any other federally sponsored programs or projects, the grantee or subgrantee shall compensate the awarding agency for its share.

8 602.34 Copyrights.

The Federal awarding agency reserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish or otherwise use, and to authorize others to use, for Federal Government purposes:

(a) The copyright in any work developed under a grant, subgrant, or contract under a grant or subgrant; and

(b) Any rights of copyright to which a grantee, subgrantee or a contractor purchases ownership with grant support.

(b) Procurement standards. (1) Grantees and subgrantees will use their own procurement procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this section.

(2) Grantees and subgrantees will maintain a contract administration system which ensures that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.

(3) Grantees and subgrantees will maintain a written code of standards of conduct governing the performance of their employees engaged in the award and administration of contracts. No employee, officer or agent of the grantee or subgrantee shall participate in selection, or in the award or administration of a contract supported by Federal funds if a conflict of interest, real or apparent, would be involved. Such a conflict would arise when:

(i) The employee, officer or agent,

(ii) Any member of his immediate family,

(iii) His or her partner, or

(iv) An organization which employs, or is about to employ, any of the above, has a financial or other interest in the firm selected for award. The grantee's or subgrantee's officers, employees or agents will neither solicit nor accept gratuities, favors or anything of monetary value from contractors, potential contractors, or parties to subagreements. Grantee and subgrantees may set minimum rules

8 602.35 Subawards to debarred and

suspended parties. Grantees and subgrantees must not make any award or permit any award (subgrant or contract) at any tier to any party which is debarred or suspended or is otherwise excluded from or

where the financial interest is not sub- (9) Grantees and subgrantees will stantial or the gift is an unsolicited maintain records sufficient to detail item of nominal intrinsic value. To the the significant history of a procureextent permitted by State or local law ment. These records will include, but or regulations, such standards or con are not necessarily limited to the folduct will provide for penalties, sanc- lowing: rationale for the method of tions, or other disciplinary actions for procurement, selection of contract violations of such standards by the type, contractor selection or rejection, grantee's and subgrantee's officers, em and the basis for the contract price. ployees, or agents, or by contractors or (10) Grantees and subgrantees will their agents. The awarding agency may use time and material type contracts in regulation provide additional prohi- onlybitions relative to real, apparent, or (i) After a determination that no potential conflicts of interest.

other contract is suitable, and (4) Grantee and subgrantee proce- (ii) If the contract includes a ceiling dures will provide for a review of pro

price that the contractor exceeds at its posed procurements to avoid purchase own risk. of unnecessary or duplicative items.

(11) Grantees and subgrantees alone Consideration should be given to con

will be responsible, in accordance with solidating or breaking out procure

good administrative practice and sound ments to obtain a more economical

business judgment, for the settlement purchase. Where appropriate, an analy

of all contractual and administrative sis will be made of lease versus pur

issues arising out of procurements. chase alternatives, and any other ap

These issues include, but are not limpropriate analysis to determine the

ited to source evaluation, protests, dismost economical approach.

putes, and claims. These standards do (5) To foster greater economy and ef

not relieve the grantee or subgrantee ficiency, grantees and subgrantees are

of any contractual responsibilities encouraged to enter into State and

under its contracts. Federal agencies

will not substitute their judgment for local intergovernmental agreements

that of the grantee or subgrantee unfor procurement or use of common

less the matter is primarily a Federal goods and services.

concern. Violations of law will be re(6) Grantees and subgrantees are en

ferred to the local, State, or Federal couraged to use Federal excess and sur

authority having proper jurisdiction. plus property in lieu of purchasing new

(12) Grantees and subgrantees will equipment and property whenever such

have protest procedures to handle and use is feasible and reduces project

resolve disputes relating to their pro

curements and shall in all instances (7) Grantees and subgrantees are en

disclose information regarding the procouraged to use value engineering

test to the awarding agency. A clauses in contracts for construction

protestor must exhaust all administraprojects of sufficient size to offer rea tive remedies with the grantee and sonable opportunities for cost reduc

subgrantee before pursuing a protest tions. Value engineering is a system with the Federal agency. Reviews of atic and creative analysis of each con protests by the Federal agency will be tract item or task to ensure that its es- limited to: sential function is provided at the (1) Violations of Federal law or reguoverall lower cost.

lations and the standards of this sec(8) Grantees and subgrantees will tion (violations of State or local law make awards only to responsible con will be under the jurisdiction of State tractors possessing the ability to per- or local authorities) and form successfully under the terms and (ii) Violations of the grantee's or conditions of a proposed procurement. subgrantee's protest procedures for Consideration will be given to such failure to review a complaint or promatters as contractor integrity, com- test. Protests received by the Federal pliance with public policy, record of agency other than those specified past performance, and financial and above will be referred to the grantee or technical resources.

subgrantee.

costs.

(c) Competition. (1) All procurement transactions will be conducted in a manner providing full and open competition consistent with the standards of 8 602.36. Some of the situations considered to be restrictive of competition include but are not limited to:

(i) Placing unreasonable requirements on firms in order for them to qualify to do business,

(ii) Requiring unnecessary experience and excessive bonding,

(iii) Noncompetitive pricing practices between firms or between affiliated companies,

(iv) Noncompetitive awards to consultants that are on retainer contracts,

(v) Organizational conflicts of interest,

(vi) 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

(vii) Any arbitrary action in the procurement process.

(2) Grantees and subgrantees will conduct procurements in a manner that prohibits the use of statutorily or administratively imposed in-State or local geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts State licensing laws. When contracting for architectural and engineering (AVE) services, geographic location may be a selection criteria provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract.

(3) Grantees will have written selection procedures for procurement transactions. These procedures will ensure that all solicitations:

(i) Incorporate a clear and accurate description of the technical requirements for the material, product, or

product or service to be procured. Such description shall 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, shall 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 equal" description may be used as a means to define the performance or other salient requirements of a procurement. The specific features of the named brand which must be met by offerors shall be clearly stated; and

(ii) Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals.

(4) Grantees and subgrantees will ensure that all prequalified 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, grantees and subgrantees will not preclude potential bidders from qualifying during the solicitation period.

(d) Methods of procurement to be followed-(1) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than $25,000 in the aggregate. If small purchase procurements are used, price or rate quotations will be obtained from an adequate number of qualified sources.

(2) Procurement by sealed bids (formal advertising). Bids are publicly solicited and a firm-fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bid method is the preferred method for procuring construction, if the conditions in $ 602.36(d)(2)(i) apply.

(i) In order for sealed bidding to be feasible, the following conditions should be present:

(A) A complete, adequate, and realistic specification or purchase descrip tion is available;

(B) Two or more responsible bidders are willing and able to compete effectively for the business; and

[ocr errors][merged small]

(C) The procurement lends itself to a advantageous to the program, with firm fixed price contract and the selec- price and other factors considered; and tion of the successful bidder can be (v) Grantees and subgrantees may made principally on the basis of price. use competitive proposal procedures

(ii) If sealed bids are used, the follow- for qualifications-based procurement of ing requirements apply:

architectural/engineering (AVE) profes(A) The invitation for bids will be sional services whereby competitors' publicly advertised and bids shall be qualifications are evaluated and the solicited from an adequate number of most qualified competitor is selected, known suppliers, providing them suffi- subject to negotiation of fair and reacient time prior to the date set for sonable compensation. The method, opening the bids;

where price is not used as a selection (B) The invitation for bids, which factor, can only be used in procurewill include any specifications and per- ment of AVE professional services. It tinent attachments, shall define the cannot be used to purchase other types items or services in order for the bidder of services though A/E firms are a poto properly respond;

tential source to perform the proposed (C) All bids will be publicly opened at effort. the time and place prescribed in the in (4) Procurement by noncompetitive vitation for bids;

proposals is procurement through solic(D) A firm fixed-price contract award itation of a proposal from only one will be made in writing to the lowest source, or after solicitation of a numresponsive and responsible bidder. ber of sources, competition is deterWhere specified in bidding documents, mined inadequate. factors such as discounts, transpor- (i) Procurement by noncompetitive tation cost, and life cycle costs shall be proposals may be used only when the considered in determining which bid is award of a contract is infeasible under lowest. Payment discounts will only be small purchase procedures, sealed bids used to determine the low bid when or competitive proposals and one of the prior experience indicates that such following circumstances applies: discounts are usually taken advantage (A) The item is available only from a of; and

single source; (E) Any or all bids may be rejected if (B) The public exigency or emergency there is a sound documented reason for the requirement will not permit a

(3) Procurement by competitive propos- delay resulting from competitive solicals. The technique of competitive pro- itation; posals is normally conducted with (C) The awarding agency authorizes more than one source submitting an noncompetitive proposals; or offer, and either a fixed-price or cost- (D) After solicitation of a number of reimbursement type contract is award- sources, competition is determined ined. It is generally used when conditions adequate. are not appropriate for the use of (ii) Cost analysis, i.e., verifying the sealed bids. If this method is used, the proposed cost data, the projections of following requirements apply:

the data, and the evaluation of the spe(1) Requests for proposals will be pub cific elements of costs and profit, is relicized and identify all evaluation fac quired. tors and their relative importance. Any (iii) Grantees and subgrantees may response to publicized requests for pro be required to submit the proposed proposals shall be honored to the maxi- curement to the awarding agency for mum extent practical;

pre-award review in accordance with (ii) Proposals will be solicited from paragraph (g) of this section. an adequate number of qualified (e) Contracting with small and minority sources;

firms, women's business enterprise and (iii) Grantees and subgrantees will labor surplus area firms. (1) The grantee have a method for conducting tech and subgrantee will take all necessary nical evaluations of the proposals re- affirmative steps to assure that minorceived and for selecting awardees;

ity firms, women's business enter(iv) Awards will be made to the re- prises, and labor surplus area firms are sponsible firm whose proposal is most used when possible.

(2) Affirmative steps shall include:

(2) Grantees and subgrantees will ne(i) Placing qualified small and minor- gotiate profit as a separate element of ity businesses and women's business the price for each contract in which enterprises on solicitation lists;

there is no price competition and in all (ii) Assuring that small and minority

cases where cost analysis is performed. businesses, and women's business en To establish a fair and reasonable profterprises are solicited whenever they

it, consideration will be given to the are potential sources;

complexity of the work to be per(iii) Dividing total requirements,

formed, the risk borne by the contracwhen economically feasible, into small

tor, the contractor's investment, the er tasks or quantities to permit maxi

amount of subcontracting, the quality mum participation by small and minor

of its record of past performance, and ity business, and women's business en

industry profit rates in the surround

ing geographical area for similar work. terprises;

(3) Costs or prices based on estimated (iv) Establishing delivery schedules,

costs for contracts under grants will be where the requirement permits, which

allowable only to the extent that costs encourage participation by small and

incurred or cost estimates included in minority business, and women's busi

negotiated prices are consistent with ness enterprises;

Federal cost principles (see 8602.22). (v) Using the services and assistance

Grantees may reference their own cost of the Small Business Administration,

principles that comply with the appliand the Minority Business Develop

cable Federal cost principles. ment Agency of the Department of

(4) The cost plus a percentage of cost Commerce; and

and percentage of construction cost (vi) Requiring the prime contractor,

methods of contracting shall not be if subcontracts are to be let, to take

used. the affirmative steps listed in para

(8) Awarding agency review. (1) Grantgraphs (e)(2) (1) through (v) of this sec ees and subgrantees must make availtion.

able, upon request of the awarding (f) Contract cost and price. (1) Grant- agency, technical specifications on proees and subgrantees must perform a posed procurements where the awardcost or price analysis in connection ing agency believes such review is with every procurement action includ- needed to ensure that the item and/or ing contract modifications. The meth- service specified is the one being prood and degree of analysis is dependent posed for purchase. This review genon the facts surrounding the particular erally will take place prior to the time procurement situation, but as a start the specification is incorporated into a ing point, grantees must make inde- solicitation document. However, if the pendent estimates before receiving bids grantee or subgrantee desires to have or proposals. A cost analysis must be the review accomplished after a performed when the offeror is required solication has been developed, the to submit the elements of his esti- awarding agency may still review the mated cost, e.g., under professional, specifications, with such review usuconsulting, and architectural engineer- ally limited to the technical aspects of ing services contracts. A cost analysis the proposed purchase. will be necessary when adequate price (2) Grantees and subgrantees must on competition is lacking, and for sole request make available for awarding source procurements, including con- agency pre-award review procurement tract modifications or change orders, documents, such as requests for proposunless price reasonableness can be es- als or invitations for bids, independent tablished on the basis of a catalog or cost estimates, etc., when: market price of a commercial product (i) A grantee's or subgrantee's prosold in substantial quantities to the curement procedures or operation fails general public or based on prices set by to comply with the procurement standlaw or regulation. A price analysis willards in this seciton; or be used in all other instances to deter (ii) The procurement is expected to mine the reasonableness of the pro- exceed $25,000 and is to be awarded posed contract price.

without competition or only one bid or

« PreviousContinue »