137. Procurement Standards
By the end you'll be able to
- Route any planned purchase to the correct procurement tier under 2 CFR 200.320.
- Apply the micro-purchase ($10K) and simplified acquisition ($250K) thresholds.
- Document a defensible sole-source justification when noncompetitive procurement is necessary.
- Maintain a procurement file that survives a federal audit.
Federal procurement standards under 2 CFR 200.317 through 200.327 govern how recipients buy goods and services with grant funds, and the rules tighten quickly as dollar amounts rise. Below the micro-purchase threshold (currently 250,000), you must obtain price or rate quotations from an adequate number of qualified sources.
In this lesson you will walk through each procurement tier (micro-purchase, small purchase, sealed bids, competitive proposals, and noncompetitive proposals) and learn the documentation expected at each level. You will also learn the five conditions under which a sole-source (noncompetitive) procurement is allowable: the item is available only from a single source, a public exigency exists, the awarding agency authorizes it, or competition is deemed inadequate after solicitation. Every sole-source purchase needs a written justification in the file.
By the end you should be able to look at any planned purchase and instantly route it to the correct tier, gather the right documentation, and avoid the procurement violations that consistently rank among the top federal audit findings. Procurement is not about paperwork for its own sake. It is about proving that public funds were spent competitively and fairly.
Common mistakes
These are the traps learners hit most often on this topic. Knowing them in advance is half the fix.
Splitting a single purchase to stay under a threshold.
Breaking up a 10,000 invoices to avoid competitive quoting is a procurement violation and is easy for auditors to detect through vendor history.
Treating sole-source as a paperwork exercise rather than a substantive test.
A sole-source memo that simply asserts "this is the only vendor we know" without documented market research will not survive audit scrutiny.
Practice problems
Try each on paper first. Click Show solution only after you've made a real attempt.
- Problem 1Your program needs to purchase $30,000 of specialized software next month. Walk through the correct procurement steps.
Show solution
10,000) and the simplified acquisition threshold ($250,000), which means the small purchase rules apply. Obtain price or rate quotations from an adequate number of qualified sources, typically at least three, and document them in the procurement file. If the software is genuinely available only from a single source, prepare a written sole-source justification citing the specific reason (proprietary technology, no functional substitute), attach evidence of market research, and obtain internal approval before purchase.
Practice quiz
- Question 1What is the current federal micro-purchase threshold for most recipients?
- Question 2Which condition does NOT justify a sole-source (noncompetitive) procurement?
Lesson 137 recap
Procurement standards scale with dollar value, micro-purchase below 250,000, and formal competition above. Sole source is allowable only under four specific conditions and always requires written justification.
Coming next: Lesson 138 — Financial Reporting (FFR)
Next, we move from spending controls to the reports that prove how the money was actually used.
Saved in your browser only — no account, no server.