Compliance - Procurement Restricted and Prohibited Items

STRENGTHENING
CIVIL SOCIETY
GLOBALLY
Implementation Tips
for USAID Partners
Sharing Resources and Knowledge Among the Global CSO Community Compliance 4 | 2018
Definitions Procurement Restricted and

Restricted Items—Goods or services Ineligible Items
that cannot be purchased without specific
written permission in advance.
Ineligible Items—Goods or services
Q. What limitations apply to procuring goods and services using
U.S. Government (USG) funds?
A.
Many conditions surround how USG funds may and may not
that cannot be purchased under
be spent. These include limitations on:
any circumstances.
• particular goods and services;
Commodity—Any item that can be bought
or sold, usually a product or raw material • where the item was manufactured or procured;
(lumber, wheat, coffee, metals, etc.). Note • who you can purchase goods and services from; and
the following limitations:
• how you can ship them to your project site.
• Agricultural commodities must be
procured from the USA. Restricted items are generally not allowable unless you receive
specific written permission (for example, vehicles).
• Motor vehicles must be manufactured in
the USA. Ineligible items cannot be purchased under any circumstance
(for example, military equipment or alcoholic beverages).
• Pharmaceuticals must be manufactured
and procured in the USA. The following covers the most common types of restricted and
ineligible items. Additional restrictions based on the source and origin
of particular items, is covered. Consult your Agreement to clarify
what specific regulations or restrictions based on the source and
References origin of particular items apply to you.
USAID ADS Chapter 312 Eligibility of
Restricted Commodities
Commodities
The following seven restricted commodities may be purchased with
ADS Chapter 312 includes:
USG funds but require prior written approval from the Agreement
• Motor Vehicle Source/Manufacture Officer (AO) who will issue a waiver:
Waiver Request Guide
1. agricultural commodities,
• Motor Vehicle Source/Manufacture
Waiver Request Guide 2. motor vehicles,
• Template of Approval Request for 3. pharmaceuticals,
Agricultural Commodity Financing
Under ADS 312 4. pesticides,
• Pharmaceuticals 5. used equipment,

USAID Standard Provisions for 6. U.S. Government-owned excess property, and
U.S.-Based Partners
7. fertilizer.
USAID Standard Provisions for
Non-U.S.-Based Partners
CFR 200 Subpart E “Cost Principles”
NGOConnect.net
Implementation Tips for USAID Partners
Compliance 4 | 2018
Authority to issue waivers is delegated within USAID. A waiver is

In Your Notice requested through your AO who will issue written authorization. If
USAID Cooperative you procure the item prior to receiving written authorization, you risk
Agreements contain procurement- paying for the item yourself. Two types of waivers are:
related requirements under the
• Pharmaceutical waiver
Standard Provisions. Focus on
A waiver provides authority to procure non-US manufactured and
the sections entitled “Ineligible
purchased items for some types of pharmaceuticals. HIV drugs and
Goods and Services” and
test kits are included.
“Restricted Commodities.”
• Blanket waiver
Blanket waivers currently include:
• authorization to procure non-US manufactured right-hand-drive
Consequences of Misuse motor vehicles;
of Funds • authorization to procure non-US manufactured two-wheel and
The USG reserves the right to three-wheel motorcycles.
refund any amount that is not spent
in accordance with the terms and Ineligible Items
conditions of the award (that is, costs The following cannot be purchased with USG funds under any
not allowable under the regulations). circumstances:
Be sure to keep records for at least • Military equipment—goods or equipment to be used to meet the
three years after you submit your final cooperating country’s military requirements;
report, in case of an audit. • Surveillance equipment—equipment such as microphones,
transmitters and recording devices (does not include general use
audio-visual equipment, as long as there is a clear purpose and
need for that equipment in your program);
• Commodities and services for support of police or other law
enforcement activities;
• Abortion equipment and services;
• Luxury goods and gambling equipment, including alcoholic
beverages, jewelry or expensive textiles; and
• Weather modification equipment.
Other Types of Restrictions

The above-described restrictions and prohibitions are applicable to
most USG global health and development funding and are part of U.S.
law and agency regulations. Further guidance is provided in 2 CFR
200 Subpart E “Cost Principles,” which details rules for 55 specific
goods and services, including when they can and cannot be paid
for with USG funds. It is a good idea to scan this list and familiarize
yourself with all items relevant to your program.
page 2 NGOConnect.net
Implementation Tips for USAID Partners
Compliance 4 | 2018
In addition, further restrictions may be included in your Cooperative

For More Information Agreement. The best way to keep track of all restricted and
For this or other issues of prohibited items is to create a table and fill it out based on the
Implementation Tips, please visit agreements and guidance documents applicable to your program. If
www.NGOConnect.net. The Web you receive funding through multiple grants, you may find different
site is a dynamic and interactive limitations on different funding streams. Be sure to note to which
portal dedicated to connecting and agreement each restriction applies.
strengthening CSOs, networks and
Use of Private Funds
CSO support organizations worldwide.
When private funds are used to procure restricted goods and
Funding for this publication was services, they can contribute to your cost-share requirement.
provided by the U.S. Agency for However, private funds used to purchase prohibited items (such as
International Development, under alcohol) cannot be counted toward your cost-share commitment.
the Strengthening Civil Society (SCS)
However, in some circumstances, it is possible to use cost share
Global Leader Award. Its contents,
creatively to use your funds more efficiently. For example, you may
managed by SCS Global, do not
purchase a used non U.S.-manufactured vehicle with private funds
necessarily reflect the views of USAID
and shift your USG funds to other program costs. If this results in
or the U.S. Government.
significant rebudgeting, you will need to get approval first.
© 2018 by FHI 360. This publication
may be photocopied or adapted for
Requirements for Subawards
Almost all procurement limitations apply both to prime and
noncommercial use only, without prior
subrecipients on an award. USAID requires that subagreements with
permission, provided credit is given to
procurements over US$5,000 include certain procurement-related
FHI 360, SCS Global and USAID.
standard provisions.
Review your procurement-related clauses closely to ensure that
your staff understand the limitations and that your subrecipients
understand them as well.
page 3 NGOConnect.net

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STRENGTHENING

Definitions Procurement Restricted and

• Pharmaceuticals 5. used equipment,

Authority to issue waivers is delegated within USAID. A waiver is

Other Types of Restrictions

In addition, further restrictions may be included in your Cooperative

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