OMB New Uniform Guidance Session 5

OMB New Uniform Guidance Session 5


>>HELLO, EVERYONE. MY NAME IS DAVID VOGT AND I WANT TO WELCOME
YOU TO THE FIFTH OF THE NINE PART SERIES ON IMPLEMENTING THE NEW UNIFORM GUIDANCE FOR
IHBG AND ICDBG. IN THIS SEGMENT, WE’RE GOING TO BE REVIEWING
THE PROCUREMENT STANDARDS. AND THESE STANDARDS ARE INCLUDED IN SUBPART
D, POST FEDERAL AWARD REQUIREMENTS. BEFORE WE GO ON, LET’S TAKE A MOMENT AND REVIEW
THAT WE HAVE THE NINE PART SERIES AND HERE’S A LIST OF THE — EACH OF THE WEB CASTS, SO
YOU CAN CHOOSE TO VIEW THE ONE THAT YOU’RE INTERESTED IN.
AND ALSO I WANT TO POINT OUT THAT, IN ADDITION TO THE WEBCAST, WE HAVE QUITE A LARGE TOOLBOX
OF MATERIALS, HUNDREDS OF PAGES TO ASSIST YOU IN UNDERSTANDING AND IMPLEMENTING THE
UNIFORM GUIDANCE. BUT IN THIS SESSION WE’RE GOING TO BE FOCUSED
ON PROCUREMENT STANDARDS, THE PROCUREMENT STANDARDS ARE FOUND IN THE UNIFORM GUIDANCE
BETWEEN 200.317 AND .326. I’D LIKE TO START OFF WITH THIS GRAPHIC BECAUSE
IT REALLY ENCOMPASSES THE BASIS OF PROCUREMENT REQUIREMENTS. WE HAVE FIVE DIFFERENT COMPETITIVE PROCUREMENT
PROCESSES. MICROPURCHASES, SMALL PURCHASES, SEALED BIDS,
COMPETITIVE PROPOSALS, AND NONCOMPETITIVE PROPOSALS. SO ONE OF YOUR TASKS IN THE PROCUREMENT PROCESS
IS DECIDING WHICH IS THE MOST APPROPRIATE PROCEDURE TO USE FOR YOUR PROCUREMENT. AND THEN WE HAVE THE GENERAL STANDARDS. NUMBER ONE, ESTABLISHING AND COMPLYING WITH
YOUR DOCUMENTED PROCEDURES, AND I WANTED TO NOTE THAT THE VERBIAGE HERE IS CHANGED TO
“PROCEDURES” RATHER THAN JUST POLICIES. NUMBER TWO, THE PURCHASE NEEDS TO BE REASONABLE. THE STANDARD REQUIREMENT TO BE ELIGIBLE, IT
NEEDS TO BE REASONABLE, NECESSARY, AND DOCUMENTED. THERE ALSO NEEDS TO BE FULL AND OPEN COMPETITION. AND THERE CANNOT BE A CONFLICT OF INTEREST. AND IN TERMS OF DOCUMENTATION, WE WANT TO
DOCUMENT ALL THE DECISIONS WE’RE MAKING, INCLUDING THE COST AND PRICE ANALYSIS, THE COST ESTIMATE,
WHICHEVER METHOD WE’RE USING, AND THE BASIS FOR SELECTING THE CONTRACTOR. I ALSO NOTED CONTRACTOR IN BLUE HERE BECAUSE
THE PREVIOUS TERM THAT WAS USED WAS “VENDOR”. WE NO LONGER USE THE TERM “VENDOR”. FOR PROCUREMENT, WE’RE ALWAYS DEALING WITH
THE CONTRACTOR. AND WE’LL BE GETTING MORE INTO THIS DEFINITION
OF THE CONTRACTOR IN THE NEXT SEGMENT. OKAY. SO WE START OUT WITH THE GENERAL STANDARDS. AGAIN, IT’S REQUIRED TO HAVE DOCUMENTED PROCUREMENT
PROCEDURES, AND THOSE PROCEDURES MUST CONFORM TO FEDERAL AND LOCAL LAWS. ALSO INCLUDED IN THE GENERAL STANDARDS ARE
THE REQUIREMENT FOR WRITTEN STANDARDS OF CONDUCT. WELL, WHAT ARE THE WRITTEN STANDARDS OF CONDUCT? NO EMPLOYEE, OFFICER OR AGENT MAY PARTICIPATE
IN THE SELECTION, AWARD OR ADMINISTRATION OF A CONTRACT IF THERE IS A REAL OR APPARENT
CONFLICT OF INTEREST. SO WE HAVE TO KEEP IN MIND HERE OF THE APPEARANCE
OF A CONFLICT OF INTEREST. THAT WOULD ERODE THE CREDIBILITY OF YOUR PROGRAM
AND BRING INTO QUESTION THE USE OF FEDERAL FUNDS. SO WE HAVE TO ADDRESS THE APPEARANCE OF A
CONFLICT OF INTEREST EVEN THOUGH YOU MAY FEEL THERE’S NOT INFORMATION A REAL CONFLICT OF
INTEREST. WELL, WHAT IS A CONFLICT OF INTEREST? HERE WE HAVE THE DEFINITION. WHEN THE EMPLOYEE, OFFICER OR AGENT OR A MEMBER
OF HIS OR HER IMMEDIATE FAMILY HAS A FINANCIAL OR OTHER INTEREST IN OR A TANGIBLE PERSONAL
BENEFIT FROM A FIRM CONSIDERED FOR A CONTRACT. AND OF COURSE WE HAVE VERY CLEAR GUIDANCE
IN THE HASDA UNDER 101,000.30 A. THERE’S A NEW COMPONENT TO CONFLICT OF INTEREST
THAT I WANT TO POINT OUT. AND THAT IS THE REQUIREMENT TO HAVE WRITTEN
STANDARDS OF CONDUCT WITH RESPECT TO ORGANIZATIONAL CONFLICT OF INTEREST. AND THAT’S AN INTERESTING CONCEPT. SO IF YOU HAVE A SUBSIDIARY, A PARENT COMPANY,
THEN YOU HAVE THE POTENTIAL OR THE APPEARANCE OF A CONFLICT OF INTEREST, AND SO YOU’RE REQUIRED
TO ESTABLISH WRITTEN STANDARDS ABOUT HOW YOU’RE GOING TO WORK WITH THAT ORGANIZATION THAT
YOU HAVE A SPECIAL RELATIONSHIP WITH. SO, THIS IS SOMETHING THAT, IF YOU IDENTIFY
THAT YOU HAVE A RELATIONSHIP WITH ANOTHER ORGANIZATION LIKE THAT, THIS IS SOMETHING
YOU NEED TO PUT ON YOUR TO-DO LIST, TO IMPLEMENT THE UNIFORM GUIDANCE, YOU’RE GOING TO HAVE
TO DEVELOP THAT POLICY. AND WE ALSO HAVE ANOTHER NEW REQUIREMENT HERE
HAVING TO DO WITH TIME AND MATERIAL CONTRACT. NOW, A TIME AND MATERIAL CONTRACT IS THE LEAST
DESIRABLE OF YOUR OPTIONS FOR CONTRACTING. BUT AS A LAST RESORT, YOU MAY FEEL THAT THIS
IS THE ONLY WAY THAT YOU CAN PROCEED WITH A NEEDED PROJECT. THE ISSUE WITH THIS IS THAT THERE IS NO INCENTIVE
FOR THE CONTRACTOR TO BE EFFICIENT AND EFFECTIVE IN THEIR COMPLETION OF THE PROJECT, BECAUSE
THEY’RE PAID ON A FIXED HOURLY RATE, INCLUDING PROFIT, PLUS THEIR ACTUAL COST OF MATERIALS. SO ONE MIGHT BE CONCERNED ABOUT A CONTRACTOR
WITH SUCH A CONTRACT, OF DRAWING OUT THAT WORK AS LONG AS POSSIBLE BECAUSE IT GIVES
HIM AN ONGOING CASH FLOW. SO, YOU ARE NOW REQUIRED TO SET A CEILING
PRICE FOR SUCH A CONTRACT, AND NOTING THAT THE CONTRACTOR EXCEEDS THAT CEILING PRICE
AT HIS OWN RISK, AND IT IS SPECIFICALLY NOTED IN THE UNIFORM GUIDANCE THAT YOU MUST EXERCISE
A HIGHER DEGREE OF OVERSIGHT OVER THAT CONTRACTOR AND THAT CONTRACT TO ENSURE THAT IT’S PROCEEDING
IN AN EFFICIENT AND EFFECTIVE WAY. AGAIN, SOMETHING TO INCLUDE IN BRINGING YOUR
PROCUREMENT POLICY INTO STANDARDS WITH THE UNIFORM GUIDANCE. YET ANOTHER NEW REQUIREMENT FOR PROCUREMENT,
THIS HAS TO DO WITH A RELATIONSHIP THAT COULD AFFECT OPEN COMPETITION. CONTRACTORS WHO WERE INVOLVED IN DRAFTING
SPECIFICATIONS, STATEMENT OF WORK OR IN SOME OTHER WAY WITH THE RFP OR IFP, MUST BE EXCLUDED
FROM CONSIDERATION FOR BEING AWARDED THE CONTRACT. THE THOUGHT HERE IS THAT THIS GIVES THEM INSIDE
INFORMATION; THIS GIVES THEM THE OPPORTUNITY TO STRUCTURE THE RFP OR IFB IN A WAY THAT
WOULD GIVE THEM A PREFERENCE. SO YOU HAVE TO, AGAIN, MAKE THE CHANGE TO
YOUR POLICY TO ENSURE THAT YOU DON’T HAVE THAT CONFLICT BETWEEN THE ENTITIES THAT ARE
INVOLVED IN DRAFTING THE PROCUREMENT DOCUMENTS AND ALSO PARTICIPATING IN THE PROCUREMENT. OKAY, LET’S GO ON NOW AND GET STARTED LOOKING
AT THE METHODS OF PROCUREMENT, AND YOU’RE GOING TO FIND THE METHODS OF PROCUREMENT UNDER
200.320. STARTING WITH MICROPURCHASES. AND MICROPURCHASES LOSS YOU TO PROCEED WITH
A VERY SIMPLE PROCESS TO PROCURE MATERIALS BUT THERE IS A LOW LIMIT FOR MAKING PROCUREMENTS
OF THAT TYPE, AND I THINK THAT’S IN RECOGNITION THAT IT TAKES TIME AND MONEY TO GO THROUGH
A MORE ELABORATE PROCUREMENT PROCESS, AND FOR SMALL PURCHASES, THAT IT’S A COST SAVING
MEASURE THAT WE CAN USE MICROPURCHASE SIMPLIFIED MEASURES. LET’S LOOK AT THE DEFINITION OF MICROPURCHASE
— OR THE DESCRIPTION OF MICROPURCHASE UNDER 200.320. A, PROCUREMENT BY MICROPURCHASES. PROCUREMENT BY MICROPURCHASE IS THE ACQUISITION
OF SUPPLIES OR SERVICES, THE AGGREGATE DOLLAR AMOUNT OF WHICH DOES NOT EXCEED THE MICROPURCHASE
THRESHOLD. AND MICROPURCHASES MAY BE AWARDED WITHOUT
SOLICITING COMPETITIVE QUOTATIONS IF THE NONFEDERAL ENTITY CONSIDERS THE PRICE TO BE REASONABLE. SO, THERE IS A REQUIREMENT THAT YOU MAKE THE
DETERMINATION OF THE COST BEING REASONABLE, AND ALSO THE SECOND SENTENCE, TO THE EXTENT
PRACTICAL, THE NONFEDERAL ENTITY MUST DISTRIBUTE MICROPURCHASES EQUITABLY AMONG QUALIFIED SUPPLIERS. SO ALTHOUGH WE’RE NOT DOING COMPETITIVE PROCESS
HERE, WE ARE MAKING THAT BUSINESS FUNDED WITH FEDERAL FUNDS AVAILABLE BY ROTATING THE PURCHASES
TO QUALIFIED SUPPLIERS. BUT IT’S NOT TELLING US WHAT THE DOLLAR AMOUNT
HERE IS FOR MICROPURCHASES. LET’S FLIP OVER TO SUBPART A, DEFINITION FOR
MICROPURCHASES THAT CAN BE FOUND AT 200.67. MICROPURCHASE MEANS A PURCHASE OF SUPPLIES
OR SERVICES USING SIMPLIFIED ACQUISITION PROCEDURES, THE AGGREGATE AMOUNT OF WHICH DOES NOT EXCEED
THE MICROPURCHASE THRESHOLD. AND DOWN AT THE BOTTOM, THE MICROPURCHASE
THRESHOLD IS SET BY THE FEDERAL ACQUISITION REGULATION. IT IS $3,000 EXCEPT AS OTHERWISE DISCUSSED
IN SUBPART 2.1 OF THE REGULATIONS. BUT THIS THRESHOLD IS PERIODICALLY ADJUSTED
FOR INFLATION. AND THAT IS WHAT HAS HAPPENED SINCE THE UG
WAS PUBLISHED, THAT THRESHOLD HAS BEEN INCREASED TO $3,500. SO, FOR ALL PROGRAMS THAT IS UNDER THE UNIFORM
GUIDANCE, THE THRESHOLD IS $3,500. NOW, IT’S IMPORTANT TO POINT OUT THAT WE DO
HAVE A PROGRAM-SPECIFIC REQUIREMENT, HOWEVER, FOR IHBG. AND THAT ESTABLISHES — THAT PROGRAM-SPECIFIC
REQUIREMENT ESTABLISHES $5,000 AS BEING THE THRESHOLD FOR MICROPURCHASES WHEN USING THOSE
FUNDS. I DO WANT TO POINT OUT THAT $2,000 IS THE
THRESHOLD THAT TRIGGERS DAVIS-BACON, SO THIS IN NO WAY — THIS IS A PROCUREMENT ISSUE. THIS IS IN NO WAY ALLOWS YOU TO ENGAGE OTHER
PROGRAM REQUIREMENTS SUCH AS DAVIS-BACON, TRIBALLY DESIGNATED WAGE RATES AND SO ON.
AND LET’S GO ON AND LOOK AT OTHER METHODS OF PROCUREMENT NOW.
AND, REALLY, FOR OUR PROGRAMS HERE IN ONAP, THERE’S REALLY NO SIGNIFICANT CHANGE HERE. THE SIMPLIFIED ACQUISITION THRESHOLD IS FOR
SMALL PURCHASE PROCEDURES, IS $150,000. THAT WAS NOT CHANGED. IT REMAINS AT $150,000. AND ALL THAT’S REQUIRED HERE IS THAT YOU GET
BIDS FROM REQUIRED ADEQUATE NUMBER OF QUALIFIED SOURCES. HOW YOU DEFINE THE NUMBER OF — REQUIRED NUMBER
OF QUALIFIED SOURCES IS SOMETHING THAT SHOULD BE IDENTIFIED IN YOUR PROCUREMENT POLICIES
AND PROCEDURES. THEN WE HAVE SEALED BIDS. THIS IS FORMAL PROCUREMENT, FORMAL ADVERTISING
IS REQUIRED. IT REQUIRES A DETAILED SCOPE OF WORK. IT REQUIRES AT LEAST TWO RESPONSIBLE AND RESPONSIVE
BIDDERS. AND IT LENDS ITSELF TO A FIRM FIXED PRICE
CONTRACT. YOU’RE SELECTING THE LOWEST RESPONSIBLE AND
RESPONSIVE BIDDER. THE ONLY — BECAUSE YOU ARE SPECIFIC, EXPLICIT
ABOUT WHAT’S REQUIRED BY THE CONTRACTOR, THE ONLY POINT OF MAKING THE SELECTION IS BASED
ON THE PRICE, THE COST. SO IT’S NOT BASED ON LOW BID ALONE; IT’S THE
LOWEST BID FROM THE RESPONSIBLE AND RESPONSIVE BIDDERS. YOU IDENTIFY IN YOUR PROCUREMENT DOCUMENTS
WHAT IS REQUIRED FOR THAT BIDDER TO BE RESPONSIVE AND RESPONSIBLE. AND THEN WE COME TO COMPETITIVE PROPOSALS. SO WHEN CONDITIONS ARE NOT APPROPRIATE FOR
THE PROJECT THAT YOU CAN BE EXPLICIT ABOUT WHAT YOU ARE REQUIRING, THEN YOU NEED TO GO
THROUGH THIS COMPETITIVE PROPOSAL PROCESS WHERE YOU ARE IDENTIFYING EVALUATION FACTORS
AND THEIR RELATIVE IMPORTANCE. YOU STILL NEED AN ADEQUATE NUMBER OF SOURCES
TO EVALUATE. AND YOUR WRITTEN RFP WOULD PROVIDE ALL THE
INFORMATION ABOUT WHAT IS BEING REQUESTED AND HOW THEIR PROPOSALS WILL BE EVALUATED. AND THEN WE COME TO NONCOMPETITIVE PROPOSALS. AND THERE’S A NUMBER OF REASONS WHY YOU WOULD
DO A NONCOMPETITIVE PROPOSAL. NUMBER ONE IS THAT IT WOULD ONLY BE AVAILABLE
FROM ONE SOURCE. IT’S AN EMERGENCY, AND YOU CAN NOT DELAY THE
PROCESS FOR COMPETITIVE SOLICITATION, OR THAT YOU WENT THROUGH COMPETITIVE PROCESS AND YOU
FOUND INADEQUATE COMPETITION. NOW, IF YOU CHOOSE TO GO TO YOUR AGENCY AND
ASK THEIR APPROVAL FOR NONCOMPETITIVE PROPOSAL, YOU MUST DO SO IN WRITING. SO THIS IS THE NEW REQUIREMENT IN REGARD TO
NONCOMPETITIVE PROPOSALS. THERE’S ALSO A VERY EXPLICIT REQUIREMENT FOR
SMALL MINORITY BUSINESS, WOMEN-OWNED BUSINESSES, AND LABOR SURPLUS AREAS. AND IT’S VERY CLEAR, THE FEDERAL — NONFEDERAL
ENTITY MUST TAKE ALL NECESSARY STEPS TO ASSURE THAT THESE TYPE OF BUSINESSES ARE USED WHEN
POSSIBLE. AND SO THIS IS WHAT YOU MUST DO TO FACILITATE
THAT. PLACING THESE FIRMS ON A SOLICITATION LIST. SOLICITING, INCLUDING THEM IN YOUR SOLICITATION
WHEN THEY’RE A POTENTIAL SOURCE. ADJUSTING THE SCOPE OF WORK AND SCHEDULING
WHEN FEASIBLE. THAT’S VERY SIGNIFICANT. THINKING ABOUT BREAKING UP PROCUREMENT IN
ORDER TO MAKE IT POSSIBLE FOR THE SMALL BUSINESSES TO PARTICIPATE, RECONSIDERING YOUR SCHEDULE
TO MAKE IT POSSIBLE FOR THESE SMALL FIRMS TO PARTICIPATE. A VERY INTERESTING NEW REQUIREMENT HERE IN
THIS REGARD, I THINK. AND, AGAIN, REQUIRES MODIFICATION OF YOUR
PROCUREMENT POLICY AND PROCEDURES. PARTNERING WITH THE SHALL BUSINESS ADMINISTRATION
AND MINORITY BUSINESS DEVELOPMENT AGENCY. AND THESE REQUIREMENTS ARE PASSED ON TO YOUR
PRIME CONTRACTOR. SO VERY, VERY SIGNIFICANT. VERY SIGNIFICANT. HOW THIS WOULD BE IMPLEMENTED IN YOUR AREA,
YOU KNOW, THIS IS SOMETHING THAT YOU WOULD HAVE TO EVALUATE SINCE EACH AREA IS DIFFERENT
AND THE NUMBER OF FIRMS THAT WOULD FALL INTO THIS CATEGORY WOULD HAVE TO BE IDENTIFIED
AND SO ON. OKAY. LET’S MOVE ON AND TALK ABOUT .323 CONTRACT
COST AND PRICE. WHEN IS A COST AND PRICE ANALYSIS REQUIRED? IT IS REQUIRED WHEN THE PROCUREMENT IS ABOVE
THE SIMPLIFIED ACQUISITION THRESHOLD, WHICH IS $150,000. SO, BELOW THAT, A COST OR PRICE ANALYSIS GENERALLY
IS NOT REQUIRED; HOWEVER, YOU STILL HAVE TO DETERMINE THAT THE COST IS REASONABLE. AND SO THAT REQUIRES COMING UP WITH A COST
ESTIMATE BEFORE YOU GET INTO THE PROCUREMENT. ALSO, WHEN YOU HAVE A SITUATION WHERE YOU
HAVE NO COMPETITION, THEN THAT WOULD ALSO REQUIRE GOING BEYOND THE ESTIMATE AND MAKING
SOME COST OF ANALYSIS TO HELP ENSURE THAT YOU ARE GETTING AN APPROPRIATE PRICE FOR THAT
WORK, BECAUSE YOU DON’T HAVE THE EFFECT OF COMPETITION AT THAT POINT. SO UNDER .324 THEN, THERE IS, SIMPLY STATED,
A REQUIREMENT THAT THE FEDERAL AWARDING AGENCY OR PASS-THROUGH ENTITY WHO WOULD BE WORKING
— THE PASS-THROUGH ENTITY PRESUMABLY WOULD BE THE RECIPIENT OF THE GRANT AND THEY HAVE
A SUBRECIPIENT, AND IN EITHER CASE, THEY HAVE — THEY ARE GIVEN THE RIGHT HERE IN THE UNIFORM
GUIDANCE TO REQUEST PROCUREMENT DOCUMENTS SO THAT THEY CAN REVIEW, MAKE SURE THAT THE
PROPER PROCEDURES ARE BEING FOLLOWED AS WE JUST DISCUSSED. IT IS NECESSARY TO DOCUMENT ALL 1
OF YOUR PROCUREMENT DECISIONS, THE BASIS FOR ALL OF YOUR
PROCUREMENT DECISIONS. SO WHEN THESE — THOSE DOCUMENTS
WOULD BE REQUESTED, THERE REALLY SHOULDN’T BE A PROBLEM IN
PROVIDING THOSE. REMEMBER, WHEN YOU ARE
DOCUMENTING YOUR FILES, THOSE DOCUMENTS ALSO HAVE TO BE
RETRIEVABLE. YOU HAVE TO HAVE A FILING SYSTEM
THAT ENABLES YOU TO PRODUCE THOSE DOCUMENTS UPON REQUEST. LET’S TALK ABOUT BONDING
REQUIREMENTS HERE. THERE REALLY ISN’T A CHANGE
HERE. DO WANT TO POINT OUT THAT
UNIFORMED GUIDANCE ESTABLISHES GUIDELINES FOR BONDING
REQUIREMENTS. WE DO HAVE SOME PROGRAMS
SPECIFIC REQUIREMENTS HERE FOR IHGB AS SHOWN THAT PROVIDES AN
ALTERNATIVE TO WHAT’S IN THE UNIFORM GUIDANCE. THE UNIFORM GUIDANCE TALKS ABOUT
BID GUARANTEES OF 5%, PERFORMANCE BOND OF 100%,
PAYMENT BOND OF 100%. HERE ARE SOME ALTERNATIVES YOU
HAVE. IT’S NOTED, HOWEVER, THAT FOR
ICDBG, THE 10% IS NOT AN OPTION. AGAIN, WE’RE TALKING ABOUT
PROGRAMS SPECIFIC REQUIREMENTS. WE HAVE ONE REQUIREMENT FOR
IHGB. ANOTHER REQUIREMENT FOR ICDBG. THAT’S A LITTLE BIT DIFFERENT. NOW, THIS IS WHERE IT REALLY
GETS FUN. CONTRACT PROVISIONS. OH, BOY.
AND WE’RE GOING TO FIND THESE CONTRACT PROVISIONS IN APPENDIX
2 OF THE UNIFORM GUIDANCE. SO THERE’S A LOT OF CONTRACT
PROVISIONS. 2
WE’RE ONLY GOING TO LOOK AT THE CONTRACT PROVISIONS THAT HAVE
CHANGED. SO HERE WE HAVE THE EQUAL
OPPORTUNITY CLAUSE. THE THRESHOLD USED TO BE
$10,000. NOW IT’S REQUIRED FOR ALL
CONTRACTS THAT MEET THE DEFINITION OF FEDERALLY-ASSISTED
CONSTRUCTION CONTRACT. AND THEN WE HAVE THE CONTRACT
WORK HOURS AND SAFETY STANDARDS ACT. THE THRESHOLD USED TO BE $2,000
AND $25,000. NOW IT’S BEEN RAISED TO
$100,000. AND WE HAVE ALSO CLEAN AIR ACT. THE THRESHOLD USED TO BE
$100,000. NOW IT’S $150,000. AND WE HAVE A NEW PROVISION FOR
THE BIRD ANTI-LOBBYING AMENDMENT. THIS IS REQUIRED FOR CONTRACTORS
WHO APPLY YOUR BID FOR MORE THAN $100,000. IT ALSO GETS CARRIED OVER TO
THEIR SUBCONTRACTORS. AND SO THIS IS SIMPLY SAYING NO
FEDERAL FUNDS WERE USED TO AFFECT THE USE OF THE FEDERAL
FUNDS. THEY MUST DISCLOSE ANY LOBBYING
USING OTHER THAN FEDERAL FUNDS AND THAT INCLUDES THEIR
SUBCONTRACTORS. LET’S DO A COUPLE OF EXERCISES
AND APPLY SOME OF THE MATERIAL THAT WE JUST WENT OVER HERE. SO HERE IS EXERCISE 1, STANDARDS
OF CONDUCT. THE ELK MOUNTAIN TRIBAL COUNCIL
SELECTED JOHNSON CONSTRUCTION FOR THE DEVELOPMENT OF A
TEN-UNIT HOUSING PROJECT. ONE OF THE COUNCILMEMBERS, FRED
JOHNSON, IS THE BROTHER OF THE OWNER OF JOHNSON CONSTRUCTION. 3
HOWEVER, FRED ABSTAINED FROM PARTICIPATING IN THE DECISION. CHARLIE JOHNSON, FRED’S SON, IS
A DEVELOPMENT COORDINATOR FOR THE TRIBE. SO ACCORDING TO UNIFORM
GUIDANCE, IS THERE A CONFLICT OF INTEREST?>>[ INAUDIBLE ]
>>THAT’S EXACTLY RIGHT. HE IDENTIFIED THERE WAS A
CONFLICT OF INTEREST AND REMOVED HIMSELF. THAT WOULD BE IMPORTANT TO
DOCUMENT IN THE RECORD AND ALSO TO MAKE THAT DISCLOSURE. OKAY. DO WE HAVE ANY OTHER CONFLICTS
OF INTEREST HERE?>>CHARLIE JOHNSON.>>CHARLIE JOHNSON. HE HAS A CONFLICT OF INTEREST.>>YES, FRED’S SON.>>FOR HIS SON. ALTHOUGH HE’S NOT MAKING THE
PROCUREMENT DECISION. SO HE HAS NO CONFLICT OF
INTEREST WITH THE PROCUREMENT PROCESS. WHAT IS HIS CONFLICT OF
INTEREST? LET’S TAKE A LOOK AT THE
REGULATIONS FOR THIS UNDER 200.3.8-C-1. NO EMPLOYEE, OFFICER OR AGENT
MAY PARTICIPATE IN THE SELECTION, AWARD OR
ADMINISTRATION OF A CONTRACT IF THERE IS A REAL OR APPARENT
CONFLICT OF INTEREST. SO IN THIS CASE, CHARLIE
WOULDN’T BE INVOLVED IN THE ADMINISTRATION OF THE CONTRACT. THAT’S, AGAIN, A CONFLICT OF
INTEREST. THAT HAS TO BE RESOLVED. HERE WE HAVE A SITUATION WHERE
CHARLIE IS THE DEVELOPMENT THE COORDINATOR. SO THIS IS GOING TO REQUIRE AN 4
ORGANIZATIONAL ISSUE ABOUT HOW TO REASSIGN RESPONSIBILITY FOR
THE ADMINISTRATION OF THIS PARTICULAR CONTRACT. SO AGAIN, THAT HAS TO BE
IDENTIFIED, RESOLVED IN A WAY THAT REMOVES CHARLIE FROM ANY
INVOLVEMENT OR INFORMATION ABOUT THE ADMINISTRATION OF THIS
CONTRACT. AND THAT WOULD BE DOCUMENTED IN
THE RECORDS SO THAT INFORMATION IS DISCLOSED. IT’S A MATTER OF SHINING THE
LIGHT ON IT. NOTHING IS BEING HIDDEN. IT’S ALL UP FRONT. VERY GOOD. OKAY. LET’S GET STARTED WITH
PROCUREMENT EXERCISE 2. COMPETITION. TO HELP FUND THE HOUSING
DEVELOPMENT PROJECT, THE ELK MOUNTAIN TRIBE IS CONSIDERING
APPLYING FOR THE INDIAN DEVELOPMENT COMMUNITY PROGRAM. THEY NEED TO HIRE A CONSULTANT
TO HELP THEM WITH IHBG APPLICATIONS. TRIBAL ADMINISTRATIONS SUGGEST
DRAFTING BECAUSE THEY ASSISTED A FEW YEARS AGO.
IS THIS ALLOWABLE? IS THERE A PROBLEM WITH THAT?>>[ INAUDIBLE ]
>>I DON’T KNOW HOW MUCH THEY ESTIMATE THIS CONTRACT WOULD BE. I WOULDN’T THINK IT WOULD BE A
WHOLE LOT. IT PROBABLY — I DON’T KNOW WHAT
SOURCE OF FUNDS THEY WOULD BE USING FOR THAT. IT PROBABLY WOULD BE A
MICROPURCHASE. SO THEY CAN JUST PROCEED WITH
THAT PROCUREMENT IF THEY WISH. NOW, LET’S SAY FURTHER DOWN THE
LINE HERE, UNDER WHAT CIRCUMSTANCES WOULD IT NOT BE 5
ALLOWABLE?>>IF BOTH CONSULTANTS DRAFTED,
IT WOULD NOT BE ALLOWABLE FOR THEM TO PREPARE THE REGULATIONS.>>THAT’S RIGHT. THE RULE IS THAT AN ENTITY THAT
IS INVOLVED IN DEVELOPING THE PROCUREMENT DOCUMENTS IS
PRECLUDED FROM PARTICIPATING IN THE PROCUREMENT ITSELF. SO THAT’S FINE FOR THEM TO HAVE
WILSON CONSULTANTS PREPARE THE PROCUREMENT DOCUMENTS BUT THEY
MUST BE EXCLUDED. THEY COULD NOT BE CONSIDERED IN
ACTUALLY RECEIVING THE AWARD UNDER THAT PROCUREMENT PROCESS. VERY GOOD. AND THAT IS LAID OUT EXPLICITLY
IN 200.319-A. OKAY. WE TALKED IN SOME DETAIL ABOUT
MICROPURCHASES. LET’S TEST OUR KNOWLEDGE HERE BY
GOING THROUGH THESE MICROPURCHASE EXERCISES HERE. SO A PICKUP TRUCK COSTING $7,000
USING IHBG FUNDS, WHAT TYPE OF PROCUREMENT — WHAT PROCUREMENT
METHOD WOULD BE USED FOR THIS PURCHASE? IS.>>SMALL PURCHASE.>>SMALL PURCHASE, YES. IT’S HIGHER THAN THE
MICROPURCHASE LIMIT. IT’S LOWERED THAN THE SIMPLIFIED
ACQUISITION THRESHOLD. SO IT WOULD BE A SMALL PURCHASE. A LAPTOP COMPUTER FOR A
DEVELOPMENT COORDINATOR COSTING $5,000 USING IHBG FUNDS.>>THAT WOULD BE A
MICROPURCHASE.>>THAT WOULD BE A
MICROPURCHASE, YES. NOW, FOR IHBG, WE HAD THE
PROGRAM SPECIFIC REQUIREMENT. THAT LIMIT IS $5,000. SINCE THEY ARE USING IHBG FUNDS, 6
THIS WOULD BE WITHIN THE THRESHOLD OF $5,000. HOWEVER, FOR THE OTHER PROGRAMS,
LET’S REMEMBER THAT THE THRESHOLD IS $3500. OKAY. THE COST $2500 USING IHBG FUNDS.>>THAT WOULD BE A
MICROPURCHASE.>>YES. THAT’S WITHIN THE $3500 LIMIT
FOR MICROPURCHASES, YES. LUMBER COSTING $4,000 USING A
COMBINATION OF ICDBG AND IHBG FUNDS.>>THAT WOULD BE A SMALL
PURCHASE.>>THAT WOULD BE A SMALL
PURCHASE. NOW, IF ONLY IHBG FUNDS WERE
USED, THAT COULD BE A MICROPURCHASE. BUT SINCE ICDBG FUNDS ARE USED,
WE HAVE TO GO WITH THE MOST RE– WITH THE MOST RESTRICTIVE
REQUIREMENT. THAT COULD KICK IT UP TO THE
SMALL PURCHASE PROCEDURES. OKAY. VERY GOOD. OKAY. SO THAT BRINGS US TO EXERCISE 4,
CONTRACT COST AND PRICE. WE HAVE TWO LITTLE EXERCISES
HERE. THE ELK MOUNTAIN TRIBE RECEIVED
A LOW BID FROM ACE SAND AND GRAVEL IN THE AMOUNT OF
$145,000. THE GRAVEL WOULD BE USED IN
THEIR CONSTRUCTION PROJECT. THEY HAD ESTIMATED IT WOULD COST
$160,000. IS THE COST AND PRICE ANALYSIS
REQUIRED AND WHY OR WHY NOT?>>SINCE THE AMOUNT OF THE
CONTRACT IS LESS THAN $145,000, IT WOULD NOT BE REQUIRED.>>YES, FOR PROCUREMENT UNDER
$150,000. 7
>>RIGHT.>>THAT IS CORRECT. NOW, IN THIS CASE, THEY
ESTIMATED IT WOULD COST $160,000. THE THRESHOLD FOR DOING A COST
OR PRICE ANALYSIS IS $150,000. SO ONCE THEY ESTIMATE THE COST
IS GOING TO BE $160,000, THAT WOULD HAVE REQUIRED THEM TO DO A
COST FOR PRICE AN — PRICE ANALYSIS. AND THAT’S IDENTIFIED IN
200.243-A. THAT ESTIMATES MUST BE MADE
BEFORE THE BID, BEFORE THE BID. ALL RIGHT. THAT’S A TRICK QUESTION THERE. [LAUGHTER]
>>LET’S GO ON AND LOOK AT THE SECOND QUESTION. AFTER ENTERING INTO THE CONTRACT
AND STARTING WORK, ACE SUBMITTED A CHANGE ORDER IN THE AMOUNT OF
$20,000 DUE TO A CHANGE IN THE SCOPE OF WORK. IS THE COST FOR PRICE ANALYSIS
REQUIRED AND WHY OR WHY NOT?>>SINCE THE ORIGINAL CONTRACT
WAS NONCOMPETITIVE, I WOULD THINK THAT YOU WOULD PROBABLY
NEED ONE TO JUSTIFY IT AND ALSO A NEW ONE BECAUSE IT’S OVER
$150,000.>>ESSENTIALLY THE CHANGE ORDER
REALLY IS A NONCOMPETITIVE PROPOSAL. YOU HAVE NO EFFECT OF
COMPETITION. THEREFORE, A COST — ACTUALLY, I
WOULD SAY A PRICE ANALYSIS IS REQUIRED. WHEN YOU DO NOT HAVE
COMPETITION, YOU MUST EVALUATE PROFIT SEPARATELY. THAT BRINGS US TO OUR PRICE
ANALYSIS. SO THAT’S SOMETHING TO KEEP IN
MIND IS THAT THE ISSUE OF COMPETITION. 8
COMPETITION HAS THE EFFECT OF DETERMINING THE MARKET VALUE. WHEN YOU DON’T HAVE COMPETITION,
YOU HAVE TO TAKE OTHER MEASURES TO ENSURE THAT YOU ARE GETTING A
REASONABLE PRICE. I WANT TO POINT OUT THAT IF A
PROCUREMENT POLICY IS INCLUDED WITH SUPPLEMENTAL MATERIALS, I
SHOW YOUD THE LIST OF MATERIALS THAT WE HAVE AVAILABLE AT THE
BEGINNING OF THIS SEGMENT. I JUST WANTED TO TAKE A MINUTE
TO POINT OUT SOME OF THE COMPONENTS OF THE SAMPLE POLICY
THAT I THINK WOULD ENCOURAGING YOU TO TAKE A LOOK AT THAT
POLICY. IT IS A SUBSTANTIAL POLICY. IT’S 33 PAGES. IT INCLUDES THE MINORITY
BUSINESS REQUIREMENTS IT INCLUDES THE CONTRACT CAUSES,
THE METHODS OF PROCUREMENT, BID PROTESTS, CONFLICT OF INTEREST
AND IT ALSO INCLUDES A PROCUREMENT ANALYSIS FORM AND I
THINK THE USE OF FORMS SUCH AS THAT GOES A LONG WAY IN
DOCUMENTING WHAT YOU DID AND WHY YOU DID IT AND SO I ENCOURAGE
YOU TO TAKE A LOOK AT THIS POLICY AND BUILD ONTO IT WITH
YOUR OWN INTERNAL PROCEDURES AND TO ADDRESS HOW BUSINESS IS DONE
IN YOUR PARTICULAR COMMUNITY AND THE RULES THAT YOU NEED TO —
THE LOCAL RULES YOU NEED TO FOLLOW. THAT CONCLUDES OUR PRESENTATION
ON PROCUREMENT. THANK YOU FOR JOINING US. AND I HOPE YOU FOUND THIS
HELPFUL. THANK YOU.

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