1. The Library Director shall be the chief purchasing agent of the Library and is responsible for the Library-wide purchasing function. (S)he may delegate authority to other staff members to make purchases within their respective budgets as necessary.

2. All purchases shall be made within the legal requirements of the laws of Michigan and of the United States. No employee, officer, or agent of the Library shall divide, split, or otherwise structure a procurement into two or more separate transactions for the purpose of avoiding competitive bidding requirements, dollar thresholds, or any other requirement of this Policy. Any purchase determined to have been structured in this manner may be treated as a procurement violation and subject to disciplinary action.

3. The Library will not knowingly purchase or contract for goods or services from:

A. Library Board members

B. Library employees

C. Spouses of the above individuals

D. Children, parents, grandparents, grandchildren, siblings of the above individuals and their spouses

E. Firms or enterprises in which any of the above individuals have a vested interest involving ownership, partnership, sales commission or other direct and immediate gain resulting from such purchases.

F. Notwithstanding the foregoing, if any individual described in Regulations 3(A) through 3(E) above has a potential conflict of interest with respect to a proposed solicitation, purchase or contract, that individual shall promptly disclose the conflict in writing to the Library Director (or, if the Library Director has the conflict, to the Board President) before any procurement decision is made. Following such disclosure, the Library Board may, by majority vote at a duly noticed public meeting, waive the conflict and authorize the proposed transaction if and only if: (i) the transaction is permitted under applicable Michigan law and any applicable federal requirements; (ii) the Library Board affirmatively determines, based on documented evidence, that the transaction is fair and reasonable to the Library and made on terms no less favorable than those available from an unrelated third party (i.e., at arms' length); and (iii) the conflicted individual recuses himself or herself from all deliberation and voting on the matter. The written disclosure, the basis for the Board's determination, and the vote shall be recorded in the minutes of the meeting and retained as part of the procurement record.

4. Purchases greater than $1,000 of a single item must be approved by the Library Director.

5. Purchases greater than $10,000 but less than $25,000 must be based on a minimum of three quotations and approved by the Library Director.

6. Purchases of $25,000 or greater will follow a competitive bidding process using a request for quotation or request for proposal as appropriate. Notice of the solicitation shall be published for at least two (2) weeks before the bid due date. The requirement of publication shall be accomplished by means reasonably calculated to enhance competition, such as publication on the web through a recognized public solicitation platform, such as Bidnet Direct or similar web service. All purchases, contracts, and expenditures of Library funds shall be awarded to bidders considering conformity with specifications, competitiveness of bid, terms of delivery, quality, value, previous work performed for the Library, and serviceability. Preference will be given to purchasing from businesses in the Library’s legal service area when total cost, quality and timeliness of delivery are comparable.

7. Purchases of $25,000 or greater shall be brought to the Library Board for final approval.

8. Competitive bidding is not required under the following circumstances:

A. Where the goods or services are economically procurable from only a single source. A written rationale shall be retained in the file in these instances and may be provided to the Library Board for these instances.

B. Where the services required are for professional skills of the provider, such as accounting, audit, legal, and professional design services.

C. In emergencies involving public health, public safety, or where immediate expenditure is necessary.

D. Contracts for the maintenance or servicing of equipment which are made with the manufacturer or authorized service agents of that equipment.

E. Where the goods or services are procured from another governmental agency or through a Library cooperative program in which prices have been previously determined by competitive bidding.

F. Purchases and contracts for the use, purchase, or installation of proprietary software.

G. For similar purchases from a vendor that has won a competitive bidding process from the Library within the past two years so long as the price has not increased substantially.

H. If a contractor is providing an ongoing service to the Library’s satisfaction and as long as the annual increase does not exceed 2%; such services shall be put out for bid at least every 4 years.

I. From major Library vendors that are supplying proprietary computer hardware and software, books, audiovisual materials, electronic and periodicals subscriptions, and other items intended for checkout.

9. All contracts $50,000 or greater shall be sent to the Library’s attorney for review before signed by the Library Director or his/her designee. Other contracts may be reviewed by the attorney at the Library Director’s discretion.

10. If a situation impinges on Library services or facilities and an emergency purchase contravening the policy statements above is deemed necessary, it must be approved by the Library Director or his/her designee and a member of the Library Board, preferably the president. A written justification of the nature of the emergency and the selection of the particular vendor shall be submitted to the Library Board and shall become part of the record for the purchase.

11. Because the purpose of the Library as a public library is to use taxpayer provided funds for Library services only, such funds may not be distributed to any other charitable purpose.

12. If the Library Director deems property to be obsolete, surplus or salvage and is no longer needed for Library or public purposes, the property may be offered for sale except as restricted by law. The Library Director or his/her designee may sell individual pieces of property not exceeding $5,000 in value or $25,000 in total. Property with a value of $5,000 or greater may be sold after approval of the sale has been given by the Library Board. If property remains unsold after reasonable attempts to obtain cash for the item, it may be donated or discarded. Other libraries will be given first priority for the sale/donation of property.

A. Purpose and Scope. This Addendum sets forth procurement requirements that apply to all purchases, contracts, and expenditures funded in whole or in part by a federal award or subaward, including but not limited to grants and cooperative agreements administered by or through a federal agency or pass-through entity. In the event of any conflict between this Addendum and the foregoing Purchasing Policy, this Addendum shall control with respect to federally funded transactions. All other provisions of the Purchasing Policy that are not inconsistent with this Addendum remain in full force and effect for federally funded transactions. These requirements implement and are consistent with 2 CFR Part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards).

B. Documented Procurement Procedures (2 CFR § 200.318(a)). For all procurement transactions under a federal award or subaward, the Library shall maintain and use documented procurement procedures consistent with applicable Michigan law and the standards set forth in 2 CFR §§ 200.317 through 200.327. These documented procedures shall be on file with the Library Director and made available for review upon request by the applicable federal agency or pass-through entity.

C. Standards of Conduct and Conflict of Interest (2 CFR §§ 200.112, 200.318(c)).

(1) No employee, officer, agent, or Board member shall participate in the selection, award, or administration of a contract if he or she has a real or apparent conflict of interest. A real or apparent conflict of interest arises when any of the following has a financial or other interest in, or a tangible personal benefit from, a firm considered for a contract: the employee, officer, agent, or Board member; any member of his or her immediate family; his or her partner; or an organization that employs or is about to employ any of the foregoing.

(2) The Library's employees, officers, agents, and Board members shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. The Library may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value.

(3) Violations of the standards of conduct described in this Section shall result in disciplinary action, up to and including termination, and referral to appropriate legal authorities.

(4) Any employee, officer, agent, or Board member who identifies a potential conflict of interest in connection with a federally funded procurement shall promptly disclose that conflict in writing to the Library Director. Where required by the terms of the applicable federal award, the Library shall disclose potential conflicts of interest in writing to the applicable federal agency or pass-through entity in accordance with 2 CFR § 200.112.

D. Prohibition on Purchase Splitting. No employee, officer, agent, or Board member shall divide, split, or otherwise structure a procurement transaction into two or more separate transactions for the purpose of avoiding competitive bidding requirements, approval thresholds, or any other requirement of this Policy or applicable federal or state law. Violations of this prohibition shall be treated as a serious procurement violation and shall be subject to disciplinary action and reporting to the applicable federal agency or pass-through entity.

E. Full and Open Competition (2 CFR § 200.319).

(1) All procurement transactions under a federal award shall be conducted in a manner that provides full and open competition consistent with the standards of 2 CFR §§ 200.319 and 200.320 or their successor regulations.

(2) To ensure objective contractor performance and eliminate unfair competitive advantage, any contractor that develops or drafts specifications, requirements, statements of work, requests for proposals, or invitations for bids for a federally funded procurement shall be excluded from competing for that procurement.

(3) Written procurement procedures for federally funded procurements shall clearly describe the technical requirements for the property, equipment, or service to be procured; identify all evaluation factors and their relative importance; and ensure that any prequalified lists of persons, firms, or products are current and include enough qualified sources to ensure maximum open and free competition.

F. Procurement Methods for Federal Awards (2 CFR § 200.320). The Library shall use procurement methods consistent with 2 CFR § 200.320 (informal procurement, formal procurement, and non-competitive procurement methods) and shall do so in a manner that is closest to achieving the objectives of the general regulations in the Library Procurement Policy.

G. Noncompetitive Procurement for Federal Awards (2 CFR §§ 200.319(g), 200.320(c)). Notwithstanding any exception to competitive bidding set forth in Regulation 8 of this Policy, noncompetitive procurement methods for transactions under a federal award may only be used if one of the following circumstances applies and is documented in writing:

(1) the aggregate amount of the procurement transaction does not exceed the micro-purchase threshold;

(2) the procurement can only be fulfilled by a single source;

(3) a public exigency or emergency will not permit a delay resulting from providing public notice of a competitive solicitation;

(4) the Library has requested in writing to use a noncompetitive procurement method and the applicable federal agency or pass-through entity has provided written approval prior to the procurement; or

(5) after soliciting several sources, competition is determined inadequate. In all noncompetitive procurement situations covered by this Section, the Library shall prepare and retain a written justification documenting which of the foregoing circumstances applies, the basis for contractor selection, and the basis for the contract price. Any provision of Regulation 8 of the general Purchasing Policy that is broader than the foregoing shall not apply to federally funded transactions.

H. Cost and Price Analysis (2 CFR § 200.324).

(1) The Library shall perform a cost or price analysis for every procurement transaction under a federal award, including contract modifications, in excess of the simplified acquisition threshold. The method and degree of analysis shall depend on the facts surrounding the particular procurement. The Library must make independent cost or price estimates before receiving bids or proposals.

(2) Costs or prices based on estimated costs for contracts under a federal award are allowable only to the extent they comply with the cost principles set forth in 2 CFR Part 200, Subpart E.

(3) The use of cost-plus-a-percentage-of-cost and percentage-of-construction-cost contract types is prohibited for all procurements under federal awards.

(4) Documentation of the cost or price analysis shall be retained in the procurement file.

I. Responsible Contractors (2 CFR § 200.318(h)). For all procurement transactions under a federal award, contracts shall be awarded only to responsible contractors that possess the ability to perform successfully under the terms and conditions of the proposed contract. In evaluating contractor responsibility, the Library shall consider: contractor integrity; compliance with public policy; proper classification of employees consistent with the Fair Labor Standards Act (29 U.S.C. 201); past performance record; and financial and technical resources. The Library shall document its contractor responsibility determination and retain that documentation in the procurement file.

J. Limitation on Local Preference for Federal Awards. The local business preference set forth in Regulation 6 of this Policy shall not apply to any procurement transaction funded in whole or in part by a federal award, nor shall it be applied in any manner that would violate federal law or requirements. All procurement transactions under a federal award shall be evaluated solely on the basis of full and open competition criteria consistent with 2 CFR § 200.319.

K. Procurement Records (2 CFR § 200.318(i)). The Library shall maintain records sufficient to detail the complete history of each procurement transaction under a federal award. At a minimum, these records shall include:

(1) the rationale for the procurement method selected;

(2) the basis for contractor or vendor selection;

(3) documentation of any contractor rejections and the reasons therefor;

(4) the basis for the contract price, including any cost or price analysis performed;

(5) copies of all solicitations, bids, proposals, and quotations received;

(6) any independent cost estimates prepared;

(7) written justifications for noncompetitive procurements; and

(8) any written approvals received from the applicable federal agency or pass-through entity.

Procurement records under a federal award shall be retained in accordance with the records retention requirements of 2 CFR § 200.334 for a minimum of three (3) years from the date of submission of the final expenditure report for the applicable award, or such longer period as required by law or the terms of the award.

L. Strategic Sourcing and Intergovernmental Agreements (2 CFR § 200.318(e)). For federally funded procurements, the Library is encouraged to enter into State and local intergovernmental agreements or inter-entity agreements for the procurement of common or shared goods and services where such arrangements foster greater economy and efficiency. Documented procurement actions using strategic sourcing, shared services, or similar cooperative arrangements shall satisfy the competition requirements of 2 CFR Part 200, provided the underlying cooperative contract was itself competitively awarded. The Library shall document the use of any such arrangement and retain that documentation in the applicable procurement file.

M. Mandatory Disclosure (2 CFR § 200.113). The Library shall promptly disclose in writing to the applicable federal agency, the agency's Office of Inspector General, and any pass-through entity any credible evidence of: (1) fraud, waste, or abuse in connection with a federal award; (2) a conflict of interest, bribery, or gratuity violation affecting a federally funded procurement; or (3) a violation of the civil False Claims Act (31 U.S.C. §§ 3729–3733) arising in connection with the Library's receipt or expenditure of federal award funds. Disclosures shall be made as promptly as practicable and in accordance with the requirements of the applicable federal award. The Library Director shall be responsible for ensuring that all required disclosures are made in a timely manner.

N. Disposition of Property Acquired with Federal Award Funds (2 CFR §§ 200.311–200.314). Notwithstanding Regulation 12 of this Policy, the following requirements apply to the disposition of property originally acquired in whole or in part with federal award funds:

(1) Equipment. Prior to disposing of any equipment acquired under a federal award with a current per-unit fair market value in excess of $5,000, the Library shall notify the applicable federal agency or pass-through entity and request disposition instructions. Proceeds from the sale or disposition of such equipment shall be returned to the federal agency in proportion to the federal share of the original acquisition cost, unless the federal agency provides other written instructions.

(2) Supplies. At the end of a federal award period, if the aggregate value of unused supplies acquired with federal award funds exceeds $10,000, the Library shall retain or sell those supplies and compensate the federal agency or pass-through entity for the federal agency's percentage interest in the current market value or sale proceeds, after deducting a selling and handling allowance not to exceed $1,000.

(3) The Library Director shall maintain records of all property acquired with federal award funds and shall ensure that disposition of such property complies with the requirements of the applicable federal award agreement and 2 CFR §§ 200.311–200.314.

O. Procurement of Audit Services (2 CFR § 200.509). When procuring audit services in connection with a federal award, the Library shall follow the procurement standards set forth in 2 CFR §§ 200.317 through 200.327. The Library shall make clear the objectives and scope of the audit in any request for proposals and shall request a copy of the audit organization's peer review report, which the auditor must provide under Generally Accepted Government Auditing Standards (GAGAS). Evaluation of proposals for audit services shall include consideration of: responsiveness to the request for proposals; relevant experience; availability of staff with professional qualifications and technical abilities; results of peer and external quality control reviews; and price. The Library shall make efforts to contract with small and disadvantaged businesses where possible. An auditor who prepared the Library's indirect cost proposal may not be selected to perform the audit if recovered indirect costs exceed $1,000,000 under a federal award.