NOFA 7 FAQ
NOFA 007 Frequently Asked Questions
Revised July 8, 2022
The Office of the Chief Information Officer (OCIO) is providing these frequently asked questions (FAQs) as guidance regarding the administration of Notice of Funding Opportunity #007 (NOFA 007). NOFA 007 was funded using Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) made available under the American Rescue Plan Act (ARPA). Note that NOFA 007 operates under the Interim Final Rule. Regarding responses citing to Federal authorities, this Office does not have the authority to interpret Federal law. These responses should be used as guidance only. Grantees are encouraged to contact Treasury directly for an authoritative response to any questions pertaining to Federal law, including those pertaining to 2 CFR Part 200.
What resources are available that address the Federal requirements in NOFA 007?A. The U.S. Treasury has published a number of resources that can be found at https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/state-and-local-fiscal-recovery-funds.
For Compliance and Reporting Guidance, go to https://home.treasury.gov/system/files/136/SLFRF-Compliance-Statement.pdf.
Please note that NOFA 007 operates under the INTERIM Final Rule, found at https://www.govinfo.gov/content/pkg/FR-2021-05-17/pdf/2021-10283.pdf.
Where can I find the required federal contract provisions?A. Applicable Federal contract provisions can be found in your NOFA 007 Grant Agreement, Attachment B. Federal provisions regarding cost principles and audit requirements can be found at https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200?toc=1.
Do subsequent and additional grants (i.e. ARPA) impact the current NOFA #007 grant awarded amount (decrease)?A. Grants are all assessed independently and are subject to terms applicable to the specific grant. Future grants will take into account the buildout of your current broadband project. Your entity cannot receive more than 100% of the total costs incurred for buildout.
Can the 50% drawdown be achieved with a single advanced payment, or can I split it into multiple disbursements?A. OCIO will approve one advanced payment per project. The maximum request for the advanced payment is 50%, but a grantee is permitted to request less.
If I bought materials before the period of performance start date of March 3rd, 2021, am I subject to 2 CFR Procurement Regulations?A. All federally-funded grants are subject to 2 CFR Part 200. In addition, all funds must be obligated between March 3, 2021 and December 31, 2024. Purchases made prior to March 3, 2021 are not allowable expenditures and will not be reimbursed. See Interim Final Rule: Frequently Asked Questions section 6.2 and 6.12.
If we decide to perform fiber construction in house, as we do not have a need for a contractor to provide a specific service, do we still need to ensure a competitive bid for the work?A. Work that is self-performed does not require competitive bid. Personnel/Labor costs support is discussed in 2 CFR § 200.430. Fringe benefits (2 CFR § 200.431) and equipment rates per hour can be charged back to the project but the methodology for the costs must be documented, as well as a source for the amounts charged.
7. Does the 2 CFR require more than one fiber construction bid, even if we already have a provider who has historically produced at the lowest cost?
A. Recipients may leverage existing contracts for SLFRF activities if the existing contracts conform to the procurement standards in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR § 200.317-200.327. If you have competitively bid your vendor in the last 6 years and can show they currently have cost reasonableness, and you have proper supporting documentation, including any change orders for price differences, then it would appear you have reasonable documentation to justify a noncompetitive procurement. If you have not competitively bid, please consult 2 CFR § 200.320 to determine whether you have sufficient justification for sole sourcing your procurement. The Office will not approve noncompetitive procurements.
8. What happens if an awardee does not comply with the 2 CFR Part 200 or NOFA #007 regulations for competitive selection?
A. The Office will not approve noncompetitive procurements. If you do not participate in a competitive bid process, or do not adhere to the requirements in 2 CFR § 200.320, you may be subject to grant claw back or other remedies as noted in 2 CFR § 200.339.
9. I have an engineering firm I have worked with in the past, and am limited in choice of firms due to proximity to the construction area. Do I still need to competitively procure?
A. Although existing contracts may be leveraged under NOFA 007, these contracts must be in compliance with 2 CFR Part 200. While this statute allows for non-competitive or sole source procurements, the subrecipient is liable for making the determination as to whether the procurement complies with the requirements outlined in 2 CFR § 200.320. The Office will not approve noncompetitive procurements. If the subrecipient determines that the purchase complies with the requirements of 2 CFR Part 200, complete and thorough documentation should be made and kept by the subrecipient justifying its reasons for not seeking a competitive bid. When documenting a non-competitive procurement, a cost reasonableness analysis for the costs incurred should be included. Reasonableness of costs is outlined in 2 CFR § 200.404.
10. I have already contracted an engineering firm to prepare our grant application. Since we have already begun contracting an engineering firm, do I need to participate in a competitive bidding process?
A. See response to question 9.
11. We have an exiting relationship with a local contractor, and believe we get competitive pricing, as well as quality workmanship. Further, competitive bidding, including purchasing materials, will delay projects. Due to supply chain issues, some items require a significant lead time. What options do we have?
A. See response to question 9. See also 2 CFR § 200.320 for Methods of Procurement.
12. What happens if we attempt to competitively bid, and we only get 1 or 2 submissions?
A. Procurement requirements and methods are discussed in 2 CFR § 200.320. If, after a number of sources have been solicited, and competition is determined to be inadequate, a non-competitive procurement under 2 CFR § 200.320(c)(5) may be of consideration to the Grantee. Documentation to support this justification of inadequate competition should be maintained.
13. Can a parent company sell inventory to a subsidiary, if the original inventory purchase from the parent and the subsequent sale are competitive?
A. Parent/subsidiary intercompany procurement and materials invoicing is not specifically addressed in the CSLFRF guidance. For the subsidiary, a noncompetitive procurement may be justified at the Grantee's discretion, and if so, should include supporting documentation that the parent company competitively procured the materials. For the inventory movement, documentation is necessary to demonstrate that the original company competitively procured for the materials purchased, and then subsequent movement through to the subrecipient. The U.S. Treasury may not agree with this interpretation. Based on other federal guidance, exchanges between entities of this nature must be at cost.
14. Can I use Part 32 (average unit costing) accounting rules when purchasing inventory?
A. Part 32 is not an explicit acceptable accounting method listed in the Grants Management Guide or the NOFA 007 Grant Agreement. Please refer to section 4.4 (Proof of Allowable Expenditures) of the Grant Agreement, and the Grants Management Guide where the Office explicates acceptable proofs of purchase and proofs of payment the Office will accept at the time of claims reimbursement.
15. Does NOFA 7 restrict charging connection fees to locations?
A. Yes, you can charge a connection fee if those costs are not in your awarded budget. OCIO will not reimburse a subgrantee for costs passed to customers for reimbursement. Costs associated with completion of the project must be consistent with the 2 CFR Part 200.404 (reasonable costs).