Chapter 5101:9-4 Acquistion and Procurement
(A) Federal and state acquisition requirements
(1) Each county family services agency (CFSA) and workforce development agency (WDA) shall ensure that all purchases of services, supplies, and equipment funded by state or federal funds received from the Ohio department of job and family services (ODJFS) meet applicable federal and state statutes, regulations, rules, and 2 C.F.R. 200 and 45 C.F.R. 75, as in effect December 19, 2014. These requirements include, but are not limited to, Chapter 125. of the Revised Code, this chapter, and:
(a) 29 C.F.R. 95 when not-for-profit organizations expend department of labor (DOL) funds; and
(b) 29 C.F.R. 97 when governments expend DOL funds;
(2) This chapter contains a number of provisions from the applicable federal rules, but not all such provisions.
(B) Acquisition standards
(1) Development of written standards Each CFSA and WDA shall develop written acquisition standards. These acquisition standards shall comply with all applicable federal and state acquisition statutes, regulations, rules, and circulars. The written standards shall also contain all relevant requirements of the provisions of this chapter, including the requirements listed in rule 5101:9-4-07 of the Administrative Code.
(2) Application of standards
(a) The CFSA and WDA shall follow written acquisition standards whenever making any acquisition funded in whole or in part by state or federal funds .
(b) These acquisition standards are also applicable to any sub-grantee of the CFSA or WDA that is funded in whole or in part by state or federal funds .
(c) The acquisition standards referred to in this rule and the requirements contained in this chapter do not apply to those acquisitions made exclusively with county funds that are not used to match state or federal funds received from ODJFS.
(a) Each CFSA and WDA is legally responsible to ensure that all acquisitions funded in whole or in part by state or federal funds meet the acquisition standards established under this chapter.
(b) Each CFSA and WDA shall ensure that all of its employees involved in procurement activities know and comply with these acquisition standards.
(c) Each CFSA and WDA shall ensure that any sub-grantee entity or
contractor funded in whole or in part by state or federal funds is aware of the requirements contained in paragraph (A) of this rule. The agency shall ensure that any grant agreement or contract, specify that any acquisition shall conform to these requirements.
(A) Each county family services agency (CFSA) and workforce development agency (WDA) shall maintain written standards of conduct covering conflicts of interest and governing the performance of their officers and employees engaged in awarding, recommending, approving, monitoring, administering contracts, other purchases of goods and services, and grants. The CFSA and WDA are responsible for the conduct of agents who are not CFSA and WDA employees. For the purpose of this rule, an "agent" is anyone that is acting on behalf of an agency in awarding, recommending, approving, monitoring, administering contracts, other purchases of goods and services, and grants. The CFSA and WDA shall also ensure that this code governs the conduct of such agents.
(B) The CFSA and WDA shall provide a copy of the written standards of conduct to each employee or agent engaged in awarding or administering contracts and shall ensure that such employees and agents receive sufficient training to understand how to apply the written standards of conduct.
(C) The CFSA's and WDA's written standards of conduct shall at a minimum comply with the following federal and state requirements:
(D) In addition to meeting the requirements of state and federal law listed in paragraph (C) of this rule, the CFSA's and WDA's written standards of conduct shall, at a minimum, include all of the following requirements and prohibitions.
(1) The CFSA and WDA employees or agents shall not solicit or accept gratuities, favors, or anything of value, as defined in section 102.01 of the Revised Code from anyone doing business with or seeking to do business with, or regulated by the agency, including:
(a) Contractors and potential contractors;
(b) Vendors and potential vendors; and
(c) Grantees and potential grantees.
(2) The CFSA and WDA employees or agents shall not participate in the following contract, purchase, or grant related activities if a real, potential, or apparent conflict of interest could arise:
(b) Award recommendations;
(d) Monitoring; and
(e) Administering contract, purchase, or grant.
(3) A conflict of interest could arise when the entities listed in paragraphs (D)(3)(a) to (D)(3)(c) of this rule have a financial, personal, or other interest in the individual or company selected for the award of a contract, purchase, or grant in the following instances:
(b) The partner or business associate of the employee or agent; or
(c) Any person or organization that employs or is about to employ the employee or agent, a member of his or her immediate family, his or her partner or business associates.
(4) The written standards of conduct shall ensure that each CFSA and WDA employee or agent engaged in awarding, recommending, approving, or administering a CFSA and WDA contract, purchase, or grant receives a copy of the Ohio ethics commission's Ohio ethics law (Chapter 102. of the Revised Code). The written standards of conduct shall advise such employees and agents on the following information:
(a) How to obtain educational information related to Ohio ethics law;
(b) The identification of the contact person in the CFSA, WDA, or the prosecuting attorney's office for any employee who is unsure as to whether any particular course of conduct violates the requirements of the CFSA's or WDA's standards of conduct or Ohio's ethics law; and
(c) Employees/agents may discuss concerns on the telephone or obtain an advisory opinion from the Ohio ethics commission. The advice should be obtained before the employee engages in the conduct.
(5) CFSA and WDA employees are prohibited from selling or attempting to sell any goods or services to the Ohio department of job and family services (ODJFS), a county department of job and family services (CDJFS), a public children's services agency (PCSA), a child support enforcement agency (CSEA), a WDA, or a one-stop agency with whom they are employed or otherwise affiliated.
(6) CFSA and WDA employees are prohibited from soliciting or accepting employment from anyone doing business with such agencies unless the employee completely withdraws, with the agency's approval, from the CFSA or WDA activities regarding the party offering employment.
(7) CFSA and WDA employees and the employee's immediate family members and business associates are prohibited from benefiting from any contract, purchase, or grant authorized or approved by the CFSA and WDA unless all criteria established by section 2921.42 of the Revised Code are met.
(8) CFSA and WDA employees are prohibited from voting, authorizing, recommending, or in any other way using his or her position to secure approval of a CFSA and WDA contract, purchase, or grant in which any of the following have any interest:
(b) A member of the employee's immediate family; or
(c) Anyone with whom the employee has a business or employment relationship.
(9) CFSA employees, WDA employees, and previous employees that have left public employment for twelve months or less shall not act in a representative capacity, in any manner, before a public agency on behalf of any contractor or other person on any matter in which the employee personally participated in any of the following activities:
(b) Approvals or disapprovals;
(c) Recommendations; or
(d) Other substantial exercise of administrative discretion.
(10) Any contractor or grantee acting on behalf of the CFSA or WDA is prohibited from activities that could result in violations of this rule. A contractor, grantee, individual, company, or organization seeking a contract or grant or seeking to sell goods or services to a CFSA and WDA shall not:
(a) Promise or give to any CFSA and WDA employee anything of value, including employment or promise of employment within the scope of his or her job duties; nor
(b) Ask a CFSA and WDA employee to violate any of the standards of conduct requirements.
(11) A CFSA and WDA shall reserve the right to exercise civil remedies against a contractor that violates paragraph (D)(10) of this rule. Any contractor, sub-grantee, or potential contractor or potential sub-grantee who violates the requirements and prohibitions of paragraph (C)(2) or (D)(10) of this rule is subject to the following actions:
(a) The CFSA and WDA may refuse to enter into a contract;
(b) Contract termination; or
(12) Employees, contractors, and sub-grantees who violate the prohibitions or requirements in paragraph (C)(2) of this rule may be prosecuted for criminal violations.
(13) The signature of any CFSA and WDA employee on the following documents shall be considered to be a certification that he or she has complied with the requirements and prohibitions of this rule:
(b) Invoices; and
(c) Documents requesting or approving the purchase of or payment for goods and services.
(E) When a CSFA or WDA employee, agent, or contractor violates the standards of conduct, the CFSA and WDA shall enforce the requirements contained in the agency's written standards governing the following:
(2) Sanctions; and
(3) Disciplinary actions including suspensions and removal.
(F) All CFSA and WDA contracts and grants shall contain the following provisions:
(1) The contractor or grantee shall not promise or give to any CFSA or WDA anything of value that is of such character as to manifest a substantial and improper influence upon the employee with respect to his or her duties;
(2) The contractor or grantee agrees that it shall not solicit a CFSA or WDA employee to violate the county agency's standards of conduct or prohibitions or requirements in paragraph (C)(2) of this rule ; and
(3) The contractor or grantee shall not engage in direct or indirect conflicts of interest.
(G) The CFSA and WDA contract or grant shall also include the following:
(1) A certification by the contractor or grantee that it is in compliance with and will maintain compliance with the requirements described in paragraph (C)(2) of this rule;
(2) Portions of the CFSA's and WDA's standards of conduct applicable to contractors and grantees; and
(3) A provision stating that the contractor or grantee shall promptly notify the CFSA and WDA of any newly arising conflicts of interest or potential violations of state ethics law.
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 102, 187.01, 307.86, 329.04, 2921.42, 2921.43
Prior Effective Dates: 9/20/80, 8/13/82, 5/1/96, 9/5/97, 9/12/05, 3/12/10
The county family services agency (CFSA) and workforce development agency (WDA) shall make efforts to utilize small and minority-owned businesses, women's business enterprises, and labor surplus area firms when they are potential resources for supplies, equipment, construction, and services as established in 2 C.F.R. Part 200.321. These efforts include:
(A) Placing qualified small and minority businesses, and women's business enterprises on solicitation lists, and assuring that those businesses are solicited whenever they are potential resources.
(B) Dividing total requirements into small tasks or quantities to permit maximum small and minority businesses and women's business enterprises participation when economically feasible. When tasks are divided to allow small businesses and women's business enterprises to compete, the separation cannot be done to avoid competitive bidding requirements.
(C) Establishing delivery schedules to encourage participation by small and minority businesses, and women's business enterprises where the requirement permits.
(D) Using the services and assistance of the small business administration, the office of minority business development agency of the U.S. department of commerce, the community services administration, and other entities, as appropriate.
(E) Requiring the prime contractor to take affirmative steps as listed in paragraphs (A) to (D) of this rule if any subcontracts are to be let.
(F) Encouraging small and minority-owned businesses and women's business enterprises to contract with consortiums of small business and minority-owned firms and women's business enterprises when a contract is too large for one of these firms to handle individually.
(A) General purpose and applicability
(1) County family services agencies (CFSAs) and local Workforce Innovation and Opportunity Act (WIOA) areas may enter into procurement contracts to acquire goods and services for the administration of a federal program. Where applicable, local WIOA areas shall include workforce development agencies (WDAs). This rule establishes general procurement and contract requirements for CFSAs and local WIOA areas. Specific methods of procurement are outlined in rule 5101:9-4-07.1 of the Administrative Code.
(2) Subgrant agreements funded in whole or in part with federal funds do not represent acquisitions and are not subject to the requirements contained in this rule providing that such relationships are documented between the entities. CFSAs and local WIOA areas shall inform sub-grantees of applicable procurement requirements in any contract or other applicable types of agreements used in awarding the contract or grant.
(3) Unless applicable local requirements are more restrictive, acquisitions that are made in whole or in part with federal funds, including instances where state or county funds are used as match for state/federal funds, CFSAs and local WIOA areas shall procure pursuant to rule 5101:9-4-02 of the Administrative Code and the federal requirements set forth in this rule.
(a) Pursuant to division (D) of section 307.86 of the Revised Code, acquisitions made under section 329.04 of the Revised Code are exempt from state competitive bidding requirements. However, acquisitions made under section 307.86 of the Revised Code are not exempt from applicable federal requirements, including those referenced in this rule.
(b) Acquisitions listed that are procured with federal block grants authorized by the Omnibus Budget Reconciliation Act of 1981 and the "Child Care and Development Block Grant of 1990," as amended, are excluded from the requirements of this rule. However, CFSAs and local WIOA areas shall adhere to state and local standards of acquisition.
(B) General procurement requirements
The following are general procedural requirements applicable to all procurements unless deemed exempt:
(1) Contract cost and price analysis
(a) CFSAs and local WIOA areas shall perform a cost or price analysis in connection with every procurement action in excess of one hundred and fifty thousand dollars, including contract modification. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point the CFSA and local WIOA area must make independent estimates before receiving bids or proposals. The CFSA and local WIOA area must maintain written documentation to support any procurement action based on cost or price analysis.
(i) A cost analysis shall be performed when the bidder is required to submit elements of the estimated cost, (e.g., under professional consulting and architectural engineering services contracts.) A cost analysis is the verification of proposed cost data and projections of the data, and the evaluation of the specific elements of costs and profits. A cost analysis will be necessary when adequate price competition is lacking. A cost analysis will also be necessary for sole source procurements, including contract modifications or change orders, unless price reasonableness can be established on the basis of catalog or market price of commercial product sold in substantial quantities to the general public; or based on prices set by law or regulation.
(ii) A price analysis will be used in all other instances to determine the reasonableness of the proposed contract price.
(b) CFSAs and local WIOA areas shall negotiate profit as a separate element of the price for each contract in which there is no price competition and in all cases where cost analysis is performed. To establish a fair and reasonable profit, consideration will be given to the complexity of the work to be performed; the risk borne by the contractor; the contractor's investment; the amount of subcontracting; the quality of its record of past performance; and industry profit rates in the surrounding geographical area for similar work.
(c) Costs or prices based on estimated costs for contracts under grants will be allowable only to the extent that costs incurred or cost estimates included in negotiated prices are consistent with federal cost principles. CFSA's and local WIOA areas may reference their own cost principles that comply with the applicable federal cost principles.
(d) The cost plus a percentage of cost and percentage of construction cost methods of contracting shall not be used.
(2) Competition All procurement transactions will be conducted in a manner providing full and open competition consistent with the standards of 45 C.F.R. 75.327 to 75.335 (U.S. department of health and human services (HHS)), and 2 C.F.R. 200.319 (U.S. department of labor (DOL) and U.S. department of agriculture (USDA) food and nutrition service (FNS). In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, invitations for bids or requests for proposals must be excluded from competing for such procurements. Some of the situations considered to be restrictive of competition include but are not limited to:
(a) Placing unreasonable requirements on firms in order for them to qualify to do business;
(b) Requiring unnecessary experience and excessive bonding;
(c) Non-competitive pricing practices between firms or between affiliated companies;
(d) Non-competitive awards to consultants that are on retainer contracts;
(e) Organizational conflicts of interest;
(f) Specifying only a "brand name" product instead of allowing an "equivalent" product to be offered and describing the performance of other relevant requirements of procurement; and
(g) Any arbitrary action in the procurement process.
(3) Selection procedures
All CFSAs and local WIOA areas shall have written selection procedures for all procurement transactions.
(a) Written procedures must ensure that all solicitations:
(i) Incorporate a clear and accurate description of the technical requirements for the materials, products or services to be procured. Such description shall not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured, and when necessary, shall set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of technical requirements, a "brand name or equivalent" description may be used as a means to define the performance or other salient requirements of procurement. The specific features of the brand name which must be met by bidders must be clearly stated.
(ii) Identify all requirements that the bidder must fulfill and all other factors to be used in evaluating bids or proposals.
(b) CFSAs and local WIOA areas shall ensure that all pre-qualified lists of persons, firms or products, which are used in acquiring goods and services, are current and include enough qualified sources to ensure maximum open and free competition. CFSAs and local WIOA areas must not preclude potential bidders from qualifying during the solicitation period.
(c) CFSA and local WIOA area procedures shall include a review of proposed procurements to avoid purchase of unnecessary or duplicative items. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, the CFSA and local WIOA area shall conduct an analysis of lease versus purchase alternatives and any other appropriate analysis to determine the most economical approach. Breaking out procurements should only be done to obtain a more economical price and shall not be done to avoid procedural requirements.
(4) Non-profit agencies for persons with severe disabilities
(a) If permissable under federal law for procurements involving federal funds, then before determining which method of procurement to use, CFSAs and local WIOA areas shall determine whether a product or service is on the procurement list for products and services provided by persons with severe disabilities as described in section 4115.33 of the Revised Code. If the product or service is on the procurement list and is available within the period required by that agency, the agency must procure the product or service at the price established by the state use committee from a qualified nonprofit agency.
(b) If the provision of the product or service cannot be made in either the time period required or in the amount specified by the agency, the CFSAs and local WIOA areas may pursue a method of procurement outlined in rule 5101:9-4-07.1 of the Administrative Code.
(5) Geographic preference
(a) For purchases made in whole or in part with federal funds, or with state or local funds required for match, CFSAs and local WIOA areas shall conduct procurement in a manner that prohibits the use of statutorily or administratively imposed in-state or local geographical preferences in evaluation of bids or proposals, except in those cases where applicable federal statutes expressly mandate or encourage geographic preference.
Nothing in paragraph (B) of this rule preempts state licensing laws. When contracting for architectural and engineering (A/E) services, geographic location may be a selection criteria provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract.
(b) When only state and/or local funds are used for a purchase, the board of county commissioners, by resolution, may adopt the model system of preferences for products mined or produced in Ohio and for Ohio-based contractors (formerly "Buy-Ohio"). The resolution shall specify the class or classes of contracts to which the system of preferences apply. While the system of preferences is in effect, no county officer or employee shall award a contract in violation of the preference system.
(6) Debarment and suspension
(a) CFSA and local WIOA area procedures shall include requirements to ensure that no contracts are entered into with or purchases made from a person or entity which is debarred or suspended or is otherwise ineligible for participation in federal assistance programs under executive orders 12549 and 12689, debarment and suspension, and other applicable regulations and statutes, including 2 C.F.R. parts 180, 200, and 417, 29 C.F.R. part 98, and 45 C.F.R. part 75.
(b) CFSA and local WIOA area procedures shall also include provisions that purchases will be made in conformance with section 9.24 of the Revised Code which prohibits the awarding of contracts, paid for in whole or in part with state funds, to a person against whom a finding for recovery has been issued by the auditor of state on or after January 1, 2001, if the finding for recovery is unresolved.
CFSAs and local WIOA areas shall maintain a contract administration system that ensures that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.
(C) General contract requirements
CFSA and local WIOA area contracts shall contain the following provisions:
(1) Administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms, and provide for such sanctions and penalties as may be appropriate. This applies to all contracts for more than the simplified threshold of one hundred and fifty thousand dollars.
(2) Termination for cause and for convenience by the CFSA and local WIOA area including the manner by which it will be effected and the basis for settlement. This applies to all contracts in excess of ten thousand dollars.
(3) Compliance with executive order 11246 of September 24, 1965, entitled "Equal Employment Opportunity," as amended by executive order 11375 of October 13, 1967, and as supplemented in DOL regulations (41 C.F.R. chapter 60). This applies to all federally assisted construction contracts awarded in excess of ten thousand dollars by CFSAs and local WIOA areas and their contractors or sub-grantees.
(5) Compliance with the Davis-Bacon Act as amended ( 40 U.S.C. 3141 - 3148 ) as supplemented by DOL regulations (29 C.F.R. part 5). This applies to all construction contracts in excess of two thousand dollars.
(7) Compliance with "Rights to Inventions" clause 37 C.F.R. part 401 pertaining to patent rights with respect to any discovery or invention which arises or is developed in the course of or under such contract.
(8) Access by the Ohio department of job and family services (ODJFS), the CFSA and the local WIOA area, the federal grantor agency, the comptroller general of the United States, or any of their duly authorized representatives to any books, documents, papers, and records of the contractor which are directly pertinent to that specific contract for the purpose of making audit, examination, excerpts, and transcriptions.
(9) Compliance with all applicable standards, orders, or requirements issued pursuant to the Clean Air Act as amended ( 42 U.S.C. 7401 - 7671 ) and the Federal Water Pollution Control Act as amended ( 33 U.S.C. 1251 - 1387 ). This is applicable with any contract in excess of one hundred and fifty thousand dollars).
(10) Financial, programmatic, statistical, and recipient records and supporting documents must be retained for a minimum of three years after the submittal of the final expenditure report for the grant or as otherwise provided by any minimum retention requirements specified by applicable state or federal law. If any litigation, claim, negotiation, audit or other action involving the records has started before the expiration of the three-year period, the records must be retained until the completion of the action and resolution of all issues that arise from it, or until the end of the regular three-year period, whichever is later.
(11) Certification that a contractor has not and will not use federal funds to pay for any lobbying activities as defined in the Byrd Anti-lobbying Amendment ( 31 U.S.C. 1352 ). Certification is required for contractors that apply or bid for an award of one hundred thousand dollars or more.
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 153.54, 307.86, 307.87, 307.88, 307.89, 307.90, 307.91
Prior Effective Dates: 9/20/80, 8/13/82, 1/1/86 (Emer), 4/1/86, 10/1/86 (Emer), 12/15/86, 5/1/96, 9/5/97, 9/12/05, 10/30/06, 1/30/12
(A) General purpose
Unless applicable local requirements are more restrictive, county family services agencies (CFSAs) and local Workforce Innovation and Opportunity Act (WIOA) areas shall use one of the following procurement methods when acquiring goods and/ or services paid for in whole or part with federal funds.
(B) Procurement methods
(a) CFSAs or local WIOA areas may acquire by micro-purchase any supplies or services in which the aggregate dollar amount does not exceed the micro-purchase threshold as set by the federal acquisition regulation at 48 C.F.R. subpart 2.1.
(b) Micro purchases may be awarded without soliciting quotes for acquisitions of supplies or services if:
(i) Price is considered reasonable; and
(ii) To the extent practical, micro-purchases are distributed equitably among qualified suppliers.
(2) Small purchase procedure
(a) For purchases where price is the overriding factor and which involve standardized products or services (e.g., office equipment and supplies) and where the aggregate acquisition costs are greater than the micro-purchase threshold but do not exceed the small purchase threshold (currently set at one hundred fifty thousand dollars for purchases involving U.S. department of health and human services (HHS) and U.S. department of labor (DOL) funds and U.S. department of agriculture (USDA) food and nutrition service funds (FNS)), CFSAs and local WIOA areas may use relatively simple and informal procurement methods by obtaining price or rate quotations from an adequate number of qualified sources but not less than three sources, if available.
(b) For purchases where price is not the overriding factor but are relatively simple and straight forward purchases that are greater than the micro-purchase threshold but do not cost more than the small purchase threshold, and where relative quality and performance must be evaluated (e.g., consultant services), CFSAs and local WIOA areas shall seek proposals from an adequate number of qualified sources, but not less than three sources if available. CFSAs and local WIOA areas shall maintain a list of qualified sources from which to solicit proposals, and the list shall include qualified sources that have expressed an interest in providing products or services to the CFSA or local WIOA area. The CFSA and local WIOA area must identify and document the evaluation factors and their relative importance. Awards will be made to the responsible source whose proposal is most advantageous to the program, with price and other factors considered.
(3) Competitive sealed bidding
(a) CFSAs and local WIOA areas shall use competitive sealed bidding (formal advertising) under the following conditions:
(i) A complete, comprehensive, and realistic specification or purchase description is available;
(ii) Two or more responsible bidders are willing and able to compete effectively for the business; and
(iii) The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price.
(b) CFSAs and local WIOA areas shall adhere to the following procedural requirements in administering competitive sealed bidding (formal advertising):
(i) The invitation to bid (ITB) will be publicly advertised and bids shall be solicited from an adequate number of known suppliers, providing them sufficient time prior to the date set for opening the bids;
(ii) The ITB which will include any specifications and pertinent attachments, shall define the items or services in order for the bidder to properly respond;
(iii) All bids will be publicly opened at the time and place prescribed in the ITB;
(iv) A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation costs and life cycle costs shall be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of and any or all bids may be rejected if there is a sound documented reason; and
(v) Any or all bids may be rejected if there is a sound documented reason.
(4) Competitive proposals
(a) CFSAs and local WIOA areas shall use competitive proposals when the conditions are not appropriate for the use of competitive sealed bidding, micro-purchases, small purchases, or non-competitive proposals. The technique of competitive proposals is normally conducted with more than one source submitting an offer, either a fixed price or cost reimbursement type contract is awarded, and the following conditions are met:
(i) The complex and technical nature of the procurement cannot be described in bid specifications; and
(ii) It is logical to award a contract on factors other than price.
Evaluation factors other than price can only be used when they are clearly explained in the purchasing agency's request for proposal (RFP).
(b) CFSAs and local WIOA areas shall comply with the following procedural requirements in administering competitive proposal procurements, commensurate with the scope and complexity of the acquisition:
(i) Requests for proposals will be publicized and identify all evaluation factors and their relative importance. Any response to publicized requests for proposals shall be honored to the maximum extent practical.
(ii) Proposals will be solicited from an adequate number of qualified sources.
(iii) CFSAs and local WIOA areas will have a method for conducting technical evaluations of the proposals received and for selecting awardees. A technical evaluation is a review to verify that the technical requirements contained in the request for proposals are met.
(iv) Awards will be made to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered.
(v) CFSAs and local WIOA areas may use competitive proposal procedures for qualification based procurement of architectural/engineering (A/E) professional services whereby competitor's qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services through A/E firms that are a potential source to perform the proposed effort.
If after solicitation of an adequate number of qualified sources, CFSAs or local WIOA areas determine that competition is inadequate resulting in a failed competitive procurement, CFSAs or local WIOA areas may use a small purchase procurement method as detailed in paragraph (B)(2) of this rule. In this instance, the CFSA or local WIOA area has completed a legitimate and reasonable competitive procurement.
(5) Noncompetitive procurement methods
(a) CFSAs and local WIOA areas may use noncompetitive procurement methods only when the award of a contract is infeasible under the micro-purchasing threshold, small purchase procedure, competitive sealed bidding or competitive proposals, and one of the following conditions applies:
(i) The item is available only from a sole source. This type of noncompetitive proposal means only one source exists for the goods or services being procured; an example being the procurement of proprietary products. Business justification or long-term relationships with a particular contractor does not constitute justification as sole source procurement. Sole source procurements do not require prior approval.
(ii) The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation. This type of noncompetitive procurement is mainly reserved for emergencies caused by natural disasters. Public exigency or emergency procurements do not require prior approval.
(iii) The federal awarding agency or ODJFS authorizes noncompetitive procurements.
(iv) The purchases are for equipment or services where the prices are established by law for technical equipment requiring standardization and interchangeability of parts with existing equipment.
(b) Noncompetitive proposals require the mutual discussion and arrangement of terms of a transaction or agreement for the purpose of arriving at a common understanding of contract essentials such as technical requirements, schedules, prices, and terms. From any noncompetitive proposal in excess of the small purchase threshold, written documentation must be included in the records to show why a noncompetitive proposal was used instead of competitive sealed bidding. Such justification must include the following items:
(i) Copies of the public advertisements;
(ii) A list of providers contacted;
(iii) Copies of all letters received from prospective bidders or respondents, including those indicating a bidder's lack of interest in competing for the contract;
(iv) Any other materials which would justify the agency's use of noncompetitive procurement methods; and
(v) Cost analysis, the projections of the data, and the evaluation of the specific elements of costs and profit. Independent estimates must be made before receiving bids or proposals.
(C) Special circumstances
(1) State purchasing contracts
(a) Purchases may be made by CFSAs and local WIOA areas under state purchasing contracts. Because the state completes competitive procurement, purchases made through state purchasing contracts that meet all of the requirements contained in section 125.04 of the Revised Code are not subject to the requirements contained in paragraphs (B)(1) to (B)(4) of this rule.
(b) An agency cannot access state purchasing contracts when competitive bidding by the county has already occurred unless the state purchasing contract has the same terms, conditions, and specifications at a lower price.
(c) To participate in state purchasing contracts, a certified copy of a resolution by the board of county commissioners must be filed with the department of administrative services (DAS) office of state purchasing. The resolution must request that the agency be authorized to participate in the purchasing contracts, agree that the agency is bound by terms and conditions set by DAS, and agree that the agency will directly pay the contractor under each purchase contract.
(d) A CFSA or local WIOA area may also use the price contained in a state purchasing contract in other competitive selection procedures performed pursuant to this rule.
(2) State term schedules
State purchasing contracts are not to be confused with state term schedules, which are non-competitive schedules of products or services and shall be treated only as a pre-qualified vendor contractor list. State term schedules do not represent competitive procurement. Purchases made by a CFSA or local WIOA area using the state term schedule to obtain a pre-qualified vendor list must follow the requirements contained in paragraphs (B)(1) to (B)(4) of this rule.
(3) Foster care maintenance purchases and child welfare service purchases
(a) Purchases for foster care placement services that include public and private agency foster homes, group homes, children's residential centers, residential parenting facilities, adoption services and other services performed by a public children services agency (PCSA) in the discharge of its duties under Chapter 5153. of the Revised Code, including services on behalf of a child in the custody of a PCSA and purchases made pursuant to rule 5101:2-47-23.1 of the Administrative Code, will generally be considered to follow the small purchase procedures or noncompetitive proposals of this rule when they are purchased for individually specific cases. The need for these purchases shall be documented by the PCSA in records that support each case.
(b) When purchasing case specific services other than foster care placement and adoption services, and where there are contractors in close proximity providing substantially similar services, and who are equally qualified to meet the service need presented; the PCSA shall document that the process of awarding the contract was done in a manner that demonstrates that a cost comparison of the contractors has been performed.
(c) A PCSA may not establish an exclusive or preferential relationship with foster care maintenance providers, adoption services providers, or other service contractors to the exclusion of all other foster care maintenance providers, adoption service providers or service contractors, with the exception of those relationships resulting from the competitive means as described in this rule. In addition to following such procurement procedures, the PCSA shall also document the reasons for seeking an exclusive relationship with the foster care maintenance provider, adoption service provider, or service vendor. Such documentation shall include a demonstration that the foster care maintenance provider, adoption service provider, or service contractor is qualified to meet the needs of all children and families who will receive services from the provider or vendor, and provide assurances that no child or family will be denied services due to the exclusive nature of the relationship with the foster care maintenance provider, adoption service provider, or service contractor.
(d) Procurements of goods and services made by a PCSA shall conform to the requirements of this rule. This includes the purchase of child welfare services that benefit children and families that are not purchased in response to a specific case need. Examples of such services include, but are not limited to, outreach and recruitment campaigns; promotional items; training for staff, adoptive families, and foster parents; master contracts for home studies from third parties; visitation center leases; child abuse prevention campaigns; and foster parent liability insurance master contracts.
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 153.54, 307.86, 307.87, 307.88, 307.89, 307.90, 307.91
Prior Effective Dates: 9/20/80, 8/13/82, 1/1/86 (Emer), 4/1/86, 10/1/86 (Emer), 12/15/86, 5/1/96, 9/5/97, 9/12/05, 10/30/06, 1/30/12, 7/6/15
(A) A public children services agency (PCSA) may claim costs for contractually purchased services incurred for allowable Title IV-E activities. Unlike other Title IV-E administration and training costs, which are claimed via random moment sample time study and calculated through a cost pool, Title IV-E contract costs are claimed as direct costs. All contract costs are established prior to contract execution.
A PCSA shall report the following types of Title IV-E contract costs as direct costs:
(1) Recruitment, study and certification of persons desiring to be foster parents;
(2) Recruitment, study, and supervision of persons desiring to be adoptive parents;
(3) Training of PCSA staff and short-term training of current or prospective foster or adoptive parents;
(4) Transportation of foster children (transportation of foster children is limited to transportation provided by those other than foster parents; the cost of transportation by foster care parents is included in the foster care maintenance payment);
(5) Contracted services for eligibility determination; and
(6) Services of a prosecutor or private counsel.
(B) The Ohio department of job and family services (ODJFS) calculates federal financial participation (FFP) for each contract type on a county specific basis. ODJFS calculates the FFP quarterly. In some instances, the amount of the FFP paid will reflect apportionment of the amount paid to the vendor, provider, or PCSA sub-grantee by the applicable Title IV-E eligibility ratio prior to the computation of the actual federal share.
(A) Each CFSA and WIA area shall develop a written policy for the reimbursement of the costs of CFSA and WIA area assets that complies with state, federal, and local requirements. The CFSA and WIA area shall follow the state and federal requirements unless local requirements are more restrictive. The policy shall:
(1) Include asset classification standards and a useful life schedule;
(2) Be consistent with the practices:
(a) Reflected in capital asset accounting policies used in preparing financial statements under generally accepted accounting principles (GAAP); or
(b) For entities producing cash-basis or other types of financial statements, the GAAP-based accounting policies used in establishing a reasonable useful life schedule for capital assets for use in establishing federal reimbursement claims; and
(c) That meet requirements for reasonableness, allowability, and allocability as outlined in office of management and budget (OMB) 2 C.F.R. part 200, "Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards."
(B) A CFSA or a WIA area may adopt the written policy of the county auditor when the county auditor's policy is, at a minimum, as restrictive as the federal requirements. When a WIA area is composed of workforce development agencies from multiple counties, the WIA area shall follow the most restrictive of state, federal, and local requirements when seeking federal or state reimbursement for an asset.
(C) Expensing and depreciation are the methods of asset reimbursement that CFSAs and WIA areas can utilize for claiming federal financial participation. A CFSA or WIA area's claim for reimbursement of capital assets must be based upon useful life and relative benefit to the federal program(s). Assets which are not capital assets may be expensed.
(1) Capital asset means tangible or intangible assets used in operations having a useful life of more than one year which are capitalized at five thousand dollars, unless the local area has a more restrictive capitalization threshold. Capital assets include:
(a) Land, buildings (facilities), equipment, and intellectual property,including software, whether acquired by purchase, construction, manufacture, lease-purchase, exchange, or through capital leases; and
(b) Additions, improvements, modifications, replacements, rearrangements, reinstallations, renovations or alterations to capital assets that materially increase their value or useful life, not ordinary repairs and maintenance.
(2) Equipment means tangible personal property, including information technology systems, having a useful life of more than one year and a per-unit acquisition cost which are capitalized at five thousand dollars, unless the local area has a more restrictive capitalization threshold.
(3) Supplies mean all tangible personal property other than those defined as equipment. A computing device is a supply if the acquisition cost is less than five thousand dollars or the local area's more restrictive capitalization threshold, regardless of the length of its useful life.
(1) An item with an acquisition cost of less than five thousand dollars is considered a supply and may be claimed as a direct or indirect cost (expense) and expensed during the accounting period. Unless local requirements are more restrictive, when seeking federal reimbursement for the costs of an asset with an acquisition cost of five thousand dollars or more, the cost shall be recovered through depreciation as an indirect cost. The only exception to the capitalization threshold is established in paragraph (D)(2) of this rule and applies to equipment that will only benefit programs supported solely by United States department of labor (DOL) funds in WIA areas that are not covered by more restrictive local requirements.
(2) A local WIA area may direct charge equipment with an acquisition cost of more than five thousand dollars as an expense with prior written approval from the Ohio department of job and family services (ODJFS).
(a) A local area shall request such approval by submitting a completed JFS 01994 "Request for Approval to Direct Charge Workforce Investment Act (WIA) Area Funds for Equipment" (3/2009). The ODJFS review criteria include the following items:
(i) The existence of any local requirements, either at the WIA area or at the county level if the WIA area is acting on behalf of a county workforce development agency.
(ii) The purchase of the equipment must meet the standard federal guidelines of reasonableness and allowability.
(iii) The proposed methodology of allocating the costs between the adult, dislocated, and youth grants, and any administration costs must ensure the grants are charged in accordance with relative benefits received.
(iv) All supporting documentation required on the JFS 01994.
(3) ODJFS will provide additional guidance on a case-by-case basis for approved requests to expense and direct charge the cost of equipment, including timing of the direct charge and reporting of the expenditure.
Depreciation is the method for allocating the cost of fixed assets to periods benefitting from asset use. The CFSA or WIA area may be reimbursed for the use of its buildings, capital improvements, equipment, and software projects capitalized in accordance with generally accepted accounting principles (GAAP) provided they are used for allowable activities and properly allocated to the proper federal awards according to the ODJFS cost allocation plan (CAP) and federal cost principles established in 2 CFR 200. Actual reimbursement costs must be determined by calculating depreciation by applying the following rules.
(1) The calculation of depreciation must be based on the acquisition cost of the assets involved. Acquisition cost means the cost of the asset including the cost to ready the asset for its intended use. For an asset donated to the CFSA or WIA area by a third party, its fair market value at the time of the donation must be considered as the acquisition cost. Such assets may be depreciated or claimed as matching, where allowable, but not both. The calculation of depreciation shall exclude:
(a) The cost of land;
(b) Any portion of the cost of buildings and equipment borne or donated by the federal government irrespective of where the title was originally vested or where it is presently located;
(c) Any portion of the cost of buildings and equipment contributed by or for the CFSA or WIA area or where law or agreement prohibits recovery; and
(d) Any asset acquired solely for the performance of a non-federal award.
(2) In addition to the provisions in paragraph (A)(2) of this rule, in determining the useful life of assets that may be claimed for federal reimbursement, the following factors must be considered:
(a) Type of construction;
(b) Nature of the equipment used;
(c) Technological developments in the particular area;
(d) Historical usage data; and
(e) The renewal and replacement policies followed for the individual items or classes of assets involved.
(3) The straight-line method of depreciation is presumed to be the appropriate method of depreciation unless the CFSA or WIA area presents clear evidence indicating that the expected consumption of the asset will be significantly greater in the early portions than in the later portions of its useful life.
(4) The CFSA or WIA area may not change depreciation methods unless approved in advance by ODJFS. The CFSA or WIA area may not change an accounting estimate to shorten the useful life of a building being claimed for federal reimbursement unless approved in advance by ODJFS. The CFSA or WIA area shall submit all requests to change the method of depreciation to the ODJFS fiscal supervisor. All requests shall include no less than the following information:
(a) The useful life of the item;
(b) The history of the method of costing that has been used for the life of the asset; and
(c) The reasoning behind the request to change the asset reimbursement method.
(5) The CFSA or WIA area has two options for cost recovery when the depreciation method is used for buildings.
(a) The entire building (i.e., the shell and all components) may be treated as a single asset and depreciated over a single useful life; or
(b) The building may be divided into multiple components and each component depreciated over its estimated useful life. The building components must be grouped into three general components of a building:
(i) Building shell, including construction and design costs;
(ii) Building services systems (e.g., elevators, HVAC and plumbing); and
(iii) Fixed equipment (e.g. casework, fume hoods, etc.).
(6) The CFSA or WIA area may not depreciate any assets that have outlived their depreciable lives. However, other related costs such as maintenance and insurance may be allowable.
(7) The CFSA or WIA area must ensure that charges for depreciation are supported by adequate property records. The agency must:
(a) Perform a physical inventory of assets at least once every two years to ensure that the assets exist and are usable, used, and needed; and
(b) Maintain depreciation records indicating the amount of depreciation taken each period.
(8) When the CFSA or WIA area is converting to the depreciation method from the use allowance method, depreciation must be computed as if the asset had been depreciated over its entire life (i.e., from the date the asset was acquired and ready for use to the date of disposal or withdrawal from service). The total amount of use allowance and depreciation for an asset (including imputed depreciation applicable to periods prior to the conversion from the use allowance method as well as depreciation after the conversion) may not exceed the total acquisition cost of the asset.
(9) The CFSA or the WIA area shall report the appropriate amount in accordance with rule 5101:9-7-29 of the Administrative Code in order to receive reimbursement for assets by using the depreciation method.
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 329.04
Prior Effective Dates: 8/24/81, 7/15/84, 2/2/85, 1/1/86 (Emer), 4/1/86, 7/11/88, 9/5/97, 1/31/08, 6/5/09
(A) The county family service agency (CFSA) and workforce development agency (WDA) shall follow federal, state, and local regulations when seeking federal financial participation (FFP) for the costs associated with the rental or lease of property and/or equipment. The costs must be necessary and reasonable for proper and efficient performance and administration of the specific program financing the cost and must be in compliance with 2 C.F.R. part 200 and generally accepted accounting principles (GAAP).
(B) . In determining reasonability, the CFSA or WDA shall research rental/lease costs of property and/or equipment to ensure costs are allowable to the extent that the rates are reasonable and consideration is given to each of the following factors:
(1) Available alternatives;
(2) Comparable property, if available;
(3) Area market conditions; and
(4) The type, life expectancy, condition, and value of the property being leased.
CFSA and WDA shall review rental/lease agreements periodically to determine if circumstances have changed and other options are available.
(C) Specific requirements for special lease/rental agreement types
(1) Sale and leaseback agreements.
A sale and leaseback agreement is one under which one party sells property to a buyer and the buyer immediately leases the property back to the seller. While it is acknowledged that an increase in rental costs may result from a change in ownership, the allowable claim to federal programs cannot exceed the amount allowable prior to the sale and leaseback arrangement. Rental/lease costs are allowable only up to the amount that would be allowed had the non-federal entity continued to own the property. Examples of the types of costs included in the calculation of allowable costs are provided in paragraph (C)(4) of this rule.
(2) Less-than-arm's-length lease agreements.
For this purpose, a less-than-arm's-length lease is one in which one party to the lease agreement is able to control or substantially influence the actions of the other. Rental/lease costs are allowable only up to the amount that would be allowed if the non-federal entity owned the property. Examples of the types of costs included in the calculation of allowable costs are provided in paragraph (C)(4) of this rule. Such leases include, but are not limited to, those between the following entities:
(a) Divisions of the non-federal entity;
(b) The non-federal entity under common control through common officers, directors, or members, as in a lease between a county agency and a board of county commissioners; and
(c) The non-federal entity and a director, trustee, officer, or key personnel of the non-federal entity or his/her immediate family as defined in 2 CFR 200.465, either directly or through corporations, trusts, or similar arrangements in which they hold a controlling interest.
(3) Capital lease agreements.
A capital lease agreement is a lease that is required to be treated as a capital lease under generally accepted accounting principles (GAAP).
(a) The following provisions of GAAP, as outlined in "Financial Accounting Standards Board Statement 13," must be used to determine whether a lease is a capital lease:
(i) The CFSA or WDA obtains the title to the property/equipment by the end of the lease term; or
(ii) The CFSA or WDA has an option to purchase the property/equipment at a bargain purchase price at the end of the lease term. A bargain purchase option only exists if the purchase price is significantly below market value; or
(iii) The lease term (including initial term and renewal options) is equal to seventy-five per cent or more of the estimated economic life of the lease property/equipment. ; or
(iv) The present value at the beginning of the lease term of the minimum lease payment, excluding that portion of the payments representing executory costs, equals or exceeds ninety per cent of the fair value of the leased property/equipment. The portion of the payments representing executory costs such as insurance, maintenance, and taxes including profit are excluded from the present value calculation .
(v) However, if the beginning of the lease term falls within the last twenty-five per cent of the total estimated useful life of the leased property including earlier years of use, the criterion in paragraphs (C)(3)(a)(iii) and/or (C)(3)(a)(iv) of this rule shall not be used to determine classification of the lease.
(b) Rental/lease costs are allowable only up to the amount that would be allowed had the non-federal entity purchased the property on the date the lease agreement was executed. Examples of the types of costs included in the calculation of allowable costs are provided in paragraph (C)(4) of this rule.
(4) Calculation of allowable rental/lease costs under the special lease/rental types in this paragraph include expenses such as:
(b) Maintenance costs of keeping the property in efficient operating condition. These costs are not allowable if included in the rental agreement or result in an increase in the property's permanent value;
(c) Taxes; and
(D) The rental of any property owned by any individuals or entities affiliated with the non-federal entity, including commercial or residential real estate, for purposes such as the home office workspace is unallowable.
Assets acquired in whole or in part with federal funds must be disposed of in compliance with 2 (C.F.R.) part 225, 7 C.F.R. part 277, 29 C.F.R. part 97, and 45 C.F.R. part 92 and part 95 in accordance with state and local requirements. The most restrictive regulations shall apply.
(A) The county agency must notify the board of county commissioners for disposal of an asset when one of the following apply:
(1) The loss of the asset was claimed for federal financial participation (FFP);
(2) The asset is not needed by the county agency for public use; or
(3) The asset is obsolete or unfit for the use for which the county agency acquired it.
(B) Once the board of county commissioners is notified by the county agency, it is the board's responsibility to dispose of the asset.
(C) In accordance with section 307.12 of the Revised Code, when the board of county commissioners finds, by resolution, that the county has an asset that is not needed for public use or is obsolete or unfit for the use for which it was acquired, disposal options include the following:
(1) An asset that has been determined to have no value may be discarded or salvaged;
(2) Scrap metal valued at or less than two thousand five hundred dollars may be discarded or salvaged;
(3) An asset with a fair market value under two thousand five hundred dollars, as determined by the board, may be sold by private sale or internet auction, without advertisement or public notification;
(4) An asset with a fair market value over two thousand five hundred dollars, as determined by the board, may be sold at public or internet auction or by sealed bid to the highest bidder; and
(5) A vehicle valued at or less than four thousand five hundred dollars may be donated to a nonprofit organization exempt from federal income taxation for the purpose of meeting transportation needs of Ohio works first and/or prevention, retention, and contingency program participants.
(D) When the county agency notifies the board that an asset is not of immediate need, the board may lease the asset to any municipal corporation, township, political subdivision of the state,or a county land reutilization corporation.