Procurement Guidance for Subrecipients

Effective Date: July 1, 2018

Updated: November 2025

Overview

The purpose of this document is to ensure subrecipient compliance with requirements of the Uniform Guidance (UG) related to procurement (spending of the federal based grant funds received from the State.) This Guidance document applies to all federal grant funding unless the federal grant program is exempt from the UG or the program has additional requirements beyond those identified in the UG. 

This guidance is intended for subrecipients that are local governments, nonprofits, and private entities. State agencies that are subrecipients of federal funds should follow the OSC Guide for State Agency Compliance with the OMB Uniform Guidance document for complying with UG. The State has the right to, and may, add state requirements in addition to the federal requirements found within the UG. Additional state requirements are not covered in this guidance document. Questions should be addressed to the state agency from which the subrecipient received its funding. 

If this guidance document does not provide the answer to a question subrecipients may have regarding the procurement process, please direct these questions to the state agency procurement office or the grant program of the department from which the subrecipient received its award of federal funds.

Pre-Procurement Process

Prior to starting a procurement: 

1. Subrecipients should read and understand the terminology found in the UG.
2. Subrecipients should read and understand the materials presented in this guidance. 

The following questions help the subrecipient evaluate their preparedness to comply with the UG procurement requirements:

1. Is subrecipient using its own documented procurement procedures?
2. Do these documented procedures conform to the UG? See §200.318(a)
3. Does subrecipient have written standards of conduct regarding conflicts of interest? If so, has subrecipient followed and maintained these written standards of conduct? See §200.318(c)(1)
4. Does subrecipient have a parent, affiliate, or subsidiary organization that is not a state, local government, or Indian tribe? If yes, does subrecipient have written standards of organizational conflict of interest? See §200.318(c)(2)
5. Does subrecipient maintain records sufficient to detail the history of the procurement? See §200.318(i)
6. Does subrecipient understand that the subrecipient, alone, mustbe responsible for the settlement of all contractual and administrative issues arising out of procurement? See §200.318(k)
7. Does subrecipient maintain oversight of the contractor(s) performance per the terms, conditions and specifications of their contracts? See §200.318(b)
8. Is subrecipient prepared to make technical specifications available to state agency or federal agency for review if asked? See §200.325(a)
9. Is subrecipient prepared to make available upon request, for the federal agency or pass‐through agency pre‐procurement review, procurement documents, such as requests for proposals or invitations for bids, or independent cost estimates, in the following instances? See §200.325(b), if the recipient or subrecipient procurement systems are not determined to be compliant with the standards.
10. Does subrecipient know it can be exempt from the pre-procurement review in paragraph 200.325(b) if the federal agency or pass-through agency determines that its procurement systems comply with the following standards? See §200.325(c).

Procurement Process

Prior to making a new purchase, the subrecipient should answer the following key questions:

1. Has the subrecipient avoided buying unnecessary or duplicative items? See §200.318(d)
2. Has subrecipient considered the option of entering into state and local intergovernmental agreements or inter‐agency agreements where appropriate for procurement or use of common or shared goods and services? See §200.318(e)
3. Has subrecipient considered using federal excess and surplus property in lieu of purchasing new equipment and property? See §200.318(f)

Updated 2 CFR 200 Procurement Methods available to subrecipient:

Informal Procurement Methods 

Micro-purchases 

Purchases totaling less than or equal to $15,000: Micro-purchase Method. See § 200.320(a)

Small Purchases (Simplified Acquisition) 

>$15,000 to $350,000: Simplified Acquisition (Small Purchase Method) - See Informal Procurement Methods 200.320(a)(2) Simplified Acquisitions

Formal Procurement Methods 

1. Has the subrecipient obtained price or rate quotes from two or more qualified sources? See §200.320(b)(1)(ii)(A)

>$350,000: Proposal 

For competitive purchases greater than $350,000, two selection methods exist:

• Sealed Bid or
• Competitive Proposal

Prior to selecting a method for any procurement greater than $350,000, a cost or price analysis must be done.

1. Is subrecipient aware that a cost or price analysis is required for every procurement action in excess of $350,000 (including modifications)? See §200.324

Sealed Bid 

1. Does subrecipient know sealed bids are the preferred method for procuring construction? See § 200.320(b)(1)
2. How does subrecipient determine if sealed bidding is feasible? See §200.320(b)(1)(i‐ii)
3. What requirements apply to an invitation for bid? See §200.320(b)(1)(i‐ii)

Bonding requirements

1. When is bonding required? If conducting a sealed bid for construction or facility improvements, bonding is required. See §200.326
2. What are the bonding requirements? See §200.326
3. Has the state pass-through agency or federal agency made a determination that subrecipient’s bonding policy and bonding requirements adequately protect the federal interest?

• If yes, follow the bonding policy and requirements of subrecipient’s agency.
• If no, then the subrecipient must follow the requirements in §200.326 included above.

Bid Guarantee is a form of security assuring that the bidder will not withdraw a bid within the period specified for acceptance and will execute a written contract and furnish required bonds, including any necessary coinsurance or reinsurance agreements, within the time specified in the bid, unless a longer time is allowed, after receipt of the specified forms. A bid guarantee usually consists of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder must, upon acceptance of the bid, execute such contractual documents as may be required within the time specified.

• Performance Bond is an obligation, expressed in writing, to pay a fixed and liquidated sum on the happening or nonoccurrence of a specified condition or event. The term "bond" is conditioned on the performance of duties, or other obligations undertaken by the principal obligor in the bond or collateral things to be done by the principal obligor; and indemnity and fidelity bonds or undertakings to indemnify the obligee against loss from conduct of the principal. A performance bond guarantees the owner that the principal will complete the contract according to its terms including price and time.
• Payment bond is a bond conditioned upon the payment by the principal of money to persons under contract.

Formal Procurement Methods - Proposal 200.320(b)(2)

1. What are the requirements for a Competitive Proposal? See §200.320(b)((2)(i-iv)

Noncompetitive Proposal/Sole Source See §200.320(c)

1. What circumstances are appropriate to use a sole source? See §200.320(c)

Competition: Drafting specifications and/or Scope of Work 

1. What are the specifications or Scope of Work for the purchase? See §200.320(c)
2. Does it matter who drafts the specifications or scope of work? See §200.319(a)

Creating a solicitation:

1. What information does subrecipient need to include in a solicitation? See §200.320(c)
2. Has the subrecipient included all necessary affirmative steps to include minority businesses, women’s business enterprises, veteran-owned businesses and labor surplus area firms? See §200.321(a). 

If yes, what specific action are established in the affirmative steps? See §200.321(b)(1‐6)

• Subrecipient must take the affirmative steps 1 to 6 included in §200.321 to assure that minority businesses, women’s business enterprises, veteran-owned businesses and labor surplus are affirms are used when possible.
• The subrecipient may find the following resources helpful in complying with these steps:
  • Colorado Minority Business Office
  • Colorado Procurement Technical Assistance Center (PTAC)

Award of Contract

1. Is the subrecipient making awards to only responsible contractors possessing the ability to perform the work successfully under the terms of the agreement? See §200.318(h)
2. Has the subrecipient checked System for Award Management (SAM.gov) to confirm the contractor is not identified as a party ineligible to receive federal funds? See §200.318(h)

Type of Contract

1. What type of contract is the subrecipient awarding?

• The subrecipient should determine the best contracting and payment methodology prior to issuing a competitive solicitation. Types of contracts include time and materials, firm fixed price, and cost reimbursement, explained below.

Time and Materials Type Contracts 

Time and materials type contractscan only be used if a determination has been made that no other contract is suitable and if the contract includes a ceiling price that the contractor exceeds at its own risk. See §200.318(j)

Clauses needed in Contract

1. What specific clauses are subrecipients required to include when writing a contract?

If the subrecipient is a local government of the State, Procurement of Recovered Materials is required of the local government and its contractors: See §200.323

Applicable provisions described in Appendix II to Part 200 See §200.327

The recipient’s or subrecipient’s contracts mustcontain the applicable provisions described in Appendix II to Part 200—Contract Provisions for non-federal Agency Contracts Under Federal Awards.

Contracts in excess of $350,000 mustaddress administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms and provide for such sanctions and penalties as appropriate.

• Contracts >$10,000 mustaddress termination for cause and for convenience by the non‐federal agency including the manner by which it will be effected and the basis for settlement.
• Equal Employment Opportunity (all federally assisted construction contracts).
• Davis‐Bacon Act (federally assisted construction contract >$2,000).
• Copeland Anti-Kickback Act (federally assisted construction contracts)
• Contract Work Hours and Safety Standards (>$100,000 where mechanics or laborers).
• Rights to Inventions Made Under a Contract or Agreement (all contracts requiring experimental, developmental or research work)
• Clean Air Act and Federal Water Pollution Control Act (>$150,000).
• Byrd Anti‐Lobbying Amendment (>$100,000).
• Debarment and Suspension (any award or contract >$25,000).
• Prohibition on Certain Telecommunications and Video Surveillance Equipment or Services (See §200.216)
• Domestic Preferences for Procurement (See §200.322)
• Procurement of Recovered Materials (See §200.323)

Post-Award Process

After an award is made:

1. What does the subrecipient need to know once the contract is in place and active?

The subrecipient should maintain oversight of the contractor(s) performance per the terms, conditions and specifications of their contracts. See §200.318(b).

Contract modifications:

1. Subrecipient must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. See §200.324.
2. For every modification to a contract, has the subrecipient checked SAM.gov to make sure the contractor is not identified as a party ineligible to receive federal funds?

Non-Compliance Consequences

1. What if subrecipients don’t comply with the UG? See §200.339 Remedies for noncompliance