Loss Measurement



1 FEMA Public Assistance Guide

One of the most significant risks an applicant faces when dealing with FEMA is using improper procurement procedures. The penalty could be a complete disallowance of associated project costs.

Contracts must be of reasonable cost, generally must be competi- tively bid and must comply with Federal, State, and local procure- ment standards. FEMA finds four methods of procurement accept- able. Each is described below. 1

Small Purchase Procedures

Small purchase procurement is an informal method for securing ser- vices or supplies, that do not cost more than $100,000, by obtaining several price quotes from different sources.

Sealed Bids

Sealed bid procurement is a formal method where bids are publicly advertised and solicited and the contract is awarded to the bidder whose proposal is the lowest in price. This method is the preferred method for procuring construction contracts.

Competitive Proposals

Competitive procurement is a method similar to sealed bid procurement in which contracts are awarded on the basis of contractor qualifications instead of price (this method is used for procuring architectural or engineering professional services).

Noncompetitive Proposals

Noncompetitive procurement is a method whereby a proposal is received from only one source. Noncompetitive proposals should be used only when the award of a contract is not feasible under small purchase procedures, sealed bids, or competitive proposals, and one of the following circumstances apply:

FEMA provides reimbursement for three types of contracts. They are:

Time and materials contracts should be avoided, but may be allowed for work that is necessary...

Contracts must be of reasonable cost, generally must be competitively bid, and must comply with Federal, State, and local procurement standards.