Effective June 30, 2010
This policy governs the Board's acquisition of supplies, services, construction, and real property. When used in conjunction with the Board's Delegations of Administrative Authority, the Procurement Manual for Technical Personnel, and other applicable policies, including the Small and Disadvantaged Business Acquisition Policy, this policy is intended to foster efficiency and effectiveness in the acquisition process, and help the Board acquire the highest-quality supplies, services, construction, and real property within the time required and at the best possible value. These objectives are achieved by
- using competitive acquisition methods to the maximum extent practicable;
- making awards only to responsible vendors;
- considering a variety of factors, such as product quality, reliability, dependability, and life-cycle price, in determining which offer provides the best value to the Board;
- providing vendors with a fair opportunity under competitive acquisition methods; and
- fostering fair and equitable relationships between the Board and its vendors.
Acquisition means buying, purchasing, renting, leasing, or otherwise obtaining supplies, services, construction, and real property. It includes all functions pertaining to the acquisition of any supplies, services, construction, or real property, including the description of requirements, the solicitation and selection of sources, the award of contracts, and purchase orders.
Chief acquisition officer means the officer designated by the director of the Management Division and referenced in the Delegations of Administrative Authority to act as the Board's contracting officer with the authority to procure goods and services and with the overall responsibility for acquisition policies and procedures.
Contract means any type of written agreement, regardless of form, for the acquisition of supplies, services, real property, or construction.
Contract administration means the oversight of a contract by the contracting officer or the contracting officer's technical representative in order to ensure that a contractor meets all terms, conditions, and requirements of the contract.
Contracting officer means a person who has the required delegated procurement authority to sign contracts on behalf of the Board.
Contracting officer's technical representative (COTR) means an authorized representative of the contracting officer who is acting within a scope of authority as delegated by the contracting officer. The COTR is responsible for preparing an adequate statement of work (SOW) and specifications. The SOW includes the work to be performed by the vendor, a list of deliverables, a delivery schedule and milestones, performance measures where applicable, and acceptance criteria. Information on the procurement process and the creation of SOWs is contained in the Procurement Manual for Technical Personnel. (See also paragraph VI.B.)
Invitation for bids (IFB) means a written solicitation, issued in connection with the formal bidding procedure, for specifically described supplies, services, or construction.
Procurement authority means the authority to enter into contracts on behalf of the Board.
Purchase card purchases means acquisitions made with the Board's government purchase card by an employee authorized by his or her division or office director to make purchases for that division or office within established cost limits.
Request for proposals (RFP) means a written solicitation, issued in connection with the negotiated procurement procedure, requesting proposals to furnish described supplies, services, construction, or real property. The RFP establishes the criteria for identifying the proposal that provides the best value to the Board in terms of quality, timeliness, price, service reliability, vendor dependability, or other identified factors.
Responsible vendor means a vendor who, in the Board's opinion, possesses the skill, ability, integrity, and financial and other resources necessary for the faithful performance of the work and who has complied with all requirements set forth in the solicitation.
Responsive vendor means a vendor who has submitted a bid or proposal that conforms in all material respects to the requirements of the IFB or the RFP.
Services means the furnishing of labor, time, or effort by a vendor but does not mean construction or the furnishing of supplies.
Supplies means property except for real property. Supplies includes furniture and equipment.
SOA means solicitation, offer, and award. An SOA is an RFP that contains the Board's solicitation for a bid and becomes the actual contract document when executed by the vendor and the Board's contracting officer. The SOA allows vendors to sign the contract when they submit their bids. The Board's contracting officer can then countersign the document and establish a contract that takes effect immediately.
- The Board's procurement authority. The Board's procurement authority is established by section 10(3) and (4) of the Federal Reserve Act, 12 USC 243 and 244. The Board has sole control over its buildings and expenditures and is not covered by the Federal Property and Administrative Services Act of 1949 or the Federal Acquisition Regulation (FAR). However, the Board's Acquisition Policy observes the spirit of the FAR.
- Delegation of procurement authority. Delegation of procurement authority within the Board is outlined in the Delegations of Administrative Authority. On the basis of the delegations, the chief acquisition officer is the contracting officer with the authority to procure goods, services, and real property. The chief acquisition officer may further delegate that authority. Except as stated below, all procurement actions (contracts and purchase orders) must be initiated, finalized, and administered by the Procurement Section:
- The chief acquisition officer re-delegates to staff in the Research and Legal libraries who are specifically authorized to procure books, periodicals, and other materials the procurement authority to make such purchases without further review or approval and without regard to the procedures set forth in section IV below, provided that the total cost of the purchase does not exceed $50,000. Purchases shall not be artificially divided to permit the use of this delegated authority.
- As set forth in the Delegations of Administrative Authority, procurements by the inspector general, when in the opinion of the inspector general operational necessity warrants, are not subject to further review or approval and are not subject to the procedures set forth in sections IV and VI.A below. In all other circumstances, however, procurements for the Office of Inspector General shall follow the procedures set forth in section IV.
- The chief acquisition officer re-delegates to staff who are authorized to use the Board's government purchase card the procurement authority to purchase items consistent with their purchase card limits and consistent with the purchase card procedures set forth in section V below. Any contracts resulting from purchases made with a government purchase card will be administered by the acquiring division, unless the acquiring division requests that the Procurement Section be responsible for administration of the contracts.
The following procedures shall be used, as appropriate, for the acquisition of supplies, services, construction, and real property. A material modification of an existing contract must follow an appropriate acquisition procedure under this policy. Acquisitions shall not be artificially divided to permit the use of procedures that apply only to contracts at or below a certain threshold value.
Except in the case of purchase card purchases, payments shall be made by the Accounting Section. Use of the government purchase card is limited to acquisitions of supplies and services that have a total cost of less than or equal to $5,000, subject to the cardholder's purchasing limit. Purchasers may choose to use the government purchase card as the payment method for other acquisitions, provided that the purchase is within the individual's purchasing limit for the card and follows an appropriate acquisition procedure under this policy. (See section V below.)
- Formal bidding procedures. When the quality, characteristics, or other aspects of the goods or services to be acquired are so standard that no technical evaluation is required, a contract may be awarded to a vendor (or vendors) responding to an IFB on the basis of the vendor's price without discussions with the vendor. Acquisition of standard equipment, supplies, and services in which no significant differences in quality, delivery times, or other factors important to the Board are anticipated are subject to this process. The award is made to the lowest responsive and responsible vendor whose bid meets all the terms and conditions of the IFB and any documents attached to or included in the IFB. Formal bidding procedures shall be used for the type of acquisitions described in this paragraph if (1) time permits the solicitation of sealed bids, (2) the award is to be based on low price, (3) more than one bid will likely be received, and (4) simplified purchase procedures or other acquisition procedures cannot be used.
- Negotiated procurement procedures. Negotiated procurements result from the proposals submitted in response to an RFP or SOA issued to several vendors. These procedures permit discussions with vendors and allow revisions of proposals as necessary before the Board awards a contract on the basis of specific evaluation factors. The award is made to the responsive and responsible vendor whose proposal is most advantageous to the Board, considering price and other factors in the solicitation. This form of procurement is used when there are significant tradeoffs in the quality, price, vendor support, timeliness, and reliability of the goods or services being acquired.
- GSA Federal Supply Schedule. A contracting officer may purchase supplies and services listed on the General Services Administration's Federal Supply Schedule (the schedule) without further competition. When ordering services from the schedule that are provided by numerous vendors at hourly rates, the contracting officer should review quotes from at least three contractors and select the one that best meets the Board's needs. If a division does not select the contractor offering the lowest quoted bid, the division ordering the services shall provide a memorandum to the Procurement Section explaining why the selected contractor best meets the Board's needs. Regardless of whether a three-contractor review is necessary, a contracting officer may negotiate with a vendor for a better price than appears on the schedule. A contracting officer may acquire nonschedule supplies or services from a vendor listed on the schedule under this procurement procedure, so long as the nonschedule items are offered in addition to the schedule items and the price for all the items (both schedule and nonschedule) is the same or better than the schedule price for the schedule items alone. The contracting officer may purchase supplies or services listed on agency contracts or other government-wide schedules in the same manner as set forth in this paragraph, provided the Legal Division has determined that such contracts or schedules operate in a manner that is consistent with Board policies.
- National Procurement Office. A contracting officer may purchase services or supplies from the same contractor selected by the Federal Reserve Banks' National Procurement Office (NPO) or by Federal Reserve Information Technology (FRIT) on behalf of the Federal Reserve Banks without further competition, provided the Board is purchasing the same services or supplies as the NPO and the chief acquisition officer determines that there is a need for substantial similarity between the Board and the Reserve Banks in the use of those services or supplies. The chief acquisition officer shall consult with the Legal Division in making such a determination when the procurement exceeds $50,000 annually.
- Simplified purchase procedures. Under simplified purchase procedures, the contracting officer must apprise all vendors contacted of the factors on which the award will be based and must maintain records to establish the propriety of any award made, but the contracting officer need not formally issue an RFP or SOA. The contracting officer should review written quotes from at least three vendors and select the one that best meets the Board's needs. A contracting officer may use simplified purchase procedures for acquisition of supplies or services costing less than (1) $50,000 if the solicitation is issued in writing or (2) $25,000 if the solicitation is conducted orally.
- Micropurchase procedures. A micropurchase is the purchase of supplies or services that have a total cost of less than or equal to $5,000. Micropurchases do not require the solicitation of competitive quotations if the contracting officer (including an authorized holder of a government purchase card) determines the price is reasonable, but micropurchases for services exceeding $2,500 must include the appropriate Service Contract Act language and information (for example, the Board's boilerplate language from General Contract Provisions addressing the Service Contract Act and the Department of Labor's wage determination). To the maximum extent practicable, government purchase cards should be used for micropurchases, consistent with the procedures set forth in section V below. Acquisitions shall not be artificially divided to permit the use of micropurchase procedures. The Board's Small and Disadvantaged Business Acquisition Policy is not applicable to micropurchases.
- Directed purchase procedures. Occasionally, due to unusual circumstances, it is necessary to use procedures other than those listed in paragraphs A, B, C, D, E, F, or I for an individual acquisition. In those situations, requests and justifications for a directed procurement must be in writing. Except for procurements requested by the Management Division, the director of the Management Division authorizes directed purchases up to $250,000, and the chairman of the Committee on Board Affairs authorizes purchases over $250,000. Requests by the Management Division must be authorized by the chairman of the Committee on Board Affairs. (See also paragraph VI.A.6. regarding legal review.)
- Purchase or lease of real property. Except in situations governed by the Board's Relocation Policy, the Board of Governors must approve all purchases of real property. Leases of real property in which the value of the initial lease term exceeds $500,000 must be approved by the chief acquisition officer in consultation with the general counsel. Leases for less than that amount are made in accordance with the other applicable procedures set forth in this policy.
- Unique purchase procedures. The following unique purchase procedures may be used only when competitive acquisition methods are not appropriate. All requests to use a unique purchase procedure, except contracts for visiting scholars and legal services, must be justified in writing and approved by the chief acquisition officer.
- Sole source. The supplies, services, and construction are economically available from only one responsible vendor, and no other type of property or service will satisfy the Board's requirements. Sole-source procedures can be used for the extension of ongoing contracts when it is likely that award to any other vendor would result in either substantial duplication of cost that is not expected to be recovered through competition or in unacceptable delays in fulfilling the Board's requirements. (See also paragraph VI.A.6. regarding legal review.)
- Confirming order. The acquisition of any goods, services, or construction that the acquiring division should have sent to the Procurement Section for processing in accordance with section III.B. above, but that was not, requires a confirming-order memo signed by the director of the acquiring division. The memo must explain how and why the purchase was made without following Board policy and must describe the actions taken by the division to prevent future procurements of this type. The division director submits the memo to the manager of the Procurement Section, who will review and forward it to the chief acquisition officer. Except for memos sent by the Management Division, the chief acquisition officer will review memos and send them to the director of the Management Division for approval. Memos from the Management Division will be sent to the Legal Division for review. No payment will be made until the director of the Management Division or the Legal Division approves the confirming order. A confirming-order memo is not required for emergency procurements that follow another procedure stated in this policy or that are otherwise approved by the contracting officer. (See also paragraph VI.A.2.b. regarding legal review of confirming order memos submitted by the Management Division.)
- Exigency. The need for the property or service is of such an unusual and compelling urgency that the Board could incur material risk or injury unless it limits the number of vendors from which it solicits bids or proposals in order to obtain the property or service in the most timely fashion possible.
- Visiting scholar program. The service is provided by experts who come to the Board under the visiting scholar program, provided the service is obtained by contract letter and is for an amount under $10,000. Such contracts are not considered to be sole-source.
- Retention of law firms or legal professionals. Selection of a law firm or legal professional to provide legal services to the Board or the Office of Inspector General on a particular matter shall be at the sole discretion of the general counsel or the inspector general, respectively, on the basis of the particular needs relating to the lawsuit or other legal matter.
- Retention of dispute-resolution and investigative services. Selection of an individual or firm to provide professional dispute-resolution or investigative services to the Equal Employment Opportunity Programs Office on a particular matter shall be at the sole discretion of the EEO programs director, on the basis of the particular needs relating to a filed or anticipated complaint.
- Research materials and information-service subscriptions. Divisions may procure without competition research materials and subscriptions to information services and publications that contain unique editorial content or that provide compilations of data or information in a way or format that the acquiring division deems necessary to fulfilling its business functions. Except as otherwise provided in this policy (see section III.B.1.), acquisitions made under this procedure are subject to the same review procedures as sole-source procurements.
The Board participates in the government-wide purchasing card program. To reduce the administrative costs of acquiring low-cost, standard items, divisions should, to the maximum extent practicable, use the Board-issued government purchase card, within established purchasing limits. The Procurement Section issues purchase cards to Board employees who have been designated by their division or office director to use government purchase cards for small-dollar purchases. Purchasers using the government purchase card must conform to one of the acquisition procedures set forth in section IV above.
- In consultation with the cardholder's division director, the manager of the Procurement Section sets purchasing limits on an individual basis. In unusual or exigent circumstances, and after the review and endorsements described in section VI.A.2. below, the chief acquisition officer may approve exceptions to these purchasing limitations, subject to the documentation requirements set forth in the Purchase Card Procedures.
- Aggregated purchasing requirements that exceed the purchasing limits set forth in paragraph A above shall not be broken down into several purchases that are less than the limit in order to permit use of the government purchase card.
- Purchases of supplies and services that have a total cost of less than or equal to $5,000 may be made using the government purchase card without soliciting competitive quotations if the cardholder determines the price is reasonable. If the purchase of services exceeds $2,500, the cardholder shall include the appropriate Service Contract Act language and information (for example, the Board's boilerplate language from General Contract Provisions addressing the Service Contract Act and the Department of Labor's wage determination) in the purchase agreement. To use a government purchase card for purchases exceeding $5,000, the cardholder shall follow other appropriate acquisition procedures, such as the simplified purchase procedures (see section IV.E.) and procedures for purchases from the GSA Federal Supply Schedule (see section IV.C.).
The Procurement Section shall document the acquisition process in the contract file. In addition to the final contract, the contract file should include documentation of the number of solicitations issued and the number of proposals received, technical and cost/price evaluation results, negotiation results, the sole-source justification (if applicable), the legal review (as appropriate), the IFB or RFP if not incorporated in the contract, the final contract award summary, and any other material information.
- Acquisition review.
- In the case of procurement by formal bidding or negotiated procurement procedures, senior management in the division or office requesting an acquisition must review and approve the draft statement of work and evaluation criteria before the Procurement Section releases an RFP to the public. The COTR is responsible for ensuring that this review is conducted.
- Any proposed sole-source or exigency procurement must be reviewed and endorsed by the appropriate division or office director or by an officer designated by that director.
- Except for contracts originating from the Management Division, the chief acquisition officer will determine whether to approve a sole source or exigency procurement. For any sole source or exigency procurement with a total cost exceeding $50,000, the chief acquisition officer will request a review by the Legal Division prior to approving a request. If the chief acquisition officer denies the procurement request, the originating division director may appeal the denial to the director of the Management Division, whose decision on appeal will be final.
- The general counsel or the general counsel's designee must approve all confirming order memos and sole-source or exigency procurements proposed by the Management Division. The general counsel's decision on appeal will be final.
- Responses to an RFP that has an estimated value exceeding $100,000 per year must be evaluated by a technical evaluation team and a cost/price evaluation team appointed by the manager of the Procurement Section. The weighting of the cost and technical evaluations will depend on the nature of the acquisition. The final determination of the weighting will be made by the manager of the Procurement Section. A representative from the Planning and Budget (PAB) Section must be on any cost/price evaluation team or must review the cost/price evaluation before the contract award
- All division purchase requisitions that have an annual value less than or equal to $200,000 and that have been approved through the Board's automated purchasing system will go directly to the Procurement Section. All purchase requisitions over $200,000 will go to PAB for approval and then to Procurement.
- The Procurement Section will route the draft statement of work to relevant functions for review.
- The Legal Division must review selected contracts, as described below, for compliance with this policy, other applicable Board policies, general law, and federal contract law. The Legal Division review will also assess the risk of a challenge by an unsuccessful bidder. The Legal Division will assess general legal risk when facts are made known to Legal that raise such an issue. General legal risk is the risk associated with any other legal issues raised by the contract that may affect the Board. The Legal Division will provide substantive comments in writing to the Procurement Section. The Legal Division review does not address the establishment or evaluation of technical criteria, unless the acquisition is being made by the Legal Division or unless Legal is requested to do so by the acquiring division. The Legal Division also does not address contractor performance, the desirability of entering into the contract, or the need for the contract. The following contracts are subject to legal review:
- All procurements whose value exceeds or is expected to exceed an annual cost of $100,000, except instances where the exercise of an option year was priced in the original contract reviewed by the Legal Division and where no additional modifications are made to the option-year exercise. (The Legal Division must review a solicitation before it is issued and a purchase order before it is signed. The manager of the Procurement Section may also refer procurements that have an estimated annual value of less than $100,000 to the Legal Division for review.)
- All sole-source or exigency acquisitions that have a value that exceeds or is expected to exceed $50,000 annually. (This is in addition to the review required by paragraph A.2. above.)
- Any cost-reimbursement contract or directed purchase.
- Any contract to outsource services that would result in eliminating an occupied position. (See also the Board's Outsourcing Policy.)
- Any contract that involves copyrights, patents, or other intellectual property matters.
- Contract administration. The contracting officer may designate an individual to act as his or her representative to perform specific functions under awarded contracts. The contracting officer's technical representative (COTR) normally represents the contracting officer in administering technical details within the scope of the contract (see "Definitions" above). Any employee designated as a COTR must take a Board-sponsored or Board-approved course on COTR responsibilities. If the employee has not already completed the course prior to commencing COTR responsibilities, the employee must take the course within six months of designation as a COTR. The COTR is responsible for keeping the contracting officer apprised of the status of the contract, for performing necessary inspections, and for accepting services and construction. (Supplies are accepted by the Mail Operations and Supply Section of the Management Division.) The COTR approves invoices for services and construction, as necessary, and initiates contract close-out procedures with procurement staff on a timely basis. The COTR is required to maintain all necessary documentation needed to support payments and contractor performance. The COTR is not authorized to make any representations or commitments of any kind on behalf of the contracting officer or the Board. The COTR does not have the authority to alter the contractor's obligations or change the terms and conditions of any contract. Any changes to a contract, including a modification or change order, must be issued in writing and signed by the contracting officer.
- Standard for developing specifications. Plans, drawings, specifications, standards, purchase descriptions, and "brand-name or equal" descriptions for acquisitions should seek to promote economy and encourage competition in satisfying the Board's needs and should not be unduly restrictive.
- Release of acquisition information. Information concerning proposed acquisitions may not be released to any vendor before the Procurement Section issues a solicitation, except that information concerning a prospective solicitation may be provided to outside vendors to help the Board prepare for the solicitation. However, if the contacted vendors would obtain an unfair competitive advantage over other vendors, appropriate constraints shall be placed on their eligibility to participate in the resulting award. Until an award is made, any information contained in bids or proposals and other information concerning the award shall not be released to any person except Board staff directly involved in the evaluation and selection process. After an award is made, information may be disclosed in accordance with the Freedom of Information Act and other applicable law. The Board's policy is to disclose information to unsuccessful vendors in a manner that is consistent with the FAR.
- Reporting of anticompetitive practices. Whenever the Procurement Section or other individuals involved in the procurement process have reason to believe that collusion or any anticompetitive or unlawful practice has occurred, a written notice of the relevant facts should be sent to the Board's Office of Inspector General.
- Knowledge of acquisition policy. Directors of divisions or offices requesting acquisitions by contract shall ensure that the officer responsible for the request, the division's administrators, authorized users of government purchase cards, and the COTR, if assigned, have a thorough understanding of the procedures described in this Acquisition Policy, as well as other applicable policies, including the Board's Ethics Rules (12 CFR 264), the Small and Disadvantaged Business Acquisition Policy, and the Procurement Manual for Technical Personnel. Any violation of the Acquisition Policy or other Board policies could result in disciplinary action up to and including termination.
- Protests. Any actual or prospective contractor who is aggrieved in connection with the solicitation or award of a contract may submit a written protest to the manager of the Procurement Section. A protest based on alleged apparent improprieties in a solicitation shall be filed before the closing date for receipt of proposals. In all other cases, a protest shall be filed no later than 10 calendar days after the basis of the protest is known or should have been known, whichever is earlier. If the protest cannot be satisfied or settled by mutual agreement, the manager of the Procurement Section will issue a determination. The protestant may appeal the manager's determination by submitting a protest in writing to the chief acquisition officer or, if the chief acquisition officer has a conflict, to the director of the Management Division. An appeal shall be filed no later than 10 calendar days after receipt of the manager's determination. Decisions made by the director of the Management Division or the chief acquisition officer are final.
The Management Division administers this policy.