Using Sponsored Funds

Purchases using sponsored funds often have unique requirements beyond that of the university’s normal procurement process. This page describes these unique requirements for federal sponsored funds from the Uniform Guidance 2 CFR 200. Non-federal sponsors may have other unique requirements when making purchases with their funds that may be found in the agreement with the sponsor.

 

Beginning July 1, 2018 purchases using federal sponsored funds must be made in accordance with Uniform Guidance (2 CFR 200): The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The Uniform Guidance requires Sponsored Programs to review transactions meeting certain criteria to determine if they are allowable. The purpose of these federal guidelines is to verify that all expenses charged to a research project have a "direct benefit" and should be charged as "direct costs" to the project. To ensure compliance, all activity affecting a sponsored project/grant should meet the terms and conditions of the grant or contract.

 

When purchasing with federal funds University faculty and staff must avoid the acquisition of unnecessary or duplicative items. Consideration should be given to the use of federal excess or University surplus through property disposition in lieu of purchasing new equipment whenever such use is feasible and reduces project costs. University faculty and staff should also take all necessary steps to include minority businesses, women business enterprises, and labor surplus area firms whenever possible.

 

Procurement transactions using federal funds must be conducted in a manner providing full and open competition to ensure objective supplier performance and eliminate unfair competitive advantage. Suppliers that develop or draft specifications, requirements, statements of work, and invitations for bids or requests for proposals must be excluded from competing for such procurements. In addition the University should not:

 

  • place unreasonable requirements on firms in order for them to qualify to do business
  • require unnecessary experience and excessive bonding
  • implement noncompetitive pricing practices between firms or between affiliated companies
  • enter into noncompetitive contracts with consultants that are on retainer contracts
  • have unmanaged organizational conflicts of interest
  • specify only a “brand name” product instead of allowing “an equal” product to be offered and describe the performance or other relevant requirements of the procurement  
  • take any arbitrary actions in the procurement process.

 

Any request for proposal for a purchase using federal funds over the federal simplified acquisition threshold must be publicized per the Uniform Guidance. Any response to publicized requests for proposals must be considered to the maximum extent practical.

 

Non competitive transactions using federal sponsored funds may require express written authorization from the federal awarding agency.

 

In addition to the conflict of interest requirements in SPG 201.65-1 and the Michigan Public Act 317 of 1968, the Uniform Guidance requires that no University employee may participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. In addition, University faculty and staff whenever possible should avoid making purchases that could create an organizational conflict of interest with University-affiliated entities to avoid the appearance that the University is unable to be impartial in conducting a procurement action involving the related organization.
 

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