With the influx of the CARES Act funds to Part C centers, you have been purchasing personal protective equipment, food, technology, internet or delivery services and more. Are you following your own procurement policies? And do they fall within the federal requirements? Let’s take a look.
First, why was a purchase COVID-19 related and why was it necessary? For example, did you upgrade your server or other internet or computer resources? Was that necessary for capacity for everyone working from home? Describe what was needed and how the purchase met that need.
Second, all of your costs must be reasonable, and you must document this by capturing similar costs from other venders and/or by making a case for the reason you are making the specific purchase. Often the rationale for “reasonable and necessary” is stated together.
Next, make sure your procurement policies are equal to or less than the limits for each area found in the federal regulations. It may make sense to use the federal terms and definitions in your financial policies and procedures. The first of those categories — the level where you use a simple purchasing process of approval without price comparisons* or bids — is call “micro-purchase” and applies to any purchase of supplies or services, in aggregate, that are under the threshold of $10,000. “In aggregate” means that you would be able to apply this simpler approval method only if all the purchases for that vendor for the year, when added together, are still under this threshold. To the extent practicable, you should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive quotations if you consider the price to be reasonable
The category called “small purchase” applies to purchases over $10,000 and less than $250,000 . Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. Note, however, that theses are not necessarily formal bids. You can check prices by email or phone, or use posted prices on the internet, as long as you document your process assures that purchases are reasonable.
Above the small purchase amount of $250,000 you must secure sealed bids with formal advertising. There are a lot of requirements for that level of purchase, but I doubt the CARES Act funds will be sufficient to make purchases at this level. Refer to 45 CFR 75.329 for more details. Other considerations when purchasing include:
- Contracting with small and minority businesses, women’s business enterprises and labor surplus area firms.
- Following the executive order to “Buy American, Hire American”
- Assure there is no conflict of interest related to the purchasing of goods or services.
- Getting prior approval from ACL on equipment costs in excess of $5,000.
*I still recommend price comparisons to show reasonableness.