Grantees may use their own procurement regulations which reflect applicable State and local law, rules and regulations provided that procurements made with federal grant funds adhere to the standards set forth as follows:
(a) The grantee shall maintain a code or standards of conduct which shall govern the performance of its officers, employees, or agents in contracting with and expending federal grant funds. The grantee's officers, employees or agents, shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or potential contractors. To the extent permissible by State or local law, rules or regulations, such standards shall provide for penalties, sanctions or other disciplinary actions to be applied for violations of such standards by either the grantee officers, employees or agents, or by contractors or their agents.
(b) All procurement transactions regardless of whether negotiated or advertised and without regard to dollar value shall be conducted in a manner so as to provide maximum open and free competition. The grantee shall be alert to organizational conflicts of interest or noncompetitive practices among contractors which may restrict or eliminate competition or otherwise restrain trade.
(c) The grantee hereby establishes, as a minimum, the following procedural requirements:
(1) Proposed procurement actions shall be reviewed by grantee officials to avoid purchasing unnecessary or duplicative items. Where appropriate, an analysis shall be made of lease and purchase alternatives to determine which would be the most economical, practical procurement.
(2) Invitations for bids or requests for proposals shall be based upon a clear and accurate description of the technical requirements for the material, product or service to be procured. Such description shall not, in competitive procurements, contain features which unduly restrict competition. Brand name or equal description may be used as a means to define the performance or other salient requirements of procurement, and when so used the specific features of the named brand which must be met by offerors should be clearly specified.
(3) Positive efforts shall be made by the grantees to utilize small business and minority-owned business sources of supplies and services. Such efforts should allow these sources the maximum feasible opportunity to compete for contracts to be performed utilizing federal grant funds.
(4) The type of procuring instruments used, fixed price contracts, cost reimbursable contracts, purchase orders, incentive contracts, shall be appropriate for the particular procurement and for promoting the best interest of the grant program involved. The cost-plus-a-percentage-of cost method of contracting shall not be used.
(5) Formal advertising, with adequate purchase description, sealed bids, and public openings shall be the required method of procurement unless negotiation pursuant to paragraph (6) below is necessary to accomplish sound procurement. However, procurement of ten thousand dollars ($10,000) or less need not be so advertised unless otherwise required by State or local law or regulations. Where such advertised bids are obtained the awards shall be made to the responsible bidder whose bid is responsive to the invitation and is most advantageous to the grantee, price and other factors considered. Factors such as discounts, transportation costs, taxes may be considered in determining the lowest bid. Invitations for bids shall clearly set forth all requirements which the bidder must fulfill in order for his bid to be evaluated by the grantee. Any or all bids may be rejected when it is in the grantee's interest to do so, and such rejections are in accordance with applicable State and local law, rules and regulations.
(6) Procurements may be negotiated if it is impracticable and unfeasible to use formal advertising. Generally, procurements may be negotiated by the grantee if:
A. The public exigency will not permit the delay incident to advertising;
B. The material or service to be procured is available from only one person or firm; all contemplated sole source procurements where the aggregate expenditure is expected to exceed five thousand dollars ($5,000) shall be referred to the grantor agency for prior approval.
C. The aggregate amount involved does not exceed ten thousand dollars ($10,000);
D. The contract is for personal or professional services, or for any service to be rendered by a university, college or other educational institutions;
E. The material or services are to be procured and used outside the limits of the United States and its possessions;
F. No acceptable bids have been received after formal advertising;
G. The purchases are for highly perishable materials or medical supplies, for material or services where the prices are established by law, for technical items or equipment requiring standardization and interchangeability of parts with existing equipment, for experimental, developmental or research work, for supplies purchased for authorized resale and for technical or specialized supplies requiring substantial initial investment for manufacture;
H. Otherwise authorized by law, rules or regulations.
Notwithstanding the existence of circumstances justifying negotiation, competition shall be obtained to the maximum extent practicable.
(7) Contracts shall be made only with responsible contractors who possess the potential ability to perform successfully under the terms and conditions of a proposed procurement. Consideration shall be given to such matters as contractor integrity, record of past performance, financial and technical resources, or accessibility to other necessary resources.
(8) Procurement records or files for purchases in amounts in excess of ten thousand dollars ($10,000) shall provide at least the following pertinent information: justification for the use of negotiation in lieu of advertising, contractor selection and the basis for the cost or price negotiated.
(9) A system for contract administration shall be maintained to assure contractor conformance with terms, conditions and specifications of the contract or order, and to assure adequate and timely follow-up of all purchases. (1967 Code §2-69)