The New Uniform Guidance OMB Circular A-81 2 CFR Procurement Standards Carla Helm, Associate Director, Procurement Services University of Washington Kelly Kozisek, Chief Procurement Officer Oregon State University Richard Taylor, Director of Procurement Strategies University of California, Berkeley and San Francisco October 6, 2015 NAEP District VI Annual Meeting

The New Uniform Guidance OMB Circular A-81 Agenda Summary of Office of Management and Budget (OMB) Circular A-81  Major Points and Issues Organizations working on behalf of the procurement issues Implementation  4 Perspectives Q & A

The New Uniform Guidance OMB Circular A-81 Late Breaking News! When Uniform Guidance (UG) was published on 12/26/13, effective date was the first full fiscal year after 12/26/14 However, effective date for procurement standards was extended one full fiscal year after the effective date of 12/26/14* Effective date for the procurement standards has been extended for one additional year, so a total extension of two years o Example: If your fiscal year runs from July 1 – June 30, then your effective date would now be 7/1/17, in lieu of 7/1/16 *Note: You must make note in your institutional policies that you are following Circular A-110 instead of the UG, if you chose not to implement the new UG procurement rules as of the original effective date

The New Uniform Guidance OMB Circular A-81-Major Points Why did the feds implement the Uniform Guidance? To ”harmonize” (align) procurement rules and simplify the grant management process previously codified in 8 different federal circulars To build more accountability into the grants management process To strengthen conflict of interest/ethics rules To align procurement rules for grants with FAR (Federal Acquisition Regulations – which apply to federal contracts )

The New Uniform Guidance OMB Circular A-81 – Major Points § – Methods of procurement to be followed – 1.Micro Purchase 2.Small Purchase 3.Sealed Bid 4.Competitive Proposals 5.Non-Competitive Proposals

The New Uniform Guidance OMB Circular A-81 – Major Points § – Methods of procurement to be followed – 1.Micro Purchase Defined at § // Set by FAR 48 CFR Subpart 2.1 Threshold currently *$3,000 ($2,000 for construction subject to Davis- Bacon Act) Do not require competitive quotations if Non-Federal Entity (NFE) considers price reasonable NFE must distribute equitably among qualified suppliers to the extent practicable *Note: Current pressure for increase to $5,000-$10,000.

The New Uniform Guidance OMB Circular A-81 – Major Points § – Methods of procurement to be followed – 2.Small Purchase Aggregate dollar amount less than Simplified Acquisition Threshold  Simplified Acquisition Threshold is currently $150,000; Relatively simple and informal Price or rate quotations must be obtained from an adequate number (2 or more) of qualified sources  “Adequate” and Method (written, oral, price list, web search) is determined by the NFE

The New Uniform Guidance OMB Circular A-81 – Major Points § – Methods of procurement to be followed – 3.Sealed Bid- This method is preferred for construction if the following apply: Sufficient and complete specifications or descriptions Firm fixed price (lump sum or unit) Two or more responsible, willing and able bidders

The New Uniform Guidance OMB Circular A-81 – Major Points § – Methods of procurement to be followed – 3.Sealed Bid- Requirements: Publicly advertised and bids solicited from an adequate number of known suppliers, providing them sufficient response time Publicly opened at time and place prescribed in the solicitation Firm-fixed price contract award will be made in writing to lowest responsive and responsible bidder Bids can be rejected – document reason

The New Uniform Guidance OMB Circular A-81 – Major Points § – Methods of procurement to be followed – 4.Competitive Proposals a.Technique usually includes: Normally, more than one source responding Normally, fixed price or cost-reimbursement type contract is awarded Used when conditions are not appropriate for sealed bids

The New Uniform Guidance OMB Circular A-81 – Major Points § – Methods of procurement to be followed – 4.Competitive Proposals – Requirements: RFPs must be publicized RFPs must identify all evaluation factors and their relative importance Any response must be considered to the maximum extent practical Proposals must be solicited from an adequate number of qualified sources Must be a written method for conducting technical evaluations of responses and for selecting recipients Contracts must be awarded to the responsible source whose proposal is most advantageous to the program, with price and other factors considered When soliciting qualifications-based A&E professional services subject to negotiation, cannot solicit other types of services even though a firm may be able to provide them

The New Uniform Guidance OMB Circular A-81 – Major Points § – Methods of procurement to be followed – 5.Non- Competitive - Single or Sole Source Only one source, or Awarding agency expressly authorizes, or After soliciting, competition is inadequate

The New Uniform Guidance OMB Circular A-81 – Major Points Other Items § General Procurement Standards NFE must have procedures that avoid unnecessary or duplicative procurements NFE should use Federal excess and surplus property in lieu of new when feasible and cheaper § – Competition – Solicitations must: Incorporate clear and accurate description of technical requirements Not include features that unduly restrict competition May include qualitative statements When necessary, include minimum essential characteristics and standards When necessary, OK to use “brand name or equivalent” But the specific features of the named brand must be clearly stated Identify ALL requirements that respondents must fulfill and all other factors that will be used in evaluation

The New Uniform Guidance OMB Circular A-81 – Major Points Other Items § – Contract Cost and Price Must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold ($150,000) Method and degree depends on facts surrounding the procurement As a starting point, must make independent estimates before receiving bids or proposals

The New Uniform Guidance OMB Circular A-81 – Major Points Other Items § – Contract Cost and Price Must negotiate profit as a separate element of price for each contract in which there is no price competition and in all cases where cost analysis is performed Must consider all of the following:  Complexity of the work to be performed  Risk borne by the contractor  Contractor’s investment  Amount of subcontracting  Quality of record of past performance  Industry profit rates in the geographical area for similar

The New Uniform Guidance OMB Circular A-81- Major Points Other Items § – Contract Provisions (Appendix II) All contracts made by the NFE under the Federal award must contain certain required provisions. These are listed in Appendix II of 2 CFR 200. Link below:

The New Uniform Guidance OMB Circular 81- Organizations Working on Procurement Issues COGR – Council on Governmental Relations: COGR and higher eds working with OMB with the intent to revise the UG procurement rules to align more with our current practices: June 30 letter from COGR to OMB asks for an exemption from the new rules, and continued use of existing A-110 rules OR – if not that, then raise micro purchase threshold to $10K, and fix other “broken” sections of the rules

The New Uniform Guidance OMB Circular A-81- Organizations Working on Procurement Issues CURRENT LEGISLATION: House and Senate both have bills to amend the Federal Acquisition Regulations (FAR) specifically raising the $3,000 threshold The FAR is the source OMB used to establish their requirement

The New Uniform Guidance OMB Circular A-81- Organizations Working on Procurement Issues Federal Demonstration Partnership (FDP): FDP is a cooperative initiative between federal agencies and institutions to reduce administrative burdens Working in tandem with COGR to change UG procurement rules Do a “demonstration” or “pilot” to validate our approach is sound i.e. – a higher micropurchase threshold could still protect the government’s interests Currently analyzing procurement data from 10 universities (UC and UW participated) Timeline for pilot: TBD

The New Uniform Guidance OMB Circular A-81 Moving Towards Implementation Oregon State University University of California, Berkeley University of California, San Francisco University of Washington

The New Uniform Guidance OMB Circular A-81 Common Issues/Decisions State vs. IHE – how do you decide which rules are applicable? Whether to have one set of rules for all procurements or two sets Whether to lower departmental delegations (i.e. pcard) What are your challenges and how are you addressing?

The New Uniform Guidance OMB A-81 – Oregon State University Oregon State University – what we’ve done to date: Publically announced delay of implementing the UG and until the implementation date, plan is to follow current standards Created a site on our webpage Approached Faculty Senate for feedback Developed a plan and timeline approved by the VP Created a UG Procurement Committee and held meetings Engaged with a consultant to develop an impact assessment, suggest rule changes and develop training Communicated with Procurement staff

The New Uniform Guidance OMB A-81 – Oregon State University Oregon State University – Our key decision points: Apply the UG to all procurements, just those that are federally funded, or just to those organizations that have had a history of grant funding? Looking at: – Data – Risk in having two sets of rules – Level of tolerance by the OSU community

The New Uniform Guidance OMB A-81 – Oregon State University Oregon State University – Other key decision points: What do we do with our exemptions from competition? Do we lower our Pcard limit? Procedures for: – Negotiating profit – Defining “Adequate” number of bids – Getting independent estimates

The New Uniform Guidance OMB Circular A-81 – University of California Berkeley We are also reviewing the questions raised by OSU Campus Shared Services (CSS) Central point of entry for Purchase Requisitions Developing training Materials for CSS Considering change in Workflow to route Purchase Requisitions to Central Buyers

The New Uniform Guidance OMB Circular A-81 – University of California Berkeley Training to Departments on P-Card requirements with a post audit for compliance Goal is to be Transparent to the end user Major Communication effort will begin in July, 2016 Target “Go Live” is July 1, 2017

The New Uniform Guidance OMB Circular A-81 – University of California San Francisco Does not have a Share Services for the Research units Considering Change in Workflow so Orders above $3K will route to Central Buyer Training to departments on P-Card requirements with a post audit for compliance Major Communication will begin July, 2016 Target “Go Live” July 1, 2017

The New Uniform Guidance OMB Circular A-81 – University of Washington Similar approach to both other schools Spent time analyzing whether we qualify as a state or an IHE Utilizing task force to assess impact, communicate to campus and implement UG Posted notice of adherence to Circular A-110 rules until July 1, 2017 on Procurement website and in internal procedures Ariba work flow changes in place to manage orders exceeding $3,000 (have ability to change $ limit) Will reduce Pcard limit to $3K across the board, not just for federally funded purchases (currently $3.5K)

The New Uniform Guidance OMB Circular A-81 – University of Washington 2 different processes for orders over $3K: Apply UG thresholds and procedures to federal grant and contract purchases Apply WA state procurement rules to non-federally funded purchases State rules require formal competition at $100K, so we will apply this lower threshold to all purchases, regardless of fund source Delaying development of internal UG policies & procedures until we hear the outcome of the COGR/FDP work Communicate and leverage existing contracts to minimize impact of low $ threshold and additional documentation

The New Uniform Guidance OMB Circular A-81 QUESTIONS?

The New Uniform Guidance OMB Circular A-81 Useful Links: eCFR Part 200 (Electronic Code of Federal Regulations): idx?SID=964b d2ce84162e7adea171120&tpl=/ecfrbrowse/ Title02/2cfr200_main_02.tpl idx?SID=964b d2ce84162e7adea171120&tpl=/ecfrbrowse/ Title02/2cfr200_main_02.tpl COFAR (Council on Financial Assistance Reform): COGR (Council on Governmental Relations): (Some resources only avail. to members)