ARRA Guide General FAQ
ARRA Guide General FAQ
- How do local governments calculate “jobs created” and “jobs retained” due to ARRA-funded projects?
- How do local governments report “jobs created” and “jobs retained” due to ARRA-funded projects?
- What information are local governments required to report?
- Do the ARRA reporting requirements apply to projects or purchases funded through Recovery Zone Bonds, Tribal Economic Development Bonds, Qualified School Construction Bonds, or Build America Bonds?
- If my local government has received ARRA funds, but has not awarded a contract for the funds yet or spent any of the funds, do we still need to report?
- Will the bidding rules that apply to other local government purchases and contracts apply to purchases and contracts involving ARRA funding?
- What procurement rules apply to ARRA-funded projects or purchases that are different from or in addition to rules that apply to other local government purchases, construction projects, and service contracts?
- For purchases that are funded at least in part with ARRA funds, can local governments buy these items off of state contract, or do they have to bid them out? Can local governments use any of the bidding exceptions (such as piggybacking, competitive bidding group purchasing programs, or sole source purchasing) for purchases or construction projects using recovery funds?
- Are service contracts funded through ARRA exempt from bidding?
- Do local governments have to follow the Buy American requirements?
- Are local government recipients of ARRA funds required to use E-Verify?
- Is every item purchased with these funds to be accounted for as an asset or may some items be expensed?
- Who must inform contractors of their responsibilities under the new rules for ARRA funds?
- Is the ARRA funding ongoing or just for 2009-10 and 2010-11?
Information on calculating “jobs created” and “jobs retained” is found in OMB Memorandum 09-21. Additional information is available through a series of free webinars offered by the Office of Management and Budget (a federal agency).
If the funding agency (the agency that has provided the grant, bond, or other ARRA funding to your local government) is a federal agency, you will need to report “jobs created” and “jobs retained” in the quarterly reports that you submit through FederalReporting.gov. This website provides instructions and information about how to report, and also provides a reporting template. You can find additional (and more user-friendly) information (including a quick start reference guide) on the Recipient Reporting Information webpage on Recovery.gov. Additional information on reporting “jobs created” and “jobs retained” can be found in OMB Memorandum 09-21.
To report on FederalReporting.gov, your local government will need a DUNS number and will also need to register with Central Contractor Registration (CCR), if your local government has not already done so. To get a DUNS number, go to the DUNS Request Service website. It will take about 24 - 48 hours to receive your DUNS number after you complete the form. Once you have a DUNS number, register on the Central Contractor Registration website (click on “Start New Registration”). It will take a few hours to complete the CCR registration application, and you should receive your CCR registration in about 3-4 business days. Once you have your DUNS number and you are registered with CCR, you can register with FederalReporting.gov.
If the funding agency is a state agency, the agency should have told you whether they will require you to report on FederalReporting.gov (see the information above) or if they will require you to report directly to them (the state agency). (If the state agency has not explained this to you yet, ask them immediately.) If the agency requires you to report to them directly, you will need to find out (1) where to submit the report;
(2) what information should be contained in the report; (3) what format the report should follow; and (4) when the report will be due. Do not assume that each state agency will require reporting in the same form or on the same timeline. If you’re receiving ARRA funding from more than one state agency, you will need to contact each of those agencies to ask them for this information.
The first reporting period is October 1, 2009 through October 10, 2009. For this initial reporting period, if your local government has received any ARRA funding by September 30, 2009, you must report on all ARRA funding received through September 30, 2009. Reports must be submitted quarterly. The next reporting period will be January 1, 2010 through January 10, 2010.
Local governments will be required to report the following information:
- A description of the project and its status;
- The number of jobs created and retained (information on how to calculate jobs created and retained can be found in OMB Memorandum 09-21, starting at page 33 [“Section 5 – Reporting on Jobs Creation Estimates by Recipients”]);
- A description of jobs created;
- The amount of ARRA funds received;
- The amount of ARRA funds spent;
- The total number and amount of payments made to vendors/contractors using ARRA funds (for vendors/contractors paid less than $25,000 per award); and
- Supplemental information (name, DUNS number, location, product/service description, and payment amount) regarding vendors/contractors paid $25,000 or more per award.
For a complete list and description of the information you will be required to report, visit FederalReporting.gov, click on “Downloads,” and then click on “Recipient Reporting Data Model,” which is the fourth item listed under the heading “Documentation.”
Do the ARRA reporting requirements apply to projects or purchases funded through Recovery Zone Bonds, Tribal Economic Development Bonds, Qualified School Construction Bonds, or Build America Bonds?
No, although other special requirements may apply to these bonds. You will need to work with the state or federal agency charged with administering these bonds to determine what requirements and procedures apply ot these bonds.
(Here's the rationale for why the reporting requirements don't apply to these bonds: The American Recovery and Reinvestment Act is split into 3 parts: (1) general provisions, (2) “Division 1” and (3) “Division 2.” Section 4 of the Act (in the general provisions) provides that “any reference to ‘this Act’ contained in any division of this Act shall be treated as referring only to the provisions of that division.” The reporting requirements are in Section 1512 of Division 1, and require reporting from “each recipient that received recovery funds.” Section 1512 defines “recovery funds” as “any funds that are made available from appropriations made under this Act.” Since Section 4 of the Act says “this Act” means “this Division,” the reporting requirements apply only to funds appropriated in Division 1 of the Act (which includes most of the funding made available under ARRA). These bonds are authorized in Division 2 of the Act, not Division 1, so the reporting requirements that apply to ARRA grant-funded projects do not apply to these bonds.)
If my local government has received ARRA funds, but has not awarded a contract for the funds yet or spent any of the funds, do we still need to report?
Yes. If your local government has received ARRA funds, even if the funding has not yet been spent, you will need to submit reports. Simply insert “0” for funds spent and “n/a” or “not applicable” for information about vendors and contractors with an explanation that the contract has not yet been awarded.
Will the bidding rules that apply to other local government purchases and contracts apply to purchases and contracts involving ARRA funding?
Yes, when those rules do not conflict with rules specific to ARRA funding. For example, if you are using ARRA funds to purchase apparatus, equipment, materials, or supplies costing $90,000 or more, you will need to follow the formal bidding requirements found in G.S. 143-129. For more information on these rules, please refer to the School of Government’s North Carolina Local Government Purchasing and Contracting website, where you can find helpful publications, tools, and links to the bidding statutes.
What procurement rules apply to ARRA-funded projects or purchases that are different from or in addition to rules that apply to other local government purchases, construction projects, and service contracts?
All federal agencies have adopted a set of regulations, known as the Grants Management Common Rule, which apply to all federal grants. Because all ARRA funding comes from federal agencies (either directly from a federal agency or indirectly through a state agency), the Grants Management Common Rule applies to all ARRA-funded projects or purchases that are funded through grants. The Grants Management Common Rule does not apply to ARRA-funded projects or purchases that are funded through bonds or other non-grant funding. For ARRA-funded projects or purchases funded through bonds or other non-grant funding, review the information provided by the funding agency to determine if special procurement rules will apply. If you are not sure which rules apply, ask the funding agency.
Although a description and explanation of all of the regulations contained in the Grants Management Common Rule goes beyond the scope of this document, the following is a list of five examples of requirements found in the Grants Management Common Rule that are different from the requirements found in the North Carolina procurements statutes applicable to local governments:
- Grant recipients (including local governments) must maintain a written code of standards of conduct, and this code must specify that no employee or officer of the local government shall participate in the award or administration of an ARRA-funded project or purchase if that person, that person’s spouse, any member of that person’s immediate family, or an organization which employs or is about to employ the person, the person’s spouse, or a member of the person’s immediate family has a financial or other interest in the company selected for award.
- Grant recipients (including local governments) must develop bid protest procedures and must disclose information regarding any protests to the funding agency.
- Competition must be sought for all grant-funded purchases and contracts, with very limited exceptions. (In other words, local governments should assume that the exceptions to bidding found in G.S. 143-129(e), G.S. 143-129(g), and G.S. 143-135 (the “force account” limit) will not be available for ARRA-funded projects or purchases. If a local government believes there is no competition available for a specific purchase, construction project, or service contract, the local government should contact the funding agency to get their written approval before attempting to purchase or contract through one of the bidding exceptions.)
- A 5% bid bond, 100% performance bond, and 100% payment bond is required for all construction and repair contracts and subcontracts costing more than $100,000.
- Grant recipients (including local governments) are required to “take all necessary affirmative steps to assure that minority firms [and] women’s business enterprises are used when possible.” The Rule provides 6 steps that grant recipients shall take:
- Placing qualified small and minority businesses and women’s business enterprises on solicitation lists;
- Assuring that small and minority businesses, and women’s business enterprises are solicited whenever they are potential sources;
- Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority business, and women’s business enterprises;
- Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority business, and women’s business enterprises;
- Using the services and assistance of the Small Business Administration, and the Minority Business Development Agency of the Department of Commerce; and
- Requiring the prime contractor, if subcontracts are to be let, to take these steps.
These steps apply to all types of contracts (purchases, construction, and services), regardless of contract amount.
Local governments receiving ARRA funding through grants will be expected to comply with the Grants Management Common Rule. Accordingly, local government attorneys, procurement officials, and other employees involved in supervising ARRA-funded projects or purchases should read the Rule and follow it.
In situations where the Grants Management Common Rule conflicts with the North Carolina local government procurement statutes, local governments should comply with whichever requirement is more restrictive. (For example, the North Carolina General Statutes do not require that local governments develop a bid protest procedure, but the Grants Management Common Rule requires grant recipients to develop a bid protest procedure. This means that a local government receiving ARRA funds must develop a bid protest procedure.)
For purchases that are funded at least in part with ARRA funds, can local governments buy these items off of state contract, or do they have to bid them out? Can local governments use any of the bidding exceptions (such as piggybacking, competitive bidding group purchasing programs, or sole source purchasing) for purchases or construction projects using recovery funds?
As discussed in the question above, the Grants Management Common Rule requires that competition be sought for all grant-funded purchases and contracts, with very limited exceptions. This means that local governments should assume that the exceptions to bidding found in G.S. 143-129(e), G.S. 143-129(g), and G.S. 143-135 (the “force account” limit) will not be available for projects or purchases funded through ARRA grants. If a local government believes there is no competition available for a specific purchase, construction project, or service contract, the local government should contact the funding agency to get their written approval before attempting to purchase or contract through one of the bidding exceptions. In many cases, the funding agency may require a local government to first seek competition, and will only allow the use of an exception to bidding (such as purchasing off of a state contract) after the competitive process has resulted in either (1) no competition or (2) pricing that is higher than the pricing available through the use of an exception to bidding. If your local government receives approval from a funding agency to use an exception to the bidding laws, do not use the exception until the agency provides that approval in writing or through email. Keep this written approval with your records.
Although local governments are usually not required to bid out service contracts, the Grants Management Common Rule requires grant recipients (including local governments) to solicit competition whenever possible. The Rule does allow for something called “competitive proposals,” which allows grant recipients (including local governments) to use a request for proposal (RFP) process and award to the “responsible firm whose proposal is most advantageous to the program, with price and other factors considered” (rather than to the lowest responsive, responsible bidder). Before using an RFP process to solicit services, however, local governments should get approval—in writing—from the funding agency (state or federal). If your local government is receiving ARRA funding through a bond or other non-grant funding, check the information provided by the funding agency to determine if the agency will require you to bid service contracts, and ask the funding agency if the information provided to you does not answer this question.
Yes, but only for constructoin projects (not purchases), and there are exceptions. The funding agency should provide guidance to you regarding these exceptions. For specifics (e.g. when does the provision apply, what exceptions there are, what reporting is required), ask the funding agency (federal or state).
According to the Department of Homeland Security’s E-Verify website, E-Verify “is an Internet based system operated by the Department of Homeland Security (DHS) in partnership with the Social Security Administration (SSA) that allows participating employers to electronically verify the employment eligibility of their newly hired employees.” As of September 8, 2009, federal contractors are required to use the E-Verify system to verify their employees’ eligibility to work in the United States. However, this requirement does not automatically apply to state or local government contracts that are funded through ARRA. (A federal agency may choose to apply this requirement to a specific grant, so review the grant documents to determine whether you will be required to use E-Verify on your ARRA-funded project.)
Is every item purchased with these funds to be accounted for as an asset or may some items be expensed?
Although all items purchased or constructed should be physically accounted for, the accounting for some items may be different depending on the individual unit’s asset capitalization policy. Unless the funding agency (state or federal) has a policy about this, then the local government’s own capitalization policy will apply. Note that federal agencies generally require a threshold of $5,000, below which items may be expensed rather than capitalized. (See OMB Circular A-87 for more information.)
Each local government is responsible for informing contractors about the new rules. For contracts involving ARRA funding from state agencies, the Contract Provisions provided in OERI Management Directive 3 and transmitted in State Treasurer’s Memo 1127 must be included in the solicitation document and the contract itself. Local governments should explain and discuss these provisions with potential bidders and contractors.
For contracts involving ARRA funding received from federal agencies, the grant documents will tell you what specific contract provisions must be included in the solicitation and contract documents. Again, local governments should explain and discuss these provisions with potential bidders and contractors.
Each local government is ultimately responsible for complying with the rules that come with ARRA funding. Your local government must determine for itself what organizational structure and internal controls will ensure that these rules are followed.
Because these grants place new and unfamiliar responsibilities on contractors, it is strongly recommended that local governments hold pre-submittal meetings on each contract involving ARRA funds to discuss these responsibilities.
All ARRA funding is to be awarded by 2011. The funding is not “ongoing” because each state and each federal agency was given only a certain amount of ARRA funds to award. Once that funding is depleted, there will be no additional grants from that source, unless Congress chooses to increase the amount of funding for that state, agency, or program. (Note: Because each grant is different, local governments will have to review the terms of each grant to determine the deadlines for (1) bidding, (2) contract award, and (3) completion of the work.)