Sneak Preview: Associations Applaud Micro-Purchase Legislation

January 6, 2017 | By Jerry Ashworth | Post a Comment

xgran_bookshot(The following was excerpted from a recent article in the Federal Grants Management Handbook.) A provision in a bill passed by Congress that would raise the current micro-purchase procurement threshold for research programs and entities could help relieve administrative burdens for universities and other research institutions that have spent considerable effort lobbying the federal government to raise the threshold.

Sec. 217 of the National Defense Authorization Act for Fiscal Year 2017 (NDAA) (S. 2943), which passed both houses of Congress and was sent to the president on Dec. 14, would increase the micro-purchase threshold for basic research programs and activities of the Department of Defense (DoD) science and technology reinvention laboratories.

The provision states: “For purposes of this section, the micro-purchase threshold for procurement activities administered under sections 6303 through 6305 of title 31 by institutions of higher education (as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)), or related or affiliated nonprofit entities, or by nonprofit research organizations or independent research institutes is —

“(A) $10,000; or

“(B) such higher threshold as determined appropriate by the head of the relevant executive agency and consistent with clean audit findings under chapter 75 of title 31, internal institutional risk assessment or state law.”

The provision was praised by Council on Governmental Relations (COGR), an association representing more than 100 research universities, affiliated medical centers and independent research institutes, and the Association of Independent Research Institutes (AIRI), which is comprised of more than 80 nonprofit biomedical, behavior and clinical science research institutes. “The research community has received a win!” COGR staff said in a recent letter to its membership. “The NDAA provision is applicable to funding from all federal agencies. Most research institutions are covered by (A). Those that have a threshold greater than $10,000 can use a higher threshold, per (B), in coordination with the acceptability of the results of the single audit, internal institutional risk assessment or state law.”

The micro-purchase provision at §200.320(a) in the Office of Management and Budget’s (OMB’s) uniform guidance can be used when the aggregate dollar amount for the purchase does not exceed $3,000 ($2,000 for acquisition for construction, subject to the Davis-Bacon Act). Such purchases do not need to be advertised nor is there a requirement for obtaining quotations, if the nonfederal entity considers the price to be reasonable. However, nonfederal entities who may have previously had a no-bid purchase threshold at $10,000 or $25,000 will need to review and adjust their procurement procedures accordingly, which is a primary concern of these institutions.

Results from membership surveys that COGR and AIRI conducted in 2015 found that complying with the micro-purchase threshold in the uniform guidance will create a cumulative annual burden of more than $50 million for their membership stakeholders. For example, AIRI respondents said the increased time needed to document the competitive bids in order to comply with a $3,500 micro-purchase threshold would be, on average, 22 percent to 33 percent longer than under the current threshold.

Although the current micro-purchase threshold in the uniform guidance is $3,000, the surveys sought responses on the administrative and cost impact of a $3,500 threshold, which corresponds to the micro-purchase threshold under the Federal Acquisition Regulation (FAR). According to §200.67 of the uniform guidance, the micro-purchase threshold is set by the FAR at 48 C.F.R. Subpart 2.1, and this level has been adjusted for inflation since the December 2013 release of the uniform guidance.

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)


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