5. Procurement/Property Requirements

Federal Procurement Requirements

Federal grantee agencies are required to establish their own written procedures based on Federal standards for purchasing services, supplies, and other expendable property, equipment, and real property. The standards for procurement are found in regulations 45 CFR 92.36 for local government organizations. The Federal standards were established to ensure that grantee agencies obtain materials and services paid for with Federal funds in an effective manner and in compliance with Federal laws. Grantee agencies are directed to use Federal funds to purchase items and services in the most economical way, and to buy only what they need.

Grantees shall have in place written procurement policies which ensure:

• Procurement need is legitimate;
• Open and free competition;
• Clear specifications for bids;
• Efforts to use small and minority owned businesses;
• Price comparisons/cost analysis;
• Invoices are checked against purchase orders and receiving reports;
• Goods/services are received prior to payment; and
• Contractors comply with the terms of contracts.

Within the parameters of the Federal standards, grantee agencies are allowed to design their own systems for procurement and use whatever forms and workflow processes best suit the organizational structure. Such systems may be more stringent than the Federal requirements, but not less.

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