Permitted Approaches to Procurement. Depending on the scarcity of the item or service desired, and the size of the purchase, different methods of procurement are available for use by subrecipients under the Federal regulations. • Small purchases may be used for procurement of $100,000 or less in the aggregate: (24 CFR 85.36(d)(1) and 84.44(e)(2)) • Small purchases are made through the use of purchase orders. Competition is sought through oral or written price quotations. A subrecipient must document the receipt of an adequate number of price or rate quotations from qualified sources. • A procurement of more than $100,000 may not be inappropriately broken up into smaller components solely to qualify for the less complicated procedures followed under the “small purchases” approach. • Competitive sealed bids (formal advertisement, 24 CFR 85.36(d)(2)): • The procurement must lend itself to a firm, fixed price contract (lump sum or unit price) where the selection can be principally made on the basis of price. • A subrecipient must advertise the Invitation for Bid (IFB) in publications of general circulation. • The IFB must include complete and accurate specifications and pertinent attachments and clearly define items or services needed, in sufficient detail for the bidders to properly respond. 1 Subrecipients need to be aware, however, that local or state laws or policies may require additional procedures or set lower dollar-value thresholds for some forms of procurement. Therefore, it is important to check with your grantee to learn whether any such additional procurement provisions apply. • Bids must be opened publicly at the time and place stated in the IFB. • A subrecipient must receive at least two or more responsible bids for each procurement transaction. • If awarded, the contract must be given to the lowest responsive and responsible bidder (the subrecipient, however, can decide not to make the award to any of the bidders). The competitive sealed bid method is the preferred approach for procuring construction services. • Competitive proposals (24 CFR 85.36(d)(3)): • A subrecipient should use this method only when conditions are not appropriate for the use of formal advertising. • The Request for Proposal (RFP) must clearly and accurately state the technical requirements for the goods and services required. • A subrecipient must publicize the RFP, and to the maximum extent practicable, honor reasonable requests by parties to have an opportunity to compete. • Proposals must be solicited from...
