E-004 Hot Topics-Non-competitive Practices and How Lucy Became an "Accidental" Grant Manager - Grant Talks with Lucy Morgan CPA
Episode Summary:
### Quick Episode Summary Grant Talks Podcast [#004]
*Intro ***.41***
* Lucy Morgan-My Grant Journey ***1:43***
* Getting Started-How Competitive Practices Promote Efficiency***7:32***
* What are Non-competitive Practices ***10:01***
* Hot Topic Alert: Caution to Grant Writers and Grant Consultants ***13:39***
* The Last Word with Lucy Morgan CPA***17:02***
*Outro Audio GrantTalks Podcast with Lucy M. Morgan CPA ***18:27***
Be sure to subscribe to the show!
- Listen to Lucy’s Welcome Message in Episode 001
Click on the Player Below to Listen to the Podcast
Introduction: Grant Talks Episode 4
Introduction: 00:04
Welcome to the Grant Talks podcast with Lucy Morgan. Lucy is the CEO and Director of MyFedTrainer.com, a leading provider of grant management training and templates for federal grant recipients. This show is for grant professionals looking to gain confidence managing their grants. In an age of increasing complexity, you'll hear from leading professionals on the best practices surrounding grants, what's involved in successfully managing the grants lifecycle and how to make sure your grants are managed correctly. Now here's your host, Lucy Morgan.
Lucy Morgan: 00:41
Welcome to the GrantTalks podcast.
I’m your host Lucy Morgan
In this episode, I’ll be discussing a hot topic for federal grant recipients called non-competitive practices.
Now, if you aren’t working with federal grants, you might also find these topics of interest as more and more funders…even non-federal funders are on the lookout for things that give the appearance of conflicts of interest or double-dealing.
So, let’s talk first about what non-competitive practices are.
While there are many specific types of things that can get you in trouble with non-competitive practices, think of it conceptually as anything that gives someone an unfair advantage over another person or company during the period of performance for your grant.
And we will talk about some examples as well cover how this area for grant recipients has been evolving in recent years.
But first, if you listened to our first podcast episode number 001, you might be wondering how I went from a person who was overwhelmed, intimidated and even a bit fearful of grants to a federal grant authority… 😊
Lucy Morgan-My “Accidental” Grant Journey
Lucy Morgan CPA 01:43
I mentioned that I went to work for a nonprofit. Well, I was a little late to the party.
You see, I had spent most of my career in the “for-profit” world…and I started having this recurring dream-well it felt more like a nightmare and it revolved around Excel spreadsheets.
I hate to admit this, but Excel had become the air that I breathed. And some of you may have done something like this in Freshman comp in college, where you write this letter to yourself about the legacy you are leaving the world.
And I started thinking about that.
And I started seeing my family, I could picture them gathered around after my passing and my granddaughter holding up this Excel spreadsheet going “Grandma left me an Excel spreadsheet!”
If you work in Excel, maybe you can relate.
And I thought, you know I don’t want my legacy to end with Excel spreadsheets.
I want more!
So, I quit the for-profit world and went to work for a non-profit.
It was great. I was working in an organization managing over $100 million in federal funding. I was making a difference in the world. I supported scientific research, we were changing the world…
There was just one little problem.
I really didn’t know what I was doing with grants.
Sure, I knew the accounting side inside and out, but the grants part-not so much.
Now there were a bunch of folks that had worked with federal contractors and grants for a long time, and I was able to convince myself that “Surely someone must know what they’re doing.”
I mean “Why would they give us over $100 million dollars in funding if someone didn’t know what to do with them!”
And I “assumed” that someone must be keeping us square with grants.
And you may not realize this, but until the start of the Uniform Guidance which is the set of the regulations that federal grant recipients follow since 2014, the federal government had what they called a “pay and chase” strategy.
And that went something like this:
You get the money.
You spend the money.
And then they come in any tell you’ve done it all wrong. 😊
And that was our experience.
We had gotten to the end of a large construction project and the auditors came in and we had a little problem.
Fortunately, it wasn’t big dollars, and it wasn’t one of the really bad things like someone was stealing money, but it was an audit finding.
And if you haven’t gone through that type of a Single Audit, an audit “finding” just means that the auditors “found” something.
That’s why they call it a “finding.”
For us, it revolved around whether or not blue jeans were goods or services for personal use, which was an unallowable cost or part of a uniform, which would have been an allowable cost.
And it proved to me, that you never know just what little thing your funder or your auditors are going to latch onto with your grant and get you into trouble.
So, when bad things happen to good grants, one of the things that come out of that is something called a “Corrective Action Plan” or a C-A-P.
And those go something like this:
We’re sorry
We did it wrong
We’ll never do it that way again!
And the reason that we won’t is because we are going to train people in the right way to do it!
And that is where I want from, I call myself an “accidental” grant manager, almost a grant spectator and joined the field as a grant player.
Because part of my job after this finding what to show people the right way to manage their grants.
And so reluctantly at first, and then as a person on a mission, I started to realize two things.
Number one: Very few people were getting any training on how to manage their grants. I wasn’t alone in feeling like I didn’t know what I was doing, especially with federal grants. And those “speedbumps” those little things that you run into when you manage grants, could cost your organizations big time. So, I was in good company feeling overwhelmed and confused about the regulations.
Number two: There was an amazing amount of funding out there being pumped out of the federal government to solve problems in our communities. And if I could help people do the right thing, more good could happen every single day in communities, not only around the United States but around the world.
And I could be part of helping people.
It was very attractive.
I could make a bigger difference.
I mean it was scary. I had been a corporate “controller” right, and I wasn’t in a position that you typically cast your future with the role of the dice. I would say I was pretty risk-averse. And I was deathly afraid of public speaking. This does not sound like a recipe for success for someone to become a trainer and national speaker.
I was the main support for my family.
There were all these reasons that I could stay with the familiar.
But I knew there were other people out there working on grants who were in the same boat as me and they needed my help.
And so, in 2010 I quit my job and started MyFedTrainer.com on a simple premise.
Most people want to do the right thing, but oftentimes no one has actually shown them what the right thing is to do when it comes to grants, especially federal grants.
And boy, running a training company different than working for corporate America. I had lots of hats to wear. I had to figure out how to produce a course, put together websites, do marketing and even the dreaded sales, and even how to speak in public.
People often ask me, what it takes to run a successful company, and I have to truthfully say it took everything I had. 😊
It hasn’t been easy. It hasn’t been safe, but it’s been worth it.
I’ve gotten to meet people all around the world who are trying to change their communities for the better through grant funding.
Every day I wake up wondering “What I can do today to help make grant management more manageable?”
My life doesn’t revolve around Excel spreadsheets anymore!
So, this Grant Talks Podcast is just one more way, that I hope I can help you get the support you need to make a bigger difference in your community with grants.
Getting Started-How Competitive Practices Promote Efficiency
Lucy Morgan CPA: 07:32
OK, I promised that we would get into one of the hot topics that I’ve been working with grant recipients on, and here is the deal:
There are lots of things that can get you into trouble with grants and non-competitive practices are one of the hot topics that I see going on right now.
First of all, why does it matter?
Well, when someone an unfair advantage in how grant funds are spent, whether on purpose or by accident, the funds are not spent as efficiently as they could be.
And when grant funds are spent efficiently, we can help more people.
So at the core of all these rules and regulations, is really how do we help the most people with the funds that we have.
Let’s think of a case that’s been in the news a lot lately about how the Baltimore Mayor recently had to resign. She was serving on the University of Maryland Hospital System board and reportedly sold $100,000 of a book that she self-published. She actually was serving on several boards and had sold nearly $800,000 of these books. Now it is under dispute whether or not she actually delivered the books, but think about how a board member for an organization just inherently has an unfair advantage over an outsider when it comes to getting the let’s call it the “inside track” on getting picked to provide goods or services to that organization.
And in absence of a strong ethical climate, and things like a conflict of interest policy, we can probably agree that an insider has certain advantages over let’s call it, Joe Blow off the street.
But could an outsider provide goods and services that are at a better price, maybe a better value, or more suited to an organization’s needs?
And the answer to that is “We don’t really know”
That’s why it’s important to have full and open competition.
That process of full and open competition is how an organization finds the best value to meet their needs.
Now there are special circumstances where we may choose to not have full and open competition.
Let’s say we have a disaster and we need helicopters to pluck people off the roofs, they’re sitting on their roofs in the case of flooding.
Well, we aren’t going to take the time to go out and competitively procure helicopter services in that type of a disaster.
But non-competitive practices are designed, or the rules against non-competitive practices are designed so we can avoid the risk of running up the costs on our grants because when we do that we can’t help as many people.
What are Non-competitive Practices?
Lucy Morgan CPA 10:01
Now you may be saying, “OK Lucy what types of things are considered non-competitive practices?”
Well, with federal grants, we don’t have to guess, because in the regulations called 2 CFR Part § 200.319 Competition, they are laid out.
And they include a number of types of things. And some of these also apply when you are looking at the non-federal sources (of funding) as well.
- First of all, placing unreasonable requirements on firms in order for them to qualify to do business (for example, let’s say you require twenty years in business, for no good reason, that’s going to exclude any newer companies, so that would be considered a non-competitive practice.)
- Maybe you require unnecessary experience or excessive bonding (Maybe you tell companies you have to have a million-dollar bond and it’s really a little small project.)
- The third one, noncompetitive pricing practices between firms or between affiliated companies (This is where you think of things like price-fixing-“OK, don’t bid on this one, we’ll bid on this one and the next one, you bid on that so that you can get it.” where there are those types of practices going on behind the scenes.)
- Another one is noncompetitive contracts to consultants especially ones that are on retainer contracts (So, how does someone get a foot in the door? “We’ve always used that same legal firm” “We’ve always used this other firm” Anything like that is considered non-competitive practice. And it’s a danger for organizations because we get “comfortable” with certain service providers.)
- Another one is organizational conflicts of interest (An organizational conflict of interest would be where you have associated organizations, like let’s say you are a non-profit hospital or even a for-profit hospital that also has an imaging lab. Is the natural tendency going to be to try and route people through that affiliated business that you own? Absolutely! So that is why that is considered a non-competitive practice.)
- Now for you Apple fans, listen up on this one. Specifying only a “brand name” product instead of allowing “an equal” product to be offered and without describing the performance or other relevant requirements of the procurement is considered a non-competitive practice. (Now I know we always get into that battle between Apple products and other types of products, but anytime you specify it has to be Apple you have to have a really good reason why otherwise that would be considered a non-competitive practice.
- Now this next one, sometimes people forget about because they are interested in “Buying Local”. Any type of geographic preference with federal dollars are prohibited unless there is some kind of statutory or administratively imposed preference in the actual writing of the award. And that’s because the federal government feels that geographic preferences drive up the cost overall of the grant. Now that’s a danger, danger, danger if you have a “Buy Local.” Now could you support local small businesses, women-owned firms, minority-owned firms? Absolutely. That is something the federal government gets behind. But they do not get behind a geographic preference.
- And here’s the one that has really turned into a hot topic. This one says that when you have a contractor that helps develop the specs, they can’t also do the work. They, the federal government believes that this is a non-competitive practice because the person writing the specifications could exert some influence, so the only company in the whole world that can do the work just happens to be them as well. So, this is something that has been around for a while. But I want to highlight an area that has been evolving…
Hot Topic Alert: Caution to Grant Writers and Grant Consultants
Lucy Morgan CPA: 13:39
If you are a grant writer or grant consultant, pay attention to this part.
Grant writers and grant consultants have a long history of working both in the pre-award phase and post-award phase. Maybe they help write the grant or do some of the evaluation before it gets submitted and then they work on the grant after it.
Hear this clearly: This is a “danger, danger, danger” because of this prohibition on contractors who write the specs doing the work. Because this is evolving. In many cases, federal agencies are increasingly starting to view a grant consultant or grant writer who works pre-award as being excluded from working post-award.
Now I’ve been preaching about this for a few years because I started seeing this interpretation, not only by agencies but also by auditors, And I never actually saw the language behind it anywhere, maybe in the notice of funding opportunity (NOFO) or the terms and conditions, but I had seen more and more times that grant consultants were getting into trouble.
So now I’m starting to see it actually in some of the language. For example, in a recent HHS agreement that I was reviewing I found the following language and here’s what it said:
“Outside companies or individuals that prepare or participate in the preparation on the grant application may NOT be contractors on those grants per 45 CFR Part 75.328, which addresses full and open competition.”
Now that part of the regulations is HHS’ equivalent to the Uniform Guidance 2 CFR Part 200. So, it is word-for-word pretty much what’s in the Uniform Guidance about full and open competition and it has to do with contractors that develop the specs, can’t also do the work afterward.
So, if you are a grant writer or consultant working pre-award, HHS, they give out about ¾ of all federal grants is saying no-no-no-no working on both sides of the fence.
Are you ready for that if you are a grant consultant?
The Last Word with Lucy Morgan CPA
Lucy Morgan CPA: 15:42
So, whether you are working on the federal side or other types of grants, understand that the expectations of funders are to error on the side of full and open competition, not kind of backroom deals, being comfortable, all those types of things to the extent required for spending your grant funds.
So, whether you are working on a federal grant which has very specific rules about competition, or you are not working on a federal grant, but you have funder expectations that to the extent required, you are going to do your best to spend those funds as efficiently as possible.
This is why non-competitive practices matter.
So, I hope this has helped you on your grant journey.
Thanks again for checking out the GrantTalks.com podcast!
If you would like to provide feedback, you can contact me via email at [email protected]
And you can find all the episodes at GrantTalks.com
Oh, and remember I’ve got a helpful little infographic that you can download on this topic at GrantTalks.com
Thanks for tuning in!
Outro: 16:43
To learn more about how MyFedTrainer.com makes grant management more manageable, visit MyFedTrainer.com. That's MyFedTrainer.com you'll find all the grant talks episodes at GrantTalks.com. That's GrantTalks.com.
More About Lucy Morgan:
Lucy M. Morgan is a CPA, MBA, GPA approved trainer, speaker, and author of 3 books including “Decoding Grant Management-The Ultimate Success Guide to the Federal Grant Regulations in 2 CFR Part 200.” As a leading authority on federal grant management for nonprofits, institutions of higher education and state, local and tribal governments she has written over 250 articles on grant management topics featured in LinkedIn, various publications and on the MyFedTrainer.com blog.
She is a sought-after presenter at national conferences sponsored by organizations such as the Grant Professional Association (GPA), National Grant Management Association (NGMA) and American Institute of Certified Public Accountants (AICPA).
Lucy is also a highly regarded trainer whose techniques and teaching style come from real-world experience. Having faced many of the same challenges her audiences have endured, Lucy understands that what looks good on paper may not always work in the real world. Because she has been there, she provides people of all professional backgrounds with practical tools to advance their careers and make a bigger difference in the world. She can be reached at [email protected].
More Resources for Grant Professionals
Thanks for checking out the Grant Talks podcast!
In this episode of Grant Talks, we talked about a subject that you may want to know more about:
- What are the “speedbumps” around non-competitive practices with federal funding?
So...as promised I want to share some resources that may help you on YOUR grant journey.
Click below to download a copy of:
I’m getting more and more of these types of frantic calls from consultants who are just finding out that they could lose an evaluation project because they helped write a grant for federal grant recipient.
Here’s the thing…many of them had been helping with both pre and post-award work for years, and it never was a problem until NOW!
This would be a rude awakening!
This area has been evolving in interpretations for quite a few years.
And I have to tell you, this “both sides now” prohibition is an interpretation that more and more agencies (including HHS) are viewing as a non-competitive practice.
(And this is a little detail in the Uniform Guidance that is getting more and more consultants and organizations into trouble!)
That’s why I put together this “short and sweet” Non-competitive Practices Infographic to remind you of the latest requirements.
I hope this simple infographic will keep you on the journey to more federal grants and better grant management.
Here's what’s included:
- The 1 big “no-no” that prohibits a contractor from working on a federal project if they also help develop the specifications for the solicitation
- 7 practices that the feds view as non-competitive including the use of “brand names” in the request for proposal (RFP)
- An example of HHS language in the request for application (RFA) that prohibits outside individuals and companies from preparing grants and working on the grant and more…
These resources are designed to keep you safe as a grant manager, and I hope that you will find them valuable on your grant journey.
Click here to download and share
P.S. If you want to know more about the competition requirements spending your federal grants, check out my article at https://blog.myfedtrainer.com/decoding-grant-management-success-tip-competition-and-affirmative-steps/
Thanks again for listening in!
