State Controller Policy
Effective Date:10/25/24
Approved by: Robert Jaros, CPA, MBA, JD, Colorado State Controller
Background
- The purpose of this policy is to provide direction to State Agencies and Institutions of Higher Education (IHEs) that enter into either a Contract with the Federal Government (Federal Government Contract) or a Contract with a Contractor paid with Federal funds from the State Agency (Contract). The policy includes compliance requirements, procurement by State Agencies and IHEs, and required provisions when State Agencies and IHEs enter into a Contract with a Contractor.
Authority
- §24-30-202(1), C.R.S. (State Controller Authority for Commitment Vouchers)
- §24-30-202(13), C.R.S. (State Controller's Authority Regarding Fiscal Rules)
- §24-101-101 et seq. State Procurement Code
- §24-106-103, C.R.S. (Centralized Contract Management System)
- 1 CCR 101-9 Procurement Rules 2 CFR §200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance)
- 2 CFR Appendix II to Part 200 – Contract Provisions for Non-Federal Entity Contracts Under Federal Awards
- 48 CFR Subpart 2.1 – Definitions
- Office of the State Controller (OSC) policies
Compliance Requirements
- 2 CFR §200 Uniform Guidance
- Procurement Code and Rules
- Fiscal Rule 2-1 Propriety of Expenditures
- OSC Conflict of Interest Policy and Technical Guidance
- OSC Competition Requirements for Grants and Technical Guidance
- OSC Records Retention for Contracts Policy
Definitions
- Federal Financial Assistance, the instrument setting forth the terms and conditions. The instrument is the grant agreement, cooperative agreement, other agreement for assistance covered in paragraph (2) of the definition of Federal financial assistance in this section, or the cost-reimbursement contract awarded under the Federal Acquisition Regulations.
- Federal Award has the meaning, depending on the context, in either paragraph or (2) of this definition:
- (1)
- The Federal financial assistance that a recipient receives directly from a Federal awarding agency or indirectly from a pass-through entity, as described in § 200.101; or
- The cost-reimbursement contract under the Federal Acquisition Regulations that a non-Federal entity receives directly from a Federal awarding agency or indirectly from a pass-through entity, as described in § 200.101.
- (2) The instrument setting forth the terms and conditions. The instrument is the grant agreement, cooperative agreement, other agreement for assistance covered in paragraph (2) of the definition of Federal financial assistance in this section, or the cost-reimbursement contract awarded under the Federal Acquisition Regulations.
- (3) Federal award does not include other contracts that a Federal agency uses to buy goods or services from a contractor or a contract to operate Federal Government owned, contractor operated facilities (GOCOs).
- (4) See also definitions of Federal financial assistance, grant agreement, and cooperative agreement.
- (1)
- Recipient, an entity, usually but not limited to non-Federal entities that receives a Federal award directly from a Federal awarding agency. The term recipient does not include subrecipients or individuals that are beneficiaries of the award.
- Subrecipient, an entity that receives a subaward from a pass-through entity to carry out part of a Federal award. The term subrecipient does not include a beneficiary or participant. A subrecipient may also be a recipient of other Federal awards directly from a Federal agency.
- Pass-through Entity, (PTE) means a non-Federal entity that provides a subaward to a subrecipient to carry out part of a Federal program.
- Contractor, an entity that receives a contract as defined in this section.
- Contract, for the purpose of Federal financial assistance, a legal instrument by which a recipient or subrecipient purchases property or services needed to carry out the project or program under a Federal award. For additional information on subrecipient and contractor determinations, see 200.331. See also the definition of subaward in this section.
- Subaward, an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a Federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract.
- Federal Awarding Agency, the Federal agency that provides a Federal award directly to a non-Federal entity.
- Contract, for the purpose of Federal financial assistance, a legal instrument by which a recipient or subrecipient conducts procurement transactions under a Federal award. (2 CFR §200.1 Definitions) For additional information on subrecipient and contractor determinations, see 2 CFR § 200.331. A contract includes purchase orders.
- Contractor, an entity that receives a contract. (2 CFR §200.1 Definitions)
- Federal Government Contract, agreements with an agency or branch of the Federal Government relating to the goods or services the Federal Government provides, or which require a contribution by the State, or which require goods or services for the State Agency or IHE in support of the Federal Government.
- Fiscal Agent of a State Agency, an organization that acts on behalf of a State agency performing various financial duties. Generally, a Fiscal Agent would be classified as a Contractor, unless the Fiscal Agent has program and other responsibilities that would result in the Fiscal Agent being classified as a Subrecipient.
- Grant, means a legal instrument of financial assistance between a federal agency and a recipient or between a pass-through entity and a subrecipient, consistent with 31 U.S.C. 6302, 6304. (2 CFR §200.1 Definitions)
Contract vs. Grant Determination
- Agencies and IHEs may use the Sample Subrecipient v Contractor Determination Tool or the Classification and Requirement for Awards using Federal Funds in State Controller Technical Guidance Competition Requirements for Grants to determine whether an agreement is a contract or grant.
When there are questions on the entity’s classification, agencies and IHEs shall document their determination and shall include this documentation in the contract file or grant file. - Based on the determination:
- If a grant, Agencies and IHEs shall comply with 2 CFR §200 Uniform Guidance for subrecipients and OSC guidance for grants.
- If a contract, Agencies and IHEs shall comply with 2 CFR §200 Uniform Guidance for contractors and this Policy.
- If there is a conflict between this policy, including OSC policies, Procurement Code) and 2 CFR §200, State agencies shall follow 2 CFR §200.
Procurement by States
- As noted in 2 CFR §200.317, when procuring goods and services under a Federal award, a State must follow the same policies and procedures it uses for procurements from its non-Federal funds. This means that the State Agencies and IHEs shall follow the Procurement Code and Procurement Rules in contracts paid with Federal funds, except in situations where there is a conflict in which case State agencies shall follow 2 CFR §200.
- All other non-Federal entities, including subrecipients of a State, must follow the procurement standards in 2 CFR §§ 200.318 through 200.327. See State Controller Guidance for Federal Awards for Subrecipients and Contractors.
Procurement Methods, Dollar Limits, and Requirements for State Agencies - Follow State Procurement Code and Rules
(Exceptions to the Procurement Code are included in §24-101-105(1)(a) C.R.S.)
| Threshold | Bidding Tools | Required Commitment Voucher |
|---|---|---|
| Up to $50,00 | No Competition Required (A governmental body without delegated purchasing authority may purchase goods or services with no competition required up to a limit of $5,000) | None, small purchases documentation |
| Above $50,000 to $250,000 | Documented Quote (DQ) (The CPO may approve or deny a request to use a DQ process when the estimated cost would exceed the small purchase threshold) | Purchase Order or State Contract (shall include the Contract Federal Provisions Exhibit on the OSC website) |
| Above $250,000 | Request for Proposal (RFP), Invitation for Bid (IFB) or Invitation to Negotiate (ITN) | State Contract (shall include the Contract Federal Provisions Exhibit on the OSC website) |
Procurement Methods, Dollar Limits, and Requirements - Construction
| Threshold | Bidding Tools | Required Commitment Voucher |
|---|---|---|
| Up to $10,000 | No competition required | None, small purchases documentation |
| Above $10,000 to $50,000 | No competition required | Purchase Order or State Contract |
| Above $50,000 to $150,000 | Documented Quote (DC) | Purchase Order or State Contract or PO with approval from OSA (See Fiscal Rule 4-1, §3.1.1.2) |
| Above $150,000 to $250,000 (Above $150,000 must meet the bonding requirements of §38-26-106 C.R.S) | Documented Quote (DQ) (See OSA Policies and Procedures for minimum solicitation time frames based on solicitation method) | Construction Contract |
| Above$250,000(Above $150,000 must meet the bonding requirements of §38-26-106 C.R.S) | Invitation for Bid (IFB) or Request for Proposal (RFP) | Construction Contract |
Procurement Methods, Dollar Limits, and Requirements - Professional Services
| Threshold | Bidding Tools | Required Commitment Voucher |
|---|---|---|
| Up to $25,000 (§24-30-1403) | No competition required (See OSA Policies and Procedures for minimum solicitation time frames based on solicitation method) | Professional Services Contract |
| $25,000 to $100,000 (§24-30-1403) | Informal Request for Qualifications (RFQ) (See OSA Policies and Procedures for minimum solicitation time frames based on solicitation method) | Professional Services Contract |
| Above $100,000 (§24-30-1403) | Request for Qualifications (RFQ) Public Notice (See OSA Policies and Procedures for minimum solicitation time frames based on solicitation method) | Professional Services Contract |
Required Provisions (2 CFR Appendix II to Part 200)
- Exhibits:
- Contract Federal Provisions Exhibit
- Grant Federal Provisions Exhibit
- Purchase Order and Small Dollar Grant Award Form
- State of Colorado Purchase Order Terms and Conditions
- State of Colorado Small Dollar Grant Award Terms and Conditions
If a State agency has additional required provisions, the agency should attach these provisions to the purchase order and revise the order of precedence. The additional required provisions should be above the contract federal provisions in the order of precedence.
Impermissible Provisions
- Contract - Impermissible provisions include Price Increase, State’s Indemnity – Hold Harmless, and Choice of Law. See OSC Policy on Vendor Agreements.
- Federal Government Contract
- Payment above agreed upon price - All provisions putting the State at risk for payment of more than the agreed price for the goods or services or other performance.
- State’s Indemnity – Hold Harmless - Any provision the effect of which is to require the State to indemnify or hold harmless the Federal Government from or against third party claims regardless of how it is phrased; e.g., stating “the State shall be responsible for” in place of the “the State shall indemnify”, does not change the meaning. Also, adding the phrase “to the extent provided by law” does not make an indemnity permissible.
Review of Federal Contracts
- Contract – State agencies may approve expenditure contracts between a State agency and a Contractor in accordance with OSC policies.
- Federal Government Contract – The OSC shall approve all contracts between the Federal Government and State agencies. See OSC Policy Federal Government Contracts
- Contract and Federal Government Contract for IHEs – A Reviewing Attorney shall approve all contracts between IHEs that follow State fiscal rules and the Federal government as well as contracts with subrecipients.