New Procurement Thresholds under U.S. OMB’s Uniform GuidanceBy John D'Amico | August 2, 2018
The OMB recently issued Memorandum M-18-18 that raised the procurement thresholds for micro-purchases to $10,000 and the simplified acquisition threshold to $250,000. The change is due to statutory changes set forth in the National Defense Authorization Acts (NDAA) of 2017 and 2018 for all recipients of federal awards and is effective upon issuance of this memorandum.
All non-federal entities, including nonprofits, are required to implement the new procurement standards in Uniform Guidance for fiscal years beginning on or after December 26, 2017. For a non-federal entity with a June 30th year end, implementation is required for its fiscal year beginning July 1, 2018. Non-federal entities must update their internal policies in accordance with Title 2 CFR Section 200.318 “General Procurement Standards” of the Uniform Guidance and should also update the thresholds in their procurement policies.
The revised procurement categories under Uniform Guidance are:
Micro-purchase – Under the new standards, micro-purchases are the acquisition of supplies or services costing less than $10,000. They may be awarded without soliciting competitive quotations if the nonprofit considers the price to be reasonable.
Small purchase – Services, supplies or other property costing less than $250,000 are now considered “small purchase” and are subject to new relatively simple and informal procurement methods. Nonprofits must obtain price or rate quotations from an adequate number of qualified sources. The standards do not define “adequate number”.
Sealed bids – Sealed bids are used for purchases over $250,000 and primarily for construction contracts. Sealed bids are publicly solicited and a firm price contract is awarded to the responsible bidder. Generally the lowest bid is selected.
Competitive proposals – Competitive proposals are used for procurements over $250,000 and require a formal solicitation and can be either fixed-price or cost-reimbursement contracts. Competitive bids are used when sealed bids are not appropriate. The contract is awarded to the proposal that is most advantageous to the program.
Sole source – This category applies to procurements where the item is only available from a single source or when there is a public emergency that makes a competitive proposal process too time consuming. Sole source procurements require approval from the federal or pass-through funding source.
About John D'Amico
John D'Amico, CPA, is a Partner within the Professional Standards Group at Marks Paneth LLP, which is responsible for monitoring quality control in the firm as mandated by professional standards. He specializes in pre-issuance reviews and inspections of nonprofit organizations, governments and Single Audits. Mr. D’Amico also provides consultation on accounting and attestation matters and tests and monitors the firm's quality review policies and procedures. He teaches continuing education classes for the firm and on... READ MORE +