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Federal Purchasing Guidelines

When purchasing goods or services with grant funds, the purchase is subject to the Federal Uniform Guidance (UG) and University purchasing procedures. Review UG requirements on the Code of Federal Regulations website. It is important to note that the UG only applies to federal grants (financial assistance) and not federal contracts.

In addition to the following information, review the requisition checklist, which is intended to help you keep track of required documentation, applicable links to important information, and forms required for the requisition phase for purchases using federal grant funding.

The UG procurement standards identifies three thresholds:

  • Micro-Purchase: $10,000 or less
  • Small Purchase: $10,000.01 - $200,000.00
  • Competitive Solicitation: $200,000.01 or more

Micro-Purchases

Purchases under the Micro-Purchase Threshold can be awarded “without soliciting competitive quotations” if the price is reasonable. For purchases under $10,000, following University guidelines should be sufficient.

Small Purchase Threshold

Purchases in the Small Purchase Threshold, between $10,000.01 and $200,000, require “relatively simple and informal procurement methods.”  For purchases under $200,000.00 a minimum of three competitive quotes should be solicited, the purchase shall be made from the Vendor that provides the lowest quote which meets the required Scope of Services/Specifications.

Competitive Solicitation Threshold

Purchases that exceed the Competitive Proposal Threshold, $200,000 are subject to strict procurement requirements.   If a purchase is needed exceeding the Competitive Solicitation Threshold contact the Procurement office as soon as the need is identified.   The Procurement office will assist departments with competitive solicitations and can provide guidance as to the best solicitation method for a need.  It is important to note that a formal solicitation may take an extended period of time, it may vary based on the type of purchase being made but it should be expected that the process may take 3-4 months to complete.

Types of Solicitations

There are multiple types of solicitations the Procurement office may recommend.  For the vast majority of cases the best solicitation method is either Request for Proposals (RFP) or Invitation for Bids (IFB).

Request for Proposals (RFP)

To be used in instances where cost is not the only factor that needs to be considered in making an award. Cost will be a weighted criteria amongst other criteria such as Qualifications and Proposed Project Plan.

Invitation of Bids (IFB)

To be used in instances where the required specifications can be detailed to prospective bidders.  Cost of specified goods/services is the only consideration in making an award.

Non-Competitive Proposals

All purchases over $10,000 have a competitive bidding requirement under the UG. You must submit a Request for Waiver of Competition for all sole-source purchases with federal grant funds that are $10,000.01 or greater.

Situations which are allowable* for sole source procurement include:

  • Available only from a particular source for scientific reasons; is expressly permitted in the UG.
  • Awarding agency expressly authorizes noncompetitive proposals in response to a written request from the University
    • Include this when submitting the Request for Waiver of Competition
  • After an Competitive Solicitation process, competition is deemed inadequate

Please note – although a federal agency may have approved a grant application that specifically included the name of a company or independent contractor that the principal investigator stated would provide goods or services, the approval of the grant application is not federal government approval of the use of the company on a directed or sole source basis.

*Under the UG Procurement Standards, any sole source purchase over $200,000 must be accompanied by a cost analysis that includes all costs that lead to the quoted price. Virginia Tech’s process for this cost analysis is to complete a “Price Reasonableness Form.” This process shall be completed by the Procurement Office.

Use of University Contracts

Majority of University Contracts are established through a competitive solicitation process, and as a result when utilizing these contract vehicles, additional competition requirements are not applicable since competition has already been formally sought by the Procurement Office.

Use of Cooperative Contracts

The UG allows for “piggybacking” off existing contracts that were competitively solicited. You should ask the supplier you are working with whether they have public contracts, such as those with a government (federal, state, county, city, etc.) or a co-operative entity (E&I, Omnia, NASPO Valuepoint etc.).