Research Policy Analysis and Coordination
Chapter 16
Revision History
- Archive of Chapter 16 prior to September 22, 2022: Chapter 16, specifically 16-420, was republished on September, 2022 to include clarification regarding UC Legal or campus counsel review of terms which commit UC to legally binding alternative dispute resolution (e.g. arbitration).
16-100 Purchasing/Subaward Authority
- 16-101 Definition
- 16-102 Distinction From "Expenditure" / "Budget" Authority
- 16-110 Purchasing Authority - The President
- 16-111 Limitations on the President's Purchasing Authority
- 16-120 Purchasing Authority - Chancellors/Laboratory Directors/Administrative Officers
- 16-130 Purchasing Authority - Materiel Managers/Librarians/Others
- 16-140 Low-Value Purchase Authorization
- 16-150 Unauthorized Purchases
16-200 Purchasing Responsibilities
- 16-210 Materiel Management Office, Office of the President
- 16-220 Contract and Grant Officers
- 16-230 Determination of Subrecipient or Contractor
16-300 Purchasing Policies
- 16-310 External Purchasing Policies and Requirements
- 16-311 External "Prior Approval" Requirements
- 16-312 "Flow-Down" of External Policies and Requirements Through Purchasing Transactions
- 16-320 Purchase Contracts
- 16-321 Special Documents
- 16-322 General Counsel Approval
- 16-323 Contract and Grant Officer Coordination
- 16-330 Planned Purchasing Program
- 16-331 Policy
- 16-332 Responsibility
- 16-333 Laboratory Participation
- 16-340 Competition
- 16-341 Contract and Grant Officers' Responsibility
- 16-350 Negotiation
- 16-360 Conflicts of Interest
- 16-370 Socio-Economic Requirements
16-400 Subawards
- 16-410 Subawards for Research
- 16-420 Elements of a Standard Research Subaward
- 16-430 Subrecipient Monitoring
- 16-440 Fixed-price Subawards
16-500 Special Purchasing Situations
- 16-510 Equipment and Equipment Installation
- 16-520 Service Contracts
- 16-540 Computer Services
- 16-550 Consulting Services
- 16-560 Alcohol, Drugs, Hazardous and Radioactive Materials
- 16-570 Construction
16-999 Related University References
Chapter 16-100
16-101 Definition
Purchasing/subaward authority is the authority to make legally binding commitments on behalf of the University to purchase goods or services from external sources, including entering into subawards (i.e., subcontracts or subagreements) (see 16-320 through 16-323). The terms “purchasing authority” or “purchasing” as used in this Chapter encompasses subawards (subcontracts and subagreements). Purchasing authority is delegated from the President to the Chancellors/Laboratory Director who redelegate it to appropriate campus/Laboratory administrative staff. (See 16-110 through 16-130.) Authority for campus Contract and Grant Officers to enter into subawards is described in 16-220 below.
Authority to enter into independent consultant agreements with parties outside of the University is separate from purchasing authority and, as such, is conveyed though a separate delegation of authority. See 16-442 for coverage on independent consultant agreements.
Policy governing the purchase of goods or services from sources within the University (i.e., from other campuses or from the DOE Laboratory) is presented in 10-250 through 10-253.
16-102 Distinction From "Expenditure" / "Budget" Authority
Authority for purchasing transactions is distinct from authority to budget or expend funds. Budget or expenditure authority refers to the establishment of budgets and to the authorization of budget transaction requests and purchasing requests. Expenditure/Budget authorities and related responsibilities are discussed in Chapter 6.
16-110 Purchasing Authority - The President
Pursuant to its powers as provided by the Constitution of the State of California and described in Chapter 13, The Regents of the University have granted authority to the President to execute on behalf of The Regents all contracts and other documents necessary in the exercise of the President's duties, including those for purchasing goods and services, within the restrictions of Standing Order 100.4(dd) itemized in 16-111.
16-111 Limitations on the President's Purchasing Authority
The President must seek specific authorization The Regents (see 10-210) for:
- obligations on the part of the University which require the construction of facilities not previously approved;
- exceptions to approved University programs and policies;
- obligations on the part of the University to expenditures or costs for which there is no established fund source;
- agreements for the provision of employee group insurance benefits, with the understanding that Board authorization shall not be required for periodic revisions to existing agreements when the revisions do not substantially change the authorized scope of the benefit plans;
- agreements with associations composed of medical staff for collection of professional fees for services rendered to patients at University or affiliated teaching hospitals; and
- agreements by which the University assumes liability for conduct of persons other than University officers, agency, employees, students, invitees, and guests. This restriction does not apply to agreements under which the University assumes responsibility for the condition of property in its custody.
However, the President is authorized to take all actions and to execute all documents necessary in the exercise of the President's duties when an emergency precludes prior submission to the Board of Regents (see 10-213(b)).
16-120 Purchasing Authority - Chancellors/Laboratory Directors/Administrative Officers
The President has delegated to Chancellors and Laboratory Director (DA 2100) the “authority to execute purchase contracts, subcontracts, and standard purchase orders for goods and services" (but excluding independent consultant agreements) with the following additional provisos:
- purchase contracts, subcontracts, or standard purchase orders are issued in accordance with University policy (refer to 16-300 and 16-370);
- funds are available;
- prior approval is secured as required pursuant to the provisions of a contract, grant, or other extramural sponsor agreement (refer to 16-311); iv) prior approval shall be obtained from the Treasurer of The Regents for any acquisition or lease/purchase which contemplates or will result in the issuance of Certificates of Participation, in order to provide funding for the transaction; and
- approval as to form is secured from the General Counsel for any purchase contract other than that made on the standard purchase order form or for any changes in the standard terms and conditions (see 16-320);
- Chancellors and Laboratory Directors are authorized to redelegate this authority to the administrative officers responsible for purchase of all goods and services.
16-130 Purchasing Authority - Materiel Managers/Librarians/Others
The administrative officers responsible for purchase of all goods and services may further redelegate their purchasing authority as described in 16-120 to the Librarian for the purchase of books and periodicals and to the Materiel Manager for all other goods and services or to other campus personnel. “Any redelegation of these authorities to other than the University Librarian or Materiel Manager shall have the prior approval of the Senior Vice President - Business and Finance, except that the University Librarian and Materiel Manager may redelegate this authority to individuals under their supervision without obtaining such approval or providing copies to the above University officials.” (DA2100) As such, for campuses where the Sponsored Projects Office has delegated authority to negotiate and sign subawards (i.e., subcontracts and subagreements) under awards accepted in that office, this authority is redelegated from the campus administrative officer with purchasing authority under DA 2100 to the Sponsored Projects Office Director. This redelegation must have the prior approval of the Executive Vice President – Business Operations, (formerly the Senior Vice President - Business and Finance).
16-140 Low-Value Purchase Authorization
Materiel Managers may delegate "Low-Value" purchasing authority to individuals in departments outside the purchasing department. Such a delegation of authority must be in writing and include written procedures adequate to ensure observance of good business practices and compliance with University purchasing policy.
The conditions under which such delegations may be made and the criteria attached thereto are discussed in detail in Business and Finance Bulletin BUS-43, Part 3, Section IX, B., "Low-Value Purchase Authorization." The amount an individual is authorized to expend shall not exceed $2,500 per transaction in accordance with the criteria specified. Greater amounts may be authorized in an emergency situation.
Typically, the “Low-Value” purchasing authority is inappropriate for purchases/subawards that pay a subrecipient since agreements where the University is entering into a transaction with a subrecipient, as defined below, require subrecipient monitoring that typically is not included in the “Low-Value” purchase process.
16-150 Unauthorized Purchases
An individual who makes a purchase of goods or services without proper authority shall be responsible for payment of the charges incurred. The amount of payment and conditions under which such payment must be made by an individual are discussed in Business and Finance Bulletin BUS-43, Part 3, Section VIII, "Unauthorized Purchases."
Chapter 16-200
It is the responsibility of each Materiel Manager and of others possessing purchasing authority as set forth in 16-100 through 16-150 to carry out their purchasing responsibilities in accordance with University purchasing policies as set forth in Business Finance Bulletin BUS-43 and 16-300 through 16-370. University personnel are expected to abide by the Principles and Standards of Purchasing Practice of the National Association of Purchasing Management and the Code of Ethics of the National Association of Education Buyers (Exhibit B, Business and Finance Bulletin BUS-43.
In addition, the University must comply with all applicable external policies and requirements accepted by the University as a condition of extramural sponsor funding(16-310 through 16-312).
16-210 Materiel Management Office, Office of the President
The Office of the President Executive Director of Strategic Sourcing develops and recommends policies, monitors compliance, provides effective coordination and counsel in the purchasing area, consistent with the policies set forth in Business and Finance Bulletin BUS-43, Materiel Management, and in 16-300 through 16-370. This position administers the Planned Purchasing Program (see 16-330); represents the University with external agencies; assesses proposed and implements applicable State and federal regulations; formulates long-range planning; conducts special studies as needed; and staffs task forces and cross-functional work groups. Further detail is presented at Business and Finance Bulletin BUS-43, Part 2.I.B.
16-220 Contract and Grant Officers
It is the responsibility of University Contract and Grant Officers to be knowledgeable about the purchasing policies contained in this Chapter 16 and in Business and Finance Bulletins BUS-43 and BUS-34, Securing the Services of Independent Consultants, in order to effectively exercise their authority to solicit, approve, and accept or execute extramural funded awards and to carry out their related contract and grant administration responsibilities and duties pursuant to 10-300 through 10-320, as well as any redelegated purchasing authority to negotiate and sign subawards under the awards administered by their offices, as applicable for each specific campus, and redelegated to them under DA 2100. (See Section 16-130 above.)
16-230 Determination of Subrecipient or Contractor
The Uniform Guidance (2 CFR 200.330) requires that the University make a case-by-case determination as to whether a party that is receiving “pass through” federal funds is a subrecipient or a contractor. Note: The term “contractor” is functionally equivalent to the term “vendor.” For the purposes of this section, a “non-Federal entity” is a campus location.
Section §200.330 Subrecipient and Contractor determinations
The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section.
(a) Subrecipients. A subaward is for the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship with the subrecipient. See §200.92 Subaward. Characteristics which support the classification of the non-Federal entity as a subrecipient include when the non-Federal entity:
(1) Determines who is eligible to receive what Federal assistance;
(2) Has its performance measured in relation to whether objectives of a Federal program were met;
(3) Has responsibility for programmatic decision making;
(4) Is responsible for adherence to applicable Federal program requirements specified in the Federal award; and
(5) In accordance with its agreement, uses the Federal funds to carry out a program for a public purpose specified in authorizing statute, as opposed to providing goods or services for the benefit of the pass-through entity.
(b) Contractors. A contract is for the purpose of obtaining goods and services for the non-Federal entity's own use and creates a procurement relationship with the contractor. See §200.22 Contract. Characteristics indicative of a procurement relationship between the non-Federal entity and a contractor are when the contractor:
(1) Provides the goods and services within normal business operations;
(2) Provides similar goods or services to many different purchasers;
(3) Normally operates in a competitive environment;
(4) Provides goods or services that are ancillary to the operation of the Federal program; and
(5) Is not subject to compliance requirements of the Federal program as a result of the agreement, though similar requirements may apply for other reasons.
(c) Use of judgment in making determination. In determining whether an agreement between a pass-through entity and another non-Federal entity casts the latter as a subrecipient or a contractor, the substance of the relationship is more important than the form of the agreement. All of the characteristics listed above may not be present in all cases, and the pass-through entity must use judgment in classifying each agreement as a subaward or a procurement contract.
Campuses are encouraged to develop systems that will document that the above determination is made when awarding federal funds as a pass-through entity.
Chapter 16-300
Business and Finance Bulletin BUS-43 introduction sets forth guidelines for “appropriate implementation of the policies….” relating to purchasing activities. These include:
- "recognition that the interests of the people of the State of California are paramount and that University Materiel Management policies and practices should be developed to best serve those interests,
- recognition that the basic purpose of Materiel Management is to support the teaching, research, and public service missions of the University in the most cost effective manner,
- continuing development and refinement of University purchasing policies in accordance with good business judgment and normal business practice as applicable to the University's total operations,
- the firm belief that it is in the overall interest both of extramural sponsors and the University to limit as much as possible the effect of sponsor regulations on University policy and administration."
Specific purchasing policies are presented in 16-310 through 16-370 and in Business and Finance Bulletin BUS-43 and apply to all campus and Laboratory purchasing activities unless otherwise indicated.
16-310 External Purchasing Policies and Requirements
Certain federal and State laws and regulations also govern University purchasing activities. Some obligations are required by a particular extramural sponsor award. In such cases, the Contract and Grant Officer must coordinate such requirements with the responsible purchasing personnel during the proposal, negotiation, acceptance/execution, and post-award administrative phases, as appropriate. Other extramural sponsors’ requirements fall under general obligations for the University, unrelated to any particular extramural award. Some of these are included in 16-F01 through 16-F07 and 16-S01.
The Executive Vice President-Business Operations is responsible for providing information on all such requirements through the Executive Director, Strategic Sourcing, the Director-Research Administration Office, as applicable, and through other appropriate channels to Chancellors and Laboratory Directors who, in turn, shall establish appropriate procedures and controls to ensure compliance.
See 16-320 through 16-323 for information on purchase contracts under externally funded federal and State awards.
16-311 External "Prior Approval" Requirements
Both general and specific purchasing requirements imposed by external fund sources may require that the University to obtain prior approval from the sponsoring agency prior before a specific purchasing action.
16-312 "Flow-Down" of External Policies and Requirements Through Purchasing Transactions
Sponsored agreements often require the University to include in its subcontracts sponsor-specific provisions or “flow-down” terms from the sponsored agreement which govern purchase contracts with vendors for the acquisition of goods or services. Such flow-down provisions must also be included in purchase contracts as well as in subawards, if required by the prime sponsored award , in accordance with 16-320 through 16-323.
16-320 Purchase Contracts
Purchase contracts (e.g., purchase orders and subcontracts) are the legal documents which bind the University when purchasing goods and services from sources outside of the University. (Coverage on appropriate instruments for purchasing goods or services from sources within the University, i.e., from other campuses or DOE Laboratories, is presented in 10-240 through 10-253).
Policy coverage and details regarding purchase contract form and content, compliance enforcement, claims or disputes, and revisions to terms are contained in Business and Finance Bulletin BUS-43, Part 3“Purchase Transactions”. Generally, all purchase contracts should be in writing using standard purchase order forms and standard terms and conditions of purchase as approved for use by the Executive Director of Strategic Sourcing and included in Business and Finance Bulletin BUS-43, Exhibit C.
16-321 Special Documents
Purchase contracts may need to be specifically tailored for unusually complex or high-value items or services, or for purchases under extramural sponsor agreements which require flow-down provisions as discussed at 16-312. Such purchase contracts shall be entered into only when these documents have been approved and coordinated in accordance with 16-322 and 16-323.
16-322 General Counsel Approval
No changes, deletions, exceptions, or additions to the standard terms and conditions shall be made to purchase contract terms in BUS 43, Exhibit C, without written approval of the General Counsel. (See BUS-43 Part 3, Section III.G.2.
16-323 Contract and Grant Officer Coordination
For campuses where the campus Purchasing Office is responsible for any subawards for research and development work under awards accepted by the campus Contract and Grant Office, such subawards (subcontracts and subagreements) must be coordinated in advance with the respective campus Contract and Grant Officer to ensure flow-down of applicable requirements from the prime award. In addition, purchase contracts for unusually complex or high-value items or other services under an extramurally funded awards should be coordinated with the respective campus Contract and Grant Officer.
16-330 Planned Purchasing Program
16-331 Policy
University policy seeks to make purchases at the lowest possible overall cost through planned, quantity purchasing. To this end, regional and University-wide pool purchases, commodity agreements, and price schedules shall be utilized to the maximum practicable extent. These mechanisms comprise the University's Planned Purchasing Program which is discussed in Business and Finance Bulletin BUS-43. BUS-43, Part 4 provides definitions, guidelines, and coverage on program management, purchase transactions, and State supply schedules and contracts for the Planned Purchasing Program.
16-332 Responsibility
The Executive Director, Strategic Sourcing, shall represent the University in its relations with the State Procurement Office, Department of General Services, to secure mutually beneficial supply agreements.
The Executive Director is also responsible for all other requirements described in BUS-43 including chairing the Planned Purchasing work group which advises on commodity assignments, development of systems for the Planned Purchasing Program, establishment of criteria for determining when consolidated purchasing should be undertaken, and review and recommendation of changes to the Program.
16-333 Laboratory Participation
The prime Department of Energy contract which governs the Lawrence Berkeley National Laboratory (LBNL) require the use of certain federal government sources not generally available to campuses. When they would be cost effective and there would be no conflict with federal requirements, LBNL may use University-wide pool purchases, commodity agreement, and price schedules.
16-340 Competitive Bids
BUS-43, Part I, defines a competitive bid as “a minimum of three qualified suppliers submitted in accordance with a solicitation from the Materiel Manager.” University policy requires competitive bids for “any transaction expected to involve an expenditure of $50,000 or more for goods or services, other than personal or professional services, unless it is determined that a brand or trade name article, thing or product, or proprietary service is unique, available only from a sole source, or is designated to match others used in or furnished to a particular installation, facility, or location.” (BUS-4, Part 3. III. D.) For transactions for less than $50,000, the Materiel Manager (or designee) may negotiate orally or in writing with one or more vendors . In such exceptional circumstances, purchasing transactions shall occur in accordance with 16-350. Purchasing transactions and subawards shall not be artificially divided into separate transactions to avoid or change competitive bidding requirements.
Implementing policies and procedures for competition bidding are located in Business and Finance Bulletin BUS-43, Part 3, “Purchasing Transactions.” [http://www.ucop.edu/ucophome/policies/bfb/bus43p3.pdf] Competition bidding requirements for individual consultants are set forth in Business and Finance Bulletin BUS-34, “Securing the Services of Independent Consultants,” Part VI. (See 16-442.
16-341 Contract and Grant Officers' Responsibility
Contract and Grant Officers shall not commit the University through submission of a legally binding offer to an extramural sponsor, to the purchase of a particular brand name product, or otherwise restrict competitive procurements under a subsequent award, unless such brand name product or other restriction meets the exception from competition criteria discussed in 16-340 and Business and Finance Bulletin, BUS-43.
16-350 Negotiation
When purchasing transactions involve goods or services which meet the exception-from-competition criteria discussed in 16-340, such transactions may be conducted through negotiation in accordance with Business and Finance Bulletin BUS-43, Part 3.
16-360 Conflicts of Interest
The University complies with federal and State laws concerning purchasing transactions made with or influenced by current or past employees of the University and the near-relatives of such employees, University policy coverage in this area is provided in BUS-43, Part 7, “Employee-Vendor Relationships,” and BUS-34.
16-370 Socio-Economic Requirements
The University of California complies with federal and State law regarding equal employment opportunity and affirmative action. The University’s Policy to Ensure Equal Opportunity in Business Contracting, January 1, 1996.
“The University of California Administrative Guidelines to Ensure Equal Opportunity in Business Contracting” were issued to Materiel Managers and Contracting Officials by the President effective January 1, 1996. In the area of purchasing goods and services, these Guidelines provide that "the University will continue to set goals and timetables for small, disadvantaged, women-owned, and disabled veteran business enterprises where such goals and timetables are required as a condition of federal or state funded contracts or grants....In addition, the University will continue to utilize outreach programs to assure equality of opportunity." The guidelines recommend a number of different outreach activities to be employed, and require each University location to designate a knowledgeable official(s) to oversee outreach activities. Campuses are further required to maintain separate statistical records for purchases from small businesses, small disadvantaged businesses, women-owned businesses, and disabled veteran businesses, compared to total dollars expended to all businesses. This statistical information is to be submitted to the Office of the President not later than August 15 each year.
OP Strategic Sourcing provides guidance to campus Materiel Managers regarding federal- or State-wide contract or grant requirements under agreements for research, training, or public service, such as requirements incorporated in Federal Acquisition Regulation Subpart 19.7 (see 16-F02), OMB Circular A-110 Section __.44(b) (see 16-F01), and the State Public Contract Code (see 16-S01) as well as any University-wide programs regarding purchases from small, disadvantaged, women-owned, and disabled veteran businesses, in Business and Finance Bulletin BUS-43, Part 5, Purchasing and Public Policy.
The role of the campus Contract and Grant Office, as stated in the guidelines, is to advise campus purchasing offices when any contract or grant has transaction-specific requirements regarding purchases from disadvantaged or women-owned businesses under that award, such as a federal contract with subcontracting plan requirements. (See 16-F02.).
The OP Facilities Management Department provides guidance on implementing the University “Administrative Guidelines” cited above with respect to awarding and administering construction contracts. (See University Facilities Manual, 1.5 Equal Opportunity Policy.)
Chapter 16-400
16-410 Subawards for Research
The basic policies governing the issuance of such subawards for research are contained in Business and Finance Bulletin BUS-43 (PDF) and in the conditions of the Presidential delegation DA2100.
BUS-43 defines "Subagreement" as:
A Purchase contract issued by the University, under an extramural prime award, to implement a portion of the scope of work, to perform scholarly or professional instruction, or to perform public service programs relating to research or to scholarly or professional instruction.
Though such a subagreement could be issued using a University Purchase Order with standard terms and conditions as are included in BUS-43, these standard terms and conditions are not tailored to meet the requirements of a subaward to an entity identified as a subrecipient conducting research. In most cases, when the entity receiving the University agreement has been identified as a subrecipient, as opposed to a contractor, it will be necessary to develop subagreements containing flow-down provisions as required by the extramural prime award under which the subagreement is written, and terms and conditions which are unique and appropriate to the individual project. Please see section 16-230 Determination of Subrecipient or Contractor for the federal guidelines on determining if a given purchase is a subaward for research.
University policy requires competition in the placement of its purchases. A purchase may be placed without competition if the purchase is for a unique item or unique service, or is available from only one source. If a purchase is made without competition, the noncompetitive action must be justified. The justification must be in writing and made before the purchase is placed. The purchasing agent for a transaction is responsible for preparing or obtaining the justification for noncompetitive procurement. The foregoing applies to subagreements placed by the University under extramural prime awards.
Subagreements under extramural prime awards are likely to be requested to be placed without competition. Therefore, when a proposal to a sponsor includes a proposed sole source subagreement, the Principal Investigator must provide the facts which justify a noncompetitive subaward prior to submission of the proposal to the funding agency. Such a justification may be on the basis that the subject/scientific/technical expertise is available only from the designated sole source. Given that subrecipients by definition are conducting work that is research and that cannot be obtained from other entities because of its unique intellectual, experimental, and research nature, a simple justification is all that is required. Additionally, most subrecipients are issued subagreements with budgets that are based on the entities’ federally negotiated rates and therefore, an extensive cost analysis is not required. However, in the event an entity does not have a federally negotiated rate agreement or another federally approved rate, a cost analysis may be appropriate, consistent with BUS-43.
16-420 Elements of a Standard Research Subaward
The form and format of a subaward is primarily driven by the structure of the incoming award from the prime funding agency. The following elements are the most common components that may be included in a complete subaward agreement. The specific details of the project scope of work, as well as the requirements of the incoming agreement and any applicable laws, regulations and policies will also affect the final language.
|
Category |
Specific Clauses Include |
Basic Requirements |
|---|---|---|
|
Basic Structure |
Preamble |
Identifies the parties, funding source, and project. It may include key incoming award data as well as internal Campus reference information such as the assigned subaward number. It may provide background for the agreement. It should not contain any terms of the agreement. |
|
Contacts/Notices |
Includes the key contact information for all parties for communication regarding the ongoing project. At minimum, the Authorized Institutional Official (AOR) for each party must be included with their contact information. |
|
|
Endorsement Statement |
May include certification statement for the AORs regarding their authority to bind their institution and their endorsement of the agreement as well as any applicable representations and certifications included in the subaward agreement. |
|
|
Technical Requirements |
Scope of Work |
Incorporates the final approved scope of work for the project as a legal requirement of the subaward agreement. It should include a prior approval requirement for changes that constitute a change in scope. |
|
Project Management |
Identifies the pass-through entity (PTE) Principal Investigator (PI) and designates the Subrecipient PI. It may include language to incorporate a prior approval requirement for change of Subrecipient PI. |
|
|
Technical Reporting |
Specifies the requirements for technical reporting by the Subrecipient to PTE. It should include a specific schedule for reports and designate to whom reports should be submitted. Generally, technical reports are submitted directly to the PTE PI. However, they may be directed to other project staff depending on the specific requirements of the project. It may include invention/patent reporting. |
|
|
Financial Requirements |
Compensation |
Obligates the current funding and may specify the total estimated funding. It also sets the funding framework as cost reimbursement or fixed price. It should include any cost limitations imposed by the Sponsor of the incoming award. It may specify prior approval requirements for rebudget. |
|
Term |
Obligates the current budget period and may specify the total estimated project period. |
|
|
Payment and Invoicing |
Specifies the method and frequency of payment. It establishes procedures for submitting invoices for payment. It may include requirements for management of a Working Capital Advance. |
|
|
Audit and Records |
Specifies the requirements for the retention of project records, including financial records. It grants the Sponsor for the incoming award audit rights and access. |
|
|
Legal Considerations |
Governing Law |
Specifies the ruling jurisdiction for legal actions under the subaward. |
|
Disputes |
Establishes procedures for resolution of disagreements regarding the project. It may include provision for arbitration, mediation, and rules of order. It may also include a statement that the outcome does not prevent the parties from pursuing any legal recourse available to them under the law. Consult with campus counsel before accepting an agreement term that commits UC to legally binding alternative dispute resolution (e.g. arbitration). |
|
|
Prior Approval Requirements |
Specifies any actions that require prior approval of the PTE and the appropriate procedure to seek approval. May be a separate provision or incorporated into individual clauses as applicable. |
|
|
Use of Names/Publicity and Publication |
Specifies requirements for when Subrecipient must seek approval to use PTE and/or Sponsor’s name for the purposes of publicity. It should include a provision excluding the requirement for scholarly publications and internal reports in accordance with Subrecipient’s policies, procedures and legal requirements. It may include provision for attribution of Sponsor funding in publications in accordance with the requirements of the incoming award. |
|
|
Independent Contractor |
Specifies that the subaward agreement does not create an employer and employee relationship between the University of California and the Subrecipient, its officers, agents, and/or employees. |
|
|
Incorporation Clause(s) |
Incorporates the applicable terms and conditions of the incoming agreement into the subaward agreement and flows down the required provisions to the Subrecipient. |
|
|
Integration Clause |
Specifies that the subaward agreement is the complete and final agreement and that no prior written or oral representations apply once the agreement is endorsed. |
|
|
Insurance and Indemnification |
Establishes the limitations on liability as agreed to in advance between the parties, as well as the minimum requirements for the Subrecipient’s insurance coverage for the project. |
|
|
Representations and Certifications |
Incorporates any representations and certifications required to be endorsed by the Subrecipient. |
|
|
Anti-Terrorism and/or Export Control |
Incorporates US Federal Anti-Terrorist Financing and Export Control regulations as they pertain to the Subrecipient and/or the source of funding. |
|
|
Closeout |
Provides the specific requirements needed to terminate and close the subaward, including any final financial and technical reports or deliverables. (Please see C&G Manual Chapter 2-770.) |
|
|
Intellectual Property and Work Products |
Copyright |
In accordance with UC IP Policy, specifies that Subrecipient holds ownership of Subrecipient’s copyrightable works and provides for license requirements PTE needs in order to meet the requirements of the incoming agreement. |
|
Patent |
Specifies who holds ownership of patent in accordance with the rules for inventorship and UC IP Policy. Generally provides for any future license PTE needs in order to meet the requirements of the incoming agreement. |
|
|
Data Rights |
Specifies Subrecipient holds ownership of the data generated by the Subrecipient’s employees under the agreement and provides for access rights that PTE needs in order to meet the requirements of the incoming agreement. |
|
|
Compliance Clauses |
Conflict of Interest |
Specifies requirements for complying with conflict of interest requirements of the incoming award in accordance with the PTE’s policies and procedures. |
|
Human Subjects |
Specifies the regulatory requirements and procedures governing human subjects research conducted under the subaward agreement. |
|
|
Animal Subjects |
Specifies the regulatory requirements and procedures governing animal subjects research conducted under the subaward agreement. |
16-430 Subrecipient Monitoring
If a subaward is made under a federal prime award, then 2 CFR 200.331(b) requires pass-through entities to evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in 2 CFR 200.331 (d) and (e), which may include considerations of such factors as:
- The subrecipient’s prior experience with the same or similar subawards;
- The results of previous audits, including whether or not the subrecipient receives a Single Audit in accordance with audit requirements described in Subpart F – Audit Requirements, and the extent to which the same or similar subaward has been audited as a major program;
- Whether the subrecipient has new personnel or new or substantially changed systems; and
- The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency.
Pursuant to §200.331(d), pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subawards; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include:
- Reviewing financial performance reports required by the pass-through entity.
- Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient form the pass-through entity detected through audits, on-site review, and other means.
- Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by 2 CFR §200.521 Management decision.
- 200.331(e) provides that depending upon the pass-through entity’s assessment of risk posed by the subrecipient as described in §220.331(b), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals:
- Providing subrecipients with training and technical assistance on program-related matters; and
- Performing on-site reviews of the subrecipient’s program operations;
- Arranging for agree-upon-procedures engagements as described in 2 CFR §200.425 Audit services.
Pass-through entities must evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Such evaluation can include:
- Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in 2 CFR §200.207 Specific conditions.
- Verify that every subrecipient is audited as required by Subpart F when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR §200.501 Audit requirements.
- Consider whether the results of the subrecipient’s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records.
- Consider taking enforcement action against noncompliant subrecipients as described in 2 CFR §200.339 Remedies for noncompliance.
In general it is best to keep the level of subrecipient monitoring in line with the Campus’s standard business processes and procedures, as well as the prime agreement reporting requirements. The primary tools for monitoring the financial aspects of the project are the invoicing procedures included in the payment provision. Annual financial reporting is also commonly required for projects that exceed a twelve month period, although campus procedures may allow accepting the existing invoices in lieu of financial reports when sufficient detail is provided for monitoring purposes. The programmatic reporting also affords a baseline level of monitoring for the Principal Investigator to monitor the technical progress, as well as any project timelines for the research program at the Subrecipient Institution. As the recipient of the technical reports, the Principal Investigator is responsible for ensuring that the work has been completed prior to any invoices being approved for payment. Should a Subrecipient be assessed a medium to high level of risk, additional requirements should be included in the final subaward agreement based on the campus’s evaluation of that subrecipient. The particular details of the project plan and the sponsor requirements should also be taken into account when developing special provisions for the purposes of risk mitigation in individual subawards. If a campus determines that a given subrecipient will require a formal audit, then the cost of that audit can be borne by the federal award. (Please see 2 CFR 200.425(c)) Such a determination would be made ideally at the time of proposal submission and included in the proposed budget.
16-440 Fixed-price Subawards
In some cases, Contract & Grant Officers may determine that the most effective mechanism for the work being performed by a subrecipient is a fixed-price award. For subawards that are made on a Federally funded prime award, 2 CFR 200.332 indicates that with prior written approvals from the Federal awarding agency, a pass-through entity may provide subawards based on fixed-amounts up to the Simplified Acquisition Threshold (currently set at $150,000), provided that the subawards meet the requirement for fixed amount awards in §200.201 Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts.
The requirements for fixed-amount awards are:
- The award is negotiated using the cost principles as a guide. The pass-through entity may use fixed amount awards if the project scope is specific and if adequate cost, historical, or unit pricing data is available to establish a fixed amount subaward based on a reasonable estimate of actual cost. Payments are based on meeting specific requirements of the subaward agreement. Accountability is based on performance and results. Except in the case of termination before completion of the award, there is no required review of the actual costs incurred by the subrecipient in performance of the subaward. Some of the ways in which the subaward may be paid include, but are not limited to:
- In several partial payments, the amount of each agreed upon in advance, and the “milestone” or event triggering the payment also agreed upon in advance, and set forth in the award;
- On a unit price basis, for a defined unit or units, at a defined price or prices, agreed to in advance of performance of the subaward and set forth in the subaward; or,
- In one payment at subaward completion.
- A fixed amount subaward cannot be used in programs which require mandatory cost sharing or match.
- The subrecipient must certify in writing at the end of the subaward that the project or activity was completed or the level of effort was expended. If the required level of activity or effort was not carried out, the amount of the subaward must be adjusted.
- Periodic reports may be established for each subaward.
- Changes in principal investigator, project leader, project partner, or scope of effort must receive the prior written approval from the pass-through entity.
Campuses are encouraged to develop systems that will document that the above requirements are followed when awarding federal funds as a fixed-price subaward.
Chapter 16-999
- Academic Personnel Manual, Section 664
- Business and Finance Bulletin BUS-2, Tax-Free Alcohol Permits, Records, and Operations
- Business and Finance Bulletin BUS-34, Securing the Services of Independent Consultants
- Business and Finance Bulletin BUS-43, Materiel Management
- Business and Finance Bulletin BUS-50, Materiel Management: Acquisition and Use of Narcotics and Dangerous Drugs
- Business and Finance Bulletin IS-8, Guidelines for Campus and Office of the President Acquisitions Involving Computing
- Delegation of Authority 2100, June 11, 1998
- Facilities Manual
- Administrative Guidelines to Ensure Equal Opportunity in University Business Contracting, effective 1/1/96
- The Standing Order of The Regents 100.4
External Requirements - Federal
16-F01 Sections .40 through .48 of OMB Circular No. A-110, Procurement Standards
Purpose
The procurement standards set forth in OMB Circular A-110 are intended to ensure that supplies, equipment, construction and other services purchased with Federal funds are obtained in an effective manner and in compliance with the provisions of applicable Federal law and executive orders.
Applicability
A-110's procurement standards apply to procurements (i.e., subcontracts, subagreements, purchase orders) made by the University under Federal grants or other Federal assistance agreements. A-110's standards do not apply to subgrants or other assistance subawards made by the University under Federal grants or cooperative agreements.
Text
The following is the full text of the procurement standards of A-110.
Primary University Responsibility
The OP Office of Strategic Sourcing is responsible for issuing guidance on complying with the procurement standards of A-110. OP Research Administration issues Operating Guidance memos regarding administration of financial assistance subawards and purchase subagreements under federal prime grants and cooperative agreements.
University Policy Implementation
University guidance on implementing the procurement standards of A-110 are issued in Business and Finance Bulletin BUS-43.
16-F02 Public Law 95-507, Section 211, "Subcontracting Under Contracts"
Purpose
To establish and enforce as a policy of the United States, that
...small business concerns, and small business concerns owned and controlled by socially and economically disadvantaged individuals, shall have the maximum practicable opportunity to participate in the performance of contracts let by any Federal agency.
Lead Agency
Office of Federal Procurement Policy (OFPP), Office of Management and Budget (OMB).
Implementing Regulations
OFPP Policy Letter 80-2, "Regulatory Guidance on Section 211 of Public Law 95-507", April 29, 1980.
Federal Acquisition Regulation (FAR) 19.7, "Subcontracting With Small Business and Small Disadvantaged Business Concerns" and FAR 52.219-08, “Utilization of Small Business Concerns.” 52.219-09, “Small Business Subcontracting Plan”; and 52.219-16, “Liquidated Damages - Subcontracting Plan”.
Subcontracting-Best Efforts
- Applicability
- Those requirements of P.L. 95-507 concerning Subcontracting - Best Efforts are applicable to all contracts from any Federal agency, except any contract that:
- does not exceed $100,000;
- is performed entirely outside of any State, territory, or possession of the United States, the District of Columbia, or the commonwealth of Puerto Rico,
- is for services which are personal in nature.
- Those requirements of P.L. 95-507 concerning Subcontracting - Best Efforts are applicable to all contracts from any Federal agency, except any contract that:
- Summary of Provisions
- Contractors are required to award subcontracts to the fullest extent consistent with the efficient performance of the contract in such a way that small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals shall have the maximum practicable opportunity to participate in the performance of contracts let by any Federal agency.
- Further, contractors are required to cooperate in any studies or surveys as may be conducted by the Small Business Administration or by the contracting agency which may be necessary to determine the extent of the contractor's compliance with these provisions.
Subcontracting Plans
- Applicability
- Those requirements of P.L. 95-507 concerning Subcontracting Plans are applicable to any contract and any amendment or modification to a contract let by any Federal agency which:
- is to be awarded, or was let, pursuant to the negotiated method of procurement;
- meets the applicability conditions of SUBCONTRACTING-BEST EFFORTS, above;
- individually may exceed $500,000 ($1,000,000 for construction of a public facility);
- offers subcontracting possibilities; and
- is not a small business concern.
- Those requirements of P.L. 95-507 concerning Subcontracting Plans are applicable to any contract and any amendment or modification to a contract let by any Federal agency which:
- Summary of Provisions
- Contractors have extensive planning, solicitation, subcontracting, and reporting obligations when conditions as set forth in Applicability, above, exist. These obligations are described in detail in OFPP Policy Letter 80-2, Part C., "Small Business and Small Disadvantaged Business Subcontracting (Negotiated)," in FAR 19.7, and in Business and Finance Bulletin BUS-43, Part 7, Section IV.
Primary University Responsibility
- The Contract and Grant Officer responsible for the campus award has primary responsibility for judging if and how P.L. 95-507, Section 211 and its implementing regulations apply to an individual contract action, and for negotiating with the extramural sponsor an acceptable Subcontracting Plan and reporting requirements, after consultation with the Principal Investigator and the campus Materiel Manager or designee (See 16-220).
- The OP Executive Director -- Strategic Sourcing has primary responsibility for monitoring, reviewing, and implementing Federal policy developments surrounding P.L. 95-507, Section 211 and its implementing regulations and informing the campuses of changes or new requirements.
- Chancellors and Laboratory Directors are responsible for the development of written local programs to implement University policies in this area and the appointment of a "Responsible Officer" to ensure effective coordination in the achievement of such program objectives.
- Campus/Laboratory personnel who have purchasing authority pursuant to 16-110 through 16-140 are responsible for effectively carry out the terms of subcontracting plans for individual contracts.
University Policy Implementation
Business and Finance Bulletin BUS-43, Part 7, "Purchasing and Public Policy" implements this external Federal requirement. In addition, OP Research Administration issues Contract and Grant Operating Guidance Memos issues on this subject as needed.
16-F03 National Women's Business Enterprise Policy
Identification
Executive Order 12138, May 18, 1979
Purpose
To create a National Women's Business Enterprise Policy and to prescribe arrangements for developing, coordinating, and implementing a national program for women's business enterprise, including encouraging the participation of women's business enterprise in the performance of contracts let by the Federal government.
Lead Agency
- The Interagency Committee on Women's Business Enterprise is the lead governmental unit for policy issues related to E.O. 12138.
- The Office of Federal Procurement Policy (OFPP) is the lead governmental unit for implementing this Executive Order in the Federal procurement area.
Implementing Regulations
OFPP Policy Letter 80-4, "Women's Business Enterprise Program," April 29, 1980.
Federal Acquisition Regulation (FAR) 19.9, "Contracting Opportunities for Women-Owned Small Businesses."
Subcontracting-Best Efforts
- Applicability
- Those requirements of OFPP Policy Letter 80-4 and FAR 19.9 concerning Subcontracting-Best Efforts are applicable to all contracts from any Federal agency except any contract that:
- does not exceed $10,000;
- including all subcontracts under such contract will be performed entirely outside of the United States, its possessions, Puerto Rico and the Trust Territory of the Pacific Islands; or
- is for services which are personal in nature.
- Those requirements of OFPP Policy Letter 80-4 and FAR 19.9 concerning Subcontracting-Best Efforts are applicable to all contracts from any Federal agency except any contract that:
[*NOTE: The Subcontracting Program elements of OFPP Policy Letter 80-4 have not been included in Federal Acquisition Regulation (FAR) 19.9 or any other section of the FAR or in any major agency supplement to the FAR. Therefore, these applicability criteria may be ignored by most agencies. This situation may also provide an opportunity to resist unnecessary burdensome Subcontracting Programs proposed by agencies to be included in their contracts.*]
- Summary of Provisions
- Contractors are required to award subcontracts to the fullest extent consistent with the efficient performance of the contract in such a way that women-owned businesses shall have the maximum practicable opportunity to participate in the performance of contracts awarded by any Federal agency.
Subcontracting Programs
- Applicability
- Those requirements of OFPP Policy Letter 80-4 concerning Subcontracting Programs are applicable to any contract and any amendment or modification to a contract made by any Federal agency which:
- meet the Applicability conditions of SUBCONTRACTING-BEST EFFORTS, above; and
- individually may exceed $500,000 ($1,000,000 for construction of any public facility).
- Those requirements of OFPP Policy Letter 80-4 concerning Subcontracting Programs are applicable to any contract and any amendment or modification to a contract made by any Federal agency which:
- Summary of Provisions
- Contractors have extensive planning, outreach, and reporting obligations when conditions as set forth in Applicability, above, exist. Those Obligations are described in detail in OFPP Policy Letter 80-4, Part 2., "Women-Owned Business Concerns Subcontracting Program."
Primary University Responsibility
- The campus Contract and Grant Officer has primary responsibility for judging if and how E.O. 12138 and its implementing regulations apply to an individual contract action and for negotiating acceptable subcontracting clauses and reporting. (See 16-220.)
- The Executive Director – OP Strategic Sourcing has primary responsibility for monitoring, reviewing, and implementing Federal policy developments surrounding E.O. 12138 and its implementing regulations.
- Chancellors and Laboratory Directors are responsible for developing written programs to implement University policies in this and for appointing a "Responsible Officer" to ensure effective coordination in the achievement of such program objectives.
- Campus/Laboratory personnel who have purchasing authority pursuant to 16-110 through 16-140 are responsible for carrying out the terms of subcontracting clauses and programs for individual contracts.
University Policy Implementation
Business and Finance Bulletin BUS-43, Part 7, "Purchasing and Public Policy" implements this external federal requirement.
16-F04 Fly America Act
Purpose
To support U.S. air carriers through the encouragement of maximum feasible travel to and from the U.S. on U.S. carriers by Government-financed passengers.
Applicability
Applicable to all executive departments and agencies or instrumentalities of the U.S. which procure, contract for, or obtain (under payment by the Government) any transportation of persons (and their personal effects) or property, by air, between a place in the U.S. and a place outside the U.S., or between places outside the U.S.
Implementing Regulations
Federal Acquisition Regulation, FAR Part 47.4 and 52.247-63; various agency grant terms.
Summary of Provisions
The following excerpt from Paragraph 17 of the Federal Demonstration Project General Terms and Conditions provide a concise restatement of the Comptroller General decision, and may be used as guidance in complying with the Fly America Act in all Federal awards unless the specific award terms are more restrictive:
Any air transportation to, from, between, or within a country other than the U.S., of persons or property, the expense of which will be assisted by this award, must be performed on a U.S.-flag air carrier if service provided by such carrier is "available."
The following rules apply unless the result would be use of a foreign air carrier ("foreign carrier") for the first or last leg of travel from or to the U.S.:
- A U.S.-flag air carrier ("U.S. carrier") shall be used to destination or, in the absence of through service, to farthest interchange point.
- If a U.S. carrier does not serve an origin or interchange point, a foreign carrier shall be used to the nearest interchange point to connect with a U.S. carrier.
- If a U.S. carrier involuntarily reroutes the traveler via a foreign carrier, the foreign carrier may be used.
Exceptions. In the following situations, use of a foreign carrier is permissible:- Travel to and from the U.S. Use of a foreign carrier is permissible if:
- The airport abroad is the origin or destination airport, and use of a U.S. carrier would extend the total travel time 24 hours or more than would travel by foreign carrier; or
- The airport abroad is an interchange point, and use of a U.S. carrier would require the traveler to wait six (6) hours or more to make connection or would extend the total travel time six (6) hours or more than would travel by foreign carrier.
- Travel Between Points Outside the U.S. Use of a foreign carrier is permissible if:
- Travel by foreign carrier would eliminate two (2) or more aircraft changes en route; or
- Travel by U.S. carrier would extend the total travel time six (6) hours or more than would travel by foreign carrier.
- Short Distance Travel. For all short distance travel, regardless of origin and destination, use of a foreign carrier is permissible if the elapsed travel time on a scheduled flight from origin to destination airport by foreign carrier is three (3) hours or less and service by U.S. carrier would double the travel time.
- Travel to and from the U.S. Use of a foreign carrier is permissible if:
Primary University Responsibility
University official responsible for approval of travel and travel costs should not approve any travel or reimbursement of travel costs that violate the Fly America Act.
University Policy Implementation
This Manual chapter and Business and Finance Bulletin G-28, Policy and Regulations Governing Travel, Section VI.B.1.
16-F05 Buy American Act
Purpose
The Buy American Act is intended to protect Americans from foreign competition by requiring under circumstances described in "Applicability", below that the Federal government, its contractors and subcontractors buy manufactured and unmanufactured equipment and supplies from sources in the United States instead of from foreign sources. There are some exceptions as discussed in "Summary of Provisions", below.
Applicability
As implemented in the Federal Acquisition Regulation, the provisions of the Buy American Act apply
- to Federal supply contracts,
- to contracts for services that involve the furnishing of supplies, and
- to contracts for the construction, alteration, or repair of any public building or public work in the United States.
It is important to note that FAR 2.1 defines "supplies" very broadly to include equipment.
Provisions of the Act Do Not Apply to Grants nor to Research of Other Contracts that Do Not Involve the Furnishing of Supplies to the Federal Government.
Implementing Regulations
Federal Acquisition Regulation (FAR) Part 25; FAR clauses 52.225-01, “Buy American Act – Supplies” and 52.225-02, “Buy American Act Certificate”; individual agency FAR supplements and grant provisions.
Summary of Provisions
- The Act requires for contracts to which it is applicable (see "Applicability" above), that only domestic end products be acquired for public use. "Domestic end products" is defined by FAR to mean:
- an unmanufactured end product mined or produced in the United States, or
- an end product manufactured in the United States, if the cost of its components [articles, materials, and supplies incorporated directly into the end products] mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components...[see FAR 25.101 for further definition].
- Only articles, materials, and supplies specified in the contract as deliverable to the Government are required to meet the domestic preference provision of the Act. Conversely, supplies and equipment purchased under a contract which are not specified in that contract to be delivered to the Government, but are simply used by the contractor in the course of producing the deliverable research or other product are not required to meet the domestic preference provisions of the Act.
- For supplies and equipment which are specified in the contract to be delivered to the Government, there are exceptions to the domestic end products requirement for articles, materials, and supplies:
- For use outside the U.S.;
- For which the domestic cost would be unreasonable [Unreasonable means the price of the lowest acceptable domestic offer exceeds the lowest foreign offer, inclusive of duty by more than 6%, if the domestic offer is from a large business that is not a labor surplus area concern or, more than 12%, if the domestic offer is from a small business concern or any labor surplus area concern];
- For which the agency head determines that domestic preference would be inconsistent with the public interest;
- That one or more agencies have determined are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities, of a satisfactory quality [restrictions on the use of this exception are set forth in FAR 25.102(b) and 25.108], or
- Purchased specifically for commissary resale.
- Provisions of the Act applicable to contracts for the construction, alteration, or repair of any public building or public work in the United States are outside the scope of this Manual and are not summarized here.
Primary University Responsibility
- Campus Contract and Grant Officers are responsible for:
- completing and executing the solicitation provision entitled Buy American Certificate (FAR 52.225-1) where it appears in solicitations for the acquisition of supplies or for services involving the furnishing of supplies;
- determining that the provisions of the Act are NOT incorporated into grants or into research or other service contracts which do not involve the furnishing of supplies; and
- for those contracts which do contain language incorporating the provisions of the Act, identifying for purchasing personnel those end products (as defined by the Act), if any, which are specified in the contract for delivery to the Government and which, therefore, must be given domestic preference pursuant to the provisions of the Act.
- Campus purchasing personnel are responsible for compliance with the domestic preference provisions of the Buy American Act for those contracts and for those end products identified by the Contract and Grant Officer as under the Act.
University Policy Implementation
The requirements established by the Buy American Act are implemented generally in Sections 16-300, 16-310 and 16-F05 of this Manual and in Business and Finance Bulletin BUS-43.
16-F06 Indian Self-Determination and Education Assistance Act, Public Law 93-638
Identification
Public Law 93-638;
88 Stat. 2205
25 U.S.C. 450e(b)
Purpose
To ensure Indians are given preference to the greatest extent feasible for subcontracts let under Federal contracts, grants and cooperative agreements, including employment and training opportunities that are let for the benefit of Indians.
Applicability
Section 7(b) subcontracting requirements as described in "Summary of Provisions", below, apply to all Federal contracts and grants which benefit Indians on or near Indian reservations. It is unlikely the University would receive such awards.
Lead Agency
Each Federal agency affected would issue regulations for Section 7(b) of P.L. 93-638. The Office of Federal Contract Compliance Programs (OFCCP) may routinely incorporate 7(b) into its ongoing compliance activities.
Implementing Regulations
25 CFR Parts 271, 273, 274, 276, and 277
41 CFR Part 14 H70
FAR clause 52.226-1, “Utilization of Indian Organizations and Indian-Owned Economic Enterprises.
Summary of Provisions
Section 7(b) of P.L. 93-638 requires:
Any contract, subcontract, grant, or subgrant pursuant to this Act, the Act of April 16, 1934 (48 Stat. 596), as amended, or any other Act authorizing Federal contracts with or grants to Indian organizations or for the benefit of Indians, shall require that to the greatest extent feasible:
- Preferences and opportunities for training and employment in connection with the administration of such contracts or grants shall be given to Indians; and
- Preference in the award of subcontracts and subgrants in connection with the administration of such contracts or grants shall be given to Indian organizations and to Indian-owned economic enterprises as defined in section 3 of the Indian Financing Act of 1974 (88 Stat. 77).
Primary University Responsibility
- The campus Contract and Grant Officer has primary responsibility for judging whether an extramural award falls within the provisions of P.L. 93-638 and for advising the Materiel Manager or designee when such a condition exists. b) If the University should receive an award subject to the provisions of P.L. 93-638, campus personnel offices have primary responsibility to ensure that the University complies with training and employment requirements of the Public Law (See chapter 14-300). Campus purchasing personnel have primary responsibility to ensure that the University complies with subcontracting and purchasing requirements of the Act. (See 16-310.)
16-F07 2 CFR 200.500, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; Subpart F Audit Requirements
Purpose
This Part F sets forth standards for obtaining consistency and uniformity among Federal agencies for the audit of non-Federal entities expending Federal awards.
Applicability
With the implementation of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards on December 26, 2014, all parts of 2 CFR 200, including Subpart F Audit Requirements “…apply to Federal agencies that make Federal awards to non-Federal entities. These requirements are applicable to all costs related to Federal awards.” (see 2 CFR 200.101 Applicability)
External Requirements - State
16-S01 State Public Contract Code, Sections 10500.5, and 10507 through 10510
Purpose
To legislatively mandate competitive bidding procedures for the purchase of materials, goods, and services by the University of California and encourage small, small disadvantaged, and women business enterprise participation in these purchases.
Applicability
This law applies to all contracts, $50,000 or more, issued by the University for the purchase of materials, goods and services (exceptions noted under "Summary of Provisions", 10508, below).
Summary of Provisions
The following is a full text quote of the State Public Contract Code Sections 10500.5 and l0507 through l0510:
10500.5. It is the intent of the Legislature to facilitate the participation of small businesses, particularly small disadvantaged or minority business enterprises women business enterprises, and disabled veteran business enterprises in business contracting with the University of California. The Legislature intends that The Regents of the University of California adopt policies and procedures to ensure that a fair proportion of University contracts be placed with small business concerns, particularly small disadvantaged, women, and disabled veteran business enterprises, in areas of commodity purchases, services, and construction contracts. It is further the intent of the Legislature that The Regents adopt, by January 1, 1985, with respect to small business enterprises, particularly small disadvantaged and women business enterprises, and by January 1, 1992, with respect to disabled veteran business enterprises, policies and procedures that include, but are not limited to, all of the following:
- Annual targets for utilization of small businesses, particularly disadvantaged business enterprises, women business enterprises, and disabled veteran business enterprises, including subcontracts for construction.
- Annual statistical reports on the participation of small businesses, particularly disadvantaged business enterprises, women business enterprises, and disabled veteran business enterprises as general contractors and subcontractors in each project.
- Outreach programs.
- Directories of disadvantaged business enterprises, women business enterprises, and disabled veteran business enterprises.
- Monitoring by The Regents of progress with respect to the utilization of disadvantaged business enterprises, women business enterprises, and disabled veteran business enterprises.
It is also the intent of the Legislature that The Regents of the University of California report annually to the Legislature, on or before each July 1, on the participation of small disadvantaged business enterprises, women business enterprises, and disabled veteran business enterprises in University business contracting.
10507.7 Except as provided for in this article, The Regents of the University of California shall let all contracts involving an expenditure of more than fifty thousand dollars ($50,000) annually for goods and materials to be sold to the University of California to the lowest responsible bidder meeting specifications, or else reject all bids. Contracts for services to be performed, other than personal or professional services, involving an expenditure of fifty thousand dollars (50,000) or more annually shall be made or entered into with the lowest responsible bidder meeting specifications, or else all bids shall be rejected. If the Regents deem it to be for the best interest of the University, The Regents may, on the refusal or failure of the successful bidder for materials, goods, or services to execute a tendered contract, award it to the second lowest responsible bidder meeting specifications. If the second lowest responsible bidder fails or refuses to execute the contract, The Regents may likewise award it to the third lowest responsible bidder meeting specifications.
10508. The requirements of this article shall not be applicable when The Regents determine that a brand or trade name, article, thing or product, or proprietary service is the only one which will properly meet the needs of the University of California because the item or service is unique, available only from a sole source, or is designated to match others, used in, or furnished to, a particular installation, facility, or location. Contracts for unique products or service, or personal or professional services, shall not be made unless The Regents determine that the proposed price therefore is reasonable.
10509. The Regents of the University of California shall prescribe methods of procurement for goods, materials, and services to be purchased, including:
- Requirements for public advertisement where feasible and practicable for solicitation from at least three sources in other cases.
- Bidder prequalification and evaluation standards.
- Guidelines for negotiating contracts for unique products or proprietary services.
- Procedures for solicitation of vendor and service contractor interest.
- Dissemination of award information.
- Such other matters as may encourage the receipt of the most favorable price and conditions of purchase by the University.
10510. The requirement of this article shall not be applicable to the procurement of goods, materials, or services funded exclusively by federal agencies to the extent that the requirements of this article are in conflict with mandatory requirements of such federal agency.
Primary University Responsibility
The OP Executive Director – Strategic Sourcing has primary responsibility for developing and implementing University policy in response to the above State Public Contract Code sections. Campus purchasing personnel have the responsibility to carry out purchasing transactions consistent with these requirements. Contract and Grant Officers have related responsibilities as discussed at 16-341.
University Policy Implementation
State Public Contract Code Section 10500.5 is implemented in this Manual Section 16-370 and Business and Finance Bulletin BUS-43, Part 5. Sections 10507.7 through 10510, as discussed above, are implemented in BUS-43, Part 2, "Responsibility and Authority" and Part 3, "Purchase Transactions," and in this Manual Sections 16-340 and 16-341.
Chapter 16-500
The policies presented in this Chapter 16, Sections 16-100 through 16-370 and 16-F01 through 16-S01, generally apply to all purchases of goods or services from sources outside of the University except as specifically noted. Special purchasing situations are subject to additional policy coverage as presented in 16-410 through 16-460.
16-510 Equipment and Equipment Installation
Policy coverage and guidance on the purchase of supplies and equipment and related installation or alterations is presented in Chapter 15 of this Manual.
16-520 Service Contracts
Purchase contracts for maintenance or services, including purchase contracts funded by extramural awards, are administered pursuant to Business and Finance Bulletin BUS-43, Part 3.
16-540 Computer Services
University policy and procedure for the purchase of computer services is contained in Business and Finance Bulletin IS-8, Guidelines for Campus and Office of the President Acquisitions Involving Computing.
16-550 Consulting Services
Business and Finance Bulletin BUS-34, Securing the Services of Independent Consultants, establishes policies and procedures to be followed for securing the services of independent consultants. Administrative responsibility for BUS-34 vests in the Chancellor, and the OP Vice Presidents. BUS-34 does not apply to the appointment of architects and engineers for approved projects covered by Standing Order 100.4(y) or to the appointment of consultants for the DOE Laboratories. University faculty who serve internally as consultants are covered under Section 664 of the Academic Personnel Manual, Additional Compensation/Services as Faculty Consultant.
BUS-34 outlines the conditions under which consultant agreements are appropriate, as opposed to those which should be handled as employment or purchase contracts. The agreement between the University and an independent consultant is executed on the standard agreement form promulgated in BUS-34. Consultant agreements are signed by the consultant and by the University "Responsible Administrative Official," and "Program Review Official." The "Responsible Administrative Official" is that official designated by a Chancellor or Vice President to be responsible for overall administration of independent consultant procedures and agreements. The "Program Review Official" is the Chancellor, Vice President, or person(s) designated by each to approve the purpose and content of an independent consultant agreement. The Responsible Administrative Official must send an annual report of all consultant agreements to the Senior Vice President--Business and Finance.
16-560 Alcohol, Drugs, Hazardous and Radioactive Materials
Policies and procedures for the purchase and use of hazardous and radioactive materials are found in Chapter 3 of this Manual. Requirements for University alcohol and drugs purchases are set forth in Business and Finance Bulletins BUS-2, Tax-Free Alcohol Permits, Records, and Operations and BUS-50, Materiel Management: Acquisition and Use of Narcotics and Dangerous Drugs.
16-570 Construction
University policy and procedures on purchasing contracts for construction-related services are presented in the University's Facilities Manual.
Chapter 16-300
Purchasing Policies
Business and Finance Bulletin BUS-43 introduction sets forth guidelines for “appropriate implementation of the policies….” relating to purchasing activities. These include:
- "recognition that the interests of the people of the State of California are paramount and that University Materiel Management policies and practices should be developed to best serve those interests,
- recognition that the basic purpose of Materiel Management is to support the teaching, research, and public service missions of the University in the most cost effective manner,
- continuing development and refinement of University purchasing policies in accordance with good business judgment and normal business practice as applicable to the University's total operations,
- the firm belief that it is in the overall interest both of extramural sponsors and the University to limit as much as possible the effect of sponsor regulations on University policy and administration."
Specific purchasing policies are presented in 16-310 through 16-370 and in Business and Finance Bulletin BUS-43 and apply to all campus and Laboratory purchasing activities unless otherwise indicated.
16-310 External Purchasing Policies and Requirements
Certain federal and State laws and regulations also govern University purchasing activities. Some obligations are required by a particular extramural sponsor award. In such cases, the Contract and Grant Officer must coordinate such requirements with the responsible purchasing personnel during the proposal, negotiation, acceptance/execution, and post-award administrative phases, as appropriate. Other extramural sponsors’ requirements fall under general obligations for the University, unrelated to any particular extramural award. Some of these are included in 16-F01 through 16-F07 and 16-S01.
The Executive Vice President-Business Operations is responsible for providing information on all such requirements through the Executive Director, Strategic Sourcing, the Director-Research Administration Office, as applicable, and through other appropriate channels to Chancellors and Laboratory Directors who, in turn, shall establish appropriate procedures and controls to ensure compliance.
See 16-320 through 16-323 for information on purchase contracts under externally funded federal and State awards.
16-311 External "Prior Approval" Requirements
Both general and specific purchasing requirements imposed by external fund sources may require that the University to obtain prior approval from the sponsoring agency prior before a specific purchasing action.
16-312 "Flow-Down" of External Policies and Requirements Through Purchasing Transactions
Sponsored agreements often require the University to include in its subcontracts sponsor-specific provisions or “flow-down” terms from the sponsored agreement which govern purchase contracts with vendors for the acquisition of goods or services. Such flow-down provisions must also be included in purchase contracts as well as in subawards, if required by the prime sponsored award , in accordance with 16-320 through 16-323.
16-320 Purchase Contracts
Purchase contracts (e.g., purchase orders and subcontracts) are the legal documents which bind the University when purchasing goods and services from sources outside of the University. (Coverage on appropriate instruments for purchasing goods or services from sources within the University, i.e., from other campuses or DOE Laboratories, is presented in 10-240 through 10-253).
Policy coverage and details regarding purchase contract form and content, compliance enforcement, claims or disputes, and revisions to terms are contained in Business and Finance Bulletin BUS-43, Part 3“Purchase Transactions”. Generally, all purchase contracts should be in writing using standard purchase order forms and standard terms and conditions of purchase as approved for use by the Executive Director of Strategic Sourcing and included in Business and Finance Bulletin BUS-43, Exhibit C.
16-321 Special Documents
Purchase contracts may need to be specifically tailored for unusually complex or high-value items or services, or for purchases under extramural sponsor agreements which require flow-down provisions as discussed at 16-312. Such purchase contracts shall be entered into only when these documents have been approved and coordinated in accordance with 16-322 and 16-323.
16-322 General Counsel Approval
No changes, deletions, exceptions, or additions to the standard terms and conditions shall be made to purchase contract terms in BUS 43, Exhibit C, without written approval of the General Counsel. (See BUS-43 Part 3, Section III.G.2.
16-323 Contract and Grant Officer Coordination
For campuses where the campus Purchasing Office is responsible for any subawards for research and development work under awards accepted by the campus Contract and Grant Office, such subawards (subcontracts and subagreements) must be coordinated in advance with the respective campus Contract and Grant Officer to ensure flow-down of applicable requirements from the prime award. In addition, purchase contracts for unusually complex or high-value items or other services under an extramurally funded awards should be coordinated with the respective campus Contract and Grant Officer.
16-330 Planned Purchasing Program
16-331 Policy
University policy seeks to make purchases at the lowest possible overall cost through planned, quantity purchasing. To this end, regional and University-wide pool purchases, commodity agreements, and price schedules shall be utilized to the maximum practicable extent. These mechanisms comprise the University's Planned Purchasing Program which is discussed in Business and Finance Bulletin BUS-43. BUS-43, Part 4 provides definitions, guidelines, and coverage on program management, purchase transactions, and State supply schedules and contracts for the Planned Purchasing Program.
16-332 Responsibility
The Executive Director, Strategic Sourcing, shall represent the University in its relations with the State Procurement Office, Department of General Services, to secure mutually beneficial supply agreements.
The Executive Director is also responsible for all other requirements described in BUS-43 including chairing the Planned Purchasing work group which advises on commodity assignments, development of systems for the Planned Purchasing Program, establishment of criteria for determining when consolidated purchasing should be undertaken, and review and recommendation of changes to the Program.
16-333 Laboratory Participation
The prime Department of Energy contract which governs the Lawrence Berkeley National Laboratory (LBNL) require the use of certain federal government sources not generally available to campuses. When they would be cost effective and there would be no conflict with federal requirements, LBNL may use University-wide pool purchases, commodity agreement, and price schedules.
16-340 Competitive Bids
BUS-43, Part I, defines a competitive bid as “a minimum of three qualified suppliers submitted in accordance with a solicitation from the Materiel Manager.” University policy requires competitive bids for “any transaction expected to involve an expenditure of $50,000 or more for goods or services, other than personal or professional services, unless it is determined that a brand or trade name article, thing or product, or proprietary service is unique, available only from a sole source, or is designated to match others used in or furnished to a particular installation, facility, or location.” (BUS-4, Part 3. III. D.) For transactions for less than $50,000, the Materiel Manager (or designee) may negotiate orally or in writing with one or more vendors . In such exceptional circumstances, purchasing transactions shall occur in accordance with 16-350. Purchasing transactions and subawards shall not be artificially divided into separate transactions to avoid or change competitive bidding requirements.
Implementing policies and procedures for competition bidding are located in Business and Finance Bulletin BUS-43, Part 3, “Purchasing Transactions.” [http://www.ucop.edu/ucophome/policies/bfb/bus43p3.pdf] Competition bidding requirements for individual consultants are set forth in Business and Finance Bulletin BUS-34, “Securing the Services of Independent Consultants,” Part VI. (See 16-442.
16-341 Contract and Grant Officers' Responsibility
Contract and Grant Officers shall not commit the University through submission of a legally binding offer to an extramural sponsor, to the purchase of a particular brand name product, or otherwise restrict competitive procurements under a subsequent award, unless such brand name product or other restriction meets the exception from competition criteria discussed in 16-340 and Business and Finance Bulletin, BUS-43.
16-350 Negotiation
When purchasing transactions involve goods or services which meet the exception-from-competition criteria discussed in 16-340, such transactions may be conducted through negotiation in accordance with Business and Finance Bulletin BUS-43, Part 3.
16-360 Conflicts of Interest
The University complies with federal and State laws concerning purchasing transactions made with or influenced by current or past employees of the University and the near-relatives of such employees, University policy coverage in this area is provided in BUS-43, Part 7, “Employee-Vendor Relationships,” and BUS-34.
16-370 Socio-Economic Requirements
The University of California complies with federal and State law regarding equal employment opportunity and affirmative action. The University’s Policy to Ensure Equal Opportunity in Business Contracting, January 1, 1996.
“The University of California Administrative Guidelines to Ensure Equal Opportunity in Business Contracting” were issued to Materiel Managers and Contracting Officials by the President effective January 1, 1996. In the area of purchasing goods and services, these Guidelines provide that "the University will continue to set goals and timetables for small, disadvantaged, women-owned, and disabled veteran business enterprises where such goals and timetables are required as a condition of federal or state funded contracts or grants....In addition, the University will continue to utilize outreach programs to assure equality of opportunity." The guidelines recommend a number of different outreach activities to be employed, and require each University location to designate a knowledgeable official(s) to oversee outreach activities. Campuses are further required to maintain separate statistical records for purchases from small businesses, small disadvantaged businesses, women-owned businesses, and disabled veteran businesses, compared to total dollars expended to all businesses. This statistical information is to be submitted to the Office of the President not later than August 15 each year.
OP Strategic Sourcing provides guidance to campus Materiel Managers regarding federal- or State-wide contract or grant requirements under agreements for research, training, or public service, such as requirements incorporated in Federal Acquisition Regulation Subpart 19.7 (see 16-F02), OMB Circular A-110 Section __.44(b) (see 16-F01), and the State Public Contract Code (see 16-S01) as well as any University-wide programs regarding purchases from small, disadvantaged, women-owned, and disabled veteran businesses, in Business and Finance Bulletin BUS-43, Part 5, Purchasing and Public Policy.
The role of the campus Contract and Grant Office, as stated in the guidelines, is to advise campus purchasing offices when any contract or grant has transaction-specific requirements regarding purchases from disadvantaged or women-owned businesses under that award, such as a federal contract with subcontracting plan requirements. (See 16-F02.).
The OP Facilities Management Department provides guidance on implementing the University “Administrative Guidelines” cited above with respect to awarding and administering construction contracts. (See University Facilities Manual, 1.5 Equal Opportunity Policy.)