Effective Date: March 28, 2024*
Approval Date: March 28, 2024
Approval Office: Dean of Faculty Office
The federal government imposes requirements on purchases of supplies and other expendable property, equipment, real property, and services made with federal funds. All purchases made with federal funds must follow this policy, the Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR §200), and any requirements unique to a specific grant. Purchases made on federal grants or contracts should always be made in consultation with the Williams College Grants Office.
Financial Conflicts of Interest
Employees, officers, and agents of Williams College must adhere to the Financial Conflict of Interest for Grant-Funded Research at Williams College policy and may not participate in the selection, award, or administration of a grant or contract supported by federal funds if a real or apparent conflict of interest exists.
General Procurement Principles
The College and those acting on its behalf must comply with the following general procurement principles when purchasing goods or services with federal funds (the cost principles relating to expenditures on federal awards are contained in the OMB Uniform Guidance (UG), Subpart E, 200.400-409.):
- Purchases must be reasonable, necessary, allowable, allocable, and must provide a direct benefit to the federal grant.
A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. In determining reasonableness of a given cost, consideration must be given to:
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- Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the College or the proper and efficient performance of the Federal award.
- The restraints or requirements imposed by such factors as: sound business practices; arm’s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award.
- Market prices for comparable goods or services for the geographic area.
- Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government.
- Whether the College significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award’s cost.
Costs must meet the following general criteria in order to be allowable under Federal awards:
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- Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles.
- Conform to any limitations or exclusions set forth in 2 CFR 200 or in the Federal award as to types or amount of cost items.
- Be consistent with the policies and procedures that apply uniformly to both federally-financed and other activities of the College.
- Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost.
- Be determined in accordance with generally accepted accounting principles (GAAP). (Contact the Finance Office for assistance).
- Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period.
- Be adequately documented.
- Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods.
A cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. This standard is met if the cost:
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- Is incurred specifically for the Federal award;
- Benefits both the Federal award and other work of the College and can be distributed in proportions that may be approximated using reasonable methods; and
- Is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles of 2 CFR 200.405.
- Where appropriate and to the extent required by this policy, analysis and selection must ensure open competition, objective contractor performance, and elimination of unfair competitive advantage. Written solicitations should conform to the requirements of 2 CFR 200.319(d). Many situations considered to be restrictive of competition are listed in 2 CFR §200.319(b).
- Contracts and subawards may only be given to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement.
- An analysis must be made to determine the most economical and practical procurement method, including lease and purchase options where appropriate.
- Affirmative steps must be made to use small businesses, minority-owned firms, women’s business enterprises, and labor surplus area firms and to purchase goods made within the United States whenever possible.
- The type of purchasing instrument used shall be appropriate for the particular procurement and for promoting the best interest of the program or project involved. “Cost-plus-a-percentage-of-cost” or “percentage of construction cost” methods of contracting shall not be used. Time-and-materials contracts may only be used after a determination is made that no other contract is suitable and if the contract includes a ceiling price that the contractor exceeds at its own risk.
- Contracts should include all applicable standard contract clauses of Appendix II to part 200.
- Transactions must be supported by original detailed and unduplicated documentation.
- Purchases must remain in aggregate and cannot be separated into multiple increments in order to bypass the procurement threshold requirements referenced below.
Procurement Methods
The following are acceptable methods of procurement for each purchasing threshold. For additional information about each of these methods, refer to Uniform Guidance Methods of Procurement to Be Followed (2 CFR §200.320).
A. Micro-Purchases: The purchase of supplies, services, or equipment where the aggregate dollar amount is less than $10,000.
- To the extent practicable, micro-purchases should be distributed in an equitable and reasonable manner to ensure fair and competitive pricing.
B. Small Purchases: The purchase of supplies, services or equipment in the range of $10,000 to $250,000.
- Price or rate quotations must be obtained from a minimum of three qualified sources prior to making a purchase. Sources can include documentation of verbal discussion, catalogs, and written bids.
- To the extent practicable, small purchases must be distributed in an equitable and reasonable manner to ensure fair and competitive pricing.
C. Large Purchases: The purchase of supplies, services or equipment greater than $250,000.
- Competitive Proposals
- Must be conducted with more than one source submitting an offer.
- College must perform a cost or price analysis
- Either a fixed price or cost-reimbursement type contract is awarded.
- Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program with price and other factors considered.
- Sealed Bids
- Sealed bids must be publicly solicited.
- College must perform a cost or price analysis
- A firm fixed price contract is awarded to the responsible bidder whose bid is the lowest price.
D. Noncompetitive Purchases: The purchase of supplies or services through solicitation of a proposal from only one source.
- Sole source purchases may only be used when one or more of the following circumstances apply (contact the grants office for a sole source justification form which must completed prior to your purchase):
- The aggregate dollar amount of the purchase does not exceed the micro-purchases threshold;
- The item is available only from a single source
- The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation;
- The federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the College; or
- After solicitation of a number of sources, competition is determined to be inadequate.
Unallowable Costs
The following is a list of common unallowable costs.
- Alcoholic beverages
- Bad debt
- Bonding costs
- Compensation for personal services
- Depreciation & use allowances
- Donations & contributions
- Employee morale, health & welfare costs
- Entertainment costs
- Fines & penalties
- Fundraising & investment costs
- Gains & losses on depreciable assets
- Goods or services for personal use
- Lobbying
- Selling & marketing
Business meals shall be reasonable and be $75 or less per person (including tax and tip). When sound business reasons necessitate that business meals exceed $75 per person, the excess cost of the business meal must be approved by the Office of the Dean of the Faculty.
Unallowable costs, mistakenly charged to an award, must be promptly transferred to your manager’s operating budget or faculty unrestricted research account. If you have questions, please contact the Finance Office.
Suspension and Debarment
Care must be taken to not do business with a suspended or debarred vendor or subrecipient. For any purchase made of $25,000 or more or for any subcontract agreement, regardless of dollar amount, the college must confirm that the vendor or subrecipient does not appear on the excluded parties listing using the System for Award Management search function.
Record Keeping
The College must maintain records sufficient to detail the history of procurement including at a minimum: (a) the rationale for the method of procurement, (b) the basis for selection of contract type, (c) the basis for contractor selection or rejection, (d) justification for lack of competition when competitive bids or offers are not obtained, and (e) the basis for the contract price. The College must make procurement records available to the federal awarding agency upon request.
* Replaces existing/outdated policy on Williams College website.
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