Procurement Policies and Procedures

Supplier Diversity Program

The federal government's procurement process is different than that of private 

industry because it entails the spending of taxpayer dollars. Simply stated, the 

federal process involves obtaining the best results using best-value 

procedures, usually through competition, while carrying out many national 

security, social and economic goals established by law. As a result, the formal 

process may seem rigid and frustrating to the small-business person.

FEDERAL AND TRUST FUND PURCHASING:

Federal appropriations account for about 64% of the Smithsonian's net 

operating funds. The purchase of supplies, materials, equipment, services and 

building construction, alteration and repair with appropriated funds is guided 

by provisions of the Federal Acquisition Regulation and other federal 

regulations appropriate to the Smithsonian's role as a trust instrumentality of 

the United States. The Smithsonian's Office of Contracting and Personal 

Property Management (OCON&PPM) and the Office of General Counsel 

(OGC) determine the applicability of such regulations.

Funds that the Smithsonian receives from sources other than direct federal 

appropriations are known as trust funds. When practicable, the policy for 

expenditure of trust funds is based on the principles embodied in the Federal 

Acquisition Regulation.

DELEGATION OF AUTHORITY:

Through a delegation of authority from the Secretary of the Smithsonian 

Institution, the Director of the OCON&PPM is the designated Head of the 

Smithsonian Contracting Activity and principle Contracting Officer. In this 

capacity, the Director is authorized to acquire property and services needed to 

conduct the affairs of the Institution and may re-delegate his/her authority to 

other Smithsonian employees. Purchase orders and contracts may be entered 

into only by Smithsonian employees who hold official delegations of authority 

from the Director of OCON&PPM.

The Director of OCON&PPM has delegated authority to more than 500 

purchasing agents and contracting officers at the Smithsonian’s museums, 

Prepared by the Office of Equal Employment and Supplier Diversity Updated 3/21/2024
research centers and offices (known as Smithsonian units). Each delegation of 

authority is in writing and contains administrative and dollar limitations. 

Purchases for restricted items or items that exceed the delegated dollar limits 

must be awarded from OCON&PPM, but the unit purchasing staff remains 

responsible for the details of the agreement, including locating qualified 

vendors and obtaining price quotes.

PURCHASING POLICIES:

For purchases, the Smithsonian's policy is to seek competition when possible 

to ensure that a fair and reasonable price is obtained from the vendor that is 

selected. The Smithsonian supports the use of priority sources, such as 

vendors under UNICOR (formerly the Federal Prison Industries program), 

Ability One program, and General Services Administration supply sources or 

vendors with GSA contracts.

The Smithsonian also establishes and utilizes agency- and government-wide 

contracts for its needs. When these sources cannot provide the services or 

supplies required, the Institution turns to commercial sources in the open 

market. For open market purchases over $10,000, Smithsonian buyers are 

required to obtain quotations from at least three sources to ensure adequate 

competition. Exceptions exist in such cases as museum collection objects, 

lecturers and some emergency purchases.

Although purchasing requirements that exceed the delegated procurement 

authority are submitted to OCON&PPM for approval, the evaluation of 

vendors generally occurs at the unit level. Therefore marketing efforts should 

be directed to the Supplier Diversity Program liaisons for those units rather 

than OCON&PPM staff.

Purchases under $100,000 are generally set aside for small businesses. If a 

company qualifies as a small business, minority, socially and economically 

disadvantaged 8(a), women-owned, historically underutilized business zone 

(HUBZone), or service-disabled veteran-owned business, it will receive 

consideration for needs to met through existing Smithsonian contracts or other 

pre-established government contracts. When appropriate and feasible, 

purchasing requirements are submitted for consideration under the small 

Business Administration's 8(a) Business Development Program. More 

information on this program can by going to SBA's 8(a) Business Development 

Program.

Prepared by the Office of Equal Employment and Supplier Diversity Updated 3/21/2024
PURCHASING PROCESS:

Before initiating an acquisition from commercial sources, Smithsonian must 

determine whether the required supplies or services are available from the 

applicable Federal Supply Schedule established by the General Services 

Administration. (Small businesses interested in conducting business as a 

Federal Supply Schedule contractor should contact GSA's Assistance for Small 

Businesses.)

The purchasing process begins with a Smithsonian office identifies a need and 

writes a purchase description or a statement of work describing the need in 

detail. A market survey is performed to determine a price range. If the price is 

estimated to be above the Simplified Acquisition Threshold (SAT) of $100,000; 

a requisition is submitted to OCON&PPM, where it is screened for possible 

inclusion in any set-aside programs for small and disadvantaged businesses. 

Vendors are notified of the contracting opportunity and asked to provide 

proposal information. If the procurement falls under the Simplified Acquisition 

Threshold, the unit searches for potential vendors and obtains three quotes.

Using a request for quotation (RFQ) or request for proposal (RFP), the 

Smithsonian unit describes its objects, requirements, and other pertinent 

information. This solicitation contains all of the information needed for a 

business to prepare an adequate response. Vendors should give great 

attention and care to their responses, noting all instructions, particularly the 

submittal deadline. Any oversite may result in elimination from consideration.

SOLICITATION PROCEDURES OVER THE SIMPLIFIED ACQUISITION 

THRESHOLD:

Solicitations that result in an award of a contract that does not involve 

competition are known as sole-source procurements. Federal procurements 

emphasize the need for competition, so sole-source awards are the exception 

to the rule for the Smithsonian.

The Smithsonian uses two types of competitive processes: sealed bidding and 

negotiation. Sealed bidding is a method of contracting that involves 

competitive bids, public opening of bids and awards. Each sealed bid addresses 

the factors specified in the solicitation, including technical specifications, 

deliver or completion date, place and method of delivery, nature and number 

of reports or manuals, and operational tests and instructions. Smithsonian 

Prepared by the Office of Equal Employment and Supplier Diversity Updated 3/21/2024
terms and conditions are described in detail, while contract clauses are 

incorporated by reference to the Federal Acquisition Regulation. Unless 

specifically authorized, a bid submitted electronically or an alternate bid will 

not be considered.

Negotiation accommodates the government's need for flexibility in evaluating 

potential contractors through factors other than price. These factors may 

include technical aspects of the proposal, such as delivery or completion dates, 

performance requirements, and technical expertise. Proposals may even be 

improved or clarified during negotiations. To solicit a proposal for this type of 

procurement, the Smithsonian issues a request for proposal that details 

performance specifications, as well as, detailed design specifications. 

Negotiations are conducted with all firms in the competitive range. At the 

conclusion of negotiations, all firms in the competitive range are requested to 

submit a "best and final offer," which usually forms the basis for contract 

awards. The Smithsonian measures the proposals it receives through standards 

set for by evaluation criteria as stated in the original solicitation. Accordingly, 

solicitations should be analyzed carefully to avoid responding to those with 

requirements that cannot be fully satisfied.

PURCHASE ORDERS:

Purchase orders under the SAT are generally awarded as fixed-price contracts, 

meaning a definite price for the product or service is agreed upon before the 

contract is awarded. This price remains fixed throughout the life of the 

contract and usually is not subject to adjustment. This type of contract does 

not require detailed accounts of direct and indirect costs. Fixed-price contracts 

generally are used when clear designs or performance specifications are 

available and fair and reasonable prices can be estimated and established.

Cost-reimbursement contracts provide for payment to the contractor of all 

allowable costs incurred during performance of the contract. This type of 

contract may also establish payment of a fixed fee to the contractor over and 

above the allowable costs incurred during the course of the contract. Costreimbursement contracts generally are used when a project's work 

specifications cannot be detailed, as in research and development activities, 

and when performance questions establish that a fixed-price contract is 

inappropriate.

PURCHASE CARDS AND UNIT BLANKET AGREEMENTS:

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Although the purchase card is preferred for most micro-purchases (those 

under $3,500), the Smithsonian establishes unit blanket agreements (UBAs) 

with vendors that do not accept the purchase card. Upon establishment of a 

UBA, the unit gives the prospective vendor a purchase order that describes the 

supplies or services, lists the personnel authorized to place the order, and 

places a dollar limitation on each order. Smithsonian units are authorized to 

established their own unit-based UBAs with limits on the annual cost per 

agreement.

Prepared by the Office of Equal Employment and Supplier Diversity Updated 3/21/2024