(a) General. (1) For purposes of this section, the term procurement
means the process which leads to any award of JTPA funds.
(2) The Governor, in accordance with the minimum requirements
established in this section, shall prescribe and implement procurement
standards to ensure fiscal accountability and prevent waste, fraud, and
abuse in programs administered under this Act.
(3) When procuring property and services, a State shall follow the
same policies and procedures it uses for procurements from its non-
Federal funds, provided that the State's procurement procedures also
comply with the minimum requirements of this section.
(4) Each subrecipient shall use its own procurement procedures which
reflect applicable State and local laws and regulations, provided that
the subrecipient's procurement procedures also comply with the
requirements of this section and the standards established by the
Governor, pursuant to paragraph (a)(2) of this section.
(5) States and subrecipients shall not use funds provided under JTPA
to duplicate facilities or services available in the area (with or
without reimbursement) from Federal, State, or local sources, unless it
is demonstrated that the JTPA-funded alternative services or facilities
would be more effective or more likely to achieve performance goals
(sections 107(b) and 141(h)).
(6) Awards are to be made to responsible organizations possessing
the demonstrated ability to perform successfully under the terms and
conditions of a proposed subgrant or contract. A determination of
demonstrated ability shall be done in accordance with the requirements
contained in Sec. 627.422 (b) and (d).
(b) Competition. (1) Each State and subrecipient shall conduct
procurements in a manner which provides full and open competition. Some
of the situations considered to be restrictive of competition include,
but are not limited to:
(i) Placing unreasonable requirements on firms or organizations in
order for them to qualify to do business;
(ii) Requiring unnecessary experience and excessive bonding;
(iii) Noncompetitive pricing practices between firms or
organizations or between affiliated companies or organizations;
(iv) Noncompetitive awards to consultants that are on retainer
contracts;
(v) Organizational conflicts of interest;
(vi) Specifying only a ``brand name'' product instead of allowing
``an equal'' product to be offered and describing the performance of
other relevant requirements of the procurement;
(vii) Overly restrictive specifications; and
(viii) Any arbitrary action in the procurement process.
(2) Each State and subrecipient shall have written procedures for
procurement transactions. These procedures shall ensure that all
solicitations:
(i) Incorporate a clear and accurate description of the technical
requirements for the material, product, or service to be procured
(including quantities). Such description shall not, in competitive
procurements, contain features which unduly restrict competition; and
(ii) Identify all requirements which the offerors must fulfill and
all other factors to be used in evaluating bids or proposals.
(3) Each State and subrecipient shall ensure that all prequalified
lists of persons, firms, or other organizations which are used in
acquiring goods and services are current and include sufficient numbers
of qualified sources to ensure maximum open and free competition.
(c) Conflict of interest. (1) Each recipient and subrecipient shall
maintain a written code of standards of conduct governing the
performance of persons engaged in the award and administration of JTPA
contracts and subgrants. To the extent permitted by State or local law
or regulation, such standards of conduct will provide for penalties,
sanctions, or other disciplinary actions for violations of such
standards by the awarding agency's officers, employees, or agents, or by
awardees or their agents.
(2) Staff conflict of interest. Each recipient and subrecipient
shall ensure that no individual in a decisionmaking capacity shall
engage in any activity, including participation in the selection, award,
or administration of a subgrant or contract supported by JTPA funds if a
conflict of interest, real or apparent, would be involved.
(3) PIC conflict of interest. (i) A PIC member shall not cast a
vote, nor participate in any decisionmaking capacity, on the provision
of services by such member (or any organization which that member
directly represents), nor on any matter which would provide any direct
financial benefit to that member.
(ii) Neither membership on the PIC nor the receipt of JTPA funds to
provide training and related services shall be construed, by itself, to
violate provisions of section 141(f) of the Act or Sec. 627.420.
(4) A conflict of interest under paragraphs (c) (2) and (3) of this
section would arise when:
(i) The individual,
(ii) Any member of the individual's immediate family,
(iii) The individual's partner, or
(iv) An organization which employs, or is about to employ, any of
the above, has a financial or other interest in the firm or organization
selected for award.
(5) The officers, employees, or agents of the agency and PIC members
making the award will neither solicit nor accept gratuities, favors, or
anything of monetary value from awardees, potential awardees, or parties
to subagreements. States and subrecipients may set minimum rules where
the financial interest is not substantial or the gift is an unsolicited
item of nominal intrinsic value.
(d) Methods of procurement. (1) Each State and subrecipient shall
use one of the following methods of procurement, as appropriate for each
procurement action:
(i) Small purchase procedures--simple and informal procurement
methods for securing services, supplies, or other property that do not
cost more than $25,000 in the aggregate. Recipients and subrecipients
shall not break down one purchase into several purchases merely to be
able to use small purchase procedures. The Governor shall establish
standards for small purchase procedures to ensure that price or rate
quotations will be documented from an adequate number of qualified
sources.
(ii) Sealed bids (formal advertising)--bids are publicly solicited
procurements for which a firm-fixed-price award (lump sum or unit price)
or other fixed-price arrangement is awarded to the responsible bidder
whose bid, conforming with all the material terms and conditions of the
invitation for bids, is the lowest in price. The Governor shall
establish standards for sealed bids which include requirements that
invitations for bids be publicly advertised, and that bids be solicited
from an adequate number of organizations.
(iii) Competitive proposals--normally conducted with more than one
source submitting an offer and either a fixed-
price or cost-reimbursement type award is made. The Governor shall
establish standards for competitive proposals which include requirements
for the establishment of a documented methodology for technical
evaluations and award to the responsible offeror whose proposals are
most advantageous to the program with price, technical, and other
factors considered.
(iv) Noncompetitive proposals (sole source)--procurement through
solicitation of a proposal from only one source, the funding of an
unsolicited proposal, or when, after solicitation of a number of
sources, competition is determined inadequate. Each State and
subrecipient shall minimize the use of sole source procurements to the
extent practicable, but in every case the use of sole source
procurements shall be justified and documented. On-the-job training
(OJT) awards (except OJT brokering awards, which shall be selected
competitively) and the enrollment of individual participants in
classroom training may be sole sourced. For all other awards,
procurement by noncompetitive proposals may be used only when the award
is infeasible under small purchase procedures, sealed bids, or
competitive proposals and one of the following circumstances applies:
(A) The item or service is available only from a single source;
(B) The public exigency or emergency need for the item or service
does not permit a delay resulting from competitive solicitation;
(C) For SDAs, SSGs and subrecipients, the awarding agency authorizes
noncompetitive proposals; for States, the noncompetitive proposal is
approved through the State's normal sole source approval process;
(D) After solicitation of a number of sources, competition is
determined inadequate;
(2) Pass Throughs--The procurement rules do not apply to pass
throughs of monies from any unit of State or local government (or SDA or
SSG administrative entities) to other such units, such as a local
educational agency or public housing authority. To qualify as a pass
through, the receiving entity must either further pass through the
monies to another such entity or procure services in accordance with the
procurement rules.
(e) Cost or price analysis. (1) Each recipient, in accordance with
the minimum requirements established in this section, shall establish
standards on the performance of cost or price analysis.
(2) Each recipient and subrecipient shall perform a cost or price
analysis in connection with every procurement action, including
modifications (except for modifications where a determination has been
made that they do not have a monetary impact). The method and degree of
analysis depends on the facts surrounding the particular procurement and
pricing situation. At a minimum, the awarding agency shall make
independent estimates before receiving bids or proposals. A cost
analysis is necessary when the offeror is required to submit the
elements of the estimated cost (e.g., as in the case of subrecipient
relationships), when adequate price competition is lacking, and for sole
source procurements, including modifications or change orders. A price
analysis shall be used when price reasonableness can be established on
the basis of a catalog or market price of a commercial product sold in
substantial quantities to the general public or based on prices set by
law or regulation (including situations involving inadequate price
competition and sole source procurements where a price analysis may be
used in lieu of a cost analysis). When a cost analysis is necessary and
there is inadequate price competition, the offeror shall certify that to
the best of its knowledge and belief, the cost data are accurate,
complete, and current at the time of agreement on price. Awards or
modifications negotiated in reliance on such data should provide the
awarding agency a right to a price adjustment to exclude any significant
sum by which the price was increased because the awardee had knowingly
submitted data that were not accurate, complete, or current as
certified.
(3) JTPA procurements shall not permit excess program income (for
nonprofit and governmental entities) or excess profit (for private for-
profit entities). If profit or program income is included in the price,
the awarding
agency shall negotiate profit or program income as a separate element of
the price for each procurement in which there is no price competition
and in all cases where cost analysis is performed. To establish a fair
and reasonable profit or program income, consideration shall be given
to:
(i) The complexity of the work to be performed;
(ii) The risk borne by the awardee;
(iii) The offeror's investment;
(iv) The amount of subcontracting/subgranting;
(v) The quality of the offeror's record of past performance;
(vi) Industry profit rates in the surrounding geographical area for
similar work; and
(vii) Market conditions in the surrounding geographical area.
(4) Each recipient and subrecipient may charge to the agreement only
those costs which are consistent with the allowable cost provisions of
Sec. 627.435 of this part, including the guidelines issued by the
Governor, as required at Sec. 627.435(i) of this part.
(5) The cost plus a percentage of cost method shall not be used.
(f) Oversight. (1) Each recipient and subrecipient shall conduct and
document oversight to ensure compliance with the procurement standards,
in accordance with the requirements of Sec. 627.475 of this part,
Oversight and monitoring.
(2) Each recipient and subrecipient shall maintain an administration
system which ensures that vendors and subrecipients perform in
accordance with the terms, conditions, and specifications of their
awards.
(g) Transactions between units of government. (1) Except as provided
in paragraph (g)(2) of this section, procurement transactions between
units of State or local governments, or any other entities organized
principally as the administrative entity for service delivery areas or
substate areas, shall be conducted on a cost reimbursable basis. Cost
plus type awards are not allowable.
(2) In the case of procurement transactions with schools that are a
part of these entities, such as State universities and secondary
schools, when tuition charges or entrance fees are not more than the
educational institution's catalogue price, necessary to receive specific
training, charged to the general public to receive the same training,
and for training of participants, the tuition and/ or entrance fee does
not have to be broken out by items of cost.
(h) Award provisions. Each recipient and subrecipient agreement
shall:
(1) Clearly specify deliverables and the basis for payment; and
(2) In the case of awards to subrecipients, contain clauses that
provide for:
(i) Compliance with the JTPA regulations;
(ii) Assurance of nondiscrimination and equal opportunity as found
in 29 CFR 34.20, Assurance required; duration of obligation; covenants.
(3) In the case of awards to vendors, contain clauses that provide
for:
(i) Access by the recipient, the subrecipient, the Department of
Labor, the Comptroller General of the United States, or any of their
duly authorized representatives to any books, documents, papers, and
records (including computer records) of the contractor or subcontractor
which are directly pertinent to charges to the program, in order to
conduct audits and examinations and to make excerpts, transcripts, and
photocopies; this right also includes timely and reasonable access to
contractor's and subcontractor's personnel for the purpose of interviews
and discussions related to such documents;
(4) In the case of awards to both subrecipients and vendors, contain
clauses that provide for:
(i) Administrative, contractual, or legal remedies in instances
where contractors/subgrantees violate or breach agreement terms, which
shall provide for such sanctions and penalties as may be appropriate;
(ii) Notice of 29 CFR 97.34 requirements pertaining to copyrights
(agreements which involve the use of copyrighted materials or the
development of copyrightable materials);
(iii) Notice of requirements pertaining to rights to data.
Specifically, the awarding agency and the Department of Labor shall have
unlimited rights to any data first produced or delivered under the
agreement (agreements
which involve the use/development of computer programs/ applications, or
the maintenance of databases or other computer data processing program,
including the inputing of data);
(iv) Termination for cause and for convenience by the awarding
agency, including the manner by which the termination will be effected
and the basis for settlement;
(v) Notice of awarding agency requirements and regulations
pertaining to reporting;
(vi) Audit rights and requirements;
(vii) Payment conditions and delivery terms;
(viii) Process and authority for agreement changes; and
(ix) Provision against assignment;
(5) The Governor may establish additional clauses, as deemed
appropriate, for State and subrecipient procurements.
(i) Disputes. (1) The Governor shall ensure that the recipient and
each subrecipient have protest procedures to handle and resolve disputes
relating to their procurements. A protester shall exhaust all
administrative remedies with the subrecipient before pursuing a protest
at a higher level.
(2) Violations of law will be handled in accordance with the
requirements contained in Sec. 627.500(c).
(j) Each recipient and subrecipient shall maintain records
sufficient to detail the significant history of a procurement. These
records shall include, but are not necessarily limited to, the
following: rationale for the method of procurement, selection of
agreement type, awardee selection or rejection, and the basis for the
agreement price.
