Procurement

All procurement transactions must be in compliance with existing MSMU procurement guidelines. In addition, there are restrictions that must be followed relating to the expenditure of federally awarded funds. These additional restrictions and requirements are found under Procurement Standards of the Uniform Guidance sections 200.317 - 326. All purchases made with federal funding are subject to required audit by federal awarding agencies.

All procurement transactions must be conducted in a manner providing full and open competition consistent with the standards noted below. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements. Some of the situations considered to be restrictive of competition include but are not limited to:

1. Placing unreasonable requirements on firms in order for them to qualify to do business;
2. Requiring unnecessary experience and excessive bonding;
3. Noncompetitive pricing practices between firms or between affiliated companies;
4. Noncompetitive contracts to consultants that are on retainer contracts;
5. Organizational conflicts of interest;
6. Specifying only a "brand name" product instead of allowing "an equal" product to be offered;
7. Any arbitrary action in the procurement process.

MSMU will conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state and local preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference.

The Pl must use one of the following methods of procurement whenever purchasing goods or services with federal funding. The thresholds listed below are per the 0MB issued memorandum M-18-18, "Implementing Statutory Changes to the Micro-Purchase and Simplified Acquisition Threshold for Financial Assistance" which was effective as of June 20, 2018.

1. Micro Purchasing Method: Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold of $10,000. To the extent practicable, the Pl will distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive quotations if the Pl considers the price to be reasonable.
2. Small Purchase Method: Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies or other property that do not cost more than the defined Simplified Acquisition Threshold of $250,000. Price or rate quotations must be obtained from at least three suppliers. The Pl is responsible for documenting suppliers reviewed, quotes received and reason for selection of supplier.
   
   Quotes can be obtained from suppliers or from public websites and included as backup documentation for the purchase. For purchases of $25,000 or more, the Pl, before engaging a supplier, must search the System for Award Management (SAM) for the vendor by name, tax identification number, or another characteristic to make sure the person or entity hasn't been suspended or debarred from performing federally funded work. The Pl is responsible to document their search with a screen grab which includes the date and time and attach it to the internal routing form and share it with the Office of Sponsored Research and Grants.
3. Sole Source Method: Procurement by noncompetitive proposal is procurement through solicitation of a proposal from only one source and may be used only when one or more of the following circumstances apply:
   1. The item is available only from a single source;
   2. The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation;
   3. The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the non-Federal entity; or
   4. After solicitation of a number of sources, competition is determined inadequate.
4. The Uniform Guidance recognizes researchers need to acquire items from a sole/selected source for scientific/technical reasons (for example when services or items are only available with the required quality from one source or only one source can provide the items or service in the time frame required). This "sole/selected source" option is available at all dollar amounts and the justification must be documented and maintained by the Pl. Instances when sole/selected source purchasing may be applicable would include, but not limited to:
   1. The equipment, supplies and/or service provider are required by the funding agency (specifically named in an awarded grant or contract) and therefore deemed essential to the project. Please note: just naming a supplier in a proposal does not justify their use as a sole source supplier - justification still needs to be documented.
   2. Specific materials or supplies are required to maintain critical experimental continuity.
   3. Property and services can be obtained only from a specific supplier (i.e. real estate, utilities services, one of a kind items, etc.).
   4. Competitive sourcing is precluded because of the existence of patents, copyrights, secret processes, control of raw materials by suppliers or similar circumstances that limit competition.
   5. Procurement of replacement or upgrade components for equipment manufactured by a specific original equipment manufacturer (OEM) if OEM parts are required in order to not void the warranty.
   6. Purchasing of support services in connection with the assembly, installation or servicing of equipment or software of a highly technical or specialized nature.
   7. Purchasing of compatible additions to existing equipment where a different manufacturer's equipment would be impractical for the specific need.
   8. The project/work has a firm schedule requirement which only one supplier has the capability of meeting. Failure to meet the schedule requirement would seriously impact the project/work.
   9. Purchasing where only a single supplier in a relevant market is licensed or authorized to service or sell a specific product line and related services.
   10. Software/ Subscription renewal or equipment services / maintenance agreement.

1. Required for any construction projects greater than $250,000. Bids are publicly solicited and a firm fixed price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming to all the material terms and conditions of the invitation for bids, is the lowest price. In order for sealed bidding to be feasible, the following conditions should be present:
   1. A complete, adequate and realistic specification or purchase description is available;
   2. Two or more responsible bidders are willing and able to compete effectively for the business; and
   3. The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price.
2. If sealed bids are used, the following requirements apply:
   1. Bids must be solicited from an adequate number of known suppliers, providing them sufficient response time prior to the date set for opening the bids;
   2. The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond;
   3. All bids will be opened at the time and place prescribed in the invitation for bids;
   4. A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and
   5. Any or all bids may be rejected if there is a sound documented reason.

1. Required for any non-construction purchases greater than $250,000. Competitive selection is normally conducted with more than one source submitting an offer, and either a fixed price or cost-reimbursement type contract is awarded. It is generally used when conditions are not appropriate for the use of sealed bids. If this method is used, the following requirements apply:
   1. Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Any response to publicized requests for proposals must be considered to the maximum extent practical;
   2. Proposals must be solicited from an adequate number of qualified sources;
   3. The Pl must have a written method for conducting technical evaluations of the proposals received and for selecting recipients;
   4. Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered; and
   5. The Pl will use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby competitors' qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. of architectural/engineering (A/E) professional services whereby competitors' qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation.

Financial records, supporting documents, statistical records, and all other MSMU records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the federal awarding agency or pass-through entity in the case of a sub-recipient. The only exceptions are the following:

1. If any litigation, claim or audit is started before the expiration of the three-year period, the records must be retained until all litigation, claims or audit findings involving the records have been resolved and final action is taken.
2. When MSMU is notified in writing by the federal awarding agency, cognizant agency for audit, oversight agency for audit, cognizant agency for indirect costs, or pass-through entity to extend the retention period.
3. Records for real property and equipment acquired with federal funds must be retained for three years after final disposition.
4. When records are transferred to or maintained by the federal awarding agency or pass-through entity, the three-year retention requirement is not applicable to MSMU.

Beginning in January 2010, many federal grantmaking agencies – including the National Science Foundation and the National Institutes of Health – required grantees to certify that they provided appropriate training and oversight in the responsible and ethical conduct of research.

During the course of a sponsored project, unexpected circumstances may arise that may not have been previously anticipated. As a result, the PI/PD may need to request changes to his/her project. Recipients are required to report deviations from budget or project scope or objective, and request prior approvals from federal awarding agencies when:

• Change in scope of the objective of the project or program.
• Change in a key person.
• Disengagement from the project for more than three months or a 25% reduction in time devoted.
• The transfer of funds budgeted for participant support costs.
• The sub-awarding or transferring out of any work not previously described.
• Changes in the amount of cost-sharing or matching.

This law (Public Law 100.463, Section 8136) is intended to give the federal government public credit for federally funded programs and projects. It requires federal grant recipients to include funding information on all publications related to projects that use federal funds, including statements, press releases, signs at construction sites, requests for proposals, bid solicitations, and other documents that describe projects or programs funded in whole or in part with federal money. The information must state clearly the total cost of the program and the dollar amount of federal funds used.

This law applies to grants and cooperative agreements but not to contracts. It does not apply to subcontracts, but it may apply to sub-awards. Academic publications (peer-reviewed journals, presentations to professional groups) resulting from the project research are not required to include this information.

Although no sanctions are specified for noncompliance, failure to comply could be considered a breach of responsibilities and may result in termination, suspension or debarment.

MSMU is responsible for ensuring that all sub-award agreements it issues comply with federal regulations. Prior to a sub-award being issued, MSMU must take certain steps to ensure the appropriate use of federal funds by the sub-recipient. MSMU will use our sub-award agreement for compliance. The principal investigator (PI) / project director (PD), with support from the grants manager and the Office of Accounting and Finance, is responsible for monitoring the activities of the sub-recipient as necessary to ensure that the sub-award is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the sub-award; and those sub-award performance goals are achieved. Risk assessment and monitoring resources are available through the Office of Sponsored Research and Grants. Read more about process and policy in the Policy Book.

Evaluate Risk - Evaluate each subrecipient's risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). This evaluation of risk may include consideration of such factors as the following:

1. The subrecipient's prior experience with the same or similar subawards.
2. The results of previous audits including whether the subrecipient receives single audits in accordance with 2 CFR Part 200, Subpart F, and the extent to which the same or similar subaward has been audited as a major program.
3. Whether the subrecipient has new personnel or new or substantially changed systems.
4. The extent and results of federal awarding agency monitoring (e.g. if the subrecipient also receives federal awards directly from a federal awarding agency).

Submit Documentation:

• Confirm the statement of work and review any non-standard terms and conditions of the subaward during the subaward agreement negotiation process.
• In approving the subrecipient's invoices for payment, certify the expenditure was incurred during the period of performance of the subaward and is for authorized activities of the subaward.
• Monitor programmatic progress and ability of the subrecipient to meet objectives of the subaward throughout the period of performance and escalate concerns to the Department Head and Grants Manager.
• Submit to the Grants Manager and Director of ASPIRE a copy of the assessed risk report using the considerations above.

• Provide training to Pis on subrecipient monitoring.
• Provide support in subrecipient assessed risk review as needed. Note that past assessment determination and documentation is the responsibility of the Pl.
• Review information obtained for initial and annual subrecipient organization risk assessment and assign a risk rating.
• Incorporate additional terms into subawards if needed, based on information from the Pl, department/local level managing unit, and the risk assessment of the subrecipient organization.
• It is the responsibility of the grants manager to identify potential funding sources for faculty and administrators, to guide them in searching for prospective state, federal, corporate, and foundation agencies from which to seek grant funding, and to assist in writing and editing grant proposals for institutional projects or programs. The grants manager maintains contact and assists in setting up or brokering meetings between PIs and state, federal, corporate, and foundation agencies. The grants manager ensures there is no conflict of interest concerning the funding agency and assists in providing the documentation and resources needed to submit the final proposal. The grants manager helps the project leader in meeting post-award requirements.

• Report all new federal subawards in excess of $25,000 to the Federal Funding Accountability and Transparency Act (FFATA) as required by federal guidelines.
• Prior to the end of each fiscal year, send an annual certification letter to all subrecipients currently receiving federal funding to ensure the subrecipient has and maintains effective internal controls over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs.

MSMU may terminate a federal award to a sub-recipient in whole or part because the sub-recipient fails to comply with the terms and conditions of a federal award. Upon sending the sub-recipient a written notification setting forth the reasons for such termination, the effective date, and in the case of partial termination, the portion to be terminated. The notification will also state that the termination decision may be considered in evaluating future applications received from the sub-recipient. In accordance with requirements of the federal awarding agency, MSMU must provide the sub-recipient an opportunity to object and provide information and documentation challenging the termination.

Escalation is not limited to the annual review process. Serious or recurring issues should be addressed as soon as they are identified. To escalate an issue, contact the Grants Manager. Once an issue has been escalated, the Office of Sponsored Research and Grants will work with the Pl, department level managing unit, subrecipient, and any other relevant departments.

In accordance with federal requirements (§200.430) prescribed by the Office of Management and Budget (OMB), charges to federal awards for salaries and wages must be based on records that provide reasonable assurance that the charges are accurate, allowable and properly allocated. In order to receive and maintain eligibility for funding, sponsoring agencies require organizations to gather documentation to substantiate that the level of salary or wages charged to federal awards is commensurate with the effort expended. This certification is completed for the following two purposes:

1. To verify that the percentage of effort placed on a federal award is not less than the percentage of salary charged to the federal award.
2. To capture any voluntary cost sharing by indicating any excess percentage of effort as compared to the percentage of salary.

Time and Effort Certification (.pdf) >

MSMU utilizes an “after-the-fact” reporting system to comply with the federal effort certification requirement. Under an after-the-fact system, distribution of salaries and wages for employees working on externally-funded projects will be supported by effort certification reports. Charges are made initially on the basis of estimates made before the services are performed. Effort certification reports will reflect an after-the-fact reporting of the actual percentage distribution of activity of employees. If significant (>10%) differences between the charges and actual distribution, the charges will be promptly adjusted to reflect actual activity.

Employees working on federal awards are required to adhere to following procedures on effort certification:

• Faculty and exempt employees will be asked to report the percent effort for all federally sponsored activity and curricular activities (i.e., instruction, administration, advising, etc.). Note: Hourly employees and student workers are not required to complete a report as their time is certified via Workday.
• Effort certification reports will reasonably reflect the percentage distribution of effort by faculty and exempt employees charged to federally funded projects. Effort is not determined based on a 40-hour week but rather as a percentage of total employment activities. 100% effort is an employee’s total hours actually spent on work within the scope of his/her employment activities. The activities for which you are being compensated, include sponsored and non-sponsored activities, for a given time period. The purpose of the report is to certify the level of effort expended on these activities.
• Employees should provide an account of all effort expended on a sponsored activity, even if the sponsor did not compensate the employee for that activity, which constitutes “cost sharing.” This can occur on a mandatory or voluntary basis. Mandatory cost sharing occurs when it is required by the sponsor at the time of application. Voluntary cost sharing represents additional effort expended on a project that is not required by the sponsor. Although it is MSMU’s practice to minimize voluntary cost sharing, the principal investigator must record all effort expended on their projects regardless of the source of compensation.
• Faculty and exempt employees will complete and sign the effort certification report. Principal investigators (PI) / project directors (PD) are required to verify the accuracy of information provided by employees working on the grant. Certification reports of the PI/PD are to be verified by the department chair or dean.
• Effort certification reports are required annually and at the completion of a grant. The grants financial administrator will distribute the reports to PI/PDs in September of each year and when closing out a grant. Completed forms must be returned to the grants financial administrator by 30 days after a request. The PI/PD is responsible for sending the form to any other faculty or administrative employees working on the grant and ensuring the forms are completed.
• Completed employee effort certification reports will be filed in the Office of the Grants Financial Administrator.