FEDERAL REGULATIONS

Applicable to State Procurement

ARRA

American Recovery and Reinvestment Act of 2009

ARRA Grants &

Procurements

American Recovery & Reinvestment Act

ARRA Background President Barack Obama signed the American Recovery and

Reinvestment Act (ARRA) into law on February 17, 2009. The ARRA provides $787 billion of federal tax reductions and federal spending increases to accelerate the nations economic recovery and preserve and create jobs. The Congressional Joint Committee on taxation estimates the act will provide $334 billion in tax relief prior to the close of the 2011 federal fiscal year. Individual filers receive a tax reduction of $174 billion and businesses, $90 billion. The alternative minimum tax is also reduced for tax year 2009 at a cost of $70 billion.

ARRA Background….cont.

The ARRA also provides for $453 billion in additional federal spending. About 20 percent of the additional federal spending goes directly to individuals through increases in spending on programs such as food stamps. The remainder goes to pay for federal proejcts and to state and local governments.

Utah’s Portion Utah expects to receive $1.6 billion in direct

funding from the federal stimulus bill. Some of this funding can be used to fill state budget gaps, but other funds are to be spent on specific programs identified by Congress. Total funding may grow depending on the State’s success in receiving competitive grants for which there are no specific state allocations.

How will the federal stimulus bill affect Utah’s budget deficit?

State and local governments in Utah are estimated to be eligible to receive a substantial amount of one-time assistance under the ARRA. Most of the funding being provided by ARRA is being distributed by existing funding programs. In some cases this allows the State to reallocate funds to balance budget shortfalls as long as it is receiving ARRA funds.

Requirements associated with ARRA funds received by the State include:

Proper accounting and tracking of expenditures Compliance with state and federal procurement

laws Compliance with antitrust regulations Accurate and compliant reporting under Section

1512

ARRA PURCHASING

Grant Process

Grants are not typically processed through State Purchasing!

However, in a memorandum dated August 11, 2009, from the Governor’s Office of Planning and Budget (GOPB), it was recommended that state agencies advertise grants involving ARRA funds through the Department of Administrative Services, Division of Purchasing.

WHY? Promote competition Help ensure full and complete transparency. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - BidSync is the bid notification system used by the Division of

Purchasing to advertise most all procurements. Grant advertisements, known as Requests for Grant Applications

(RGA’s) are advertised in BidSync to create fair and open competition to allow for the required transparency in the process.

All potential grant applicants are notified of the RGA posting in BidSync by the granting agency. Applicants download the RGA documents and submit applications hard copy directly to the agency.

The memorandum from GOPB can be accessed on the State Purchasing website at www.purchasing.utah.gov.

Does the grant require you to sign an agreement with a specific company?

If the answer is yes, you can enter into the agreement without the involvement of Purchasing.

The agreement must identify all specific requirements of the ARRA funding.

If the grant does not indicate a specific company; The RGA document must be submitted to purchasing in an email.

Clearly indicate that ARRA funds are being used. (Only ARRA funded grants come to State Purchasing).

Indicate any special requirements that must be included such as Buy American provisions or Davis/Bacon wage rates.

Include in the RGA a complete and detailed statement of work with specific details regarding the time frame for the grant.

Work with the state purchasing agent to determine the amount of time for the RGA to be advertised.

Agencies are required to announce the grant by email to potential applicants. The email should provide instructions on how to access BidSync and how to review the grant information. Purchasing will assist the agency with this language.

ARRA Funded Procurements ARRA funded purchases must follow the normal procurement

process. The agency must enter an RQS/RQM into the state Finet system

with “ARRA Funding” clearly indicated. Provide any special requirements that must be included, such as

Buy American provisions or Davis-Bacon wage rates. Send Purchasing a complete and detailed statement of work or

specification, including details regarding a contract performance time or a product delivery date.

Work with the state purchasing agent to determine the amount of time to advertise the procurement.

Notification to State Purchasing that ARRA or other federal funds are being used is the responsibility of the requesting agency.

State Purchasing Commitment Regarding ARRA Funding

Assist agencies with ARRA funded grants and procurements.

Make all ARRA procurements a priority Ensure transparency by advertising grants and

procurements on the State’s electronic bid notification system (BidSync).

For details regarding your specific purchase, contact the appropriate purchasing agent. A list of agents can be found at:

http://purchasing.utah.gov/directories/documents/agentlist.pdf

ARRA Interesting Tidbits!! Transparency and Oversight Requirements,

Title XV, Subtitle A, Section 1511 Recovery Accountability and Transparency

Board, Title XV, Subtitle B, Section 1521 Protecting State and Local Govmt.

Whistleblowers, Title XV< Subtitle D, Section 1553 – …………..

Protecting State and Local Government Whistleblowers

Prohibitions of Reprisals-- An employee of any non-Federal employer

receiving covered funds may not be discharged, demoted, or otherwise discriminated against as a reprisal for disclosing, including the disclosure made in the ordinary course of an employee's duties, to the Board, an inspector general, the Comptroller General, a member of Congress, a State or Federal regulatory or law enforcement agency, a person with supervisory authority over the employee (or such other person working for the employer who has the authority to investigate, discover, or terminate mis-conduct), a court or grand jury, the head of a Federal agency, or their representatives, information that the employee reasonably believes is evidence of: (1) gross mis-management of an agency contract or grant relating to covered funds, (2) a gross waste of covered funds, (3) a substantial and specific danger to public health or safety related to the implementation or use of covered funds, (4) an abuse of authority related to the implementation or use of covered funds, or (5) a violation of the law, rule or regulation related to an agency contract (including the competition for or negotiation of a contract) or grant, awarded or issued relating to covered funds.

FEDERALREQUIREMENTSIN PURCHASING

Introduction

Four Laws to Consider:

Davis-Bacon Act

Service Contract Act of 1965

Walsh Healey Public Contracts Act

Buy American Act

Agency Responsible:

The requesting agency is responsible for including any federal requirements in the scope of work/specifications

Agencies are considered the “expert” Communication is the key Annotate on requisition that federal funds are

involved

Federal Contract Labor Laws Rights and Obligations of the Parties

Specifically the rights of contractor’s employees Purchasing Officer – Ensure Compliance

As long as agency annotates federal funds used on the requisition

Problems – Agency monitors, may get a claim, and directs contractors employee to the Department of Labor (DOL)

DAVIS-BACON ACT

History Senator James Davis & Rep. Robert L. Bacon Signed By President Hoover in March, 1931 Amendments

1935: Contractors – not to lower wages to improve bid 1964: Fringe benefits included 1994: Construction on buildings used by Head Start

Suspensions

DAVIS-BACON ACT

All contracts over $2,000 for Construction Contractors paid weekly Wage rates and fringe benefits determined by DOL Proper accounting and tracking of expenditures

Includes Contract Work Hours & Safety Standards Act Time and a half – Excess of 40 hours/week

Law covers contractors and all sub-contractors Certified Payroll Records

DAVIS-BACON ACT….continued

Suspected violations – discuss with contractor Unresolved issues – report to DOL Employee claim – direct employee to DOL DOL conducts investigation and deals with

contractor Always consult with DOL for guidance

SERVICE CONTRACT ACT of 1965 History All Service contracts over $2,500

Act covers most types of services Contractors paid no less that bi-weekly Wage rates and fringe benefits determined by

DOL DOL responsible for enforcement Agency contacts DOL if violation is suspected Wage Rate Site: www.wdol.gov/index/aspx

WALSH HEALEY PUBLIC CONTRACTS ACT

History Still on the books but basically replaced with FLSA

Manufacture or Furnish Supplies Within U.S., and some U.S. Possessions Contracts exceeding $10,000.00 Contractor Employee Wages similar to DB and SCA Controls Child and Convict Labor Protects against unsanitary, unsafe or otherwise

dangerous to health and safety of employees Exemptions – Statutory and Regulatory (FAR 22.604)

BUY AMERICAN ACT History Preference for U.S. made products

Two part test to define domestic end product Requirement Can be Waived

More expensive Unavailability Public Interest Additional Information

FAR subparts 25.101, 25.102 and 25.103 Over 100 Items Predetermined - Not Available in U.S.

FAR subpart 25.104 Includes many raw produce, chemical and mineral

products

BUY AMERICAN ACT…cont. Act Includes Construction Materials

Furnished by contractor & used in const. project Exceptions in FAR 25.202, Similar to those in FAR 25.204

President Has Power to Waive the Buy American Act Applying the Terms of the Buy American Act

Large Business - Add six percent to price Small Business – Add twelve percent to price Large vs. small Business – Consult USSBA

Note: Buy American Act vs. Buy America Act

ARRA AND BUY AMERICAN ACT

Buy American Act Provision in ARRA Change in the FAR

Implement this provision Construction Materials

Excerpt from Washington Post Article

May 15, 2009

ARRA AND DAVIS BACON ACT

ARRA Construction Projects All Davis Bacon Act Provisions Apply Federal Agency Awarding Grant Money

Include Language in Grant Announcement ARRA Expands Scope of Davis Bacon Act

Projects funded even partially by ARRA funds Off Site Employees covered DB not limited to public buildings and public works

ARRA AND DAVIS BACON ACT

Davis-Bacon Requirements ARRA Requirements

Apply to contracts “to which the United States or the District of Columbia is a party.”

Apply to “projects funded in whole or in part by and through the Federal Government.”

Workers must be “employed directly upon the site of the work.”

No such requirement.

Apply to work conducted on “public buildings or public works of the United States or the District of Columbia.”

No such limitation.