Since the joint interim final rule, 2 C.F.R. Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), became effective on December 26, 2014:

  • the U.S. Department of Housing and Urban Development (HUD) issued Notice SD-2015-01;
  • the Office of Management and Budget published corrections and amendments in the Federal Register;
  • HUD published conforming changes to its program regulations;
  • HUD’s Office of Community Planning and Development issued Notice CPD-16-04; and
  • HUD’s Office of Inspector General issued an Integrity Bulletin titled 7 Keys to Handling Conflicts of Interest (Integrity Bulletin).

While as of the writing of this article, the Office of Public and Indian Housing has not issued a notice providing additional transition and implementation guidance for 2 C.F.R. Part 200, PHAs should take note of these developments.

In particular, 2 C.F.R. §200.110(a) provides public housing agencies (PHAs) a grace period of two additional fiscal years after December 26, 2014 to implement the procurement standards in 2 C.F.R. §§200.317–200.326. For example, a PHA with a fiscal year that starts on July 1 could take advantage of such grace period and delay implementation of the procurement standards in the Uniform Guidance until June 30, 2017. If a PHA chooses to delay implementation of the procurement standards in the Uniform Guidance and use the prior procurement standards during this grace period, the PHA must document this decision in its internal procurement policies; PHAs should ensure that they have taken this necessary step, if applicable. As noted in the Integrity Bulletin, "[r]egulations are in transition between grants issued before December 26, 2014 (when 2 CFR Part 200 went into effect), and those issued later."

Additionally, it is important to note that outside of procurement, the effective date of the Uniform Guidance is December 26, 2014. Federal awards will be governed by the regulations in effect and codified in:

A. unless B(i) below applies, 24 CFR part 85 (2013 edition) or as provided by the terms of the Federal award if the Federal awards were made prior to December 26, 2014.

-and-

B. 2 CFR part 200 if:

        (i) the terms of a Federal award made prior to December 26, 2014 state that the award will be subject to regulations as may be amended;

-or-

        (ii) the Federal awards were made on or after December 26, 2014.

This may impact PHAs other than as direct recipients of a federal award. For example, an affiliate or instrumentality of a PHA may be a subrecipient of funds, such as CDBG or HOME, that were obligated on or after December 26, 2014 and are subject to Uniform Guidance. As noted in the Integrity Bulletin:

Regulations at 2 CFR 200.112 require HUD to establish conflict of interest policies for Federal awards and require non-Federal entities to disclose in writing any potential conflict of interest to HUD or a pass-through entity in accordance with HUD’s policy. HUD is finalizing its conflict-of-interest policy, but entities are still expected to use the policies developed under the various Community Planning and Development (CPD) program-specific regulations. In general, all CPD program regulations prohibit grant-assisted activity benefitting relatives of people who work for the grantee or the pass-through entity.

Finally, PHAs that are starting to review their current procurement policies with respect to changes brought about by Uniform Guidance also need to consider local law. For example, Pennsylvania PHAs need to review 35 P.S. § 1551 and the associated amounts published by the Pennsylvania Department of Labor and Industry. For 2016,

A. public bid is required whenever the estimated cost of any

        (i) construction, erection, installation, completion, alteration, repair of or addition to, any project subject to the control of a PHA

-or-

        (ii) purchase of supplies, materials or equipment or the rental of any equipment exceeds $19,400

-and-

B. written or telephonic price quotations from at least three contractors must be requested for contracts that exceed $10,500 but are less than $19,400 (assuming that three qualified contractors exist in the market area within which it is practicable to obtain quotations).

The Pennsylvania public bid threshold of $19,400 is significantly lower than the current simplified acquisition threshold in 2 C.F.R. § 200.88, which as of the writing of this article is $150,000, pursuant to which a non-Federal entity may purchase property or services using small purchase methods.

Thus, while we likely have not heard all that may be said on the transition to and implementation of Uniform Guidance, particularly with respect to procurement, it is a good time to: (a) confirm that if a PHA has chosen to delay implementation of the procurement standards in the Uniform Guidance, it has documented this decision in its internal procurement policy; and (b) start planning to update your procurement policy to implement the procurement standards in 2 C.F.R. §§200.317–200.326, subject to any more restrictive local law.