Archive

Intergovernmental Service Delivery

Recommendations and Actions

FSL05:

Simplify Administration by Modifying the Common Grant Rules on Small Purchases

Background

Currently, OMB Circular A-102, "Grants and Cooperative Agreements to State and Local Governments," sets a limit of $25,000 in the aggregate for the use of small purchase procedures by local governments to secure services, supplies, or other property.[Endnote 1] Small purchase procedures allow a grantee to use relatively simple and informal procurement methods (e.g., obtaining price or rate quotations over the phone from an adequate number of qualified vendors).

Need for Change

Local governments have found the $25,000 limit to be overly restrictive, especially for the purchase of small vehicles that often exceed this amount. For example, to procure one small van with federal funds to satisfy Americans with Disabilities Act requirements, grantees must formally advertise and solicit sealed public bids. This requirement delays the procurement process and prevents grantees from acquiring rolling stock quickly.

Action

Modify OMB Circular A-102 to require that the common grants management rules increase the dollar threshold for small purchases by local governments from $25,000 to $100,000. (2)

Cross References to Other NPR Accompanying Reports

Reinventing Federal Procurement, PROC4: Establish New Simplified Acquisition Threshold and Procedures.

Endnote

1. State governments are not affected. They are authorized to use their own procedures and are, therefore, not necessarily restricted to $25,000.

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