Federal Funds Purchasing Policy

Background

The OMB Uniform Guidance went into effect on December 26, 2014 and applies to awards or funding increments issued on or after that date.  Purchases funded by federal grant funds must adhere to regulations found in Uniform Guidance as a condition of receiving funds and to meet annual audit compliance.  The NDAA 2017 compliance supplement enacted on December 23, 2016 increased the micro-purchase threshold to $10,000. Wesleyan University will officially reflect this change in their policy effective July 1, 2018. 

What are the Methods of Procurement?

  1. Micro-purchases - the acquisition of supplies or services, the aggregate dollar amount of which does not exceed $10,000. 
  2. Small purchase - the acquisition of supplies, services or equipment in the range of $10,001 to $150,000.  Price or rate quotations must be obtained from an adequate number or qualified sources prior to making a purchase.
  3. Sealed bids - For acquisitions costing more than $150,000, bids are publicly solicited and a firm fixed price contract is awarded to the responsible bidder whose bid is the lowest price.
  4. Competitive proposals - For acquisitions costing more than $150,000, conducted with more than one source submitting an offer, and either a fixed price or cost-reimbursement type contract is awarded.  Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program with price and other factors considered.
  5. Noncompetitive proposals - procurement through solicitation of a proposal from only one source.  A waiver must be granted by submitting the Sole Source Justification Form.

For additional information on each of these methods, please refer to Uniform Guidance 200.320 Methods of procurement to be followed. 

What You Need to Know

For purchases $10,000 or less, use your own judgment in identifying potential suppliers.  Purchase orders will not be required.  When possible, buyers should use Wesleyan discounts.  If you are uncertain as to whether or not a purchase qualifies as a micro purchase or a small purchase, please contact the grants accounting office prior to making the purchase.  For example, installment payments less than $10,000 towards a total purchase price greater than $10,000 do not count as micro purchases. 

For purchases between $10,001 and $150,000 buyers will need to submit a purchase order documenting at least 3 price quotes and the basis for vendor selection prior to making a purchase.  Documentation needs to be in writing from the vendors and can include screen shots from websites, copies of published price lists and advertised pricing in established magazines or journals.  This documentation should be attached to the purchase order prior to routing for workflow and the buyer should not make the purchase until the purchase order has been fully approved.  If a purchase order is not received prior to an accounts payable voucher, the grants office will have the authority to reject the invoice from being paid against federal funds.  If you require assistance in obtaining 3 quotes, please contact Olga Bookas, Purchasing Director. 

For purchases greater than $150,000 buyers will need to contact Olga Bookas, Purchasing Director, to help assist them with the formal bid process.  Olga will work collaboratively with the PI or requestor to facilitate this process and meet all the federal requirements.  It is important therefore that the buyer communicate their plans for major purchases as early as possible so there will be reasonable time to accomplish the bidding procedure. 

Sole Source Justification Form

There may be times when competitive bids are not appropriate and the requirement for obtaining them is waived.  Failing to anticipate needs resulting from poor planning is not an exception to the bidding policy.  For an exception to be valid, a clear statement of justification for waiving the competitive bidding process must be submitted in writing for approval by completing the Sole Source Justification Form.

Situations that would justify purchases without the competitive bid process are:

  • The supplier is obviously a sole source for the item.  Examples:
    • Artwork
    • Unusual and not generally available used equipment
    • A very specialized piece of scientific equipment
    • A specialized service (lobbyist, consultant) when the supplier has a one-of-a-kind ability to provide the required service due to demonstrably unique circumstances (knowledge, contacts, experience)
  • There is an undeniable compatibility requirement.  The item will be hooked up to existing equipment or the purchase is an upgrade to existing equipment/software.
  • There has been an unpredictable emergency and there is no time to bid.  Examples:
    • Human life, health or University property is in jeopardy
    • Repairs are immediately needed for equipment where delay would lead to higher expense. 
  • Subcontracts whereby the agreement to work with another individual or institution was written into the grant award.

Situations that would NOT justify purchases without the competitive bid process are:

  • We did some looking around and this supplier is offering a very good deal. - while this may be true, federal guidelines require a competitive bidding process that demonstrates that due diligence was used in spending tax payer dollars.
  • I waited so long to work on this that now I need it tomorrow - busy schedules do not excuse the University from following federal regulations
  • It would be so much more convenient is we could just use this supplier - Convenience is not a strong enough factor to allow the granting of a waiver from the process.  An emergency situation must be present.
  • The company already started the work. - making such agreements or purchases at a departmental level is contrary to this University policy and federal regulations.

How Do I Request a Waiver?

Please fill out the Sole Source Justification Form and submit it to the Grants Accounting Office.  Include as much documentation as possible to justify the waiver.  Do not proceed with any purchases until you have received notification that the waiver has been approved.