Uniform Guidance - An update from the field: More questions answered!

Baker Tilly provided an update on the current regulatory landscape with a focus on what higher institutions are doing to address the Uniform Guidance requirements during a recent webinar partnered with ACUA. During this webinar, Baker Tilly higher education specialists shared key initiatives institutions are undertaking to achieve compliance. Continue reading to learn more about Uniform Guidance: an update from the field and see the answers to your questions.


If my institution has established preferred purchasing relationships with vendors as part of a strategic sourcing initiative, will these be considered to meet the Uniform Guidance’s procurement requirements?

It will depend on the dollar amount of the purchase, but typically a preferred vendor relationship would be appropriate under the Uniform Guidance. Preferred vendor relationships usually include price comparison/competition when establishing the initial relationship (and related prices), especially when performed as part of a strategic sourcing initiative. Assuming that items purchased through these agreements are below the Simplified Acquisition Threshold ($150,000), an institution should be able to consider the process followed to establish these relationships as its competitive method for “procurement by small purchase procedures.” Additionally, since items purchased through preferred vendor relationships are typically for commercial goods, an institution could always alleviate concerns by comparing prices from preferred vendor agreements with published prices from other vendors of similar goods.

For purchases below the micro-purchase threshold ($3,000), the Uniform Guidance does encourage organizations to distribute purchases equitably among qualified suppliers “to the extent practicable.” If your institution requires purchases from only preferred suppliers, the organization should be able to justify the benefit of using the preferred supplier (e.g., lower cost charged) rather than distributing purchases.

How does the Uniform Guidance define “adequate”?

Section 200.320 of the Uniform Guidance states:

Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.

What does that really mean?

The Uniform Guidance does not specifically define what an adequate number of sources would be in this situation. Rather it is the institution’s responsibility to define its expectations for small purchases in its policies and procedures. In practice we have seen institutions receive three sources; however this is not specifically defined by The Uniform Guidance.

Will the Office of Management and Budget (OMB) provide an official checklist or other tool for use in determining whether an entity is a sub-recipient or a vendor/contractor?

We do not expect OMB to provide such a tool. We encourage institutions to utilize the factors provided in Section 300.322 of the Uniform Guidance to inform their checklist and/or process. In addition, some institutions make sample checklists available either online or to peers upon request.

Are institutions able to negotiate an indirect rate for a subrecipient of less than 10%, the current de minimus rate per the Uniform Guidance?

The 10% de minimus rate has been provided to ease the administrative burden of institutions negotiating indirect rates directly with individual subrecipients and to allow for a standard recoupment of indirect costs without additional required documentation. Many institutions are therefore opting to utilize this 10% rate for their subrecipients who do not otherwise have a negotiated rate with a federal agency.

Section 200.414(F) states: “…any non-Federal entity that has never received a negotiated indirect cost rate…may elect to charge a de minimis rate of 10% of modified total direct costs, which may be used indefinitely.” If a subrecipient has a negotiated indirect rate in place, the Uniform Guidance requires that that rate be honored; otherwise, the subrecipient has the right to claim the full 10% de minimis rate. If an organization decides to use the de minimis rate, this rate must be applied consistently to all federal awards received by that organization. An institution could negotiate a lower indirect rate for payment to a subrecipient if desired and the subrecipient is willing.


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For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.