USAID ProcurementProcedures
Kampala, Uganda
8-11 December 2009
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Procurement
Procurement is the process of acquiring goods,supplies and services. It includes:
•Equipment, spare parts & supplies forprogram activities
•Equipment, office furniture & supplies forproject offices
•Technical assistance by individuals ororganizations
Procurement Rules and Regulations
22 CFR 226 contains:
–Inventory requirements
–Property Management requirements
–Other procurement requirements includingdefinitions and regulations on equipment, codes ofconduct including avoidance of conflict of interest,competition, written procurement procedures,required flow-down clauses, and record keeping
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USAID Rules and Regulations
22 CFR 226
Award
Admin
2 CFR 230
Cost Principles
For Non Profits
Audits
Circular A-133
U.S.-basedorganizations
($500,000threshold)
USAID Guidelinesfor Financial Audits
Contracted byForeign Recipients
Foreign Entities
($300,000 threshold)
Standard
Provisions
ADS
Chapter
303
USAID
Circular A-110 –UniformAdministrativeRequirements
for Grants andAgreements with
Institutions of HigherEducation,
Hospitals, and
Other Non-ProfitOrganizations
Required
as
Applicable
Provisions:
17 for U.S.based
35 for Non-U.S. based
MandatoryProvisions:
21 for U.S.based
17 for Non-U.S. based
Procurement Policy
You may use your own procurement policies and practices aslong as they conform with the following USAID’s eligibilityrequirements and:
1.A written code of conduct preventing and addressing conflictof interests
2.Procurement transactions providing, to the maximum extentpractical, open and free competition
3.Document price or cost analysis in its procurement files
4.Define sound and complete contract for contracts in excess of$10,000. The contract should include provisions that allowadministrative, contractual, or legal remedies for contractorviolation of terms; and suitable provisions for termination by therecipient.
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Recipient Procurement Procedures
At a minimum they should:
Avoid purchasing unnecessary items
All solicitations should provide for: clear and accuratedescription, requirements that bidder/offeror must fulfill;description of technical requirements; specific features
–Remember to compare ‘Apples with Apples’
Procurement made with responsible contractors
–Based on best value to organization (if not the lowest price, thereason must be documented)
Make available to USAID procurement documents
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USAID Thresholds
Note the following USAID procurement thresholds:
1.$3,000 (micro-purchase threshold): over thistransactional amount must obtain at least 3 quotationsand conduct analysis to justify vendor selection.
1.$100,000 (simplified acquisition threshold): requires“full and open competition”. You must issue solicitationpublicly and establish criteria for evaluatingsubmissions.
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Organizational Thresholds
Taking into account USAID thresholds, DGP Partners mustestablish and follow their own organizationalpurchasing thresholds in coordination with signatorypolicies and levels of authority.
*Note* Purchases of similar types of items that can beobtained from the same vendor cannot be separated toavoid meeting thresholds (i.e. separate computer andprinter equipment to avoid reaching the $100,000threshold where public solicitation is required)
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Restrictions on Goods
Standard Provision entitled “USAID Eligibility Rules forGoods and Services”
–Ineligible Goods & Services: Cannot be procured underany circumstances.
–Restricted Goods: Need prior approval from theAgreement Officer (AO).
–Ineligible Suppliers: Cannot procure from firms orindividuals whose name appears on the “Lists of PartiesExcluded from Federal Procurement and NonprocurementPrograms.” www.epls.gov and terrorism databases
What You Cannot Buy – Ineligible Goodsand Services
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•Abortion equipment and services
•Luxury goods and gambling equipment
•Weather modification equipment
•Military Equipment
•Surveillance Equipment
•Commodities and services for support ofpolice or other law enforcement activities
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What You Need Prior Approval For –Restricted Goods
Motor vehicles
Pharmaceuticals
Used Equipment
US.. Government-owned excess property
Agricultural commodities
Pesticides
Fertilizers
Contraceptives
Rules and Regulations
22 CFR 228 contains:
–List of geographic codes
–Waiver definition and criteria
–Source, origin, and nationality definitions andrequirements
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Procurement – USAID Geographic Codes
When undertaking procurement activitiesfirst look at:
–The USAID-specified Project Geographic Code:a three digit code which designates a country ora group of countries
–In Section A of your Cooperative Agreement
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Procurement – USAID Geographic Code
The Source and Origin of the goods procured mustcomply with the authorized Geographic Code.
–Source means the country from which acommodity is shipped to the CooperatingCountry, or the Cooperating Country if thecommodity is located in-country at time ofpurchase.
–Origin means the country where a commodity ismined, grown or produced.
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935935
899899
941941
000000
Procurement – USAID Geographic Code
Code 000
The United States
Code 935
Any area or country
including thecooperating country,
but excluding theforeign policy
restricted countries.
Cuba, Laos, Iran,North Korea, Syria.
“SPECIAL FREEWORLD”
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Procurement - USAID Geographic Code 935
Code 935: Special Free World. Includes anyarea or country in the Free World, including theCooperating Country (least restrictive). Preference
1.U.S.
2 . Host country
3. Code 941
4. Code 935
Local Procurement (If USAID Geo Code = 000)
All locally financed procurement must have source andnationality waivers except:
Commodities and services only available in the localeconomy (fuel, rent, etc.)
Commodities of 935 origin if transaction is <$5,000
U.S. origin items if the transaction is <$100,000
Professional Services Contracts < $250,000
Construction Services Contracts <$5,000,000
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Country Restrictions
Foreign Policy Restricted Countries
–You cannot purchase goods made in, orshipped from, those countries.
–Currently those countries are:
•Cuba, Iran, Libya, North Korea andSyria
–If any component of a product is from oneof those countries, it cannot be purchased.
Special Source Rules – Restricted Goods
Need prior approval from USAID and
USAID “Special Source Rules” require procurementfrom the U.S. (22 CFR 228.13) for:
–Motor Vehicles (includes trucks, cars, buses,motorcycles, utility vehicles and motorized bicycles)
–Pharmaceutical Products
–Agricultural Commodities
–Contraceptives
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What Is a Waiver?
Waivers are required whenever the project needsto buy outside the authorized geographiccode and has met one of the criteria for a waiver(see 22 CFR 228.50 Subpart F).
Waivers from USAID must be in writing, signedby the Mission Director, or as delegated to theAO.
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Approval Requirements
Request approval from the USAID AO for thefollowing:
–Items not in the budget / program description
–Restricted goods as noted above (includingmotor vehicles)
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Motor Vehicle Example
To purchase motor vehicles, you need thefollowing written documentation from the AO:
1.Approval to purchase the motor vehiclebecause it is a restricted good
2.A waiver to purchase the motor vehicle if itis non-U.S. source and origin (per specialsource rules)
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Group Exercise
Plot the procurement process your organizationwill have to go through before purchasing an item.
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Best Practices in Procurement
1.Conduct annual procurement planning that includes both officeand program equipment, supplies and services
2.Link procurement planning to budget and workplanningprocesses
3.Follow established written procurement procedures
4.Provide for open competition to the extent possible
5.Obtain quotations, review quotations against establishedcriteria, use evaluation committees and justify vendor selection
–Ensure adequate segregation of duties – prepare/review/authorize
6.Document the procurement process
7.Keep an inventory of all equipment purchased and update itregularly, noting condition and location of items (see inventoryregister)
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Documentation - Procurement
Should tell the “procurement story” without additionalverbal explanation
‘Procurement story’ should include:
1.Request for Quotations or Request for Proposals (includinginternet / newspaper postings) – if required
2.Quotations obtained
3.Bid analysis
4.Evaluation committee outcomes, and justification of vendorselection based on clear criteria
Depending on organizational policy, a checklist shouldbe developed to ensure the organization is regularlykeeping standard documentation
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Documentation – Procurement Continued
Approval and/or waiver from USAID (if applicable)
Approval from organization signatory policy (as applicable)
Signed Purchase Order or Contract
Confirmation of receipt of item/Signed PropertyManagement Letter (if recipient other than organization)
Copy of Vendor’s Invoice (stamped paid)
Relevant correspondence, memos, faxes, records ofconversations collected throughout the procurementprocess
Terrorism searches
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Procurement Scenarios
Use the following procurement scenarios to workthrough and evaluate:
–Procurement systems and procedures working well
–What could use improvement in the scenario
–Potential procurement issues and how to preventthem
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Questions?
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