This Is Anything but Simplified

November 30, 2012 | By Jerry Ashworth | Post a Comment

I have spent an incredible amount of time this week contacting grants management attorneys, federal officials and consultants trying to determine how the grants community should comply with the simplified acquisition threshold. If I wasn’t adamant enough in my previous requests for an update of the Office of Management and Budget grants administrative circulars, I really am now.

Procurement standards in the grants management common rule for state and local governments discusses the simplified acquisition threshold, which is also known as the small purchase threshold in OMB Circular A-110 (2 C.F.R. Part 215). Even if you get past the fact that they are referred to by different names in the two circulars, there appears to be changes afoot in this area, which for me is creating an inordinate level of confusion.

If you turn in your hymnals to OMB Circular A-110 Subpart A, §__.44(e), OMB states that applicable recipients “shall, on request, make available for the federal awarding agency, pre-award review and procurement documents, such as request for proposals or invitations for bids, independent cost estimates, etc., when any of the following conditions apply.

(2) The procurement is expected to exceed the small purchase threshold fixed at 41 U.S.C. 403 (11) (currently $25,000) and is to be awarded without competition or only one bid or offer is received in response to a solicitation.”

Well, first of all, 41 U.S.C. 403(11) was amended in 1994 to raise the small purchase (simplified acquisition) threshold to $100,000. Over the years, this became standard practice and adopted in agency grants regulations.

Then, Section 807 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-375) added a provision to the Office of Federal Procurement Policy Act (41 U.S.C. 403, et. seq.) requiring that most federal “acquisition-related thresholds” be periodically adjusted for inflation. The adjustments are made by the Federal Acquisition Regulatory Council. In 2010, the Federal Acquisition Council issued a final rule increasing the federal simplified acquisition threshold to $150,000 from $100,000.

In response, however, OMB issued a special note in Part 3, Section I of the 2012 OMB Circular A-133 Compliance Supplement stating that the $100,000 threshold for procurement under grants “remains unchanged. It is not affected by the change in the federal simplified acquisition threshold to $150,000.” Hmm. OK.

Yet, in an Oct. 2 memo to state and regional directors, the head of the Food and Nutrition Services Child Nutrition Programs called attention to the change in the federal small purchase threshold under federal grants. The memo confirmed that the new threshold was $150,000, replacing the previous threshold, and that the change was made through statutorily required administrative action. “State and local agencies may use the simplified acquisition procedures for small purchases up to the threshold set by 41 U.S.C. 403(11), which is $150,000,” the memo adds.

FNS is the only agency I could find using the new threshold. Maybe others are now or will be considering policy changes to increase the threshold for their grantees. But I’ll leave this up to you now in the grants community — what do you consider the threshold to be? I’m pretty much torn on this issue.

I always stress that each individual grant award is unique and grantees should understand the terms and conditions of their grant. The threshold should be spelled out in that award. But, frankly, some consistency on the threshold in the OMB circulars would go a long way to improving grants management. It’s really high time for an update. Just a thought.

Please let us know your reaction to how to comply with the simplified acquisition threshold and what you think the threshold level officially is. I’m all ears on this one.  And if I’m totally off-base on this, please let me know.

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