Q: Can different methods of competition, and different purchase approval procedures, be used for purchases of different amounts?

A: Yes, in fact most non-profit grantee agencies in particular, establish, as part of their written procurement procedures, a "tiered" system regarding what competition method is to be used, and which staff member is authorized to approve the purchase for various price levels and for various cost categories.

For example, for small items under $50 the center directors might be authorized to approve a purchase based on cost comparisons at local discount stores, and maybe even pay for it out of a locally maintained petty cash fund. Procurements between $50 and $1,000 might need program director approval and be purchased using telephone quotes from vendors or comparison of catalog prices. Procurements between $1,000 and $5,000 might need approval of the executive director and need written quotes from at least three vendors. Procurements over $5,000 (and audits and other annual bid items) might need board approval and require formal advertising with sealed bids (in addition to the required Federal approvals applicable, such as for equipment or facilities).

Some grantees may also choose tiers that are based on cost categories (as well as price levels), such as purchases of consumable supplies, non-consumable supplies (computers, copiers, small kitchen appliances, etc.), capital equipment, or program or administrative services.

Each grantee agency must decide whether or not to even use a tiered system, and if so, what criteria should be used for each tier level (possibly in consultation with their insurance and bonding providers and their auditor). Whatever method is used must be based on the grantee agency written procurement procedures.

Q: Can the grantee agency use an annual bid process, especially for items we buy in quantity throughout the year?

A: Yes, many grantee agencies do annual bidding for procuring items in bulk, such as classroom supplies, office supplies, paper products, cleaning supplies; and for procuring program and administrative services to be provided by outside contractors. Once a vendor has been selected, that same vendor is then used all year. This saves staff time and enables the grantee agency to get better prices.

Q: How should we document that we got appropriate purchase approvals and competitive bids?

A: Most grantee agencies use a form for each procurement transaction, with columns for each vendor and price. At the bottom of the form is usually space for a narrative statement explaining which vendor was chosen and why. The form is then signed and dated by the procurement officer, and signed and approved by the appropriate authorizing official. All supporting documents are stapled to the back of the form, and the form is filed in the selected vendor’s file. It is not a requirement that all grantee agencies use this exact process, but a variation of this process is used by most grantee agencies.

Q: What other purchasing methods can governmental grantees use that may not be available to non-profit grantees?

A: Grantees that are governmental agencies are encouraged to use inter-governmental agreements for purchasing, and to use cooperative purchasing and consortium arrangements. When feasible, governmental grantees are also encouraged to use Federal excess and surplus property in lieu of purchasing new items.