Circular CDBG 2015-01
Related to: All CDBG funded projects
Subject: Procurement Standards
Contact: George Hunton, Director of Housing and Community Development; Katy Easterly Martey, Director of Economic Development
Issuance date: April 20, 2015
This CDFA Circular provides information on new procurement standards for grantees and sub recipients, issued by the U.S. Department of Housing and Urban Development (HUD).
This circular also clarifies what procurement standards are required for a private for-profit entity for the purpose of carrying out an eligible activity.
The U.S. Department of Housing and Urban Development (HUD) issued notice SD-2015-01 on December 26th 2014; the subject of the notice is Transition to 2 CFR Part 200, Uniform Requirements, Cost Principles, and Audit Requirements for Federal Awards, Final Guidance.
The purpose of 2 CFR Part 200 is to streamline the Federal government’s guidance and consolidate the requirements from eight OMB Circulars.
This circular provides guidance on procurement only, future circulars will provide guidance on other issues address in 2 CFR Part 200.
The uniform guidance is designed to reduce administrative burden for non-Federal entities receiving Federal awards. The following is an outline of some of the changes,
- Methods of procurement now include a micro –purchase option, which is the acquisition of supplies or services that do not exceed $3,000 (or $2,000 for acquisition for construction subject to the Davis-Bacon Act)
- The threshold for small purchase procedures has been increased from $100,000 to $150,000.
All contracts issued by CDFA after the date of this circular will have the following change.
11. PROCUREMENT. Grantee and any Sub recipient procurement procedures shall be in accordance with state and local procurement practices and regulations, provided that procurements made with Grant Funds adhere, at a minimum, to the standards set forth in 2 CFR Part 200.318 – 326. Grantee shall not use debarred, suspended or ineligible contractors or sub recipients as provided in 24 CFR 570.489 (l).
HUD takes the position that when a CDBG grantee grants funds to a sub recipient who in turn loans the CDBG funds to a private for-profit entity for the purpose of carrying out an eligible economic development project under 24 CFR 570.203 the purchase of goods and services by such for-profit business is not a procurement subject to 2 CFR Part 200.
All other sub recipients are subject to procurement standards set forth in 2 CFR Part 200 regardless of whether they are a for-profit business or non-profit entity.
HUD issued memo.
April 20, 2015