4.8 Procurement Standards

4.8.2 General Procurement Standards

Effective date: TBD

1. Written Procedures. The recipient¹ must have and use documented procurement procedures, that are consistent with federal, state, and local laws and regulations and the standards of this section, for the acquisition of property or services required under a federal award² or subaward³. The recipient's documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 2 CFR 200.327.⁴
2. Code of Conduct. The recipient must maintain a written code of conduct providing standards governing the performance of its officers, employees, or agents engaged in the selection, award, and administration of contracts⁵ using DWD-DET funds. These standards must provide the following:
   • Conflict of Interest. No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by a federal award if they have a real or apparent conflict of interest.
   • Gratuities and Favors. No officers, employees, and agents of the award recipient may either solicit or accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts.
   • Penalties. To the extent permitted by state or local law or regulations, such standards must provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the recipient.
3. Avoid Acquisition of Unnecessary or Duplicative Items. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis should be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach.
4. Excess and Surplus Property. The recipient is encouraged to use federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs.⁶
5. Settlements. In accordance with good administrative practice and sound business judgment, the recipient alone must be responsible for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but are not limited to, source evaluation, protests, disputes, and claims. These standards do not relieve the recipient of any contractual responsibilities under its contracts. The judgment of the federal awarding agency⁷ will not substituted for that of the recipient unless the matter is primarily a federal concern. Violations of law will be referred to the local, state, or federal authority that has proper jurisdiction.

• ¹ 2 CFR 200.1 "Recipient"
• ² 2 CFR 200.1 "Federal award"
• ³ 2 CFR 200.1 "Subaward"
• ⁴ 2 CFR 200.318(a)
• ⁵ 2 CFR 200.318(c)(1)
• ⁶ 2 CFR 200.318(f)
• ⁷ 2 CFR 200.1 "Federal awarding agency"

4.8.3 Competition

Effective date: TBD

All procurement transactions for the acquisition of property or services required under a federal award must be conducted in a manner providing full and open competition consistent with the standards of this section¹ and section 4.8.4.

1. To ensure objective contractor performance and eliminate unfair competitive advantage, contractors² that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements.³
2. The recipient must conduct procurements 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.
3. The recipient must have written procedures covering procurement transactions. These procedures must ensure that all solicitations:
   • Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. In competitive procurements, this description must not contain features that would unduly restrict competition.⁴
   • Identify all requirements that must be fulfilled, as well as all other factors to be used in evaluating bids or proposals.
4. The recipient must ensure that all prequalified lists of persons, firms, or products used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition.⁵

• ¹ 2 CFR 200.319(a)
• ² 2 CFR 200.1 "Contractor"
• ³ 2 CFR 200.319(b)
• ⁴ 2 CFR 200.319(d)(1)
• ⁵ 2 CFR 200.319(e)

4.8.4 Methods of Procurement

Effective date: TBD

The recipient must have and use documented procurement procedures, consistent with the standards of this section and 2 CFR 200.317, 2 CFR 200.318, and 2 CFR 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a federal award or subaward.¹

1. Micro-Purchases.² Includes the acquisition of supplies or services for which the aggregate dollar amount does not exceed the micro-purchase threshold³ ($10,000). To the maximum extent practicable, the recipient should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the recipient considers the price to be reasonable based on research, experience, purchase history, or other information and documents it files accordingly.⁴
2. Small Purchases.⁵ Includes the acquisition of property or services for which the aggregate dollar amount is higher than the micro-purchase threshold⁶ but does not exceed the simplified acquisition threshold⁷ ($250,000). When small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources the recipient determines is appropriate.
3. Sealed Bids.⁸ Bids are publicly solicited procurements. A firm fixed-price contract, either lump sum or unit price, is awarded to the responsible bidder whose bid conforms with all the material terms and conditions of the invitation for bids and is the lowest in price.
   • For sealed bidding to be feasible, the following conditions should be present:⁹
     • A complete, adequate, and realistic specification or purchase description is available;
     • Two or more responsible bidders are willing and able to compete effectively for the business;
       and
     • The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made primarily on the basis of price.
   • If sealed bids are used in procurement, the following requirements apply:
     • Bids must be solicited from an adequate number of qualified sources, providing them sufficient response time prior to the date set for opening the bids;
     • The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services to enable the bidder to properly respond;
     • All bids will be opened at the time and place prescribed in the invitation for bids;
     • A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Factors such as discounts, transportation costs, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of;
       and
     • Any or all bids may be rejected if there is a sound documented reason.
4. Proposals.¹⁰ Procurement method where either a fixed price or cost-reimbursement type contract is awarded. Proposals are typically used when conditions are not appropriate for the use of sealed bids. They are awarded in accordance with the following requirements:
   • Requests for proposals must be publicized and identify all evaluation factors, along with their relative importance. Proposals must be solicited from an adequate number of qualified offerors. Any response to publicized requests for proposals must be considered to the maximum extent practical;
   • The recipient must have a written method for conducting technical evaluations of the proposals received and making selections;
   • Contracts must be awarded to the responsible offeror whose proposal is most advantageous to the recipient, with price and other factors considered.
5. Noncompetitive Procurement (Sole Source).¹¹ Procurements used in specific circumstances that can only be awarded if one or more of the following circumstances apply:
   • The acquisition of property or services for which the aggregate dollar amount does not exceed the micro-purchase threshold;
   • The item is available only from a single source;
   • Public exigency or emergency need for the property or service will not permit the delay that would result from publicizing a competitive solicitation;
   • DOL-ETA or DWD-DET expressly authorizes a noncompetitive procurement in response to a written request from the recipient;
     or
   • After solicitation of a number of sources, competition is determined to be inadequate.

• ¹ 2 CFR 200.320
• ² 2 CFR 200.320(a)(1)
• ³ 2 CFR 200.1 "Micro purchase threshold"
• ⁴ 2 CFR 200.320(a)(1)(ii)
• ⁵ 2 CFR 200.320(a)(2)
• ⁶ 48 CFR 2.101 "Micro purchase threshold"
• ⁷ 48 CFR 2.101 "Simplified acquisition threshold"
• ⁸ 2 CFR 200.320(b)(1)
• ⁹ 2 CFR 200.320(b)(1)(i)
• ¹⁰ 2 CFR 200.320(b)(1)(ii)(E)
• ¹¹ 2 CFR 200.320(c)

4.8.5 Consideration of Small, Minority-Owned, and Women's Businesses, and Labor Surplus Area Firms

Effective date: TBD

The recipient must take all necessary steps to ensure that minority businesses, women's business enterprises, and labor surplus area firms are used when possible. These steps must include:¹

1. Placing qualified small, minority, and women's businesses on solicitation lists;
2. Ensuring small, minority, and women's businesses are used to the fullest extent practicable;
3. When economically feasible, dividing total requirements into smaller tasks or quantities to permit maximum participation by small, minority, and women's businesses;
4. Where the requirement permits, establishing delivery schedules to encourage participation by small, minority, and women's businesses;
5. Using the services and assistance, as appropriate, of such organizations as the Small Business Administration, the Wisconsin Economic Development Corporation, the Minority Business Development Agency, the US Chamber of Commerce, LinkedIn, or Google the relevant term (e.g., minority-owned or women-owned service providers);
   and
6. Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps (A) through (E) listed above in this section.

• ¹ 2 CFR 200.321(b)

4.8.6 Domestic Preferences for Procurements

Effective date: TBD

As appropriate and consistent with law, and to the greatest extent practicable under a federal award, the recipient should afford preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States. The requirements of this section must be included in all subawards including all contracts and purchase orders for work or products under this award.¹

• ¹ 2 CFR 200.322

4.8.7 Contract Cost and Price

Effective date: TBD

Standards and Procedures. The recipient must establish standards and procedures on the performance of cost/price analysis.

1. The recipient must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold, including contract modifications. The method and degree of analysis depends on the facts surrounding the particular procurement and pricing situation, but as a starting point, the recipient must make independent estimates before receiving bids or proposals.
2. Profit must be negotiated as a separate element of the price for each contract in which there is no price competition, and in all cases where cost analysis is performed. 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.
3. Costs or prices based on estimated costs for contracts under the federal award are allowable only to the extent that costs incurred, or cost estimates included in negotiated prices would be allowable for the recipient under subpart E¹ of Uniform Guidance. The recipient may reference its own cost principles that comply with the federal cost principles.

• ¹ Subpart E - Cost Principles

4.8.8 Contract Provisions

Effective date: TBD

The recipient's contracts must contain the applicable provisions described in 2 CFR 200, Appendix II - Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.¹

• ¹ 2 CFR 200, Appendix II

4.8.9 Subrecipient and Contractor Determinations

Effective date: TBD

1. The recipient must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. See also 2 CFR 200.214.¹
2. Please refer to DWD-DET Policy 1.2.2 Types of Recipients and Oversight Responsibilities (Oversight and Monitoring).

• ¹ 2 CFR 200.318(h)

4.8.10 Record Requirements

Effective date: TBD

The grant recipient, when acting as a Pass-Through Entity (PTE), must ensure that all applicable records management requirements are observed by the subrecipients as required by 2 CFR § 200.334 - 2 CFR § 200.338.

4.8.11 Noncompliance and Termination

Effective date: TBD

1. Noncompliance is the failure or refusal of a subrecipient to comply with a law, regulation, or term of a contract. If the grant recipient determines that noncompliance cannot be remedied by imposing additional conditions, such those described in 2 CFR §200.208¹, the recipient may take one or more of the following actions, as appropriate:²
   • Temporarily withhold cash payments until the deficiency is corrected.
   • Disallow all or part of the cost of the activity or action not in compliance.
   • Wholly or partly suspend or terminate the federal award.
   • Initiate suspension or debarment proceedings.
   • Withhold further federal awards.
   • Take other remedies that may be legally available.
2. Termination means ending a federal award, whether in whole or in part, prior to the end of the contracted period of performance. Termination may occur as follows:³
   • If the subrecipient fails to comply with the terms and conditions of the federal award.
   • To the greatest extent authorized by law if the federal award no longer achieves the program goals.
   • When the recipient and subrecipient mutually agree upon termination conditions, including the effective date and, in the case of partial termination, the portion of the award to be terminated.
   • The subrecipient notifying the recipient, in writing, the reasons for termination, including the effective date and, in the case of partial termination, the portion of the award to be terminated. In the case of partial award termination, if the recipient determines the reduced or modified portion of the award will not achieve program goals, the recipient may terminate the award in its entirety.
     or
   • By the recipient in accordance with termination provisions included in the award.

If an award is wholly or partially terminated, both the recipient and subrecipient remain responsible for complying with the requirements of 2 CFR §200.344 and 2 CFR §200.345.

Please note, a lack of available funds does not constitute an award termination.

• ¹ 2 CFR 200.208
• ² 2 CFR 200.339
• ³ 2 CFR 200.340(a)