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Posted by on Feb 25, 2014

Meet the Supercircular – Changes to Procurement Policies

Meet the Supercircular – Changes to Procurement Policies

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The Uniform Guidance: Uniform Administrative Requirements, Cost Principles, and Audit Requirements (“Supercircular”) contains more than 50 policy changes to grants administration. Grant recipients and pass-through entities need to prepare for the changes now to be ready on December 26, 2014 when the Supercircular becomes effective.

Subtitle III of Subpart D of the Supercircular details the procedures non-federal entities must follow when procuring property, goods, and services under a federal award. The Supercircular uses language from A-102 as the foundation of this subtitle. The selection of A-102 as the basis for procurement standards is likely to present some difficulties and administrative burdens for recipient entities that currently follow 2 CFR 215 (A-110). Institutions of higher education (IHEs), hospitals, and nonprofit organizations will need to review and update their procurement policies to ensure compliance.

Section 200.320 identifies the five procurement methods non-federal entities must use. The five allowable methods are:

  • Procurement by micro-purchase;
  • Procurement by small purchase procedures;
  • Procurement by sealed bids;
  • Procurement by competitive proposals; and
  • Procurement by noncompetitive (sole-sourced) proposals.

The micro-purchase procurement method is a new provision that will enable non-federal entities to obtain supplies, valued at less than $3,000, without soliciting competitive quotations. For example, a recipient that needs to buy $500 of office supplies, such as pens, computer paper, and ink cartridges, can go to an office supply store and purchase the items. Recipients will no longer have to request quotes for these types of purchases. Receipts will still need to be kept for accounting purposes.

All non-federal entities will need to update their internal procurement policies to reflect the changes described in the Supercircular. It is important that a recipient’s procurement policies identify the five allowable methods outlined in Section 200.320. Recipients should also note that the Supercircular increases the Simplified Acquisition Threshold to $150,000 and ties all future increases to the Federal Acquisition Regulation (FAR).

The Supercircular also requires all non-federal entities to maintain written policy standards governing organizational conflicts of interest. Under current regulations, non-federal entities are required to maintain standards of conduct covering conflicts of interest. The new provision will require IHEs, hospitals, and nonprofit organizations to devise and implement new policies.

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