FEDERAL REGULATIONS. Applicable to State Procurement. ARRA. American Recovery and Reinvestment Act of 2009. ARRA Grants & Procurements American Recovery & Reinvestment Act. ARRA Background
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FEDERAL REGULATIONS Applicable to State Procurement
ARRA American Recovery and Reinvestment Act of 2009
ARRA Grants & Procurements American Recovery & Reinvestment Act
ARRA Background • President Barack Obama signed the American Recovery and Reinvestment Act (ARRA) into law on February 17, 2009. The ARRA provides $787 billion of federal tax reductions and federal spending increases to accelerate the nations economic recovery and preserve and create jobs. The Congressional Joint Committee on taxation estimates the act will provide $334 billion in tax relief prior to the close of the 2011 federal fiscal year. Individual filers receive a tax reduction of $174 billion and businesses, $90 billion. The alternative minimum tax is also reduced for tax year 2009 at a cost of $70 billion.
ARRA Background….cont. • The ARRA also provides for $453 billion in additional federal spending. About 20 percent of the additional federal spending goes directly to individuals through increases in spending on programs such as food stamps. The remainder goes to pay for federal proejcts and to state and local governments.
Utah’s Portion • Utah expects to receive $1.6 billion in direct funding from the federal stimulus bill. Some of this funding can be used to fill state budget gaps, but other funds are to be spent on specific programs identified by Congress. Total funding may grow depending on the State’s success in receiving competitive grants for which there are no specific state allocations.
How will the federal stimulus bill affect Utah’s budget deficit? • State and local governments in Utah are estimated to be eligible to receive a substantial amount of one-time assistance under the ARRA. Most of the funding being provided by ARRA is being distributed by existing funding programs. In some cases this allows the State to reallocate funds to balance budget shortfalls as long as it is receiving ARRA funds.
Requirements associated with ARRA funds received by the State include: • Proper accounting and tracking of expenditures • Compliance with state and federal procurement laws • Compliance with antitrust regulations • Accurate and compliant reporting under Section 1512
ARRA PURCHASING Grant Process
Grants are not typically processed through State Purchasing! • However, in a memorandum dated August 11, 2009, from the Governor’s Office of Planning and Budget (GOPB), it was recommended that state agencies advertise grants involving ARRA funds through the Department of Administrative Services, Division of Purchasing.
WHY? • Promote competition • Help ensure full and complete transparency. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - • BidSync is the bid notification system used by the Division of Purchasing to advertise most all procurements. • Grant advertisements, known as Requests for Grant Applications (RGA’s) are advertised in BidSync to create fair and open competition to allow for the required transparency in the process. • All potential grant applicants are notified of the RGA posting in BidSync by the granting agency. Applicants download the RGA documents and submit applications hard copy directly to the agency. • The memorandum from GOPB can be accessed on the State Purchasing website at www.purchasing.utah.gov.
Does the grant require you to sign an agreement with a specific company? • If the answer is yes, you can enter into the agreement without the involvement of Purchasing. • The agreement must identify all specific requirements of the ARRA funding.
If the grant does not indicate a specific company; • The RGA document must be submitted to purchasing in an email. Clearly indicate that ARRA funds are being used. (Only ARRA funded grants come to State Purchasing). • Indicate any special requirements that must be included such as Buy American provisions or Davis/Bacon wage rates. • Include in the RGA a complete and detailed statement of work with specific details regarding the time frame for the grant. • Work with the state purchasing agent to determine the amount of time for the RGA to be advertised. • Agencies are required to announce the grant by email to potential applicants. The email should provide instructions on how to access BidSync and how to review the grant information. Purchasing will assist the agency with this language.
ARRA Funded Procurements • ARRA funded purchases must follow the normal procurement process. • The agency must enter an RQS/RQM into the state Finet system with “ARRA Funding” clearly indicated. • Provide any special requirements that must be included, such as Buy American provisions or Davis-Bacon wage rates. • Send Purchasing a complete and detailed statement of work or specification, including details regarding a contract performance time or a product delivery date. • Work with the state purchasing agent to determine the amount of time to advertise the procurement. • Notification to State Purchasing that ARRA or other federal funds are being used is the responsibility of the requesting agency.
State Purchasing Commitment Regarding ARRA Funding • Assist agencies with ARRA funded grants and procurements. • Make all ARRA procurements a priority • Ensure transparency by advertising grants and procurements on the State’s electronic bid notification system (BidSync). • For details regarding your specific purchase, contact the appropriate purchasing agent. A list of agents can be found at: http://purchasing.utah.gov/directories/documents/agentlist.pdf
ARRA Interesting Tidbits!! • Transparency and Oversight Requirements, Title XV, Subtitle A, Section 1511 • Recovery Accountability and Transparency Board, Title XV, Subtitle B, Section 1521 • Protecting State and Local Govmt. Whistleblowers, Title XV< Subtitle D, Section 1553 – …………..
Protecting State and Local Government Whistleblowers • Prohibitions of Reprisals-- An employee of any non-Federal employer receiving covered funds may not be discharged, demoted, or otherwise discriminated against as a reprisal for disclosing, including the disclosure made in the ordinary course of an employee's duties, to the Board, an inspector general, the Comptroller General, a member of Congress, a State or Federal regulatory or law enforcement agency, a person with supervisory authority over the employee (or such other person working for the employer who has the authority to investigate, discover, or terminate mis-conduct), a court or grand jury, the head of a Federal agency, or their representatives, information that the employee reasonably believes is evidence of: (1) gross mis-management of an agency contract or grant relating to covered funds, (2) a gross waste of covered funds, (3) a substantial and specific danger to public health or safety related to the implementation or use of covered funds, (4) an abuse of authority related to the implementation or use of covered funds, or (5) a violation of the law, rule or regulation related to an agency contract (including the competition for or negotiation of a contract) or grant, awarded or issued relating to covered funds.
FEDERAL REQUIREMENTS IN PURCHASING Introduction
Four Laws to Consider: Davis-Bacon Act Service Contract Act of 1965 Walsh Healey Public Contracts Act Buy American Act
Agency Responsible: • The requesting agency is responsible for including any federal requirements in the scope of work/specifications • Agencies are considered the “expert” • Communication is the key • Annotate on requisition that federal funds are involved
Federal Contract Labor Laws • Rights and Obligations of the Parties • Specifically the rights of contractor’s employees • Purchasing Officer – Ensure Compliance • As long as agency annotates federal funds used on the requisition • Problems – Agency monitors, may get a claim, and directs contractors employee to the Department of Labor (DOL)
DAVIS-BACON ACT • History • Senator James Davis & Rep. Robert L. Bacon • Signed By President Hoover in March, 1931 • Amendments • 1935: Contractors – not to lower wages to improve bid • 1964: Fringe benefits included • 1994: Construction on buildings used by Head Start • Suspensions
DAVIS-BACON ACT • All contracts over $2,000 for Construction • Contractors paid weekly • Wage rates and fringe benefits determined by DOL • Proper accounting and tracking of expenditures • Includes Contract Work Hours & Safety Standards Act • Time and a half – Excess of 40 hours/week • Law covers contractors and all sub-contractors • Certified Payroll Records
DAVIS-BACON ACT….continued • Suspected violations – discuss with contractor • Unresolved issues – report to DOL • Employee claim – direct employee to DOL • DOL conducts investigation and deals with contractor • Always consult with DOL for guidance
SERVICE CONTRACT ACT of 1965 • History • All Service contracts over $2,500 • Act covers most types of services • Contractors paid no less that bi-weekly • Wage rates and fringe benefits determined by DOL • DOL responsible for enforcement • Agency contacts DOL if violation is suspected • Wage Rate Site: www.wdol.gov/index/aspx
WALSH HEALEY PUBLIC CONTRACTS ACT • History • Still on the books but basically replaced with FLSA • Manufacture or Furnish Supplies • Within U.S., and some U.S. Possessions • Contracts exceeding $10,000.00 • Contractor Employee Wages similar to DB and SCA • Controls Child and Convict Labor • Protects against unsanitary, unsafe or otherwise dangerous to health and safety of employees • Exemptions – Statutory and Regulatory (FAR 22.604)
BUY AMERICAN ACT • History • Preference for U.S. made products • Two part test to define domestic end product • Requirement Can be Waived • More expensive • Unavailability • Public Interest • Additional Information • FAR subparts 25.101, 25.102 and 25.103 • Over 100 Items Predetermined - Not Available in U.S. • FAR subpart 25.104 • Includes many raw produce, chemical and mineral products
BUY AMERICAN ACT…cont. • Act Includes Construction Materials • Furnished by contractor & used in const. project • Exceptions in FAR 25.202, Similar to those in FAR 25.204 • President Has Power to Waive the Buy American Act • Applying the Terms of the Buy American Act • Large Business - Add six percent to price • Small Business – Add twelve percent to price • Large vs. small Business – Consult USSBA • Note: Buy American Act vs. Buy America Act
ARRA AND BUY AMERICAN ACT • Buy American Act Provision in ARRA • Change in the FAR • Implement this provision • Construction Materials • Excerpt from Washington Post Article May 15, 2009
ARRA AND DAVIS BACON ACT • ARRA Construction Projects • All Davis Bacon Act Provisions Apply • Federal Agency Awarding Grant Money • Include Language in Grant Announcement • ARRA Expands Scope of Davis Bacon Act • Projects funded even partially by ARRA funds • Off Site Employees covered • DB not limited to public buildings and public works