403.2 - Simplified Acquisition
09/27/2004
OPR: Office of Acquisition and Grants
Instruction: This chapter replaces chapter 403.2, dated 8/28/95.
This Survey Manual (SM) chapter defines several widely-used simplified acquisition terms and summarizes the methods and procedures for acquisition of supplies, services and construction from open market sources when the aggregate amount does not exceed the simplified acquisition threshold. This chapter also does not apply to:
A. Federal Acquisition Regulation (FAR) Part 13, Simplified Acquisition Procedures.
B. Department of the Interior Acquisition Regulation (DIAR) Part 1413, Simplified Purchase Procedures.
A. Simplified Acquisition. Acquisition of supplies, nonpersonal services, and construction in an amount not exceeding the simplified acquisition threshold using the procedures, methods, and instruments prescribed in FAR Part 13.
B. Simplified acquisition threshold is established in Public Law 103-355, Sec. 4001 and FAR 13.101 as $100,000 (with limited exceptions as set forth in FAR 2.101).
C. Micropurchase is a simplified acquisition not exceeding the micropurchase threshold as defined in FAR 2.101 (generally $2,500 or, for construction, less than $2,000).
D. Request for Quotations (RFQ). Written, oral, or electronic solicitation issued by an authorized Contracting Officer (CO) to obtain quotations.
A. Simplified acquisition procedures are used for open market acquisitions of supplies, nonpersonal services, and construction
B. Requirements exceeding the simplified acquisition threshold shall not be broken down into several purchases or artificially reduced to smaller quantities to permit negotiations under simplified acquisition procedures or to avoid other regulatory thresholds or delegated authority limits (FAR 13.003(c)). As long as the acquisition has been treated as a single requirement for purposes of applying the various regulatory thresholds and competitive procedures, it may be broken into multiple awards for administrative convenience (e.g., for separate accounts or delivery addresses). The total amount involved in any one transaction includes all supplies and services that would be logically solicited or procured together, including reimbursable shipping costs.
C. Each acquisition of supplies or services above the micropurchase threshold shall be set aside exclusively for small business concerns in accordance with Public Law 95-507, as amended (FAR 13.003(b)). Exceptions to the mandatory small business set-aside are found in FAR 19.502-2 and FAR Subpart 19.10. Although below the statutory small business reserve, micropurchases should still be placed with small businesses (including small disadvantaged businesses, veteran owned small businesses, women-owned small businesses, and Historically Underutilized Business Zone (HUBZone) concerns) to the maximum practical extent.
D. Micropurchase requirements should be satisfied within the originating office whenever possible. The preferred method for such purchases is the Government charge card, then convenience check.
E. Simplified acquisitions over the micropurchase threshold will be solicited and awarded by electronic commerce means whenever practicable and cost effective, as required by FAR 4.502.
F. Use of more complex contract methods and instruments may be necessary for actions below the simplified acquisition threshold if the acquisition involves cost-reimbursement type pricing, includes complex or critical work needing more complex contract clauses to protect the Governments interests, or establishes a mechanism for placing subsequent delivery or task orders.
A. The office initiating a requisition is responsible for identifying the need, describing the requirement, obtaining any required commodity approvals, and assisting as needed in technical evaluation of offered products and services. (See SM 402.3 for instructions on requisitioning and SM 402.5 for specifications.) In the case of electronic and information technology, this includes determining applicable Section 508 accessibility standards and conducting market research to determine availability of accessible commercial solutions. In the case of services, this includes developing a performance-based work statement whenever possible.
B. Requisitioners are permitted to contact potential suppliers to obtain published vendor literature or information about commercial prices and availability. Requisitioners are not permitted to solicit formal quotations nor to make any commitments regarding purchase of goods or services. The CO is responsible for solicitation of quotations, the selection of the procurement method, and award.
C. It is a violation of law to improperly disclose proprietary or source selection information. (See FAR 3.104, Procurement Integrity.) Nonprocurement personnel may not provide any outside source with copies of requisitions, drafts or copies of specifications or work statements, the government estimate or amount of funds available for procurement, or other information that may give one vendor an advantage over potential competitors. USGS will not accept or use specifications or work statements prepared by a potential competitor for the acquisition.
There are several methods to buy goods and services under the simplified acquisition threshold. The small business set-aside requirement applies to all purchase methods and instruments for transactions exceeding the micropurchase threshold.
A. Imprest Fund (Petty Cash). The imprest fund method of purchasing is no longer used at the USGS.
B. Third-Party Drafts. Third Party Drafts are no longer used at the USGS.
C. Government Charge Cards and Convenience Checks. (See SM 205.4, Appendix A, Item C.3. for authority delegations.)
(1) The Government charge card is a commercial credit card provided to Government employees under the terms and conditions of a GSA contract with a commercial banking institution. The charge cards are designed to be used by both warranted and non-warranted employees for making purchases in person, by mail, by fax, on-line, or by telephone. Restrictions and procedures for use of charge cards are found in SM 403.7, in the Department of the Interior Integrated Charge Card Guide, and in the USGS Supplemental Charge Card Guide.
(2) Convenience Checks are provided by the bank under the authority of GSA's charge card program. The checks may be written by specially designated charge card holders for amounts not exceeding $2,500. Convenience checks may only be used when the vendor does not accept the charge card and may not be used to make payments under other contracts or agreements (including purchase orders).
D. Blanket Purchase Agreement (BPA). When used as a simplified acquisition instrument, the BPA is a mechanism for making purchases without issuing individual purchase documents. BPAs are established when the Government anticipates repetitive needs for a variety of items within a category of goods or services. A BPA is an agreement between the Government and a vendor that allows individuals authorized to use the BPA to place orders by telephone or in person with simplified documentation. Use of the BPA procurement method is found in SM 403.6 and FAR 13.303. (See SM 205.4, Appendix A, item C.2 for authority delegations.)
E. Oral Orders. The oral order - certified invoice method is no longer an approved method of purchasing at the USGS. When a micropurchase is required, one should consider the use of the charge card or convenience check, in that order.
F. Purchase Order. A purchase order is a written or electronic offer signed by a warranted CO to acquire supplies or services (including construction) at stated prices upon specified terms and conditions, using simplified acquisition procedures. Unsigned electronic purchase orders may be used as described in FAR 13.302-1(c). The application of the purchase order method is found in SM 403.5.
G. SF 44 Purchase Order-Invoice-Voucher. The SF 44 (9-044) is not authorized for use within USGS.
H. Gasoline and Oil Obtained by Credit Card. The U.S. Government Fleet Fuel Purchase Card is obsolete. Vehicle cards issued under the integrated charge card program are now used for this purpose.
The following forms are provided for use in USGS offices performing simplified acquisitions. Offices are authorized to modify the forms or use alternate forms, provided the same informational items are covered.
A. Small Purchase Competition Worksheet (USGS Form 9-3009). COs will use the Small Purchase Competition Worksheet, Figure 1, for all competitive simplified acquisition transactions and for orders placed against multiple award Federal Supply Schedules, or record the same information on a comparable form or electronic record.
B. Open Market Small Purchase Memorandum (USGS Form 9-3010). COs will use the Small Purchase Memorandum, Figure 2, to support open market transactions. The completed form, or equivalent record, must be included in the purchase file for all open market purchase orders of any amount. Micropurchases made by charge card or BPA call are exempt from this documentation requirement.
Purchases exceeding the micropurchase threshold must be competed among a minimum of three qualified vendors, unless the action is supported by a noncompetitive justification or conducted under a small business preference program authorizing noncompetitive awards. Competition is obtained by soliciting quotes informally, by telephone or fax, or by using a more formal written or electronic Request for Quotation.
A. Competitive Awards.
(1) Before soliciting quotations, the CO should use the Central Contractor Registration system and any local vendor lists to develop a listing of potential small business sources. If a CO cannot locate two or more small business concerns who appear capable of providing the product or service, the CO will document that finding and proceed with an unrestricted solicitation. Sources other than small business should not be contacted until the CO determines the item or service is not reasonably available from a small business.
(2) The CO should solicit quotations from three or more suppliers, making a reasonable effort to obtain at least two competitive, responsive quotes. The names of vendors solicited and their responses must be recorded in the purchase file using USGS Form 9-3009 or comparable written or electronic record, annotated to document the basis for the award decision.
(3) If, after soliciting on a set-aside basis, the CO has not obtained an acceptable quote from any small business source, the CO may make a written determination to withdraw the set-aside and resolicit on an unrestricted basis.
B. Noncompetitive Awards. Documentation explaining the absence of competition must be included in the purchase file for noncompetitive awards, except those made under the 8(a) program (FAR 19.8). For noncompetitive Service Disabled Veteran Owned Small Business (SDVOSB) awards, the CO need only document that no other SDVOSB can satisfy the requirement (FAR 19.14). For all other noncompetitive actions, the signed justification for noncompetitive award must be provided by project personnel and approved by the CO. All noncompetitive awards, including 8(a) and SDVOSB awards, must also be supported by a determination of price reasonableness (see 9. below). Application of common reasons for restricting competition are discussed below.
Qualifications. Noncompetitive documentation must demonstrate that the source is uniquely qualified and is the only reasonably available alternative. Demonstrating that the recommended vendor is well qualified, or even the best qualified, is not sufficient to justify a noncompetitive award. When other qualified sources can be found, deciding which source can best meet the Government's needs must be done within the procedural safeguards of the acquisition process and must include consideration of price or cost. Similarly, competition cannot be restricted to a single source based on informal market research that concludes the firm offers the most economical or advantageous solution.
Urgency/Delivery time. Urgency of need can be a valid basis for making awards without competition, but the award must be limited to the immediately needed quantities. The noncompetitive justification must demonstrate the risk of injury, damage, or loss posed by the added delay needed to locate and solicit additional sources. Potential loss of expiring funds is not an accepted reason for limiting competition (FAR 6.301(c)(2)).
Brand name. Limiting an acquisition to a single brand can be unavoidable when procuring replacement parts or software maintenance. Purchases can also be limited to a single brand/make and model when no other item has all the performance or design features needed to meet our minimum needs. The need to restrict competition to a single brand must be documented for the file. Purchases restricted to a single brand must be competed among suppliers of the brand name product/service when available.
A. Purchases not over the micropurchase threshold may be made without soliciting competition and/or documenting the price analysis as long as the CO or cardholder finds no reason to question the fairness and reasonableness of the price. When the buyer has doubt as to the reasonableness of the price, then the buyer should obtain additional quote(s) or take action to verify the reasonableness of the price, such as reviewing published price lists or requesting data from the vendor on sales to other customers. Micropurchases should be rotated among qualified small business suppliers to maintain familiarity with competitive market rates.
B. Purchases exceeding the micropurchase threshold must be supported by a written determination by the CO that the price is fair and reasonable. Whenever possible, this determination is based on competition. When awards are made without competition, or when only a single responsive quote is received, the CO must use other price analysis techniques described in FAR 15.404-1(b) to determine if the price is reasonable. Areas that may be considered along with the independent Government cost estimate in determining price reasonableness include: price history, current catalog or market price list and discounting practices, and market prices for similar items. Price analysis must be documented on Form 9-3010 or in a separate memorandum for the file.
Record retention requirements for simplified acquisitions are found in FAR 4.805.
A. Each purchasing activity with a warranted CO must maintain files of all their purchase transactions. As a minimum, these files will include: a requisition (DI-1) with specifications or statement of work, competitive quotations or documentation supporting the lack of competition (when required), determination of price reasonableness (when required), names and size status of all vendors contacted, any required approvals (Information Technology, temporary services, duplicating equipment, etc.), a copy of the FPDS report (when required), and a copy of the purchase document (or award information, for other than written orders). The official file copy of the order must contain a complete copy of the purchase order sent to the vendor, including signature(s), clauses, specifications, and other attachments. This data is maintained in the purchase file to support the award; provide historical reference; and furnish documentation for management review, audit, and litigation.
B. For micropurchases made by non-warranted individuals, documentation and record keeping requirements are established separately for each available acquisition method. (See the Supplemental Charge Card Guide and SM 403.6, BPAs.)
Effective with Fiscal Year 2004, all transactions over the micropurchase threshold must be individually reported to the Federal Procurement Data System - Next Generation (FPDS-NG). To help insure data accuracy, reports must be completed by the warranted contracting officer or other trained purchasing agent knowledgeable in the terms and procedures covered by the reports. DOI requires FPDS-NG reporting to be done through the Interior Department Electronic Acquisition System - Procurement Desktop (IDEAS-PD) system. Each office with a warranted CO must report their acquisition awards to the new FPDS-NG as provided below. Offices may also be required to compile and report additional purchase data for separate studies, in response to Freedom of Information Act requests, or to meet Department of the Interior reporting requirements. These reporting obligations are conditions of the delegation of warrant authority given to individuals in field procurement offices. Repeated failure to submit timely reports is a basis for removal of the warrant(s) from that office.
A. Offices with IDEAS-PD. Offices with access to IDEAS-PD acquisition software will report their purchase actions to FPDS via the IDEAS-PD system in accordance with established procedures.
B. Offices without access to IDEAS-PD. Offices without access to the IDEAS-PD award functions will report manually in accordance with instructions from the Office of Acquisition and Grants.
Figure 1 - USGS Form 9-3009, Small Purchase Competition Worksheet
Figure 2 - USGS Form 9-3010, Open Market Small Purchase Memorandum