Office of Sponsored Programs
The Ohio State University

Procurement

Uniform Guidance Update

Beginning July 1, 2018 The Ohio State University Office of Sponsored Programs will implement new purchasing policies and procedures to comply with the Procurement sections (2 CFR 200.318-326) of the Office of Management and Budget’s “Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards” (Uniform Guidance), and with the “American Competitiveness and Innovation Act (AICA)” section 207 (a) (1). Changes to requirements made in Uniform Guidance and AICA focus on increased competition and transparency in the purchasing process.

Changes to the Uniform Guidance Procurement section “Methods of procurement to be followed (Section §200.320)” are summarized below: 

  • Few changes affect Micro-Purchase procurements (less than $25,000 or less than $2,000 for alterations and renovations or construction)
  • For procurements between $25,000 and $250,000 (Small Purchases), and if more than one supplier exists, two or more informal quotes/proposals must be obtained for the required documentation of basis of contractor selection and determination of the reasonableness of cost
  • For procurements of $250,000 (Simplified Acquisition Threshold) or more, and if more than one potential supplier exists, OSP Procurement must submit formal requests for bids (Competitive Proposals) to two or more sources
  • PIs requesting a sole source (Noncompetitive Proposal) for procurements of $25,000 up to $250,000 must complete and submit the new “Request for Sole Source” form with their purchase request
  • If the procurement is estimated to be $250,000 or more, PIs must submit both a “Request for Sole Source” form and the OSP “Competition Determination Requirements” form with their purchase request
  • The criteria for approval of requests for Sole Source procurements are listed below (see Noncompetitive Proposal). Approvals for Noncompetitive Proposal procurements may not be granted until after OSP Procurement’s attempt to obtain competitive bids from multiple sources is proven inadequate.

Uniform Guidance Five Methods of Procurement

  1. Micro-Purchases: Purchasing of supplies, equipment or services where the aggregate total is less than $25,000. If the purchase is subject to Davis-Bacon Act or Service Contract Act, the aggregate total may not exceed $2,000.
    • Micro-purchases may be awarded without soliciting competitive quotations if the OSP buyer can defend the price as reasonable
    • One quote/proposal is needed
    • Micro-purchases must be distributed equitably among qualified suppliers, when practicable
  2. Small Purchases: Aggregate total is between $25,000 and $250,000 for procurements of supplies, equipment or services.
    • If more than one supplier exists, two or more informal quotes/proposals must be obtained (to be used as the basis for the required determination of the reasonableness of cost). The same specifications must be provided to all solicited vendors to ensure quotes are comparable (see Competition: Section §200.319)
    • If only one supplier exists, the Noncompetitive Proposal guidelines (item 5 below) must be followed
  3. Sealed Bids: Bids are publicly solicited and a firm fixed price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming to 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. The following procedures and requirements apply:
    • The OSP buyer, in conjunction with the requestor, will determine if the procurement request lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price
    • Requestors must complete and submit the OSP “Competition Determination Requirements” form with their purchase request
    • Using the information provided on the OSP “Competition Determination Requirements” form, the OSP buyer, in accordance with applicable requirements in Uniform Guidance Sections 200.319 and 200.320, initiates the competitive bidding process by preparing and issuing the appropriate formal request for competitive proposals (RFIs and/or RFPs or RFQs). The OSP buyer also determines how and where to publicize the request for competitive proposals. (OSP Procurement has a public Bid Opportunities webpage that is used to publicize all requests for competitive proposals.)
    • The OSP buyer conducts the public bid opening at the time and place prescribed in the invitation for bids
    • A firm fixed price Purchase Order (PO) contract award will be made to the lowest responsive and responsible bidder
  4. Competitive Proposals: The aggregate total is $250,000 (Simplified Acquisition Threshold) or more, and more than one potential supplier exists. Suppliers submit offers, and either a fixed price or cost-reimbursement type PO contract can be awarded. This method is generally used when conditions are not appropriate for the use of sealed bids. The OSP buyer will determine whether a competitive proposal or sealed bidding procurement method will be performed. If the Competitive Proposals procurement method is used, the following procedures and requirements apply:
    • Requestors must complete and submit the OSP “Competition Determination Requirements” form with their purchase request
    • Using the information provided on the OSP “Competition Determination Requirements” form the OSP buyer, in accordance with applicable requirements in Uniform Guidance Sections 200.319 and 200.320, initiates the competitive bidding process by preparing and issuing the appropriate formal requests for competitive proposal (RFIs and or RFPs or RFQs) and determines how and where to publicize the request for competitive proposals. (OSP Procurement has a public Bid Opportunities webpage that is used to publicize all requests for competitive proposals.)
    • Principal investigators must select the responsible bidder whose proposal is most advantageous (see Competition: Section §200.319)
  5. Noncompetitive Proposal: Limited circumstances, as specified in the Uniform Guidance, must apply. This method is applicable to any dollar amount, but must be documented on procurements over $25,000. It may be used only when one or more of the following applies: item is available only from a single source; public exigency or emergency (as defined by FAR Subpart 6.302-2:7) exists; sponsor expressly authorizes noncompetitive proposals in response to written request; or when after solicitation from multiple sources it is determined that competition is inadequate.

The Uniform Guidance Procurement Requirements Decision Tree below illustrates how the selection of the procurement method is determined in relationship to dollar thresholds for each procurement method, and whether or not competition exists (more than one supplier) for the item being requested. This decision tree identifies the requirements for each method of procurement.

Uniform Guidance Procurement FAQs

Thresholds

Q:  What are the dollar thresholds implemented by Uniform Guidance procurement regulations?
A:  There are two thresholds: the Micro-Purchase Threshold (MPT) and the Simplified Acquisition Threshold (SAT). The MPT is generally $25,000; however, it may be lower if the procurement is subject to the Davis-Bacon Act ($2,000) or Service Contract Act ($2,500). The SAT is $250,000.

Q:  What counts as a quote for Micro-Purchases and Small Purchases?
A:  A “quote” can be a formal written price quotation, an email, or a price from a published price list or established contract. You may request verbal quotes, but these will need to be verified and documented by OSP Procurement. It is best practice when requesting verbal price quotes to obtain the full name and direct contact information of the individual providing the quote. Also, when possible, ask the person providing the quote to confirm it in writing by email.

Q:  I don’t know how much a planned purchase is going to be, and I won’t know for sure until I get a quote. How should I proceed?
A:  Make your best independent estimate prior to requesting quotes. If your best estimate is anywhere close to the MPT, you should err on the side of caution and get multiple quotes. If your best estimate is anywhere close to the SAT, you should err on the side of caution and contact OSP Procurement to ensure the procurement is handled properly.

Q:  Can OSP Procurement conduct a sealed bid or RFP for me below the SAT?
A:  Yes, OSP Procurement can conduct competitive bidding for any procurements. If you would like OSP Procurement to conduct a bid, please complete the OSP “Competition Determination Requirements” form and/or contact OSP Procurement to discuss.

Q:  What is the sole source threshold?
A:  There is not technically a sole source dollar threshold as this method may apply at any dollar amount. However, sole source procurements must be documented starting at $25,000 and require additional documentation starting at $250,000.  A sole source procurement can occur at any amount and is classified as a “Noncompetitive Proposal” procurement, one of the five methods of procurement.

Applicability

Q:  Do the Uniform Guidance procurement standards apply to my sponsored award that is not federally funded?
A:  Yes. Per Uniform Guidance 200.403(c), in order for costs to be allowable under federal awards they must be “consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-federal entity.”  Therefore, OSP Procurement is required to apply consistent policies and procedures to all sponsored programs purchases.

Q:  Do the Uniform Guidance procurement standards apply if I submitted my eRequest before July 1, 2018?
A:  The Uniform Guidance procurement standards apply to purchase orders placed AFTER July 1, 2018. The cutoff date is not related to the date the eRequest is submitted. OSP Procurement will make all efforts to approve and dispatch purchase orders for any in-process requests received prior to July 1, 2018.

Q:  Do the Uniform Guidance procurement standards apply if I am requesting a change order that increases an existing PO above an applicable threshold or by more than an applicable threshold?
A:  Yes, change orders count as a separate procurement action and must be treated in the same manner as new procurement requests.

Q:  Do Uniform Guidance procurement standards apply to subawards?
A:  No, Uniform Guidance procurement standards apply to the issuance of contracts as defined in Uniform Guidance Section 200.22, which specifically excludes subawards as defined in Uniform Guidance Section 200.92. Uniform Guidance has separate standards for subawards that went into effect December 26, 2014.

Sole Sources

Q:  What if I know I don’t have a sole source, but I don’t know where to go to get additional quote(s)?
A:  Please contact OSP Procurement for assistance.

Q:  If I named a vendor in my proposal and the sponsor approved the award, is that adequate justification for a sole source?
A:  No. This is a major change implemented in Uniform Guidance procurement. Uniform Guidance procurement does allow for noncompetitive proposals with sponsor approval.  However, the sponsor must expressly authorize noncompetitive proposals “in response to a written request” from Ohio State.

Q:  Uniform Guidance procurement standards state that noncompetitive proposals may be used in the case of a public exigency or emergency. I have a very strict deadline to meet and do not have time to conduct a bid. Can I justify this as an emergency?
A:  No. A public exigency or emergency only exists in specific circumstances (such as a FEMA declared disaster). It is important to plan ahead for any large procurements to allow sufficient time to meet all requirements.

Q:  Uniform Guidance procurement standards state that noncompetitive proposals may be used when competition is determined inadequate. I tried to get multiple quotes, but only received one response. Can I request a sole source?
A:  Yes. Please document your efforts to obtain multiple quotes on the “Request for Sole Source” form. OSP Procurement will review the form to determine whether the procurement can be made using the noncompetitive proposal method. Please note; however, that in many cases it is extremely difficult to prove a sole source, so OSP Procurement may need to conduct a public bid to ensure full and open competition.

Q:  Will OSP Procurement accept the old sole source form after July 1, 2018?
A:  No. The old sole source form allowed for sole source or waiver justifications which are no longer allowed under Uniform Guidance. OSP Procurement has simplified the sole source form into the new one-page “Request for Sole Source” form, and has created a new “Request for Sole Source (Individual Consultants)” form that is tailored to sole source requests for individual consultants. Additionally, the new OSP “Competition Determination Requirements” form must be submitted when requesting a sole source procurement of $250,000 or more.

Other

Q:  What if I need to submit a request for payment of an invoice after-the-fact?
A:  OSP Procurement will review the request to determine whether it meets all Uniform Guidance procurement standards. It is unlikely that after-the-fact requests will meet the procurement process requirements implemented by Uniform Guidance. Therefore, it is very important that all requests are submitted prior to the vendor providing any goods or services. This is especially critical for orders over the MPT and SAT.

Q:  What if I want to purchase something that is on a university, state or consortium contract? Do I still need to get multiple quotes or conduct a competitive bid?
A:  It depends. If the contract was bid out according to Uniform Guidance procurement standards, you would NOT need to get multiple quotes or conduct a bid. However, it is generally difficult to document that such contracts were established in accordance with Uniform Guidance procurement standards. For instance, State of Ohio State Term Schedule (STS) contracts are not competitively bid, and the state recommends always getting multiple quotes when using their STS contracts. Additionally, by getting multiple quotes or conducting a bid, we are ensuring the procurement is conducted in a manner providing full and open competition and we are being good stewards of our sponsors’ funds. Therefore, it is strongly recommended that you always obtain multiple quotes, or work with OSP Procurement to conduct bids as appropriate.

Q:  What are the changes regarding requests for procurements from Individual Consultants?
A:  Changes to process involving requests for Individual Consultant Agreements include:

  • New “Individual Consultant Agreement” and “Consultant Amendment” forms must be used beginning July 1, 2018
  • We recommend the PI obtain multiple quotes for all individual consultant requests whenever possible in order to streamline processing and support the required cost analysis/justification
  • We have created the new “Request for Sole Source (Individual Consultant)” form to assist with any individual consultant agreement of $25,000 or more when multiple quotes cannot be obtained. Please note that the individual consultant’s CV may now be required in order to justify a sole source procurement.

Q:  What if I need to submit a Cost Transfer request?
A:  Cost Transfers are more difficult under Uniform Guidance and should be avoided, particularly if $25,000 or more. Requests to transfer costs to a project for procurements not done by OSP must include supporting documentation as required under each procurement method. After review and evaluation of the procurement records supplied with the Cost Transfer request, a determination will be made as to whether or not the procurement was conducted according to Uniform Guidance requirements and thus whether the costs may be transferred to the project.

Q:  Uniform Guidance procurement standards place more emphasis on reducing project costs by using federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible. How can I use federal excess and surplus property?
A:  Principal investigators are encouraged to contact OSP Procurement for assistance in searching for federal excess and surplus property and/or for the discussion of any other appropriate analysis to determine the most economical approach to reducing costs. For example, where appropriate, an analysis will be made of lease versus purchase alternatives for proposed equipment needs.

About OSP Procurement

The Procurement department provides valuable purchasing, travel, and property management services to the Office of Sponsored Programs, Ohio State faculty, staff, and research sponsors.

Principal investigators who direct sponsored programs will need to obtain equipment, supplies, parts and services from university and commercial sources to conduct their projects. The Office of Sponsored Programs maintains a federally approved procurement department that is required for purchasing items on federal grants and contracts for use by sponsored projects personnel.

All purchases must be conducted in a manner that will provide open and free competition to the maximum extent practical and consistent with applicable federal cost principles. Departmental procedures reflect the ethical standards of the Office of Sponsored Programs and the university. All university personnel authorized to conduct purchasing activities shall adhere to these principles and standards. Each employee involved in the expenditure of public funds is held to the highest degree of public trust. No employee shall engage in or permit any illegal or improper purchasing practices, including but not limited to the following:

  • Submission of equal or rotated bids
  • Kickbacks (Reference the Anti Kickback Act and Public Law 99-6334)
  • Conflicts of interest
  • Acceptance of gratuities
  • Participation in any community of financial interest with bidders
  • Elimination of competition or restraint of trade
  • Violation of minimum wage or payment schedules for construction contracts
  • Violation of standard work week, overtime and safety standards for construction contracts

Any employee having knowledge of any of these practices or other unethical or illegal conduct by any employee should immediately report this knowledge to the Director of Procurement. Engaging in or permitting unethical or illegal conduct or the failure to report such conduct constitutes grounds for disciplinary action, including possible termination of employment and/or criminal prosecution.

Terms and Conditions

The Ohio State University Office of Sponsored Programs Purchase Order Terms and Conditions
(Rev. 10/01/18)

Consultant Agreement Terms and Conditions For Individual (Non-OSU Employee) Consulting Services
(Effective 7/01/18)

Policies and Procedures

Small and Small-Disadvantaged Business Subcontracting
The policy of the Office of Sponsored Programs and The Ohio State University is to promote the procurement of goods and services from small, small-disadvantaged, woman-owned, veteran-owned businesses and vendors located in Labor Surplus areas whenever possible. It is the responsibility of both the PI and the Procurement Department to direct purchases toward these types of businesses.

Additionally, Public Law 95-507 requires implementation of a subcontracting plan with established goals for expenditures to small and small-disadvantaged businesses for all federally sponsored contracts in excess of $500,000. The Business Opportunity Development Reform Act of 1988 (Public Law 100-656) requires that a prime contractor pay liquidated damages upon a finding of lack of good-faith effort to meet its small business subcontracting goals. The liquidated damages will be assessed at the actual dollar amount by which the contractor failed to achieve each subcontract goal. The government also has authority to impose other penalties such as cancellation of the contract award. Any monetary penalty will be assessed to the PI’s department.

The U.S. Environmental Protection Agency (EPA) requires that eight per cent of the total dollars available for expenditures on EPA grants and contracts be made to small-disadvantaged and woman-owned businesses.

Subcontracting plans for small and small-disadvantaged business, as required for proposals/awards, should be developed jointly between the Sponsored Program Officer, the PI, and the Director of Procurement. After the award of the grant or contract that includes either a subcontracting plan or EPA Fair Share Goal, Purchasing will screen requisitions for possible placement with a small or small-disadvantaged business, administer the subcontracting plan, and submit reports, as required, to the sponsoring agency or to the U.S. Small Business Administration. Project leaders with subcontracting plans or EPA Fair Share Goals are responsible for effectively implementing small and small-disadvantaged utilization programs. This includes achieving program goals and taking all reasonable action to increase small and small-disadvantaged participation in their project’s purchases.

Purchasing maintains directories and other source information on small, small-disadvantaged, woman-owned, veteran-owned businesses, and vendors located in Hub Zones, “Historically Underutilized Business Zones,” to assist principal investigators in locating such businesses. Additional resources include:

Vendor Registration
All vendors contracting or selling goods and services to sponsored projects must have completed or have on file in Purchasing, a Vendor Profile/Business Status Certification/Registration Form PR-015 prior to issuance of any purchase order or subcontract. Individuals who are not licensed merchants or do not have a Federal Tax Identification Number are not permitted to receive purchase orders.

Debarment
Pursuant to Federal Acquisition Regulation (FAR) section 9.4, any vendor/contractor who is debarred from receiving federal procurements or is shown in the “List of Parties Excluded from Federal Procurement or Non-procurement Programs” may not contract with the Office of Sponsored Programs.