Procuring services with government funds carries with it certain requirements. Grantees must develop a system, a process, and indeed a culture of appropriate procurement practices that takes into account the government’s preference for competition, considers the risks of each competing contractor, develops methods for assessing proposals and determining appropriate awardees, flows down the appropriate contractual provisions required by law, and generally administers and oversees such contracts as required.

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On May 17, 2017, the U.S. Office of Management and Budget (OMB) amended 2 C.F.R. § 200.110 to extend the grace period for non-federal entities (states, local governments, nonprofits, institutions of higher education, and Indian tribes) to comply with the procurement standards set forth in the Uniform Guidance (2 C.F.R. §§ 200.317-200.326). Such entities now have through December 25, 2017 to implement changes to their procurement policies and procedures to come into compliance with the Uniform Guidance standards, and the implementation date for the standards will begin for fiscal years beginning on or after December 26, 2017. This serves as an important reminder to non-federal entities—including nonprofit organizations—to ensure that their procurement policies and procedures are meeting the standards set forth in the Uniform Guidance, which require, among others, that non-federal entities maintain oversight to ensure that contractors perform according to the terms of their contracts; that non-federal entities maintain written standards of conduct covering conflicts of interest and governing the actions of their employees engaged in contract selection, award, and administration; that procurements are conducted using full and open competition; and that non-federal entities take steps to utilize minority- and women-owned businesses when possible.

As the implementation of the Super Circular nears, federal grantees will be obligated to meet certain new procurement standards not previously required. Indeed, many of these standards may be familiar to nonprofits with federal contracts, as they closely resemble those set out in the Federal Acquisition Regulation (FAR). When implementing their new procurement policies and procedures, nonprofit federal grantees should be mindful of various pitfalls, including the following:

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