Common use of Procurement and Contracting Clause in Contracts

Procurement and Contracting. This chapter outlines the requirements for using Federal funds to purchase materials, products, or services under the CDBG Entitlement program. Whether you are a small agency purchasing occasional office supplies or a large organization contracting for millions of dollars of construction services, the requirements governing the purchasing process are designed to ensure that you: • Follow a free and open competitive process in securing those products or services. • Properly document your purchasing activities and decisions. • Observe the special rules for particular kinds of purchases (small purchases, competitive sealed bids, competitive proposals, and sole source procurements). • Properly bond and insure work involving large construction contracts and/or subcontracts. • Use local businesses and contract with small, minority and/or women-owned businesses to the maximum extent feasible. When it comes to spending the taxpayer’s money, no matter how little the amount, it is important to ensure that the prices you pay are competitive, and that you (and the taxpayer) are getting good value. The rules don’t require that you get a bargain every time you buy, but only that you pay a fair price. They don’t require that you always get the latest in technology at the lowest possible cost, but only that you shop around and get what you paid for. This means that you should seek to buy with CDBG funds only what is necessary under the terms of your Subrecipient Agreement, and no more. You should also be able to ensure the integrity of your purchasing decisions; to document the history, results, and decisions behind your purchases; to follow the rules for certain kinds of transactions; and to offer opportunities to local and disadvantaged firms to respond to your purchasing needs. By following these requirements you are helping to guarantee the fairness and the vitality of our free market system, and to ensure that taxpayer resources are not being wasted. By observing the basic rules, you’ll also find your purchasing decisions can be more efficient. For example, if you set up a standardized purchasing system for securing price quotations and preparing purchase orders, you won’t have to reinvent the wheel every time you want to buy materials and supplies. These efficiencies in turn can help make your limited purchasing budgets go much farther. You’ll also have the satisfaction of knowing you paid a fair price for every purchase. In addition, when you use CDBG funds to purchase materials or services, it is not sufficient simply to state that you got the lowest possible price and followed the rules. You have to be able to prove it. Therefore, to avoid disallowed costs and/or recapture of payments, it is necessary that you document the background, need, and the details of every purchasing decision, whether it involves renting an office or buying two-by-fours. At first, this may appear burdensome, but full documentation can only help you avoid serious problems and a lot of extra work in the long run. AS YOU READ THIS CHAPTER, THINK ABOUT …

Procurement and Contracting. This chapter outlines the requirements for using Federal funds to purchase materials, products, or services under the CDBG Entitlement program. Whether you are a small agency purchasing occasional office supplies or a large organization contracting for millions of dollars of construction services, the requirements governing the purchasing process are designed to ensure that you: •  Follow a free and open competitive process in securing those products or services. •  Properly document your purchasing activities and decisions. •  Observe the special rules for particular kinds of purchases (small purchases, competitive sealed bids, competitive proposals, and sole source procurements). •  Properly bond and insure work involving large construction contracts and/or subcontracts. •  Use local businesses and contract with small, minority and/or women-owned businesses to the maximum extent feasible. When it comes to spending the taxpayer’s money, no matter how little the amount, it is important to ensure that the prices you pay are competitive, and that you (and the taxpayer) are getting good value. The rules don’t require that you get a bargain every time you buy, but only that you pay a fair price. They don’t require that you always get the latest in technology at the lowest possible cost, but only that you shop around and get what you paid for. This means that you should seek to buy with CDBG funds only what is necessary under the terms of your Subrecipient Agreement, and no more. You should also be able to ensure the integrity of your purchasing decisions; to document the history, results, and decisions behind your purchases; to follow the rules for certain kinds of transactions; and to offer opportunities to local and disadvantaged firms to respond to your purchasing needs. By following these requirements you are helping to guarantee the fairness and the vitality of our free market system, and to ensure that taxpayer resources are not being wasted. By observing the basic rules, you’ll also find your purchasing decisions can be more efficient. For example, if you set up a standardized purchasing system for securing price quotations and preparing purchase orders, you won’t have to reinvent the wheel every time you want to buy materials and supplies. These efficiencies in turn can help make your limited purchasing budgets go much farther. You’ll also have the satisfaction of knowing you paid a fair price for every purchase. In addition, when you use CDBG funds to purchase materials or services, it is not sufficient simply to state that you got the lowest possible price and followed the rules. You have to be able to prove it. Therefore, to avoid disallowed costs and/or recapture of payments, it is necessary that you document the background, need, and the details of every purchasing decision, whether it involves renting an office or buying two-by-fours. At first, this may appear burdensome, but full documentation can only help you avoid serious problems and a lot of extra work in the long run. AS YOU READ THIS CHAPTER, THINK ABOUT …