USAID Procurement Procedures

Transcription

1 USAID Procurement Procedures Rabat, Morocco May 2011 Objectives Understand how USAID defines procurement and how to comply with USAID s procurement regulations. Understand what you may and may not buy with USG funds. Understand how USAID geographic codes affect procurement. Discuss when and how a waiver or approval should be requested. Exercises 9.1 Procurement Scenario A 9.2 Procurement Scenario B 9.3 Procurement Flow Chart 1 1

2 Procurement Procurement is the process of acquiring goods, supplies and services. It includes: Equipment, spare parts and supplies for program activities; Equipment, office furniture and supplies for project offices; Technical assistance by individuals or organizations; and Subawards and subcontracts. 2 Understanding your USAID Agreement Standard Provisions Award Administration (22 CFR 226) Administrative Requirements A-110 USAID Cooperative Agreement Cost Principles for NGOs (2 CFR 230) ADS Chapter 303 Audit Guidelines A-133 2

3 22 CFR 226: Award Administration This establishes uniform administrative requirements for grants and cooperative agreements awarded by USAID to non-profit organizations, and to subawards there under. Procurement Rules and Regulations 22 CFR 226 contains: o Inventory requirements o Property management requirements o Other procurement requirements, including definitions and regulations on equipment, codes of conduct including avoidance of conflict of interest, competition, written procurement procedures, required flow-down clauses and record keeping 5 3

4 Procurement Policy Requirements You may use your own procurement policies and practices as long as they conform with the following USAID eligibility ibilit requirements that include: 1. A written code of conduct preventing and addressing conflict of interest 2. Procurement transactions providing, to the maximum extent practical, open and free competition 3. Procedures to document price or cost analysis in your procurement files 4. Sound and complete policies for procurements in excess of $10,000. Any agreement should include provisions that allow administrative, contractual, or legal remedies for contractor violation of terms; and suitable provisions for termination by the recipient. 6 Recipient Procurement Best Practices At minimum: Avoid purchasing unnecessary items. All solicitations should provide: clear and accurate descriptions, requirements that a bidder/offeror must fulfill, and descriptions of technical requirements. Remember to compare apples with apples. Procurement made with responsible contractors. Based on best value to organization (if not the lowest price, the reason must be documented). Make procurement documents available to USAID. 7 4

5 USAID Thresholds Note the following USAID procurement thresholds: $3,000 (micro-purchase threshold): over this transactional amount you must obtain at least 3 quotations and conduct analysis to justify vendor selection. $100, (simplified acquisition threshold): over this amount requires full and open competition; you must issue a solicitation publicly and establish criteria for evaluating submissions. 8 Organizational Thresholds Taking into account USAID thresholds, DGP partners must establish and follow their own organizational purchasing thresholds in coordination with signatory policies and levels of authority. Note: Purchases of similar types of items that can be obtained from the same vendor may not be separated to avoid meeting thresholds (in other words, do not separate computer and printer equipment to avoid reaching the $100,000 threshold, which triggers the public solicitation requirement). 9 5

6 Restrictions on Goods Refer to Standard Provision entitled USAID Eligibility Rules for Goods and Services Ineligible Goods & Services: May not be procured under any circumstances. Restricted Goods: Need prior approval from the Agreement Officer (AO). Ineligible Suppliers: Cannot procure from firms or individuals whose name appears on the Lists of Parties Excluded from Federal Procurement and Nonprocurement Programs ( and terrorism databases. 10 Ineligible Goods and Services What You May Not Buy Abortion equipment and services Luxury goods and gambling equipment Weather modification equipment Military equipment Surveillance equipment Commodities and services for support of police or other law enforcement activities 11 6

7 Restricted Goods What You Need Prior Approval For Motor vehicles Pharmaceuticals Used Equipment U.S. Government-owned excess property Agricultural commodities Pesticides Fertilizers Contraceptives 12 Ineligible Suppliers Before purchasing goods and services or hiring staff and consultants with USG funds, you are required to check the following three sources and document the search results: 1. Excluded Parties List (EPLS) required under the Terrorism Financing clause in the Special Provisions section (listed under Attachment A Schedule) of your Cooperative Agreement 2. U.S. Department of Treasury List of Specially Designated Nationals and Blocked Persons and 3. United Nations Al-Qaida and Taliban Consolidated List

8 Specific Procurement Rules & Regulations ADS Chapter 310: Source, Origin, and Nationality of Commodities 22 CFR 228: Rules on Source, Origin and Nationality for Commodities and Services Financed by USAID. ADS Chapter 310 and 22 CFR 228 contain: List of geographic codes designating countries or areas Waiver definition and criteria Source, origin, and nationality definitions and requirements Procurement USAID Geographic Codes When undertaking procurement activities first look at: The USAID-specified project Geographic Code: a three digit code which designates a country or a group of countries Schedule A of your Cooperative Agreement 15 8

9 Procurement USAID Geographic Code The source and origin of the goods procured must comply with the authorized Geographic Code. Source means the country from which a commodity is shipped to the Cooperating Country, or the Cooperating Country if the commodity is located in-country at time of purchase. Origin means the country where a commodity is mined, grown or produced. 16 Procurement USAID Geographic Code Code 935 Any area or country including the cooperating country, but excluding the foreign policy restricted countries. Cuba, Laos, Libya, Iran, Iraq, North Korea, Syria. SPECIAL FREE WORLD Code 608 Morocco Code The United States 9

10 Procurement USAID Geographic Code 935 Code 935: Special Free World; includes any area or country in the Free World, including the Cooperating Country (least restrictive). Preferences: 1. U.S. (000) 2. Cooperating Country (608) 3. Non-European (941) 4. Special Free World (935) 18 Local Procurement (if USAID Geo Code = 000) All locally financed procurement must have source and nationality waivers except: Commodities and services only available in the local economy (fuel, rent, etc.) Commodities of 935 origin if transaction is <$5,000 U.S. origin items if the transaction is <$100, Professional Services Contracts <$250,000 Construction Services Contracts <$5,000,

11 Country Restrictions Foreign Policy Restricted Countries: You cannot purchase goods made in, or shipped from, restricted countries. Currently restricted countries are: o Cuba, Iran, Iraq, Laos, Libya, North Korea and Syria If any component of a product is from one of those countries, it cannot be purchased. 20 Special Source Rules Restricted Goods Need prior approval from USAID; and USAID Special Source Rules require procurement from the U.S. (22 CFR ) for: Motor Vehicles (includes trucks, cars, buses, motorcycles, utility vehicles and motorized bicycles) Pharmaceutical Products Agricultural Commodities Contraceptives 21 11

12 What Is a Waiver? Waiver: written permission to eliminate the requirements of a specific policy. Waivers are required whenever the project needs to buy outside the authorized geographic code and has met one of the criteria for a waiver (see 22 CFR Subpart F). Waivers from USAID must be in writing, signed by the Mission Director or as delegated to the AO. 22 Prior approval is deemed to be granted when an item is: In award; In approved budget; and Purchased from a U.S. source 23 12

13 Special Source Example: Purchasing a Motor Vehicle To purchase a motor vehicle, you need the following written documentation from the AO: 1. Approval to purchase the motor vehicle, because it is a restricted good. 2. A waiver to purchase the motor vehicle if it is of non-u.s. source and origin (per special source rules). 24 Exercise 9.1 Procurement Scenario A Objective: Enhance procurement procedure understanding Scenario: You are the authorized official in your organization to approve procurement. A project needs materials printed for an upcoming workshop on gastrointestinal disease and health. Tasks: 1) Review and evaluate the procurement request detailed in the handout for Exercise ) Answer the following questions: 1) Should you approve this procurement? Why or why not? 2) Where is this procurement request strong and where is it weak? 3) Name at least four issues with this procurement, and suggest how the organization might prevent them

14 Best Practices in Procurement Conduct annual procurement planning that includes both office and program equipment, supplies and services. Link procurement planning to budget and workplanning processes. Follow established, written procurement procedures (approval before the fact). Provide for open competition to the extent possible. Obtain quotations, review quotations against established criteria, use evaluation committees and justify vendor selection. o Ensure adequate segregation of duties prepare/review/authorize. Document the procurement process. Keep an inventory of all equipment purchased, and update it regularly, noting condition and location of items (see inventory register). 26 Procurement Documentation What to include in the file: Your documentation should tell the procurement story without the need for additional verbal explanation. The procurement story (file) must include: Request for Quotations or Request for Proposals (including internet /newspaper postings) if required Quotations obtained Bid analysis Evaluation committee outcomes, and justification of vendor selection based on clear criteria Depending on organizational policy, a checklist should be developed to ensure that the organization is regularly keeping standard documentation

15 Procurement Documentation the procurement story (file) may also include: Approval and/or waiver from USAID (if applicable) Approval from organization signatory policy (as applicable) Signed Purchase Order (PO) or Contract Confirmation of receipt of item/signed Property Management Letter (if recipient other than organization) Copy of Vendor s Invoice (stamped PAID ) Relevant correspondence, memos, s, faxes, records of conversations collected throughout the procurement process Printouts of terrorism searches 28 Exercise 9.2 Procurement Scenario B Objective: Improve compliance with procurement regulations. Scenario: A field office for a US NGO in Mali has a cooperative agreement to train radio station personnel across on climate change and environmental impact. The NGO is preparing its procurement plan for the next 12 months. Tasks: Answer the list of questions from the Handout for Exercise 9.2 Procurement Scenario B. Advise what additional steps should be taken on each of the actions to ensure compliance. Relate each of your answers to specific USAID procurement requirement(s)

16 Exercise 9.3 Procurement Flowchart Objective: Improve understanding of procurement process and requirements. Scenario: You are planning to hire a construction company to build a sanitation system. Your cursory estimate is that the project will cost around $150,000 for services and materials. Tasks: 1) Unpack the envelope containing the steps in the procurement process. 2) Use the cutouts of the steps in the procurement process to create a flowchart plotting the procurement process your organization must go through to before hiring a construction company. 3) Compile a checklist of documentation and required materials you will need to fully execute the procurement. 30 How does USAID procurement reform affect DGP Grantees? USAID is making changes to improve its procurement policy and processes and evaluation and monitoring procedures. One effort is to streamline the collection of documents and to ensure procurement compliance of grant recipients. For DGP grantees, this means: You will be asked to self-certify that personal, procurement and travel policies are compliant with USG rules and regulations. You will need to respond to a checklist containing basic requirements before compliance certification can be completed. Your certification will require annual audit reports using A-133 or other audit guidelines

17 Summary Learned how USAID defines procurement and how to comply with USAID s procurement regulations. Learned what you may and may not buy with USG funds. Learned how USAID geographic codes affect procurement. Discussed when and how a waiver or approval should be requested. 32 Questions and Comments? 33 17