Highlights of changes from old regs to 2 CFR 200

2 CFR 200 introduces some important changes to the rules for administration of federal awards. The changes with greatest impact on recipients occur in two key practice areas: procurement and subawards.

Important New Requirements on Recipient Procurement Policy

  • Explicit requirement to maintain written standards of conduct covering organizational conflicts of interest when dealing with a parent, affiliate or subsidiary organization. (§ 200.318(c)(2)).
  • Expanded requirements for documentation of procurement actions, including the following:
    • requirement to document the selection of type of contract (fixed price/fee, cost plus fee, etc.) - § 200.318(i);
    • specific limitations on the use of time-and-materials type of contract - § 200.318(j);
    • expanded requirements regarding competition in awarding contracts - § 200.319.
  • Required micro-purchase threshold of $3000 - §§ 200.67 and 200.320(a).
  • Clear definition of the federal Simplified Acquisition Threshold - § 200.88.
  • Expanded language detailing the requirements for use of small purchase procedures (those greater than the micro-purchase threshold and smaller than the simplified acquisition threshold) - § 200.320(b).
  • Requirement to use sealed bids whenever appropriate - § 200.320(c).
  • Specific requirements on the use of competitive proposals - § 200.320(d).
  • Specific limitations on and requirements for the use of non-competitive (sole source) proposals - § 200.320(f).
  • Requirement to perform and document cost or price analysis on every procurement in excess of the Simplified Acquisition Threshold - § 200.323(a).
  • Requirement to negotiate profit as a separate element of the price in the absence of competition or whenever cost or price analysis is conducted - § 200.323(b).
  • Requirement to follow the Cost Principles in Subpart E of 2 CFR 200 whenever negotiating or reimbursing costs under cost-type contracts - § 200.323(c).
  • New requirement for contract provisions to be included in procurement contracts - § 200.326 and Appendix II.

Important New Requirements on Recipient Subaward Policy

  • New terminology:
    • Clarification that subawards (§ 200.92) are federal awards (§ 200.92);
    • Definitions of the terms “pass-through entity” (§ 200.74) and “subrecipient” (§ 200.93).
  • New clarity and limitations on the use of Fixed Amount Awards by federal awarding agencies (§ 200.201).
  • New requirement for pass-through entities to distinguish between assistance and acquisition when issuing contracts and subawards under federal awards (§ 200.330).
  • Specific requirements for the contents of subaward agreements (§ 200.331).
  • New requirement to provide for subrecipient indirect costs, with provision for a de minimis rate of 10% of MTDC (§ 200.331(a)(4)).
  • New clarity and limitations on the use of Fixed Amount Subawards (§ 200.332):
    • Requirement for prior approval by the federal awarding agency for the use of fixed amount subawards;
    • Limitation on size of fixed amount subawards of up to the Simplified Acquisition Threshold. (See also general rules on the use of Fixed Amount Awards at §§ 200.45 and 200.201.)

The requirements for announcement of opportunities and the specific contents of such announcements (Appendix I), while not required of pass-through entities, may be instructive for PTEs in crafting their own subaward policy.

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