Talquin Electric Cooperative, Inc.Non-Profit

2019-001 ? Procurement Methods CFDA Title and Number: 97.036 ? Disaster Grant ? Public Assistance Name of Federal Agency: Department of Homeland Security (DHS) Compliance/Internal Control over Compliance: Allowable Cost/Cost Principles Criteria: 2 CFR ? 200.320 Methods of procurement to be followed (a) Informal procurement methods (2) Small purchases (i) states that if small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. 2 CFR ? 200.320 Methods of procurement to be followed (c) Noncompetitive procurement (4) states noncompetitive procurement can be awarded if the Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity. PAPPG Chapter 6: Cost Eligibility ? VIII. Procurement and Contracting Requirements (B.) Procurement and Contracting Requirements for Tribal and Local Government Agencies and Private Nonprofits (3.) Procurement Methods (a) Noncompetitive Procurement states ?The public exigency or emergency for the requirement will not permit delay resulting from competitive solicitation (this exception to competitive procurement is only for work specifically related to the circumstance and only while the circumstances exists. Therefore, Applicants need to immediately begin the process of competitively procuring similar goods and services and transition to a competitively procured contract as soon as the circumstances cease to exist). Condition and Context: The Cooperative utilized a contractor for storm-related services that qualified for the small purchases method of procurement but did not obtain price or rate quotations as required under 2 CFR ? 200.320 (a)(2)(i). The Cooperative did not document exigent circumstances allowing the services to be sole-sourced under 2 CFR ? 200.320 (c)(4) Cause: The Cooperative did not obtain price or rate quotations under the belief that it was under exigent circumstances which would allow the Cooperative to procure contractors in a noncompetitive manner. However, exigent circumstances were not documented to support the sole-sourced contract. Effect or Potential Effect: Misstatements of contract costs. The Cooperative is not in compliance with Federal requirements for methods of procurement, increasing the risk of noncompliance and exposes the Cooperative to the risk of loss of funding. Questioned Cost: $6,750 Recommendation: The Cooperative should ensure that they have a sufficient understanding of the grant requirements and ensure accuracy in the methods of procurement utilized by referencing the authoritative guidance. If the Cooperative has the belief that it is operating under exigent circumstances, it should produce a memorandum detailing the procurement under exigent circumstances. Suggested documentation includes a description of the exigent circumstances supporting why open competition could not be used, justification for the need for the specific good or service, description of any known conflicts of interest, and justification for the period of exigency. When utilizing informal procurement standards, the Cooperative should attempt to obtain price or rate quotations if operating outside of exigent circumstances. Corporation?s Response: The Cooperative concurs with the recommendation. The Cooperative generally supported larger purchases with appropriate documentation of exigent circumstances and will ensure in the future this same procedure is used for items qualifying for the simplified acquisition threshold where sole-sourcing is justified based on exigent circumstances.