Applicants must use their own procurement procedures which reflect applicable State and local laws and regulations. They must also, however, meet the minimum Federal procurement standards1 where those standard s are more onerous (including but not limited to those discussed in this Fact Sheet}, or the contract will be deemed in violation of the procurement rules, and the request for reimbursement could be subject to the enforcement provisions

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Contractor ownership preferences.2 Full and open competition also involves the adherence to procurement rules covering contractor ownership preferences. The applicant must take positive actions to involve and use "small and minority firms, women's business enterprise and labor surplus area firms."3 The applicant's process should give potential contractors in these categories a full and open opportunity to compete .4 FEMA will reimburse the applicant if, after a full and open competition, the applicant selects a contractor who provides the lowest price but does not meet one of these categories. When the applicant hires a prime contractor, the applicant must also require the prime contractor to utilize the same approach towards these categories when hiring sub-contractors.

System for managing procurement. Applicants must employ a system that governs contracts and purchase orders. This system must include a means of enforcing agreements, written procedures governing procurement actions, and a written code of standards for contract and purchase order administration. This code of standards must provide ethical rules and the penalties for violating these rules.5 The system must also include a process to handle protests involving contracts and purchase order awards.6

Required provisions in procurement actions. The applicant must include certain provisions in its procurement actions. These provisions vary depending on the type and dollar amount of the contract, and are provided in 44 CFR part 13or 2 CFR part 215, 220, 225, or 230, as applicable. Note that the Uniform Administrative Requirements for Federal Gran t Assistance require applicant contracts to con tab1a provision requiring compliance with the Davis-Bacon Act when required by grant program legislation. The Stafford Act requires preparedness grantees to comply with Davis- Bacon provisions.7 The Stafford Act does not require compliance with Davis-Bacon for any other grants. Therefore, applicant contracts to execute eligible work under the Public Assistance program are not required to contain a Davis-Bacon provision.

Guarantees and bonds. For construction contracts and facility improvements above the simplified acquisition threshold , the applicant must require a bid guarantee from each bidder equivalent to 5 percent of the bid price, a performance bond on the part of the contractor for 100 percent of the contract price, and a payment bond on the part of the contractor for 100% of the contract. In lieu of these requirements, if FEMA (with respect to a grant) or the state (with respect to a subgrant), has made a determination that FEMA or the state’s interest is adequately protected through other means, they may accept the bonding policy and requirements of the applicant.

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