As described in Part I through VIII of our previous articles, 14 different compliance requirements could have a direct and material effect on federal grants received by governmental or non-profit organizations. Organizations that utilize Federal programs may need to comply with Procurement and Suspension and Debarment.  These requirements ensure goods and services allowable under a federal grant are obtained at the best cost meeting the quality, quantity, and time restraints, as well as being obtained from local vendors.  In addition, the requirements are intended to promote fair competition while minimizing the risk of exposure to fraud and collusion.

Procurement is the acquisition of goods or services from an external party.  Guidelines for procurement procedures are identified in A-102 Common Rule or OMB Circular A-110 (2 CFR part 215).  Specific requirements might also be included in the grant award or memorandum of understanding from the granting agency.  As a recipient of a grant award, organizations are responsible for:

  • Avoiding purchasing unnecessary items and ensuring the goods and services meet the quality requirements of the grant
  • Goods and services which exceed the simplified acquisition threshold (currently $100,000) are required to go through more stringent procurement, such as sealed bids or competitive proposals. Certain grants may require a bid guarantee or performance bond.
  • Maintaining procurement records. Records need to:

o    Identify the basis for contractor or vendor selection

o    Justify the lack of competition when competitive bids or offers are not obtained

o    State the basis for the award cost or price


In addition to requirements above, if the organization receives ARRA funds, additional conditions need to be met. As stated in the A-102 Common Rule and OMB Circular A-110, Section 1605, ARRA funds cannot be used for the construction, alteration, maintenance, or repair of a public building or work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States.  This is known as the Buy-American Act.  Exceptions are available, such as non-availability, unreasonable cost, and certain international agreements.


Suspension and Debarment:

The Suspension and Debarment requirement is related to the Procurement requirement.  It prohibits organizations from making “covered transactions” with vendors that are prohibited from working on projects financed by federal funds.  “Covered transactions” are transactions that meet or exceed $25,000.  These transactions are not limited to construction and repair projects, and include goods and services an organization purchases throughout the year. When an organization enters into a covered transaction, the organization must verify the entity is not suspended or debarred or otherwise excluded.  This verification may be accomplished by checking the System for Award Management website ( maintained by the General Services Administration (GSA), collecting a certification from the entity, or adding a clause or condition to the contract with the organization.  Through, previously known as the Excluded Parties List System (EPLS), an organization can search for a specific vendor or extract a file to list all suspended and debarred vendors for a state or federal granting agency.


It is important to have the appropriate procedures in place to ensure vendors and contractors are researched prior to bids being awarded and purchases being made for goods and services.  In addition, the results of the website search, the certification, or condition/clause to the contract should be maintained in the vendor/contractor file to prove the organization’s due diligence in meeting this requirement.  Updated information should be obtained at least once a year or prior to any major project or award.

The Organization is responsible for ensuring the Procurement and Suspension and Debarment compliance requirements are met regardless of whatever the contract was performed by the organization or a subrecipient. See a future article on subrecipient monitoring.


See our previous newsletters and upcoming newsletter articles providing specific details on each of the 14 compliance requirements. Please contact Traci Hanson, Shelley Goodrich, or Sandra Weaver with specific questions.