U.S. Department of Homeland Security Washington, DC 20472

June 21, 2016

PROCUREMENT GUIDANCE FOR RECIPIENTS AND SUBRECIPIENTS UNDER

2 C.F.R PART 200 (UNIFORM RULES)

SUPPLEMENT TO THE PUBLIC ASSISTANCE

PROCUREMENT DISASTER ASSISTANCE TEAM (PDAT) FIELD MANUAL

1. PURPOSE. This document provides guidance for Non-Federal Entity (NFE) recipients

and subrecipients of Federal financial assistance awarded by the Federal EmergencyManagement Agency (FEMA) when using that assistance to finance procurements ofproperty and services. The guidance provided by this document only applies to Federalfinancial assistance (e.g., grants and cooperative agreements) subject to the procurementstandards of the government-wide Uniform Administrative Requirements, Cost Principles,and Audit Requirements for Federal Awards, at 2 C.F.R. 200.317 to 200.326, which wereadopted by the Department of Homeland Security (DHS). See 2 C.F.R. Part 3002.

2. AUTHORITY. FEMA provides Federal assistance through various financial assistanceprograms under the authority of various Federal laws. NFEs that are recipients andsubrecipients of Federal financial assistance provided by FEMA under these programs aregenerally required to comply with the Uniform Administrative Requirements, CostPrinciples, and Audit Requirements for Federal Awards (Uniform Rules) at 2 C.F.R. Part200, as adopted by DHS at 2 C.F.R. Part 3002. Chapter I, 3 of this document contains adetailed list of these programs and authorizing statutes.

3. WAIVER. FEMA may waive any provisions of this document to the extent permitted byFederal law or regulation.

4. DATES OF APPLICABILITY

a. With one exception identified in Sec. 4.b., below, financial assistance associatedwith emergencies or major disasters declared under the Robert T. StaffordDisaster Relief and Emergency Assistance Act (Stafford Act), the procurementstandards at 2 C.F.R. 200.317 to 200.326 are the default standards that apply tothose grants associated with emergencies or major disasters declared on or afterDecember 26, 2014. See 79 Fed. Reg. 75871, 75872 (Dec. 19, 2014). Forawards made by FEMA, or for emergency or major disasters declared, prior toDecember 26, 2014 (this includes awards associated with prior emergencies ordisasters, but not started until after this date), Federal financial assistance awardsare governed by the Uniform Administrative Requirements at either 44 C.F.R.Part 13 (for state, local, and Indian tribal governments) or 2 C.F.R. Part 215 (forinstitutions of higher education, hospitals, and other nonprofit organizations),depending upon the type of entity.

Page 2 FEMA Procurement Guidance

b. Grace Period. A Non-Federal Entity (also known as a NFE), however, may continue to comply with the former procurement standards applicable to FEMA awards at 44 C.F.R. Part 13 (for states, local, and Indian tribal governments) or 2 C.F.R. Part 215 (for institutions of higher education, hospitals, and other nonprofit organizations) until the completion of two additional fiscal years after December 26, 2014. This is an elective grace period. If a NFE elects to use the previous procurement standards, it must affirmatively document this decision in its internal procurement policies, including the date upon which its grace period (based upon the two additional fiscal years) will end and it will accordingly transition to the new procurement standards. 2 C.F.R. 200.110(a). See also, Ch. 1, par. 2.e., below for additional amplifying guidance.

5. AMENDMENTS TO THIS DOCUMENT. FEMA may periodically update this document due to changes in other revised or new guidance or regulations.

6. SUPPLEMENT. This document is intended to supplement the FEMA Field Manual, Public Assistance Grantee and Subgrantee Procurement Requirements Under 44 C.F.R. Pt. 13 and 2 C.F.R. pt. 215, dated, December 2014 (PDAT1 Field Manual or Field Manual) by providing up-to-date identification, analysis and discussion of the current Federal procurement standards found at 2 C.F.R. pt. 215, which went into effect on December 26, 2014. The Field Manual can be found online at the following web link: https://www.fema.gov/media-library/assets/documents/96773, and provides in-depth discussion of the previous Federal procurement standards, to include analysis of Department of Homeland Security (DHS) Office of Inspector General (OIG) audits related to various procurement violations and real-world procurement scenarios. Together, both documents provide a comprehensive analysis of the Federal procurement standards that apply to procurements associated with disaster financial assistance provided both after and prior to December 26, 2014.

7. DISCLAIMER. This document and the guidance provided therein is not intended to, nor does it provide or constitute legal advice. This document is only intended to serve as a general guide as to the Federal procurement standards identified in the Uniform Rules. Adherence to, application of, or use of this document and the information herein to a procurement subject to Federal grant money, does NOT guarantee the legal sufficiency of any procurement, nor ensure that an award or subaward will NOT be audited or investigated, and subsequently determined to be non-compliant with the procurement standards. All legal questions concerning the sufficiency or insufficiency of a procurement in regards to the Federal procurement standards should be referred to servicing legal counsel.

1 PDAT Procurement Disaster Assistance Team, Procurement and Fiscal Law Division, Office of Chief Counsel, FEMA

https://www.fema.gov/media-library/assets/documents/96773

FEMA Procurement Guidance Page i

June 21, 2016

PROCUREMENT GUIDANCE FOR RECIPIENTS AND SUBRECIPIENTS

TABLE OF CONTENTS

CHAPTER PAGE

I. INTRODUCTION.......................................................................................................... I-1

THE FEDERAL EMERGENCY MANAGEMENT AGENCY ............................I-1

BACKGROUND ....................................................................................................I-1

AUTHORIZING LEGISLATION AND GRANT PROGRAMS ..........................I-3

DEFINITIONS ........................................................................................................I-3

FEMAS ROLE ......................................................................................................I-3

II. APPLICABILITY......................................................................................................... II-1

LEGAL EFFECT.................................................................................................. II-1

APPLICABILITY................................................................................................. II-1

FEDERAL LAWS, REGULATIONS, EXECUTIVE ORDERS, AND OTHER FEMA REQUIREMENTS ................................................................................... II-3

STATE, LOCAL, AND TRIBAL LAWS AND REGULATIONS ...................... II-5

III. PROCUREMENT BY A STATE .............................................................................. III-1

GENERAL STANDARD .................................................................................... III-1

COST ALLOWABILITY.................................................................................... III-1

LAW, REGULATIONS, AND EXECUTIVE ORDERS.................................... III-2

4. PROCUREMENT BY NFEs OTHER THAN STATES. III-2

IV. GENERAL PROCUREMENT STANDARDS..........................................................IV-1

GENERAL...........................................................................................................IV-1

CONTRACTING CAPACITY AND OVERSIGHT ..........................................IV-1

STANDARDS OF CONDUCT ...........................................................................IV-1

DETERMINING NFES NEEDS ........................................................................IV-3

VALUE ENGINEERING....................................................................................IV-5

CONTRACTOR QUALIFICATIONS ................................................................IV-5

RECORD KEEPING ...........................................................................................IV-8

TIME AND MATERIALS CONTRACTS ..................................................... IV-100

FEMA Procurement Guidance June 21, 2016

SETTLEMENT OF CONTRACTUAL AND ADMINISTRATIVE ISSUES IV-111

WRITTEN PROCEDURES FOR PROCUREMENT TRANSACTIONS......IV-122

STATE AND LOCAL INTERGOVERNMENTAL AGREEMENTS ...........IV-166

CONTRACT PROVISIONS .............................................................................IV-16

V. PROCEDURES AND GUIDANCE FOR OPEN MARKET PROCUREMENTS . V-1

COMPETITION ................................................................................................... V-1

METHODS OF PROCUREMENT ...................................................................... V-7

METHODS OF PROCUREMENT ADDITIONAL TOPICS ....................... V-199

CONTRACT COST OR PRICE......................................................................... V-20

BONDING REQUIREMENTS ........................................................................ V-242

CONTRACTING WITH SMALL AND MINORITY BUSINESSES, WOMENS BUSINESS ENTERPRISES, AND LABOR AREA SURPLUS FIRMS ....... V-253

PROCUREMENT OF RECOVERED MATERIALS ...................................... V-285

CHANGES.....................................................