Legal Update, August 2021

Legal Update

Uniform Grants Guidance Procurement Standards: More Than Just Finding a Good Bargain
by Elizabeth “Issie” Karan

When buying goods or materials, Hemophilia Treatment Centers (HTCs) may not first think to check federal regulations for grantees. However, the Uniform Grants Guidance (UGG) contains requirements for procurements conducted by federal grantees. These requirements were changed significantly when the UGG was updated in 2014. After the revised UGG went into effect, the government gave grantees a grace period to implement the new procurement standards. However, that grace period ended. The Hemophilia Alliance recommends reviewing internal policies and procedures related to procurement to ensure they comply with the UGG’s standards. Below we summarize major components of the standards but also are available to answer any questions HTCs might have.

As often is the case with compliance, the UGG focuses on the content, maintenance, and execution of written policies and procedures (P&Ps) for procurement. Generally, any procurement process must provide for full and open competition. The P&Ps must incorporate the procurement methods described in the UGG and outlined below. For every procurement action involving purchases in excess of the simplified acquisition threshold ($250,000), the UGG requires that a cost or price analysis be performed and documented. The UGG requires that federal grantees take necessary affirmative steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Finally, the organization must maintain written standards of conduct covering internal and external conflicts of interest.

The UGG identifies five methods for procurement depending on the type of project and dollar amount.

Methodology Dollar Threshold Requirements
Micro-purchase Not to exceed micro-purchase threshold: $0 – $10,000
  • Must distribute micro-purchases equitably among qualified suppliers.
  • Micro-purchases may be awarded without soliciting competitive quotations if the price is determined to be reasonable.
Small purchase procedure Greater than micro-purchase, not to exceed the simplified acquisition threshold: $10,001 – $250,000
  • Price or rate quotes must be obtained from adequate number of sources (at least two)
  • Can be informal, e.g., phone call or web search
  • All quotes, including phone calls, web searches, etc., must be documented and kept on file
  • Price does not need to be deciding factor, but all quotes need to be kept in procurement records
Sealed bid Greater than the simplified acquisition threshold: $250,001 and greater
  • Used when selection of successful bidder can be made principally on the basis of price
  • Bids must be solicited from an adequate number of known suppliers, providing sufficient response time
  • Invitation for bids must define the items or services in order for bidders to properly respond
  • Firm fixed price contract made in writing to the lowest responsive and responsible bidder
  • Any or all bids may be rejected if there is a sound documented reason
Competitive proposal Greater than the simplified acquisition threshold: $250,001 and greater
  • Must be publicized and identify all evaluation factors and their relative importance
  • Must be solicited from an adequate number of qualified sources
  • Must have a written method for conducting technical evaluations of the proposals and selecting recipients
  • Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered
Noncompetitive proposal (sole source) Greater than micro-purchase threshold: $10,000 and greater
  • May be used only when one of the following conditions are met: (1) the item is available only from a single source; (2) the public exigency or emergency will not permit a delay resulting from competitive solicitation; (3) federal awarding agency or pass-through entity expressly authorizes its use in response to a written request; or (4) after solicitation of a number of sources competition is determined inadequate
  • All sole source procurements require cost/price justification of the use of noncompetitive proposal which must be documented

Also in this Issue…

Notes from Joe
· Washington Update

Washington Update
· Drug Pricing Update

Payer Update
· Working with the Payer Team and Hemophilia Alliance Network Services (HANS) a 2021 Case Study

Alliance Update
· Harmony in Hemophilia – HTC Wall of Walkers Unite Walk Challenge Update
· Update on New Member Meeting