Office of Sponsored Programs
The Ohio State University

Uniform Guidance

On December 26, 2013, the Office of Management and Budget released the “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards“, commonly known as the Uniform Guidance, or 2 CFR 200, or UG. The Uniform Guidance consolidates and makes consistent the administrative requirements, cost principles and audit requirements formerly included in eight separate circulars. For universities and other institutions of higher education, the Uniform Guidance replaces OMB Circulars A-21, A-110, and A-133.

Timeline for Implementation
The Uniform Guidance will become effective December 26, 2014, and will apply to all new awards. Depending on the issuing agency’s approach, ongoing awards that receive additional funding after that date may be subject to the new guidance or may continue under the original regulations. Ohio State’s first audit under the Uniform Guidance will be for FY 16 (i.e. costs incurred in July 1, 2015 – June 30, 2016).

The federal grant making agencies are required to publish their implementation plans by 12/26/14.

What Do Researchers and Their Staff Need To Know Now?

Pre-award/Proposal Preparation Information

Proposals submitted to federal sponsors for projects with start dates beginning on or after December 26, 2014 should follow the guidelines provided below.

Proposal Preparation Guidance – Costing and Budget Considerations in light of Uniform Guidance

Cost Sharing or Matching (Section 200.306 and Appendix I 2.C.)
The Uniform Guidance clarifies cost share requirements as follows:

  • Funding announcements must state whether there is required cost sharing, matching, or cost participation without which an application would be ineligible
  • If cost sharing is not required, the announcement must explicitly say so
  • Voluntary committed cost sharing (institutional cost share proposed but not required) is not expected in federal research proposals and cannot be used as a factor during the merit review of applications or proposals, but may be considered if it is in accordance with Federal awarding agency regulations and specified in a notice of funding opportunity. Criteria for considering voluntary committed cost sharing and any other program policy factors that may be used to determine who may receive a Federal award must be explicitly described in the notice of funding opportunity.

Charging Administrative/Clerical and Programmatic Salary Costs (Sections 200.413 and 200.430)
The UG states administrative salaries are allowable and can be direct charges if all of the following requirements are met:

  • Administrative and clerical salaries are integral to a project or activity, and
  • Individuals involved can be specifically identified with the project or activity, and
  • Such costs are explicitly included in the budget or have prior written approval of the federal awarding agency, and
  • The costs are not also recovered as indirect costs

The ‘major project’ requirement in A-21 is eliminated, but the allowable, allocable and reasonable standards still apply. Administrative salaries may be considered integral to a project when the level of service needed is identifiably above and beyond that which is provided on a routine basis by the department.

Direct Charging Computing Devices (Section 200.453)
Computing devices are allowable as a direct cost if the devices are essential and allocable, but not solely dedicated, to the performance of a federal award:

  • Computing device must be necessary and reasonable for the performance of the work, but it need no longer be used exclusively for the project
  • The device must be charged to the project in some manner that reasonably relates to its use on the project
  • PI/department should retain documentation as to how the purchase met these criteria

Participant Support Costs (Sections 200.75 and 200.456)
Participant support costs means direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences, or training projects.

  • Participant support costs are allowed on projects with an educational component, if included in the proposal budget or with subsequent sponsor approval.
  • Sponsor approval is also required to rebudget funds from participant support costs into another category
  • Participant support costs are excluded from the F&A base

F&A Rates to be used (Section 200.414)
The Uniform Guidance clarifies that an entity’s negotiated F&A rates must be accepted by all Federal awarding agencies:

  • A Federal awarding agency may use a rate different from the negotiated rate for a class of Federal awards or a single Federal award only when required by Federal statute or regulation, or when approved by a Federal awarding agency head or delegate based on documented justification
  • Notices of funding opportunities must include the policies relating to indirect cost rate reimbursement
  • Pass-thru entities must honor subrecipients’ approved F&A rates. If subrecipient doesn’t have a federally negotiated rate, a 10% MTDC de minimus rate can be used.

Post-award/Award Management Information

Prior Approvals (Section 200.407)
Section 200.407 collects all of the references to prior approval. Agencies may choose to implement or waive some, or all, of these, as the Uniform Guidance sets out a broad framework within which federal agencies must operate. In general, agencies differ in their implementation of the Uniform Guidance: consult individual agency guidelines to find out about a particular agency. Most generally important are the need for sponsor approval (if not included in the approved proposal) to:

  • Issue an unbudgeted subaward (Section 200.201)
  • Use unrecovered indirect costs, including indirect costs on cost sharing or matching as part of cost sharing or matching only with the prior approval of the Federal awarding agency. (Section200.306)
  • Use Program Income (Section 200.307)
  • Revise budget and program plans, including changes in key personnel or their level of effort (by more than 25%); disengagement of the PI (the new term for absence of PI, to acknowledge that a PI can be absent from campus but still engaged in the project) (200.308)
  • Transfer of funds budgeted for participant support costs to other categories of expense. (Section 200.456)
  • Incur unbudgeted participant support costs (Section 200.456)
  • Pay of supplemental compensation (Section 200.430 (h)(ii))
  • Purchase capital equipment (cost >$5,000) (Section 200.439)

Subaward Management
The Uniform Guidance includes a number of changes pertaining to subawards with other entities. As a result, a pass-through entity:

  • Must make and document a case-by-case determination as to whether the funding recipient should be a subrecipient or a contractor (formerly known as vendor). OSP staff can help with these determinations (Section 200.330)
  • Must use an approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal government or, if no such rate exists, either a rate negotiated between the pass-through entity and the subrecipient (in compliance with this part), or a de minimus indirect cost rate of 10% MTDC (Section 200.331)
  • Must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include reviewing financial and programmatic reports required by the pass-through entity(Section 200.331)
  • Must pay subrecipient’s invoice within 30 calendar days after receipt of the billing, unless the pass through entity reasonably believes the request to be improper (Section 200.305).
  • Subaward agreements will be modified to incorporate these changes

Project Closeout and The 90 Day Requirement (Section 200.343)
This is not a new requirement. NSF has always had a strict 90 day close-out policy, but other agencies have been more lenient. However, with the implementation of the Uniform Guidance the requirement will be more stringently enforced. Specifics include:

  • The non-Federal entity must submit, no later than 90 calendar days after the end date of the period of performance, all financial, performance, and other reports as required by or the terms and conditions of the Federal award. The Federal awarding agency or pass-through entity may approve extensions when requested by the non-Federal entity (this would be an award end date extension, or no-cost extension, not an extension of the 90 day reporting requirement).
  • A non-Federal entity must liquidate all obligations incurred under the Federal award not later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.
  • PIs, department and OSP staff will have to work together to that all project costs are recorded in time to be billed during the 90 day close-out period.

Procurement (Sections 200.318 – 326)
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.

General Procurement Standards (Section §200.318)
Uniform Guidance outlines general procurement standards for purchases using federal funds. OSP Procurement has adopted policies and procedures to ensure compliance with all standards outlined in the Uniform Guidance.

These standards include the following:

  • Standards covering conflict of interest. Access the OSP and The Ohio State University policies on conflict of interest:
  • OSP cannot issue a Purchase Order (PO) contract to a vendor or individual consultant where an organizational conflict of interest exists
  • PIs must avoid requesting the acquisition of unnecessary or duplicative items
  • PIs should review federal excess and surplus property inventory before issuing a request to purchase equipment or property. PIs are encouraged to contact OSP Procurement for assistance in searching for federal excess and surplus property
  • Purchase Orders may be issued only to responsible contractors possessing the ability to perform successfully under the terms and conditions of the proposed procurement
  • OSP Procurement is required to maintain records sufficient to detail the history of each procurement and files the issued purchase order with all associated documents. PIs are required to submit all applicable supporting documentation with each request for procurement (e.g., vendor price quotations, vendor ancillary contact agreements, product specifications, the “Request for Sole Source” form, the OSP “Competition Determination Requirements” form, scope of work, etc.).
  • A “Time and Materials” type contract may be used only after a determination that no other contract is suitable and if the contract includes a ceiling price that the contractor exceeds at its own risk
  • OSP Procurement, in conjunction with the PI, are responsible for the settlement of all contractual and administrative issues arising out of procurements

Competition (Section §200.319)
All procurement transactions must be conducted in a manner providing full and open competition consistent with standards in this section. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals (bids) must be excluded from competing for such procurements.

Situations considered restrictive to competition include but are not limited to:

  • Placing unreasonable requirements on firms in order for them to qualify to do business
  • Specifications cannot place unreasonable requirements on firms to qualify, nor require unnecessary experience
  • Noncompetitive pricing practices between firms or between affiliated companies
  • Noncompetitive contracts to consultants that are on retainer contracts
  • Organizational conflicts of interest
  • Specifying only a “brand name” product instead of allowing “an equal” product to be offered and describing the performance or other relevant requirements of the procurement
  • Any arbitrary action in the procurement process. Procurements must be conducted in a manner that prohibits the use of statutorily or administratively imposed state, local or tribal 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.

OSP Procurement maintains written policies and procedures for all types of procurement transactions. These policies and procedures include taking into consideration the items listed below for all applicable procurement transactions.

  • Requests for procurements must incorporate a clear and accurate description of the technical requirements for the material, product or service to be procured. Such descriptions must 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, must 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 equivalent” description may be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met by offers must be clearly stated
  • OSP buyers, in conjunction with requestors, must identify all requirements that the offers must fulfill and all other factors to be used in evaluating bids or proposals
  • OSP buyers 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. In addition, the OSP buyer ensures that potential bidders are not precluded from qualifying during the solicitation period.

Methods of Procurement to be Followed (Section §200.320)
OSP Procurement is required to follow one of five procurement methods specified in the Uniform Guidance and listed below. As indicated in the specifications for these procurement methods, Uniform Guidance now requires proof of competition for all procurement methods, except for procurements less than $25,000. Procurement methods used for purchases of $25,000 or more require two or more competitive price quotes and/or proof of a solicitation attempt. If the item/service costing $25,000 or more is only available from a sole source, see Item 5 below for procurement by Noncompetitive Proposals. For these procurements, requestors must complete and submit a “Request for Sole Source” form with their purchase request. Please note that because of the new Uniform Guidance requirements, OSP Procurement is discontinuing the use of its “Single/Sole Source/Waive of Competitive Bidding Form PR-025” and replacing it with the new “Request for Sole Source” form as of July 1, 2018.

PIs are encouraged to contact OSP Procurement for assistance when they have determined that they will be requesting a sole source procurement by the Noncompetitive Proposals method, and for all proposed procurements of $ 250,000 or more.

 The five procurement methods are: 

  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 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 proposals (RFIs and or RFPs or RFQs) and determines how and where to publicized 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.

Contracting with Small and Minority Businesses, Women’s Business Enterprises and Labor Surplus Area Firms (Section §200.321)
Uniform Guidance requires us to take “affirmative steps” to use small businesses (and socioeconomic subsets of small businesses) whenever possible. It is the policy of the Office of Sponsored Programs to promote the procurement of goods and services from small, small-disadvantaged and woman-owned businesses and vendors located in labor surplus areas whenever possible. It is the responsibility of both the PI and OSP Procurement to direct purchases toward these types of businesses. OSP Procurement will take the following affirmative steps:

  • Review small business lists prior to soliciting competitive proposals (see 200.319 & §200.320) and solicit quotes from small businesses and place qualified small businesses on solicitation lists as appropriate
  • Review requisitions and work with PIs to determine if requirements can be divided into smaller tasks or quantities, or delivery schedules can be modified to allow increased opportunities for small businesses

OSP’s small business subcontracting administrator will provide guidance and serve as a liaison to organizations such as the Small Business Administration and Minority Business Development Agency.

Procurement of Recovered Materials (Section §200.322)
As required by Uniform Guidance 200.326, the Office of Sponsored Programs Purchase Order Terms and Conditions have been updated to include applicable provisions by incorporation of  “Appendix II to Part 200—Contract Provisions for non-Federal Entity Contracts Under Federal Awards” for all procurements funded by federal grants. Procurement of Recovered Materials (200.322) is included in Appendix II to Part 200.

  • PIs should search for and request procurement of items that contain the highest percentage of recovered materials practical, consistent with maintaining satisfactory levels of competition, when the purchase price exceeds $25,000 or the value of the quantity procured by the project in the preceding fiscal year exceeded $25,000. The OSP buyer will ensure compliance with the standards and requirements identified in section 200.322.
  • Other requirements include procuring solid waste services in a manner that maximizes energy and resource recovery
  • Establishing an affirmative procurement program for recovered materials. Search Ohio State’s contract book for green options.

Contract Cost and Price (Section §200.323)
Uniform Guidance requires extensive supporting documentation on procurements of $250,000 or more. PIs must contact an OSP buyer for any proposed procurement of $250,000 or more prior to communication with potential suppliers. The OSP Buyer will obtain competitive proposals and perform the required cost or price analysis as described below:

  • A cost or price analysis must be performed for every procurement action of $250,000 or more, including modifications to existing contracts. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the requestor or PI must make independent estimates before receiving bids or proposals.
  • Profit must be negotiated as a separate element of the price for all Sole Source (noncompetitive proposal) procurements and in each case where a cost analysis is performed in order to establish a fair and reasonable profit for the procurements. To establish a fair and reasonable profit, consideration must be given to the complexity of the work to be performed, the risk borne by the contractor, the contractor’s investment, the amount of subcontracting, the quality of its record of past performance and industry profit rates in the surrounding geographical area for similar work.
  • Costs or prices based on estimated costs are allowable only to the extent that costs incurred or included in the cost estimate would be allowable under Uniform Guidance Part 200 Subpart E-Cost Principles
  • Cost plus a percentage of cost and percentage of proposals must not be used in establishing Purchase Order (PO) contracts

Federal Awarding Agency or Pass-Through Entity Review (Section §200.324)
OSP Procurement maintains a federally approved procurement system with established policies and procedures that ensures compliance with Uniform Guidance 200 procurement guidelines. Therefore, OSP Procurement is exempt from pre-procurement reviews from federal awarding agencies.

Bonding Requirements (Section §200.325)
This section of Uniform Guidance provides bonding requirements for construction or facility improvement procurements exceeding the Simplified Acquisition Threshold. Requestors are encouraged to contact OSP Procurement immediately if they will be requesting construction type or facility improvement procurement of $250,000 or more. The OSP buyer will obtain any necessary bonds applicable to the procurement.

Contract Provisions (Section §200.326)
As required by Uniform Guidance 200.326, the Office of Sponsored Programs Purchase Order Terms and Conditions have been updated to include applicable provisions by incorporation of Appendix II to Part 200—Contract Provisions for non-Federal Entity Contracts Under Federal Awards for all procurements funded by federal grants. Note that procurement of recovered materials, section 200.322, is included in Appendix II to Part 200.