Non-federal entities that receive federal assistance—such as colleges and universities, hospitals, nonprofits, and state, local and tribal governments—have been given an additional year to comply with the Office of Management and Budget’s (OMB) revised procurement standards for grants and federal funding.

In December 2013, OMB overhauled its guidelines for the oversight and administration of federal grants and other federal financial assistance. The sweeping changes included revisions to procurement standards codified at 2 CFR §§ 200.317-200.326.  OMB originally gave non-federal entities until December 25, 2016, to implement changes to their procurement policies and procedures to comply with the OMB revised guidance.  On May 17, OMB announced that it would allow non-federal entities a grace period of one additional year, to December 25, 2017, to implement such changes, and the implementation date for the procurement standards will start for fiscal years beginning on or after December 26, 2017.

The OMB procurement standards require non-federal entities to establish procurement procedures that are consistent with federal law, OMB standards, and any state regulations. The non-federal entities’ procurement procedures must be formally documented and must address a number of critical procurement issues, including, but not limited to:

  • Written standards of conduct covering organizational and personal conflicts of interest and contractor integrity
  • Emphasis on economical and efficient solutions during the procurement process, and the inclusion of a cost or price analysis in connection with every procurement action to determine the most economical approach
  • Promotion of full and open competition
  • Measures to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible

Federal grant recipients should continue to review the OMB procurement standards under 2 CFR §§ 200.317-200.326 and should formally document their revised internal procurement policies in order to bring the entity into compliance with OMB standards before the December 25, 2017, deadline.