Procurement and Contracting Under AIP – General Procurement

Procurement Methods

Title 2 CFR part §200.320 permits for five types of procurement methods:

  1. Micro-purchase — The micro-purchase method represents acquisition of supplies or services for which the aggregate dollar amount does not exceed $3,000 for non-construction projects or $2,000 for construction projects covered by the Davis-Bacon Act. Under the micro-purchase method, a sponsor may make a procurement award without soliciting competitive quotations. Sponsors may not use the micro-purchase method to acquire A/E services. This does not preclude a sponsor from using the micro-purchase method to acquire an independent cost estimate from a firm that is an A/E.
  2. Small Purchase — This procedure is available for procurements that fall under the simplified acquisition threshold, presently set at $150,000 [2 CFR §200.88]. Under the small purchase method, a sponsor must obtain price quotations from an adequate number of qualified sources. Sponsors must not construe the small purchase method as a means to forgo fair and open competitions. A sponsor may not exclude a vendor that expresses an interest in competing for work the sponsor addresses in their small procurement action. The sponsor must document all activities and actions of their small purchase action. Sponsors may not use small purchase procedures to forgo the qualification based procurement for A/E services. Sponsors may not split the procurement of similar nature work into two separate procurement actions if such action is primarily to allow it to stay under the simplified acquisition threshold.
  3. Competitive Sealed Bids — The regulation establishes this method as the preferred method for sponsor procurements associated with development and equipment projects. It requires a sponsor to prepare a complete and reasonable specification that details the desired work items, services, or equipment. The sponsor must publicly advertise the invitation-for-bids for the purpose of soliciting maximum interest from potential bidders. Sponsors must publicly open all bids at the time and place prescribed in the invitation-for-bids. Sponsors must objectively base their award of contract on the lowest responsive and responsible bidder. Sponsors may not make awards that are arbitrary.
  4. Competitive Proposal — Sponsors may use this method when procurement by competitive sealed bids is neither reasonable nor feasible. Projects that include significant variables and options that would prohibit the preparation of complete and concise specifications would be candidates for competitive proposals. Prior to publicly advertising for competitive proposals, a sponsor must establish all applicable evaluation factors and the relative importance of each factor. The sponsor's solicitation must result in an adequate number of qualified sources willing to compete for the work. The sponsor makes the award to the responsible firm whose proposal is most advantageous after considering price and other identified factors.

    The procurement of professional services represents a unique form of competitive proposals. Per 49 U.S.C. §47107(a)(17), AIP sponsors must base their selection of architect-engineers on a qualification based selection similar to Title 40 U.S.C. Chapter 40. The sponsor must establish appropriate evaluation criteria that they subsequently use to select the most qualified firms without any consideration of costs. The sponsor negotiates price after they complete the selection process.

  5. Procurement by Noncompetitive Proposals — Sponsors are to conduct their procurement actions in a manner that assures fair and open competition. Under certain circumstances, it is possible that a competitive procurement is not practical or feasible. Title 2 CFR §200.320(f) allows for noncompetitive procurement actions if certain conditions exist. These include--
    • The required item is available from a single source.
    • A public exigency or emergency requires urgent procurement action.
    • After solicitation from a number of sources, competition is determined to be inadequate.
    • The FAA authorizes noncompetitive negotiations.

    In all cases, the sponsor must seek prior approval from FAA in order to utilize noncompetitive procurement methods under the AIP. The FAA will review the circumstances and factors associated with the proposed non-competitive procurement action and then determine whether the AIP will or will not participate in the associated costs. Regardless of AIP participation, a sponsor that proposes a noncompetitive procurement action must conduct such procurement separately from an AIP eligible procurement action. The purpose of this restriction is to limit any adverse effect a sole source requirements may have on the AIP eligible procurement.

Procurement Competition

Title 2 CFR §200.319 requires a sponsor to conduct all procurement transactions in a manner providing full and open competition. Sponsors must avoid practices that unduly limit or restrict competition. Restrictive practices that a sponsor must avoid include but are not limited to —

  • Incorporating unreasonable requirements
  • Requiring unnecessary experience and bonding
  • Unnecessarily use of "brand name" specifications
  • Incorporating regional preferences
  • Use of arbitrary actions in the procurement process

Description of Work or Services

A sponsor must incorporate a clear and accurate description of the technical requirements for the material, product, or service they desire to procure. The description can not incorporate features that unduly restrict competition. The technical description should include a statement of the qualitative characteristics of the material, product, or service. A sponsor must identify within the solicitation all requirements the offeror must fulfill to be responsive and all other factors the sponsor intends to use in the evaluation of bids.

A sponsor may use a "brand name or equal" description only if they determine the provision of a clear and accurate description of the technical requirements is impractical. The sponsor must, however, base their acceptance on salient characteristics they explicitly identify in the solicitation.

Small and Minority Firms and Women's Business Enterprises

Grantees must implement affirmative steps to assure that minority firms and women's business enterprises are afforded an opportunity to participate in the project. Title 2 CFR §200.321 identifies the affirmative steps that should be considered.

Cost and Price Analysis

Grantees must perform an analysis of cost or price for all procurement actions, including contract modifications. The method and degree of analysis will depend on the size and complexity of the procurement action. Sponsors should typically prepare an independent estimate prior to receiving bids or proposals. For accountability purposes, the sponsor should require the preparer to sign and date the estimate and then retain the estimate in their grant records. While the sponsor has initial responsibility for determining whether a price is fair and reasonable, the FAA project manager makes the final AIP determination on whether the cost is fair and reasonable. The FAA project manager's determination may conflict with that of the sponsor provided there is sound evidence supporting the FAA determination.

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Last updated: Tuesday, August 2, 2022