Tribal Governments: Uniform Guidance Procurement Rules Are Now in Effect

The grace period for bringing your Tribe’s federally funded entities into compliance with the updated Uniform Grant Guidance (UGG) procurement standards has ended. Many of the Tribes I work with are late in aligning their procurement policies and procedures with the new guidance and thresholds, so if yours is too, you’re not alone. But it’s important that you take action now and become compliant as soon as possible to satisfy federal granting agencies and avoid audit findings and related penalties.

Documentation is critical

To start, make sure your policies and procedures are up-to-date with the current guidance (2 OMB 200.317-326). Rather than simply referencing the UGG code, you are required to write out your organizations procedures in your board-approved policies. Given the new purchase thresholds, it’s highly likely that some of your Tribe’s policies related to contract bid requirements will change. Documentation throughout the procurement process should be retained to prove that each affected Tribal entity is following the updated policies and procedures. You must also keep any documentation for required variances. This will help maintain compliance with the standard and avoid findings during an audit.

Adhere to the procurement threshold rules

There are five thresholds under the UGG procurement standards, and each has its own specific requirements:

1. Micro-purchases ($0 – $10,000) — No bid or quote is required if the price is considered reasonable. You can determine reasonableness by comparing the price to past purchases or to published prices.
2. Small purchases ($10,001 – $250,000) — A price or rate quote must be obtained from an adequate number of sources. As a best practice, at least three vendors should be solicited for quotes. These quotes can be obtained via web searches or phone calls, but all documentation of these quotes needs to be maintained.
3. Sealed bid ($250,000 and greater) — A sealed bid is used when the selection can be made predominately on price. A request for bids must be done publicly. A sufficient number (three or more, ideally) of bids should be obtained within a reasonable time period. For Tribal governments, these bids must be opened publicly. Bids can be rejected if there is sound reasoning, but this documentation must be maintained.
4. Competitive proposal ($250,000 and greater) — Competitive proposals must have a written method for conducting technical evaluations and selecting recipients. Proposals must be awarded to the bidder who is most advantageous to the program with all other factors considered.
5. Noncompetitive proposal ($10,001 and greater) — This is used when the item sought for purchase is only available from a single source. The bid can also be sole-sourced if there is an emergency that can’t wait for a competitive bids, and the federal granting agency expressly approves. In some cases, a noncompetitive proposal situation occurs if a public request doesn’t generate enough qualified bidders. All the research you conduct and the reasoning for sole-sourcing must be documented.

Follow your written policy for purchase thresholds

On June 20, 2018, the micro-purchase and simplified acquisitions thresholds were increased from $3,500 to $10,000, and from $150,000 to $250,000, respectively. So even if your policies have already been updated and approved by governance, be aware that these latest UGG revisions to purchase threshold amounts can’t be acknowledged until your written policies reflect them. Whatever your written policy currently is, you must follow it. An approved update must be made in order to use the higher thresholds.

How we can help

All Tribal governments, clinics, housing authorities, and other entities that receive federal funding must now have these updated policies in place. If your Tribe is behind and could use some assistance in modifying or drafting your policies and procedures, CLA’s Tribal-specialized professionals can guide you through every step of the process.