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The publication of 2 CFR 200 in 2014 introduced some important changes to the rules for administration of federal awards. The changes with greatest impact on recipients occurred 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.)
• New applicability of mandatory audit requirements (Subpart F) to non-US recipients/subrecipients who expend cost-reimbursable federal award funds in excess of the $750k per fiscal year (§ 200.101). (Non-US entities were previously exempt from the audit requirements of Circular A-133.)

Also…
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.