6h. Description of Types of Purchases
Throughout all stages of the procurement process, HUD grantees and sub-recipients must ensure that only allowable, allocable and reasonable costs are incurred; that funds are expended appropriately, in accordance with good financial practices; and that all relevant information regarding purchases is documented, in accordance with written organizational policies and all applicable regulations, including those outlined in the OMB omnibus circular (2 CFR Part 200.317-326).
What Is Included in Micro Purchase (< $3,000) Procedures?
Micro-purchases do not require competitive bidding or documentation of multiple bids. Micro-purchases may be awarded without soliciting competitive quotations. However, you are expected to shop around and negotiate for competitive prices, and to spread your micro-purchases amongst different vendors as much as possible. Federal regulations define micro-purchases as those under $3,000.
- If state or local government policies require lower maximums, then grantees and sub-recipients are required to follow the strictest applicable rules.
- To the extent practicable, micro-purchases should be distributed equitably among qualified suppliers.
What Is Included in Small Purchase (<$150,000) Procedures?
For small purchases, like cars, closing costs or furniture for a new small program office, you are required to seek and document multiple price quotes from qualified sources. This method should only be used for construction work when it is not cost-effective to carry out sealed bids. Note that construction work procured by a private owner is not subject to these method requirements.
- Competition is sought through oral or written price quotations.
- Grantees must document an adequate number of price or rate quotations from qualified sources.
What is Required for Procurements of More Than $150,000?
Procurements of more than $150,000 must be carried out using one of three procedures:
- Competitive sealed bid with formal advertisement
- Competitive proposals
- Non-competitive proposals or sole source
Note: Large projects may not be broken up into smaller components solely to qualify for the “small purchases” approach.