AFG 2009: Emphasis for FY 2009 – Procurement Integrity

From the 2009 Assistance to Firefighters Grants Guidance and Application Kit

Through audits conducted by the Department of Homeland Security’s Office of Inspector General (OIG) and through the Assistance to Firefighters Program Office grant monitoring, it has become apparent that some Assistance to Firefighters Grant (AFG) recipients have not adhered, or are not totally adhering, to the proper procurement requirements when spending grant funds. Anything less than full compliance with Federal procurement policies jeopardizes the integrity of the grant as well as the grant program. As such, in FY 2009 we will place a greater emphasis on oversight of grantees’ procurement actions. Below, we have reiterated the requirements and DHS expectations of fire departments and EMS organizations grantees when buying goods and services with Federal grant funds. DHS will include a review of grantees’ procurement practices as part of the normal monitoring activities.

Competition: All procurement transactions shall be conducted in a manner that provides, to the maximum extent practical, open and free competition. Grantees are expected to promote competition and ensure advantageous pricing by soliciting bids from multiple vendors. Purchases shall be made from the vendor whose bid is responsive to the solicitation and is most advantageous to the grantee when price, quality, and other factors are considered. Grantees may use their own procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal laws and standards. Grantees who fail to adhere to their own procurement policy, or otherwise fail to fully “compete” any purchase involving Federal funds, may find that their expenditures will be questioned and subsequently disallowed.

Documentation: Grantees are required to maintain and retain backup documentation such as bids, quotes, and cost/price analyses on file for review by Federal personnel. The required documentation for federally funded purchases should include specifications, solicitations, competitive quotes or proposals, basis for selection decisions, purchase orders or contracts, invoices, and cancelled checks. Grantees who fail to fully document their purchases may find that their expenditures will be questioned and subsequently disallowed.

Specifications: Specifications developed for solicitations shall clearly set forth all requirements that the bidder shall fulfill in order for the bid or offer to be evaluated by the recipient. However, those specifications may not be so narrowly constructed or contain features which unduly limit, restrict, or eliminate competition unnecessarily. Grantees may, when developing their solicitations, list factors that will be used in their evaluation of proposals that are submitted, as long as those evaluation factors are not found to limit competition. Finally, grantees cannot impose in-State or local geographical preferences in the evaluation of bids or proposals.

Applicants and grantees are encouraged to obtain product information from vendors in order to be more informed about the items they plan to purchase. However, grantees may not use specifications obtained from vendors for any solicitation with Federal grant funds if the specifications would be found to be restrictive. It is the grantee’s responsibility to assure that vendor specifications are not used in a manner which would result in restricting or limiting competition from other vendors of similar products. Additionally, if a vendor or manufacturer drafts, writes, edits, critiques, or provides any direct consultation on a grant application that vendor or manufacturer cannot submit a bid for that purchase. Likewise, if a vendor or manufacturer drafts, writes, edits, critiques, or provides any direct consultation on a specification to be used for the solicitation for the purchase of a specific product, that vendor or manufacturer cannot submit a bid for that purchase. See Conflicts of Interest below.

Grantees shall, on request, make available to DHS preaward review and procurement documents, such as requests for proposals or invitations for bids, independent cost estimates, etc., if 1) the purchase specifies a "brand name" product or 2) the proposed award is to be awarded to other than the apparent low bidder under a sealed bid process. Grantees found to be using proprietary, or otherwise limiting specifications, may find their expenditures questioned and subsequently disallowed.

Personal and Organizational Conflicts of interest: In order to ensure objective vendor performance and eliminate a real or apparent unfair competitive advantage, anyone that develops or drafts specifications, requirements, statements of work (including the grant application), invitations for bids, and/or requests for proposals shall be excluded from competing for such procurements. Additionally, no employee, officer, or agent of the grantee shall participate in the selection, award, or administration of a procurement supported by Federal funds if a real or an apparent conflict of interest would be involved. A conflict of interest could arise when any of the following conditions exists:

a) An officer, employee, or agent of the grantee has a financial or other interest in
the vendor selected for the procurement.

b) Any member of the grantee’s officers’, employees’, or agents’ immediate family
has a financial or other interest in the vendor selected for the procurement.

c) An organization which employs a grantee’s officer, employee, or agent is a
vendor or has a financial or other interest in the vendor selected for the
procurement.

For the purposes of this program, we consider volunteers of an organization and grant writers to be employees, officers, and/or agents of the grantee. As such, no volunteer or member of an organization or anyone involved in the application for funding can participate in, or benefit from, the procurement if Federal funds are involved. Grantees that purchase items with grant funds from vendors who employ any of their volunteers/members will have to document how they avoided a conflict of interest during the procurement process (i.e., specific details regarding how the members/volunteers removed themselves, or how they were prevented from participating in the process). Grantees who fail to fully document their purchases may find that their expenditures will be questioned and subsequently disallowed.