Procurement Services

Federal Funds

10/8/19 -  We have a new Form A: Source Selection & Price Reasonableness Form! This new UCOP form is to be used for all federal orders at and over $10,000, AND non-federal orders at and over $100k.

There may be restrictions on what can or cannot be purchased on certain types of accounts (i.e., federal, agency-funded). Below are some frequently asked questions and helpful information regarding governing laws and tips on documentation procedures.

What is a federal fund?

When the Office of Research has received and assigned a Federal Award (Contract, Grant, or Cooperative Agreement) to a department or particular PI, the Extramural Funds division of Business & Financial Services assigns a Fund number to the Account String. In general, the federal fund blocks are:

21000-24999: Grants
25000-28999: Contracts
59xxx - Flow-Down Contracts

For more information on specific funds, click here.

Grants, Contracts, and Cooperative Agreements: Uniform Guidance (OMB)

Grants and Cooperative Agreements are governed by the Office of Management & Budget (OMB), Uniform Guidance. In December of 2014, the Uniform Guidance became effective as a combination of 8 different OMB circulars, eliminating conflicting and duplicative guidance, and setting consistent regulations. What this means to UCSB:

When does the Uniform Guidance go in affect for Procurement activities?
- While the Procurement principles in the Uniform Guidance were provided a grace period for campus adoption, UCSB has opted to go live with the Uniform Guidance in December, 2014. UCSB was already using most of the OMB requirements, and only needed to adopt a few slight changes.

Can I use state or UC contracts to purchase in lieu of competition with my Federal Award?
- Section 200.318 (e) encourages the University to spend using state and locally sourced Agreements:

"To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services."

Where can I find more information about the Uniform Guidance?
For the full Guidance text, click here.
For a presentation specific to Procurement, click here.
For a simplified presentation given by the OMB, click here.

Which circulars are now eliminated?

1.A-21 Cost Principles for Educational Institutions
2.A-50 Audit Follow-up
3.A-87 Cost Principles for State, Local and Indian Tribal Governments
4.A-89 Catalog of Federal Domestic Assistance
5.A-102 Grants and Cooperative Agreements With State and Local Governments
6.A-110 Uniform Administrative Requirement for Grants and Other Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations
7.A-122 Cost Principles for Non-Profit Organizations
8.A-133 Audits of States, Local Governments and Non-Profit Organizations

Contracts: Federal Acquisitions Regulations (FAR) requirements

The Federal Acquisition Regulation (FAR) governs the acquisition process for Federal Contracts by which the government purchases goods and services. The UC requires suppliers adhere to certain Federal Flowdown provisions, which the campus Buyer will insert into every Contract-funded purchase order/contract exceeding $9,999.99.

  • Competitive Bidding requirements for Federal Contracts are governed by 48, CFR, subpart 6.1; which states we must promote and provide full and open competition for acquisitions using federal funds.
  • Certified Small Businesses may be used in lieu of competition on a Federal Contract up to $149.999.99, per FAR, Subpart 19.5, Set-Asides for Small Business.
  • See below for information regarding the FFATA Act, which currently only applies to "vendor agreements" (purchase orders) for Contracts.

Dollar Thresholds

Micro-Purchase (under $10,000) - For purchases UNDER the micro-purchase threshold, competitive quotes are not required, but justifying and documenting price reasonableness is. (§200.320 – Methods of Procurement) Your Gateway order using Federal Funds under $10,000.00 will not route to Procurement Services.

Small Purchase Procedures ($10,000 - $99,999.99*) - For both Contracts and Grants, the lowest dollar threshold for supporting documentation (Form A) is $10,000.00 ($2,000 for Construction subject to the Davis-Bacon Act). The federal funded amount must reach $10,000.00 before the documentation is required. (In other words, a transaction may be split-funded, whereby 19900 funds are being used for $8,000, and Grant funds are also $2,500. In that case, a Form A is not required.) Rate quotations (3 or more) must be obtained for these transactions, as well as documenting and justifying Price Reasonableness on the Form A. We have a new Form A: Source Selection & Price Reasonableness Form. This new UCOP form is to be used for all federal orders over $10,000, AND non-federal orders over $100k.

Competitive Proposals (exceeds $100,000) - For all transactions at the UC over $99,999.99, a public, competitive bid must be conducted. This means an RFQ or RFP (bid) must be posted on the public UC bid website by a member of the Procurement team. If you feel your item/commodity is unique, and only one supplier in the world can provide it, a Sole Source (see below section regarding Form A) may be acceptable. Price Reasonableness/Price Analysis must be documented for any acquisition over $99,999.99 (§200.323 – Contract Cost and Price)

A simplified version of this can be found at the below image, called the Procurement Claw:


*State vs. Federal
Note, the Small Purchase Procedure refers to the Simplified Acquisition Threshold in the FAR 88, CFR Subpart 2.1, which is currently defined as $249,999.99. However, California's state competitive bidding threshold requirement is $100,000.00 (Public Contract Code 10507.7). Because the State has more restrictive law than the Federal Government, and because the more restrictive policy applies, the UC competitive bidding threshold remains at $100,000.00 regardless of the funding source. Per the Uniform Guidance, §200.317, Procurement by States:

"When procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds."

Form A: Documenting Source Selection and Price Reasonableness

All federally funded purchases above the micropurchase threshold ($10,000.00) must be supported by either several quotes to support price analysis, or a Sole Source Justification in accordance with the requirements in 24 CFR 84 and 85, and eCFR §200.317-326 (Uniform Guidance). Please substantiate your requisition by using the Form A: Source Selection and Price Reasonableness Form. All transactions over $9,999.99 using federal funds will be reviewed by Campus Purchasing. (Need help navigating the Form A? Click here for a decision tree)

The use of a UCOP Agreement Vendor (https://solutions.sciquest.com/apps/Router/Login?OrgName=UCOP&URL=) substantiates price analysis, since most of the UCOP Agreements have been competitively bid. (If you don't have the login/password for this website, email calli.price@bfs.ucsb.edu) It's important to note, however, that some UCOP Agreements are categorized as a Price Schedule, such as Agilent, Olympus, and GE Healthcare. These contracts provide the University with price reasonableness justification, but not as a source selection since the agreements were not competitively bid. Only Primary and Co-Primary contracts may be used in lieu of soliciting competition.

The following are examples of how to substantiate Price Reasonableness, together with a discount (discount alone is not justifiable), in order of preference:

  1. Price competition - comparison of quotes
  2. UCOP, State, or GSA contract pricing, or comparison with prices under these existing contracts
  3. Prior price history with the same vendor, same items (include the Gateway PO number and $ amount paid)
  4. Comparison with current, or recent prices for a similar item(s) with another vendor
  5. Market research, and/or catalog or established price list (sales to the general public - screen shot ok)

Our ONR (Office of Naval Research) Lead Auditor said the following in order to proove the statement you write on the Form A:

"Just make sure you can back up what they write with listings, price histories, or other data. Back up is the key. An auditor should not have to question anything."

CLICK HERE for options on how to justify a Sole Source.

Helpful Tips and Links

Sales Tax & Quotes:
Federal requirements for justifying price rationale on Form A include the total cost of the acquisition, inclusive of tax (but excluding use tax) and shipping/handling as presented on the vendor quote. If the base cost of your equipment/services is $9,999.99, tax and applicable shipping will bring the acquisition over the competitive quote requirement of $10,000. (For more information, see "Cost or Pricing Data" here.)

Debarred Suppliers/Anti-Kickback:
All Grant and Contract-funded purchases over $30,000 must not be entered into with a Debarred or Suspended supplier, per FAR 52.209-6. Campus Purchasing will work with the supplier and the System for Award Management (SAM) database to ensure your vendor is not Debarred, and that the supplier certifies to the Anti-Lobbying Act.

Non-Competition
When only one bid is received in response to a competitive bid solicitation, you do not have price competition. If you decide to award on the basis of a single submitted bid price, you must justify that the price is fair and reasonable. At a minimum, you should compare the bid price to your own in-house estimate, and/or past prices paid for the same or substantially similar item(s) in the past. For purchases that meet this criteria above the Simplified Acquisition Threshold (currently set at $250,000), profit must be negotiated and included in your price reasonableness statement. For more on profit, click here.

Helpful Tips:

·  Utilize Price Analysis (obtaining multiple quotes) wherever possible; competition should be sought with all federal orders, and will speed up the process of your order.

·  If at all possible, use a UCOP Agreement Primary or Co-Primary (not Price Schedule) supplier; using contract pricing will also speed up your order, and is encouraged by the Funding Agency.

·  Price Reasonableness is a requirement of Government, per FAR 15.4; the government is looking to ensure the price paid is fair and reasonable. A sole source as a justification for price reasonableness is not allowed. Use the research you conducted to find this product as part of your price reasonableness justification. You can use prior costs, similar product costs, established price lists, or market research as your justification.

·  If using a Sole Source, be sure to answer the question completely. We are looking for specific features or parameters to explain why this is the only vendor that can provide the purchase.

·  Utilize registered Small Businesses up to the $100,000 threshold. Using small business will also speed up your order, and is encouraged by the Funding Agency.

What is FFATA?

Some federal awards are subject to the Federal Funding Accountability and Transparency Act (FFATA), which aims at reducing wasteful spending in the government and to empower every American with the ability to hold the government accountable for each spending decision. The FFATA legislation requires information on federal awards (federal financial assistance and expenditures) be made available to the public via a single, searchable website.

UCSB Procurement's role is to obtain information from the supplier on Federally funded contracts (this does not apply to Grants) for all transactions exceeding $35,000.00. We use the UC FFATA Reporting Form; and will work with your department on these transactions, as well as with Office of Research for reporting into the government website: www.usaspending.gov

Flexcard and Federal Funds

The Flexcard can be used for purchases on federal funds up to $9,999.99 (including tax and shipping). If the total amount of the acquisition exceeds the micro-purchase threshold (currently set at $10,000), you will need to enter a standard purchase order requisition in Gateway.

Due to federal regulations for contract and grant awards, the UC is required to flow-down certain contract provisions to the vendor. As a result, every vendor we need to use for federal purchases over the microcap threshold will need to be vendored into Gateway.