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(i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will
<br />include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type,
<br />contractor selection or rejection, and the basis for the contract price.
<br />G)(l) The non-Federal entity may use a time and materials type contract only after a determination that no other contract
<br />is suitable and if the contract includes a ceiling price that the contractor exceeds at its own risk. Time and materials type
<br />contract means a contract whose cost to a non-Federal entity is the sum of:
<br />(i) The actual cost of materials; and
<br />(ii) Direct labor hours charged at fixed hourly rates that reflect wages, general and administrative expenses, and profit.
<br />(2) Since this formula generates an open-ended contract price, a time-and~materials contract provides no positive profit
<br />incentive to the contractor for cost control or labor efficiency. Therefore, each contract must set a ceiling price that the
<br />contractor exceeds at its own risk. Further, the non-Federal entity awarding such a contract must assert a high degree of
<br />oversight in order to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls.
<br />(k) The non-Federal entity alone must be responsible, in accordance with good administrative practice and sound business
<br />judgment, for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but
<br />are not limited to, source evaluation, protests, disputes, and claims. These standards do not relieve the non-Federal entity of any
<br />contractual responsibilities under its contracts. The Federal awarding agency will not substitute its judgment for that of the non-
<br />Federal entity unless the matter is primarily a Federal concern. Violations oflaw will be referred to the local, state, or Federal
<br />authority having proper jurisdiction.
<br />[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014; 80 FR 43309, July 22, 2015]
<br />§200.319 Competition.
<br />(a) All procurement transactions must be conducted in a manner providing full and open competition consistent with the
<br />standards of this section. In order to ensure objective contractor performance and eliminate unfair competitive advantage,
<br />contractors that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for
<br />proposals must be excluded from competing for such procurements. Some of the situations considered to be restrictive of
<br />competition include but are not limited to:
<br />(1) Placing unreasonable requirements on firms in order for them to qualify to do business;
<br />(2) Requiring unnecessary experience and excessive bonding;
<br />(3) Noncompetitive pricing practices between firms or between affiliated companies;
<br />(4) Noncompetitive contracts to consultants that are on retainer contracts;
<br />( 5) Organizational conflicts of interest;
<br />(6) Specifying only a "brand name" product instead of allowing "an equal" product to be offered and describing the
<br />performance or other relevant requirements of the procurement; and
<br />(7) Any arbitrary action in the procurement process.
<br />(b) The non-Federal entity must conduct procurements in a manner that prohibits the use of statutorily or administratively
<br />imposed state, local, or tribal geographical preferences in the evaluation of bids or proposals, except in those cases where
<br />applicable Federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts state
<br />licensing laws. When contracting for architectural and engineering (A/E) services, geographic location may be a selection
<br />criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to
<br />compete for the contract.
<br />(c) The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that
<br />all solicitations:
<br />(1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be
<br />procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The
<br />description may include a statement of the qualitative nature of the material, product or service to be procured and, when
<br />necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its
<br />intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to
<br />make a clear and accurate description of the technical requirements, a "brand name or equivalent" description may be used as a
<br />means to define the performance or other salient requirements of procurement. The specific features of the named brand which
<br />must be met by offers must be clearly stated; and
<br />(2) Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals.
<br />(d) The non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring
<br />goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the
<br />non-Federal entity must not preclude potential bidders from qualifying during the solicitation period.
<br />[78 FR 78608, Dec. 26, 2013 , as amended at 79 FR 75885, Dec. 19, 2014)
<br />§200.320 Methods of procurement to be followed.
<br />Page 19 of 22
<br />K2871 Grant Agreement
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