Procurement and Contracting Requirements

Tribal, Territorial, local governments, and Private Non-Profits (PNP) must comply with:

  • Their own documented procurement procedures;
  • Applicable State, local, Tribal, and Territorial (SLTT) government laws and regulations; and
  • Applicable Federal laws and regulations

If a Federal requirement is different than the SLTT requirement, or the Applicant’s own requirements, the Applicant must use the more restrictive requirement.  
If your organization does not have formal procurement policies documented, please contact MEMA for guidance. Your organization may choose to adopt the State’s Procurement Policy and/or craft your own with support from your legal team and/or a professional government association such as Maine Municipal Association. 

General Federal Procurement Requirements

Federal procurement requirements are found at 2 C.F.R.§200.318 through 200.326. The requirements include, but not limited to:

  • Providing full and open competition
  • Conducting the following steps to ensure the use of small and minority businesses, women’s business enterprises, and labor surplus area firms when possible: 
    • Place such organizations that are qualified on solicitation lists; 
    • Ensure such organizations are solicited whenever they are potential sources; 
    • Divide total requirements, when economically feasible, into smaller tasks or quantities; 
    • Establish delivery schedules, where the requirement permits, which encourage their participation; 
    • Use the services and assistance, as appropriate, of the Small Business Administration and the Minority Business Development Agency of the Department of Commerce; and 
    • Require prime contractor to conduct the above steps if subcontracting. 
  • Performing a cost or price analysis in connection with every procurement action above the simplified acquisition threshold, including contract modifications. The Applicant must make independent estimates before receiving bids or proposals.  Additionally, the Applicant must negotiate profit as a separate element of the price when it performs a cost analysis and for each contract in which there is no price competition.
  • Evaluating and documenting the contractor’s integrity, compliance with public policy, record of past performance, and financial and technical resources. 
  • Ensuring that the contractor was not suspended or debarred.
  • Prohibiting the use of statutorily or administratively imposed State, local, Tribal, and Territorial (SLTT) geographic preferences in evaluating bids or proposals except where expressly encouraged by applicable Federal law.
  • Excluding contractors that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals from competing for such procurements to ensure objective contractor performance and eliminate unfair competitive advantage. 
  • Maintaining records to detail the history of the procurement including, but are not limited to: 
  • Rationale for the method of procurement; 
  • Selection of contract type; 
  • Contractor selection or rejection; and 
  • The basis for the contract price.

Procurement Methods

Applicants must use one of the following procurement methods:

  • Micro-Purchase – purchase of supplies or services where the total cost does not exceed the micro-purchase threshold set by the Federal Acquisition Regulation at 48 C.F.R. Subpart 2.1;
  • Small Purchase Procedure – relatively simple and informal procurement method securing services, supplies, or other property that do not cost more than the simplified acquisition threshold set by the Federal Acquisition Regulation at 48 C.F.R. Subpart 2.1;
  • Sealed Bid (formal advertising) – publicly solicited bid awarded via a firm fixed contract to the lowest responsive and responsible bidder;
  • Competitive Proposal – normally conducted with more than one source submitting an offer and generally used when conditions are not appropriate for the use of sealed bids; or
  • Noncompetitive Proposal (sole-sourcing) – solicitation of a proposal from only one source.

Non-Competitive Procurement

FEMA may reimburse costs incurred under a contract procured through a noncompetitive proposal, also referred to as sole-source, only when one or more of the following circumstances apply: 

  • The item is only available from one source; 
  • The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation (this exception to competitive procurement is only for work specifically related to the circumstance and only while the circumstances exists. Therefore, Applicants need to immediately begin the process of competitively procuring similar goods and services and transition to a competitively procured contract as soon as the circumstances cease to exist); 
    • Exigency:  The existence of a need to avoid, prevent or alleviate serious harm or injury, financial or otherwise, to the Applicant
    • Emergency:  The existence of a threat to life, public health or safety, or improved property requiring immediate action to alleviate the threat.
  • FEMA or the State expressly authorizes a noncompetitive proposal in response to a written request from the Applicant; or 
  • After solicitation of several sources, competition is determined inadequate.

For each noncompetitive procurement, the Applicant must identify which of the four circumstances listed above apply and provide all of the following information, documentation, and justification: 

  • A brief description of the product or service being procured, including the expected amount of the procurement; 
  • Explanation of why a noncompetitive procurement is necessary. If there was a public exigency or emergency, the justification should explain the specific conditions and circumstances that clearly illustrate why competitive procurement would cause unacceptable delay in addressing the public exigency or emergency. (Failure to plan for transition to competitive procurement cannot be the basis for continued use of noncompetitive procurement based on public exigency or emergency); 
  • Length of time the noncompetitive contract will be used for the defined SOW, and the impact on that SOW should the noncompetitively procured contract not be available for that amount of time (e.g., how long does the Applicant anticipate the exigency or emergency circumstances to continue; how long it will take to identify requirements and award a contract that complies with all procurement requirements; or how long it would take another contractor to reach the same level of competence); 
  • The specific steps taken to determine that the Applicant could not have used, or did not use, full and open competition for the SOW (e.g., research conducted to determine that there were limited qualified resources available that could meet the contract provisions); 
  • Any known conflicts of interest and any efforts that the Applicant made to identify potential conflicts of interest before the noncompetitive procurement occurred. If the Applicant made no efforts, explain why; and 
  • Any other justification. 

Prequalified Contractors

A prequalified contractor is one that the Applicant evaluated and determined to be qualified to perform the work based on capabilities, such as technical and management skills, prior experience, past performance, and availability. A prequalified contractor is not entitled to a “standby” contract. The Applicant must still conduct full and open competition. The Applicant cannot exclude potential bidders or offerors from qualifying during the solicitation period, even if they were not on the prequalified list.

Contract Types

FEMA reimburses incurred costs using three types of contracts:  fixed price, cost-reimbursement, and, to a limited extent, time & materials.  Applicants must maintain oversight on all contracts to ensure contractors perform according to the conditions and specifications of the contract and any purchase orders.

Time and Material Contracts

T&M contracts do not provide incentives to the contractor for cost control or labor efficiency. Therefore, use of T&M contracts are only allowed if all of the following apply: 

  • No other contract type was suitable; 
  • The contract has a ceiling price that the contractor exceeds at its own risk; and 
  • The Applicant maintains a high degree of oversight to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls.

FEMA generally limits the use of T&M contracts to a reasonable timeframe based on the circumstances during which the Applicant could not define a clear SOW. Therefore, the Applicant should define the SOW as soon as possible to enable procurement of a more acceptable type of contract.
When requested by FEMA, the Applicant should maintain documentation that substantiates a high degree of contractor oversight, such as daily or weekly logs, records of performance meetings.

Cost Plus Percentage of Cost or Percentage of Construction (Do Not Use)

In addition to limiting reimbursement to costs that can be determined to be reasonable, FEMA does not reimburse the increased cost associated with the percentage on a cost-plus-percentage-of-cost calculation or percentage-of-construction cost method. This type of contract billing is prohibited as it does not provide incentive to contractors to control costs because the contractor’s profit increases as the costs of performance increase. Instead, it provides a financial interest to the contractor to increase costs so that its profit increases. FEMA identifies these cost methods by determining whether: 

  • Payment is on a predetermined percentage rate; 
  • The predetermined percentage rate is applied to actual performance costs; 
  • The contractor’s total payment amount is uncertain at the time of contracting; and 
  • The contractor’s payment increases commensurately with increased performance costs.

Required Contract Clauses

Contract Provisions Guide for Non-Federal Entity Contracts with Federal Awards (PDF)

Verification of Contractor in Good Standing

FEMA Suspension & Debarment FAQs (PDF)
Verify Good Standing Status of Contractor via

Avoid Procurement and Contracting Pitfalls

Common Mistakes to Avoid by Non-State Entities (PDF)
Top 10 Procurement Under Grant Mistakes (PDF)


Procurement Disaster Assistance Team (PDAT) Field Manual – Procurement Information for FEMA Award (PDF)
An Exception to the Rules During Emergency or Exigent Circumstances (PDF)
Contracting with Federal Funds for Goods and Services Before, During and After Disasters (PDF)
Reasonable Cost Evaluation - FEMA’s Methodology (PDF)

Fact Sheets

Construction Manager at Risk (CMAR) Contracting (PDF)
Informal Methods of Procurement by Non-State Entities (PDF)
Managing Fraud Risks (PDF)
Prepare Before a Disaster (PDF)
Utilizing Small Business Administration (SBA) Resources (PDF)
Socioeconomic Contracting (PDF)
Purchasing Under a FEMA Award: Exigent or Emergency Circumstances (PDF)
Contracting Requirements Checklist (PDF)
Purchasing Under a FEMA Award: Using the GSA Schedule (PDF)


Procurement Compliance Checklist - FEMA Methodology (PDF) – This spreadsheet is used by FEMA to validate contracts are in compliance.

FEMA Training Video

Understanding PA – Procurement and Contract Guidance

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